G.R. No.
L-62376 October 27, 1983 authority to cede, transfer, and convey the parcels of land within the reglementary
MARIA VELASQUEZ, MARY GEORGE, NELLIE GEORGE, NOBLE
GEORGE, and MAYBELLE GEORGE, plaintiffs-appellants,
vs.
WILLIAM GEORGE, ROBERT GEORGE, ANDRES MUÑOZ, ISAGANI
BRIAS and CIRILO ASPERILLA defendants-appellees, ERLINDA
VILLANUEVA, mortgagee-defendant-appellee.
Moises B. Ramos for plaintiffs-appellants.
Teresita G. Oledan for defendants-appellees W. George, R. George and Andres
Munoz
Isagani Brias and Rogel Atienza for defendant-appellee Briñas
Eladio B. Samson for mortgagee-defendant-appellee Erlinda Villanueva.
GUTIERREZ, JR., J:
Plaintiffs-appellants Maria Velasquez Vda. de George and her children, Mary, Nellie,
Noble and Maybelle, all surnamed George, appealed from the decision of the Court
of First Instance of Bulacan, which dismissed their complaint for lack of jurisdiction.
According to the trial court, the case falls within the original and exclusive
jurisdiction of the Securities and Exchange Commission. The appeal was certified to
us by the Court of Appeals as one involving a pure question of law.
The plaintiffs-appellants are the widow and legitimate children of the late Benjamin
B. George whose estate is under intestate proceedings. The case is docketed as
Special Proceedings Nos. 18820 before the then Court of First Instance of Rizal at
Quezon City, Branch XVIII.
In their complaint, the plaintiffs-appellants alleged that the five defendants-
mortgagors are officers of the Island Associates Inc. Andres Muñoz, aside from being
the treasurer-director of said corporation, was also appointed and qualified as
administrator of the estate of Benjamin George in the above special proceedings. In
life, the latter owned 64.8 percent or 636 shares out of the outstanding 980 shares of
stock in the corporation. Without the proper approval from the probate court and
without notice to the heirs and their counsel, the defendants-mortgagors executed a
Deed of First Real Estate Mortgage in favor of the defendant-mortgagee Erlinda
Villanueva, covering three parcels of land owned by Island Associates. In said Deed,
the defendants-mortgagors also expressly waived their right to redeem the said
parcels. Subsequently, a power of attorney was executed by the defendants-
mortgagors in favor of Villanueva whereby the latter was given the full power and
period provided by law for redemption.
A certificate of sale was executed in favor of Villanueva by the Provincial Sheriff of
Bulacan after she submitted the highest bids at the public auction. This led to the
execution of a Deed of Sale and Affidavit of Consolidation of Ownership by virtue of
which Transfer Certificates of Titles Nos. T-16717 and T-39162, covering the three
parcels of land, were cancelled and in lieu thereof, Transfer Certificates of Titles
Nos. T239675 and T-239674 were issued in favor of Villanueva. The plaintiffs-
appellants, therefore, filed the complaint for the annulment of the — 1.) Deed of
First Real Estate Mortgage; 2.) Power of Attorney; 3.) Certificate of Sale; 4.)
Amended Certificate of Sale; 5.) Affidavit of Consolidation of Ownership; and 6.)
Transfer Certificates of Title Nos. T-239674 and T-239675.
A motion to dismiss was filed by William George, Robert George, and administrator
Andres Muñoz on the ground that the trial court had no jurisdiction over the case.
The movants contended that the subject matter of the complaint referred to the
corporate acts of the Board of Directors of Island Associates, and, therefore, falls
within the exclusive jurisdiction of the Securities and Exchange Commission. The
trial court agreed with the movants and dismissed the complaint. The plaintiffs-
appellants contend that the resolution of the validity of a mortgage contract is within
the original and exclusive jurisdiction of civil courts, and certainly not within the
jurisdiction of the Securities and Exchange Commission and that once jurisdiction of
the civil court whether in a civil or a criminal case, has properly attached, the same
cannot be ousted, divested or removed. The appellants state that the questioned
composition of the board of directors, is merely incidental to the determination of the
main issue and is insufficient cause for the trial court to divest itself of its original
and exclusive jurisdiction that has already been acquired.
The defendants-appellees, on the other hand maintain that since the complaint
questions the validity of a corporate contract which the appellants contend to have
been entered into as a fraudulent and surreptitious scheme and devise to defraud
them, this issue places the entire case outside the jurisdiction of the civil courts.
According to them, Presidential Decree No. 902-A gives the SEC exclusive
jurisdiction over such a controversy. The relevant provision reads:
Sec. 5. In addition to the regulatory and adjudicative functions of the Securities and
Exchange Commission over corporations, partnerships and other forms of
associations registered with it as expressly granted under existing laws and decrees,
it shall have original and exclusive jurisdiction to hear and decide cases involving:
a) Devices or schemes employed by any acts of the board of directors, business
associations, its officers or partners amounting to fraud and misrepresentation which
may be detrimental to the interest of the public and/or of the stockholder, partner, rather than the general rule that pending proceedings for the settlement of the estate,
members of associations or organizations registered with the Commission ... the heirs have no right to commence an action arising out of the rights belonging to
the deceased." The case at bar falls under such an exception.
Villanueva further contends that the plaintiffs-appellants have no capacity to file the
complaint because the general rule laid down in Rule 87, Section 3 of the Rules of WHEREFORE, the order of the Court of First Instance of Bulacan, dated June 16,
Court states that only the administrator or executor of the estate may bring actions of 1980, dismissing the complaint and the order dated December 1, 1980 denying the
such nature as the one in the case at bar. The only exception is when the executor or motion for reconsideration are SET ASIDE. The said court is hereby ordered to set
administrator is unwilling or fails or refuses to act, which exception according to the the case for trial on the merits as above indicated.
mortgagee-appellee does not apply in the present case.
SO ORDERED.
We agree with the plaintiffs-appellants. What the complaint sought to annul were
documents of title which vested ownership over the three parcels of land in question
to defendant-mortgagee Villanueva, who is neither an officer, a stockholder nor a
director of the corporation, but a third party. Clearly, the lower court had jurisdiction
over the controversy. The fact that the plaintiffs-appellants subsequently questioned
the legality of the constitution of the board of directors of the corporation did not
divest the court of its jurisdiction to take cognizance of the case. What determines
jurisdiction of the court are the allegations in the complaint. If from the same, the
court has already acquired jurisdiction over the subject-matter, jurisdiction is retained
up to the end of the litigation. (See Lat v. Phil. Long Distance Co., 67 SCRA 425).

Whether or not the mortgage contract, with an unusual provision whereby the
mortgagors waived their right to redeem the mortgaged property, could be executed
without proper approval of the probate court and without notice to the widow and
legitimate children of the deceased is a matter clearly within the authority of a trial
court to decide. If in the course of trial, the court believes that the validity of the
composition of the board of directors is absolutely necessary for resolution of the
issues before it, the remedy is, at most, to require that one issue to be threshed out
before the Securities and Exchange Commission and to hold in abeyance, the trial on
the merits of the principal issues in the meantime. Certainly, the solution is not for
the lower court to surrender its judicial questions to an administrative agency for
resolution.

We also find without merit the defendant-mortgagee's contention that the proper
party to file the complaint is the administrator of the estate of Benjamin George. The
administrator, Andres Muñoz, is the same person charged by the plaintiffs-appellants
to have voted in the board of directors without securing the proper authority from the
probate court to which he is accountable as administrator. In Ramirez v. Baltazar (24
SCRA 918), we ruled that "since the ground for the present action to annul the
aforesaid foreclosure proceedings is the fraud resulting from such insidious
machinations and collusion in which the administrator has allegedly participated, it
would be far fetched to expect the said administrator himself to file the action in
behalf of the estate. And who else but the heirs, who have an interest to assert and to
protect, would bring the action? Inevitably, this case should fall under the exception,
[G.R. No. 129008. January 13, 2004]
TEODORA A. RIOFERIO, VERONICA O. EVANGELISTA assisted by her
husband ZALDY EVANGELISTA, ALBERTO ORFINADA, and ROWENA O.
UNGOS, assisted by her husband BEDA UNGOS, petitioners, vs. COURT OF
APPEALS, ESPERANZA P. ORFINADA, LOURDES P. ORFINADA,
ALFONSO ORFINADA, NANCY P. ORFINADA, ALFONSO JAMES P.
ORFINADA, CHRISTOPHER P. ORFINADA and ANGELO P.
ORFINADA,respondents.
DECISION
TINGA, J.:
Whether the heirs may bring suit to recover property of the estate pending the
appointment of an administrator is the issue in this case.
This Petition for Review on Certiorari, under Rule 45 of the Rules of Court, seeks to
set aside the Decision[1] of the Court of Appeals in CA-G.R. SP No. 42053 dated
January 31, 1997, as well as its Resolution[2] dated March 26, 1997, denying
petitioners motion for reconsideration.
On May 13, 1995, Alfonso P. Orfinada, Jr. died without a will in Angeles City
leaving several personal and real properties located in Angeles City, Dagupan City
and Kalookan City.[3] He also left a widow, respondent Esperanza P. Orfinada, whom
he married on July 11, 1960 and with whom he had seven children who are the
herein respondents, namely: Lourdes P. Orfinada, Alfonso Clyde P. Orfinada, Nancy
P. Orfinada-Happenden, Alfonso James P. Orfinada, Christopher P. Orfinada, Alfonso
Mike P. Orfinada (deceased) and Angelo P. Orfinada.[4]
Apart from the respondents, the demise of the decedent left in mourning his
paramour and their children. They are petitioner Teodora Riofero, who became a part
of his life when he entered into an extra-marital relationship with her during the
subsistence of his marriage to Esperanza sometime in 1965, and co-petitioners
Veronica[5], Alberto and Rowena.[6]
On November 14, 1995, respondents Alfonso James and Lourdes Orfinada
discovered that on June 29, 1995, petitioner Teodora Rioferio
and her children executed an Extrajudicial Settlement of Estate of a Deceased
Person with Quitclaim involving the properties of the estate of the decedent located
in Dagupan City and that accordingly, the Registry of Deeds in Dagupan issued
Certificates of Titles Nos. 63983, 63984 and 63985 in favor of petitioners Teodora
Rioferio, Veronica Orfinada-Evangelista, Alberto Orfinada and Rowena Orfinada-
Ungos. Respondents also found out that petitioners were able to obtain a loan
of P700,000.00 from the Rural Bank of Mangaldan Inc. by executing a Real Estate
Mortgage over the properties subject of the extra-judicial settlement.[7]
On December 1, 1995, respondent Alfonso Clyde P. Orfinada III filed a Petition for
Letters of Administration docketed as S.P. Case No. 5118 before the Regional Trial
Court of Angeles City, praying that letters of administration encompassing the estate
of Alfonso P. Orfinada, Jr. be issued to him.[8]
On December 4, 1995, respondents filed a Complaint for the Annulment/Rescission
of Extra Judicial Settlement of Estate of a Deceased Person with Quitclaim, Real
Estate Mortgage and Cancellation of Transfer Certificate of Titles with Nos. 63983,
63985 and 63984 and Other Related Documents with Damages against petitioners,
the Rural Bank of Mangaldan, Inc. and the Register of Deeds of Dagupan City
before the Regional Trial Court, Branch 42, Dagupan City.[9]
On February 5, 1996, petitioners filed their Answer to the aforesaid complaint
interposing the defense that the property subject of the contested deed of extra-
judicial settlement pertained to the properties originally belonging to the parents of
Teodora Riofero[10] and that the titles thereof were delivered to her as an advance
inheritance but the decedent had managed to register them in his name. [11] Petitioners
also raised the affirmative defense that respondents are not the real parties-in-interest
but rather the Estate of Alfonso O. Orfinada, Jr. in view of the pendency of the
administration proceedings.[12] On April 29, 1996, petitioners filed a Motion to Set
Affirmative Defenses for Hearing[13] on the aforesaid ground.
The lower court denied the motion in its Order[14] dated June 27, 1996, on the ground
that respondents, as heirs, are the real parties-in-interest especially in the absence of
an administrator who is yet to be appointed in S.P. Case No. 5118. Petitioners moved
for its reconsideration[15] but the motion was likewise denied.[16]
This prompted petitioners to file before the Court of Appeals their Petition for
Certiorari under Rule 65 of the Rules of Court docketed as CA G.R. S.P. No. 42053.
[17]
Petitioners averred that the RTC committed grave abuse of discretion in issuing
the assailed order which denied the dismissal of the case on the ground that the
proper party to file the complaint for the annulment of the extrajudicial settlement of
the estate of the deceased is the estate of the decedent and not the respondents.[18]
The Court of Appeals rendered the assailed Decision[19] dated January 31, 1997,
stating that it discerned no grave abuse of discretion amounting to lack or excess of
jurisdiction by the public respondent judge when he denied petitioners motion to set
affirmative defenses for hearing in view of its discretionary nature.
A Motion for Reconsideration was filed by petitioners but it was denied. [20] Hence,
the petition before this Court.
The issue presented by the petitioners before this Court is whether the heirs have
legal standing to prosecute the rights belonging to the deceased subsequent to the
commencement of the administration proceedings.[21]
Petitioners vehemently fault the lower court for denying their motion to set the case
for preliminary hearing on their affirmative defense that the proper party to bring the
action is the estate of the decedent and not the respondents. It must be stressed that
the holding of a preliminary hearing on an affirmative defense lies in the discretion
of the court. This is clear from the Rules of Court, thus:
SEC. 5. Pleadings grounds as affirmative defenses.- Any of the grounds for dismissal
provided for in this rule, except improper venue, may be pleaded as an affirmative
defense, and a preliminary hearing may be had thereon as if a motion to dismiss had
been filed.[22] (Emphasis supplied.)
Certainly, the incorporation of the word may in the provision is clearly indicative of
the optional character of the preliminary hearing. The word denotes discretion and
cannot be construed as having a mandatory effect.[23] Subsequently, the electivity of
the proceeding was firmed up beyond cavil by the 1997 Rules of Civil Procedure
with the inclusion of the phrase in the discretion of the Court, apart from the
retention of the word may in Section 6,[24] in Rule 16 thereof.
Just as no blame of abuse of discretion can be laid on the lower courts doorstep for
not hearing petitioners affirmative defense, it cannot likewise be faulted for
recognizing the legal standing of the respondents as heirs to bring the suit.
Pending the filing of administration proceedings, the heirs without doubt have legal
personality to bring suit in behalf of the estate of the decedent in accordance with the
provision of Article 777 of the New Civil Code that (t)he rights to succession are
transmitted from the moment of the death of the decedent. The provision in turn is
the foundation of the principle that the property, rights and obligations to the extent
and value of the inheritance of a person are transmitted through his death to another
or others by his will or by operation of law.[25]
Even if administration proceedings have already been commenced, the heirs may
still bring the suit if an administrator has not yet been appointed. This is the proper
modality despite the total lack of advertence to the heirs in the rules on party
representation, namely Section 3, Rule 3 [26] and Section 2, Rule 87 [27] of the Rules of
Court. In fact, in the case of Gochan v. Young,[28] this Court recognized the legal
standing of the heirs to represent the rights and properties of the decedent under
administration pending the appointment of an administrator. Thus:
The above-quoted rules,[29] while permitting an executor or administrator to represent
or to bring suits on behalf of the deceased, do not prohibit the heirs from
representing the deceased. These rules are easily applicable to cases in which an
administrator has already been appointed. But no rule categorically addresses
the situation in which special proceedings for the settlement of an estate have
already been instituted, yet no administrator has been appointed. In such
instances, the heirs cannot be expected to wait for the appointment of an
administrator; then wait further to see if the administrator appointed would care
enough to file a suit to protect the rights and the interests of the deceased; and in the
meantime do nothing while the rights and the properties of the decedent are violated
or dissipated.
Even if there is an appointed administrator, jurisprudence recognizes two
exceptions, viz: (1) if the executor or administrator is unwilling or refuses to bring
suit;[30] and (2) when the administrator is alleged to have participated in the act
complained of[31] and he is made a party defendant. [32] Evidently, the necessity for the
heirs to seek judicial relief to recover property of the estate is as compelling when
there is no appointed administrator, if not more, as where there is an appointed
administrator but he is either disinclined to bring suit or is one of the guilty parties
himself.
All told, therefore, the rule that the heirs have no legal standing to sue for the
recovery of property of the estate during the pendency of administration proceedings
has three exceptions, the third being when there is no appointed administrator such
as in this case.
As the appellate court did not commit an error of law in upholding the order of the
lower court, recourse to this Court is not warranted.
WHEREFORE, the petition for review is DENIED. The assailed decision and
resolution of the Court of Appeals are hereby AFFIRMED. No costs.
SO ORDERED.
G.R. No. L-11801 June 30, 1959
CIRILO MODESTO, petitioner,
vs.
JESUS MODESTO, ET AL., ETC., respondents.
Pelayo V. Nuevo and Segundo M. Zosa for petitioner.
Antonio Montilla for respondents.
MONTEMAYOR, J.:
This is a petition for certiorari and for a writ of preliminary injunction filed by Cirilo
Modesto to set aside the order of the Court of First Instance of Leyte dated March 8,
1954, the writ of execution dated April 27, 1954 as well as the alias writ of execution
dated November 10, 1955.
The facts in this case are not in dispute. It would appear that Bruno Modesto died
leaving several heirs, among them, Cirilo Modesto and Jesus Modesto. In the course
of the intestate proceedings, Jesus Modesto, acting as administrator of the estate of
Bruno, filed on November 7, 1953, in the Court of First Instance of Tacloban, Leyte,
a motion to cite and examine under oath several persons, especially Cirilo Modesto,
regarding properties concealed, embezzled or fraudulently conveyed. On December
7, 1953 the court issued an order appointing the Provincial Sheriff of Leyte and the
Chief of Police of Tanawan, Leyte, as joint commissioners, to verify and ascertain
persons who were holding, claiming or possessing properties belonging to the estate
of the deceased Bruno Modesto. In said motion of Jesus Modesto he listed said
properties supposed to belong to the estate, classified as follows: jewels under items
1, 2 and 3; furniture and other personal properties under items 4-10; the 11th item is
supposed to be cash taken from a deposit in the Office of the Chief of Police of
Tanawan, Leyte, after taking funeral and other expenses, in the amount of P1,700;
and real properties under items 12-26.
On January 12, 1954, the joint commissioners submitted their report. On March 1,
1954 Jesus Modesto, administrator filed a motion in court to require Cirilo Modesto
to turn over to him as administrator the personal properties belonging to the intestate
supposed to be in Cirilo's possession. Pursuant to said motion, the trial court, on
March 8, 1954, issued an order requiring Cirilo Modesto to deliver to the
administrator personal properties listed in the order, such as one narra aparador, 1
desk, 1 looking glass 5 x 3 ft., 1 trunk containing clothes, 1 bicycle, 11 pieces of steel
matting and money said to have been taken from a deposit made with the Chief of
Police in the amount of P1,700.00. Thereafter, on April 27, 1954, a writ of execution
was issued and on May 10, 1955 as alias writ of execution was also issued by the
trial court. By virtue of said writ of execution the provincial Sheriff issued a Notice
of Attachment against the real property described in Certificate of Title no. 30167 of
the Register of Deeds of Leyte and under Tax Assessment in the name of Cirilo
Modesto.
On June 2, 1955 Cirilo Modesto filed an Urgent Motion to Set Aside the Writ of
Execution and for a Writ of Preliminary Injunction, which motion was opposed by
Jesus. On June 4, 1955 the Provincial Sheriff sold at public auction the real property
above-mentioned to the highest and only bidder Jesus Modesto for P2,454 and on
June 6, 1956, the Provincial Sheriff issued a Sheriff's Certificate of Final Sale in
favor of Jesus. On June 29, 1956 Jesus Modesto filed a motion for a writ of
Possession. On July 11, 1956 Cirilo filed his Motion for Reconsideration of the order
dated June 4 which the trial court denied. On August 3, 1956, in pursuance of the
motion for a Writ of Possession, the Provincial Sheriff issued a notification to Cirilo
placing Jesus in possession of the real property sold to him. Cirilo then filed the
present petition for certiorari to annul the proceedings had before the Court of First
Instance of Leyte.
The trial court, in issuing its order of March 8, 1954 requiring Cirilo to deliver the
properties listed therein to Jesus as administrator, supposedly acted under the
provisions of Section 6, Rule 88 of the Rules of Court which reads as follows:
SEC. 6. Proceedings when property concealed, embezzled, or fraudulently conveyed.
— If an executor or administrator, heir, legatee, creditor, or other individual
interested in the estate of the deceased, complains to the court having jurisdiction of
the estate that a person is suspected of having concealed, embezzled, or conveyed
away any of the money, goods or chattels of the deceased, or that such person has in
his possession or has knowledge of any deed, conveyance, bond, contract, or other
writing which contains evidence of or tends to disclose the right, title, interest, or
claim of the deceased to real or personal estate, or the last will and testament of the
deceased, the court may cite such suspected person to appear before it and may
examine him on oath on the matter of such complaint; and if the person so cited
refused to appear, or to answer on such examination or such interrogatories as are put
to him, the court may punish him for contempt, and may commit him to prison until
he submits to the order to the court. The interrogatories put to any such person, and
his answers thereto, shall be in writing and shall be filed in the clerk's office.
In this trial court committed error because the purpose of the section above-
reproduced, which section was taken from Section 709 of Act 190, is merely to elicit
information or to secure evidence from those persons suspected of having possessed
or having knowledge of the properties left by a deceased person, or of having
concealed, embezzled or conveyed any of the said properties of the deceased. In such
proceedings the trial court has no authority to decide whether or not said properties,
real or personal, belong to the estate or to the persons examined. if, after such
examination there is good reason to believe that said person or persons examined are
keeping properties belonging to the estate, then the next step to be taken should be
for the administrator to file an ordinary action in court to recover the same (Alafriz
vs. Mina, 28 Phil., 137; Cui vs. Piccio, 91 Phil., 713; 48 Off. Gaz. [7] 2769; Changco
vs. Madrelejos, 12 Phil., 543; Guanco vs. PNB, 54 Phil., 244, cited in Moran's Rules
of Court, Vol. 2 1957 Edition, pp. 443-444).

The order requiring Cirilo to deliver the properties and cash stated in the order, as
belonging to the estate, said that Cirilo was supposed to have admitted having
received or taken possession of said properties after the death of Bruno. This
statement or findings of the lower court is not supported by the evidence on record.
As a matter of fact, in the answer of Cirilo to the motion of the administrator, he
claimed that although he held the aparador mentioned in Item 4 in the list properties,
nevertheless, said furniture belonged to their parents and so Bruno Modesto had only
1/6 share; that he, Cirilo, did not have the looking glass mentioned in the motion
because the same had been taken by Jesus himself, neither did he have the desk in
question; that though he held a trunk, it was empty and only contained clothes which
were torn; that the bicycle in question was in the possession of Mauricio Modesto,
the nephew of Bruno; that he, Cirilo, did not keep the 11 pieces of steel matting;
neither did he ever receive the amount of P1,700.00 supposed to have been deposited
in the office of the Chief of Police. But, even if Cirilo had admitted possession of the
properties which he was required by the court to deliver to Jesus, still it was
necessary for the ordinary courts, not the probate court, to determine the title and
ownership of said properties.

In view of the foregoing, the petition for certiorari is hereby granted and the order of
the trial court of March 8, 1954, the Writ of Execution of April 27, 1954 and the alias
Writ of Execution of May 10, 1955, and of course the sale made by the Sheriff of the
real property covered by Certificate of Title No. 30167 are set aside. Respondent
Jesus Modesto will pay the costs.
G.R. No. L-56504 May 7, 1987
POMPILLO VALERA and EUMELIA VALERA CABADO, petitioners,
vs.
HON. JUDGE SANCHO Y. INSERTO, in his capacity as Presiding Judge,
Court of First Instance of Iloilo, Branch 1, and MANUEL R.
FABIANA, respondents.
Nos. L-59867-68 May 7, 1987
EUMELIA V. CABADO, POMPILLO VALERA and HON. MIDPANTAO L.
ADIL, petitioners-appellants,
vs.
MANUEL FABIANA, JOSE GARIN and HON. COURT OF APPEALS (Tenth
Division), respondents-appellants.
NARVASA, J.:
Conflicting claims over a fishpond asserted by the administrators of the estate of
deceased spouses, on the one hand, and by the heirs of a daughter of said spouses
and their lessee, on the other, have given rise to the proceedings now docketed in this
Court as (1) G.R. No. 56504 and (2) G.R. Nos. 59867-68.
Sp. Proc. No. 2223, CFI, Iloilo
In the proceedings for the settlement of the intestate estate of the decedent spouses,
Rafael Valera and Consolacion Sarrosa 1 — in which Eumelia Cabado and Pompiro
Valera had been appointed administrators 2 — the heirs of a deceased daughter of the
spouses, Teresa Garin, filed a motion asking that the Administratrix, Cabado, be
declared in contempt for her failure to render an accounting of her
administration. 3 Cabado replied that no accounting could be submitted unless Jose
Garin, Teresa's husband and the movant heirs' father, delivered to the administrator
an 18-hectare fishpond in Baras, Barotoc Nuevo, Iloilo, belonging to the estate and
she in turn moved for the return thereof to the estate, 4 so that it might be partitioned
among the decedents' heirs. Jose Garin opposed the plea for the fishpond's return to
the estate, asserting that the property was owned by his children and this was why it
had never been included in any inventory of the estate.
The Court, presided over by Hon. Judge Midpantao Adil, viewed the Garin Heirs'
motion for contempt, as well as Cabado's prayer for the fishpond's return to the
estate, as having given rise to a claim for the recovery of an asset of the estate within
the purview of Section 6, Rule 87 of the Rules of Court. 5 It accordingly set said
incidents for hearing during which the parties presentee evidence in substantiation of
their positions. 6 Thereafter, the Court issued an Order dated September 17, 1980
commanding the Heirs of Teresa Garin "to reconvey immediately the fishpond in
question * * to the intestate Estate of the Spouses. 7
The Order was predicated upon the Court's factual findings mainly derived from the
testimony of the two administrators that:
1. the fishpond originally belonged to the Government, and had been given in lease
to Rafael Valera in his lifetime;
2. Rafael Valera ostensibly sold all his leasehold rights in the fishpond to his
daughter, Teresa Garin; but the sale was fictitious, having been resorted to merely so
that she might use the property to provide for her children's support and education,
and was subject to the resolutory term that the fishpond should revert to Rafael
Valera upon completion of the schooling of Teresa Garin's Children; and
3. with the income generated by the fishpond, the property was eventually purchased
from the Government by the Heirs of Teresa Garin, collectively named as such in the
Original Certificate of Title issued in their favor.
Upon these facts, Judge Adil ruled that an implied trust had been created, obligating
Teresa Garin's heirs to restore the property to the Valera Spouses' Estate, in
accordance with Articles 1453 and 1455 of the Civil Code providing as follows:
Article 1453. When property is conveyed to a person in reliance upon his declared
intentions to hold it for, or transfer it to another or the grantor, there is an implied
trust in favor of the person for whose benefit it is contemplated.
Article 1455. When any trustee, guardian or other person holding a fiduciary
relationship uses trust funds for the purchase of property and causes a conveyance to
be made to him or to a third person, a trust is established by operation of law in favor
of the person to whom the fund belongs.
The Court also held that the action for reconveyance based on constructive trust had
not yet prescribed, Cabado's motion for the fishpond's reversion to the estate having
been filed well within ten (10) years from June 30, 1980, the date on which Teresa
Garin's heirs allegedly acquired title over it. 8
There seems little doubt, however, that the Court's pronouncement regarding the
estate's title to the fishpond was merely provisional in character, made solely to
determine whether or not the fishpond should be included in the inventory of estate
assets. So it was evidently understood by the administrators who have more than
once asserted that "the probate court has jurisdiction to determine the ownership of
the fishpond for purposes of inclusion in the inventory of the properties. 9 So it was
made clear by the Probate Court itself which, at the outset, stated that the hearing on
the matter 10 was meant "merely to determine whether or not the fishpond should be
included as part of the estate and whether or not the person holding it should be
made to deliver and/or return ** (it) to the estate. 11 And so it was emphasized in
another Order, denying reconsideration of the Order of September 17, 1980, which
states that:
**(i)t is never the intendment of this court to write a finish to the issue of ownership
of the fishpond in dispute. The movants may pursue their claim of ownership over
the same in an ordinary civil action. Meanwhile, however, it is the finding of this
probate court that the fishpond must be delivered to the estate.
Clearly, there is no incompatibility between the exercise of the power of this probate
court under Section 6 in relation to Section 7, both of Rule 87, and the contention of
the movants that the proper forum to settle the issue of ownership should be in a
court of general jurisdiction. 12
Judge Adil afterwards granted the administrators' motion for execution of the order
pending appeal, and directed the sheriff to enforce the direction for the Garin Heirs
to reconvey the fishpond to the estate. 13 The corresponding writ was served on
Manuel Fabiana, the supposed encargado or caretaker. Voicing no objection to the
writ, and declaring to the sheriff that he was a mere lessee, 14 Fabiana voluntarily
relinquished possession of the fishpond to the sheriff. The latter, in turn, delivered it
to the administrators. 15
Later however, Fabiana filed a complaint-in-intervention with the Probate Court
seeking vindication of his right to the possession of the fishpond, based on a contract
of lease between himself, as lessee, and Jose Garin, as lessor. 16 But Judge Adil
dismissed his complaint on the following grounds, to wit:
(1) it was filed out of time because not only had judgment been rendered, but
execution as regards transfer of possession had already taken place; and
(2) the lease contract had not been registered and hence was not binding as against
the estate. 17
G.R. No. 56504
Fabiana thereupon instituted a separate action for injunction and damages, with
application for a preliminary injunction. This was docketed as Civil Case No. 13742
and assigned to Branch I of the Iloilo CFI, Hon. Sancho Y. Inserto,
presiding. 18 Judge Inserto issued a temporary restraining order enjoining estate
administrators from disturbing Fabiana in the possession of the fishpond, as
lessee. 19
The estate administrators filed a motion to dismiss the complaint and to dissolve the
temporary restraining order, averring that the action was barred by the Probate
Court's prior judgment which had exclusive jurisdiction over the issue of the lease,
and that the act sought to be restrained had already been accomplished, Fabiana
having voluntarily surrendered possession of the fishpond to the sheriff. 20 When
Judge Inserto failed to act on their motion within what the administrators believed to
be a reasonable time, considering the circumstances of the Case, the administrators
filed with the Supreme Court a special civil action for certiorari and mandamus, with
a prayer for Preliminary mandatory injunction and temporary restraining order,
which was docketed as G.R. No. 56504. 21 In their petition, the administrators
contended that Branch I of the Iloilo CFI (Judge Inserto, presiding) could not and
should not interfere with the Probate Court (Branch I I, Judge Adil, presiding) in the
legitimate exercise of its j jurisdiction over the proceedings for the Settlement of the
estate of the Valera Spouses.
G.R. Nos. 59867-68
In the meantime, Jose Garin — having filed a motion for reconsideration of the
above mentioned order of Judge Adil (declaring the estate to be the owner of the
fishpond), in which he asserted that the Probate Court, being of limited jurisdiction,
had no competence to decide the ownership of the fishpond, 22 which motion had
been denied 23-filed a notice of appeal from said Order. 24 But he quickly abandoned
the appeal when, as aforestated 25 Judge Adil authorized execution of the order
pending appeal, instead, he initiated a special action for certiorari prohibition and
mandamus )with prayer for preliminary injunction) in the Court of Appeals, therein
docketed as CA-G. R. No. SP-1154-R.
Fabiana followed suit. He instituted in the same Court of Appeals his own action for
certiorari and injunction, docketed as CA-G.R. No. SP-11577-R; this,
notwithstanding the pendency in judge Inserto's sala of the case he had earlier
filed. 26
These two special civil actions were jointly decided by the Court of Appeals. The
Court granted the petitions and ruled in substance that:
1. The Probate Court indeed possessed no jurisdiction to resolve the issue of
ownership based merely on evidence adduced at the hearing of a "counter-motion"
conducted under Section 6, Rule 87;
2. The original and transfer certificates of title covering the fishpond stand in the
names of the Heirs of Teresa Garin as registered owners, and therefore no
presumption that the estate owns the fishpond is warranted to justify return of the
property on the theory that it had merely been borrowed; and
3. Even assuming the Probate Court's competence to resolve the ownership question,
the estate administrators would have to recover possession of the fishpond by
separate action, in view of the lessee's claim of right to superior possession, as lessee
thereof.
From this joint judgment, the administrators have taken separate appeals to this
Court by certiorari,27 docketed as G.R. Nos. 59867 and 59868. They ascribe to the
Appellate Court the following errors, viz: Page 542
1) in holding that the Probate Court (Judge Adil, Presiding) had no jurisdiction to
take cognizance of and decide the issue of title covering a fishpond being claimed by
an heir adversely to the decedent spouses;
2) in ruling that it was needful for the administrators to file a separate action for the
recovery of the possession of the fishpond then in the hands of a third person; and
3) in sanctioning the act of a CFI Branch in interfering with and overruling the final
judgment of another branch, acting as probate Court, and otherwise frustrating and
inhibiting the enforcement and implementation of said judgment.
Jurisdiction of Probate Court
As regards the first issue, settled is the rule that a Court of First Instance (now
Regional Trial Court), acting as a Probate Court, exercises but limited
jurisdiction, 28 and thus has no power to take cognizance of and determine the issue
of title to property claimed by a third person adversely to the decedent, unless the
claimant and all the Other parties having legal interest in the property consent,
expressly or impliedly, to the submission of the question to the Probate Court for
adjudgment, or the interests of third persons are not thereby prejudiced, 29 the reason
for the exception being that the question of whether or not a particular matter should
be resolved by the Court in the exercise of its general jurisdiction or of its limited
jurisdiction as a special court (e.g., probate, land registration, etc., is in reality not a
jurisdictional but in essence of procedural one, involving a mode of practice which
may be waived. 30
The facts obtaining in this case, however, do not call for the application of the
exception to the rule. As already earlier stressed, it was at all times clear to the Court
as well as to the parties that if cognizance was being taken of the question of title
over the fishpond, it was not for the purpose of settling the issue definitely and
permanently, and writing "finis" thereto, the question being explicitly left for
determination "in an ordinary civil action," but merely to determine whether it
should or should not be included in the inventory. 31 This function of resolving
whether or not property should be included in the estate inventory is, to be sure, one
clearly within the Probate Court's competence, although the Court's determination is
only provisional in character, not conclusive, and is subject to the final decision in a
separate action that may be instituted by the parties. 32
The same norm governs the situation contemplated in Section 6, Rule 87 of the Rules
of Court, expressly invoked by the Probate Court in justification of its holding a
hearing on the issue arising from the parties' conflicting claims over the
fishpond. 33 The examination provided in the cited section is intended merely to elicit
evidence relevant to property of the decedent from persons suspected of having
possession or knowledge thereof, or of having concealed, embezzled, or conveyed
away the same. Of course, if the latter lays no claim to the property and manifests
willingness to tum it over to the estate, no difficulty arises; the Probate Court simply
issues the appropriate direction for the delivery of the property to the estate. On the
other hand, if the third person asserts a right to the property contrary to the
decedent's, the Probate Court would have no authority to resolve the issue; a separate
action must be instituted by the administrator to recover the property. 34
Parenthetically, in the light of the foregoing principles, the Probate Court could have
admitted and taken cognizance of Fabiana's complaint in intervention after obtaining
the consent of all interested parties to its assumption of jurisdiction over the question
of title to the fishpond, or ascertaining the absence of objection thereto. But it did
not. It dismissed the complaint in intervention instead. And all this is now water
under the bridge.
Possession of Fishpond Pending
Determination of Title Thereto
Since the determination by the Probate Court of the question of title to the fishpond
was merely provisional, not binding on the property with any character of authority,
definiteness or permanence, having been made only for purposes of in. conclusion in
the inventory and upon evidence adduced at the hearing of a motion, it cannot and
should not be subject of execution, as against its possessor who has set up title in
himself (or in another) adversely to the decedent, and whose right to possess has not
been ventilated and adjudicated in an appropriate action. These considerations
assume greater cogency where, as here, the Torrens title to the property is not in the
decedents' names but in others, a situation on which this Court has already had
occasion to rule.
In regard to such incident of inclusion or exclusion, We hold that if a property
covered by Torrens title is involved, the presumptive conclusiveness of such title
should be given due weight, and in the absence of strong compelling evidence to the
contrary, the holder thereof should be consider as the owner of the property in
controversy until his title is nullified or modified in an appropriate ordinary action,
particularly, when as in the case at bar, possession of the property itself is in the
persons named in the title. 35
Primary Jurisdiction over Title issue in
Court Taking Cognizance of Separate Action
Since, too, both the Probate Court and the estate administrators are one in the
recognition of the proposition that title to the fishpond could in the premises only be
appropriately determined in a separate action, 36 the actual firing of such a separate
action should have been anticipated, and should not therefore have come as a
surprise, to the latter. And since moreover, implicit in that recognition is also the
acknowledge judgment of the superiority of the authority of the court in which the
separate action is filed over the issue of title, the estate administrators may not now
be heard to complain that in such a separate action, the court should have issued
orders necessarily involved in or flowing from the assumption of that jurisdiction.
Those orders cannot in any sense be considered as undue interference with the
jurisdiction of the Probate Court. Resulting from the exercise of primary jurisdiction
over the question of ownership involving estate property claimed by the estate, they
must be deemed superior to otherwise contrary orders issued by the Probate Court in
the exercise of what may be, regarded as merely secondary, or provisional,
jurisdiction over the same question.

WHEREFORE, the petition in G.R. No. 56504 is DISMISSED, for lack of merit.
The petitions in G.R. No. 59867 and G.R. No. 59868 are DENIED, and the judgment
of the Appellate Court, subject thereof, is affirmed in toto. The temporary restraining
order dated April 1, 1981 is lifted. Costs against petitioners.
 ABS-CBN BROADCASTING CORPORATION, G.R. No. 133347
EUGENIO LOPEZ, JR., AUGUSTO ALMEDA-LOPEZ,
and OSCAR M. LOPEZ,
Petitioners, Promulgated:
- versus - October 15, 2008
OFFICE OF THE OMBUDSMAN, ROBERTO S.
BENEDICTO,*EXEQUIEL B. GARCIA, MIGUEL V.
GONZALES, and SALVADOR (BUDDY) TAN,*
Respondents.
x------------------------------------------------------------------------------------x
DECISION
NACHURA, J.:
At bar is a petition for certiorari under Rule 65 of the Rules of Court challenging the
Joint Resolution[1] dated May 2, 1997 of then Ombudsman Aniano Desierto in OMB-
0-94-1109, dismissing the complaint filed by petitioners against private respondents,
and the Order[2] denying their motion for reconsideration.
This case stems from an all too familiar chapter in Philippine history, i.e., the
declaration of martial law by then President Ferdinand Marcos and the simultaneous
sequestration of not a few private corporations, including one of the petitioners
herein, ABS-CBN Broadcasting Corporation (ABS-CBN).
On April 18 and 26, 1994, petitioners Eugenio, Jr., Oscar and Augusto Almeda, all
surnamed Lopez, as officers and on behalf of ABS-CBN, executed separate
complaint-affidavits charging private respondents Roberto S. Benedicto, Exequiel B.
Garcia, Miguel V. Gonzalez, and Salvador (Buddy) Tan with the following crimes
penalized under the Revised Penal Code (RPC): (a) Article 298 - Execution of Deeds
by Means of Violence or Intimidation; (b) Article 315 paragraphs 1[b], 2[a], 3[a] -
Estafa; (c) Article 308 - Theft; (d) Article 302 - Robbery; (e) Article 312 -
Occupation of Real Property or Usurpation of Real Rights in Property; and (f) Article
318 - Other Deceits.
Individual petitioners complaint-affidavits[3] uniformly narrated the following facts:
1. The day after the declaration of martial law, or on September 22, 1972, just before
midnight, military troops arrived at the ABS-CBN Broadcast Center in Bohol
Avenue, Quezon City, and informed the officers and personnel thereat of the seizure
and closure of the premises by virtue of Letter of Instruction (LOI) No. 1 issued by
President Marcos ordering the closure of all radio and television stations in the
country.
2. LOI No. 1 authorized the Secretary of National Defense to take over or control, or
cause the taking over and control of all x x x newspapers, magazines, radio and
television facilities and all other media of communications throughout the country.
Consequently, a total of seven (7) television stations owned and operated by ABS-
CBN were closed down by the government.[4]
3. When it became apparent that petitioners would not be granted a permit to re-
open, ABS-CBN on October 31, 1972, terminated the services of all its employees,
giving each employee his/her retirement benefits. Corollary thereto, sometime in
November 1972, Eugenio Lopez, Jr., then president of ABS-CBN, wrote then
Secretary of National Defense, Juan Ponce Enrile, [5] of their desire to sell ABS-CBN
to the government. In that same month, however, Eugenio Lopez, Jr. was arrested by
the military, and detained at FortBonifacio for almost five (5) years until his escape
therefrom on September 30, 1977.
4. Subsequently, after the proposal to sell ABS-CBN to the Marcos government did
not materialize, ABS-CBN started negotiations with then Governor of Leyte,
Benjamin Kokoy Romualdez, who expressed his desire and intention to acquire the
former. However, the negotiations with Kokoy Romualdez in 1973 likewise did not
result in the sale and re-opening of ABS-CBN.
5. On June 6, 1973, the television and radio stations of Kanlaon Broadcasting System
(KBS) on Roxas Boulevard, Pasay City were consumed by fire. KBS was the
umbrella corporation of the Benedicto Group of broadcasting companies, including
Radio Philippines Network (RPN),[6] which operated TV Channel 9, the only
television station allowed to continue operating during the early years of the martial
law regime. Respondent Benedicto, then Philippine Ambassador to Japan, managed,
controlled, and was one of the principal stockholders of RPN.
6. On even date, both Benedicto and Alfredo Montelibano, who at that time was
Chairperson of the Board of Directors (BOD) of ABS-CBN, were in Bacolod.
Benedicto constituted Montelibano as his emissary to the Lopezes, relaying his plan
to temporarily use ABS-CBNs broadcast studios in Quezon City, from which to
operate TV Channel 9, for such period of time as may be necessary to rebuild KBS
burned studios.
7. On June 8, 1973, Montelibano met with other officers and executives of ABS-
CBN, including herein petitioners Oscar and Augusto Lopez, informing them of
Benedictos request. Oscar and Augusto, and the rest of the ABS-CBN management
team, strongly opposed the request. Eventually, however, when Montelibano
mentioned that Malacaang and Romualdez had cleared said request, the possibility of
a government-ordered confiscation of ABS-CBN, and not least of all, the possible
release of Eugenio Lopez, Jr., petitioners Oscar and Augusto, as with the rest of
ABS-CBNs executives, acquiesced to Benedictos request.
8. Thus, at noontime on the same day, representatives of KBS headed by Jose
Montalvo arrived at the Meralco Building to finalize the proposed arrangement with
ABS-CBN. The transaction between ABS-CBN and KBS is evidenced by a letter-
agreement dated June 8, 1973, which reads in relevant part:
This is to confirm the agreement arrived at between RPN and ABS-CBN to the
following effect:
1. Commencing on the date hereof, ABS-CBN hereby conveys to RPN by way of
lease its TV and radio equipment (excluding TV channels and radio frequencies) and
its premises at the ABS-CBN Broadcast Center, Bohol Avenue, Quezon City
(collectively called the leased facilities) listed in the schedule attached hereto and
marked as Annex A.
2. RPN shall pay ABS-CBN monthly rental as is reasonable compensation for the
use of the leased facilities. The amount of the rental shall be determined after a
discussion with Ambassador Roberto Benedicto.
3. The term of this lease shall commence on the date hereof and continue for such
reasonable time as may be normally necessary for the rehabilitation of RPNs
facilities unless an earlier period may be fixed by RPN and ABS-CBN after
discussion with Ambassador Benedicto.
4. RPN hereby assumes full and complete responsibility for the leased facilities and
shall be answerable for any and all losses and damages to such facilities.
xxxx
6. Upon termination of this lease, RPN shall return the possession of the leased
facilities to ABS-CBN and vacate the same without the need of notice or demand.
7. ABS-CBN, through its Chairman, Mr. Alfredo Montelibano, shall have the right to
select and designate the personnel (not to exceed 20 at any one time) to maintain and
operate all specialized TV and radio equipment.
xxxx
10. ABS-CBN shall have the right to enter the Broadcast Center at any reasonable
time during the term of this lease for the purpose of determining compliance by RPN
of the terms hereof.
xxxx
12. RPN shall not, without the prior written consent of ABS-CBN, sub-lease the
leased facilities or any part thereof nor shall any part be removed from the premises
except the equipment, which are intended for operation the Broadcast Center in due
course of operations.
9. Meanwhile, it appears that the parties were hard pressed to negotiate and fix the
monthly rental rate. Several attempts by Oscar to set up a meeting with Benedicto for
the fixing of the monthly rentals proved unsuccessful.
10. After more than four months of trying, a meeting between Oscar and Benedicto
finally materialized on October 31, 1973. At that meeting, the discussion not only
covered fixing of reasonable rentals for the lease of the ABS-CBN studios, but
likewise included the possibility of an outright sale.
11. Thereafter, the discussions and negotiations stopped as none of the petitioners
were able to meet anew with Benedicto who had supposedly referred the matter to
people above and the man on top.
12. Frustrated, then Senator Lorenzo Taada, as counsel for ABS-CBN, in May 1976,
wrote Benedicto demanding vacation of the ABS-CBN Broadcast Center and
payment of back rentals for the use of the ABS-CBN studios and facilities.
13. In response, Senator Estanislao Fernandez, on behalf of Benedicto, met with
Senator Taada in June 1976. Another meeting took place between the parties
respective counsels which included respondent Gonzales, another counsel for
Benedicto. Despite these meetings, no agreement was reached between Benedicto
and ABS-CBN. On the whole, from June 8, 1973, the time KBS occupied the ABS-
CBN studios in Quezon City, no rental was paid by the former to the latter.
14. In the years following until the Marcos government was toppled in 1986, the
ABS-CBN stations were transferred to the National Media Production Center
(NMPC) headed by Gregorio Cendaa of the Ministry of Information. Starting in
January 1980, KBS, on a staggered basis, transferred possession, control and
management of ABS-CBNs provincial television stations to NMPC. Some of the
radio stations of ABS-CBN were turned over to the governments Bureau of
Broadcast, while some were retained by KBS thru the Banahaw Broadcasting
Corporation (BBC) and Radio Philippines Network (RPN).
15. Parenthetically, during a military inventory in 1979-1980, and a visit by ABS-
CBN executives at ABS-CBNs radio transmitting stations in Meycauayan, Bulacan,
headed by petitioner Augusto, on August 13, 1984, ABS-CBN properties and
massive equipment were found to be missing. In addition, the musical records and
radio dramas accumulated by ABS-CBN in a span of twenty-five (25) years and
stored in its library were now gone.
16. In June 1986, President Corazon Aquino, acting on the request of ABS-CBN
through Senator Taada, returned to ABS-CBN these radio and TV stations on a
gradual and scheduled basis.
As required by the Ombudsman, the respondents, except for Garcia, filed their
respective counter-affidavits,[7] with Benedicto adopting that of Gonzales, denying
petitioners charges, and averring that:
1. The execution of the June 8, 1973 letter-agreement was a free and voluntary act of
ABS-CBN which agreed thereto fully expecting remuneration in the form of rentals,
thus:
2. RPN shall pay ABS-CBN monthly rental as is reasonable compensation for the
use of the lease facilities. The amount of the rental shall be determined after a
discussion with Ambassador Roberto Benedicto.
2. In that regard, respondent Gonzales, counsel for KBS, RPN and Benedicto,
participated in the negotiations and was present at three (3) meetings for the fixing of
rentals. Also in attendance were former Senator Estanislao Fernandez, specially
engaged to represent RPN and Benedicto, and Senator Taada and petitioner Augusto
for ABS-CBN.
3. Initially, the discussions centered on the possible formulas for the fixing of rentals.
Later on, however, before an agreement on the rental rate could be reached, the
discussions shifted to the possibility of an outright sale. The discussions on the sale
were expanded as various creditors of ABS-CBN had made and presented claims
before respondent Garcia, then Comptroller of KBS-RPN.
4. However, the discussions were discontinued when then Secretary of National
Defense Juan Ponce Enrile reminded KBS of the sequestered status of ABS-CBN
facilities such that arrangements undertaken for the use and lease thereof should be
taken up with the government.[8]
5. Meanwhile, in July 1974, Secretary Ponce Enrile authorized KBS, acting on
behalf of BBC, to make use of the ABS-CBN provincial stations which were not
covered by the June 8, 1973 letter-agreement. The authorization was granted in
connection with the increased undertakings assigned by the Department of National
Defense (DND) to KBS, specifically, for the governments mass-media
developmental peace and order nationwide campaign.
7. Thereafter, in October 1977, RPN vacated the ABS-CBN studios and turned over
the properties to George Viduya, the general manager of the government station
GTV-4. Viduya continued operations of GTV-4 at the ABS-CBN properties, after
which, the properties were all delivered in 1979 to the NMPC headed by Cendaa.
The provincial stations were delivered and turned over on a staggered basis, with the
DZRI station in Dagupan handed over in 1979. The successive transfer of all ABS-
CBN studios and stations, in Quezon City and the provinces, were covered by
receipts which were collated by the law firm of respondent Gonzales retained by
KBS for that purpose.
8. The use of the ABS-CBN studios involved only three (3) juridical entities, RPN,
ABS-CBN and the government. The charges leveled by petitioners in their
complaint-affidavits merely point to civil liability as specified in the letter-agreement
itself:
4. RPN hereby assumes full and complete responsibility for the leased facilities and
shall be answerable for any and all losses and damages to such facilities.
On the whole, the allegations of petitioners do not support the elements of the crimes
charged.
9. Lastly, respondents invoke the grant of absolute immunity to Benedicto as part of
the Compromise Agreement in Sandiganbayan Civil Case No. 34 which states:
The Government hereby extends absolute immunity, as authorized under the
pertinent provisions of Executive Orders Nos. 1, 2, 14 and 14-A, to Benedicto, the
members of his family, officers and employees of the corporations above mentioned,
who are included in past, present and future cases and investigations of the
Philippine Government, such that there shall be no criminal investigation or
prosecution against said persons for acts, omissions committed prior to February 25,
1986 that may be alleged to have violated any penal law, including but not limited to
Republic Act No. 3019, in relation to the acquisition of any asset treated, mentioned
or included in this Agreement.

Expectedly, the petitioners in their joint reply-affidavit refuted respondents counter-
affidavits. Contrary to respondents allegations, petitioners reiterated Benedictos
over-all ploy, in conspiracy with the other respondents who were officers of KBS
and/or RPN, to use and occupy ABS-CBN properties without paying compensation
therefor. Petitioners maintain that respondents grand scheme was to take-over ABS-
CBN, albeit ostensibly covered by the letter-lease agreement, giving the take over a
semblance of legality.
Thereafter, with the issues having been joined, the Ombudsman issued the herein
assailed Joint Resolution dismissing petitioners complaints. To the Ombudsman, the
following circumstances did not give rise to probable cause necessary to indict
respondents for the various felonies charged:
1. The Letter-Agreement of June 8, 1973 belie any illegal take-over of the ABS-CBN
complex.
While the Lopezes are now complaining that the letter-agreement was virtually
forced unto them thru intimidation, hence, the vitiated consent of Mr. Montelibano,
there is nothing however which the complainants adduced to prove this allegation
except their threadbare allegations of threats. On the contrary, it appears that the
Lopezes blessed the letter-agreement hoping that their financial difficulties with
respect to the affairs of the ABS-CBN and their problem concerning the continued
detention of Eugenio Lopez, Jr. by the military, would at least be mitigated. x x x
It is thus clear that the ABS-CBN complex was freely leased by Montelibano upon
consultation with the Lopezes who entertained some ulterior motives of their own
which they expect would result from the agreement, either directly or indirectly. Of
course, the Lopezes may not have realized some of these expectations (i.e., the
rentals, the release of Eugenio, Jr. from detention) but this does not change the fact
that the parties consent to the contract appears to have been freely given. Perforce,
the complaint under Article 298 of the Revised Penal Code of the Philippinesmust
fail.
2. Other TV and radio stations were taken over pursuant to LOI 1-A, hence no
violations of Art. 312, 302 and 308 of RPC.
To the alleged violation of Art. 312 of the Revised Penal Code, the respondents
contended that their use of ABS-CBNs facilities other than those included in the
lease-agreement, was in fact with the authority of the then Department of National
Defense (DND). There is no denying that all of the ABS-CBN properties including
the provincial ones are under sequestration pursuant to Presidential Letter of
Instruction No. 1-A, issued on September 28, 1972. It was under the strength of this
Presidential Letter of Instruction that KBS-RPN was authorized to enter,
occupy and operate the facilities of ABS-CBN. This was also confirmed by DND
Secretary Juan Ponce Enrile in his letter to RPN dated June 26, 1976. Unmistakably,
KBS-RPNs possession of the ABS-CBNs property other than those in the ABS-CBN
complex is primarily anchored on the authority pursuant to LOI 1-A. With this
apparent authority, this investigation can not see in any which way how the
respondents could have illegally taken over the properties of the [petitioners],
particularly those in the province; there is therefore no convincing proof to support a
charge under Article 312 of the Revised Penal Code. It may come to mind that
occupation of real property or usurpation of real rights in property under Article 312
requires as one of its elements the presence of violence against or intimidation of
persons as a means in securing real property or rights belonging to another. Plainly,
this element is not shown. The complainants may have felt intimidated by the
sequestration order, but it is in the nature of such Order to be coercive. It was an act
flowing from the martial law powers of then President Marcos.
3. No unlawful taking as to justify charges for Robbery or Theft.
Robbery and Theft under Articles 302 and 308 of the Revised Penal Code were also
attributed by the [petitioners] against the respondents. From the records, it is clear
that KBS-RPN has juridical possession of the ABS-CBN properties subject of this
complaint; a right which can be validly set-up even against ABS-CBN itself. It can
be recalled that KBS-RPN was authorized to enter, occupy and operate ABS-CBN
facilities by virtue of the authority granted by the President, pursuant to LOI No. 1-
A. Aside, the Broadcast Center itself was covered by the lease-agreement. Under
these situations, there is obviously no basis to charge the respondents for robbery and
theft; for these penal offense require as an element the act of unlawful taking or
asportation. Asportation is simply poles apart from the juridical possession which
KBS-RPN enjoyed over the properties.
4. No deceit was employed to gain possession of the Broadcast Center and the
provincial TV and radio stations.
In the prosecution for estafa under [Articles 315, paragraphs 2(a), 3(a) and 318] of
the Revised Penal Code, it is indispensable that the element of deceit, consisting in
the false statement of fraudulent representation of the accused, be made prior to, or,
at least simultaneously with, the delivery of the thing by the complainants, it being
essential that such false statement or fraudulent representation constitutes the very
cause or the only motive which induces the complainants to part with the thing. If
there be no such prior or simultaneous false statement or fraudulent representation,
any subsequent act of the respondent, however fraudulent or suspicious it may
appear, can not serve as basis for the prosecution of these crimes.
[From petitioners complaint-affidavits], it is very clear that the late Alfredo
Montelibano was the one who talked with Roberto Benedicto, preparatory to the
signing of the lease-agreement. As the complainants did not identify exactly which
constitute the deceitful act (or the intimidation) which could have induced the
Lopezes into accepting the lease agreement, in most probability, the occurrences
which vitiated their consent happened during this preliminary discussion. Noticeably
however, it is not Alfredo Montelibano, the one who supposedly talked with
Benedicto, who is testifying on the alleged veiled threat or deceits, if there are.
Precisely, because he is already dead.
x x x [I]t is submitted that the Lopezes can not now testify on something which are
not derived from their own personal perception. The bottomline is that what they are
now trying to adduce, pertaining to the alleged deceits [or intimidation] attending the
negotiation of the lease agreement are purely hearsay. This is a matter which only
Alfredo Montelibano could testify competently.[9]
The Ombudsman saw no need to discuss the defenses of prescription and immunity
from suit raised by the respondents given his dismissal of the complaint-affidavits on
the merits. However, in a subsequent Order denying petitioners Motion for
Reconsideration of the Joint Resolution, the Ombudsman lifted the Office of the
Chief Legal Counsels ratiocination for dismissing the complaint-affidavits, thus:
Incidentally, RPN has been identified as among the corporation in which respondent
Benedicto has substantial interests. In fact, it was one of the subject matters of the
Compromise Agreement reached by the government and respondent Benedicto in
Sandiganbayan Civil Case no. 34.
In that Compromise Agreement, for and in consideration of respondent Benedictos
cession of equities, and assignment of his rights and interest in corporations therein
listed, among them RPN, the government extended absolute immunity to Benedicto,
including officers of his corporations as therein mentioned, such that there shall be
no criminal investigation or prosecution against said persons for acts or omissions
committed prior to February 25, 1986 that may be alleged to have violated any penal
law, including but not limited to Republic Act No. 3019, in relation to the acquisition
of any asset treated or included in this Agreement.
In effect, the People of the Philippines as the offended party in criminal cases has
waived its right to proceed criminally against Benedicto, et. al., for whatever crime
they may have committed relative to, among others, the alleged plunder of ABS-
CBN properties. Again, whatever liability that remains thereabout on respondents
part is perforce only civil in nature.[10]
Hence, this recourse by the petitioners alleging grave abuse of discretion in the
Ombudsmans Joint Resolution and Order.
Before anything else, we note that on April 5, 1999 and June 13, 2000, the respective
counsel for respondents Tan and Benedicto, in compliance with Section 16, [11] Rule 3
of the Rules of Court, filed pleadings informing the Court of their clients demise.
Benedictos counsel filed a Notice of Death (With Prayer for Dismissal) [12] moving
that Benedicto be dropped as respondent in the instant case for the reason that the
pending criminal cases subject of this appeal are actions which do not survive the
death of the party accused.
Petitioners opposed the move to drop Benedicto as respondent, citing Torrijos v.
Court of Appeals[13] which held that civil liability of the accused survives his death;
because death is not a valid cause for the extinguishment of civil obligations.
Our ruling on this issue need not be arduous. The rules on whether the civil liability
of an accused, upon death, is extinguished together with his criminal liability, has
long been clarified and settled in the case of People v. Bayotas:[14]
1. Death of an accused pending appeal of his conviction extinguishes his criminal
liability as well as the civil liability based solely thereon. As opined by Justice
Regalado, in this regard, the death of the accused prior to final judgment terminates
his criminal liability and only the civil liability directly arising from and based solely
on the offense committed, i.e., civil liability ex delicto in senso strictiore.
2. Corollarily, the claim for civil liability survives notwithstanding the death of
accused, if the same may also be predicated on a source of obligation other than
delict. Article 1157 of the Civil Code enumerates these other sources of obligation
from which the civil liability may arise as a result of the same act or omission:
a) Law
b) Contracts
c) Quasi-contracts
d) x x x
e) Quasi-delicts
3. Where the civil liability survives, as explained in Number 2 above, an action for
recovery therefor may be pursued but only by way of filing a separate civil action
and subject to Section 1, Rule 111 of the 1985 Rules on Criminal Procedure [15] as
amended. The separate civil action may be enforced either against the
executor/administrator or the estate of the accused, depending on the source of
obligation upon which the same is based as explained above.

4. Finally, the private offended party need not fear a forfeiture of his right to file this
separate civil action by prescription, in cases where during the prosecution of the
criminal action and prior to its extinction, the private-offended party instituted
together therewith the civil action. In such case, the statute of limitations on the civil
liability is deemed interrupted during the pendency of the criminal case, conformably
with provisions of Article 1155 of the Civil Code, that should thereby avoid any
apprehension on a possible [de]privation of right by prescription.
Applying the foregoing rules, ABS-CBNs insistence that the case at bench survives
because the civil liability of the respondents subsists is stripped of merit.
To begin with, there is no criminal case as yet against the respondents. The
Ombudsman did not find probable cause to prosecute respondents for various
felonies in the RPC. As such, the rule that a civil action is deemed instituted along
with the criminal action unless the offended party: (a) waives the civil action, (b)
reserves the right to institute it separately, or (c) institutes the civil action prior to the
criminal action,[16] is not applicable.
In any event, consistent with People v. Bayotas,[17] the death of the accused
necessarily calls for the dismissal of the criminal case against him, regardless of the
institution of the civil case with it. The civil action which survives the death of the
accused must hinge on other sources of obligation provided in Article 1157 of the
Civil Code. In such a case, a surviving civil action against the accused founded on
other sources of obligation must be prosecuted in a separate civil action. In other
words, civil liability based solely on the criminal action is extinguished, and a
different civil action cannot be continued and prosecuted in the same criminal action.
Significantly, this Court in Benedicto v. Court of Appeals,[18] taking cognizance of
respondent Benedictos death on May 15, 2000, has ordered that the latter be dropped
as a party, and declared extinguished any criminal as well as civil liability ex
delicto that might be attributable to him in Criminal Cases Nos. 91-101879 to 91-
101883, 91-101884 to 101892, and 92-101959 to 92-101969 pending before the
Regional Trial Court of Manila.
Lastly, we note that petitioners appear to have already followed our ruling in People
v. Bayotas[19] by filing a separate civil action to enforce a claim against the estate of
respondent Benedicto.[20] The claim against the estate of Benedicto is based on
contractthe June 8, 1973 letter- agreementin consonance with Section 5, [21] Rule 86
of the Rules of Court. Plainly, the dropping of respondents Benedicto and Tan as
parties herein is in order.
We now come to the core issue of whether the Ombudsman committed grave abuse
of discretion in dismissing petitioners complaint against the respondents. We rule in
the negative and, accordingly, dismiss the petition.
We cannot overemphasize the fact that the Ombudsman is a constitutional officer
duty bound to investigate on its own, or on complaint by any person, any act or
omission of any public official, employee, office or agency, when such act or
omission appears to be illegal, unjust, improper, or inefficient. [22] The raison d
etre for its creation and endowment of broad investigative authority is to insulate it
from the long tentacles of officialdom that are able to penetrate judges and fiscals
offices, and others involved in the prosecution of erring public officials, and through
the execution of official pressure and influence, quash, delay, or dismiss
investigations into malfeasances and misfeasances committed by public officers. [23]
In Presidential Commission on Good Government (PCGG) v. Desierto,[24] we dwelt
on the powers, functions and duties of the Ombudsman, to wit:
The prosecution of offenses committed by public officers is vested primarily in the
Office of the Ombudsman. It bears emphasis that the Office has been given a wide
latitude of investigatory and prosecutory powers under the Constitution and Republic
Act No. 6770 (The Ombudsman Act of 1989). This discretion is all but free from
legislative, executive or judicial intervention to ensure that the Office is insulated
from any outside pressure and improper influence.
Indeed, the Ombudsman is empowered to determine whether there exist reasonable
grounds to believe that a crime has been committed and that the accused is probably
guilty thereof and, thereafter, to file the corresponding information with the
appropriate courts. The Ombudsman may thus conduct an investigation if the
complaint filed is found to be in the proper form and substance. Conversely, the
Ombudsman may also dismiss the complaint should it be found insufficient in form
or substance.
Unless there are good and compelling reasons to do so, the Court will refrain from
interfering with the exercise of the Ombudsmans powers, and respect the initiative
and independence inherent in the latter who, beholden to no one, acts as the
champion of the people and the preserver of the integrity of public service.
The pragmatic basis for the general rule was explained in Ocampo v. Ombudsman:
The rule is based not only upon respect for the investigatory and prosecutory powers
granted by the Constitution to the Office of the Ombudsman but upon practicality as
well. Otherwise, the functions of the courts will be grievously hampered by
innumerable petitions assailing the dismissal of investigatory proceedings conducted
by the Office of the Ombudsman with regard to complaints filed before it, in much
the same way that the courts would be extremely swamped if they would be
compelled to review the exercise of discretion on the part of the fiscals or
prosecuting attorneys each time they decide to file an information in court or dismiss
a complaint by private complainants.[25]
From the foregoing, it is crystal clear that we do not interfere with the Ombudsmans
exercise of his investigatory and prosecutory powers vested by the Constitution. In
short, we do not review the Ombudsmans exercise of discretion in prosecuting or
dismissing a complaint except when the exercise thereof is tainted with grave abuse
of discretion.
By grave abuse of discretion is meant such capricious and whimsical exercise of
judgment tantamount to lack of jurisdiction. The abuse of discretion must be so
patent and gross as to amount to an evasion of a positive duty or a virtual refusal to
perform a duty enjoined by law, or to act at all in contemplation of law, as where the
power is exercised in an arbitrary and despotic manner by reason of passion or
hostility.[26] In this regard, petitioners utterly failed to demonstrate the Ombudsmans
abuse, much less grave abuse, of discretion.
Apart from a blanket and general charge that remaining respondents herein, Gonzales
and Garcia, are officers of KBS/RPN and/or alter egos of Benedicto, petitioners
complaint-affidavits are bereft of sufficient ground to engender a well-founded belief
that crimes have been committed and the respondents, namely, Gonzales and Garcia,
are probably guilty thereof and should be held for trial. [27] Certainly, the Ombudsman
did not commit grave abuse of discretion in dismissing petitioners complaint-
affidavits.
From the entirety of the records, it is beyond cavil that petitioners seek to attach
criminal liability to an unequivocally civil undertaking gone awry. As pointed out by
the Ombudsman, although the petitioners may not have realized their expectations in
entering into the June 8, 1973 letter-agreement, such does not render their consent
thereto defective.
The execution and validity of this letter-agreement is connected with respondents
culpability for the felonies charged as these include the element of whether they had
juridical possession of the ABS-CBN properties. Essentially, petitioners claim they
did not freely give their consent to the letter-agreement. However, on more than one
occasion, petitioners have invoked the letter-agreements provisions, and made claims
thereunder.
First, petitioners met and discussed with respondents the fixing of the rental rate for
the ABS-CBN studios in Quezon City as provided in paragraph 2 of the letter-lease
agreement. Next, petitioners counsel wrote a demand letter to respondents for the
payment of rentals for the latters occupation and use of ABS-CBN properties
pursuant to the letter-agreement. Last and most importantly, petitioners have made a
claim against the estate of Benedicto based on the same June 8, 1973 letter-
agreement.
This action of petitioners clearly evinces their ratification of the letter-agreement. As
previously discussed, the civil liability of respondents Benedicto and Tan hinging on
the charged criminal acts herein was extinguished upon their death. But other civil
liabilities founded on other sources of obligations under Article 1157 of the Civil
Code may still be prosecuted either against the estate of the deceased if based on
contract,[28] or against the executors and administrators of the deceaseds estate if
based on quasi-delict.[29]
As petitioners have ratified the letter-agreement, even after the lifting of martial law
and the toppling of the Marcos government, and advanced the validity of the letter-
agreement in their claim against the estate of Benedicto, they cannot, in the same
breath, aver that respondents actuations in the execution of the letter-agreement were
criminal in nature, or that the letter-agreement was more ostensible than real and to
insist on the prosecution of respondents for felonies supposedly committed in
connection with this ubiquitous letter-agreement.[30]
In fine, the Ombudsman did not abuse his discretion in determining that the
allegations of petitioners against respondents are civil in nature, bereft of criminal
character. Perforce, he was correct in dismissing petitioners complaint-affidavits.
WHEREFORE, premises considered, the petition is hereby DISMISSED. Roberto
S. Benedicto and Salvador Tan are dropped as private respondents without prejudice
to the filing of separate civil actions against their respective estates. The assailed
Joint Resolution and Order of the Ombudsman in OMB-0-94-1109 are AFFIRMED.
SO ORDERED.
G.R. No. L-2360 December 29, 1949
GAVINO ALDAMIZ, as administrator of the estate of the deceased Santiago
Rementeria y Aldamizcogeascoa, petitioner,
vs.
THE JUDGE OF THE COURT OF FIRST INSTANCE OF MINDORO, THE
PROVINCIAL SHERIFF OF MINDORO and JUAN L. LUNA, respondents.
Jose W. Diokno and Daniel Romualdez for petitioner.
Laurel, Sabido, Almario and Laurel and Juan L. Luna for respondents.
MORAN, C.J.:
This is a petition for certiorari filed by Gavino Aldamiz, administrator of the testate
of the deceased Santiago Rementeria y Aldamizcogeascoa, to set aside the order of
the Court of First Instance of Mindoro issued in the said testate estate proceedings,
fixing the amount of fees for respondent Juan L. Luna, as attorney for said
administrator.
The facts material to the issues raised in the petition are as follows:
Santiago Rementeria y Aldamizcogeascoa, the decedent was a Spaniard and member
of the commercial partnership "Aldamiz y Rementeria." The other members were the
brothers, Gavino and Jose, surnamed Aldamiz. Santiago Rementeria died in Spain in
1937, and probate proceeding No. 705 was instituted in the same year in the Court of
First Instance of Mindoro by Gavino Aldamiz represented by Atty. Juan L. Luna.
Gavino Aldamiz was appointed administrator and as such was represented by
respondent Atty. Juan Luna up to January 21, 1947, when the order complained for
was issued. In that order it is said that "said attorney is the one who instituted this
testate proceeding ten years ago and has from its incipiency to the present stage of
the proceedings actively intervened in the same."lawphi1.net
On January 15, 1947, After ten years from the date of his appointment, Gavino
Aldamiz, as administrator, through his attorney, Juan L. Luna, submitted his accounts
for the years 1944, 1945 and 1946 and also a project of partition with a view to
closing the proceedings. On said date, the court approved the accounts by refused to
approve the project of partition unless all debts including attorney's fees be first paid.
In the project of partition, it was expressly stated that attorney's fees, debts and
incidental expenses would be proportionately paid by the beneficiaries after the
closure of the testate proceedings, but the court refused to sanction this clause of the
project. It is for this reason that right then and there, Attorney Luna, to comply with
the wishes of the court, without previously preparing and filing a written petition to
have his professional fees fixed, and without previous notice to all the interested
parties, submitted evidence of his services and professional standing so that the court
might fix the amount of his compensation and the administrator may make payment
thereof. This failure to file a written claim and to notify the interested parties thereof
was not due to bad faith or fraudulent purpose but to an honest belief on the part of
the respondent attorney that such requirements were not necessary under the
circumstance.
In this connection, it must be stated, in justice to Attorney Luna, that during the ten
years he served as attorney for the administrator and during the 25 years as legal
consultants to Santiago Rementeria, Gavino Aldamiz and Jose Aldamiz individually
and as commercial partnership under the firm name "Aldamiz y Rementeria," he
never took the trouble of charging them for his professional services, thus showing
disinterested and extreme liberality on his part due to friendship and other personal
considerations toward his clients. And it is to be observed further that even after ten
years of active work in the testate proceedings, when he wanted to close the same
and it was then time for him to demand payment for his services, he showed no
interest in demanding preferring to leave the matter to the future negotiation or
understanding with the interested parties. And when the amount of his fees was fixed
by the court and Gavino Aldamiz asked him for a substantial reduction, he answered
that it was not he who had fixed the amount but the court, and advised his client to
file a motion for reconsideration, with the assurance that he would offer no objection
to any reduction in amount and to any extension of the time for paying what might
be granted by the court. And again, when Gavino Aldamiz paid him P5,000 on
account, respondent attorney told him that he would be satisfied with any additional
amount that Gavino might later desire to pay him. Only subsequent occurrences
which proved distasteful to the parties, led them to take steps which culminated in
the filing of the instant civil action.
At the time respondent's evidence was submitted to the court, the interested parties
who were residing in the Philippines were Gavino Aldamiz and his brother Jose
Aldamiz. The others were then residing in Spain. No written claim had ever been
filed for respondent's fees, and the interested parties had not been notified thereof nor
of the hearing, not even Gavino Aldamiz who did not know when he was called to
testify that he would testify in connection with respondent's fees. The Court, after
considering the whole evidence presented, issued its order of January 21, 1947,
awarding respondent Attorney Luna, in payment of his professional services, an
aggregate sum of P28,000 in the following manner:
1. For the institution, preparation of the pleadings in the voluminous probate case,
allowance of the will, project of partition and the final closing of this proceeding, —
P15,000;
2. For the registration of a parcel of land of seventy-eight hectares in favor of the
testate, — P5,000;
3. For three naturalization cases at the rate of P1,000 each, — P3,000; and
4. For services rendered in the deduction of inheritance tax from P28,000 to P433.40
— P5,000.
The Court ordered payment of these amounts within thirty days. Petitioner Gavino
Aldamiz received copy of this order on February 21,1948. Out of the total amount of
P28,000, petitioner was able to pay P5,000 only, and upon his failure to pay the
balance of P23,000 after several demands made upon him by respondent attorney,
the latter on April 17, 1948, filed an ex-parte motion for execution which was
granted by the respondent Court on April 19,1948. Pursuant to the order of execution
on two parcels of land belonging, not to the testate estate of Santiago Rementeria y
Aldamizcogeascoa, but to the commercial partnership "Aldamiz y Rementeria" with
a total area of three hundred fifty seven(357) hectares, more or less, assessed at one
hundred eighty-two thousand, three hundred and sixty pesos (P182,360), which was
sold at a public auction on July 20,1948, in favor of respondent attorney for only
twenty thousand pesos(P20,000). This sale was made after preliminary injunction
had been issued by this court in the instant case.
We believe and so hold that the order of the respondent court issued on January
21,1948, fixing the amount of respondent attorney's fees is null and void. The correct
procedure for the collection of attorney's fees, is for the counsel to request the
administrator to make payment and file an actin against him in his personal capacity
and not as an administrator should he fail to pay (Palileo vs. Mendoza, G.R. No.
47106, 40 Off. Gaz. [8th Supp.], 132.) 1 If the judgment is rendered against the
administrator and he pays, he may include the fees so paid in his account to the
court. (Uy Tioco vs. Imperial, 53 Phil., 802.) The attorney also may, instead of
bringing such an action, file a [petition in the testate or intestate proceeding "asking
that the court, after notice to all persons interested, allow his claim and direct the
administrator to pay it as an expense of administration." (Emphasis ours.) (Escueta
vs. Sy Juilliong, 5 Phil., 405.)
In the instance case, as above stated, no written petition for the payment of attorney's
fees has ever been filed by the respondent attorney and the interested parties had not
been previously notified thereof nor of the hearing held by the court. Consequently,
the order issued by the respondent court on January 21, 1947, and all subsequent
orders implementing it, are null and void, as having been issued an excess of
jurisdiction.
We also hold that the order of execution issued on April 19,1948, is null and void,
not only because it was intended to implement the order of January 21, 1947, which
in itself was null and void, but because a writ of execution is not the proper
procedure allowed by the Rules of the Court for the payment of debts and expenses
of administration. The proper procedure is for the court to order the sale of personal
estate or the sale of mortgaged of real property of the deceased and all debts or
expenses of administration should be paid out of the proceeds of the sale or
mortgage. The order for the sale or mortgage should be issued upon motion of the
administrator and with the written notice to all the heirs, legatees and devisees
residing in the Philippines, according to Rule 89, section 3, and Rule 90, section 2.
And when sale or mortgage of real estate is to be made, the regulations contained in
Rule 90, section 7, should be complied with.
Execution may issue only where the devisees, legatees or heirs have entered into
possession of their respective portions in the estate prior to settlement and payment
of the debts and expenses of administration and it is later ascertained that there are
such debts and expenses to be paid, in which case "the court having jurisdiction of
the estate may, by order for that purpose, after hearing, settle the amount of their
several liabilities, and order how much and in what manner each person shall
contribute, and may issue execution if circumstances require" (Rule 89, section
6; see also Rule 74, section 4; Emphasis ours). And this is not the instant case.
It is alleged by respondent that petitioner is guilty of laches. True that petitioner
failed to appeal from the order of January 21, 1947, within the time provided by the
Rules and the instant petition for certiorari was filed one (1) year, four (4) months
and fourteen (14) days after petitioner had received a copy of said order. And we
have held in Prifeta vs. David, 40 Off. Gaz., 14th Supp., p. 152, 2 that orders issued
without previous notice to parties will be deemed cured if said parties fail to appeal
within time provided by the rules and their appeal is lost due to their own negligence.
But here, aside from petitioner, there are interested parties who have never been
notified of the order complained of, and as to them, said order has not become final
and executory . And with respect to petitioner, he has not lost his appeal through his
own negligence. When he received the notice of the order of the Court fixing
respondent's fees in the amount of P28,000, he immediately wrote his lawyer a letter
asking for a substantial reduction and extension of time to pay. The lawyer answered
advising him to file his motion for reconsideration within thirty days, but he received
his lawyer's letter after said period had expired. And petitioner had no other attorney
to advice him except respondent who was his adversary on the matter now in dispute.
After receiving said letter, he again sought equitable compromise with respondent
attorney and later paid him P5,000, and respondent then told him that he would be
satisfied with whatever additional amount petitioner might desire to pay him. And
petitioner would perhaps have taken no action were it not because without previous
notice to him, the respondent attorney asked authority from the court to sell two
parcels of land totalling 13 hectares, for the payment of said professional fees and
later, on July 26, 1947, respondent attorney, again without previous notice to
petitioner, filed a motion for execution for the same purpose. Both motions were,
however, abandoned. But a second motion for execution was filed by respondent
without petitioner's knowledge, which was granted by the Court on April 19, 1948.
Respondent Sheriff levied on two parcels of land belonging to the partnership
"Aldamiz y Rementeria" with a total area of 357 hectares and assessed at P182,360
and the sale was announced by the sheriff for July 20, 1948. Two motions for
consideration were filed by petitioner, one on June 16,1948, and the other on June
28, 1948, asking that the order of January 21, 1947, and the order of execution of
April 19,1948 be set aside, but both motions were denied and the last order of denial
is dated July 1,1948. The petition in the instant case was filed on July 17, 1948. We
hold that under the circumstances, particularly the fiduciary relation between
petitioner and respondent attorney, the former is not guilty of laches.

Respondents maintain that the case for the petitioner is one of pure technicality,
premised upon a supposed failure of the respondent attorney to follow a supposed
procedure. It is said that the amount of P28,000 fixed and allowed by the respondent
court as professional fees of the respondent attorney is not unconscionable or
unreasonable because the entire estate was worth P315,112 and now it is worth about
half a million pesos because of many improvements existing thereon. It appears,
however, that due to lack of notice upon the interested parties mistakes have been
committed by but the court which could have been avoided. For instance, the court
awarded fees for services rendered not to the estate but to the other persons, such as
the supposed services in connection with the petitions for naturalization filed in
behalf of Gavino Aldamiz and Jose Aldamiz and the application for registration of a
parcel of land of 78 hectares filed not in favor of the testate estate but of the
partnership "Aldamiz y Rementeria." These services evidently could not be charged
against the estate of Santiago Rementeria. And furthermore, due to lack of
preparation on the part of respondent attorney, it appears that while he was testifying
to his professional services he was apparently not sure of being able to recite them all
for at the end of his testimony he said: "Son los servicios que me acuerdo ahora. . . ."
Had he been afforded ample time to recollect the nature and details of his long and
continuos services, considering his high professional standing as recited by the
respondent court in its disputed order and the increased value of the estate then,
perhaps, a more reasonable compensation would have been fixed, or at least, the
court could have rendered a decision with full knowledge of all the facts and with
justice to all the parties concerned.

For all the foregoing, the order of the respondent court of January 21,1947, and all
the subsequent orders implementing it, particularly the order of execution issued by
the court on April 19, 1948, and the sale made by the sheriff on July 20,1948, in
favor of respondent attorney, are null and void and are hereby set aside, with costs
against respondents. It is so ordered.
G.R. No. L-3342 April 18, 1951
Intestate Estate of the deceased Lee Liong. RAFAEL A. DINGLASAN, ET
ALS., petitioners-appellees,
vs.
ANG CHIA, as Administratrix of the above intestate, LEE BING HOO alias
CLARO LEE, and LEE BUN TING,respondents-appellants.
Quisumbing, Sycip, Quisumbing and Zalazar for appellants.
Hector Bisnar and Rafael Dinglasan for appellees.
BAUTISTA ANGELO, J.:
This is an appeal by Ang Chia, her son Claro Lee, and Lee Bun Ting from an order
of the Court of First Instance of Capiz, issued in the intestate estate proceedings of
the deceased Lee Liong, holding in abeyance the approval of their petition for an
extrajudicial partition and the closing of said proceedings until after the final
termination of Civil Case No. V-331 of the same court, entitled Rafael Dinglasan, et
al., vs. Lee Bun Ting, Claro Lee and Ang Chia, in her personal capacity and as
administratrix of the estate of Lee Liong.
Rafael Dinglasan et al. filed a case in the Court of First Instance of Capiz on
February 16, 1948, against Ang Chia, her son Claro Lee and one Lee Bun Ting to
recover the ownership and possession of a parcel of land located at Capiz, Capiz, and
damages in the amount of P1,000 a month. Subsequently, the plaintiffs filed a motion
for the appointment of a receiver to which counsel for the defendants objected, and it
was only at the hearing of said motion when plaintiffs discovered that there was
pending in the same court a case concerning the intestate estate of Lee Liong. In
view thereof, the motion for the appointment of a receiver was withdrawn and the
plaintiffs filed an amended complaint seeking the inclusion as party-defendant of the
administratrix of the estate, who is the same widow Ang Chia, who was already a
party-defendant in her personal capacity. In order to protect their interests, the
plaintiffs also filed in the intestate proceedings a verified claim in intervention and a
motion praying that a co-administrator of the estate be appointed and the bond of the
administratrix in the amount of P500 be increased to P20,000. By their claim in
intervention, the plaintiffs made of record the pendency of the aforesaid civil case
No. V-331 and prayed that the intestate proceedings be not closed until said civil case
shall have been terminated.
On June 21, 1948, the administratrix filed a motion to dismiss the claim in
intervention and objected to the motion for the increase of her bond and for the
appointment of a co-administrator. On August 4, 1948, the court issued an order
denying the petition for a co-administrator but increasing the bond to P5,000, and as
regards the petition not to close the intestate proceedings until after civil case No. V-
331 shall have been decided, the court stated that it would act thereon if a motion to
close the proceedings is presented in due time and is objected to by petitioners. The
court however took cognizance of the pendency of said civil case No. V-331. The
administratrix did not appeal from said order nor file a new bond and instead moved
for the closing of the proceedings and her discharge as administratrix on the ground
that the heirs had already entered into an extrajudicial partition of the estate. To this
motion the petitioners objected, whereupon the court issued on July 15, 1949, an
order holding in abeyance the approval of the partition and the closing of the
proceedings until after the decision in said civil case has been rendered. From this
order the administratrix and the heirs appealed and now assign the following errors:
I
The lower court erred in taking cognizance of and being guided by the supposed
"claim" of petitioners-appellees.
II
The lower court erred in holding in abeyance the closing of the intestate proceedings
pending the termination of the separate civil action filed by the petitioners-appellees.
III
The lower court erred in ordering the administratrix to file an increased bond of
P5,000.
Under the first assignment of error, the appellants question the validity of the order
of the lower court of August 4, 1948, whereby the court took cognizance of the civil
case filed by the appellees against the administratrix to recover possession of lot No.
398 and damages, and required the administratrix to file a new bond of P5,000,
contending that by taking such action the court assumed jurisdiction over the case
which it cannot do because its jurisdiction as probate court is limited and especial
(Guzman vs. Anog and Anog, 37 Phil. 61). They claim further that probate
proceedings are purely statutory and their functions are limited to the control of the
property upon the death of its owner and cannot extend to the adjudication of
collateral questions. (I Woermer, The American Law of Administration, 514, 662-
663.) Appellees on the other hand claim that said order of August 4, 1948, is not the
subject of this appeal, as no appeal has been taken by the appellants from said order
and the same has long become final; so that the present appeal is only from the order
of the lower court dated July 15, 1949, which denies the motion of the appellees to
terminate the intestate proceedings on the ground that they have already agreed on
the extrajudicial settlement of the estate and to relieve the administratrix of the
obligation of filing an increased bond.
There is merit in the claim of the appellees. It really appears from the record that the
order increasing the bond of the administratrix to P5,000 was issued on August 4,
1948, and from said order no appeal has been taken by the appellants which has
become final long ago and that the present appeal is only from the order of the lower
court dated July 15, 1949. It is true that the lower court in its later order of July 15,
1949, reiterated its order to the administratrix to file a new bond in the amount of
P5,000 within 30 days after receipt thereof, but this cannot have the effect of
receiving the former order of August 4, 1948, nor does it give the appellants the right
to question in this instance the validity of said order, which has long become final.
Moreover, an order requiring the filing of a new bond by the administratrix is
interlocutory in nature and is solely addressed to the sound discretion of the court.
The act of the lower court in taking cognizance of civil case No. V-331 is not
tantamount to assuming jurisdiction over said case nor does it violate the ruling of
this court which says that "when questions arise as to the ownership of property,
alleged to be part of the estate of a deceased person, but claimed by some other
person to be his property, not by virtue of any right of inheritance from the deceased,
but by title adverse to that of the deceased and his estate, such questions cannot be
determined in the course of administration proceedings. The Court of First Instance,
acting as probate court, has no jurisdiction to adjudicate such contentions, which
must be submitted to the court in the exercise of its general jurisdiction as a Court of
First Instance to try and determine ordinary actions. . . ." (Guzman vs. Anog and
Anog, 37 Phil., 61, 62-63.)
intestate proceedings without first taking any step to settle the ordinary civil case?
This rule is but a corollary to the ruling which declares that questions concerning
ownership of property alleged to be part of the estate but claimed by another person
should be determined in a separate action and should be submitted to the court in the
exercise of its general jurisdiction. (Guzman vs. Anog and Anog, supra). These rules
would be rendered nugatory if we are to hold that an intestate proceedings can be
closed by any time at the whim and caprice of the heirs. Another rule of court
provides that "after a party dies and the claim is not thereby extinguished, the court
shall order, upon proper notice, the legal representative of the deceased to appear and
to be substituted for the deceased, within a period of thirty (30) days, or within such
time as may be granted. If the legal representative fails to appear within said time,
the court may order the opposing party to procure the appointment of a legal
representative of the deceased within a time to be specified by the court, and the
representative shall immediately appear for and on behalf of the interest of the
deceased." (Section 17, Rule 3.) This rule also implies that a probate case may be
held in abeyance pending determination of an ordinary case wherein an administrator
is made a party. To hold otherwise would be also to render said rule nugatory.
Wherefore, the Court affirms the order appealed from, with costs against appellants.

If the appellants filed a claim in intervention in the intestate proceedings it was only
pursuant to their desire to protect their interests it appearing that the property in
litigation is involved in said proceedings and in fact is the only property of the estate
left subject of administration and distribution; and the court is justified in taking
cognizance of said civil case because of the unavoidable fact that whatever is
determined in said civil case will necessarily reflect and have a far reaching
consequence in the determination and distribution of the estate. In so taking
cognizance of civil case No. V-331 the court does not assume general jurisdiction
over the case but merely makes of record its existence because of the close
interrelation of the two cases and cannot therefore be branded as having acted in
excess of its jurisdiction.

Appellants' claim that the lower court erred in holding in abeyance the closing of the
intestate proceedings pending determination of the separate civil action for the
reason that there is no rule or authority justifying the extension of administration
proceedings until after the separate action pertaining to its general jurisdiction has
been terminated, cannot entertained. Section 1, Rule 88, of the Rules of Court,
expressly provides that "action to recover real or personal property from the estate or
to enforce a lien thereon, and actions to recover damages for an injury to person or
property, real or personal, may be commenced against the executor or administrator".
What practical value would this provision have if the action against the administrator
cannot be prosecuted to its termination simply because the heirs desire to close the
G.R. No. L-16584 November 17, 1921
EUSEBIO A. GODOY, plaintiff-appellee,
vs.
GUILLERMO ORELLANO, ET AL., defendants.
FELISA PAÑGILINAN, PAZ ORELLANO assisted by her husband
FRANCISCO MARTINEZ, JOSE ORELLANO, and DEMETRIO
ORELLANO, defendants-appellants.
Francisco Sevilla for appellant Pañgilinan.
No appearance for the other appellants.
Teofilo Mendoza for appellee.
VILLAMOR, J.:
On January 13, 1919, in consideration of the amount of P1,000 received by the
appellant, Felisa Pañgilinan, a document was executed by her giving the appellee,
Eusebio A. Godoy, an option to buy a dredge for the sum of P10,000. It appears from
that document that the dredge is the common property of the vendor and of the
brothers Demetrio, Jose, Guillermo, Alfredo, and Paz, all surnamed Orellano; that
the condition was that Godoy was to pay the whole price of the dredge within twenty
days; and that said option was granted in accordance with the power of attorney
executed by her coowners who reserved the right to ratify whatever sale might be
made, or option granted by Pañgilinan, their attorney-in-fact. The latter's coowners
did not ratify the option contract. Before the expiration of twenty days, the appelle
was ready to make complete payment of the price, but the appellant failed to deliver
the dredge. Then the appellee brought suit in the Court of First Instance against
Feliza Pañgilinan, Paz Orellano, Jose Orellano, Demetrio Orellano, Guillermo
Orellano, and Alfredo Orellano, praying that they be ordered to deliver the dredge,
upon payment by him of the sum of P9,000; to pay him the sum of P10,000 as
damages, and to return to the plaintiff the sum of P1,000 should the carrying out of
the sale become impossible.
The defendants Orellano set up in their answer a general denial of the facts alleged in
the complaint and, as a special defense, alleged that the dredge in question was the
property of the intestate estate of Julio Orellano, pending in the Court of First
Instance of Manila, and under the administration of Felisa Pangilinan; that the
plaintiff perfectly knows that said dredge is under judicial control and could not be
disposed of without judicial authority, and that the court has never authorized the
sale mentioned in the complaint filed herein; and that the defendants Jose,
Guillermo, and Alfredo surnamed Orellano are at present under age, and the
defendant Paz Orellano is a married woman who had not obtained the consent of her
husband before executing the power of attorney in favor of the administratrix.
The defendant Felisa Pañgilinan filed a separate answer, and a defense alleges: (a)
That the dredge which was the subject-matter of the option is property of the
intestate estate of Julio Orellano, of which she is the administratrix; (b) that the
plaintiff, as well as the defendants, and the notary who prepared the aforesaid option
sale, were all aware of these facts, and they led her to believe that she had the
authority to dispose of the dredge in her name and by themselves; (c) that believing
herself to be under obligation to comply with the aforesaid option deed, she applied
to the court of probate for permission to sell the dredge in the sum of P10,000; (d)
that on the day of the hearing of the motion, her codefendants who had themselves
authorized her by means of a power of attorney, opposed the motion through their
attorneys, Francisco and Lualhati, on the ground that there were higher bidders and
the best thing to do was to sell it at public auction; (e) that in view of this opposition,
the administratrix asked the court that it be sold at public auction, and the court
authorized said defendant to sell it at public auction, advertising the sale in
newspapers of general circulation, and the aforesaid dredge was sold for P10,000,
accordingly; ( f ) that the defendant did not at any time refuse to make delivery of the
dredge to the plaintiff, but that it was the court that would not give her the authority
to do so; and (g) that she is all times ready to return the P1,000 received from the
plaintiff and that she has tendered it several times, but that the plaintiff refused to
accept it.
The judge a quo rendered judgment, ordering the defendants to pay Eusebio A.
Godoy the sum of P2,000 with legal interest thereon from February 13, 1919, and the
cost and dismissing the complaint as against the defendants Guillermo Orellano and
Alfredo Orellano.
From this judgment the defendants have appealed to this court by bill of exceptions.
By a resolution of this court of September 14, 1920, the appeal of the defendants Paz
Orellano, Jose Orellano and Demetrio Orellano was declared abandoned for failure
to file their brief within the period prescribed by the rules of the court. Wherefore,
this decision concerns only the appeal taken by Felisa Pañgilinan.lawphil.net
It appears from the evidence that the dredge in question belongs to the intestate
estate of Julio Orellano, father of the defendants, which was pending in the Court of
First Instance of Manila, of which the judicial administratrix is the defendant herein,
Felisa Pañgilinan; that when this defendant contracted with the plaintiff Godoy the
sale of the aforesaid dredge, she had no authority of the court; and that the plaintiff
knew that the dredge, which was the subject-matter of that contract, belonged to the
intestate estate of Julio Orellano, under the control of the court.
In the sale of the property of an intestate estate for the benefit of the heirs, it is
necessary to comply with the provisions of sections 717, 718, and 722 of the Code of
Civil Procedure. The said sections prescribed the proceedings to be had before an
administrator of an intestate or testate estate may sell personal or real property and
also the conditions under which the personal or real property pertaining to an estate
may be sold or disposed of by the administrator. Unless compliance is had with the
provisions of these sections, the sale of the aforesaid dredge by the administratrix, or
her promise to sell it is null and void.

A sale and conveyance by executors without an order of the probate court, under a
will devising property to them in trust, but not authorizing any sale of the realty,
otherwise than by a direction to pay the debts of the testator, is void, and passes no
title to the purchase. (Huse vs. Den, 85 Cal., 390.)

A sale by an administrator of the personal property of the estate, without the

authority of an order of court, or of a will, or under an order of court which is void
for want of jurisdiction, does not confer on the purchaser a title which is available
against a succeeding administrator. (Wyatt's Adm'r vs. Rambo, 29 Ala., 510.)

Under the law, the court has exclusive jurisdiction to authorize the sale of properties
like the one under consideration and the power of attorney executed by the heirs of
Orellano in favor of the administratrix, without authority of court, has no legal effect,
and this is the more so, since two of the said heirs are under age, and the others did
not ratify the option contract, as provided in the aforesaid power of attorney.

It is not necessary to dwell longer upon this point, as the appellee himself admits in
his brief "that the dredge in question being a part of the intestate estate of Julio
Orellano, it cannot be disposed of by any person without the proper authority of the
court, in accordance with the existing laws."lawphil.net

In view of the foregoing, we are of the opinion, and so hold, that the appellant was
not, in her capacity as judicial administratrix of the intestate estate of Julio Orellano,
legally authorized to sell, or contract to sell, any property belonging to said estate
without the authority of the court, and the contract entered into by her with the
plaintiff, without this authority, is null and void.

The judgment appealed from is reversed and the complaint against the appellant
Felisa Pañgilinan is hereby dismissed, without special finding as to costs. So ordered.
[G.R. No. L-51785 : July 25, 1981.]
THE HONORABLE COURT OF FIRST INSTANCE OF RIZAL, BRANCH
IX, QUEZON CITY, and ELENA ONG ESCUTIN, Petitioners, vs. THE
HONORABLE COURT OF APPEALS and FELIX ONG, Respondents. GAN
HENG, Intervenor.
DECISION
CONCEPCION, JR., J.:
Review on Certiorari of the resolution of the Court of Appeals promulgated on June
21, 1979 in CA-G.R. No. 08472-SP, entitled: "FELIX Ong, Petitioner, versus Hon.
Court of First Instance of Rizal, Branch IX, Quezon City and Elena Ong Escutin,
respondents", which set aside the order of the probate court in Spec. Proc. No. Q-
14700, "Testate Estate of the late Ponciano Ong Lacson; Elena Ong Escutin,
executrix", confirming the sale of property belonging to the estate in favor of the
intervenor Gan Heng.
The record shows that on October 20, 1977, Elena Ong Escutin, executrix of the
Testate Estate of the late Ponciano Ong Lacson, asked the probate court in Spec.
Proc. No. Q-14700 of the Court of First Instance of Rizal, Branch IX, Quezon City,
for authority to sell property of the estate in order to pay the taxes and other claims
against the estate. After a cursory inquiry on the current market value of properties
within the vicinity where the property to be sold is located, the probate court, in an
order dated February 3, 1978, authorized the executrix to sell the property for not
less than P360,000.00.
On February 28, 1978, the executrix sold the property to the herein intervenor, Gan
Heng, for P400,000.00, and from this amount she paid the taxes amounting to
P54,480.28. On March 16, 1978, she submitted the Deed of Sale to the probate court
for approval and the hearing thereof was set for April 17, 1978.
On April 11, 1978, however, FELIX Ong filed an opposition to the approval of the
sale, alleging, among others, that he cranad(FELIX Ong) had offered to buy the
property at a higher price of P450,000.00, which claim was denied by the executrix.
In view thereof, the probate court set for hearing the only issue of whether or not
FELIX Ong had made an offer to purchase the property for P450,000.00 before the
sale was made in favor of Gan Heng.
After hearing, or on August 10, 1978, the probate court found that FELIX Ong had
not made an offer to buy the property prior to its sale to Gan Heng, and approved the
sale to Gan Heng. 1
Whereupon, FELIX Ong filed a petition for Certiorari with the Court of Appeals,
docketed therein as CA-G.R. No. 08472-SP, to annul and set aside the order of the
probate court approving the sale, and to direct the probate court and the executrix to
accept his offer to buy the property for P450,000.00. After prior proceedings, the
Court of Appeals rendered a decision on April 6, 1929, dismissing the petition of
FELIX Ong. 2
However, on June 21, 1979, the Court of Appeals, acting upon the motion for
reconsideration filed by FELIX Ong, found that the probate court gravely abused its
discretion in approving the sale to Gan Heng since there was an offer from FELIX
Ong to buy the property at a higher price at the hearing of the motion for the
approval of the sale to Gan Heng and, consequently, reversed its previous decision
and granted the petition of FELIX Ong. 3
Hence, the present recourse.
The petitioners contend that the Court of Appeals erred in setting aside the order of
the probate court approving the sale of the property to Gan Heng; and in ordering
them cranad(petitioners) to accept the offer of FELIX Ong to buy the property for
P450,000.00.
There is merit in the contention. Whether or not FELIX Ong had offered
P450,000.00 for the property is of little importance. It appears that the sale sought to
be annulled is a private sale duly authorized by the probate court and not a public
auction sale, although the executrix had offered the property to different persons, so
that FELIX Ong, who merely offered to buy the property, has no legal personality to
impugn the validity of the said sale. It is well-settled that for a person to be able to
intervene in an administration proceeding concerning the estate of a deceased person,
it is necessary for him to have an interest in such estate. An interested party in the
estate of a decedent 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. 4
FELIX Ong does not claim to be a creditor of the estate of Ponciano Ong Lacson.
Neither is he an heir of the decedent. Consequently, he has no right to intervene
either in the proceedings brought in connection with the estate or in the settlement of
the succession. 5
At any rate, in a special proceeding for administration of an estate, the probate court
enjoys ample discretion in determining under what conditions a particular sale would
be most beneficial to all persons interested, and appellate courts are wont not to
interfere with or attempt to replace the action taken by it unless it be shown that there
has been positive abuse of discretion. 6 In the instant case, the offer of FELIX Ong to
buy the property at a higher price would not make the approval of the sale a grave
abuse of discretion because the difference in the prices was not the only factor taken
into consideration by the probate court in approving the sale. As the probate court
said: "The price was not at all bad and although FELIX Ong and/or Manuel Ong are
willing to pay P50,000.00 more which would benefit the estate, we are not inclined
to disapprove the sale on that account alone; as otherwise, this could put the
executrix in a very embarrassing position. After all, the Deed of Sale as executed is
in accordance with our order."
WHEREFORE, the judgment appealed from is hereby reversed, and another one
entered affirming the order of the probate court issued in Spec. Proc. No. Q-14700 of
the Court of First Instance of Rizal, Branch IX, Quezon City, entitled: "Testate Estate
of the late Ponciano Ong Lacson, Sr., Dra. Elena Ong Escutin, executrix," on August
10, 1978. With costs against FELIX Ong.
SO ORDERED.

Besides, the creditors of the estate and the heirs of the late Ponciano Ong Lacson,
including Ponciano Ong Lacson, Jr., who manifested, through counsel, that he has no
objection to selling the property to FELIX Ong, 7 did not actively oppose the sale of
the property to Gan Heng, such that there is no indication that the sale to the said
Gan Heng was not beneficial to the estate.

Moreover, FELIX Ong did not comply with the provisions of Section 3, Rule 89 of
the Rules of Court by submitting a bond in order to prevent the sale of the property.
Said section reads, as follows:

"Sec. 3. Persons interested may prevent such sale, etc., by giving bond. — No such
authority to sell, mortgage, or otherwise encumber real or personal estate shall be
granted if any person interested in the estate gives a bond, in a sum to be fixed by the
court, conditioned to pay the debts, expenses of administration, and legacies within
such time as the court directs; and such bond shall be for the security of the creditors,
as well as the executor or administrator, and may be prosecuted for the benefit of
either."

It results that the Court of Appeals erred in setting aside the order of the probate
court approving the sale of the property to Gan Heng; and in ordering the executrix
to accept the bid of FELIX Ong to buy the property.

With respect to the prayer of the executrix that she be allowed to withdraw her
Motion to Approve Sale and Motion to Sell, which she filed with the probate court,
on the ground that the said sale is detrimental to the estate because the property is
now worth P1,000,000.00, it is important to bear in mind that the sale was actually
made and the vendee, intervenor herein, made the purchase in good faith. He had
already paid the purchase price to the executrix who used part of it "to pay the estate
and inheritance taxes due from the estate of the late Ponciano Ong Lacson, Sr., and
his late wife Eugenia Ocampo Lacson as well as in the necessary repairs made to
preserve the family residence and the 4-door apartment building belonging to the
estate." 8 It would be highly iniquitous to set aside the sale after the executrix had
accepted benefits therefrom. Besides, it has already been held that the subsequent
increase in the value of the property is not sufficient reason for turning down a
conveyance made by an administrator of an estate. 9
G.R. No. L-28214 July 30, 1969
NATIVIDAD V. A. JARODA, petitioner,
vs.
THE HONORABLE VICENTE N. CUSI, JR., Presiding Judge, Branch I, Court
of First Instance of Davao, and ANTONIO V. A. TAN, in his capacity as judicial
administrator of intestate estate of Carlos Villa Abrille, Special Proc. No. 1391,
Court of First Instance of Davao, respondents.
Dario C. Rama for petitioner.
Jose R. Madrazo, Jr. for respondents.
REYES, J.B.L., J.:
Questioned as null and void in this petition for certiorari with preliminary injunction
are two (2) orders of the Court of First Instance of Davao, Branch I, issued in its
Special Proceeding No. 1391 entitled "In the Matter of the Intestate Estate of Carlos
Villa Abrille, deceased, Antonio V. A. Tan, petitioner."
The first of the said two orders, dated 5 May 1965, granted an ex-parte petition by
then special administrator Antonio V. A. Tan, the herein respondent, to withdraw
from the Philippine National Bank the amount of P182,531.08 deposited in savings
and checking accounts in the name, and during the lifetime, of Carlos Villa Abrille
(now deceased) but allegedly held in trust for the decedent's co-owners in the Juna
Subdivision.
The second order, dated 3 September 1965, approved ex-parte the power of attorney
executed by special administrator Tan appointing himself attorney-in-fact to sell the
share of the estate in the subdivision lots.
The aforesaid Special Proceeding No. 1391 was commenced by Antonio V. A. Tan
on 22 April 1965, alleging in his petition filed with the respondent court that Carlos
Villa Abrille died intestate on 3 April 1965; that he left an estate consisting of his
conjugal share in real and personal properties, among which are:
p. Nineteen (19) Percent share in the co-ownership known as Juna Subdivision;
xxx xxx xxx
xxx xxx xxx
t. Cash on Bank: BPI (Savings) D-1365 in the amount of P55,284.11; PNB (Savings)
8189, in the amount of P9,047.74; and PCIB (Savings) 337, in the amount of
P416.24. (Annex "A" to Petition, Rollo, pages 1415);
that the heirs of the deceased are his surviving spouse, nine (9) children (among them
the herein petitioner, Natividad V. A. Jaroda), and four (4) grandsons, among them
the herein respondent, Antonio V. A. Tan.
On 26 April 1965, respondent Tan was appointed special administrator.
On 4 May 1965, respondent special administrator Tan fled an ex-parte petition for
the withdrawal of the sums of P109,886.42 and P72,644.66 from the Philippine
National Bank, Davao Branch, which sums were not listed in his petition for
administration as among the properties left by the deceased, alleging that these sums
were deposited in the name of the deceased but that they actually belong to, and were
held in trust for, the co-owners of the Juna Subdivision, and alleging as reason for
the withdrawal that it would be advantageous to the estate of the deceased. Annexed
to the said petition are powers of attorney purportedly signed by the co-owners in
1948 and 1949 authorizing the late Carlos Villa Abrille to sell the lots in the Juna
Subdivision and to deposit the proceeds thereof with the Philippine National Bank.
The alleged co-owners of the subdivision concurred in the petition, but not the heirs
of the deceased (Annex "C" to Petition, Rollo, page 19).
The respondent court found the petition for withdrawal of the bank deposits as
"meritorious", and granted the petition in an order on 5 May 1965.
On 7 May 1965, special administrator Tan executed, together with the other co-
owners of the Juna Subdivision, a power of attorney appointing himself as attorney-
in-fact to "sell (or) dispose upon terms and conditions as he deems wise" the lots in
the 99.546-hectare subdivision (Annex "F-1" to Petition, Rollo, pages 30-32).
On 9 September 1965, respondent Tan was issued letters of administration by the
respondent court.
On the same day, 9 September 1965, as regular administrator, respondent Tan filed a
petition with the respondent court, alleging that the deceased was the manager of and
a co-owner in the Juna Subdivision and that he had been engaged in the business of
selling the lots, and praying for the approval by the court of the power of attorney
executed by him, in behalf of the intestate estate, and appointing and authorizing
himself to sell the lots.
The court granted the petition, "as prayed for," on 3 September 1965.1äwphï1.ñët
On 29 November 1966, herein petitioner Natividad V. A. Jaroda moved to nullify the
order of 5 May 1965, that allowed the withdrawal of the bank deposits, as well as the
order of 3 September 1965, which approved the power of attorney.
The respondent court denied, on 25 February 1967, "for lack of merit" the aforesaid
motion.
Petitioner Jaroda appealed from the order of denial, but the respondent court
dismissed the appeal on the ground that the order appealed from was interlocutory.
Jaroda then filed before the Supreme Court a petition for certiorari and/or mandamus
on 8 July 1967, docketed as G.R. No. L-27831, but this Court dismissed the petition,
adding in its resolution that appeal in due time is the remedy.
On 28 October 1967, petitioner Jaroda filed the present petition for certiorari with
preliminary injunction. She alleged, among other things, that appeal would not be
speedy and adequate as respondent Tan has sold and continues to sell the subdivision
lots on the strength of the respondent court's order, to her irreparable prejudice and
that of the other heirs. This Court gave due course to the petition and issued
preliminary injunction on 3 November 1967, restraining the respondent from selling
the share of the intestate estate.
We agree with petitioner that the order of 5 May 1965 allowing the special
administrator to withdraw the bank deposits standing in the name of the decedent is
in abuse of discretion amounting to lack of jurisdiction. In the first place, said
withdrawal is foreign to the powers and duties of a special administrator, which, as
Section 2 of Rule 80 of the Rules of Court provides, are to —
take possession and charge of the goods, chattels, rights, credits and estate of the
decease and preserve the same for the executor or administrator afterwards
appointed, and for that purpose may commence and maintain suits as administrator.
He may sell only such perishable and other property as the court orders sold. A
special administrator shall not be liable to pay any debts of the deceased unless so
ordered by the court.
In the second place, the order was issued without notice to, and hearing of, the heirs
of the deceased. The withdrawal of the bank deposits may be viewed as a taking of
possession and charge of the credits of the estate, and apparently within the powers
and duties of a special administrator; but actually, said withdrawal is a waiver by the
special administrator of a prima facie exclusive right of the intestate estate to the
bank deposits in favor of the co-owners of the Juna Subdivision, who were allegedly
claiming the same as alleged by the administrator in his motion (Petition, Annex
"C"). The bank deposits were in the name of the deceased; they, therefore,
belong prima facie to his estate after his death. And until the contrary is shown by
proper evidence at the proper stage, when money claims may be filed in the intestate
proceedings, the special administrator is without power to make the waiver or to
hand over part of the estate, or what appears to be a prima facie part of the estate, to
other persons on the ground that the estate is not the owner thereof. If even to sell for
valuable consideration property of the estate requires prior written notice of the
application to the heirs, legatees, or devisees under Rule 89 of the Rules of Court,
such notice is equally, if not more, indispensable for disposing gratuitously of assets
of the decedent in favor of strangers. Admittedly, no such notice was given, and
without it the court's authority is invalid and improper.
The order of 3 September 1965 approving the power of attorney executed by
administrator Tan and appointing himself as attorney-in-fact to sell the subdivision
lots for a price at his discretion is, likewise, void for want of notice and for
approving an improper contract or transaction.
The very rule, Section 4 of Rule 89 of the Rules of Court, relied on by respondent
Tan to sustain the power of attorney for the sale of the pro-indiviso share of the estate
in the subdivision requires "written notice to the heirs, devisees, and legatees who
are interested in the estate to be sold" and, admittedly, administrator Tan did not
furnish such notice. (Answer, pages 1 and 2, paragraph 3, Rollo, page 53) Without
such notice, the order of the court authorizing the sale is void. (Estate of Gamboa vs.
Floranza, 12 Phil. 191; Gabriel vs. Encarnacion, 94 Phil. 917)
But respondent Tan holds petitioner Jaroda with actual knowledge of the questioned
order, and to show it he quotes the transcript of stenographic notes of a discussion by
a lawyer of Jaroda about the said order. The discussion, however, took place on 19
March 1966 while the order was issued on 13 September 1965, and there is nothing
in the discussion that may indicate knowledge by Jaroda of the order before, at or
immediately after its issuance.
It has been broadly stated that an administrator is not permitted to deal with himself
as an individual in any transaction concerning trust property. (Pesula's Estate, 64
ALR 2d 851, 150 Cal. App. 2d 462, 310 P 2d 39)
It is well settled that an executrix holds the property of her testator's estate as a
trustee. In re Heydenfeldt's Estate, 117 Cal. 551, 49 P. 713; Firebaugh v.
Burbank, 121 Cal. 186, 53 P. 560. It is equally well settled that an executrix will not
be permitted to deal with herself as an individual in any transaction concerning the
trust property. Civil Code, S 2230. In Davis v. Rock Creek L., F. & M Co., 55 Cal.
359, at page 364, 36 Am. Rep. 40, it is said: 'The law, for wise reasons, will not
permit one who acts in a fiduciary capacity thus to deal with himself in his individual
capacity.' The following cases are to the same effect: Wickersham v. Crittenden, 93
Cal. 17, 29, 28 P. 788; Sims v. Petaluma Gas Light Co., 131 Cal. 656, 659, 63 P.
1011; Western States Life Ins. Co. v. Lockwood, 166 Cal. 185, 191, 135 P. 496; In re
Estate of Parker, 200 Cal. 132, 139, 251 P 907, 49 A. L. R. 1025. In Wickersham v.
Crittenden, supra, 93 Cal. at page 29, 28 P. at page 790, it is further stated in respect
to a transaction wherein a trustee sought to deal with trust property: 'Courts will not
permit any investigation into the fairness of the transaction, or allow the trustee to
show that the dealing was for the best interest of the beneficiary.' This language is
quoted with approval in the case of Pacific Vinegar & Pickle Works v. Smith, 145
Cal. 352, 365, 78 P. 550, 104 Am. St. Rep 42. (In re Bogg's Estate, 121 P. 2d 678,
683).
The opinion of some commentators that, as a general rule, auto-contracts are
permissible if not expressly prohibited (See Tolentino, Civil Code of the Philippines,
Vol. IV 1962, pages 375-377), and that there is no express provision of law
prohibiting an administrator from appointing himself as his own agent, even if
correct, cannot and should not apply to administrator of decedent's estates, in view of
the fiduciary relationship that they occupy with respect to the heirs of the deceased
and their responsibilities toward the probate court. A contrary ruling would open the
door to fraud and maladministration, and once the harm is done, it might be too late
to correct it. A concrete example would be for administrator Tan to authorize agent
Tan to sell a lot for P50, with the condition that if he can sell it for more he could
keep the difference; agent Tan sells the lot for P150.00; he retains P100.00 and
deposits in the bank P50.00 "in the name of Antonio V. A. Tan, in trust for Juna
Subdivision" (as worded in the power of attorney. Annex "F-1"); thus, administrator
Tan's accounting to the estate for the sale of the lot for P50 would be in order, but the
estate would have been actually cheated of the sum of P100, which went to agent Tan
in his individual capacity.
The court below also failed to notice that, as alleged in the administrator's petition
(Annex "F" herein), after the death of Carlos Villa Abrille the administrator Tan, in
his personal capacity, had replaced said deceased as manager of the Juna Subdivision
by authority of the other co-owners. By the court's questioned order of 3 September
1965 empowering him to represent the interest of the deceased in the management of
the subdivision, the administrator Tan came to be the agent or attorney-in-fact of two
different principals: the court and the heirs of the deceased on the one hand, and the
majority co-owners of the subdivision on the other, in managing and disposing of the
lots of the subdivision. This dual agency of the respondent Tan rendered him
incapable of independent defense of the estate's interests against those of the
majority co-owners. It is highly undesirable, if not improper, that a court officer and
administrator, in dealing with property under his administration, should have to look
to the wishes of strangers as well as to those of the court that appointed him. A
judicial administrator should be at all times subject to the orders of the appointing
Tribunal and of no one else.
The resolution of this Court in L-27836 (Natividad V. A. Jaroda vs. the Hon. Vicente
N. Cusi, Jr., etc., et al.), dismissing the petition for certiorari and/or mandamus and
stating that appeal in due time is the remedy, is no bar to the present petition, for it
has not been shown that the allegations in both the dismissed petition and those of
the present one are substantially the same. Anyway, certiorari lies if appeal would not
be prompt enough to block the injurious effects of the orders of the lower court
(Silvestre vs. Torres, et al., 57 Phil. 885; Pachoco vs. Tumangday, L-14500, 25 May
1960; Mayormente vs. Robaco Corp., L-25337, 27 Nov. 1967, 21 SCRA 1080).
After the present case was submitted for decision, respondent Tan manifested that the
co-owners of the Juna Subdivision and the heirs of the late Carlos Villa Abrille,
including the petitioner Natividad V. A. Jaroda, had executed a partial partition and
the same has been approved by the probate court. Said approved partial partition has
no effect, one way or the other, upon the orders contested in the present case. For one
thing, it is not definite whether the lots described in the 57 pages of the partition
agreement correspond to those of the Juna Subdivision as described in the power of
attorney.
FOR THE FOREGOING REASONS, the order of 5 May 1965 and 3 September
1965 of the Court of First Instance of Davao, Branch I, in its Special Proceeding No.
1391, are hereby set aside and declared null and void. The preliminary injunction
heretofore issued is hereby made permanent. Costs against the respondent, Antonio
V. A. Tan, in his personal capacity.

That petitioner Jaroda, as heir of the late Carlos Villa Abrille, should hold a minor
interest (¹/¹¹ of 19%) in the co-ownership known as the Juna Subdivision and that the
early termination of said co-ownership would redound to the benefit of the co-
owners, including the heirs of Carlos Villa Abrille, are beside the point. Jaroda's
interest in the estate demands that she be heard by the court in all matters affecting
the disposal of her share, and that the administrator should primarily protect the
interest of the estate in which she is a participant rather than those of the decedent's
co-owners.
[G.R. No. 156403. March 31, 2005]
JOSEPHINE PAHAMOTANG and ELEANOR PAHAMOTANG-
BASA, petitioners, vs. THE PHILIPPINE NATIONAL BANK (PNB) and the
HEIRS OF ARTURO ARGUNA, respondents.
DECISION
GARCIA, J.:
Assailed and sought to be set aside in this appeal by way of a petition for review
on certiorari under Rule 45 of the Rules of Court are the following issuances of the
Court of Appeals in CA-G.R. CV No. 65290, to wit:
1. Decision dated March 20, 2002,[1] granting the appeal and reversing the appealed
August 7, 1998 decision of the Regional Trial Court at Davao City; and
2. Resolution dated November 20, 2002, denying herein petitioners' motion for
reconsideration.[2]
The factual background:
On July 1, 1972, Melitona Pahamotang died. She was survived by her
husband Agustin Pahamotang, and their eight (8) children, namely: Ana, Genoveva,
Isabelita, Corazon, Susana, Concepcion and herein
petitioners Josephine and Eleonor, all surnamed Pahamotang.
On September 15, 1972, Agustin filed with the then Court of First Instance of Davao
City a petition for issuance of letters administration over the estate of his deceased
wife. The petition, docketed as Special Case No. 1792, was raffled to Branch VI of
said court, hereinafter referred to as the intestate court.
In his petition, Agustin identified petitioners Josephine and Eleonor as among the
heirs of his deceased spouse. It appears that Agustin was appointed petitioners'
judicial guardian in an earlier case - Special Civil Case No. 1785 also of the CFI of
Davao City, Branch VI.
On December 7, 1972, the intestate court issued an order granting Agustins petition.
On July 6, 1973, respondent Philippine National Bank (PNB) and Agustin executed
an Amendment of Real and Chattel Mortgages with Assumption of
Obligation. It appears that earlier, or on December 14, 1972, the intestate court
approved the mortgage to PNB of certain assets of the estate to secure an obligation
in the amount of P570,000.00. Agustin signed the document in behalf of (1) the
estate of Melitona; (2) daughters Ana and Corazon; and (3) a logging company
named Pahamotang Logging Enterprises, Inc. (PLEI) which appeared to have an
interest in the properties of the estate. Offered as securities are twelve (12) parcels of
registered land, ten (10) of which are covered by transfer certificates of title (TCT)
No. 2431, 7443, 8035, 11465, 21132, 4038, 24327, 24326, 31226 and 37786, all of
the Registry of Deeds of Davao City, while the remaining two (2) parcels by TCTs
No. (3918) 1081 and (T-2947) 562 of the Registry of Deeds of Davao del Norte and
Davao del Sur, respectively.
On July 16, 1973, Agustin filed with the intestate court a Petition for Authority To
Increase Mortgage on the above mentioned properties of the estate.
In an Order dated July 18, 1973, the intestate court granted said petition.
On October 5, 1974, Agustin again filed with the intestate court another
petition, Petition for Declaration of Heirs And For Authority To Increase
Indebtedness, whereunder he alleged the necessity for an additional loan from PNB
to capitalize the business of the estate, the additional loan to be secured by additional
collateral in the form of a parcel of land covered by Original Certificate of Title
(OCT) No. P-7131 registered in the name of Heirs of Melitona Pahamotang. In the
same petition, Agustin prayed the intestate court to declare him and Ana, Genoveva,
Isabelita, Corazon, Susana, Concepcion and herein petitioners Josephine and Eleonor
as the only heirs of Melitona.
In an Order of October 19, 1974, the intestate court granted Agustin authority to
seek additional loan from PNB in an amount not exceeding P5,000,000.00 to be
secured by the land covered by OCT No. P-7131 of the Registry of Deeds of Davao
Oriental, but denied Agustins prayer for declaration of heirs for being premature.
On October 22, 1974, a real estate mortgage contract for P4,500,000.00 was
executed by PNB and Agustin in his several capacities as: (1) administrator of the
estate of his late wife; (2) general manager of PLEI; (3) attorney-in-fact of spouses
Isabelita Pahamotang and Orlando Ruiz, and spouses Susana Pahamotang and
Octavio Zamora; and (4) guardian of daughters Concepcion and Genoveva and
petitioners Josephine and Eleonor. Offered as securities for the additional loan are
three (3) parcels of registered land covered by TCTs No. T-21132, 37786 and 43264.
On February 19, 1980, Agustin filed with the intestate court a Petition (Request for
Judicial Authority To Sell Certain Properties of the Estate), therein praying for
authority to sell to Arturo Arguna the properties of the estate covered by TCTs No.
7443, 8035, 11465, 24326 and 31226 of the Registry of Deeds of Davao City, and
also TCT No. (T-3918) T-1081 of the Registry of Deeds of Davao del Norte.
On February 27, 1980, Agustin yet filed with the intestate court another petition, this
time a Petition To Sell the Properties of the Estate, more specifically referring to
the property covered by OCT No. P-7131, in favor of PLEI.
In separate Orders both dated February 25, 1980, the intestate court granted
Agustin authority to sell estate properties, in which orders the court also required all
the heirs of Melitona to give their express conformity to the disposal of the subject
properties of the estate and to sign the deed of sale to be submitted to the same court.
Strangely, the two (2) orders were dated two (2) days earlier than February 27, 1980,
the day Agustin supposedly filed his petition.
In a motion for reconsideration, Agustin prayed the intestate court for the amendment
of one of its February 25, 1980 Orders by canceling the requirement of express
conformity of the heirs as a condition for the disposal of the aforesaid properties.
In its Order of January 7, 1981, the intestate court granted Agustins prayer.
Hence, on March 4, 1981, estate properties covered by TCTs No. 7443,11465,
24326, 31226, 8035, (T-2947) 662 and (T-3918) T-1081, were sold to
respondent Arturo Arguna, while the property covered by OCT No. P-7131 was
sold to PLEI. Consequent to such sales, vendees Arguna and PLEI filed witt the
intestate court a motion for the approval of the corresponding deeds of sale in their
favor. And, in an Order dated March 9, 1981, the intestate court granted the motion.
Thereafter, three (3) daughters of Agustin, namely, Ana, Isabelita and Corazon
petitioned the intestate court for the payment of their respective shares from the sales
of estate properties, which was granted by the intestate court.
Meanwhile, the obligation secured by mortgages on the subject properties of the
estate was never satisfied. Hence, on the basis of the real estate mortgage contracts
dated July 6, 1973 and October 22, 1974, mortgagor PNB filed a petition for the
extrajudicial foreclosure of the mortgage.
Petitioner Josephine filed a motion with the intestate court for the issuance of an
order restraining PNB from extrajudicially foreclosing the mortgage. In its Order
dated August 19, 1983, the intestate court denied Josephines motion. Hence, PNB
was able to foreclose the mortgage in its favor.
Petitioners Josephine and Eleanor, together with their sister Susana Pahamatong-
Zamora, filed motions with the intestate court to set aside its Orders of December
14, 1972 [Note: the order dated July 18, 1973 contained reference to an order dated
December 14, 1972 approving the mortgage to PNB of certain properties of the
estate], July 18, 1973, October 19, 1974 and February 25, 1980.
In an Order dated September 5, 1983, the intestate court denied the motions,
explaining:
"Carefully analyzing the aforesaid motions and the grounds relied upon, as well as
the opposition thereto, the Court holds that the supposed defects and/or irregularities
complained of are mainly formal or procedural and not substantial, for which reason,
the Court is not persuaded to still disturb all the orders, especially that interests of the
parties to the various contracts already authorized or approved by the Orders sought
to be set aside will be adversely affected.[3]
Such was the state of things when, on March 20, 1984, in the Regional Trial Court at
Davao City, petitioners Josephine and Eleanor, together with their sister Susana, filed
their complaint for Nullification of Mortgage Contracts and Foreclosure
Proceedings and Damages against Agustin, PNB, Arturo Arguna, PLEI, the
Provincial Sheriff of Mati, Davao Oriental, the Provincial Sheriff of Tagum, Davao
del Norte and the City Sheriff of Davao City. In their complaint, docketed as Civil
Case No. 16,802 which was raffled to Branch 12 of the court, the sisters Josephine,
Eleanor and Susana prayed for the following reliefs:
"1.) The real estate mortgage contracts of July 6, 1973 and that of October 2, 1974,
executed by and between defendants PNB AND PLEI be declared null and void ab
initio;
2.) Declaring the foreclosure proceedings conducted by defendants-sheriffs, insofar
as they pertain to the assets of the estate of Melitona L. Pahamotang, including the
auction sales thereto, and any and all proceedings taken thereunder, as null and void
ab initio;
3.) Declaring the Deed of Absolute Sale, Doc. No. 473; Page No.96; Book No.VIII,
Series of 1981 of the Notarial Registry of Paquito G. Balasabas of Davao City
evidencing the sale/transfer of the real properties described therein to defendant
Arturo S. Arguna, as null and void ab initio;
4.) Declaring the Deed of Absolute Sale, Doc. No. 474; Page No. 96, Book No. VIII,
series of 1981 of the Notarial Registry of Paquito G. Balasabas of Davao City,
evidencing the sale/transfer of real properties to PLEI as null and void ab initio;
5.) For defendants to pay plaintiffs moral damages in such sums as may be found to
be just and equitable under the premises;
6.) For defendants to pay plaintiffs, jointly and severally, the expenses incurred in
connection with this litigation;
7.) For defendants to pay plaintiffs, jointly and severally attorney's fees in an amount
to be proven during the trial;
8.) For defendants to pay the costs of the suit.[4]
PNB moved to dismiss the complaint, which the trial court granted in its Order of
January 11, 1985.
However, upon motion of the plaintiffs, the trial court reversed itself and ordered
defendant PNB to file its answer.
Defendant PNB did file its answer with counterclaim, accompanied by a cross-claim
against co-defendants Agustin and PLEI.
During the ensuing pre-trial conference, the parties submitted the following issues
for the resolution of the trial court, to wit:
"1. Whether or not the Real Estate Mortgage contracts executed on July 6, 1973 and
October 2, 1974 (sic) by and between defendants Pahamotang Logging Enterprises,
Inc. and the Philippine National Bank are null and void?
2. Whether or not the foreclosure proceedings conducted by defendants-Sheriffs,
insofar as they affect the assets of the Estate of Melitona Pahamotang, including the
public auction sales thereof, are null and void?
3. Whether or not the Deed of Absolute Sale in favor of defendant Arturo Arguna
entered as Doc. No. 473; Page No. 96; Book No. VIII, series of 1981 of the Notarial
Register of Notary Public Paquito Balasabas is null and void?
4. Whether or not the Deed of Absolute Sale in favor of defendant Pahamotang
Logging Enterprises, Inc. entered as Doc. No. 474; Page No. 96; Book No. VIII,
series of 1981 of the Notarial Register of Notary Public Paquito Balasabas is null and
void?
5. On defendant PNB's cross-claim, in the event the mortgage contracts and the
foreclosure proceedings are declared null and void, whether or not defendant
Pahamotang Logging Enterprises, Inc. is liable to the PNB?
6. Whether or not the defendants are liable to the plaintiffs for damages?
7. Whether or not the plaintiffs are liable to the defendants for damages?[5]
With defendant Arturo Argunas death on October 31, 1990, the trial court ordered his
substitution by his heirs: Heirs of Arturo Alguna.
In a Decision dated August 7, 1998, the trial court in effect rendered judgment for
the plaintiffs. We quote the decisions dispositive portion:
"WHEREFORE, in view of all the foregoing, judgment is hereby rendered as
follows:
1. Declaring the Mortgage Contracts of July 6, 1973 and October 22, 1974, as well as
the foreclosure proceedings, void insofar as it affects the share, interests and property
rights of the plaintiffs in the assets of the estate of Melitona Pahamotang, but valid
with respect to the other parties;
2. Declaring the deeds of sale in favor of defendants Pahamotang Logging
Enterprises, Inc. and Arturo Arguna as void insofar as it affects the shares, interests
and property rights of herein plaintiffs in the assets of the estate of Melitona
Pahamotang but valid with respect to the other parties to the said deeds of sale.
3. Denying all the other claims of the parties for lack of strong, convincing and
competent evidence.
No pronouncement as to costs.
SO ORDERED.[6]
From the aforementioned decision of the trial court, PNB, PLEI and the Heirs of
Arturo Arguna went on appeal to the Court of Appeals in CA-G.R. CV No. 65290.
While the appeal was pending, the CA granted the motion of Susana Pahamatong-
Zamora to withdraw from the case.
As stated at the threshold hereof, the Court of Appeals, in its Decision dated March
20, 2002,[7] reversed the appealed decision of the trial court and dismissed the
petitioners complaint in Civil Case No. 16,802, thus:
WHEREFORE, the appeal is hereby GRANTED. The assailed August 07, 1998
Decision rendered by the Regional Trial Court of Davao City, Branch 12, is
hereby REVERSED and SET ASIDE and a new one is entered DISMISSING the
complaint filed in Civil Case No. 16,802.
SO ORDERED.
The appellate court ruled that petitioners, while ostensibly questioning the validity of
the contracts of mortgage and sale entered into by their father Agustin, were
essentially attacking collaterally the validity of the four (4) orders of the intestate
court in Special Case No. 1792, namely:
1. Order dated July 18, 1973, granting Agustins Petition for Authority to Increase
Mortgage;
2. Order dated October 19, 1974, denying Agustins petition for declaration of heirs
but giving him authority to seek additional loan from PNB;
3. Order dated February 25, 1980, giving Agustin permission to sell properties of
the estate to Arturo Arguna and PLEI; and
4. Order dated January 7, 1981, canceling the requirement of express conformity
by the heirs as a condition for the disposal of estate properties.
To the appellate court, petitioners committed a fatal error of mounting a collateral
attack on the foregoing orders instead of initiating a direct action to annul them.
Explains the Court of Appeals:
"A null and void judgment is susceptible to direct as well as collateral attack. A direct
attack against a judgment is made through an action or proceeding the main object of
which is to annul, set aside, or enjoin the enforcement of such judgment, if not
carried into effect; or if the property has been disposed of, the aggrieved party may
sue for recovery. A collateral attack is made when, in another action to obtain a
different relief, an attack on the judgment is made as an incident in said action. This
is proper only when the judgment, on its fact, is null and void, as where it is patent
that the court which rendered such judgment has no jurisdiction. A judgment void on
its face may also be attacked directly.
xxx xxx xxx
Perusing the above arguments and comparing them with the settled ruling, the
plaintiffs-appellees [now petitioners], we believe had availed themselves of the
wrong remedy before the trial court. It is clear that they are collaterally attacking the
various orders of the intestate court in an action for the nullification of the subject
mortgages, and foreclosure proceedings in favor of PNB, and the deeds of sale in
favor of Arguna. Most of their arguments stemmed from their allegations that the
various orders of the intestate court were issued without a notification given to them.
An examination, however, of the July 18, 1973 order shows that the heirs of
Melitona have knowledge of the petition to increase mortgage filed by Agustin, thus:
`The petitioner testified that all his children including those who are of age have no
objection to this petition and, as matter of fact, Ana Pahamotang, one of the heirs of
Melitona Pahamotang, who is the vice-president of the logging corporation, is the
one at present negotiating for the increase of mortgage with the Philippine National
Bank.'
The presumption arising from those statements of the intestate court is that the heirs
were notified of the petition for the increase of mortgage.
The same can be seen in the October 19, 1974 order:
`The records show that all the known heirs, namely Ana, Isabelita, Corazon, Susana,
including the incompetent Genoveva, and the minors Josephine, Eleanor and
Concepcion all surnamed were notified of the hearing of the petition.'
On the other hand, the February 25, 1980 order required Agustin to obtain first
express conformity from the heirs before the subject property be sold to Arguna. The
fact that this was reconsidered by the intestate court in its January 07, 1981 is of no
moment. The questioned orders are valid having been issued in accordance with law
and procedure. The problem with the plaintiffs-appellees is that, in trying to nullify
the subject mortgages and the foreclosure proceedings in favor of PNB and the deeds
of sale in favor of Arguna, they are assailing the aforesaid orders of the intestate
court and in attacking the said orders, they attached documents that they believe
would warrant the conclusion that the assailed orders are null and void. This is a
clear collateral attack of the orders of the intestate court which is not void on its face
and which cannot be allowed in the present action. The defects alleged by the
plaintiff-appellees are not apparent on the face of the assailed orders. Their recourse
is to ask for the declaration of nullity of the said orders, not in a collateral manner,
but a direct action to annul the same.[8]
The same court added that petitioners failure to assail said orders at the most
opportune time constitutes laches:
"In their complaint below, plaintiffs, appellees are assailing in their present action,
four orders of the intestate court namely: July 18, 1973, October 19, 1974, February
25, 1980 and January 07, 1981 orders which were then issued by Judge Martinez. It
should be recalled that except for the January 07, 1981 order, Judge Jacinto, upon
taking over Sp. No. 1792, denied the motion of the plaintiffs-appellees to set aside
the aforesaid orders. Aside from their motion before Judge Jacinto, nothing on the
records would show that the plaintiffs-appellees availed of other remedies to set
aside the questioned orders. Further, the records would not show that the plaintiffs-
appellees appealed the order of Judge Jacinto. If an interval of two years, seven
months and ninety nine days were barred by laches, with more reason should the
same doctrine apply to the present case, considering that the plaintiffs-appellees did
not avail of the remedies provided by law in impugning the various orders of the
intestate court. Thus, the questioned orders of the intestate court, by operation of law
became final. It is a fundamental principle of public policy in every jural system that
at the risk of occasional errors, judgments of courts should become final at some
definite time fixed by law (interest rei publicae ut finis sit litum). The very object of
which the courts were constituted was to put an end to controversies. Once a
judgment or an order of a court has become final, the issues raised therein should be
laid to rest. To date, except as to the present action which we will later discuss as
improper, the plaintiff-appellees have not availed themselves of other avenues to
have the orders issued by Judge Martinez and Judge Jacinto annulled and set aside.
In the present case, when Judge Jacinto denied the motion of the plaintiffs-appellees,
the latter had remedies provided by the rules to assail such order. The ruling by Judge
Jacinto denying plaintiffs-appellees motion to set aside the questioned orders of
Judge Martinez has long acquired finality. It is well embedded in our jurisprudence,
that judgment properly rendered by a court vested with jurisdiction, like the RTC,
and which has acquired finality becomes immutable and unalterable, hence, may no
longer be modified in any respect except only to correct clerical errors or mistakes.
Litigation must have and always has an end. If not, judicial function will lose its
relevance.
In time, petitioners moved for a reconsideration but their motion was denied by the
appellate court in its Resolution of November 20, 2002.
Hence, petitioners present recourse, basically praying for the reversal of the CA
decision and the reinstatement of that of the trial court.
We find merit in the petition.
It is petitioners posture that the mortgage contracts dated July 6, 1973 and October
22, 1974 entered into by Agustin with respondent PNB, as well as his subsequent
sale of estate properties to PLEI and Arguna on March 4, 1981, are void because they
[petitioners] never consented thereto. They assert that as heirs of their mother
Melitona, they are entitled to notice of Agustin's several petitions in the intestate
court seeking authority to mortgage and sell estate properties. Without such notice,
so they maintain, the four orders of the intestate court dated July 18, 1973, October
19, 1974, February 25, 1980 and January 7, 1981, which allowed Agustin to
mortgage and sell estate properties, are void on account of Agustins non-compliance
with the mandatory requirements of Rule 89 of the Rules of Court.
Prescinding from their premise that said orders are completely void and hence, could
not attain finality, petitioners maintain that the same could be attacked directly or
collaterally, anytime and anywhere.
For its part, respondent PNB asserts that petitioners cannot raise as issue in this
proceedings the validity of the subject orders in their desire to invalidate the
contracts of mortgage entered into by Agustin. To PNB, the validity of the subject
orders of the intestate court can only be challenged in a direct action for such
purpose and not in an action to annul contracts, as the petitioners have done. This
respondent adds that the mortgage on the subject properties is valid because the same
was made with the approval of the intestate court and with the knowledge of the
heirs of Melitona, petitioners included.[9]
Upon the other hand, respondent Heirs of Arturo Arguna likewise claim that
petitioners knew of the filing with the intestate court by Agustin of petitions to
mortgage and sell the estate properties. They reecho the CAs ruling that petitioners
are barred by laches in filing Civil Case No. 16,802.[10]
As we see it, the determinative question is whether or not petitioners can obtain relief
from the effects of contracts of sale and mortgage entered into by Agustin without
first initiating a direct action against the orders of the intestate court authorizing the
challenged contracts.
We answer the question in the affirmative.
It bears emphasizing that the action filed by the petitioners before the trial court
in Civil Case No. 16,802 is for the annulment of several contracts entered into by
Agustin for and in behalf of the estate of Melitona, namely: (a) contract of mortgage
in favor of respondent PNB, (b) contract of sale in favor of Arguna involving seven
(7) parcels of land; and (c) contract of sale of a parcel of land in favor of PLEI.
The trial court acquired jurisdiction over the subject matter of the case upon the
allegations in the complaint that said contracts were entered into despite lack of
notices to the heirs of the petition for the approval of those contracts by the intestate
court.
Contrary to the view of the Court of Appeals, the action which petitioners lodged
with the trial court in Civil Case No. 16,802 is not an action to annul the orders of
the intestate court, which, according to CA, cannot be done collaterally. It is the
validity of the contracts of mortgage and sale which is directly attacked in the action.
And, in the exercise of its jurisdiction, the trial court made a factual finding in its
decision of August 7, 1998 that petitioners were, in fact, not notified by their father
Agustin of the filing of his petitions for permission to mortgage/sell the estate
properties. The trial court made the correct conclusion of law that the challenged
orders of the intestate court granting Agustins petitions were null and void for lack of
compliance with the mandatory requirements of Rule 89 of the Rules of Court,
particularly Sections 2, 4, 7 thereof, which respectively read:
Sec. 2. When court may authorize sale, mortgage, or other encumbrance of realty to
pay debts and legacies through personalty not exhausted. - When the personal estate
of the deceased is not sufficient to pay the debts, expenses of administration, and
legacies, or where the sale of such personal estate may injure the business or other
interests of those interested in the estate, and where a testator has not otherwise made
sufficient provision for the payment of such debts, expenses, and legacies, the court,
on the application of the executor or administrator and on written notice to the
heirs, devisees, and legatees residing in the Philippines, may authorize the executor
or administrator to sell, mortgage, or otherwise encumber so much as may be
necessary of the real estate, in lieu of personal estate, for the purpose of paying such
debts, expenses, and legacies, if it clearly appears that such sale, mortgage, or
encumbrance would be beneficial to the persons interested; and if a part cannot be
sold, mortgaged, or otherwise encumbered without injury to those interested in the
remainder, the authority may be for the sale, mortgage, or other encumbrance of the
whole of such real estate, or so much thereof as is necessary or beneficial under the
circumstances.
Sec. 4. When court may authorize sale of estate as beneficial to interested persons.
Disposal of proceeds. - When it appears that the sale of the whole or a part of the real
or personal estate, will be beneficial to the heirs, devisees, legatees, and other
interested persons, the court may, upon application of the executor or administrator
and on written notice to the heirs, devisees and legatees who are interested in the
estate to be sold, authorize the executor or administrator to sell the whole or a part of
said estate, although not necessary to pay debts, legacies, or expenses of
administration; but such authority shall not be granted if inconsistent with the
provisions of a will. In case of such sale, the proceeds shall be assigned to the
persons entitled to the estate in the proper proportions.
Sec. 7. Regulations for granting authority to sell, mortgage, or otherwise encumber
estate. - The court having jurisdiction of the estate of the deceased may authorize the
executor or administrator to sell personal estate, or to sell, mortgage, or otherwise
encumber real estate; in cases provided by these rules and when it appears necessary
or beneficial, under the following regulations:
(a) The executor or administrator shall file a written petition setting forth the debts
due from the deceased, the expenses of administration, the legacies, the value of the
personal estate, the situation of the estate to be sold, mortgaged, or otherwise
encumbered, and such other facts as show that the sale, mortgage, or other
encumbrance is necessary or beneficial;
(b) The court shall thereupon fix a time and place for hearing such petition,
and cause notice stating the nature of the petition, the reason for the same, and the
time and place of hearing, to be given personally or by mail to the persons interested,
and may cause such further notice to be given, by publication or otherwise, as it shall
deem proper; (Emphasis supplied).
xxx xxx xxx
Settled is the rule in this jurisdiction that when an order authorizing the sale or
encumbrance of real property was issued by the testate or intestate court without
previous notice to the heirs, devisees and legatees as required by the Rules, it is not
only the contract itself which is null and void but also the order of the court
authorizing the same.[11]
Thus, in Maneclang vs. Baun,[12] the previous administrator of the estate filed a
petition with the intestate court seeking authority to sell portion of the estate, which
the court granted despite lack of notice of hearing to the heirs of the decedent. The
new administrator of the estate filed with the Regional Trial Court an action for the
annulment of the sales made by the previous administrator. After trial, the trial court
held that the order of the intestate court granting authority to sell, as well as the deed
of sale, were void. On appeal directly to this Court, We held that without compliance
with Sections 2, 4 and 7 of Rule 89 of the Rules of Court, the authority to sell, the
sale itself and the order approving it would be null and void ab initio.
In Liu vs. Loy, Jr.,[13] while the decedent was still living, his son and attorney-in-fact
sold in behalf of the alleged decedent certain parcels of land to Frank Liu. After the
decedent died, the son sold the same properties to two persons. Upon an ex parte
motion filed by the 2nd set of buyers of estate properties, the probate court approved
the sale to them of said properties. Consequently, certificates of title covering the
estate properties were cancelled and new titles issued to the 2 nd set of buyers. Frank
Liu filed a complaint for reconveyance/ annulment of title with the Regional Trial
Court. The trial court dismissed the complaint and the Court of Appeals affirmed the
dismissal. When the case was appealed to us, we set aside the decision of the
appellate court and declared the probate court's approval of the sale as completely
void due to the failure of the 2 nd set of buyers to notify the heir-administratrix of the
motion and hearing for the sale of estate property.
Clearly, the requirements of Rule 89 of the Rules of Court are mandatory and failure
to give notice to the heirs would invalidate the authority granted by the
intestate/probate court to mortgage or sell estate assets.
Here, it appears that petitioners were never notified of the several petitions filed by
Agustin with the intestate court to mortgage and sell the estate properties of his wife.
According to the trial court, the [P]etition for Authority to Increase
Mortgage and [P]etition for Declaration of Heirs and for Authority to Increase
Indebtedness, filed by Agustin on July 16, 1973 and October 5, 1974, respectively,
do not contain information that petitioners were furnished with copies of said
petitions. Also, notices of hearings of those petitions were not sent to the petitioners.
[14]
The trial court also found in Civil Case No. 16,802 that Agustin did not notify
petitioners of the filing of his petitions for judicial authority to sell estate properties
to Arturo Arguna and PLEI.[15]
As it were, the appellate court offered little explanation on why it did not believe the
trial court in its finding that petitioners were ignorant of Agustins scheme to
mortgage and sell the estate properties.
Aside from merely quoting the orders of July 18, 1973 and October 19, 1974 of the
intestate court, the Court of Appeals leaves us in the dark on its reason for
disbelieving the trial court. The appellate court did not publicize its appraisal of the
evidence presented by the parties before the trial court in the matter regarding the
knowledge, or absence thereof, by the petitioners of Agustins petitions. The appellate
court cannot casually set aside the findings of the trial court without stating clearly
the reasons therefor. Findings of the trial court are entitled to great weight, and
absent any indication to believe otherwise, we simply cannot adopt the conclusion
reached by the Court of Appeals.
Laches is negligence or omission to assert a right within a reasonable time,
warranting the presumption that the party entitled to assert it has either abandoned or
declined the right.[16]The essential elements of laches are: (1) conduct on the part of
the defendant, or of one under whom he claims, giving rise to the situation of which
complaint is made and for which the complaint seeks a remedy; (2) delay in asserting
the complainant's rights, the complainant having had knowledge or notice of the
defendant's conduct and having been afforded an opportunity to institute a suit; (3)
lack of knowledge or notice on the part of the defendant that the complainant would
assert the right on which he bases his suit; and (4) injury or prejudice to the
defendant in the event relief is accorded to the complainant, or the suit is not held
barred.[17]

In the present case, the appellate court erred in appreciating laches against
petitioners. The element of delay in questioning the subject orders of the intestate
court is sorely lacking. Petitioners were totally unaware of the plan of Agustin to
mortgage and sell the estate properties. There is no indication that mortgagor PNB
and vendee Arguna had notified petitioners of the contracts they had executed with
Agustin. Although petitioners finally obtained knowledge of the subject petitions
filed by their father, and eventually challenged the July 18, 1973, October 19, 1974,
February 25, 1980 and January 7, 1981 orders of the intestate court, it is not clear
from the challenged decision of the appellate court when they (petitioners) actually
learned of the existence of said orders of the intestate court. Absent any indication of
the point in time when petitioners acquired knowledge of those orders, their alleged
delay in impugning the validity thereof certainly cannot be established. And the
Court of Appeals cannot simply impute laches against them.

WHEREFORE, the assailed issuances of the Court of Appeals are hereby

REVERSED and SET ASIDE and the decision dated August 7, 1998 of the trial
court in its Civil Case No. 16,802 REINSTATED.

SO ORDERED.
G.R. No. L-14400 August 5, 1960
FELICISIMO GATMAITAN, administrator, plaintiff-appellant,
vs.
GORGONIO D. MEDINA, co-administrator, defendant-appellee.
REYES, J.B.L., J.:
Appeal from the order dated April 5, 1957 of the Court of First Instance of Nueva
Ecija in Special Proceedings No. 972, which reads as follows:
This is a motion for partial partition and distribution. The parties having agreed that
only the heirs Dominica Medina and Gorgonio Medina be given an advance payment
of P1,000.00 from the cash deposit, and they, as well as the other heirs twenty-five
cavans of palay each for their subsistence, to be included in the final distribution of
the residue of the estate, the administrator is hereby ordered to advance to Dominica
Medina and Gorgonio Medina the amount of P1,000.00, each, from the cash deposit
of the estate, and twenty-five cavans each to all the five heirs for their subsistence,
pending the liquidation of the said estate, provided that the same shall be collated in
the final distribution of shares among the heirs;
and from the order of April 29, 1957, denying for lack of merit appellant's motion for
reconsideration.
The records disclose that the following proceedings were had in the lower court:
On March 10, 1956, Felicisimo Gatmaitan filed a petition, seeking his appointment
as administrator of the property of his wife, Veronica Medina, who died intestate. On
April 2, 1956, Gorgonio Medina and Dominica Medina, as heirs of the deceased (she
being their full-blooded sister), filed an opposition, praying that Gorgonio Medina, or
a neutral third party, or Felicisimo Gatmaitan and Gorgonio Medina, jointly, be
appointed as administrator or administrators of the estate. In an order dated July 18,
1956, the court appointed Felicisimo Gatmaitan as administrator of the estate with a
bond in the amount of P2,000.00 and Gorgonio Medina as co-administrator without
compensation and bond.
On March 14, 1957, administrator Gatmaitan filed an amended inventory of the
estate left by the deceased consisting of an undivided half of the conjugal partnership
properties and amounting all in all to P31,336.60. An opposition to the admission of
said inventory was registered by the oppositors on the ground that the same did not
represent the true and faithful list of the properties left by the deceased, and,
particularly, that a parcel of twenty-two (22) hectares of land, more or less, was left
out. In view of the opposition, the hearing and consideration of the amended
inventory was, in an order dated April 29, 1957, postponed until further assignment.
On April 2, 1957, the heirs of the deceased, through counsel, filed a "Motion for
Partial Partition and Distribution," stating that the estate had no debts and the heirs
were all of legal age; that some of them were necessitous and in need of cash; and
praying that the share corresponding to each of the heirs in the palay produce for the
agricultural year 1956-1957, as well as the cash deposit in the different banks, be
ordered partially distributed among the heirs pending the final distribution of the
estate. The court heard counsel for administrator Gatmaitan and for the heirs or
oppositors, but without receiving any evidence whatsoever, promulgated on April 5,
1957 the order subject-matter of the instant appeal. On April 26, 1957, the
administrator, Gatmaitan, filed a motion for reconsideration, calling attention to the
fact that, contrary to what the order states, "he has not agreed to the partial
distribution of the estate in the manner contained in the order", and urging that "the
sums ordered to be partially distributed are not warranted by the circumstances
obtaining" in the case and that, moreover, "the manner of distribution will work
difficulties to the estate and to the heirs themselves". As previously indicated, this
motion was denied by Judge Agustin P. Montesa for lack of merit.
Gatmaitan filed a notice of appeal from the foregoing orders. On May 17, 1957,
appellant filed a record on appeal and notified counsel for the oppositors of the date
he would move for the approval thereof by the court. The order of Judge Felix
Makasiar, dated July 15, 1957, approving the record on appeal presented by
appellant, states that counsel for the oppositors had failed to file written opposition
thereto as required in the order of the court dated June 12, 1957, notwithstanding the
length of time that had already elapsed. In his brief, appellant only made one
assignment of error, and it reads thus:
The lower court gravely abused its discretion in directing a partial distribution of the
intestate estate of the deceased Veronica Medina in favor of appellees, under its order
of April 5, 1957, without requiring the distributees to file the proper bonds pursuant
to the provisions of Rule 91, Section 1 of the Revised Rules of Court.
This appeal was originally taken to the Court of Appeals, but, since there is no
serious issue of fact involved in the case, the same was certified to us pursuant to the
appellate court's resolution of August 28, 1958.
The lower court, we believe, erred in rendering the order appealed from. A partial
distribution1 of the decedent's estate pending the final termination of the testate or
intestate proceedings should as much as possible be discouraged by the courts and,
unless in extreme cases, such form of advances of inheritance should not be
countenanced. The reason for this strict rule is obvious — courts should guard with
utmost zeal and jealousy the estate of the decedent to the end that the creditors
thereof be adequately protected and all the rightful heirs assured of their shares in the
inheritance.
Why the appealed order is unwarranted is evident on three counts. Firstly, to our
mind, the partial distribution was prematurely ordered by the lower court. It appears
that at the time the questioned order was rendered, the amended inventory and
appraisal filed by the administrator-appellant was not yet even accepted, and it was
still under consideration by the court, in view of an opposition to the admission
thereof by some of the heirs. Moreover, it seems that notices for the presentation of
claims by possible creditors of the estate had not yet been published, so that the
period for the presentation of claims had not as yet elapsed. Consequently, it cannot
be safely said that the court had a sufficient basis upon which to order a partial
distribution of the properties, having in mind the adverse effects that it might have on
the rights of the creditors and the heirs alike.2 As pointed out by the appellant, there
are indications that the fruits and cash amounts ordered to be partially distributed
would be in excess of the distributees' full inheritance from the estate. The inventory,
as filed, showed a total sum of P31,336.60 that actually represents the conjugal
partnership assets, half of which belongs to the surviving spouse. Said inventory
does not embody any deductions for such expenses as funeral charges, inheritance
taxes, expenses for administration or an estimate of probable debts of the estate. It is
worthwhile to state in this connection that besides the appellant, as the surviving
spouse of the decedent, there are about eight others, all claiming to be lawful heirs
and seeking respective shares in the estate, five of whom are alleged full-blood
brothers and sisters and three half-blood brothers3 of the deceased Medina. It should
be noted that appellees, being brothers and sisters of the deceased, are not entitled to
allowances for support, such as the court is authorized to provide, under Section 3 of
Rule 84 of the Rules of Court, for the widow and the children 4 of the deceased
during the settlement of the estate proceedings, to be deducted from the respective
shares of the participants.
Second, and more important, no bond was fixed by the court as a condition precedent
to the partial distribution ordered by it, a bond which, because of the reasons already
adduced, becomes all the more imperative.
Rule 91, Section 1 of the Rules of Court, specifically provides as follows:
When the debts, funeral charges, and expenses of administration, the allowances 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 person entitled to the same, naming them and the
proportions, or parts, to which 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. . . .
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 the sum to be fixed by the court, conditioned for the payment of said
obligations within such time as the courts directs. (Emphasis supplied)
Appellees contend that the order of partial distribution having been issued pursuant
to an agreement of the parties, the same could not now be assailed by the appellant.
While the wording of the appealed order seem to indicate that it was rendered with
the conformity of the heirs, there is reason to believe that it was just a mistaken
impression on the part of the court. Soon after the order was rendered, the
administrator-appellant filed a motion for reconsideration, among other things,
calling the attention of the court that he never agreed to the partial distribution of the
estate in the manner ordained in the appealed order. Although said motion was
denied for lack of merit, the court did not deny categorically appellant's imputation,
which could have been easily averred to by it; nor did the appellees at any time prior
to this appeal controvert the aforesaid allegation of the administrator. There is
plausibility in appellant's statement that the agreement referred to in the order was
actually one between the appellees among themselves.
It should be noted, furthermore, that the bond required by the Rules is not solely for
the protection of the heirs then appearing, but also for the benefit of creditors and
subsequent claimants who have not agreed to the advances.
As to the argument, that the order in question is merely interlocutory and therefore
not appealable, We find that the objection was not seasonably interposed by the
appellees. In Salazar vs. Salazar, G.R. No. L-5823, April 29, 1953, it was held, and
we quote:
The motion to dismiss filed by appellee during the pendency of this appeal on the
ground that the order appealed from is not appealable because it is merely
interlocutory, cannot be entertained. While an order denying or granting
alimony pendente lite is interlocutory and consequently non appealable . . ., however,
if appeal is taken therefrom, and no timely objection is interposed thereto, the
objection is deemed waived. Thus, when the objection is founded on the ground that
the judgment appealed from is interlocutory, but the appellee, before making such
objection, has allowed the record on appeal to be approved and printed, and has
allowed the appellant to print his brief, such objection is too late and is deemed
waived (Slade-Perkins vs. Perkins, 57 Phil., 223, 225; Linguengo and Martinez vs.
Herrero, 17 Phil., 29; Moran, Comments on the Rules of Court, Vol. 1, 1952, ed., p.
987).
Lastly, appellees urged that this appeal was prematurely taken in that appellant has
not as yet formally objected to the proffered bond as mentioned in an alleged order
of the court, dated May 16, 1957, which appellees have quoted in their brief, as
follows:
Atty. Cesar Francisco, counsel for the administrator, is hereby given one week from
today within which to file his manifestation as to whether the administrator is willing
to withdraw his appeal from the order dated April 5, 1957, provided Atty. V.M. Ruiz
files a bond in the amount of P2,000.00 and the value of 25 cavanes of palay granted
to each of the two heirs Dominica Medina and Gorgonio Medina in the aforesaid
order of the Court to guarantee the refund of the said amount and the value of the
palay should the same be found to be in excess of what is due to the said two heirs
upon the final distribution of the estates;

and upon which, they (appellees) filed the following manifestation dated May 23,
1957:

CONSIDERING that up to the present, the Court has not as yet ruled upon counsel's
opposition or objection to the administrator's appeal, nor have the administrator or
that of his counsel rejected the heir's offer of a bond to answer for whatever excess
they might receive as advance inheritance, the undersigned counsel for the heirs
above-named respectfully prays the Court to hold in abeyance whatever action it
shall take towards the approval or non-approval of the Record on Appeal, until such
time as it shall have ruled upon their opposition or until the administrator shall have
rejected formally the offer of a bond aforesaid. Counsel shall then in time file his
corresponding opposition to the Record on Appeal.

The tenor of the order of May 16, 1957, as well as the fact that neither said order nor
the "constancia" of appellees are included in the Record on Appeal, indicates that the
belated offer to file a bond amounted to no more than an attempt of appellees to
settle the particular issue between the parties that was rejected by the appellant. That
the record on appeal was approved much later, on July 15, 1957, and yet without the
written opposition . . . required in the order of this Court dated June 12, 1957,
notwithstanding the length of time that has already elapsed (R.A. p. 23), and the
absence of proof that the bond offered was ever filed and approved by the Court,
fortify that conclusion. Anyway, since the purpose of the bond required by section 1,
paragraph 2, of Rule 91 is to protect not only the appellant but also the creditors and
subsequent claimants to the estate, in order that they may not be prejudiced by the
partial distribution, the amount of the bond could not be fixed without hearing such
interested parties, and there is no showing that they were consulted. Hence, the bond
offered could not affect the merits of this appeal, although the Court below is not
precluded for approving a new bond. Wherefore, the order of partial distribution
appealed from is set aside, without prejudice to the issue of another order after strict
compliance with the Rules of Court. The records are ordered remanded to the lower
court for further proceedings. Costs against appellees.
G.R. No. 174873 August 26, 2008
QUASHA ANCHETA PEÑA AND NOLASCO LAW OFFICE FOR ITS OWN
BEHALF, AND REPRESENTING THE HEIRS OF RAYMOND
TRIVIERE, petitioners,
vs.
LCN CONSTRUCTION CORP., respondent.
DECISION
CHICO-NAZARIO, J.:
This is a Petition for Review under Rule 45 of the Revised Rules of Court with
petitioners Quasha Ancheta Peña and Nolasco Law Office (Quasha Law Office) and
the Heirs of Raymond Triviere praying for the reversal of the Decision 1 dated 11
May 2006 and Resolution2 dated 22 September 2006 of the Court of Appeals
granting in part the Petition for Certiorari filed by respondent LCN Construction
Corporation (LCN) in CA-G.R. SP No. 81296.
The factual antecedents of the case are as follows:
Raymond Triviere passed away on 14 December 1987. On 13 January 1988,
proceedings for the settlement of his intestate estate were instituted by his widow,
Amy Consuelo Triviere, before the Regional Trial Court (RTC) of Makati City,
Branch 63 of the National Capital Region (NCR), docketed as Special Proceedings
Case No. M-1678. Atty. Enrique P. Syquia (Syquia) and Atty. William H. Quasha
(Quasha) of the Quasha Law Office, representing the widow and children of the late
Raymond Triviere, respectively, were appointed administrators of the estate of the
deceased in April 1988. As administrators, Atty. Syquia and Atty. Quasha incurred
expenses for the payment of real estate taxes, security services, and the preservation
and administration of the estate, as well as litigation expenses.
In February 1995, Atty. Syquia and Atty. Quasha filed before the RTC a Motion for
Payment of their litigation expenses. Citing their failure to submit an accounting of
the assets and liabilities of the estate under administration, the RTC denied in May
1995 the Motion for Payment of Atty. Syquia and Atty. Quasha.
In 1996, Atty. Quasha also passed away. Atty. Redentor Zapata (Zapata), also of the
Quasha Law Office, took over as the counsel of the Triviere children, and continued
to help Atty. Syquia in the settlement of the estate.
On 6 September 2002, Atty. Syquia and Atty. Zapata filed another Motion for
Payment,3 for their own behalf and for their respective clients, presenting the
following allegations:
(1) That the instant Petition was filed on January 13, 1988; and Atty. Enrique P.
Syquia was appointed Administrator by the Order of this Honorable Court dated
April 12, 1988, and discharged his duties starting April 22, 1988, after properly
posting his administrator's bond up to this date, or more than fourteen (14) years
later. Previously, there was the co-administrator Atty. William H. Quasha, but he has
already passed away.
(2) That, together with Co-administrator Atty. William H. Quasha, they have
performed diligently and conscientiously their duties as Co-administrators, having
paid the required Estate tax and settled the various claims against the Estate, totaling
approximately twenty (20) claims, and the only remaining claim is the unmeritorious
claim of LCN Construction Corp., now pending before this Honorable Court;
(3) That for all their work since April 22, 1988, up to July 1992, or for four (4) years,
they were only given the amount of P20,000.00 each on November 28, 1988; and
another P50,00.00 each on October 1991; and the amount of P100,000.00 each on
July 1992; or a total of P170,000.00 to cover their administration fees, counsel fees
and expenses;
(4) That through their work, they were able to settle all the testate (sic) claims except
the remaining baseless claim of LCN Construction Corp., and were able to dismiss
two (2) foreign claims, and were also able to increase the monetary value of the
estate from roughly over P1Million to the present P4,738,558.63 as of August 25,
2002 and maturing on September 27, 2002; and the money has always been with the
Philippine National Bank, as per the Order of this Honorable Court;
(5) That since July 1992, when the co-administrators were paid P100,000.00 each,
nothing has been paid to either Administrator Syquia or his client, the widow
Consuelo Triviere; nor to the Quasha Law Offices or their clients, the children of the
deceased Raymond Triviere;
(6) That as this Honorable Court will notice, Administrator Syquia has always been
present during the hearings held for the many years of this case; and the Quasha Law
Offices has always been represented by its counsel, Atty. Redentor C. Zapata; and
after all these years, their clients have not been given a part of their share in the
estate;
(7) That Administrator Syquia, who is a lawyer, is entitled to additional
Administrator's fees since, as provided in Section 7, Rule 85 of the Revised Rules of
Court:
"x x x where the estate is large, and the settlement has been attended with great
difficulty, and has required a high degree of capacity on the part of the executor or
administrator, a greater sum may be allowed…"
In addition, Atty. Zapata has also been present in all the years of this case. In
addition, they have spent for all the costs of litigation especially the transcripts, as
out-of-pocket expenses.
(8) That considering all the foregoing, especially the fact that neither the
Administrator or his client, the widow; and the Quasha Law Offices or their clients,
the children of the deceased, have received any money for more than ten (10) years
now, they respectfully move that the amount of P1Million be taken from the Estate
funds, to be divided as follows:
a) P450,000.00 as share of the children of the deceased [Triviere] who are
represented by the Quasha Ancheta Peña & Nolasco Law Offices;
b) P200,000.00 as attorney's fees and litigation expenses for the Quasha Ancheta
Peña & Nolasco Law Offices;
c) P150,000.00 as share for the widow of the deceased [Raymond Triviere], Amy
Consuelo Triviere; and
d) P200,000.00 for the administrator Syquia, who is also the counsel of the widow;
and for litigation costs and expenses.
LCN, as the only remaining claimant 4 against the Intestate Estate of the Late
Raymond Triviere in Special Proceedings Case No. M-1678, filed its Comment
on/Opposition to the afore-quoted Motion on 2 October 2002. LCN countered that
the RTC had already resolved the issue of payment of litigation expenses when it
denied the first Motion for Payment filed by Atty. Syquia and Atty. Quasha for
failure of the administrators to submit an accounting of the assets and expenses of
the estate as required by the court. LCN also averred that the administrators and the
heirs of the late Raymond Triviere had earlier agreed to fix the former's fees at only
5% of the gross estate, based on which, per the computation of LCN, the
administrators were even overpaid P55,000.00. LCN further asserted that contrary to
what was stated in the second Motion for Payment, Section 7, Rule 85 of the Revised
Rules of Court was inapplicable,5 since the administrators failed to establish that the
estate was large, or that its settlement was attended with great difficulty, or required a
high degree of capacity on the part of the administrators. Finally, LCN argued that its
claims are still outstanding and chargeable against the estate of the late Raymond
Triviere; thus, no distribution should be allowed until they have been paid; especially
considering that as of 25 August 2002, the claim of LCN against the estate of the late
Raymond Triviere amounted to P6,016,570.65 as against the remaining assets of the
estate totaling P4,738,558.63, rendering the latter insolvent.
On 12 June 2003, the RTC issued its Order6 taking note that "the widow and the heirs
of the deceased Triviere, after all the years, have not received their respective share
(sic) in the Estate x x x."
The RTC declared that there was no more need for accounting of the assets and
liabilities of the estate considering that:
[T]here appears to be no need for an accounting as the estate has no more assets
except the money deposited with the Union Bank of the Philippines under Savings
Account No. 12097-000656-0 x x x; on the estate taxes, records shows (sic) that the
BIR Revenue Region No. 4-B2 Makati had issued a certificate dated April 27, 1988
indicating that the estate taxes has been fully paid.7
As to the payment of fees of Atty. Syquia and the Quasha Law Office, the RTC found
as follows:
[B]oth the Co-Administrator and counsel for the deceased (sic) are entitled to the
payment for the services they have rendered and accomplished for the estate and the
heirs of the deceased as they have over a decade now spent so much time, labor and
skill to accomplish the task assigned to them; and the last time the administrators
obtained their fees was in 1992.8
Hence, the RTC granted the second Motion for Payment; however, it reduced the
sums to be paid, to wit:
In view of the foregoing considerations, the instant motion is hereby GRANTED.
The sums to be paid to the co-administrator and counsel for the heirs of the deceased
Triviere are however reduced.
Accordingly, the co-administrator Atty. Syquia and aforenamed counsel are
authorized to pay to be sourced from the Estate of the deceased as follows:
a) P450,000.00 as share of the children of the deceased who are represented by the
Quasha, Ancheta, Pena, Nolasco Law Offices;
b) P100,000.00 as attorney's fees and litigation expenses for said law firm;
c) P150,000.00 as share for the widow of the deceased Amy Consuelo Triviere; and
d) P100,000.00 for the Co-administrator Atty. Enrique P. Syquia and for litigation
costs and expenses.9
LCN filed a Motion for Reconsideration10 of the foregoing Order on 2 July 2003, but
it was denied by the RTC on 29 October 2003.11
On 13 May 2004, LCN sought recourse from the Court of Appeals by assailing in
CA-G.R. SP No. 81296, a Petition for Certiorari, the RTC Orders dated 12 June
2003 and 2 July 2003, for having been rendered with grave abuse of
discretion.12 LCN maintained that:
(1) The administrator's claim for attorney's fees, aside from being prohibited under
paragraph 3, Section 7 of Rule 85 is, together with administration and litigation
expenses, in the nature of a claim against the estate which should be ventilated and
resolved pursuant to Section 8 of Rule 86;
(2) The awards violate Section 1, Rule 90 of the Rules of Court, as there still exists
its (LCN's) unpaid claim in the sum of P6,016,570.65; and
(3) The alleged deliberate failure of the co-administrators to submit an accounting of
the assets and liabilities of the estate does not warrant the Court's favorable action on
the motion for payment.13
On 11 May 2006, the Court of Appeals promulgated a Decision essentially ruling in
favor of LCN.
While the Court of Appeals conceded that Atty. Syquia and the Quasha Law Office,
as the administrators of the estate of the late Raymond Triviere, were entitled to
administrator's fees and litigation expenses, they could not claim the same from the
funds of the estate. Referring to Section 7, Rule 85 of the Revised Rules of Court, the
appellate court reasoned that the award of expenses and fees in favor of executors
and administrators is subject to the qualification that where the executor or
administrator is a lawyer, he shall not charge against the estate any professional fees
for legal services rendered by him. Instead, the Court of Appeals held that the
attorney's fees due Atty. Syquia and the Quasha Law Offices should be borne by their
clients, the widow and children of the late Raymond Triviere, respectively.
The appellate court likewise revoked the P450,000.00 share and P150,000.00 share
awarded by the RTC to the children and widow of the late Raymond Triviere,
respectively, on the basis that Section 1, Rule 91 of the Revised Rules of Court
proscribes the distribution of the residue of the estate until all its obligations have
been paid.
The appellate court, however, did not agree in the position of LCN that the
administrators' claims against the estate should have been presented and resolved in
accordance with Section 8 of Rule 86 of the Revised Rules of Court. Claims against
the estate that require presentation under Rule 86 refer to "debts or demands of a
pecuniary nature which could have been enforced against the decedent during his
lifetime and which could have been reduced to simple judgment and among which
are those founded on contracts." The Court of Appeals also found the failure of the
administrators to render an accounting excusable on the basis of Section 8, Rule 85
of the Revised Rules of Court.14
Finding the Petition for Certiorari of LCN partly meritorious, the Court of Appeals
decreed:
WHEREFORE, premises considered, the instant petition is hereby PARTLY
GRANTED. The assailed Orders of the public respondent are hereby AFFIRMED
with MODIFICATION in that -
(1) the shares awarded to the heirs of the deceased Triviere in the assailed Order of
June 12, 2003 are hereby DELETED; and
(2) the attorney's fees awarded in favor of the co-administrators are
hereby DELETED. However, inasmuch as the assailed order fails to itemize these
fees from the litigation fees/administrator's fees awarded in favor of the co-
administrators, public respondent is hereby directed to determine with particularity
the fees pertaining to each administrator.15
Petitioner filed a Motion for Reconsideration16 of the 11 May 2006 Decision of the
Court of Appeals. The Motion, however, was denied by the appellate court in a
Resolution dated 22 September 2006,17explaining that:
In sum, private respondents did not earlier dispute [herein respondent LCN's] claim
in its petition that the law firm and its lawyers served as co-administrators of the
estate of the late Triviere. It is thus quite absurd for the said law firm to now dispute
in the motion for reconsideration its being a co-administrator of the estate.
[Herein petitioners], through counsel, likewise appear to be adopting in their motion
for reconsideration a stance conflicting with their earlier theory submitted to this
Court. Notably, the memorandum for [petitioner] heirs states that the claim for
attorney's fees is supported by the facts and law. To support such allegation, they
contend that Section 7 (3) of Rule 85 of the 1997 Rules of Civil Procedure finds no
application to the instant case since "what is being charged are not professional fees
for legal services rendered but payment for administration of the Estate which has
been under the care and management of the co-administrators for the past fourteen
(14) years." Their allegation, therefore, in their motion for reconsideration that
Section 7 (3) of Rule 85 is inapplicable to the case of Quasha Law Offices because it
is "merely seeking payment for legal services rendered to the estate and for litigation
expenses" deserves scant consideration.
xxxx
WHEREFORE, premises considered, private respondents' motion for reconsideration
is hereby DENIED for lack of merit. 18
Exhausting all available legal remedies, petitioners filed the present Petition for
Review on Certioraribased on the following assignment of errors:
I.
THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE
AWARD IN FAVOR OF THE HEIRS OF THE LATE RAYMOND TRIVIERE IS
ALREADY A DISTRIBUTION OF THE RESIDUE OF THE ESTATE.
II.
THE HONORABLE COURT OF APPEALS ERRED IN NULLIFYING THE
AWARD OF ATTORNEY'S FEES IN FAVOR OF THE CO-ADMINISTRATORS
I estate, the petitioner children and widow were being awarded by the RTC, in its 12
The Court of Appeals modified the 12 June 2003 Order of the RTC by deleting the
awards of P450,000.00 and P150,000.00 in favor of the children and widow of the
late Raymond Triviere, respectively. The appellate court adopted the position of LCN
that the claim of LCN was an obligation of the estate which was yet unpaid and,
under Section 1, Rule 90 of the Revised Rules of Court, barred the distribution of the
residue of the estate.
Petitioners, though, insist that the awards in favor of the petitioner children and
widow of the late Raymond Triviere is not a distribution of the residue of the estate,
thus, rendering Section 1, Rule 90 of the Revised Rules of Court inapplicable.
Section 1, Rule 90 of the Revised Rules of Court provides:
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 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.
According to petitioners, the 12 June 2003 Order of the RTC should not be construed
as a final order of distribution. The 12 June 2003 RTC Order granting the second
Motion for Payment is a mere interlocutory order that does not end the estate
proceedings. Only an order of distribution directing the delivery of the residue of the
estate to the proper distributees brings the intestate proceedings to a close and,
consequently, puts an end to the administration and relieves the administrator of his
duties.
A perusal of the 12 June 2003 RTC Order would immediately reveal that it was not
yet distributing the residue of the estate. The said Order grants the payment of certain
amounts from the funds of the estate to the petitioner children and widow of the late
Raymond Triviere considering that they have not received their respective shares
therefrom for more than a decade. Out of the reported P4,738,558.63 value of the
June 2003 Order, their shares in the collective amount of P600,000.00. Evidently, the
remaining portion of the estate still needs to be settled. The intestate proceedings
were not yet concluded, and the RTC still had to hear and rule on the pending claim
of LCN against the estate of the late Raymond Triviere and only thereafter can it
distribute the residue of the estate, if any, to his heirs.
While the awards in favor of petitioner children and widow made in the RTC Order
dated 12 June 2003 was not yet a distribution of the residue of the estate, given that
there was still a pending claim against the estate, still, they did constitute a partial
and advance distribution of the estate. Virtually, the petitioner children and widow
were already being awarded shares in the estate, although not all of its obligations
had been paid or provided for.
Section 2, Rule 109 of the Revised Rules of Court expressly recognizes advance
distribution of the estate, thus:
Section 2. Advance distribution in special proceedings. - Notwithstanding 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. (Emphases supplied.)
The second paragraph of Section 1 of Rule 90 of the Revised Rules of Court allows
the distribution of the estate prior to the payment of the obligations mentioned
therein, provided that "the distributees, or any of them, gives 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."
In sum, although it is within the discretion of the RTC whether or not to permit the
advance distribution of the estate, its exercise of such discretion should be qualified
by the following: [1] only part of the estate that is not affected by any pending
controversy or appeal may be the subject of advance distribution (Section 2, Rule
109); and [2] the distributees must post a bond, fixed by the court, conditioned for
the payment of outstanding obligations of the estate (second paragraph of Section 1,
Rule 90). There is no showing that the RTC, in awarding to the petitioner children
and widow their shares in the estate prior to the settlement of all its obligations,
complied with these two requirements or, at the very least, took the same into
consideration. Its Order of 12 June 2003 is completely silent on these matters. It
justified its grant of the award in a single sentence which stated that petitioner
children and widow had not yet received their respective shares from the estate after
all these years. Taking into account that the claim of LCN against the estate of the
late Raymond Triviere allegedly amounted to P6,016,570.65, already in excess of
the P4,738,558.63 reported total value of the estate, the RTC should have been more
prudent in approving the advance distribution of the same.
Petitioners earlier invoked Dael v. Intermediate Appellate Court,,19 where the Court
sustained an Order granting partial distribution of an estate.
However, Dael is not even on all fours with the case at bar, given that the Court
therein found that:
Where, however, the estate has sufficient assets to ensure equitable distribution of
the inheritance in accordance with law and the final judgment in the proceedings and
it does not appear there are unpaid obligations, as contemplated in Rule 90, for
which provisions should have been made or a bond required, such partial distribution
may be allowed. (Emphasis supplied.)
No similar determination on sufficiency of assets or absence of any outstanding
obligations of the estate of the late Raymond Triviere was made by the RTC in this
case. In fact, there is a pending claim by LCN against the estate, and the amount
thereof exceeds the value of the entire estate.
Furthermore, in Dael, the Court actually cautioned that partial distribution of the
decedent's estate pending final termination of the testate or intestate proceeding
should as much as possible be discouraged by the courts, and, except in extreme
cases, such form of advances of inheritance should not be countenanced. The reason
for this rule is that courts should guard with utmost zeal and jealousy the estate of the
decedent to the end that the creditors thereof be adequately protected and all the
rightful heirs be assured of their shares in the inheritance.
Hence, the Court does not find that the Court of Appeals erred in disallowing the
advance award of shares by the RTC to petitioner children and the widow of the late
Raymond Triviere.
II
On the second assignment of error, petitioner Quasha Law Office contends that it is
entitled to the award of attorney's fees and that the third paragraph of Section 7, Rule
85 of the Revised Rules of Court, which reads:
Section 7. What expenses and fees allowed executor or administrator. Not to charge
for services as attorney. Compensation provided by will controls unless renounced. x
x x.
xxxx
When the executor or administrator is an attorney, he shall not charge against the
estate any professional fees for legal services rendered by him. (Emphasis supplied.)
is inapplicable to it. The afore-quoted provision is clear and unequivocal and needs
no statutory construction. Here, in attempting to exempt itself from the coverage of
said rule, the Quasha Law Office presents conflicting arguments to justify its claim
for attorney's fees against the estate. At one point, it alleges that the award of
attorney's fees was payment for its administration of the estate of the late Raymond
Triviere; yet, it would later renounce that it was an administrator.
In the pleadings filed by the Quasha Law Office before the Court of Appeals, it
referred to itself as co-administrator of the estate.
In the Comment submitted to the appellate court by Atty. Doronila, the member-
lawyer then assigned by the Quasha Law Office to the case, it stated that:
The 12 June 2003 Order granted the Motion for Payment filed by Co-Administrator
and counsel Atty. Enrique P. Syquia and the counsel Atty. Cirilo E. Doronila and
Co-Administrator for the children of the late Raymond Triviere. x x x. 20 (Emphasis
supplied.)
It would again in the same pleading claim to be the "co-administrator and counsel for
the heirs of the late Raymond Triviere."21
Finally, the Memorandum it submitted to the Court of Appeals on behalf of its
clients, the petitioner-children of the late Raymond Triviere, the Quasha Law Office
alleged that:
2. The petition assails the Order of the Honorable Regional Trial Court of Makati,
Branch 63 granting the Motion for Payment filed by Co-Administrators Atty.
Enrique P. Syquia and the undersigned counsel together with the children of the
deceased Raymond Triviere, and the Order dated 29 October 2003 denying
Petitioner's Motion for Reconsideration of the First Order.
xxxx
I. Statement of Antecedent Facts
xxxx
4. On 13 May 2004, Atty. Enrique Syquia, co-administrator and counsel for
respondent Amy Consuelo Triviere and the undersigned counsel, co-administrator
and counsel for the children of the late Raymond Triviere filed their Comment.22
Petitioner Quasha Law Office asserts that it is not within the purview of Section 7,
Rule 85 of the Revised Rules of Court since it is not an appointed administrator of
the estate.23 When Atty. Quasha passed away in 1996, Atty. Syquia was left as the
sole administrator of the estate of the late Raymond Triviere. The person of Atty.
Quasha was distinct from that of petitioner Quasha Law Office; and the appointment
of Atty. Quasha as administrator of the estate did not extend to his law office. Neither
could petitioner Quasha Law Office be deemed to have substituted Atty. Quasha as
administrator upon the latter's death for the same would be in violation of the rules
on the appointment and substitution of estate administrators, particularly, Section 2,
Rule 82 of the Revised Rules of Court. 24 Hence, when Atty. Quasha died, petitioner
Quasha Law Office merely helped in the settlement of the estate as counsel for the
petitioner children of the late Raymond Triviere.
In its Memorandum before this Court, however, petitioner Quasha Law Office argues
that "what is being charged are not professional fees for legal services rendered but
payment for administration of the Estate which has been under the care and
management of the co-administrators for the past fourteen (14) years."25
On the other hand, in the Motion for Payment filed with the RTC on 3 September
2002, petitioner Quasha Law Office prayed for P200,000.00 as "attorney's fees and
litigation expenses." Being lumped together, and absent evidence to the contrary,
the P200,000.00 for attorney's fees and litigation expenses prayed for by the
petitioner Quasha Law Office can be logically and reasonably presumed to be in
connection with cases handled by said law office on behalf of the estate. Simply,
petitioner Quasha Law Office is seeking attorney's fees as compensation for the legal
services it rendered in these cases, as well as reimbursement of the litigation
expenses it incurred therein.
The Court notes with disfavor the sudden change in the theory by petitioner Quasha
Law Office. Consistent with discussions in the preceding paragraphs, Quasha Law
Office initially asserted itself as co-administrator of the estate before the courts. The
records do not belie this fact. Petitioner Quasha Law Office later on denied it was
substituted in the place of Atty. Quasha as administrator of the estate only upon filing
a Motion for Reconsideration with the Court of Appeals, and then again before this
Court. As a general rule, a party cannot change his theory of the case or his cause of
action on appeal.26 When a party adopts a certain theory in the court below, he will
not be permitted to change his theory on appeal, for to permit him to do so would not
only be unfair to the other party but it would also be offensive to the basic rules of
fair play, justice and due process. 27 Points of law, theories, issues and arguments not
brought to the attention of the lower court need not be, and ordinarily will not be,
considered by a reviewing court, as these cannot be raised for the first time at such
late stage.28
This rule, however, admits of certain exceptions.29 In the interest of justice and
within the sound discretion of the appellate court, a party may change his legal
theory on appeal, only when the factual bases thereof would not require presentation
of any further evidence by the adverse party in order to enable it to properly meet the
issue raised in the new theory.30
On the foregoing considerations, this Court finds it necessary to exercise leniency on
the rule against changing of theory on appeal, consistent with the rules of fair play
and in the interest of justice. Petitioner Quasha Law Office presented conflicting
arguments with respect to whether or not it was co-administrator of the estate.
Nothing in the records, however, reveals that any one of the lawyers of Quasha Law
Office was indeed a substitute administrator for Atty. Quasha upon his death.
The court has jurisdiction to appoint an administrator of an estate by granting letters
of administration to a person not otherwise disqualified or incompetent to serve as
such, following the procedure laid down in Section 6, Rule 78 of the Rules of Court.
Corollary thereto, Section 2, Rule 82 of the Rules of Court provides in clear and
unequivocal terms the modes for replacing an administrator of an estate upon the
death of an administrator, to wit:
Section 2. Court may remove or accept resignation of executor or administrator.
Proceedings upon death, resignation, or removal. x x x.
When an executor or administrator dies, resigns, or is removed the remaining
executor or administrator may administer the trust alone, unless the court grants
letters to someone to act with him. If there is no remaining executor or
administrator, administration may be granted to any suitable person.
The records of the case are wanting in evidence that Quasha Law Office or any of its
lawyers substituted Atty. Quasha as co-administrator of the estate. None of the
documents attached pertain to the issuance of letters of administration to petitioner
Quasha Law Office or any of its lawyers at any time after the demise of Atty. Quasha
in 1996. This Court is thus inclined to give credence to petitioner's contention that
while it rendered legal services for the settlement of the estate of Raymond Triviere
since the time of Atty. Quasha's death in 1996, it did not serve as co-administrator
thereof, granting that it was never even issued letters of administration.
The attorney's fees, therefore, cannot be covered by the prohibition in the third
paragraph of Section 7, Rule 85 of the Revised Rules of Court against an attorney, to
charge against the estate professional fees for legal services rendered by them.
However, while petitioner Quasha Law Office, serving as counsel of the Triviere
children from the time of death of Atty. Quasha in 1996, is entitled to attorney's fees
and litigation expenses of P100,000.00 as prayed for in the Motion for Payment
dated 3 September 2002, and as awarded by the RTC in its 12 June 2003 Order, the
same may be collected from the shares of the Triviere children, upon final
distribution of the estate, in consideration of the fact that the Quasha Law Office,
indeed, served as counsel (not anymore as co-administrator), representing and
performing legal services for the Triviere children in the settlement of the estate of
their deceased father.

Finally, LCN prays that as the contractor of the house (which the decedent caused to
be built and is now part of the estate) with a preferred claim thereon, it should
already be awarded P2,500,000.00, representing one half (1/2) of the proceeds from
the sale of said house. The Court shall not take cognizance of and rule on the matter
considering that, precisely, the merits of the claim of LCN against the estate are still
pending the proper determination by the RTC in the intestate proceedings below.

WHEREFORE, premises considered, the Petition for Review on Certiorari is

hereby PARTLY GRANTED. The Decision dated 11 May 2006 and Resolution
dated 22 September 2006 of the Court of Appeals in CA-G.R. SP No.
81296 are AFFIRMED, with the following MODIFICATIONS:

1) Petitioner Quasha Law Office is entitled to attorney's fees of ONE HUNDRED

THOUSAND PESOS (P100,000.00), for legal services rendered for the Triviere
children in the settlement of the estate of their deceased father, the same to be paid
by the Triviere children in the manner herein discussed; and

2) Attorneys Enrique P. Syquia and William H. Quasha are entitled to the payment of
their corresponding administrators' fees, to be determined by the RTC handling
Special Proceedings Case No. M-1678, Branch 63 of the Makati RTC, the same to be
chargeable to the estate of Raymond Trieviere.

SO ORDERED.
G.R. No. L-4681 July 31, 1951
MARCELA DE BORJA VDA. DE TORRES, SATURNINA DE BORJA VDA.
DE ORTEGA, EUFRACIA DE BORJA VDA. DE LIMACO, JACOBO DE
BORJA, OLIMPIA DE BORJA, AND JUAN DE BORJA, petitioners,
vs.
THE HONORABLE DEMETRIO B. ENCARNACION, Judge of the Court of
First Instance of Rizal, and CRISANTO DE BORJA, Administrator of the
Intestate Estate of Marcelo de Borja, respondents.
Amador E. Gomez for petitioners.
E. V. Filamor for respondents.
TUASON, J.:
The petitioners contest the jurisdiction of the respondent Judge to issue the order
herein sought to be reviewed directing them to deliver to the administrator of the
intestate estate of Marcelo de Borja, (Special Proceeding No. R-2414 of the Court of
First Instance of Rizal) a certain parcel of land which is in petitioners' possession and
to which they assert exclusive ownership. They contend that the administrator's
remedy to recover that property is an action at law and not by motion in the intestate
proceeding.
It appears that in the above-entitled intestate estate, the commissioners appointed by
the court submitted on February 8, 1944, a project of partition, in which the land in
question, which is and was then in the possession of the herein petitioners, was
included as property of the estate and assigned to one Miguel B. Dayco, one of
Marcelo de Borja's heirs. Over the objection of the petitioners, surviving children of
Quintin de Borja who was one of Marcelo's children, the proposed partition was
approved in February, 1946, and the order of approval on appeal was affirmed by this
Court in 1949. Although the administratrix of Quintin de Borja's estate was the party
named in the partition in behalf of the estate, the proceeding for the reason that they
had been declared their father's sole heirs in the settlement of their father's estate.
Moreover, one of these children was herself the duly appointed administratrix of the
last named intestate estate.
Pertinent to the question posed by the petitioners is section 1 of Rule 91 which
provides as follows:
When the debts, funeral charges, and expenses of administration, the allowances 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, such persons may demand and
recover their respective shares from the executor or administrator, or any other
person having 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 distributive share to which
each person is entitled under the law, the testimony as to such controversy shall be
taken in writing by the judge, under oath.
No distribution shall be allowed until the payment of the obligation above mentioned
has been made or provided for, unless the distributes, or any of them, give a bond, in
a sum to be fixed by the court, conditioned for the payment of said obligations such
time as the court directs.
Applying this Rule in the case of De Jesus vs. Daza,* 43 Off. Gaz., (No. 6), 2055, the
facts of which were in all essential particulars analogous to those of the present case,
this Court said: ". . . the probate court, having the custody and control of the entire
estate, is the most logical authority to effectuate this provision within the same estate
proceeding, said proceeding being the most convenient one in which this power and
function of the court can be exercised and performed without the necessity if
requiring the parties to undergo the inconvenience, delay and expense of having to
commence and litigate an entirely different action. There can be no question of the
share to be delivered the probate court would have jurisdiction within the same estate
proceeding to order him to deliver that possession to the person entitled thereto, and
we see no reason, legal or equitable, for denying the same power to the probate court
to be exercised within the same estate proceeding if the share to be delivered
happens to be in the possession of 'any other person,' especially when 'such other
person' is one of the heirs themselves who are already under the jurisdiction of the
probate court in the same estate proceeding."
There are factors present in the case at bar but not in the De Jesus vs. Daza case
which greatly reinforce the probate court's authority to make the order under review:
The partition here had not only been approved and thus become a judgment of the
court, but distribution of the petitioners had received the property assigned to them
or their father's estate. And this was not all. As the administrator had refused, on
technical grounds, to turn over to them their or their father's share, they moved for
and secured from the probate court an order for the execution of the partition. And
when the administrator elevated the case to this Court on certiorari, they as
respondents in that petition vigorously defended the probate court's action. They
complained bitterly that execution of the partition was long overdue and that the
administrator was unduly delaying the closing of the estate.
The order now before this Court has to be sustained if for no other reason than that
the petitioners are in estoppel. In the face of what they have done, they are precluded
from attacking the validity of the partition or any part of it. A party can not, in law
and in good conscience, be allowed to reap the fruits of a partition, agreement or
judgment and repudiate what does not suit him.
There is not much to the complaint that the respondent Judge issued the order under
consideration without affording the petitioners a hearing on the merits of their
pretended title to the land in their possession. The question of the petitioners' title
and possession has been concluded by the partition and become a closed matter. All
they could prove if allowed to call witnesses would be that the aforesaid property
belonged to them or to their father's estate and that they are in possession of it to the
exclusion of Marcelo de Borja's personal representative. Granting all such proofs to
be true, as indeed we may for the purpose of this decision, yet they would not detract
from the authority of the court to make the order under consideration. The court had
only the partition to examine, to see if the questioned land was included therein. The
inclusion being shown, and there being no allegation that the inclusion was effected
through improper means or without the petitioners' knowledge, the partition barred
any further litigation on said title and operated to bring the property under the control
and jurisdiction of the court for proper disposition according to the tenor of the
partition. To all intents and purposes, the property was in custodia legis. What the
petitioners could have done was to ask for a reconsideration or modification of the
partition on the grounds of fraud, excusable mistake, inadvertence, etc. if they could
substantiate such allegations. They can not attack the partition collaterally, as they
are trying to do in this case.

The petition is denied with costs against the petitioners.

G.R. No. L-30787 August 29, 1974
PURIFICACION SANTOS IMPERIAL, petitioner,
vs.
HON. EMMANUEL M. MUÑOZ, and LUIS U. SANTOS, respondents.
ESGUERRA, J.:p
Petition for review on certiorari of the order of the Court of First Instance of
Bulacan, presided by respondent Judge, Hon. Emmanuel M. Muñoz, dated February
18, 1969, setting aside its order of June 6, 1967, in Special Proceedings No. 1049
entitled "Intestate Estate of Fermina Bello Santos", approving the Amended Project
of Partition dated September 22, 1966, and adjudicating the properties left by the
decedent to her forced heirs, Luis U. Santos, as surviving spouse, and Purificacion
Santos Imperial, as adopted daughter, in the sharing proportion of 5/8 and 3/8,
respectively; and of the order of July 17, 1969 denying the motion to set aside the
order of February 18, 1969.
The factual background of the case is as follows:
On October 14, 1957, Luis U. Santos, as surviving spouse of the deceased Fermina
Bello Santos, who died intestate on June 9, 1957, filed and instituted Special
Proceeding No. 1049, entitled "Intestate Estate of Fermina Bello Santos", in the
Court of First Instance of Bulacan. Luis U. Santos was appointed regular
Administrator on January 16, 1958, as there was no opposition filed by the only
other heir, herein petitioner Purificacion Santos Imperial. It was only on April 9,
1965, when petitioner Purificacion Santos Imperial entered her appearance in the
abovementioned intestate proceedings as Oppositor, and therein filed a motion to
require the regular administrator to render an accounting which resulted in the
approval by the Court a quo on June 6, 1967, of the project of partition dated
September 22, 1966, with the following awards and adjudication's:
1. To Dr. Luis U. Santos, citizen of the Philippines, of age, married to Socorro
Manankil and resident of Malolos, Bulacan, is hereby awarded and adjudicated an
undivided FIVE-EIGHTH(5/8) share in each of the above-described properties; and
2. To Purificacion Santos-Imperial, citizen of the Philippines, of age, married to Eloy
Imperial and resident of Malolos, Bulacan, is hereby awarded and adjudicated an
undivided THREE-EIGHTH(3/8) share in each of the properties described above;
The foregoing properties, as well as those realty situated in Pamplona, Camarines
Sur, and Manito, Albay, which have been omitted or excluded from this project of
partition to be dealt with later, are the only ones which have come to the knowledge
of the administrator so far. However, should any other property be discovered, the
same shall be divided between the administrator and Purification Santos-Imperial in
the proportion above-stated.
WHEREFORE, it is most respectfully prayed that the herein administrator, Luis U.
Santos, and Purificacion Santos Imperial be declared the only heirs of the deceased
and entitled to the residuary estate and the foregoing PROJECT OF PARTITION
approved.
Malolos, Bulacan, September 22, 1966.
The assailed order of June 6, 1967, approving the Amended Project of Partition dated
September 22, 1966, is herein below quoted, to wit:
Upon agreement of the parties, the hearing of the statement of accounts is hereby
postponed to July 18, 1967, at 8:30 A.M. However, the opposition to the project of
partition having been withdrawn and finding the same to be in order, said project of
partition is hereby APPROVED.
In connection with the consideration of the statement of accounts submitted by the
administrator, he is hereby directed to deliver to the clerk of court all vouchers
covering the income and disbursements of the estate within 10 days from receipt of
this order.
SO ORDERED.
Malolos, Bulacan, June 6, 1967.
(Sgd) EMMANUEL M. MUÑOZ
JUDGE
Copies of the order of June 6, 1967, were furnished counsel for the parties on the
same date, June 6, 1967, in open court. (p. 3, Petition)
On January 16, 1968, the Court a quo approved the Compromise-Agreement of the
parties concerned, wherein the administrator, respondent Dr. Luis U. Santos, among
others, agreed to let Purificacion Santos Imperial, oppositor-petitioner, have the
amount of P53,072.81 in full settlement of her 3/8 share in the income of the estate
from June 9, 1957, up to December 31, 1967, inclusive, exclusive of any other
amount she might have received in the past from the said administrator. This amount
of P53,072.81 was actually paid to said Purificacion Santos Imperial.
On April 26, 1968, the Court a quo again approved the final partial project of
partition filed by the administrator-respondent under date of March 22, 1968, with
the same sharing ratio as in the one approved in its order of June 6, 1967.
On June 18, 1968, herein respondent Luis U. Santos as administrator-heir of the
intestate estate of Fermina Bello Santos filed a Motion for Correction of both the
Amended Project of Partition of September 22, 1966, approved by the Court a
quo on June 6, 1967, and the Final Partial Project of Partition of March 22, 1968,
likewise approved by the same court on April 26, 1968, claiming that the partition
submitted to the Court was erroneous, as the same did not conform with the ruling
laid down in the case of Santillon vs. Miranda, et al., G. R. No. L-19281, June 30,
1965, 14 SCRA 563, where the Supreme Court held: "When intestacy occurs, a
surviving spouse concurring with only one legitimate child of the deceased is entitled
to one-half of the estate of the deceased spouse under Article 996 of the Civil Code."
Therefore, administrator-respondent Luis Santos should get ¾ of the properties
partitioned while oppositor-petitioner Purificacion Santos Imperial, the only child
(adopted), should get only the remaining ¼ of the estate.
Oppositor-Petitioner filed a formal opposition to the motion for correction on the
following grounds, to wit:
(a) The orders of June 6, 1967 and April 26, 1968, are already both final and
executory as of June 18, 1968, the 30-day period for appeal having lapsed, so cannot
be subject to further correction;
(b) That Purificacion Santos Imperial precisely withdrew her opposition to the
statements of accounts of Luis U. Santos from June 9, 1957, to December 31, 1965,
and relieved the administrator-heir of submitting any accounting for the years, 1966
and 1967, by virtue of the approval of the partition of September 22, 1966 on June 6,
1967, and the promise or agreement that said partition will be implemented
immediately after said COMPROMISE AGREEMENT, which served as basis of the
order of the Court of January 16, 1968. The correction will therefore violate the
COMPROMISE AGREEMENT of the parties.
(c) The orders of June 6, 1967 and April 26, 1968 are not interlocutory in nature but
FINAL ORDERS fixing the distributive sharing ratio as intended by Rule 90,
Section 1 of the Rules of Court, which was appealable by any heir who did not agree
to the distributive share fixed in such partition.
(d) As the AMENDED PROJECT OF PARTITION of September 22, 1966, fixed the
distributive share already as 5/8 to Luis U. Santos and 3/8 to Purificacion Santos-
Imperial as basis of the withdrawal of her opposition to the statement of accounts
and further accounting of any produce for 1966-1967, whatever disadvantage Luis U.
Santos suffered, if true, in the partition had been fully compensated by the produce
which were not reported correctly or where there was no report at all. Hence, the
partition can no longer be corrected.
(e) The cited case, SC-G R. No. L-19281 is not in point because, there, the Court had
no judgment as yet which was final about the proportion of the division,
while here two orders of final nature already covered the partitions sought to be
amended.
On February 18, 1969, the Court a quo granted the motion for correction, to wit:
Acting upon the motion for correction dated June 18, 1968, filed by the
administrator, which motion had been overlooked due to the numerous other motions
and petitions filed by the parties, and in the light of the decision of the Hon. Supreme
Court in Santillon vs. Miranda, G.R. No. L-19281, the order of June 6, 1967
approving the amended projects of partition is hereby reconsidered and set aside, and
the administrator is allowed to re-amend the said projects of partition as to embody
therein the corrections sought.
SO ORDERED.
On March 20, 1969, oppositor-petitioner filed a Motion to Set Aside the order of
February 18, 1969, which was denied on July 19, 1969, by the Court a quo, as
follows:
Malolos, Bulacan, February 18, 1969.
Acting upon the motion to set aside order of February 18, 1969 filed by the oppositor
and considering that, as rightly pointed out by the administrator, the said order is
merely interlocutory so that this court has not lost jurisdiction to entertain any and all
corrections of the division; considering, further, that in order to put an end to this
litigation between the parties, a correct and legal partition of the property of the
estate is necessary, MOTION DENIED.
SO ORDERED.
Malolos, Bulacan, July 17, 1969.
Hence this petition for review on certiorari.
The issues for consideration are: (1) whether an order of a probate court in testate or
intestate proceedings approving a project of partition which clearly fixed the
distributive share to which each heir is entitled is merely interlocutory in nature so
that the probate court can correct and set aside the same anytime; or is final and,
therefore, appealable within the 30 day period for appeal; and (2) whether a court can
order the correction of an erroneous final decision after it had become final and
executory.
I. THE FIRST ISSUE
The contention of the petitioner to the effect that the orders of the court a quo dated
June 6, 1967 as well as that of April 26, 1968, are final as the same have determined
the distributive shares of the known forced heirs, finds support in the very same case
cited by the respondents as their authority. In that case of Santillon vs. Miranda, et
al., G.R. No.
L-19281, June 30, 1965, 14 SCRA 563, this Court held: "Appeal in special
proceedings; Order of court determining distributive share of heirs appealable. — An
order of the Court of First Instance which determines the distributive shares of the
heirs of a deceased-person is appealable." This Court in deciding the issue as to
whether the order of the lower court is final and appealable, went on to say:

It is clear that the order of the lower court is final and, therefore, appealable to this
Court.

Under Rule 109, section 1, a person may appeal in special proceedings from an order
of the Court of First Instance where such order "determines ... the distributive share
of the estate to which such person is entitled."

The two (2) questioned orders, being final in character, should have been appealed
by the party adversely affected within the 30-day reglementary period provided for
appeal. This was not done.

II. THE SECOND ISSUE

The contention of the petitioner that an order which has already become final and,
therefore, executory is not subject to correction, finds support in Chereau vs.
Fuentebella, et al., 43 Phil. 216, where it was held that an erroneous decree or
judgment although granted without legal authority and contrary to the express
provision of the statute, is not void. Here, as no appeal was taken, the decree must be
conceded to have full force and effect. An erroneous decree is not a void decree. This
Court held in the Fuentebella case:

... Erroneous the judgment undoubtedly was, and if the matter had been brought by
appeal to this Court, and error assigned on that ground, the judgment granting the
divorce would have been reversed. But after the decree has become final and the
community property divided, the decree cannot now be changed in any proceeding;
and much less is it subject to the collateral attack which is here made upon it. (Ibid,
at p. 220)

The questioned orders having become final and, therefore, executory because of the
failure of the herein respondent Luis U. Santos to appeal on time by allowing the
period for appeal to lapse before filing his motion for correction on June 18, 1968, he
has to suffer the misfortune brought about by his own negligence and fatal
inadvertence.

WHEREFORE, the orders of the court of First Instance of Bulacan dated February
18, 1969, and July 17, 1969, are hereby reversed and set aside.

Costs against respondents.

G.R. No. L-45736 May 26, 1939
In the matter of the Intestate Estate of the deceased Emeterio Lopez.
CONCEPCION LOPEZ, petitioner-appellee,
vs.
ADELA LOPEZ, ET AL., oppositors-appellants.
Simplicio B. Peña for appellants.
Vamenta and Vamenta for appellee.
MORAN, J.:
The primary issue raised in this appeal is whether or not Concepcion Lopez is an
acknowledged natural daughter of Emeterio Lopez who died intestate, leaving no
legitimate descendants, ascendants or widow.
Concepcion Lopez filed a petition in the intestate proceedings of the deceased
Emeterio Lopez, claiming to be an acknowledged natural daughter of the deceased
and praying that she be declared his universal heiress entitled to a summary award of
his estate, same being valued at less than six thousand pesos (P6,000). The
oppositors-appellants, thru Attorney Simplicio B. Peña, filed an opposition, denying
petitioner's claim and praying that, as they are nephews and nieces of the deceased,
they be adjudged entitled to the property left by him. Concepcion Lopez filed later an
amended petition, alleging that, according to a new assessment, the estate was worth
nine thousand pesos (P9,000) and that, therefore, its distribution could not be made
summarily but thru regular administration proceedings. Accordingly, an
administrator was appointed who, thru Attorney Simplicio B. Peña, filed later a
motion for a declaration of heirs and prayed that the oppositors-appellants be so
adjudged. After hearing, the court issued an order declaring the petitioner an
acknowledged natural daughter of the deceased entitled to the rights accorded her by
law. The oppositors appealed.
Contrary to appellants' contention it is a well-settled rule that a person claiming to be
an acknowledged natural child of a deceased need not maintain a separate action for
recognition but may simply intervene in the intestate proceedings, by alleging and
proving therein his or her status as such, and claiming accordingly the right to share
in the inheritance. (Conde vs. Abaya, 13 Phil., 249; Severino vs. Severino, 44 Phil.,
343, 348; Gaas vs. Fortich, 54 Phil., 196.)
The petition filed by Concepcion Lopez in the intestate proceedings is alleged to be
insufficient. It is said that there is no prayer therein that she be declared an
acknowledged natural child, but only that she be adjudged universal heiress, of the
deceased. In the body of the petition there is an allegation that she is a natural child
of the deceased and has been in an uninterrupted possession of such status. And
inasmuch as the recognition of her status is a prerequisite to her right to heirship, her
prayer that she be declared universal heiress implies a like prayer that she be
recognized as an acknowledged natural child. Furthermore, it is a well-settled rule of
pleadings, applicable to motions or petitions, that the prayer for relief, though part of
the pleading, is no part of the cause of action or defense alleged therein, and the
pleader is entitled to as much relief as the facts duly pleaded may warrant. (Rosales
vs. Reyes and Ordoveza, 25 Phil., 495; Aguilar vs. Rubiato and Gonzalez Vila, 40
Phil., 570; Yañez de Barnuevo vs. Fuster, 29 Phil., 606; Allarde vs. Abaya, 57 Phil.,
909; Cf. Cohen vs. Benguet Commercial Co., 34 Phil., 526, 533.)
The facts found by the lower court as basis for the declaration that the petitioner had
been in an uninterrupted possession of the status of natural child of the deceased are
as follows:
De las pruebas practicadas por la representacion de dicha Concepcion Lopez se han
establecido los siguientes hechos: Que Concepcion Lopez es hija natural del finado
Emeterio Lopez habida con Juana Cuison, quienes desde el nacimiento de aquella
han estado conviviendo como marido y mujer, siendo ambos solteros, hasta que
fallecio dicha Juana Cuison; que Concepcion Lopez nacio el año 1890 en Lagonoy,
Camarines Sur, habiendo sido desde entonces mantenida por su padre, quien durante
su vida ha costeado todas las necesidades de Conception Lopez, tratandola como su
verdadera hija, pues cada vez que aquel le ilamaba a esta lo hacia ilamandola con el
apodo de "Siong" y Concepcion, a su vez, le contestaba a su padre "papa;" que dicha
Concepcion Lopez ha estado siempre viviendo con su difunto padre Emeterio Lopez
hasta que este fallecio el 24 junio de 1931.
In previous cases, similar facts were held to be sufficient to entitle a natural child to
recognition. (Cf. Dizon vs.Ullmann, 13 Phil., 88; Allarde vs. Abaya, supra;
Dalistan vs. Armas, 32 Phil., 648; see also decision of the Supreme Court of Spain of
Nov. 7, 1986.)
Appellants claim that they had no notice either of the petition for the declaration of
heirs or of the date set for the hearing thereof. We find in the record no evidence
affirmatively showing that they had no such notice; therefore, the presumption of
regularity of proceedings should stand. In the motion for reconsideration filed by
them, the lack of notice is alleged; but the motion is not even verified. Besides,
according to the record Attorney Simplicio B. Peña was the counsel for both the
administrator and the oppositors-appellants. The petition for declaration of heirs,
although signed by Attorney Simplicio B. Peña as "abogado del administrador", was,
in fact, a petition filed in behalf of the oppositors-appellants as their right to
succession is therein asserted and prayed for. Under this circumstances, there exists
sufficient ground for holding, as we do hold, that the oppositors-appellants had
notice of the petition as well as of the hearing where the said attorney was present.
Order is affirmed, with costs against appellants.
G.R. No. 163707 September 15, 2006
MICHAEL C. GUY, petitioner,
vs.
HON. COURT OF APPEALS, HON. SIXTO MARELLA, JR., Presiding Judge,
RTC, Branch 138, Makati City and minors, KAREN DANES WEI and
KAMILLE DANES WEI, represented by their mother, REMEDIOS
OANES,respondents.
DECISION
YNARES-SANTIAGO, J.:
This petition for review on certiorari assails the January 22, 2004 Decision 1 of the
Court of Appeals in CA-G.R. SP No. 79742, which affirmed the Orders dated July
21, 20002 and July 17, 20033 of the Regional Trial Court of Makati City, Branch 138
in SP Proc. Case No. 4549 denying petitioner's motion to dismiss; and its May 25,
2004 Resolution4 denying petitioner's motion for reconsideration.
The facts are as follows:
On June 13, 1997, private respondent-minors Karen Oanes Wei and Kamille Oanes
Wei, represented by their mother Remedios Oanes (Remedios), filed a petition for
letters of administration5 before the Regional Trial Court of Makati City, Branch 138.
The case was docketed as Sp. Proc. No. 4549 and entitled Intestate Estate of Sima
Wei(a.k.a. Rufino Guy Susim).
Private respondents alleged that they are the duly acknowledged illegitimate children
of Sima Wei, who died intestate in Makati City on October 29, 1992, leaving an
estate valued at P10,000,000.00 consisting of real and personal properties. His
known heirs are his surviving spouse Shirley Guy and children, Emy, Jeanne,
Cristina, George and Michael, all surnamed Guy. Private respondents prayed for the
appointment of a regular administrator for the orderly settlement of Sima Wei's
estate. They likewise prayed that, in the meantime, petitioner Michael C. Guy, son of
the decedent, be appointed as Special Administrator of the estate. Attached to private
respondents' petition was a Certification Against Forum Shopping 6 signed by their
counsel, Atty. Sedfrey A. Ordoñez.
In his Comment/Opposition,7 petitioner prayed for the dismissal of the petition. He
asserted that his deceased father left no debts and that his estate can be settled
without securing letters of administration pursuant to Section 1, Rule 74 of the Rules
of Court. He further argued that private respondents should have established their
status as illegitimate children during the lifetime of Sima Wei pursuant to Article 175
of the Family Code.
The other heirs of Sima Wei filed a Joint Motion to Dismiss 8 on the ground that the
certification against forum shopping should have been signed by private respondents
and not their counsel. They contended that Remedios should have executed the
certification on behalf of her minor daughters as mandated by Section 5, Rule 7 of
the Rules of Court.
In a Manifestation/Motion as Supplement to the Joint Motion to Dismiss, 9 petitioner
and his co-heirs alleged that private respondents' claim had been paid, waived,
abandoned or otherwise extinguished by reason of Remedios' June 7, 1993 Release
and Waiver of Claim stating that in exchange for the financial and educational
assistance received from petitioner, Remedios and her minor children discharge the
estate of Sima Wei from any and all liabilities.
The Regional Trial Court denied the Joint Motion to Dismiss as well as the
Supplemental Motion to Dismiss. It ruled that while the Release and Waiver of
Claim was signed by Remedios, it had not been established that she was the duly
constituted guardian of her minor daughters. Thus, no renunciation of right occurred.
Applying a liberal application of the rules, the trial court also rejected petitioner's
objections on the certification against forum shopping.
Petitioner moved for reconsideration but was denied. He filed a petition for certiorari
before the Court of Appeals which affirmed the orders of the Regional Trial Court in
its assailed Decision dated January 22, 2004, the dispositive portion of which states:
WHEREFORE, premises considered, the present petition is hereby DENIED DUE
COURSE and accordingly DISMISSED, for lack of merit. Consequently, the
assailed Orders dated July 21, 2000 and July 17, 2003 are hereby both AFFIRMED.
Respondent Judge is hereby DIRECTED to resolve the controversy over the
illegitimate filiation of the private respondents (sic) minors [-] Karen Oanes Wei and
Kamille Oanes Wei who are claiming successional rights in the intestate estate of the
deceased Sima Wei, a.k.a. Rufino Guy Susim.
SO ORDERED.10
The Court of Appeals denied petitioner's motion for reconsideration, hence, this
petition.
Petitioner argues that the Court of Appeals disregarded existing rules on certification
against forum shopping; that the Release and Waiver of Claim executed by Remedios
released and discharged the Guy family and the estate of Sima Wei from any claims
or liabilities; and that private respondents do not have the legal personality to
institute the petition for letters of administration as they failed to prove their filiation
during the lifetime of Sima Wei in accordance with Article 175 of the Family Code.
Private respondents contend that their counsel's certification can be considered
substantial compliance with the rules on certification of non-forum shopping, and
that the petition raises no new issues to warrant the reversal of the decisions of the
Regional Trial Court and the Court of Appeals.
The issues for resolution are: 1) whether private respondents' petition should be
dismissed for failure to comply with the rules on certification of non-forum
shopping; 2) whether the Release and Waiver of Claim precludes private respondents
from claiming their successional rights; and 3) whether private respondents are
barred by prescription from proving their filiation.
The petition lacks merit.
Rule 7, Section 5 of the Rules of Court provides that the certification of non-forum
shopping should be executed by the plaintiff or the principal party. Failure to comply
with the requirement shall be cause for dismissal of the case. However, a liberal
application of the rules is proper where the higher interest of justice would be served.
In Sy Chin v. Court of Appeals,11 we ruled that while a petition may have been flawed
where the certificate of non-forum shopping was signed only by counsel and not by
the party, this procedural lapse may be overlooked in the interest of substantial
justice.12 So it is in the present controversy where the merits 13 of the case and the
absence of an intention to violate the rules with impunity should be considered as
compelling reasons to temper the strict application of the rules.
As regards Remedios' Release and Waiver of Claim, the same does not bar private
respondents from claiming successional rights. To be valid and effective, a waiver
must be couched in clear and unequivocal terms which leave no doubt as to the
intention of a party to give up a right or benefit which legally pertains to him. A
waiver may not be attributed to a person when its terms do not explicitly and clearly
evince an intent to abandon a right.14
In this case, we find that there was no waiver of hereditary rights. The Release and
Waiver of Claim does not state with clarity the purpose of its execution. It merely
states that Remedios received P300,000.00 and an educational plan for her minor
daughters "by way of financial assistance and in full settlement of any and all claims
of whatsoever nature and kind x x x against the estate of the late Rufino Guy
Susim."15 Considering that the document did not specifically mention private
respondents' hereditary share in the estate of Sima Wei, it cannot be construed as a
waiver of successional rights.
Moreover, even assuming that Remedios truly waived the hereditary rights of private
respondents, such waiver will not bar the latter's claim. Article 1044 of the Civil
Code, provides:
ART. 1044. Any person having the free disposal of his property may accept or
repudiate an inheritance.
Any inheritance left to minors or incapacitated persons may be accepted by
their parents or guardians. Parents or guardians may repudiate the inheritance
left to their wards only by judicial authorization.
The right to accept an inheritance left to the poor shall belong to the persons
designated by the testator to determine the beneficiaries and distribute the property,
or in their default, to those mentioned in Article 1030. (Emphasis supplied)
Parents and guardians may not therefore repudiate the inheritance of their wards
without judicial approval. This is because repudiation amounts to an alienation of
property16 which must pass the court's scrutiny in order to protect the interest of the
ward. Not having been judicially authorized, the Release and Waiver of Claim in the
instant case is void and will not bar private respondents from asserting their rights as
heirs of the deceased.
Furthermore, it must be emphasized that waiver is the intentional relinquishment of a
known right. Where one lacks knowledge of a right, there is no basis upon which
waiver of it can rest. Ignorance of a material fact negates waiver, and waiver cannot
be established by a consent given under a mistake or misapprehension of fact. 17
In the present case, private respondents could not have possibly waived their
successional rights because they are yet to prove their status as acknowledged
illegitimate children of the deceased. Petitioner himself has consistently denied that
private respondents are his co-heirs. It would thus be inconsistent to rule that they
waived their hereditary rights when petitioner claims that they do not have such
right. Hence, petitioner's invocation of waiver on the part of private respondents
must fail.
Anent the issue on private respondents' filiation, we agree with the Court of Appeals
that a ruling on the same would be premature considering that private respondents
have yet to present evidence. Before the Family Code took effect, the governing law
on actions for recognition of illegitimate children was Article 285 of the Civil Code,
to wit:
ART. 285. The action for the recognition of natural children may be brought only
during the lifetime of the presumed parents, except in the following cases:
(1) If the father or mother died during the minority of the child, in which case
the latter may file the action before the expiration of four years from the
attainment of his majority;
(2) If after the death of the father or of the mother a document should appear of
which nothing had been heard and in which either or both parents recognize the
child.
In this case, the action must be commenced within four years from the finding of the
document. (Emphasis supplied)
We ruled in Bernabe v. Alejo18 that illegitimate children who were still minors at the
time the Family Code took effect and whose putative parent died during their
minority are given the right to seek recognition for a period of up to four years from
attaining majority age. This vested right was not impaired or taken away by the
passage of the Family Code.19
On the other hand, Articles 172, 173 and 175 of the Family Code, which superseded
Article 285 of the Civil Code, provide:
ART. 172. The filiation of legitimate children is established by any of the following:
(1) The record of birth appearing in the civil register or a final judgment; or
(2) An admission of legitimate filiation in a public document or a private handwritten
instrument and signed by the parent concerned.
In the absence of the foregoing evidence, the legitimate filiation shall be proved by:
(1) The open and continuous possession of the status of a legitimate child; or
(2) Any other means allowed by the Rules of Court and special laws.
ART. 173. The action to claim legitimacy may be brought by the child during his or
her lifetime and shall be transmitted to the heirs should the child die during minority
or in a state of insanity. In these cases, the heirs shall have a period of five years
within which to institute the action.
The action already commenced by the child shall survive notwithstanding the death
of either or both of the parties.
ART. 175. Illegitimate children may establish their illegitimate filiation in the same
way and on the same, evidence as legitimate children.
The action must be brought within the same period specified in Article 173, except
when the action is based on the second paragraph of Article 172, in which case the
action may be brought during the lifetime of the alleged parent.
Under the Family Code, when filiation of an illegitimate child is established by a
record of birth appearing in the civil register or a final judgment, or an admission of
filiation in a public document or a private handwritten instrument signed by the
parent concerned, the action for recognition may be brought by the child during his
or her lifetime. However, if the action is based upon open and continuous possession
of the status of an illegitimate child, or any other means allowed by the rules or
special laws, it may only be brought during the lifetime of the alleged parent.
It is clear therefore that the resolution of the issue of prescription depends on the type
of evidence to be adduced by private respondents in proving their filiation. However,
it would be impossible to determine the same in this case as there has been no
reception of evidence yet. This Court is not a trier of facts. Such matters may be
resolved only by the Regional Trial Court after a full-blown trial.
While the original action filed by private respondents was a petition for letters of
administration, the trial court is not precluded from receiving evidence on private
respondents' filiation. Its jurisdiction extends to matters incidental and collateral to
the exercise of its recognized powers in handling the settlement of the estate,
including the determination of the status of each heir.20 That the two causes of action,
one to compel recognition and the other to claim inheritance, may be joined in one
complaint is not new in our jurisprudence.21 As held in Briz v. Briz:22
The question whether a person in the position of the present plaintiff can in any event
maintain a complex action to compel recognition as a natural child and at the same
time to obtain ulterior relief in the character of heir, is one which in the opinion of
this court must be answered in the affirmative, provided always that the conditions
justifying the joinder of the two distinct causes of action are present in the particular
case. In other words, there is no absolute necessity requiring that the action to
compel acknowledgment should have been instituted and prosecuted to a successful
conclusion prior to the action in which that same plaintiff seeks additional relief in
the character of heir. Certainly, there is nothing so peculiar to the action to compel
acknowledgment as to require that a rule should be here applied different from that
generally applicable in other cases. x x x
The conclusion above stated, though not heretofore explicitly formulated by this
court, is undoubtedly to some extent supported by our prior decisions. Thus, we have
held in numerous cases, and the doctrine must be considered well settled, that a
natural child having a right to compel acknowledgment, but who has not been in fact
acknowledged, may maintain partition proceedings for the division of the inheritance
against his coheirs (Siguiong vs. Siguiong, 8 Phil., 5; Tiamson vs. Tiamson, 32 Phil.,
62); and the same person may intervene in proceedings for the distribution of the
estate of his deceased natural father, or mother (Capistrano vs. Fabella, 8 Phil., 135;
Conde vs. Abaya, 13 Phil., 249; Ramirez vs. Gmur, 42 Phil., 855). In neither of these
situations has it been thought necessary for the plaintiff to show a prior decree
compelling acknowledgment. The obvious reason is that in partition suits and
distribution proceedings the other persons who might take by inheritance are before
the court; and the declaration of heirship is appropriate to such proceedings.
WHEREFORE, the instant petition is DENIED. The Decision dated January 22,
2004 of the Court of Appeals in CA-G.R. SP No. 79742 affirming the denial of
petitioner's motion to dismiss; and its Resolution dated May 25, 2004 denying
petitioner's motion for reconsideration, are AFFIRMED. Let the records
be REMANDED to the Regional Trial Court of Makati City, Branch 138 for further
proceedings. SO ORDERED.