SUCCESSION CASE

RICARDO C. SILVERIO, SR., vs. RICARDO S. SILVERIO, JR., CITRINE HOLDINGS, INC., MONICA P.
OCAMPO and ZEE2 RESOURCES, INC.
G.R. Nos. 208828-29 August 13, 2014

FACTS:

The late Beatriz S. Silverio died without leaving a will, survived by her legal heirs, namely: Ricardo C.
Silverio, Sr. (husband), Edmundo S. Silverio (son), Edgardo S. Silverio (son), Ricardo S. Silverio, Jr. (son),
Nelia S.Silverio-Dee (daughter), and Ligaya S. Silverio (daughter). Subsequently, an intestate proceeding
for the settlement of her estate was filed by Silverio, Sr. The administrator first appointed by the Court was
EDGARDO SILVERIO ("EDGARDO"), but by virtue of a Joint Manifestation dated 3 November 1999 filed
by the heirs of BEATRIZ D. SILVERIO, the motion to withdraw as administrator filed by EDGARDO was
approved by the intestate court and in his stead, Silverio, Sr. was appointed as the new administrator.
Thereafter, an active exchange of pleadings to remove and appoint a new administrator ensued between
Silverio, Sr. and Silverio, Jr.

The intestate court flip-flopped in appointing as administrator of the estate petitioner and respondent
Silverio, Jr. In an Order in 2005, Silverio, Sr. was removed as administrator and in his stead, SILVERIO,
JR. was designated as the new administrator. By virtue of the aforesaid Order, Silverio, Jr. on 16 October
2007 executed a Deed of Absolute Sale in favor of CITRINE HOLDINGS, Inc. ("CITRINE") over the property
located Makati City. CITRINE became the registered owner thereof. A Deed of Absolute Sale was likewise
executed in favor of Monica P. Ocampo, subsequently sold to ZEE2 Resources, Inc. (ZEE2). Silverio,
Sr.filed an Urgent Application for the Issuance of TRO restraining and/or preventing Silverio, Jr., Monica,
CITRINE, and their successors-in-interest from committing any act that would affect the titles to the three
properties.

An Omnibus Order was issued by the intestate court acting upon pending motions filed by petitioner and
respondent Silverio, Jr., father and son, respectively, who are the central figures in the now decade-old
controversy over the Intestate Estate of the late Beatriz S. Silverio.

On February 2011, SILVERIO SR. filed an Urgent Omnibus Motion (a) To Declare as Null and Void the
Deed of Absolute Sale dated 16 September 2010; (b) To cancel the Transfer Certificate of Title No. 006-
2011000050; and (c) To reinstate the Transfer Certificate of Title No. 2236121 in the name of Ricardo C.
SilverioSr. and the Intestate Estate of the late Beatriz S. Silverio. The intestate court rendered the now
assailed Orders granting the preliminary injunction against Silverio, Jr., and declaring the Deed of Absolute
Sale, TCT and all derivative titles over the Cambridge and Intsia properties as null and void.

The Court of Appeals rendered decision declaring the Deed of Absolute Sale, Transfer Certificate of Title
and all derivative titles over the Cambridge and Intsia Property valid. Silverio, Sr. contends that CA
committed a reversible error in upholding the validity of the Intsia and Cambridge properties on the ground
that the intestate court cannot annul the sales as it has a limited jurisdiction only and which does not include
resolving issues of ownership.

ISSUE: Whether or not the sale of the Intestate Estate by the administrator valid.

RULING:

An administrator can validly sell the intestate estate under his administration ONLY by leave of court. While
it is true that Silverio Sr. was eventually reinstated as Administrator pursuant to the 2008 decision, the
permanent injunction issued by the CA, as explicitly stated in its fallo, pertained only to the portions of the
2006 Omnibus Order upholding the grant of letters of administration to and taking of an oath of
administration by Silverio, Jr., as otherwise the CA would have expressly set aside as well the directive in
the same Omnibus Order allowing the sale of the subject properties.
The CA therefore did not err in reversing the August 18, 2011 Order of the intestate court annulling the sale
of the subject properties grounded solely on the injunction issued in CA-G.R. SP No. 97196. Respondents
Ocampo, Citrine and ZEE2 should not be prejudiced by the flip-flopping appointment of Administrator by
the intestate court, having relied in good faith that the sale was authorized and with prior approval of the
intestate court under its Omnibus Order dated October 31, 2006 which remained valid and subsisting
insofar as it allowed the aforesaid sale. SO ORDERED.

SUCCESSION; When can Intestate Estate be validly sold by the administrator.

QUESTION:

The late Beatriz S. Silverio died without leaving a will, survived by her legal heirs, namely: Ricardo
C. Silverio, Sr. (husband), Edmundo S. Silverio (son), Edgardo S. Silverio (son), Ricardo S. Silverio, Jr.
(son), Nelia S.Silverio-Dee (daughter), and Ligaya S. Silverio (daughter). Subsequently, an intestate
proceeding for the settlement of her estate was filed by Silverio, Sr. The administrator first appointed by the
Court was EDGARDO SILVERIO ("EDGARDO"), but by virtue of a Joint Manifestation dated 3 November
1999 filed by the heirs of BEATRIZ D. SILVERIO, the motion to withdraw as administrator filed by
EDGARDO was approved by the intestate court and in his stead, Silverio, Sr. was appointed as the new
administrator. Thereafter, an active exchange of pleadings to remove and appoint a new administrator
ensued between Silverio, Sr. and Silverio, Jr. The intestate court flip-flopped in appointing as administrator
of the estate petitioner and respondent Silverio, Jr.

Silverio, Sr. filed an Urgent Omnibus Motion to declare the Deed of Absolute Sale, Transfer
Certificate of Title and all derivative titles over the Cambridge and Intsia Property null and void. The intestate
court rendered the now assailed Orders granting the preliminary injunction against Silverio, Jr., and
declaring the Deed of Absolute Sale, TCT and all derivative titles over the Cambridge and Intsia properties
as null and void. The Court of Appeals rendered decision declaring the Deed of Absolute Sale, Transfer
Certificate of Title and all derivative titles over the Cambridge and Intsia Property valid. CA explicitly stated
in its fallo that it pertained only to the portions of the Omnibus Order upholding the grant of letters of
administration to and taking of an oath of administration by respondent Silverio, Jr., but did not expressly
set aside as well the directive in the same Omnibus Order allowing the sale of the subject properties. Was
the sale of the Intestate Estate of the late Beatriz S. Silverio valid?

ANSWER:

Yes, the sale of the Intestate Estate of the late Beatriz S. Silverio was valid. An administrator can
validly sell the intestate estate under his administration ONLY by leave of court. While it is true that Silverio
Sr. was eventually reinstated as Administrator pursuant to the 2008 decision, the permanent injunction
issued by the CA, as explicitly stated in its fallo, pertained only to the portions of the 2006 Omnibus Order
upholding the grant of letters of administration to and taking of an oath of administration by Silverio, Jr., as
otherwise the CA would have expressly set aside as well the directive in the same Omnibus Order allowing
the sale of the subject properties.

The Respondents Ocampo, Citrine and ZEE2 should not be prejudiced by the flip-flopping
appointment of Administrator by the intestate court, having relied in good faith that the sale was authorized
and with prior approval of the intestate court under its Omnibus Order in 2006 which remained valid and
subsisting insofar as it allowed the aforesaid sale.
56- Agtarap v Agtarap (June 8, 2011)

FACTS:
 Decedent Joaquin left (2) parcels of land with improvements. He contracted (2) marriages.
o With Lucia (W1), who died 1924; three children, Jesus (+), Milagros (+), Jose (+)
o Then with Caridad (W2), with three children, Eduardo, Sebastian, Mercedes
 Son Eduardo (W2) filed petition for settlement of Joaquin’s intestate estate. RTC issued
resolution appointing Eduardo as administrator.
 The RTC issued an Order of Partition on Oct 23, 2000 which ruled that “bulk of estate property
were acquired during the existence of 2nd marriage, TCTs showing Joaquin married to Caridad.
 Eduardo, Sebastian, and oppositors Joseph & Teresa (Jose children) filed their respective
motions for reconsiderations. The RTC
o Denied Eduardo & Sebastian MRs
o Granted MR of Joseph & Teresa
o Declared “real properties belonged to conjugal partnership of Joaquin & Lucia” and
directed Oct Partition to reflect correct sharing of heirs
 Eduardo & Sebastian both appealed to CA before RTC could issue new order of partition. The CA
dismissed the appeals and affirmed the RTC resolution. The CA also directed the partition of
Joaquin’s properties. Aggrieved, Sebastian and Eduardo filed separate MRs which were denied.
They filed separate petitions for review which were eventually consolidated.
 Sebastian contended that
o Joseph & Teresa failed to establish that they are legitimate heirs of Jose, and thus of
their grandfather Joaquin
o Certificates of title of subject property indicate “Joaquin married to Caridad” which is
conclusive proof of ownership, and thus not subject to collateral attack
 Eduardo alleged
o CA erroneously settled Joaquin’s estate together with the estates of Lucia, Jesus, Jose,
Mercedes, Gloria and Milagros in one proceeding
o Estate of Milagros cannot be distributed, since a proceeding was already conducted in
another court for the probate of Milagros’ will, thus violating the rule on precedence of
testate over intestate proceedings.
o RTC, acting as an intestate court with limited jurisdiction has no jurisdiction to
determine questions of ownership which belongs to another court with general
jursdiction
ISSUE:
 RTC as intestate court has jurisdiction to resolve ownership of real properties?
 CA settlement of Joaquin estate together with the estates of the other heirs
 Legitimacy of Joseph & Teresa

HELD:
 Eduardo’s petition granted. Sebastian’s petition denied. CA affirmed with modification that the
o share awarded in favor of Milagros shall not be distributed until the final determination
of the probate of the will .
o Sebastian to be represented by wife and children, given demise in 2010
 Case remanded to RTC for further settlement of Joaquin’s estate.
 RTC has jurisdiction to resolve ownership of the real properties.
o Gen Rule: Jurisdiction of trial court, either as probate or intestate court, relates only to
 matters having to do with probate of will and or settlement of estate of deceased
persons and does not extend to determination of questions of ownership that arise
during the proceedings.
o Exceptions, as justified by expediency and convenience:
 Probate court may provisionally pass upon in an intestate or testate proceeding
the question of inclusion or exclusion, from inventory of a piece of property w/o
prejudice to final determination in a separate action
 If interested parties are all heirs or question is one of collation/advancement or
parties consent to the assumption of of jurisdiction by the court and the rights
of 3P are not impaired
 Estate is settled and distributed among heirs only after payment of debts of the estate, funeral
charges admin expenses, allowance to th widow, and inheritance tax. Records show these were
not complied with in 1965.
 Sebastian did not present evidence to support averments to exclude Joseph and Teresa as heirs.
 CA disposition related only to the estate of Joaquin.
o Sec 1 Rule 90: RTC granted jurisdiction to determine lawful heirs of Joaquin as well as
respective shares in the payment of obligations
o The inclusion of Lucia, Jesus, Jose, Mercedes and Gloria was merely a necessary
consequence of the settlement of Joaquin’s estate, they being his legal heirs.
EMILIO A.M. SUNTAY III v. ISABEL COJUANGCO-SUNTAY, GR No. 183053, 2012-10-10
Facts:
The decedent Cristina Aguinaldo-Suntay (Cristina) died intestate on 4 June 1990. Cristina
was survived by her spouse, Dr. Federico Suntay (Federico) and five grandchildren: three
legitimate grandchildren, including herein respondent, Isabel; and two illegitimate...
grandchildren, including petitioner Emilio III, all by Federico's and Cristina's only child,
Emilio A. Suntay (Emilio I), who predeceased his parents.
The illegitimate grandchildren, Emilio III and Nenita, were both reared from infancy by the
spouses Federico and Cristina. Their legitimate grandchildren, Isabel and her siblings,
Margarita and Emilio II, lived with their mother Isabel Cojuangco, following the separation...
of Isabel's parents, Emilio I and Isabel Cojuangco. Isabel's parents, along with her paternal
grandparents, were involved in domestic relations cases, including a case for parricide filed
by Isabel Cojuangco against Emilio I. Emilio I was eventually... acquitted.
In retaliation, Emilio I filed a complaint for legal separation against his wife, charging her
among others with infidelity. The trial court declared as null and void and of no effect the
marriage of Emilio I and Isabel Cojuangco
Intent on maintaining a relationship with their grandchildren, Federico and Isabel filed a
complaint for visitation rights to spend time with Margarita, Emilio II, and Isabel in the same
special lower court. The Juvenile Domestic Relations Court in Quezon City (JDRC-QC)...
granted their prayer for one hour a month of visitation rights which was subsequently
reduced to thirty minutes, and ultimately stopped, because of respondent Isabel's testimony
in court that her grandparents' visits caused her and her siblings stress and anxiety.
On 27 September 1993, more than three years after Cristina's death, Federico adopted his
illegitimate grandchildren, Emilio III and Nenita.
On 26 October 1995, respondent Isabel, filed before the Regional Trial Court (RTC),
Malolos, Bulacan, a petition for the issuance of letters of administration over Cristina's
estate
Federico, opposed the petition
Federico filed a Motion to Dismiss Isabel's petition for letters of administration on the ground
that Isabel had no right of representation to the estate of Cristina, she being an illegitimate
grandchild of the latter as a result of Isabel's parents' marriage being declared null... and
void. However, in Suntay v. Cojuangco-Suntay, we categorically declared that Isabel and
her siblings, having been born of a voidable marriage as opposed to a void marriage based
on paragraph 3, Article 85 of the Civil Code, were legitimate children of Emilio I,... who can
all represent him in the estate of their legitimate grandmother, the decedent, Cristina.
Undaunted by the set back, Federico nominated Emilio III to administer the decedent's
estate on his behalf in the event letters of administration issues to Federico.
On 13 November 2000, Federico died.
Almost a year thereafter or on 9 November 2001, the trial court rendered a decision
appointing Emilio III as administrator of decedent Cristina's intestate estate
On appeal, the Court of Appeals reversed and set aside the decision of the RTC, revoked
the Letters of Administration issued to Emilio III, and appointed respondent as administratrix
of the subject estate
As previously adverted to, on appeal by certiorari, we reversed and set aside the ruling of
the appellate court. We decided to include Emilio III as co-administrator of Cristina's estate,
giving weight to his interest in Federico's estate.
Isabel contends that the explicit provisions of Section 6, Rule 78 of the Rules of Court on
the order of preference for the issuance of letters of administration cannot be ignored and
that Article 992 of the Civil Code must be followed. Isabel further asserts that Emilio
III had demonstrated adverse interests and disloyalty to the estate, thus, he does not
deserve to become a co-administrator thereof.
Issues:
Isabel bewails that: (1) Emilio III is an illegitimate grandchild and therefore, not an heir of the
decedent; (2) corollary thereto, Emilio III, not being a "next of kin" of the decedent, has no
interest in the estate to justify his appointment as... administrator thereof; (3) Emilio III's
actuations since his appointment as administrator by the RTC on 9 November 2001
emphatically demonstrate the validity and wisdom of the order of preference in Section 6,
Rule 78 of the Rules of Court; and (4) there is no basis for joint... administration as there are
no "opposing parties or factions to be represented."
Ruling:
To begin with, the case at bar reached us on the issue of who, as between Emilio III and
Isabel, is better qualified to act as administrator of the decedent's estate. We did not
choose. Considering merely his demonstrable interest in the subject estate, we ruled that
Emilio III should likewise administer the estate of his illegitimate grandmother, Cristina, as a
co-administrator. In the context of this case, we have to make a choice and therefore,
reconsider our decision of 16 June 2010.
The general rule in the appointment of administrator of the estate of a decedent is laid down
in Section 6, Rule 78 of the Rules of Court
Textually, the rule lists a sequence to be observed, an order of preference, in the
appointment of an administrator. This order of preference, which categorically seeks out
the surviving spouse, the next of kin and the creditors in the appointment of an
administrator, has... been reinforced in jurisprudence.
The paramount consideration in the appointment of an administrator over the estate of a
decedent is the prospective administrator's interest in the estate.
The rationale behind the rule is that those who will reap the benefit of a wise, speedy and
economical administration of the estate, or, in the alternative, suffer the consequences of
waste,... improvidence or mismanagement, have the highest interest and most influential
motive to administer the estate correctly.[10] In all, given that the rule speaks of an order of
preference, the person to be appointed administrator of a decedent's estate... must
demonstrate not only an interest in the estate, but an interest therein greater than any other
candidate.
It is to this requirement of observation of the order of preference in the appointment of
administrator of a decedent's estate, that the appointment of co-administrators has been
allowed, but as an exception. We again refer to Section 6(a) of Rule 78 of the Rules of
Court... which specifically states that letters of administration may be issued to both the
surviving spouse and the next of kin. In addition and impliedly, we can refer to Section 2 of
Rule 82 of the Rules of Court which say that "x x x [w]hen an executor or administrator
dies,... resigns, or is removed, the remaining executor or administrator may administer the
trust alone, x x x."
In a number of cases, we have sanctioned the appointment of more than one administrator
for the benefit of the estate and those interested therein.[13] We recognized that the
appointment of administrator of the estate of a decedent or the... determination of a
person's suitability for the office of judicial administrator rests, to a great extent, in the sound
judgment of the court exercising the power of appointment.
Under certain circumstances and for various reasons well-settled in Philippine and
American jurisprudence, we have upheld the appointment of co-administrators: (1) to have
the benefits of their judgment and perhaps at all times to have different interests
represented;[15] (2) where justice and equity demand that opposing parties or factions be
represented in the management of the estate of the deceased; (3) where the estate is large
or, from any cause, an intricate and perplexing one to settle;[16] (4) to... have all interested
persons satisfied and the representatives to work in harmony for the best interests of the
estate;[17] and when a person entitled to the administration of an estate desires to have
another competent person associated with him in the... office.[18]
Hewing closely to the aforementioned cases is our ruling in Ventura v. Ventura[21] where
we allowed the appointment of the surviving spouse and legitimate children of the decedent
as co-administrators. However, we drew a distinction between the... heirs categorized as
next of kin, the nearest of kin in the category being preferred, thus:
The "next of kin" has been defined as those persons who are entitled under the statute... of
distribution to the decedent's property [citations omitted]. It is generally said that "the
nearest of kin, whose interest in the estate is more preponderant, is preferred in the choice
of administrator. 'Among members of a class the strongest ground for preference is the...
amount or preponderance of interest. As between next of kin, the nearest of kin is to be
preferred.'"
In our Decision under consideration, we zeroed in on Emilio III's demonstrable interest in
the estate and glossed over the order of preference set forth in the Rules. We gave weight
to Emilio III's demonstrable interest in Cristina's estate and without a closer scrutiny of... the
attendant facts and circumstances, directed co-administration thereof.
The collected teaching is that mere demonstration of interest in the estate to be settled does
not ipso facto entitle an interested person to co-administration thereof. Neither does
squabbling among the heirs nor adverse interests necessitate the discounting of the... order
of preference set forth in Section 6, Rule 78. Indeed, in the appointment of administrator of
the estate of a deceased person, the principal consideration reckoned with is the interest in
said estate of the one to be appointed as administrator.[31] Given Isabel's unassailable
interest in the estate as one of the decedent's legitimate grandchildren and undoubted
nearest "next of kin," the appointment of Emilio III as co-administrator of the same estate,
cannot be a demandable right. It is a... matter left entirely to the sound discretion of the
Court[32] and depends on the facts and the attendant circumstances of the case.[33]
These considerations do not warrant the setting aside of the order of preference mapped
out in Section 6, Rule 78 of the Rules of Court. They compel that a choice be made of one
over the other.

1. The bitter estrangement and long-standing animosity between Isabel, on the one
hand, and Emilio III, on the other, traced back from the time their paternal
grandparents were alive, which can be characterized as adverse interest of some
kind by, or hostility of, Emilio III to

Isabel who is immediately interested in the estate;

2. Corollary thereto, the seeming impossibility of Isabel and Emilio III working harmoniously
as co-administrators may result in prejudice to the decedent's estate, ultimately delaying
settlement thereof; and
3. Emilio III, for all his claims of knowledge in the management of Cristina's estate, has not
looked after the estate's welfare and has acted to the damage and prejudice thereof.
Contrary to the assumption made in the Decision that Emilio III's demonstrable interest in
the estate makes him a suitable co-administrator thereof, the evidence reveals that Emilio III
has turned out to be an unsuitable administrator of the estate. Respondent Isabel... points
out that after Emilio III's appointment as administrator of the subject estate in 2001, he has
not looked after the welfare of the subject estate and has actually acted to the damage and
prejudice thereof as evidenced by the following:
1. Emilio III, despite several orders from the probate court for a complete inventory, omitted
in the partial inventories[34] he filed therewith properties of the estate[35] including several
parcels of land, cash, bank deposits,... jewelry, shares of stock, motor vehicles, and other
personal properties, contrary to Section 1,[36] paragraph a, Rule 81 of the Rules of Court.
2. Emilio III did not take action on both occasions against Federico's settlement of the
decedent's estate which adjudicated to himself a number of properties properly belonging to
said estate (whether wholly or partially), and which contained a declaration that the...
decedent did not leave any descendants or heirs, except for Federico, entitled to succeed to
her estate.[37]
In compliance to our Resolution dated 18 April 2012 requiring Emilio III to respond to the
following imputations of Isabel that:
[Emilio III] did not file an inventory of the assets until November 14, 2002;
[T]he inventory [Emilio III] submitted did not include several properties of the decedent;
[T]hat properties belonging to the decedent have found their way to different individuals or
persons; several properties to Federico Suntay himself; and
[W]hile some properties have found their way to [Emilio III], by reason of falsified
documents;[38]
Emilio III refutes Isabel's imputations that he was lackadaisical in assuming and performing
the functions of administrator of Cristina's estate:
1. From the time of the RTC's Order appointing Emilio III as administrator, Isabel, in her
pleadings before the RTC, had vigorously opposed Emilio III's assumption of that
office, arguing that "[t]he decision of the [RTC] dated 9 November 2001 is not among
the judgments... authorized by the Rules of Court which may be immediately
implemented or executed;"
2. The delay in Emilio III's filing of an inventory was due to Isabel's vociferous
objections to Emilio III's attempts to act as administrator while the RTC decision was
under appeal to the Court of Appeals;
3. The complained partial inventory is only initiatory, inherent in the nature thereof, and
one of the first steps in the lengthy process of settlement of a decedent's estate,
 such that it cannot constitute a complete and total listing of the decedent's
properties; and
4. The criminal cases adverted to are trumped-up charges where Isabel, as private
complainant, has been unwilling to appear and testify, leading the Judge of the
Regional Trial Court, Branch 44 of Mamburao, Occidental Mindoro, to warn the
prosecutor of a possible motu... propio dismissal of the cases.
While we can subscribe to Emilio III's counsel's explanation for the blamed delay in the filing
of an inventory and his exposition on the nature thereof, partial as opposed to complete, in
the course of the settlement of a decedent's estate, we do not find any clarification on
Isabel's accusation that Emilio III had deliberately omitted properties in the inventory, which
properties of Cristina he knew existed and which he claims to be knowledgeable about.
The general denial made by Emilio III does not erase his unsuitability as administrator
rooted in his failure to "make and return x x x a true and complete inventory" which became
proven fact when he actually filed partial inventories before the probate court and by his...
inaction on two occasions of Federico's exclusion of Cristina's other compulsory heirs,
herein Isabel and her siblings, from the list of heirs.
As administrator, Emilio III enters into the office, posts a bond and executes an oath to
faithfully discharge the duties of settling the decedent's estate with the end in view of
distribution to the heirs, if any. This he failed to do. The foregoing circumstances of Emilio
III's omission and inaction become even more significant and speak volume of his
unsuitability as administrator as it demonstrates his interest adverse to those immediately
interested in the estate of the decedent, Cristina.
In this case, palpable from the evidence on record, the pleadings, and the protracted
litigation, is the inescapable fact that Emilio III and respondent Isabel have a deep aversion
for each other. To our mind, it becomes highly impractical, nay, improbable, for the two to...
work as co-administrators of their grandmother's estate. The allegations of Emilio III, the
testimony of Federico and the other witnesses for Federico and Emilio III that Isabel and her
siblings were estranged from their grandparents further drive home the point that
Emilio III bears hostility towards Isabel. More importantly, it appears detrimental to the
decedent's estate to appoint a co-administrator (Emilio III) who has shown an adverse
interest of some kind or hostility to those, such as herein respondent Isabel, immediately
interested... in the said estate.
 Lee (President of Philinterlife and FLAG) v. RTC, Enderes
[Feb 23, 2004]
11:38 PM Lee v. Enderes No comments

Facts:
 Dr. Juvencio P. Ortañez incorporated the Philippine International Life Insurance Company, Inc. on 1956. At the time of
the company’s incorporation, Dr. Ortañez owned ninety percent (90%) of the subscribed capital stock.
 On July 21, 1980, Dr. Ortañez died. He left behind a wife (Juliana Salgado Ortañez), three legitimate
children (Rafael, Jose and Antonio Ortañez) and five illegitimate children by Ligaya Novicio (herein private
respondent Ma. Divina Ortañez-Enderes and her siblings Jose, Romeo, Enrico Manuel and Cesar, all surnamed
Ortañez). <3 Peaches <3
 Special administrators Rafael and Jose Ortañez submitted an inventory of the estate of their father which included
2,029 shares of stock in Philippine International Life Insurance Company, representing 50.725% of the company’s
outstanding capital stock.
 Juliana (wife) and Jose (legit child) sold 1,014 and 1,011 shares respectively to FLAG.
 The legal family entered into an extrajudicial settlement of the estate of Dr. Juvencio Ortañez, partitioning the estate
among themselves. This was the basis of the number of shares separately sold by them.
 The lower court declared the shares of stock as null and void. CA affirmed.
 Meanwhile, the FLAG-controlled board of directors, increased the authorized capital stock of Philinterlife, diluting in the
process the 50.725% controlling interest Dr. Juvencio Ortañez, in the insurance company. Enderes filed an action at
the SEC. The SEC hearing officer dismissed the case acknowledging the jurisdiction of the civil courts.
 Jose Lee and Alma Aggabao as president and secretary of Philinterlife ignored the orders nullifying the sales of the
shares of stock. <3 Peaches <3
Issue:
 WON the sale of the shares of stock of Philinterlife is void. (YES)
Ruling:
 YES. Our jurisprudence is clear that
o (1) any disposition of estate property by an administrator or prospective heir pending final adjudication requires court
approval and
o (2) any unauthorized disposition of estate property can be annulled by the probate court, there being no need for a
separate action to annul the unauthorized disposition.
 An heir can sell his right, interest, or participation in the property under administration under NCC 533 which provides
that possession of hereditary property is deemed transmitted to the heir without interruption from the moment of death
of the decedent. However, an heir can only alienate such portion of the estate that may be allotted to him in the
division of the estate by the probate or intestate court after final adjudication, that is, after all debtors shall have
been paid or the devisees or legatees shall have been given their shares. This means that an heir may only sell
his ideal or undivided share in the estate, not any specific property therein. <3 Peaches <3
 It goes without saying that the increase in Philinterlife’s authorized capital stock, approved on the vote of petitioners’
non-existent shareholdings and obviously calculated to make it difficult for Dr. Ortañez’s estate to reassume its
controlling interest in Philinterlife, was likewise void ab initio.

ESTATE OF HILARIO RUIZ vs. CA

GR No. 118671; January 29, 1996
Puno, J.

DOCTRINE:

The Rules provide that if there is a controversy as to who are the lawful heirs of the decedent and their
distributive shares in his estate, the probate court shall proceed to hear and decide the same as in ordinary
cases.

FACTS:

Hilario M. Ruiz died and left a holographic will naming as his heirs his only son, Edmond Ruiz, his adopted
daughter, private respondent Maria Pilar Ruiz Montes, and his three granddaughters, private respondents
Maria Cathryn, Candice Albertine and Maria Angeline, all children of Edmond Ruiz. The testator named
Edmond Ruiz executor of his estate. Immediately thereafter, the cash component of his estate was
distributed among Edmond Ruiz and private respondents in accordance with the decedent's will. Edmond,
the named executor, did not take any action for the probate of his father's holographic will. Four years after
the testator's death, it was private respondent Montes who filed a petition for the probate and approval of
Hilario Ruiz's will and for the issuance of letters testamentary to Edmond.

Edmond opposed the petition on the ground that the will was executed under undue influence. Edmond
then withdrew his opposition to the probate of the will. Consequently, the probate court admitted the will to
probate and ordered the issuance of letters testamentary to Edmond conditioned upon the filing of a bond.
Edmond Ruiz as executor, filed an "Ex-Parte Motion for Release of Funds." Respondent Montes opposed
the motion and concurrently filed a "Motion for Release of Funds to Certain Heirs" and "Motion for Issuance
of Certificate of Allowance of Probate Will." The probate court denied petitioner's motion for release of funds
but granted respondent Montes' motion in view of petitioner's lack of opposition. Petitioner moved for
reconsideration alleging that he actually filed his opposition to respondent Montes's motion for release of
rent payments which opposition the court failed to consider. Petitioner likewise reiterated his previous
motion for release of funds.

ISSUE:

Whether or not the intrinsic validity of the will may be passed upon by the probate court.

HELD:

The probate of a will is conclusive as to its due execution and extrinsic validity and settles only the question
of whether the testator, being of sound mind, freely executed it in accordance with the formalities prescribed
by law. Questions as to the intrinsic validity and efficacy of the provisions of the will, the legality of any
devise or legacy may be raised even after the will has been authenticated.

The intrinsic validity of Hilario's holographic will was controverted by petitioner before the probate court in
his Reply to Montes' Opposition to his motion for release of funds and his motion for reconsideration of the
order of the said court. Therein, petitioner assailed the distributive shares of the devisees and legatees
inasmuch as his father's will included the estate of his mother and allegedly impaired his legitime as an
intestate heir of his mother. The Rules provide that if there is a controversy as to who are the lawful heirs
of the decedent and their distributive shares in his estate, the probate court shall proceed to hear and
decide the same as in ordinary cases.

CASE DIGEST: UNION BANK V. SANTIBANEZ (452

SCRA 228)
Published by paul on June 24, 2013 | Leave a response

Case Digest:Union Bank v. Santibanez

452 SCRA 228

FACTS:

On May 31, 1980, the First Countryside Credit Corporation (FCCC) and Efraim
Santibañez entered into a loan agreement in the amount of P128,000.00. The amount
was intended for the payment of one (1) unit Ford 6600 Agricultural Tractor. In view
thereof, Efraim and his son, Edmund, executed a promissory note in favor of the FCCC,
the principal sum payable in five equal annual amortizations. On Dec. 1980, FCCC and
Efraim entered into another loan agreement for the payment of another unit of Ford 6600
and one unit of a Rotamotor. Again, Efraim and Edmund executed a promissory note and
a Continuing Guaranty Agreement for the later loan. In 1981, Efraim died, leaving a
holographic will. Testate proceedings commenced before the RTC of Iloilo City. Edmund
was appointed as the special administrator of the estate. During the pendency of the
testate proceedings, the surviving heirs, Edmund and his sister Florence, executed a Joint
Agreement, wherein they agreed to divide between themselves and take possession of the
three (3) tractors: (2) tractors for Edmund and (1) for Florence. Each of them was
to assume the indebtedness of their late father to FCCC, corresponding to the tractor
respectively taken by them. In the meantime, a Deed of Assignment with Assumption of
Liabilities was executed by and between FCCC and Union Bank, wherein the FCCC
assigned all its assets and liabilities to Union Bank.

Demand letters were sent by Union Bank to Edmund, but the latter refused to pay. Thus,
on February 5, 1988, Union Bank filed a Complaint for sum of money against the heirs of
Efraim Santibañez, Edmund and Florence, before the RTC of Makati City. Summonses
were issued against both, but the one intended for Edmund was not served since he was
in the United States and there was no information on his address or the date of his return
to the Philippines. Florence filed her Answer and alleged that the loan documents did
not bind her since she was not a party thereto. Considering that the joint agreement
signed by her and her brother Edmund was not approved by the probate court, it was null
and void; hence, she was not liable to Union Bank under the joint agreement.

Union Bank asserts that the obligation of the deceased had passed to his legitimate heirs
(Edmund and Florence) as provided in Article 774 of the Civil Code; and that the
 unconditional signing of the joint agreement estopped Florence, and that she cannot deny
her liability under the said document.

In her comment to the petition, Florence maintains that Union Bank is trying to recover
a sum of money from the deceased Efraim Santibañez; thus the claim should have been
filed with the probate court. She points out that at the time of the execution of the joint
agreement there was already an existing probate proceedings. She asserts that even if the
agreement was voluntarily executed by her and her brother Edmund, it should still have
been subjected to the approval of the court as it may prejudice the estate, the heirs or third
parties.

ISSUE:

W/N the claim of Union Bank should have been filed with the probate court before which
the testate estate of the late Efraim Santibañez was pending. W/N the agreement between
Edmund and Florence (which was in effect, a partition of hte estate) was void considering
that it had not been approved by the probate court. W/N there can be a valid partition
among the heirs before the will is probated.

HELD:

Well-settled is the rule that a probate court has the jurisdiction to determine all the
properties of the deceased, to determine whether they should or should not be included
in the inventory or list of properties to be administered. The said court is primarily
concerned with the administration, liquidation and distribution of the estate.

In our jurisdiction, the rule is that there can be no valid partition among the heirs until
after the will has been probated. In the present case, Efraim left a holographic will which
contained the provision which reads as follows:

In our jurisdiction, the rule is that there can be no valid partition among the heirs until
after the will has been probated. In the present case, Efraim left a holographic will which
contained the provision which reads as follows:

o (e) All other properties, real or personal, which I own and may be discovered later after
my demise, shall be distributed in the proportion indicated in the immediately
preceding paragraph in favor of Edmund and Florence, my children.

The above-quoted is an all-encompassing provision embracing all the properties left by

the decedent which might have escaped his mind at that time he was making his will, and
other properties he may acquire thereafter. Included therein are the three (3) subject
tractors. This being so, any partition involving the said tractors among the heirs is not
valid. The joint agreement executed by Edmund and Florence, partitioning the tractors
among themselves, is invalid, specially so since at the time of its execution, there was
already a pending proceeding for the probate of their late father’s holographic will
covering the said tractors.
The Court notes that the loan was contracted by the decedent. The bank, purportedly a
creditor of the late Efraim Santibañez, should have thus filed its money claim with the
probate court in accordance with Section 5, Rule 86 of the Revised Rules of Court.

The filing of a money claim against the decedent’s estate in the probate court is
mandatory. This requirement is for the purpose of protecting the estate of the deceased
by informing the executor or administrator of the claims against it, thus enabling him to
examine each claim and to determine whether it is a proper one which should be allowed.
The plain and obvious design of the rule is the speedy settlement of the affairs of the
deceased and the early delivery of the property to the distributees, legatees, or heirs.

Perusing the records of the case, nothing therein could hold Florence accountable for any
liability incurred by her late father. The documentary evidence presented, particularly the
promissory notes and the continuing guaranty agreement, were executed and signed only
by the late Efraim Santibañez and his son Edmund. As the petitioner failed to file its
money claim with the probate court, at most, it may only go after Edmund as co-maker of
the decedent under the said promissory notes and continuing guaranty.

GARCIA-QUIAZON v. BELEN
G.R. No. 189121
July 31, 2013
Perez, J.

FACTS
Petitioner Elise Quiazon is the daughter of Eliseo Quiazon and Ma. Lourdes
Belen, who are common-law partners. When Eliseo died instestate, Elise
through her mother filed a Petition for Letters of Administration before the RTC,
claiming that she is a natural child of Eliseo having conceived at the time when
her parents were both capacitated to marry each other. Filiation was proven by
her Birth Certificate signed by Eliseo. Insisting on the legal capacity of Eliseo
and Lourdes, Elise impugned the validity of Eliseo’s marriage to Amelia Garcia-
Quiazon by claiming it was bigamous.
Respondent Amelia opposed the issuance of the letters of administration
asserting that the venue of the petition was improperly laid. However, the RTC
rendered its decision in favor of Elise. On appeal, the deicison was affirmed.
Hence, the petition was filed before the SC raising the argument that Elise has
not shown any interest in the petition for letters of administration and that the
CA erred in declaring that Eliseo and Amelia were no legally married because
Elise has no cause of action on it.
ISSUE
Whether or not Elise has a cause of action for declaration of nullity of marriage
despite the death of his father, hence cannot be deemed as an interested party.
RULING
Yes, Elise has a cause of action. The Court ruled that in a void marriage, no
marriage has taken place and it cannot be the source of right, such that any
interested party may attach the marriage directly or collaterally without
prescription, which may be filed even beyond the lifetime of the parties to the
marriage. Having successional rights that would be prejudiced by her father’s
marriage to Amelia, Elise may without a doubt impugn the existence of such
marriage even after the death of her father. The said marriage may be
questioned by filing an action attaching its validity, or collaterally by raising it as
an issue in a proceeding for the settlement of the estate of the deceased
spouse. As a compulsory heir, Elise has a cause of action for the declaration of
nullity of the void marriage of Eliseo and Amelia.
Likewise, Elise who stands to be benefited by the distribution of Eliseo’s estate
is deemed to be an interested part. An interested part is one who would be
benefited in the estate. Having a vested right in the distribution of Eliseo’s
estate, Elise can rightfully be considered as an interested party.

PILAPIL vs. HEIRS OF MAXIMINO R. BRIONES, February 5, 2007 G.R. No. 150175

Facts:

Petitioners are the heirs of the late Donata Ortiz-Briones (Donata), consisting of her surviving
sister, Rizalina Ortiz-Aguila (Rizalina); Rizalina’s daughter, ErlindaPilapil (Erlinda); and the other
nephews and nieces of Donata,. Respondents, on the other hand, are the heirs of the late
MaximinoBriones (Maximino), composed of his nephews and nieces, and grandnephews and
grandnieces, in representation of the deceased siblings of Maximino.

Maximino was married to Donata but their union did not produce any children. When Maximino
died, Donata instituted intestate proceedings to settle her husband’s estate, which then issued
appointedDonata as the administratrix of Maximino’s estate.Donata died. Erlinda instituted a
petition for the administration of the intestate estate of Donata. Erlinda and her husband, Gregorio,
were appointed as administrators of Donata’s intestate estate.

SilverioBriones, a nephew of Maximino, filed for Letters of Administration for the intestate estate
of Maximino, which was initially granted. The trial court also issued an order, allowing Silverio to
collect rentals from Maximino’s properties. But then, Gregorio filed with the RTC a Motion to Set
Aside the Order, claiming that the said properties were already under his and his wife’s
administration as part of the intestate estate of Donata. Silverio’s Letters of Administration for the
intestate estate of Maximino was subsequently set aside by the RTC.

The heirs of Maximino filed a complaint against the heirs of Donata for the partition, annulment,
and recovery of possession of real property. They alleged that Donata, as administratrix of the
estate of Maximino, through fraud and misrepresentation, in breach of trust, and without the
knowledge of the other heirs, succeeded in registering in her name the real properties belonging
to the intestate estate of Maximino. Furthermore, the facts show that after Donata’s death, Erlinda
took possession of the real properties, and continued to manage the same and collect the rental
fees thereon. Donata and, subsequently, Erlinda, were so obviously exercising rights of ownership
over the real properties, in exclusion of all others, which must have already put the heirs of
Maximino on guard if they truly believed that they still had rights thereto.

The heirs of Maximino knew he died on 1 May 1952. They even attended his wake. They did not
offer any explanation as to why they had waited 33 years from Maximino’s death before one of
them, Silverio, filed a Petition for Letters of Administration for the intestate estate of Maximino on
21 January 1985. After learning that the intestate estate of Maximino was already settled in
aspecial proceeding, they waited another two years, before instituting, on 3 March 1987, a
complaint for partition, annulment and recovery of the real property belonging to the estate of
Maximino.

Issue:

Whether or not respondents’ right to recover possession of the disputed properties, based on
implied trust, is also barred by laches.

Held:

Yes. Respondents’ right to recover possession of the disputed properties, based on implied trust,
is also barred by laches.

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

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

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

In view of the foregoing, the Motion for Reconsideration is DENIED.

SABIDONG VS SOLAS
A.M. No. P-01-1448 (FORMERLY OCA IPI NO. 99-664-P)

VILLARAMA, JR., J.:

The present administrative case stemmed from a sworn letter-
complaint[1] dated May 29, 1999 filed before this Court by Rodolfo C.
Sabidong (complainant) charging respondent Nicolasito S. Solas, Clerk of
Court IV, Municipal Trial Court in Cities (MTCC), Iloilo City with grave and
serious misconduct, dishonesty, oppression and abuse of authority.

The Facts

Trinidad Sabidong, complainant's mother, is one of the longtime occupants

of a parcel of land, designated as Lot 11 (Lot 1280-D-4-11 of consolidation-
subdivision plan [LRC] Pcs-483) originally registered in the name of C. N.
Hodges and situated at Barangay San Vicente, Jaro, Iloilo City.[2] The
Sabidongs are in possession of one-half portion of Lot 11 of the said Estate
(Hodges Estate), as the other half-portion was occupied by Priscila
Saplagio. Lot 11 was the subject of an ejectment suit filed by the Hodges
Estate, docketed as Civil Case No. 14706 of the MTCC Iloilo City, Branch 4
("Rosita R. Natividad in her capacity as Administratrix of C.N. Hodges
Estate, plaintiff vs. Priscila Saplagio, defendant"). On May 31, 1983, a
decision was rendered in said case ordering the defendant to immediately
vacate the portion of Lot 11 leased to her and to pay the plaintiff rentals
due, attorney's fees, expenses and costs.[3] At the time, respondent was the
Clerk of Court III of MTCC, Branch 3, Iloilo City.

Sometime in October 1984, respondent submitted an Offer to Purchase on

installment Lots 11 and 12. In a letter dated January 7, 1986, the
Administratrix of the Hodges Estate rejected respondent's offer in view of
an application to purchase already filed by the actual occupant of Lot 12, "in
line with the policy of the Probate Court to give priority to the actual
occupants in awarding approval of Offers". While the check for initial down
payment tendered by respondent was returned to him, he was nevertheless
informed that he may file an offer to purchase Lot 11 and that if he could
put up a sufficient down payment, the Estate could immediately endorse it
for approval of the Probate Court so that the property can be awarded to
him "should the occupant fail to avail of the priority given to them."[4]

The following day, January 8, 1986, respondent again submitted an Offer to

Purchase Lot 11 with an area of 234 square meters for the amount of
P35,100. Under the Order dated November 18, 1986 issued by the probate
court (Regional Trial Court of Iloilo, Branch 27) in Special Proceedings No.
1672 ("Testate Estate of the Late Charles Newton Hodges, Rosita R.
Natividad, Administratrix"), respondent's Offer to Purchase Lot 11 was
approved upon the court's observation that the occupants of the subject lots
"have not manifested their desire to purchase the lots they are occupying up
to this date and considering time restraint and considering further, that the
sales in favor of the x x x offerors are most beneficial to the estate x x x". On
January 21, 1987, the probate court issued another Order granting
respondent's motion for issuance of a writ of possession in his favor. The
writ of possession over Lot 11 was eventually issued on June 27, 1989.[5]

On November 21, 1994, a Deed of Sale With Mortgage covering Lot 11 was
executed between respondent and the Hodges Estate represented by its
Administratrix, Mrs. Ruth R. Diocares. Lot 11 was thereby conveyed to
respondent on installment for the total purchase price of P50,000.
Consequently, Transfer Certificate of Title (TCT) No. T-11836 in the name
of C. N. Hodges was cancelled and a new certificate of title, TCT No. T-
107519 in the name of respondent was issued on December 5, 1994. Lot 11
was later subdivided into two lots, Lots 11-A and 11-B for which the
corresponding titles (TCT Nos. T-116467 and T-116468), also in the name of
respondent, were issued on February 28, 1997.[6]

On motion of Ernesto Pe Benito, Administrator of the Hodges Estate, a writ

of demolition was issued on March 3, 1998 by the probate court in favor of
respondent and against all adverse occupants of Lot 11.[7]

On June 14, 1999, this Court received the sworn letter-complaint asserting
that as court employee respondent cannot buy property in litigation
(consequently he is not a buyer in good faith), commit deception,
dishonesty, oppression and grave abuse of authority. Complainant
specifically alleged the following:

3. Complainant and his siblings, are possessors and occupants of a parcel of

land situated at Brgy. San Vicente, Jaro, Iloilo City, then identified as Lot
No. 1280-D-4-11, later consolidated and subdivided and became known as
Lot 11, then registered and titled in the name of Charles Newton Hodges.
The Sabidong family started occupying this lot in 1948 and paid their
monthly rentals until sometime in 1979 when the Estate of Hodges stopped
accepting rentals. x x x

4. Upon knowing sometime in 1987 that the property over which their
house is standing, was being offered for sale by the Estate, the mother of
complainant, TRINIDAD CLAVERIO SABIDONG (now deceased), took
interest in buying said property, Lot 11;

5. TRINIDAD CLAVERIO SABIDONG, was then an ordinary housekeeper

and a laundrywoman, who never received any formal education, and did
not even know how to read and write. When Trinidad Claverio Sabidong,
together with her children and the complainant in this case, tried to
negotiate with the Estate for the sale of the subject property, they were
informed that all papers for transaction must pass through the respondent
in this case, Nicolasito Solas. This is unusual, so they made inquiries and
they learned that, Nicolasito Solas was then the Clerk of Court 111, Branch
3, Municipal Trial Court in Cities, Iloilo City and presently, the City Sheriff
of Iloilo City;

6. The respondent Nicolasito Solas, then Clerk of Court III, MTCC, Iloilo
City, has knowledge, by reason of his position that in 1983 Hodges Estate
was ejecting occupants of its land. x x x Taking advantage of this inside
information that the land subject of an ejectment case in the Municipal
Trial Court in Cities, Iloilo City, whom respondent is a Clerk of Court III,
the respondent surreptitiously offered to buy the said lot in litigation. x x x

7. Complainant nor any member of his family did not know that as early as
1984, the respondent had offered to purchase the subject lot from the estate
x x x. After receiving the notice of denial of his offer to purchase, dated
January 7, 1986, respondent made a second offer to purchase the subject
property the following day, January 8, 1986, knowing fully well that the
subject property was being occupied. x x x

8. Because of this denial, respondent met with the family of the

complainant and negotiated for the sale of the property and transfer of the
title in favor of the latter. Respondent made the complainant and his family
believed that he is the representative of the estate and that he needed a
downpayment right away. All the while, the Sabidong family (who were
carpenters, laundrywomen, a janitor, persons who belong to the
underprivileged) relied on the representations of the respondent that he
was authorized to facilitate the sale, with more reason that respondent
represented himself as the City Sheriff;

9. That between 1992-1993, a sister of the complainant who was fortunate

to have worked abroad, sent the amount of Ten Thousand (P10,000.00)
Pesos to complainant's mother, to be given to respondent Nicolasito Solas.
x x x After receiving the money, respondent assured the Sabidong family
that they will not be ejected from the lot, he being the City Sheriff will take
care of everything, and taking advantage of the illiteracy of Trinidad
Claverio Sabidong, he did not issue any receipt;

10. True enough, they were not ejected instead it took the respondent some
time to see them again and demanded additional payment. In the
meanwhile, the complainant waited for the papers of the supposed sale and
transfer of title, which respondent had promised after receiving the
downpayment of P10,000.00;

11. That sometime again in 1995, respondent again received from the
mother of complainant the amount of Two Thousand (P2,000.00) Pesos,
allegedly for the expenses of the documentation of sale and transfer of title,
and again respondent promised that the Sabidong family will not be
ejected;

12. To the prejudice and surprise of the complainant and his family,
respondent was able to secure an order for the approval of his offer to
purchase x x x in Special Proceedings No. 1672 x x x;

13. Worse, respondent moved for the issuance of a Writ of Possession in his
favor, which the probate court acted favorably x x x. A writ of possession
was issued on June 27, 1989 x x x;

14. x x x respondent took advantage of the trust and confidence which the
Sabidong family has shown, considering that respondent was an officer of
the court and a City Sheriff at that. The complainant and his family thought
that respondent, being a City Sheriff, could help them in the transfer of the
title in their favor. Never had they ever imagined that while respondent had
been receiving from them hard-earned monies purportedly for the sale of
the subject property, respondent was also exercising acts of ownership
adverse to the interest of the complainant and his family;

15. Being an officer of the court and supposed to be an embodiment of

fairness and justice, respondent acted with malice, with grave abuse of
confidence and deceit when he represented that he can facilitate the sale
and titling of the subject property in favor of the complainant and his
family;
16. That when several thousands of pesos were given to the respondent as
payment for the same and incidental expenses relative thereto, he was able
to cause the transfer of the title in his favor. x x x;

17. After the death of Trinidad Claverio Sabidong x x x the respondent

received from the complainant the amount of Five Thousand (P5,000.00)
Pesos x x x When a receipt was demanded, respondent refused to issue one,
and instead promised and assured the complainant that they will not be
ejected;

xxxx

19. The complainant again, through his sister-in-law, Socorro Sabidong,

delivered and gave to the respondent the amount of Three Thousand
(P3,000.00) Pesos as expenses for the subdivision of the subject lot. The
respondent facilitated the subdivision and after the same was approved, the
complainant did not know that two (2) titles were issued in the name of the
respondent. x x x;

20. Meanwhile, respondent prepared a Contract to Sell, for the complainant

and his neighbor Norberto Saplagio to affix their signatures, pursuant to
their previous agreement for the buyers to avail of a housing loan with the
Home Development Mutual Fund (PAG-IBIG). Complainant attended the
seminar of the HDMF for seven (7) times, in his desire to consummate the
sale. However, when the complainant affixed his signature in the contract,
he was surprised that the owner of the subject property was the respondent.
When complainant raised a question about this, respondent assured
complainant that everything was alright and that sooner complainant will
be the owner of the property. Complainant and his family, all these years,
had believed and continued to believe that the owner was the estate of
Hodges and that respondent was only the representative of the estate;

21. The Contract to Sell, appeared to have been notarized on June 3, 1996,
however, no copy thereof was given to the complainant by the respondent.
Respondent then, took the papers and documents required by the HDMF to
be completed, from the complainant allegedly for the purpose of personally
filing the same with the HDMF. Complainant freely and voluntarily
delivered all pertinent documents to the respondent, thinking that
respondent was helping in the fast and easy release of the loan. While the
said documents were in the possession of the respondent, he never made
any transaction with the HDMF, worse, when complainant tried to secure a
copy of the Contract to Sell, the copy given was not signed by the Notary
Public, x x x;

22. The complainant [was] shocked to learn that respondent had canceled
the sale and that respondent refused to return the documents required by
the HDMF. Respondent claimed that as Sheriff, he can cause the
demolition of the house of the complainant and of his family. Respondent
threatened the complainant and he is capable of pursuing a demolition
order and serve the same with the assistance of the military. x x x;

23. After learning of the demolition [order], complainant attempted to

settle the matter with the respondent, however, the same proved futile as
respondent boasted that the property would now cost at Four Thousand
Five Hundred (P4,500.00) Pesos;

24. The threats of demolition is imminent. Clearly, complainant and his

family were duped by the respondent and are helpless victims of an officer
of the court who took advantage of their good faith and trust. Complainant
later was informed that the subject property was awarded to the respondent
as his Sheriff's Fees, considering that respondent executed the decisions in
ejectment cases filed by the Hodges estate against the adverse occupants of
its vast properties;

25. A civil case for the Annulment of Title of the respondent over the
subject property is pending before the Regional Trial Court of Iloilo, Branch
37 and a criminal complaint for Estafa is also pending preliminary
investigation before the Office of the City Prosecutor of Iloilo City, known
as I.S. No. 1559-99, both filed [by] the complainant against the
respondent.[8]

Acting on the complaint, Court Administrator Alfredo L. Benipayo issued a

1st Indorsement[9] dated July 8, 1999, requiring respondent to file his
comment on the Complaint dated May 29, 1999. On October 21, 1999,
respondent submitted his Comment.[10]

In a Resolution[11] dated July 19, 1999, Public Prosecutor Constantino C.

Tubilleja dismissed the Estafa charge against respondent for insufficiency
of evidence.
On November 29, 2000, Court Administrator Benipayo issued an
Evaluation and Recommendation[12] finding respondent guilty of violating
Article 1491[13] of the Civil Code. Said rule prohibits the purchase by certain
court officers of property and rights in litigation within their jurisdiction.
Court Administrator Benipayo recommended that:

1. this administrative complaint be treated as an administrative matter;

2. respondent Nicolasito S. Solas, Clerk of Court IV, OCC, MTCC, Iloilo City
be SUSPENDED for six (6) months, with warning that a repetition of the
same offense in the future will be dealt with more severely;

3. inasmuch as there are factual issues regarding the delivery of substantial

amounts which complainant alleged and which defendant denied, this issue
should be investigated and the Executive Judge of the Regional Trial Court
of Iloilo City should be designated to hear the evidence and to make a
report and recommendation within sixty (60) days from receipt.[14]

In a Resolution[15] dated January 22, 2001, this Court adopted the

recommendation of the Court Administrator to treat the present
administrative action as a regular administrative matter and to designate
the Executive Judge of the RTC of Iloilo City to hear the evidence of the
parties. The Court, however, noted without action the Court
Administrator's recommendation to suspend respondent for six months.

On March 13, 2001, Acting Court Administrator Zenaida N. Elepaño

forwarded the records of this case to Executive Judge Tito G. Gustilo of the
Iloilo City RTC.[16] In a Resolution[17] dated July 18, 2001, the Court referred
this case to the Executive Judge of the RTC of Iloilo City for investigation,
report and recommendation within 60 days from notice. By Order[18] dated
August 30, 2001, Executive Judge Gustilo set the case for reception of
evidence.

On March 19, 2004, the RTC of Iloilo, Branch 37, dismissed the case for
annulment of title, damages and injunction against respondent for lack of
merit.[19]

In a Resolution[20] dated June 15, 2005, the Court resolved to reassign the
instant administrative case to Executive Judge Rene S. Hortillo for
investigation, report and recommendation within 60 days from notice. In a
Letter[21] dated September 15, 2005, Executive Judge Hortillo informed the
Court that per the records, the parties have presented their testimonial and
documentary evidence before retired Executive Judge Tito G. Gustilo.

On September 12, 2005, Executive Judge Hortillo required the parties to

file their respective memoranda within 60 days from notice, upon
submission of which the case shall be deemed submitted for resolution.[22]

In his Memorandum,[23] respondent maintained that his purchase of the

subject land is not covered by the prohibition in paragraph 5, Article 1491 of
the Civil Code. He pointed out that he bought Lot 11-A a decade after the
MTCC of Iloilo, Branch 3, had ordered the ejectment of Priscila Saplagio
and Trinidad Sabidong from the subject lot. He insisted that public trust
was observed when complainant was accorded his right of first refusal in
the purchase of Lot 11-A, albeit the latter failed to avail said right. Asserting
that he is a buyer in good faith and for value, respondent cited the dismissal
of the cases for Estafa and annulment of title and damages which
complainant filed against him.

On September 10, 2007, respondent compulsorily retired from service.

Prior to this, he wrote then Senior Deputy Court Administrator Zenaida N.
Elepaño, requesting for the release of his retirement benefits pending
resolution of the administrative cases against him.[24]In a
Memorandum[25] dated September 24, 2007, Senior Deputy Court
Administrator Elepaño made the following recommendations:

a) The request of Nicolasito S. Solas, former Clerk of Court, MTCC, Iloilo

City for partial release of his retirement benefits be GRANTED; and

b) Atty. Lilian Barribal Co, Chief, Financial Management Office, Office of

the Court Administrator be DIRECTED to (1) WITHHOLD the amount
of Two Hundred Thousand Pesos (P200,000.00) from the retirement
benefits of Nicolasito S. Solas to answer for any administrative liability that
the Court may find against him in A.M. No. P-01-1448 (Formerly
Administrative Matter OCA IPI No. 99-664-P); OCA IPI No. 99-659-P;
OCA IPI No. 99-670-P; and OCA IPI No. 99-753-P; and (2) RELEASE the
balance of his retirement benefits.[26]
Eventually, the case was assigned to Judge Roger B. Patricio, the new
Executive Judge of the Iloilo City RTC for investigation, report and
recommendation.

On June 2, 2008, Judge Patricio submitted his final Report and

Recommendation[27] finding respondent liable for grave misconduct and
dishonesty under A.M. No. 03-06-13-SC or the Code of Conduct for Court
Personnel. Based on the evidence presented, Judge Patricio concluded that
respondent misappropriated the money which he received for the filing of
complainant's loan application. Such money could not have been used for
the partition of Lot No. 1280-D-4-11 since the same was already subdivided
into Lots 11-A and 11-B when respondent presented the Contract to Sell to
complainant. And despite respondent's promise to keep complainant and
his family in peaceful possession of the subject property, respondent caused
the issuance of a writ of demolition against them. Thus, Judge Patricio
recommended the forfeiture of respondent's salary for six months to be
deducted from his retirement benefits.

In a Resolution[28] dated September 29, 2008, the Court noted Judge

Patricio's Investigation Report and referred the same to the Office of the
Court Administrator (OCA) for evaluation, report and recommendation.

Findings and Recommendation of the OCA

In a Memorandum[29] dated January 16, 2009, then Court Administrator

Jose P. Perez found respondent liable for serious and grave misconduct and
dishonesty and recommended the forfeiture of respondent's salary for six
months, which shall be deducted from his retirement benefits.

The Court Administrator held that by his unilateral acts of extinguishing

the contract to sell and forfeiting the amounts he received from
complainant and Saplagio without due notice, respondent failed to act with
justice and equity. He found respondent's denial to be anchored merely on
the fact that he had not issued receipts which was belied by his admission
that he had asked money for the expenses of partitioning Lot 11 from
complainant and Saplagio. Since their PAG-IBIG loan applications did not
materialize, complainant should have returned the amounts given to him
by complainant and Saplagio.
On February 11, 2009, the Court issued a Resolution[30] requiring the
parties to manifest whether they are willing to submit the case for decision
on the basis of the pleadings and records already filed with the Court.
However, the copy of the Resolution dated February 11, 2009 which was
sent to complainant was returned unserved with the postal carrier's
notation "RTS-Deceased." Meanwhile, in a Compliance[31] dated August 24,
2009, respondent expressed his willingness to submit the case for decision
and prayed for an early resolution of the case.

Our Ruling

Article 1491, paragraph 5 of the Civil Code prohibits court officers such as
clerks of court from acquiring property involved in litigation within the
jurisdiction or territory of their courts. Said provision reads:

Article 1491. The following persons cannot acquire by purchase, even at a

public or judicial auction, either in person or through the mediation of
another:

xxxx

(5) Justices, judges, prosecuting attorneys, clerks of superior and inferior

courts, and other officers and employees connected with the administration
of justice, the property and rights in litigation or levied upon an
execution before the court within whose jurisdiction or territory they
exercise their respective functions; this prohibition includes the act of
acquiring by assignment and shall apply to lawyers, with respect to the
property and rights which may be the object of any litigation in which they
may take part by virtue of their profession.

x x x x (Emphasis supplied.)

The rationale advanced for the prohibition is that public policy disallows
the transactions in view of the fiduciary relationship involved, i.e., the
relation of trust and confidence and the peculiar control exercised by these
persons.[32] "In so providing, the Code tends to prevent fraud, or more
precisely, tends not to give occasion for fraud, which is what can and must
be done."[33]

For the prohibition to apply, the sale or assignment of the property must
take place during the pendency of the litigation involving the
property.[34] Where the property is acquired after the termination of the
case, no violation of paragraph 5, Article 1491 of the Civil Codeattaches.[35]

In the case at bar, when respondent purchased Lot 11-A on November 21,
1994, the Decision in Civil Case No. 14706 which was promulgated on May
31, 1983 had long become final. Be that as it may, it can not be said that the
property is no longer "in litigation" at that time considering that it was part
of the Hodges Estate then under settlement proceedings (Sp. Proc. No.
1672).

A thing is said to be in litigation not only if there is some contest or

litigation over it in court, but also from the moment that it becomes subject
to the judicial action of the judge.[36] A property forming part of the estate
under judicial settlement continues to be subject of litigation until the
probate court issues an order declaring the estate proceedings closed and
terminated. The rule is that as long as the order for the distribution of the
estate has not been complied with, the probate proceedings cannot be
deemed closed and terminated.[37]The probate court loses jurisdiction of an
estate under administration only after the payment of all the debts and the
remaining estate delivered to the heirs entitled to receive the same.[38] Since
there is no evidence to show that Sp. Proc. No. 1672 in the RTC of Iloilo,
Branch 27, had already been closed and terminated at the time of the
execution of the Deed of Sale With Mortgage dated November 21, 1994, Lot
11 is still deemed to be "in litigation" subject to the operation of Article 1491
(5) of the Civil Code.

This notwithstanding, we hold that the sale of Lot 11 in favor of respondent

did not violate the rule on disqualification to purchase property because Sp.
Proc. No. 1672 was then pending before another court (RTC) and not MTCC
where he was Clerk of Court.

On the charges against the respondent, we find him liable for dishonesty
and grave misconduct.

Misconduct is a transgression of some established and definite rule of

action, more particularly, unlawful behavior as well as gross negligence by a
public officer. To warrant dismissal from service, the misconduct must be
grave, serious, important, weighty, momentous and not trifling. The
misconduct must imply wrongful intention and not a mere error of
judgment. The misconduct must also have a direct relation to and be
connected with the performance of the public officer's official duties
amounting either to maladministration or willful, intentional neglect, or
failure to discharge the duties of the office.[39]

Dishonesty is the "disposition to lie, cheat, deceive, defraud or betray;

untrustworthiness; lack of integrity; lack of honesty, probity, or integrity in
principle; and lack of fairness and straightforwardness."[40]

In this case, respondent deceived complainant's family who were led to

believe that he is the legal representative of the Hodges Estate, or at least
possessed of such power to intercede for overstaying occupants of the
estate's properties like complainant. Boasting of his position as a court
officer, a City Sheriff at that, complainant's family completely relied on his
repeated assurance that they will not be ejected from the premises. Upon
learning that the lot they were occupying was for sale and that they had to
negotiate for it through respondent, complainant's family readily gave the
amounts he demanded and, along with Saplagio, complied with the
requirements for a loan application with PAG-IBIG. All the while and
unknown to complainant's family, respondent was actually working to
acquire Lot 11 for himself.

Thus, while respondent was negotiating with the Hodges Estate for the sale
of the property to him, he collected as down payment P5,000 from
complainant's family in July 1986. Four months later, on November 18,
1986, the probate court approved respondent's offer to purchase Lot 11. The
latter received further down payment from complainant in the amount of
P10,000 between 1992 and 1993, or before the Deed of Sale with
Mortgage[41] dated November 21, 1994 could be executed in respondent's
favor.

Thereafter, respondent demanded P3,000 from complainant supposedly

for the subdivision of Lot 11 between the latter and the Saplagios. Yet, it was
not until respondent obtained title over said lot that the same was
subdivided into Lots 11-A and 11-B. The records[42] of the case show that the
Subdivision Plan dated April 25, 1996, duly approved by the Land
Management Services (DENR) subdividing Lot 11 into sublots 11-A and 11-
B, was inscribed on February 28, 1997 two years after TCT No. T-107519
covering Lot 11 was issued in respondent's name on December 5, 1994.

Finally, in 1995, respondent received the amount of P2,000 to defray the

expenses for documentation and transfer of title in complainant's name. In
the latter instance, while it may be argued that respondent already had the
capacity to sell the subject property, the sum of all the circumstances belie
an honest intention on his part to convey Lot 11-A to complainant. We note
the inscription in TCT No. T-11836[43] in the name of C.N. Hodges that
respondent executed a Request dated February 19, 1997 "for the issuance of
separate titles in the name of the registered owner."[44] Soon after, TCT No.
T-116467[45] covering Lot 11-A and TCT No. T-116468[46] covering Lot 11-B
were issued in the name of respondent on February 28, 1997 only eight
months after he executed the Contract to Sell[47] in favor of complainant on
June 3, 1996.

Respondent's bare denials were correctly disregarded by the Court

Administrator in the light of his own admission that he indeed asked money
from both complainant and Saplagio. The evidence on record clearly
established that by misrepresenting himself as the estate's representative
and as a court officer having the power to protect complainant's family
from eviction, respondent was able to collect sums totaling P20,000 from
complainant's family. Even after the latter realized they were duped since
respondent was already the owner of Lot 11, they still offered to buy the
property from him. Respondent, however, changed his mind and no longer
wanted to sell the property after nothing happened to the loan applications
of complainant and Saplagio. This subsequent unilateral cancellation by
respondent of the contract to sell with complainant may have been an
afterthought, and plainly unjustified, based merely on his own assumption
that complainant could not make full payment. But it did not negate the
deception and fraudulent acts perpetrated against complainant's family
who were forced into submission by the constant threat of eviction. Such
acts constitute grave misconduct for which respondent should be held
answerable.

In Re: Complaint Filed by Paz De Vera Lazaro Against Edna Magallanes,

Court Stenographer III, RTC Br. 28 and Bonifacio G. Magallanes, Process
Server, RTC Br. 30, Bayombong, Nueva Vizcaya,[48] the Court stressed
that to preserve decency within the judiciary, court personnel must comply
with just contractual obligations, act fairly and adhere to high ethical
standards. In that case, we said that court employees are expected to be
paragons of uprightness, fairness and honesty not only in their official
conduct but also in their personal dealings, including business and
commercial transactions to avoid becoming the court's albatross of
infamy.[49]

More importantly, Section 4(c) of Republic Act No. 6713[50] or the Code of
Conduct and Ethical Standards for Public Officials and
Employees mandates that public officials and employees shall remain true
to the people at all times. They must act with justness and sincerity and
shall not discriminate against anyone, especially the poor and the
underprivileged. They shall at all times respect the rights of others, and
shall refrain from doing acts contrary to law, good morals, good customs,
public policy, public order, public safety and public interest.

Under Section 52,[51] Rule IV of the Uniform Rules on Administrative Cases

in the Civil Service, dishonesty and grave misconduct are classified as grave
offenses with the corresponding penalty of dismissal for the first offense.
Section 58(a) states that the penalty of dismissal shall carry with it the
cancellation of eligibility, forfeiture of retirement benefits, and the
perpetual disqualification for reemployment in the government service.

Section 53 further provides that mitigating circumstances attendant to the

commission of the offense should be considered in the determination of the
penalty to be imposed on the erring government employee. However, no
such mitigating circumstance had been shown. On the contrary, respondent
had been previously held administratively liable for irregularities in the
performance of his duties as Clerk of Court. In A.M. No. P-01-1484,[52] this
Court imposed on respondent a fine of P5,000 for acting imprudently in
notarizing documents and administering oath on matters alien to his
official duties. And in A.M. Nos. P-08-2567 (formerly OCA IPI No. 99-670-
P) and P-08-2568 (formerly OCA IPI No. 99-753-P),[53] respondent was
found liable for simple misconduct and ordered to pay a fine equivalent to
his three (3) months salary to be deducted from his retirement benefits.

Since respondent had compulsorily retired from service on September 10,

2007, for this additional administrative case he should be fined in an
amount equivalent to his salary for six months which shall likewise be
deducted from his retirement benefits.
[G.R. No. 156407. January 15, 2014.]
THELMA M. ARANAS, petitioner, vs. TERESITA V. MERCADO, FELIMON V.
MERCADO, CARMENCITA M. SUTHERLAND, RICHARD V. MERCADO, MA.
TERESITA M. ANDERSON, and FRANKLIN L. MERCADO, respondents.

FACTS:
Emigdio S. Mercado (Emigdio) died intestate on January 12, 1991, survived by his second
wife, Teresita V. Mercado (Teresita), and their five children, namely: Allan V. Mercado, Felimon
V. Mercado, Carmencita M. Sutherland, Richard V. Mercado, and Maria Teresita M. Anderson;
and his two children by his first marriage, namely: respondent Franklin L. Mercado and petitioner
Thelma M. Aranas (Thelma).

Emigdio inherited and acquired real properties during his lifetime. He owned corporate
shares in Mervir Realty Corporation (Mervir Realty) and Cebu Emerson Transportation
Corporation (Cebu Emerson). He assigned his real properties in exchange for corporate stocks of
Mervir Realty, and sold his real property in Badian, Cebu (Lot 3353 covered by Transfer
Certificate of Title No. 3252) to Mervir Realty.

Thelma filed in the Regional Trial Court (RTC) in Cebu City a petition for the appointment
of Teresita as the administrator of Emigdio's estate. The RTC granted the petition considering that
there was no opposition. The letters of administration in favor of Teresita.

As the administrator, Teresita submitted an inventory of the estate of Emigdio for the
consideration and approval by the RTC. She indicated in the inventory that at the time of his death,
Emigdio had "left no real properties but only personal properties" worth P6,675,435.25 in all,
consisting of cash of P32,141.20; furniture and fixtures worth P20,000.00; pieces of jewelry valued
at P15,000.00; 44,806 shares of stock of Mervir Realty worth P6,585,585.80; and 30 shares of
stock of Cebu Emerson worth P22,708.25.

Claiming that Emigdio had owned other properties that were excluded from the inventory,
Thelma moved that the RTC direct Teresita to amend the inventory, and to be examined regarding
it. Teresita filed a compliance with the order of January 8, 1993, 3 supporting her inventory with
copies of three certificates of stocks covering the 44,806 Mervir Realty shares of stock; 4 the deed
of assignment executed by Emigdio on January 10, 1991 involving real properties with the market
value of P4,440,651.10 in exchange for 44,407 Mervir Realty shares of stock with total par value
of P4,440,700.00; 5 and the certificate of stock issued on January 30, 1979 for 300 shares of stock
of Cebu Emerson worth P30,000.00.

Thelma again moved to require Teresita to be examined under oath on the inventory. The
RTC issued an order expressing the need for the parties to present evidence and for Teresita to be
examined to enable the court to resolve the motion for approval of the inventory. Thelma opposed
the approval of the inventory, and asked leave of court to examine Teresita on the inventory.

The RTC issued on March 14, 2001 an order finding and holding that the inventory
submitted by Teresita had excluded properties that should be included. The RTC denied the
administratrix's motion for approval of inventory and orders the said administratrix to re-do the
inventory of properties which are supposed to constitute as the estate of the late Emigdio S.
Mercado. The RTC also directed the administratrix to render an account of her administration of
the estate of the late Emigdio S. Mercado which had come to her possession.

Teresita, joined by other heirs of Emigdio, timely sought the reconsideration of the order
of March 14, 2001 on the ground that one of the real properties affected, Lot No. 3353 located in
Badian, Cebu, had already been sold to Mervir Realty,

On appeal, the CA reversed the RTC decision insofar as the inclusion of the inclusion of
parcels of land known as Lot No. 3353 located at Badian, Cebu with an area of 53,301 square
meters subject matter of the Deed of Absolute Sale dated November 9, 1989 and the various parcels
of land subject matter of the Deeds of Assignment dated February 17, 1989 and January 10, 1991
in the revised inventory to be submitted by the administratrix is concerned.

ISSUE:
Whether or not he RTC committed grave abuse of discretion amounting to lack or excess
of jurisdiction in directing the inclusion of certain properties in the inventory notwithstanding that
such properties had been either transferred by sale or exchanged for corporate shares in Mervir
Realty by the decedent during his lifetime?

RULING: No. The CA's conclusion of grave abuse of discretion on the part of the RTC was
unwarranted and erroneous.

WHEREFORE, the Court GRANTS the petition for review on certiorari; REVERSES and
SETS ASIDE the decision promulgated on May 15, 2002; REINSTATES the orders issued on
March 14, 2001 and May 18, 2001 by the Regional Trial Court in Cebu; DIRECTS the Regional
Trial Court in Cebu to proceed with dispatch in Special Proceedings No. 3094-CEB entitled
Intestate Estate of the late Emigdio Mercado, Thelma Aranas, petitioner, and to resolve the case;
and ORDERS the respondents to pay the costs of suit.

RATIO:
The probate court is authorized to determine the issue of ownership of properties for
purposes of their inclusion or exclusion from the inventory to be submitted by the administrator,
but its determination shall only be provisional unless the interested parties are all heirs of the
decedent, or the question is one of collation or advancement, or the parties consent to the
assumption of jurisdiction by the probate court and the rights of third parties are not impaired. Its
jurisdiction extends to matters incidental or collateral to the settlement and distribution of the
estate, such as the determination of the status of each heir and whether property included in the
inventory is the conjugal or exclusive property of the deceased spouse.

Under Section 6 (a), Rule 78 of the Rules of Court, the letters of administration may be
granted at the discretion of the court to the surviving spouse, who is competent and willing to serve
when the person dies intestate. Upon issuing the letters of administration to the surviving spouse,
the RTC becomes duty-bound to direct the preparation and submission of the inventory of the
properties of the estate, and the surviving spouse, as the administrator, has the duty and
responsibility to submit the inventory within three months from the issuance of letters of
administration pursuant to Rule 83 of the Rules of Court, viz.:
 Section 1. Inventory and appraisal to be returned within three
months. — Within three (3) months after his appointment every
executor or administrator shall return to the court a true inventory
and appraisal of all the real and personal estate of the deceased
which has come into his possession or knowledge. In the
appraisement of such estate, the court may order one or more of the
inheritance tax appraisers to give his or their assistance.
The usage of the word all in Section 1, supra, demands the inclusion of all the real and
personal properties of the decedent in the inventory. However, the word all is qualified by the
phrase which has come into his possession or knowledge, which signifies that the properties must
be known to the administrator to belong to the decedent or are in her possession as the
administrator. Section 1 allows no exception, for the phrase true inventory implies that no
properties appearing to belong to the decedent can be excluded from the inventory, regardless of
their being in the possession of another person or entity.
The objective of the Rules of Court in requiring the inventory and appraisal of the estate
of the decedent is "to aid the court in revising the accounts and determining the liabilities of the
executor or the administrator, and in malting a final and equitable distribution (partition) of the
estate and otherwise to facilitate the administration of the estate." Hence, the RTC that presides
over the administration of an estate is vested with wide discretion on the question of what
properties should be included in the inventory. According to Peralta v. Peralta, the CA cannot
impose its judgment in order to supplant that of the RTC on the issue of which properties are to be
included or excluded from the inventory in the absence of "positive abuse of discretion," for in the
administration of the estates of deceased persons, "the judges enjoy ample discretionary powers
and the appellate courts should not interfere with or attempt to replace the action taken by them,
unless it be shown that there has been a positive abuse of discretion." As long as the RTC commits
no patently grave abuse of discretion, its orders must be respected as part of the regular
performance of its judicial duty.
There is no dispute that the jurisdiction of the trial court as an intestate court is special and
limited. The trial court cannot adjudicate title to properties claimed to be a part of the estate but
are claimed to belong to third parties by title adverse to that of the decedent and the estate, not by
virtue of any right of inheritance from the decedent. All that the trial court can do regarding said
properties is to determine whether or not they should be included in the inventory of properties to
be administered by the administrator. Such determination is provisional and may be still revised.
As the Court said in Agtarap v. Agtarap:
The general rule is that the jurisdiction of the trial court, either as a probate court or an
intestate court, relates only to matters having to do with the probate of the will and/or settlement
of the estate of deceased persons, but does not extend to the determination of questions of
ownership that arise during the proceedings. The patent rationale for this rule is that such court
merely exercises special and limited jurisdiction. As held in several cases, a probate court or one
in charge of estate proceedings, whether testate or intestate, cannot adjudicate or determine title to
properties claimed to be a part of the estate and which are claimed to belong to outside parties, not
by virtue of any right of inheritance from the deceased but by title adverse to that of the deceased
and his estate. All that the said court could do as regards said properties is to determine whether
or not they should be included in the inventory of properties to be administered by the
administrator. If there is no dispute, there poses no problem, but if there is, then the parties, the
administrator, and the opposing parties have to resort to an ordinary action before a court
exercising general jurisdiction for a final determination of the conflicting claims of title.
However, this general rule is subject to exceptions as justified by expediency and
convenience.
The probate court may provisionally pass upon in an intestate or a testate proceeding the
question of inclusion in, or exclusion from, the inventory of a piece of property without prejudice
to final determination of ownership in a separate action. Second, if the interested parties are all
heirs to the estate, or the question is one of collation or advancement, or the parties consent to the
assumption of jurisdiction by the probate court and the rights of third parties are not impaired, then
the probate court is competent to resolve issues on ownership. Verily, its jurisdiction extends to
matters incidental or collateral to the settlement and distribution of the estate, such as the
determination of the status of each heir and whether the property in the inventory is conjugal or
exclusive property of the deceased spouse.

The inventory of the estate of Emigdio must be prepared and submitted for the important
purpose of resolving the difficult issues of collation and advancement to the heirs. Article 1061 of
the Civil Code required every compulsory heir and the surviving spouse, herein Teresita herself,
to "bring into the mass of the estate any property or right which he (or she) may have received
from the decedent, during the lifetime of the latter, by way of donation, or any other gratuitous
title, in order that it may be computed in the determination of the legitime of each heir, and in the
account of the partition." Section 2, Rule 90 of the Rules of Court also provided that any
advancement by the decedent on the legitime of an heir "may be heard and determined by the court
having jurisdiction of the estate proceedings, and the final order of the court thereon shall be
binding on the person raising the questions and on the heir." Rule 90 thereby expanded the special
and limited jurisdiction of the RTC as an intestate court about the matters relating to the inventory
of the estate of the decedent by authorizing it to direct the inclusion of properties donated or
bestowed by gratuitous title to any compulsory heir by the decedent.
The determination of which properties should be excluded from or included in the
inventory of estate properties was well within the authority and discretion of the RTC as an
intestate court. In making its determination, the RTC acted with circumspection, and proceeded
under the guiding policy that it was best to include all properties in the possession of the
administrator or were known to the administrator to belong to Emigdio rather than to exclude
properties that could turn out in the end to be actually part of the estate. As long as the RTC
commits no patent grave abuse of discretion, its orders must be respected as part of the regular
performance of its judicial duty. Grave abuse of discretion means either that the judicial or quasi-
judicial power was exercised in an arbitrary or despotic manner by reason of passion or personal
hostility, or that the respondent judge, tribunal or board evaded a positive duty, or virtually refused
to perform the duty enjoined or to act in contemplation of law, such as when such judge, tribunal
or board exercising judicial or quasi-judicial powers acted in a capricious or whimsical manner as
to be equivalent to lack of jurisdiction.

GR 171388 765SCRA 227

SPOUSES MARIA BUTIONG and FRANCISCO VILLAFRIA,
substituted by DR. RUEL B. VILLAFRIA, petitioners, vs. MA.
GRACIA RIÑOZA PLAZO and MA. FE RIÑOZA ALARAS,
respondents.
Peralta, J:
Facts:
Pedro L. Riñoza died intestate, leaving several heirs, including his children with
his first wife, respondents Ma. Gracia R. Plazo and Ma. Fe Alaras, his second
wife Benita Tenorio and other children, as well as several properties including a
resort covered by Transfer Certificates of Title (TCT) No. 51354 and No. 51355,
each with an area of 351 square meters, and a family home, the land on which it
stands is covered by TCT Nos. 40807 and 40808, both located in Nasugbu,
Batangas.
Respondents Plazo filed an action for Judicial Partition with Annulment of Title
and Recovery of Possession dated September 15, 1993, on the ground their co-
heirs, Pedro's second wife, Benita Tenorio and other children, had sold Pedro’s
resort and family home to petitioners, spouses Francisco Villafria and Maria
Butiong, who are now deceased and substituted by their son, Dr. Ruel B.
Villafria, without their knowledge and consent. When confronted about the sale,
Benita acknowledged the same, showing respondents a document she believed
evidenced receipt of her share in the sale, which, however, did not refer to any
sort of sale but to a previous loan obtained by Pedro and Benita from a bank.
Subsequently, respondents learned that on July 18, 1991, a notice of an extra-
judicial settlement of estate of their late father was published in a tabloid called
Balita. Because of this, they caused the annotation of their adverse claims over
the subject properties before the Register of Deeds of Nasugbu and filed their
complaint praying, among others, for the annulment of all documents conveying
the subject properties to the petitioners and certificates of title issued pursuant
thereto.
RTC ruled in favor of the respondents due to the irregularities irregularities in the
documents of conveyance offered by petitioners as well as the circumstances
surrounding the execution of the same. Specifically, the Extra-Judicial
Settlement was notarized by a notary public who was not duly
commissioned as such on the date it was executed. The Deed of Sale was
undated, the date of the acknowledgment therein was left blank, and the 2
typewritten name "Pedro Riñoza, Husband" on the left side of the
document was not signed.
The CA affirmed RTC’s decision.
Before the SC, petitioners contended that the RTC had no jurisdiction. According
to them, the allegations in the complaint filed by the respondents show that the
cause of action is actually one for settlement of estate of decedent Pedro.
Considering that settlement of estate is a special proceeding cognizable by
a probate court of limited jurisdiction, while judicial partition with
annulment of title and recovery of possession are ordinary civil actions
cognizable by a court of general jurisdiction, the trial court exceeded its
jurisdiction in entertaining the respondent’s complaint.
Issue: WON the RTC had no jurisdiction on the ground that the complaint filed is
for the settlement of the estate of Pedro and not of Partition.
Held: Yes. The RTC had jurisdiction.
Petitioner is mistaken. It is true that some of respondents' causes of action
pertaining to the properties left behind by the decedent Pedro, his known heirs,
and the nature and extent of their interests thereon, may fall under an action for
settlement of estate. However, a complete reading of the complaint would readily
show that, based on the nature of the suit, the allegations therein, and the reliefs
prayed for, the action is clearly one for judicial partition with annulment of title
and recovery of possession.
Section 1, Rule 69 of the Rules of Court provides:
Section 1. Complaint in action for partition of real estate. — A person having the
right to compel the partition of real estate may do so as provided in this Rule,
setting forth in his complaint the nature and extent of his title and an adequate
description of the real estate of which partition is demanded and joining as
defendants all other persons interested in the property.
Here, the complaint alleged: (1) that Pedro died intestate; (2) that respondents,
together with their co-heirs, are all of legal age, with the exception of one who is
represented by a judicial representative duly authorized for the purpose; (3) that
the heirs enumerated are the only known heirs of Pedro; (4) that there is an
account and description of all real properties left by Pedro; (5) that Pedro's estate
has no known indebtedness; and (6) that respondents, as rightful heirs to the
decedent's estate, pray for the partition of the same in accordance with the laws
of intestacy. It is clear, therefore, that based on the allegations of the complaint,
the case is one for judicial partition. That the complaint alleged causes of
action identifying the heirs of the decedent, properties of the estate, and
their rights thereto, does not perforce make it an action for settlement of
estate.

SAN LUIS VS. SAN LUIS

Balanay, Rendel Bryan
FACTS:
During his lifetime, Felicisimo T. San Luis contracted
three marriages. His first marriage was with Virginia Sulit on
March 17, 1942 out of which were born six children. On August
11, 1963, Virginia predeceased Felicisimo. Five years later, on
May 1, 1968, Felicisimo married Merry Lee Corwin, with whom
he had a son, Tobias. However, on October 15, 1971, Merry Lee,
an American citizen, filed a Complaint for Divorce before the
Family Court of the First Circuit, State of Hawaii, which issued a
Decree Granting Absolute Divorce and Awarding Child Custody
on December 14, 1973. On June 20, 1974, Felicisimo married
Felicidad San Luis (marriage solemnized at California, U.S.A.),
then surnamed Sagalongos. He had no children with respondent
but lived with her for 18 years from the time of their marriage
up to his death on December 18, 1992. Upon death of
Felicisimo, Felicidad (respondent in this case) sought the
dissolution of their conjugal partnership assets and the
settlement of Felicisimo’s estate. On December 17, 1993, she
filed a petition for letters of administration before the Regional
Trial Court of Makati City.
On February 4, 1994, petitioner Rodolfo San Luis, one of the
children of Felicisimo by his first marriage, filed a motion to
dismiss on the grounds of improper venue and failure to state a
cause of action. Rodolfo claimed that the petition for letters of
administration should have been filed in the Province of Laguna
because this was Felicisimo’s place of residence prior to his
death. He further claimed that respondent has no legal
personality to file the petition because she was only a mistress
of Felicisimo since the latter, at the time of his death, was still
legally married to Merry Lee.
The RTC ruled that Felicidad, as a widow of the decedent,
possessed the legal standing to file the petition and that the
venue was properly laid. Mila, one of the children by first
marriage, filed a motion for inhibition against Judge Tensuan.
The motion was granted and the case was reraffled to Branch
134 presided by Judge Arcangel. Same issues were raised at the
second trial. However, the trial court dismissed the petition for
letters of administration. It held that, at the the time of
Felicisimo’s death, he was duly elected governor and a resident
of Laguna. Hence, the petition should have been filed in Sta.
Cruz, Laguna and not in Makati City. It also ruled that
respondent was without legal capacity to file the petition for
letters of administration because her marriage with the
decedent was bigamous, thus, void ab initio.
On appeal to the CA, it reversed the decision of the RTC. The
appellate court ruled that under Section 1, Rule 73 of the Rules
of Court, the term "place of residence" of the decedent, for
purposes of fixing the venue of the settlement of his estate,
refers to the personal, actual or physical habitation, or actual
residence or place of abode of a person as distinguished from
legal residence or domicile. It noted that although Felicisimo
discharged his functions as governor in Laguna, he actually
resided in Alabang, Muntinlupa. Thus, the petition for letters of
administration was properly filed in Makati City.
In the instant consolidated petitions, Edgar and Rodolfo insist
that the venue of the subject petition for letters of
administration was improperly laid because at the time of his
death, Felicisimo was a resident of Sta. Cruz, Laguna. They
contend that pursuant to our rulings in Nuval v. Guray and
Romualdez v. RTC, Br. 7, Tacloban City, "residence" is
synonymous with "domicile" which denotes a fixed permanent
residence to which when absent, one intends to return. They
claim that a person can only have one domicile at any given
time. Since Felicisimo never changed his domicile, the petition
for letters of administration should have been filed in Sta. Cruz,
Laguna.
Hence the instant petition for review on certiorari.
ISSUE:
Whether venue was properly laid.
RULING:
Yes. Under Section 1, Rule 73 of the Rules of Court, the
petition for letters of administration of the estate of Felicisimo
should be filed in the Regional Trial Court of the province "in
which he resides at the time of his death." The term "resides"
connotes ex vi termini "actual residence" as distinguished from
"legal residence or domicile." This term "resides," like the terms
"residing" and "residence," is elastic and should be interpreted
in the light of the object or purpose of the statute or rule in
which it is employed. In the application of venue statutes and
rules - Section 1, Rule 73 of the Revised Rules of Court is of
such nature - residence rather than domicile is the significant
factor. Even where the statute uses the word "domicile" still it is
construed as meaning residence and not domicile in the
technical sense. The word "resides" should be viewed or
understood in its popular sense, meaning, the personal, actual
or physical habitation of a person, actual residence or place of
abode. It signifies physical presence in a place and actual stay
thereat.
In this popular sense, the term means merely residence, that is,
personal residence, not legal residence or domicile. Residence
simply requires bodily presence as an inhabitant in a given
place, while domicile requires bodily presence in that place and
also an intention to make it one's domicile. No particular length
of time of residence is required though; however, the residence
must be more than temporary. There is a distinction between
"residence" for purposes of election laws and "residence" for
purposes of fixing the venue of actions. In election cases,
"residence" and "domicile" are treated as synonymous terms,
that is, the fixed permanent residence to which when absent,
one has the intention of returning. However, for purposes of
fixing venue under the Rules of Court, the "residence" of a
person is his personal, actual or physical habitation, or actual
residence or place of abode, which may not necessarily be his
legal residence or domicile provided he resides therein with
continuity and consistency. Hence, it is possible that a person
may have his residence in one place and domicile in another. In
the instant case, while petitioners established that Felicisimo
was domiciled in Sta. Cruz, Laguna, respondent proved that he
also maintained a residence in Alabang, Muntinlupa from 1982
up to the time of his death. From the foregoing, we find that
Felicisimo was a resident of Alabang, Muntinlupa for purposes of
fixing the venue of the settlement of his estate. The subject
petition for letters of administration was validly filed in the
Regional Trial Court which has territorial jurisdiction over
Alabang, Muntinlupa. The subject petition was filed on
December 17, 1993. At that time, Muntinlupa was still a
municipality and the branches of the Regional Trial Court of the
National Capital Judicial Region which had territorial jurisdiction
over Muntinlupa were then seated in Makati City as per
Supreme Court Administrative Order No. 3. 51 Thus, the subject
petition was validly filed before the Regional Trial Court of
Makati City.
Petition is DENIED.