rule 85, 87, 88 ,89, 90 cases

8/13/2019 Rule 85, 87, 88 ,89, 90 Cases

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Rule 85

Republic of the PhilippinesSUPREME COURT

ManilaEN BANC

DECISION

September 17, 1919

G.R. No. 13910SOCIEDAD DE LIZARRAGA HERMANOS, plaintiffs-appellants,vs.FELICISIMA ABADA, ET AL., defendants-appellants.Charles C. Cohn for plaintiff and appellant. Crossfield and O'Brien for defendants and

appellants.

MOIR, J.: This case is before the court on appeal by plaintiffs from a judgment of the Court of FirstInstance of Occidental Negros, Honorable Norberto Romualdez, judge.

For a better understanding of the facts the history of the case is given.

Francisco Caponong died in October, 1906, owing the plaintiffs a sum of money which was thenless than the amount allowed by the commissioners.

His widow, Felicisima Abada, was appointed administratrix of the estate, commissioners toappraise the estate and to pass on the claims against the estate were duly appointed, and

plaintiffs presented their claim which was allowed by the commissioners in the sum ofP12,783.74. The commissioner's report was dated in February, 1909.

The administratrix leased the hacienda [farm] known as "Coronacion" to Hilario Zayco for a termof years, but afterwards she married Vicente Alvarez, one of the defendants, and the lease wastransferred to Alvarez by Zayco, October 2, 1908.

On the 11th of April, 1913, nearly seven years after the death of Caponong, the plaintiffs hereinfiled a suit in the Court of First Instance of Occidental Negros against Felicisima Abadapersonally and as administratrix of the estate of Francisco Caponong, alleging that FranciscoCaponong owed plaintiffs P12,783.74, and that Felicisima Abada in her own name and asadministratrix, had been receiving from the plaintiffs money and effects from 1908 to 1912 whichmoney and effects were used by the defendant in "the expense of cultivation and theexploitation of the Hacienda 'Coronacion,' "and that defendant had delivered to plaintiffs thesugar produced until the last crop which she refused to deliver to them. And that due to "loscontratiempos agricolas y a la poca produccion de la hacienda [drought and poor crops of thefarm],' and after deducting for the sugar delivered, the account of the defendant showed abalance in favor of plaintiffs on the 27th of August, 1912, of P62,437.15; that of this amount theywere informed the defendant recognized as due from the estate only "about P14,000" which

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defendants had let two installments go by without paying anything; that the amount due themwith accrued interest was P90,383.49; that besides the property mortgaged, as per Exhibit B,another parcel of land was mortgaged, and that defendants promised to mortgage the carabaoson the hacienda 'Coronacion," and that this promise was one of the motives and considerationsincluding the plaintiffs to accept the compromise agreement, but that defendants refused to sign

the agreement mortgaging the carabaos with the object and intent of reducing the security ofplaintiffs; that defendants were about to transfer their property not mortgaged, and they prayedfor an attachment on property of defendants not to exceed P20,000 in value, and for judgmentfor P90, 383.49 with interest, and that if this amount should not be paid that the mortgagedproperty be sold, and if not sufficient to pay the debts, that the property levied on under theattachment be sold.

The court granted the attachment order the 24th of July, 1916, and the provincial sheriffattached one parcel of land, the growing crops, certain products of the soil, and various animals.

On the 16th of February, 1917, the plaintiffs filed a motion in court alleging that the propertymortgaged to secure their debt was not sufficient to secure the debt; that defendants, with theintention of prejudicing the interest of the plaintiffs, were negligent in the conservation and careof the property, and they asked the court to appoint a receiver for the property that wasmortgaged. The court granted this motion on the 20th of February, 1917, as to all the propertyattached, and on the 26th of February, extended the receivership to all the mortgaged property.

The receiver took charge of the property and the defendants were ousted from the house theyhad been occupying on the premises.

The defendants, Felicisima Abada, administratrix, and Januario Granada, the guardian, filed anamended answer in which they allege their representative capacity; that the claim of theplaintiffs against the intestate proceedings of Francisco Caponong had been allowed in the sum

of P12,783.74 by the commissioners; that the property belonged to the children of thedeceased; that the only interest of Felicisima Abada personally was her usufructuary interest inone-sixth of the property; that all the property was in custodia legis, and could not lawfully beattached; that the administratrix had not contracted any other obligation, and that, if any existed,it was the personal debt of her present husband, Vicente Alvarez; that Exhibits A and B, (thecompromise agreement and the mortgage executed in conformity therewith) made a part of thecomplaint, were obtained through fraud and false representation; that the approval of the courtwas obtained through fraud and deceit, and was illegal and of no value; that defendants havenever attempted to sell or conceal their property, and prayed the court to declare Exhibits A andB null and void; and that the attachment was malicious and illegal, and they presented acounterclaim based on the wrongful issuance, on false affidavits of the attachment, laying their

damages in the sum of P89,960 for which they asked judgment. And a second counterclaimwas presented based on the unwarranted appointment of a receiver for property already incustody of the court, through the administratrix and they alleged their damages in this count inthe sum of P28,120.

The Honorable Norberto Romualdez, judge, in his decision largely sustained defendants' claim,and declared that plaintiffs should pay as damages

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For improperly causing the appointment of a receiver

P 500.00

For the attachment of carabaos, etc

500.00

For damages to the sugar because of the attachment and the appointment of a receiver

4,462.50

For damages to land by reason of being left to grow up in bushes

5,000.00

For damages to palay crop

2,800.00

13,262.50

A further sum of P1,000 damages was awarded to Felicisima Abada for having been put out ofher house when the receiver was appointed.

The attachment was dissolved and the receiver discharged, and he was ordered to return theproperty to defendants.

Judgment was given for the plaintiffs to recover from defendant administratrix the sum of

P8,555.78 with interest which, added to the principal, brought the amount to P11,392.99 with 10per cent interest on that sum till paid.

A personal judgment was also given plaintiffs against the defendants Abada and Alvarez forP79,970.21.

The plaintiffs' claim against the guardian of the children was dismissed.

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From this judgment Felicisima Abada appealed personally and as administratrix alleging that thetrial court should have granted greater damages. The questions presented by her appeal will besufficiently treated in the appeal of plaintiffs.

The plaintiffs allege nineteen different errors of the trial court. It seems that all the questions are

involved in errors Nos. 1, 2, 4, 5, 10, 12, 13 and 18, which are as follows:1. The court erred in holding that the obligation set forth in Exhibits A and B should beunderstood as limited to the sum of P8,555.78, instead of the sum of P68, 611.01 therein stated.

2. The court erred in reducing the amount of the mortgage, Exhibit B, from P68,611.01 toP8,555,78.

4. The court erred in finding that just and sufficient grounds did not exist for the attachment ofthe properties which are the subject-matter of this action.

5. The court erred in finding that just and sufficient grounds did not exist for the appointment of a

receiver for the properties which are the subject-matter of this action.

10. The court erred in finding that the defendants, or either or any of them, were damaged in thesum of P5,000 by reason of injury to the sugar lands which are the subject-matter of this action.

12. The court erred in declining and refusing to foreclose the mortgages which are the subject-matter of the present action.

13. The court erred in reducing the indebtedness of the Estate of Francisco Caponong fromP90,383.49 to P11,392.99.

18. The court erred in absolving from the complaint herein the defendant Januario Granada asguardian of the minors, Juan Buenaventura, Jose, Nicanor and Carlos Caponong y Abada.

As to the first error. - Exhibit A was the compromise agreement made in action No. 969,Lizarraga Hermanos against Felicisima Abada personally and as administratrix, in which theguardian of the minor children intervened, as defendant, by permission of the court. Exhibit Bwas the mortgage given to secure the amount agreed upon in that settlement.

The claim of the plaintiffs herein against the estate of Francisco Caponong had been fixed bythe commissioners. The amount so determined was all the estate owed plaintiffs. The courtsays in its decision that in approving the settlement of action No. 969, its approval was meant toinclude only the amount actually due by the estate, and that the balance of the claim was

intended to be approved as against Felicisima Abada personally.

It is argued that "this is sheer and unequivocal repudiation of a solemn and formal act" of thecourt.

The record in case No. 969 is presented as Exhibit C by plaintiffs. In their complaint in thataction (which suit should never have been filed as all the property was in the custody of thecourt), plaintiffs allege that their original claim against the estate of Francisco Caponong was

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only P12,783.74, and that the balance of the claim was due from Felicisima Abada asadministratrix and personally without stating how much was owed by her personally and howmuch was owed by her as administratrix.

Whether the court in approving the compromise intended to hold the defendant estate liable

only for the original debt, and defendant Abada for the balance, is not material. The languageused by the court is very clear and seems to be an outright approval of the "transaccion"(compromise), and would, so far as the language goes, leave no room for doubt of the court'sapproval of the agreement in full and as written.

But could the court approve such an agreement? Could the court authorize a mortgage of thestate?

The law declares that commissioners shall pass upon all claims against the estate. They haddone so in this case. The law fixed the limit of the estate's liability. The court could not charge itwith debts that were never owed by it. The administratrix could only charge the estate with thereasonable and proper expenses of administration.

The estate owed plaintiffs less than P13,000 when the commissioners passed on their claim.Part of this has been paid, and there was a balance due plaintiffs of P8,555.78 at the time of thetrial, plus interest. The plaintiffs, after their claim had been presented and allowed by thecommissioners, made advances to the administratrix till their claim was more than P68,000.

It is urged that the major part of this debt of P68,000 is administration expenses, and as such ischargeable against the assets of the estate. No reason is given why the expense ofadministration should be so great, and the evidence fails to sustain this position.

The administration expense would be the necessary expenses of handling the property, of

protecting it against destruction or deterioration, and possibly producing a crop, but if plaintiffs,holding a claim originally for less than P13,000 against the estate, let the administratrix havemoney and effects till their claim grow to P68,000 they can not be permitted to charge thisamount as expense of administration. They might be allowed to charge it against the currentrevenue from the hacienda or the net proceeds of the "exploitation of the hacienda" for which itwas obtained and used, as plaintiffs allege, but it cannot relate back to the presenting of theirclaim to the commissioners, and be a charge against the inheritance of the heirs, or even aclaim to prorate with other creditors' claims allowed by the commissioners. By expense ofadministration we understand to be the reasonable and necessary expense of caring for theproperty and managing it till the debts are paid, as provided by law, and of dividing it, ifnecessary, so as to partition it and deliver to the heirs.

The court could not approve a settlement saddling upon the estate debts it never owed, and if itdid, its approval would be a nullity.

To give effect to the compromise as written would result in great wrong, and destroy everychance the minor children had to participate in the inheritance of their father.

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The contract was clearly a dead letter, and the approval of the court could not breathe thebreath of life into it.

That the mortgage given at the same time and as a result of the agreement was without legalwarrant is equally clear. No mortgage can be placed by an administrator on the estate of a

descendant, unless it is specifically authorized by statute.There is no statute in the Philippine Islands authorizing it.

It may be stated as a general proposition, that neither executors, unless specially authorized bywill, nor administrators, have the power to bind the estate of the deceased by borrowing money.(The American Law of Administration, Woerner, Vol. 2, sec. 345.)

In the case of Johnson vs. Davidson, the Supreme Court of Illinois (Vol. 162, at page 235) said:

The argument on behalf of appellants seems to proceed upon the supposition that anadministrator may bind the heirs by his mortgage of real estate for the purpose of raising money

with which to pay the debts of the ancestors, and that a court of equity will sustain the mortgage,or a title derived under it, if it be shown that the borrowed money was honestly applied to thepayment of debts. No authority is cited in support of this position, and none, we believe, can befound. (See also Smith vs. Hutchinson, 108 Ill., at p. 668.)

In the case of Black vs. Dressel's Heirs, the Supreme Court of Kansas (Vol. 20, at page 154)said:

. . . That the statute grants no power to an administrator to borrow money upon a mortgage ofthe real estate of the decedent, is not controverted. Indeed, such an act is foreign to the policyand purpose of administration, which aims to close up, not to continue an estate. . . .

In 151 N. Y. Reports, Duryea vs. Mackey, it is said at p. 207:

The mortgage executed by the temporary administrator in this case which purported to bind thewhole estate, was therefore ineffectual to charge the interest of the devises in remainder, unlessthe order of the surrogate authorizing the mortgage was a lawful exercise of his jurisdiction orunless they have estopped themselves from questioning its validity. It is very clear that the orderof the surrogate was without jurisdiction.

The learned counsels for appellants in their brief do not cite a single authority for the placing ofa mortgage on an estate in administration, and none has been found. It must be held that themortgage was void.

The court should have closed up the estate.

So many courts seem to violate the law on this point that it may serve a useful purpose to callattention to our statutes on the subject of estates.

Section 743 of the Code of Civil Procedure declares:

http://philippinelaw.info/statutes/act190.html


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The court, at the time of granting letters testamentary or of administration, shall allow to theexecutor or administrator a time for disposing of the estate and paying the debts and legacies ofthe deceased person, which time shall not, in the first instance, exceed one year; but the courtmay, on application of the executor or administrator, from time to time, as the circumstances ofthe estate require, extend the time not exceeding six months at a time, nor so that the whole

time allowed to the original executor or administrator shall exceed three years.

Section 745 provides that if the executor or administrator dies, the new administrator appointedshall give the same notice for an extension of time which shall not exceed six months beyondthe time which might have been allowed the first administrator.

While these sections may be considered as only directory, all Courts of First Instance shouldexert themselves to close up estates within twelve months from the time they are presented,and they may refuse to allow any compensation to executors and administrators who do notactively labor to that end, and they may even adopt harsher measures.

The second assignment of error is that the court should not have reduced the amount of themortgage (Exhibit B) from P68,611.01 to P8,555.78. The court did err, but its error consisted innot declaring the mortgage void.

The court was without jurisdiction to approve the mortgage in the first place, and its approvalwas a nullity. Plaintiff's claim against the estate was P8,555.78 with interest as added by thecourt. This claim should be paid pro rata with any other unpaid claims against the estate.

The other errors of appellant need only brief consideration.

That an attachment should not have been levied on the carabaos in administration is too plain toneed discussion. If they were in the name and possession of the administratrix, they were in

custodia legis, and could not be lawfully attached. The plaintiffs as creditors of the estate couldhave petitioned the court to compel the administratrix to take any steps necessary and proper toprotect the interest of all concerned.

The appointment of a receiver was equally unjustified and improper. The property being underthe court's control, the court should have removed the administratrix, if necessary, and it couldhave taken other means to protect the creditors and wind up the estate.

The plaintiffs assign as error No. 10 that the court should not have allowed the sum of P5,000damages for injury to the sugar lands.

The evidence as to this damage is not considered as clear and satisfactory as it should be.

It seems this claim should have been wholly denied by the trial court, and we think the judgmentin favor of the administratrix and against the plaintiffs should be reduced from P13,262.50 toP8,262.50 with interest as provided therein. The other damages allowed by the trial court are sofully sustained by the evidence, it is not necessary to discuss them.

With the above modification and with a declaration that the mortgage, exhibit B, was absolutelyvoid, the judgment appealed from is affirmed, with costs against the appellants. So ordered.

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Manila

SECOND DIVISION

G.R. No. L-29276 May 18, 1978

Testate Estate of the Late Felix J. de Guzman. VICTORINO G. DE GUZMAN, administrator-appellee,vs.CRISPINA DE GUZMAN-CARILLO, ARSENIO DE GUZMAN and HONORATA DE GUZMAN-MENDIOLA,oppositors-appellants.

Emiliano Samson & R. Balderama-Samson for appellants.

Cezar Paralejo for appellee.

AQUINO, J.:

This case is about the propriety of allowing as administration expenses certain disbursementsmade by the administrator of the testate estate of the late Felix J. de Guzman of Gapan, NuevaEcija.

The deceased testator was survived by eight children named Victorino, Librada, Severino,Margarita, Josefina, Honorata, Arsenio and Crispina. His will was duly probated. Letters ofadministration were issued to his son, Doctor Victorino G. de Guzman, pursuant to the order

dated September 17, 1964 of the Court of First Instance of Nueva Ecija in Special ProceedingNo. 1431.

One of the properties left by the dent was a residential house located in the poblacion. Inconformity with his last will, that house and the lot on which it stands were adjudicated to hiseight children, each being given a one-eighth proindiviso share in the project of partition datedMarch 19, 1966, which was signed by the eight heirs and which was approved in the lowercourt's order of April 14, 1967 but without prejudice to the final outcome of the accounting.

The administrator submitted four accounting reports for the period from June 16, 1964 toSeptember, 1967. Three heirs Crispina de Guzmans-Carillo Honorata de Guzman-Mendiola and

Arsenio de Guzman interposed objections to the administrator's disbursements in the total sumof P13,610.48, broken down as follows:

I. Expense for the improvement and renovation of the decedent's residential house.

1. Construction of fence — P3,082.07

2. Renovation of bathroom — P1,389.52

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3. Repair of terrace and

interior of house — P5,928.00 — P10,399.59

II. Living expenses of Librada de Guzman while occupying the family home without paying rent:

1. For house helper — P1,170.00

2. Light bills — 227.41

3. Water bills — 150.80

4. Gas oil, floor wax

and switch nail — 54.90 — P 1,603.11

III. Other expenses:

1. Lawyer's subsistence — P 19.30

2. Gratuity pay in lieu

of medical fee — 144.00

3. For stenographic notes — 100.00

4. For food served on

decedent's first

death anniversary — 166.65

5. Cost of publication of

death anniversary

of decedent — 102.00

6. Representation

expenses — 26.25 — P558.20

IV. Irrigation fee P1.049.58

TOTAL P13,610.48

It should be noted that the probate court in its order of August 29, 1966 directed theadministrator "to refrain from spending the assets of the estate for reconstructing and

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remodeling the house of the deceased and to stop spending (sic) any asset of the estate withoutfirst during authority of the court to do so" (pp. 26-27, Record on Appeal).

The lower court in its order of April 29, 1968 allowed the d items as legitimate expenses ofadministration. From that order, the three oppositors appealed to this Court. Their contention isthat the probate court erred in approving the utilization of the income of the estate (from rice

harvests) to defray those expenditures which allegedly are not allowable under the Rules ofCourt.

An executor or administrator is allowed the necessary expenses in the care, management, andsettlement of the estate. He is entitled to possess and manage the decedent's real and personalestate as long as it is necessary for the payment of the debts and the expenses ofadministration. He is accountable for the whole decedent's estate which has come into hispossession, with all the interest, profit, and income thereof, and with the proceeds of so much ofsuch estate as is sold by him, at the price at which it was sold (Sec. 3, Rule 84; Secs. 1 and 7,Rule 85, Rules of Court).

One of the Conditions of the administrator's bond is that he should render a true and justaccount of his administration to the court. The court may examine him upon oath With respect toevery matter relating to his accounting 't and shall so examine him as to the correctness of hisaccount before the same is allowed, except when no objection is made to the allowance of theaccount and its correctness is satisfactorily established by competent proof. The heirs, legatees,distributes, and creditors of the estate shall have the same privilege as the executor oradministrator of being examined on oath on any matter relating to an administration account."(Sec. 1[c] Rule 81 and secs. 8 and 9, Rule 85, Rules of Court).

A hearing is usually held before an administrator's account is approved, especially if aninterested Party raises objections to certain items in the accounting report (Sec. 10, Rule 85).

At that hearing, the practice is for the administrator to take the witness stand, testify under oathon his accounts and Identify the receipts, vouchers and documents evidencing hisdisbursements which are offered as exhibits. He may be interrogated by the court and crossedby the oppositors's counsel. The oppositors may present proofs to rebut the ad. administrator'sevidence in support of his accounts.

I. Expenses for the renovation and improvement of the family residence — P10,399.59. — Asalready shown above, these expenses consisted of disbursements for the repair of the terraceand interior of the family home, the renovation of the bathroom, and the construction of a fence.The probate court allowed those expenses because an administrator has the duty to "maintainin tenantable repair the houses and other structures and fences belonging to the estate, anddeliver the same in such repair to the heirs or devises" when directed to do so by the court (Sec.

2, Rule 84, Rules of Court).On the other hand, the oppositors-appellants contend that the trial court erred in allowing thoseexpenses because the same did not come within the category of necessary expenses ofadministration which are understood to be the reasonable and necessary expenses of caring forthe property and managing it until the debts are paid and the estate is partitioned and distributedamong the heirs (Lizarraga Hermanos vs. Abada, 40 Phil. 124).

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As clarified in the Lizarraga case, administration expenses should be those which are necessaryfor the management of the estate, for protecting it against destruction or deterioration, and,possibly, for the production of fruits. They are expenses entailed for the preservation andproductivity of the estate and its management for purposes of liquidation, payment of debts, anddistribution of the residue among the persons entitled thereto.

It should be noted that the family residence was partitioned proindiviso among the decedent'seight children. Each one of them was given a one-eighth share in conformity with the testator'swill. Five of the eight co-owners consented to the use of the funds of the estate for repair andimprovement of the family home. It is obvious that the expenses in question were incurred topreserve the family home and to maintain the family's social standing in the community.

Obviously, those expenses redounded to the benefit of an the co- owners. They were necessaryfor the preservation and use of the family residence. As a result of those expenses, the co-owners, including the three oppositors, would be able to use the family home in comfort,convenience and security.

We hold that the probate court did not err in approving the use of the income of the estate todefray those ex

II. Expenses incurred by Librada de Guzman as occupant of the family residence without payingrent — P1 603.11— The probate court allowed the income of the estate to be used for thoseexpenses on the theory that the occupancy of the house by one heir did not deprive the otherseven heirs from living in it. Those expenses consist of the salaries of the house helper, lightand water bills, and the cost of gas, oil floor wax and switch nail

We are of the opinion that those expenses were personal expenses of Librada de Guzman,inuring y to her benefit. Those expenses, not being reasonable administration expensesincurred by the administrator, should not be charged against the income of the estate.

Librada de Guzman, as an heir, is entitled to share in the net income of the estate. Sheoccupied the house without paying rent. She should use her income for her living expenseswhile occupying the family residence.

The trial court erred in approving those expenses in the administrator's accounts. They shouldbe, as they are hereby, disallowed (See 33 C.J.S 1239-40).

III. Other expenses — P558.20 . — Among these expenses is the sum of P100 for stenographicnotes which, as admitted by the administrator on page 24 of his brief, should be disallowed.

Another item, "representation expenses" in the sum of P26.25 (2nd accounting), was notexplained. it should likewise be disallowed.

The probate court erred in allowing as expenses of ad. administration the sum of P268.65 whichwas incurred during the celebration of the first death anniversary of the deceased. Thoseexpenses are disallowed because they have no connection with the care, management andsettlement of the decedent's estate (Nicolas vs. Nicolas 63 Phil 332).

The other expenses, namely, P19.30 for the lawyer's subsistence and P144 as the cost of thegift to the physician who attended to the testator during his last s are allowable expenses.

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IV. Irrigation fee — P1,049.58 . —The appellants question the deductibility of that expense onthe ground that it seems to be a duplication of the item of P1,320 as irrigation fee for the same1966-67 crop-year.

The administrator in his comment filed on February 28, 1978 explained that the item of P1,320represented the "allotments" for irrigation fees to eight tenants who cultivated the Intan crop,

which allotments were treated as "assumed expenses" deducted as farming expenses from thevalue of the net harvests.

The explanation is not quite clear but it was not disputed by the appellants. The fact is that thesaid sum of P1,049.58 was paid by the administrator to the Penaranda Irrigation System asshown in Official Receipt No. 3596378 dated April 28, 1967. It was included in his accounting aspart of the farming expenses. The amount was properly allowed as a legitimate expense ofadministration.

WHEREFORE, the lower court's order of April 29, 1968 is affirmed with the modifications thatthe sum of (a) P1,603.11 as the living expenses of Librada de Guzman. (b) P100 forstenographic notes, (c) P26.25 as representation expenses, and (d) P268.65 as expenses forthe celebration of the first anniversary of the decedent's death are disallowed in theadministrator's accounts. No costs.

SO ORDERED.

Fernando (Chairman), Barredo, Antonio, Concepcion, Jr., and Santos, JJ., concur.

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ManilaEN BANC

December 29, 1949G.R. No. L-2360GAVINO ALDAMIZ, as administrator of the estate of the deceased Santiago Rementeria yAldamizcogeascoa, petitioner,vs.THE JUDGE OF THE COURT OF FIRST INSTANCE OF MINDORO, THE PROVINCIALSHERIFF OF MINDORO and JUAN L. LUNA, respondents.Jose W. Diokno and Daniel Romualdez for petitioner.

Laurel, Sabido, Almario and Laurel and Juan L. Luna for respondents. MORAN, C.J.: This is a petition for certiorari filed by Gavino Aldamiz, administrator of the testate of thedeceased Santiago Rementeria y Aldamizcogeascoa, to set aside the order of the Court of FirstInstance of Mindoro issued in the said testate estate proceedings, fixing the amount of fees forrespondent Juan L. Luna, as attorney for said administrator.

The facts material to the issues raised in the petition are as follows:

Santiago Rementeria y Aldamizcogeascoa, the decedent was a Spaniard and member of thecommercial partnership "Aldamiz y Rementeria." The other members were the brothers, Gavinoand Jose, surnamed Aldamiz. Santiago Rementeria died in Spain in 1937, and probateproceeding No. 705 was instituted in the same year in the Court of First Instance of Mindoro byGavino Aldamiz represented by Atty. Juan L. Luna. Gavino Aldamiz was appointed

administrator and as such was represented by respondent Atty. Juan Luna up to January 21,1947, when the order complained for was issued. In that order it is said that "said attorney is theone who instituted this testate proceeding ten years ago and has from its incipiency to thepresent stage of the proceedings actively intervened in the same."On January 15, 1947, After ten years from the date of his appointment, Gavino Aldamiz, asadministrator, through his attorney, Juan L. Luna, submitted his accounts for the years 1944,1945 and 1946 and also a project of partition with a view to closing the proceedings. On saiddate, the court approved the accounts by refused to approve the project of partition unless alldebts including attorney's fees be first paid. In the project of partition, it was expressly statedthat attorney's fees, debts and incidental expenses would be proportionately paid by thebeneficiaries after the closure of the testate proceedings, but the court refused to sanction this

clause of the project. It is for this reason that right then and there, Attorney Luna, to comply withthe wishes of the court, without previously preparing and filing a written petition to have hisprofessional fees fixed, and without previous notice to all the interested parties, submittedevidence of his services and professional standing so that the court might fix the amount of hiscompensation and the administrator may make payment thereof. This failure to file a writtenclaim and to notify the interested parties thereof was not due to bad faith or fraudulent purposebut to an honest belief on the part of the respondent attorney that such requirements were notnecessary under the circumstance.

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In this connection, it must be stated, in justice to Attorney Luna, that during the ten years heserved as attorney for the administrator and during the 25 years as legal consultants toSantiago Rementeria, Gavino Aldamiz and Jose Aldamiz individually and as commercialpartnership under the firm name "Aldamiz y Rementeria," he never took the trouble of chargingthem for his professional services, thus showing disinterested and extreme liberality on his part

due to friendship and other personal considerations toward his clients. And it is to be observedfurther that even after ten years of active work in the testate proceedings, when he wanted toclose the same and it was then time for him to demand payment for his services, he showed nointerest in demanding preferring to leave the matter to the future negotiation or understandingwith the interested parties. And when the amount of his fees was fixed by the court and Gavino

Aldamiz asked him for a substantial reduction, he answered that it was not he who had fixed theamount but the court, and advised his client to file a motion for reconsideration, with theassurance that he would offer no objection to any reduction in amount and to any extension ofthe time for paying what might be granted by the court. And again, when Gavino Aldamiz paidhim P5,000 on account, respondent attorney told him that he would be satisfied with anyadditional amount that Gavino might later desire to pay him. Only subsequent occurrences

which proved distasteful to the parties, led them to take steps which culminated in the filing ofthe instant civil action.

At the time respondent's evidence was submitted to the court, the interested parties who wereresiding in the Philippines were Gavino Aldamiz and his brother Jose Aldamiz. The others werethen residing in Spain. No written claim had ever been filed for respondent's fees, and theinterested parties had not been notified thereof nor of the hearing, not even Gavino Aldamizwho did not know when he was called to testify that he would testify in connection withrespondent's fees. The Court, after considering the whole evidence presented, issued its orderof January 21, 1947, awarding respondent Attorney Luna, in payment of his professionalservices, an aggregate sum of P28,000 in the following manner:

1. For the institution, preparation of the pleadings in the voluminous probate case, allowance ofthe will, project of partition and the final closing of this proceeding, — P15,000;

2. For the registration of a parcel of land of seventy-eight hectares in favor of the testate, — P5,000;

3. For three naturalization cases at the rate of P1,000 each, — P3,000; and

4. For services rendered in the deduction of inheritance tax from P28,000 to P433.40 — P5,000.

The Court ordered payment of these amounts within thirty days. Petitioner Gavino Aldamiz

received copy of this order on February 21,1948. Out of the total amount of P28,000, petitionerwas able to pay P5,000 only, and upon his failure to pay the balance of P23,000 after severaldemands made upon him by respondent attorney, the latter on April 17, 1948, filed an ex-partemotion for execution which was granted by the respondent Court on April 19,1948. Pursuant tothe order of execution on two parcels of land belonging, not to the testate estate of SantiagoRementeria y Aldamizcogeascoa, but to the commercial partnership "Aldamiz y Rementeria"with a total area of three hundred fifty seven(357) hectares, more or less, assessed at onehundred eighty-two thousand, three hundred and sixty pesos (P182,360), which was sold at a

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been notified of the order complained of, and as to them, said order has not become final andexecutory . And with respect to petitioner, he has not lost his appeal through his ownnegligence. When he received the notice of the order of the Court fixing respondent's fees in theamount of P28,000, he immediately wrote his lawyer a letter asking for a substantial reductionand extension of time to pay. The lawyer answered advising him to file his motion for

reconsideration within thirty days, but he received his lawyer's letter after said period hadexpired. And petitioner had no other attorney to advice him except respondent who was hisadversary on the matter now in dispute. After receiving said letter, he again sought equitablecompromise with respondent attorney and later paid him P5,000, and respondent then told himthat he would be satisfied with whatever additional amount petitioner might desire to pay him.

And petitioner would perhaps have taken no action were it not because without previous noticeto him, the respondent attorney asked authority from the court to sell two parcels of landtotalling 13 hectares, for the payment of said professional fees and later, on July 26, 1947,respondent attorney, again without previous notice to petitioner, filed a motion for execution forthe same purpose. Both motions were, however, abandoned. But a second motion for executionwas filed by respondent without petitioner's knowledge, which was granted by the Court on April

19, 1948. Respondent Sheriff levied on two parcels of land belonging to the partnership"Aldamiz y Rementeria" with a total area of 357 hectares and assessed at P182,360 and thesale was announced by the sheriff for July 20, 1948. Two motions for consideration were filedby petitioner, one on June 16,1948, and the other on June 28, 1948, asking that the order ofJanuary 21, 1947, and the order of execution of April 19,1948 be set aside, but both motionswere denied and the last order of denial is dated July 1,1948. The petition in the instant casewas filed on July 17, 1948. We hold that under the circumstances, particularly the fiduciaryrelation between petitioner and respondent attorney, the former is not guilty of laches.Respondents maintain that the case for the petitioner is one of pure technicality, premised upona supposed failure of the respondent attorney to follow a supposed procedure. It is said that theamount of P28,000 fixed and allowed by the respondent court as professional fees of the

respondent attorney is not unconscionable or unreasonable because the entire estate wasworth P315,112 and now it is worth about half a million pesos because of many improvementsexisting thereon. It appears, however, that due to lack of notice upon the interested partiesmistakes have been committed by but the court which could have been avoided. For instance,the court awarded fees for services rendered not to the estate but to the other persons, such asthe supposed services in connection with the petitions for naturalization filed in behalf of Gavino

Aldamiz and Jose Aldamiz and the application for registration of a parcel of land of 78 hectaresfiled not in favor of the testate estate but of the partnership "Aldamiz y Rementeria." Theseservices evidently could not be charged against the estate of Santiago Rementeria. Andfurthermore, due to lack of preparation on the part of respondent attorney, it appears that whilehe was testifying to his professional services he was apparently not sure of being able to recite

them all for at the end of his testimony he said: "Son los servicios que me acuerdo ahora. . . ."Had he been afforded ample time to recollect the nature and details of his long and continuosservices, considering his high professional standing as recited by the respondent court in itsdisputed order and the increased value of the estate then, perhaps, a more reasonablecompensation would have been fixed, or at least, the court could have rendered a decision withfull knowledge of all the facts and with justice to all the parties concerned.

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For all the foregoing, the order of the respondent court of January 21,1947, and all thesubsequent orders implementing it, particularly the order of execution issued by the court on

April 19, 1948, and the sale made by the sheriff on July 20,1948, in favor of respondentattorney, are null and void and are hereby set aside, with costs against respondents. It is soordered.

Ozaeta, Pablo, Bengzon, Padilla, Tuason, Reyes and Torres, JJ., concur.

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ManilaEN BANC

November 11, 1908G.R. No. 4777SUILIONG & CO., as liquidators of The Yek Tong Lim Fire, Marine, and Insurance Co.,Ltd., plaintiffs-appellees,vs.SILVINA CHIO-TAYSAN, defendant,FRANCISCA JOSE, intervener-appellant.Leodegario Azarraga, for appellant.

Carlos Ledesma, and Ramon Fernandez, for appellees. CARSON, J .:

Avelina Caballero, deceased, owned during her lifetime a certain tract of land, which was dulyinscribed in her name in the land registry of the city of Manila. On March 27, 1903, sheborrowed from Francisca Jose, the intervener and appellant in this action, 1,000 pesos, Mexicancurrency, and turned over her title deeds to this tract of land to the lender as security for theloan, but no entry touching the transaction was noted in the land registry.

Avelina Caballero died on the 5th day of June, 1903, and thereafter Silvina Chio-Taysan, thedefendant in this action, instituted in the Court of First Instance of Manila an action, known,under the system of civil procedure in existence prior to the adoption of the present code, as an"action for the declaration of heirship" and on the 5th day of August, 1903, the following orderdeclaring her to be the only and exclusive heir of Avelina Caballero, deceased, was issued inthat proceeding:

[United States of America, Philippine Islands. In the Court of First Instance of Manila. Part III.]

It having been proven by both documental and oral evidence introduced in the above-citedcase, that the petitioner Silvina Chio-Taysan y Caballero is the daughter of Jose Chio-Taysanand Avelina Caballero, who died on the 29th of April, 1895, and on the 5th of June, 1903,respectively, without leaving any other descendant or having executed any will; and there beingno objection whatever to the claim of the petitioner, it is hereby declared that the said SilvinaChio-Taysan y Caballero is the legal heir abintestato of her deceased parents, the said JoseChio-Taysan and Avelina Caballero, in conformity with the provisions of the Civil Code now inforce. Let a certificate of this decision be issued to the interested party and those who may

hereafter apply for the same. So ordered. A.S. CROSSFIELD, Judge.

On March 9, 1904, the registrar of deeds of the city of Manila by virtue of this order entered thefollowing inscription in the land registry whereby the said Silvina Chio-Taysan is made to appearas the owner of the land in question:

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Ninth inscription. — Urban property. — A parcel of land and a house of a strong materials, tileroofed, built thereon, marked number eight, situated in Calle Lavezares of the district ofBinondo, this city, the remaining description of which appears in the first inscription of thisnumber. — It has no encumbrances. — Doña Avelina Caballero y Bugnot, of age, widow, of thisvicinity, is the owner of this property under a title of repurchase, according to the proceeding

inscription. Said lady and her husband, Don Jose Chio-Taysan, died on June 5, 1903, and April29, 1895, respectively, and neither of them having executed a will, the corresponding intestateproceedings were instituted, in which an order was issued on August 5, 1903, by A.S.Crossfield, judge of the third sala of the Court of First Instance of this city, declaring theirdaughter, Silvina Chio-Taysan y Caballero, their intestate heir. By virtue thereof, I inscribe, infavor of the said Silvina Chio-Taysan y Caballero, the right she was acquired over the propertyof this number, under title by intestate inheritance. All the above appears from the previousrecords and from the copy of the above judicial order, issued by Don Salvador Chofre, assistantclerk of the Court of First Instance of this city, on August 5, 1903, which document waspresented to this registry at 8:50 a. m. on the 25th day of February last, as per record No. 452,page 266, of the 7th volume of the Diario. And all the above being in accordance with the

document above referred to, I sign these presents in Manila, on March 9, 1904 — Fees: $7.50,No. 7, Tariff of Fees. — Alberto Barretto.On the 26th day of May, 1904, the said Silvina Chio-Taysan borrowed the sum of P2,500 fromthe Fire and Marine Insurance and Loan Co., of which the plaintiff is the lawfully appointedliquidator, and mortgaged the land in question as security for the repayment of the loan.

Thereafter the husband of Silvina Chio-Taysan instituted special proceedings under theprovisions of the present Code of Civil Procedure, for the administration of the estate of AvelinaCaballero, deceased, and on the 16th day of October, 1905, he was, in accordance with hispetition, appointed administrator; and thereupon, submitted as such administrator, an inventoryof the property of the estate, in which was included the land in question; and on the 28th of

November, 1905, Francisca Jose, the intervener in this action, submitted her claim to thecommissioner appointed in these proceedings, for the sum of 1,000 pesos, Mexican currency,loaned the deceased, as above set out, on the 28th day of March, 1904, which claim was dulyapproved on the 31st of August, 1906.On the 10th day of October, 1906, the plaintiff in this action filed its complaint against thedefendant, Silvina Chio-Taysan, praying for judgment for the amount loaned her as above setout, and the foreclosure of its mortgage upon the land. To this complaint the defendant, SilvinaChio-Taysan, filed her answer, admitting the facts alleged in the complaint and declining tointerpose any objection to the prayer of the complaint; but on the 30th of October, 1907,Francisca Jose was permitted to intervene and file her separate "complaint in intervention"wherein she set out the facts touching the loan made by her to Avelina Caballero, deceased,

and prayed that the court declare the mortgage executed by Silvina Chio-Taysan rescinded andof no effect; and further that it annul the inscription in the land registry of the title of Silvina Chio-Taysan to the land in question; and declare this land subject to her claim against the estate of

Avelina Caballero, deceased.

The trial court entered judgment in favor of the plaintiff and against both the defendant and theintervener in conformity with the prayer of the complaint, and the intervener brings that judgmentbefore this court for review upon her bill of exceptions duly signed and certified.



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We do not think that the judgment of the trial court can be sustained in so far as it wholly deniesrelief to the intervener, Francisca Jose. The trial judge denied the relief prayed for by theintervener, on the ground that her intervention in this action was for the purpose of the writtentitle deeds on the land, and that, since she admitted that she had admitted her claim against theestate of Avelina Caballero, deceased, to the committee appointed in the administration

proceedings, she must be taken to have abandoned, whatever lien she may have held assecurity therefor, in accordance with the provisions of section 708 of the Code of CivilProcedure. The prayer of her complaint in intervention, however, is merely for the rescission and annulmentof the mortgage contract between the loan company and the defendant and of the inscription inthe land registry of the title of the defendant, and a declaration that as a creditor of the estateshe has a superior right to that of the plaintiff company in the proceeds of any sale of the land inquestion. She does not seek to enforce her claim and recover her debt in this proceeding, butmerely to prevent the plaintiff from securing a judgment in this action which would take out ofthe estate property which she believes to be subject to her claim set up in the administrationproceedings. If her contentions are well founded, and if the estate of the deceased is subject to

the payment of the debts of the deceased in such form that the heirs of the deceased could notalienate this land free of the claims of the creditors of the deceased against the land, for thepayment of their claims against the deceased, the intervener is clearly entitled to at least somuch of the relief she seeks in this action as will have the effect of preventing the sale of thisland under the plaintiff's foreclosure proceedings, free of the claims of creditors of thedeceased, because, if the plaintiffs in this action were permitted to foreclosure their mortgageand to recover their debt from the sale of the land in question, it might well be that there wouldnot be sufficient property in the estate to pay the amount of the claim of the intervener againstthe estate.

Had the transactions above set out in taken place under the system of law in force in these

Islands immediately prior to the 1st day of October, 1901, when the new Code of CivilProcedure went into effect, there would be no difficulty in determining the respective rights ofthe various parties to this action. Article 657 of the Civil Code provides that Los derechos a la

succession de una persona se transmiten desde el momento de su muerte. (The rights to thesuccession of another are transmitted from the moment of his death); and article 661 providesthat Los herederos suceden al difunto por el hecho solo de su muerte en todos sus derechos y

obligaciones. (Heirs succeed the deceased by the mere fact of his death, in all rights andobligations). Under these, and co-related provisions of the Civil Code, a sole and exclusive heir(as defined in article 660 of the Civil Code) became the owner of the property and was chargedwith the obligations of the deceased at the moment of his death, upon precisely the same termsand conditions as the property was held and as the obligations had been incurred by the

deceased prior to his death, save only that when he accepted the inheritance, "with benefit of aninventory" he was not held liable for the debts and obligations of the deceased beyond the valueof the property which came into his hands.The property of the deceased, both real and personal, became the property of the heir by themere fact of death of his prodecessor in interest, and he could deal with it in precisely the sameway in which the deceased could have dealt with it, subject only to the limitations which by lawor by contract were imposed upon the deceased himself. He could alienate or mortgage it withthe same freedom as could the deceased in his lifetime; the unsecured debts and other









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personal obligations of the deceased becoming the unsecured debts and personal obligations ofthe heir for which he was held personally responsible in precisely the same manner as thedeceased, save only, as has been said before, where he availed himself of the privilege oftaking the estate "with the benefit of an inventory," in which case the extent of his liability waslimited to the value of the estate which came into his hands, though in other respects its

character as a personal liability remained unchanged. Thus death created no new lien in favorof creditors upon the property of the deceased, which was not in existence at the time of hisdeath; personal debts and obligations of the deceased becoming the personal debts andobligations of the heir, to whom the creditor was compelled to look for payment, with no newright in or to the property of the decease, in the hands of the heir, which he did not have in or tosuch property in the hands of the deceased. (Title 3, Book of the Civil Code.)

Spanish procedural law provided an action known as an action for the declaration of heirship(declaracion de herederos) whereby one claiming the status of heir could have his right thereto

judicially declared, and this judicial declaration of heirship unless and until set aside or modifiedin a proper judicial proceeding, was evidence of the fact of heirship which the officials charged

with the keeping of the public records, including the land registry, were bound to accept as asufficient basis for the formal entry, in the name of the heir, of ownership of the property of thedeceased.It is evident therefore that, unless the provisions of Spanish procedural and substantive law, inforce when the new Code of Civil Procedure went into effect, have been repealed or modifiedthereby, the defendant in this action, Silvina Chio-Taysan, who was judicially declared to be thesole and universal heir of Avelina Caballero, deceased, became, by the mere fact of the deathof Caballero, the absolute owner of the tract of land in question, subject only to such liensthereon as may have existed prior thereto, the personal obligations of the deceased alsopassing to her at the same time; that, upon proof of such judicial declaration of heirship, theregister of deeds of the city of Manila properly entered Chio-Taysan in the land registry as the

owner of this land by right of inheritance; and that the Loan Company, of which the plaintiffs arethe duly appointed liquidators, was entitled to rely on the properly noted entries in the landregistry and that the company's mortgage deed from Chio-Taysan, in whose name the land isregistered, could not be affected by the unrecorded claim of the indebtedness of the intervener,who must look to the heirs for the recovery of her debt.But both the substantive and procedural law touching rights of succession and theirenforcement, which were in force in these Islands when the new Code of Civil Procedure wentinto effect, have, to a greater or less degree, been repealed or modified by its enactment; andwe are of opinion that, under the provisions of the new code, the heir is not asuch personally responsible for the debts of the deceased, in whole or in part; and on the otherhand, the property of the deceased comes to him charged with the debts of the deceased, so

that he can not alienate or charge it free of such debts,until and unless they are extinguishedeither by payment, prescription, or satisfaction in one or other of the modes recognized by law.It must be admitted that we can not point out the specific section of the new Code of CivilProcedure which in express terms repeals the old law and formally enacts the new doctrine ofsuccession just laid down; but we think that an examination of the various provisions of thatcode touching the administration of the estates of deceased person leaves no room for doubtthat they do so by necessary implication.









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The legislators who enacted this code were more especially acquainted with the American andEnglish systems of legislation, and in most of its provisions closely adhered to Americanprecedent. It substantially repeals in toto the proceedings prescribed under the old law for theadministration of estates of deceased persons, and substitutes therefor a system similar to thatgenerally adopted in the United States; most of its provisions having been borrowed word for

word from the codes of one or other of the various States. The substantive law in force in theseIslands being in many respects, and especially in regard to rights of inheritance, wholly differentfrom that in force in the various States from which the new system of administration of theestates of deceased persons was adopted, many irreconcilable conflicts are to be foundbetween the provisions of the new and the old law, so that it becomes necessary either todeclare a great part of the provisions of the new Code of Procedure void and no effect, aswholly inapplicable, or to hold that in such cases the provisions of substantive as well asprocedural law in conflict or inconsistent with the provisions of the new Code of Procedure arerepealed, or amended by the substitution of such other provisions as are clearly necessary as abasis upon which the new provisions of procedural law are predicated.

An examination more especially of sections 597, 644, 695, 727, 729, 731, 733, and 749 of

the Code of Civil Procedure, read together with the remaining provisions for the administrationof the estates of deceased persons, clearly indicates that the provisions of articles 660 and 661of the Civil Code have been abrogated.These provisions of the new code clearly demonstrate that the terms heredero and legatario, asdefined in the Civil Code (art. 660), are not synonymous with the words "heir" and "legatee," asused in the new code; the word "heir" in the new code being technically and applicable only to arelative taking property of an intestate by virtue of the laws of descent, devisee and legateebeing reserved for all persons whether relatives or not, taking respectively real or personalproperty by virtue of a will; while heredero in the Civil Code was applicable not only to one whowould be called an "heir," under the provisions of the new code, but also to one, whetherrelative or not, who took what might be called "a residuary estate under a will" (el que sucede a

titulo universal ).It appears also from an examination of these provisions that the legislature has provided nomachinery whereby an absolute right on the part of the heir to succeed by the mere fact ofdeath to all the rights and property of the deceased may be enforced, without previous paymentor provision of the payment of the debts; and on the other hand, it has provided machinery forthe enforcement of the debts and other obligations of the deceased, not as debts or obligationsof the heir, but as debt or obligations of the deceased, to the payment of which the property ofthe deceased may be subjected wherever it be found. Thus section 597 expressly provides that,in those cases where settlement of an intestate estate may be made without legal proceedings,either by a family council, as known under the Spanish law, or by an agreement in writingexecuted by all the heirs, the real estate of the deceased remains charged with liability to

creditors of the deceased for two years after the settlement, "notwithstanding any transfersthereof that may have been made;" and we think the inference is clear that the legislator in thissection recognizes and affirms the doctrine that, prior to the date of such settlement, the realestate at least was charged in like manner with the debts of the deceased. So it will be foundthat, where the legal proceedings are had looking to the settlement of testate or intestateestates, provision is made for the recovery of claims against the deceased, not by proceedingsdirected against the heir, but by proceedings looking directly to the subjection of the property ofthe deceased to the payment of such claims; the property both real and personal being, in



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express terms, made chargeable with the payment of these debts, the executor or administratorhaving the right to the possession of the real as well as the personal property, to the exclusionof the heirs, so long as may be necessary for that purpose (secs. 727 and 729).For practical purposes it may well be said that in the eye of the law, where there is no remedy toenforce an alleged right when it is invaded, the existence of the right may safely be denied; and

where the law furnishes a remedy whereby one may enforce a claim, that claim is a rightrecognized and established by the law. The new Code of Procedure furnishing no remedywhereby the provisions of article 661 of the of the Civil Code may be enforced, in so far as theyimpose upon the heredero (heir) the duty of assuming as a personal obligation all the debts ofthe deceased, at least to the extent of the value of the property received from the estate; or inso far as they give to the heredero the reciprocal right to receive the property of the deceased,without such property being specifically subjected to the payment of the debts to the deceasedby the very fact of his deceased, these provisions of article 661 may properly be held to havebeen abrogated; and the new code having provided a remedy whereby the property of thedeceased may always be subjected to the payment of his debts in whatever hands it may befound, the right of a creditor to a lien upon the property of the deceased, for the payment of the

debts of the deceased, created by the mere fact of his death, may be said to be recognized andcreated by the provisions of the new code. (Pavia vs. De la Rosa, 8 Phil. Rep., 70).It is evident, therefore, that a judgement in an action for the declaration of heirship in favor ofone or more heirs could not entitle such persons to be recognized as the owner or owners of theproperty of the deceased on the same terms as such property was held by the deceased, for itpasses to the heir, under the new code, burdened with all the debts of the deceased, his deathhaving created a lien thereon for the benefit of creditor; and indeed an examination of theproceedings prescribed in the new Code of Civil Procedure for the administration anddistribution of the estates of deceased persons leaves no room for doubt that those proceedingsare exclusive of all other judicial proceedings looking to that end, and supersede the judicialproceeding for the declaration of heirship, as recognized in the old procedure, at least so far as

that proceeding served as a remedy whereby the right of specific persons to succeed to therights and obligations of the deceased as his heirs might be judicially determined and enforced.Examining the facts in the case at bar, in the light of the doctrine as to the law of succession asthus modified and amended by the new Code of Civil Procedure, which went into effect prior tothe death of Avelina Caballero, it is evident that her death created a lien upon her property infavor of the intervener Francisca Jose, for the payment of the debt contracted by her during herlifetime, and that this lien ought to have and has priority to any lien created upon this property bythe heir of the deceased; that the judicial declaration of heirship in favor of Silvina Chio-Taysan,could not and did not furnish a basis for an entry in the land registry of the name of Silvina Chio-Taysan as the absolute owner of the property of Avelina Caballero; that such entry, improperlymade, could not and did not prejudice the lien of the intervener, Francisca Jose, for the debt due

her by the deceased (Mortgage Law, art. 33); and that the mortgage of the property of thedeceased by her heir, Silvina Chio-Taysan, was subject to the prior lien of the intervener,Francisca Jose, for the payment of her debt.It is not necessary for us to consider the action of the court below in ordering the foreclosure ofthe mortgage, in so far as it affects the defendant Silvina Chio-Taysan who did not appeal; butwe think that the intervener, who is seeking to subject the property of the deceased to thepayment of her debt in the administration proceedings now pending, is clearly entitled to somuch of the relief prayed for as will have the effect of preventing the application of the proceeds

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of the sale of this land under foreclosure proceedings to the payment of debts contracted by theheir until and unless it shall appear that the residue of the estate of the deceased is sufficient tosatisfy her claim. Such provision for the protection of her rights having been made, the otherrelief prayed for by her may properly be denied, since a provision subjecting the land in questionto the payment of her claim against the estate of Avelina Caballero, deceased, fully and

sufficiently protects her rights in the premises, and her rights having been secured, she has noproper interest in the rescission of the mortgage contract between plaintiff and defendant, or thecancellation of the inscription of the defendant's title as heir in the land registry.

The judgment of the trial court should, therefore, be modified in accordance with the foregoingprinciples, and the record will be returned to the trial court where judgment will be enteredmodifying the judgment, by providing that the proceeds of the sale of the land under theforeclosure proceedings will be deposited with the clerk of the court, where it will be retaineduntil the amount of the debt due the intervener and unpaid in the course of the administration ofthe estate of Avelina Caballero shall have been ascertained, whereupon the said funds shall beapplied: first, to extinguish the unpaid residue, if any, of the claim of the intervener; second, to

pay the debt due the plaintiff in this action; and finally, the residue, if any, to be paid to theestate of the deceased; the intervener to have her costs in this action in both instances. Soordered.

Arellano, C.J., Torres, Mapa, and Willard, JJ., concur.

Tracey, J., concurs in the result.

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Manila

EN BANC

G.R. No. L-18403 September 30, 1961

IN RE ADMINISTRATION OF THE ESTATE OF PASCUAL VILLANUEVA. MAURICIA G. DEVILLANUEVA,petitioner,vs.PHILIPPINE NATIONAL BANK, defendant-appellant.

Ramon B. de los Reyes for defendant-appellant.Marcos M. Calo for petitioners.

PAREDES, J.:

A case certified by the Court of Appeals on the ground that the issues involved are purely oflaw.

For the administration of the estate of her deceased husband, Pascual Villanueva, the widowMauricia G. Villanueva, on December 19, 1949, petitioned the Court of First Instance of Agusan,for letters of Administration (Sp. Proc. No. 67). The petition was set for hearing and Noticethereof was published on February 25, March 4, and 11, 1950, in the Manila Daily Bulletin. Atthe hearing, other heirs while agreeing to the placing of estate under administration, opposedthe appointment the widow. The name of Atty. Teodulo R. Ricaforte, suggested and all the

parties agreed. After the taking the required oath, Atty. Ricaforte entered upon the performanceof his duties. Under date of November 9, 1950 the Clerk of the Agusan CFI, issued the followingNotice to Creditors:

Letters of administration having been issued in the above entitled case in favor ofTeodulo R. Ricaforte for the settle of the intestate of Pascual Villanueva, deceased;

Notice is hereby given to all persons having claims for money against the decedent, thesaid Pascual Villanueva, arising from contract, express or implied, whether the same bedue, not due or contingent, for funeral expenses and expenses of last sickness of thedeceased, and Judgment for money against him, requiring them to file their claims withthe clerk of court within six but not beyond twelve months after date of the first

publication of this notice, serving copies of such claims upon administrator, the saidTeodulo R. Ricaforte.

The above notice contained the usual order for publication thereof (once a week for threeconsecutive weeks) which was effected, thru the Morning Times of City, a newspaper of generalcirculation, on Nov. 16, 23 and 30, 1950, which expired on November 16, 1951.

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On July 20, 1953, the defendant-appellant Philippine National Bank filed in the administrationproceedings, Creditor's Claim of the following tenor —

The Philippine National Bank, Creditor of Pascual Villanueva, deceased, respectfullypresents its claim against the estate of the said deceased for Approval as follows:

Original amount thru Agusan Agency on Dec. 20, 1939........................................................ P600.00

To int. at 10%: on P600.00 fr. 12-20-39 to 6-5-53...................................................................... 747.45

Total due as of June 5, 1953 (Daily int. of P0.1644 after June 5, 1953) ..........................P1,347.45

That the said obligation has been due demandable since Dec. 20, 1940; that the same istrue and just claim and that it is still unpaid without any set-off.

On October 12, 1954, the Philippine National Bank filed a Motion for Admission of claim, stating—

1. That the Philippine National Bank filed its claim dated July 20, 1953;

2. That the last action taken on the claim was an ordered this Honorable Court issued onMarch 20, 1954, transferring the hearing of the claim until the next calendar of the court,without objection of the administrator;

3. That the administrator has not answered the claim nor denied the same.1awphîl.nèt

WHEREFORE, it is respectfully prayed that an order be issued admitting and approvingthe claim and ordering the administrator to pay the Bank the amount of the claim.

The administrator, on November 5, 1954, opposed the alleging that he had no knowledge orinformation sufficient to form a belief as to the truth of the allegations therein. As specialdefenses, he interposed —

That the same indebtedness, if it existed, has already been paid;

That the caused action for the recovery of the aforesaid amount of P1,847.45 is barredby the statute of limitations, for more than ten (10) Years have elapsed since the causeof action accrued up to present time;

That the said claim is barred forever on the ground that notice to creditors having beenpublished in the MORNING TIMES of Cebu City, a newspaper of general circulation inon November 16, 23 and 30, 1950, ... the Philippine National Bank failed to file its claimwithin the time limited in the notice, ....

The appellant PNB, on November 14, 1958, more than four (4) Years after the opposition of theclaim presented by the administrator, filed a pleading captioned "Petition for an Extension of

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time within which to File the Claim of Philippine National Bank", alleging, among others, thatSec. 2, Rule 87 of the Rules, allows the filing of claims even if the period stated in the notice tocreditors elapsed, upon cause shown and on such terms as equitable; that its failure to presentthe claiming with the period stated in the notice, was its lack of knowledge of administrationproceedings, for while said maintains a branch office in Agusan, the employees did not come toknow of the proceedings, the notice has been published in the Morning Times, a newspaper

very limited circulation.

On January 16, 1959, the CFI issued the following Order —

It appearing that the claim of the Philippine National Bank against the estate of thedeceased Pascual Villanueva already barred by the statute of limitations because theclaim was due and demandable since December 20, 1940, but filed on July 20, 1953,after the expiration of ten years, considering that said filing was furthermore not presentcourt within the period fixed by Sec. 2, Rule 87 of the Rules of Court, and no reasonhaving been shown to justify the tension of time for its filing, the Court resolves to deny itas it hereby denies the petition for an extension of time for filing of the claim by thePhilippine National Bank. The failure of the Bank to present on time the claim was due

its own fault and can hardly be considered excusable negligence.

Appellant Bank moved to reconsider the above Order, arguing that the statute of limitations hadbeen suspended by the Moratorium Law, and that the courts can extend the period limited in thenotice, under special circumstances, and on grounds of equity (Velasquez v. Teod 46 Phil. 757).The PNB listed five incidents, which considered special circumstances to warrant the of theextension to present the claim, among which the lack of knowledge of the pendency of theadministration proceedings; the legitimacy of the loan secured the deceased; that when it filedthe claim, it did know that the period stated in the notice had already expired.

In disposing the motion for reconsideration, the lower court, on March 3,1959, said —

The Court believes that the filing of money claim on July 20, 1953 in the Office of theClerk of Court did not suspend running of the period of prescription because said claimwas filed out of time and therefore invalid for all legal purposes. A careful revision of therecord shows that the Philippine National Bank, contrary to the pretension of its counsel,had knowledge of the present administration proceedings long before July 20, 1953,because the second payment of the claim due to the deceased Pascual Villanueva fromthe Philippine War Damage Commission in the amount of P6,441.30, was deposited inthe Agusan Agency of the Bank in June, 1951. And in the inventory filed by the newadministrator Francisco S. Conde, on February 27, 1957, the following item appears:

Money belonging to the said deceased which came into the hands of the

administrator on December 1, 1951, appearing in the Bank A-1114, Agusan Agency deposited by the late administrator Teodulo R. Ricaforte. — P6,897.52.

WHEREFORE, the motion for reconsideration is denied for lack of merits.

The order of January 16, 1959 was the subject of the appeal to the Court of Appeals which, asstated at the threshold of this opinion, certified the same to this Court.

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The important issue presented is whether or not the in question is already barred. Admittedly,the claim was filed outside of the period provided for in the Order of the lower court, within whichto present claims against the estate. The period fixed in the notice lapsed on November 16,1951 and the claim was filed on July 20, 1953 or about 1 year and 8 months late. Thisnotwithstanding, appellant contends that it did not know of such administration proceedings, noteven its employees in the Branch Office in Butuan City, Agusan. It is to be noted that the

petition for Letters of Administration and the Notice to Creditors were duly published in theManila Daily Bulletin and in the Morning Times, respectively, which was a full compliance withthe requirements of the Rules. Moreover, the supposed lack of knowledge of the proceedingson the part of appellant and its employees had been belied by uncontested and eloquentevidence, consisting of a deposit of an amount of money by the administrator Of the estate insaid Bank (Agusan Agency). The deposit was made on December 1, 1951, inspite of which theappellant Bank only filed its claim on July 20, 1953. It is quite true that the Courts can extendthe period within Which to present claims against the estate, even after the period limited haselapsed; but such extension should be granted under special circumstances. The lower did notfind any justifiable reason to give the extension and for one thing, there was no period to extend,the same had elapsed.

Having reached the above conclusions, We deem it necessary to determine the question as towhether or not the Moratorium Law had suspended the prescriptive period for filing of the claimunder consideration.

WHEREFORE, the order subject of the appeal is hereby affirmed, with costs against appellantPhilippine National Bank, in both instances.

Bengzon, C.J., Padilla, Bautista Angelo, Labrador, Dizon, Regala and Makalintal, JJ., concur.Concepcion, Reyes, J.B.L., and Barrera, took no part.

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ManilaEN BANC

August 28, 1925G.R. No. 23718In the matter of estate of Henry w. Elser, deceased.VICENTE E. REYES, claimnant-appellant,vs.C.W. ROSENSTOCK, executor-appelant.

STATEMENT On or about April 30, 1923, the plaintiff obtained a judgment against Henry W. Elser, who wasthen living, for the sum of P64,242.69, and for the foreclosure of a certain real mortgage onproperty in Manila and the sale thereof to satisfy the judgment. Pending proceedings to appealto this court from the judgment, Elser died June 18, 1923, and in the ordinary course ofbusiness C.W. Rosenstock was appointed as executor of his estate, and later the appeal wasperfected by him as executor, and the judgment of the lower court was affirmed by this courtand the case returned to the court of its origin for further proceedings.1 Execution was issued,and on May 17, 1924, the mortgaged property was sold by the sheriff of Manila at public auctionfor P13,000. On June 2, 1924, the sale was duly confirmed, and no appeal was taken from theorder of confirmation. The plaintiff duly applied for and on July 25, 1924, obtained a deficiency

judgment against the Elser estate for the sum of P68,700.88 with interest at 12 per cent per

annum on P64,242.69 of said sum from July 8, 1924. After obtaining the deficiency judgment,the plaintiff at once applied to the Court of First Instance for the appointment of a committee onclaims to examine and approve his claim against the Elser estate, of which the defendant wasduly notified, and to which he duly objected.

After a hearing the court appointed Jose de Guzman and P.D. Carman as commissioners.

August 29, 1924, the plaintiff, based upon his deficiency judgment, filed with the commissionershis proof of claim, to which the defendant objected. September 19, 1924, the plaintiff's claimwas allowed in full by the commissioners, as a claim against the Elser estate, to which thedefendant excepted. December 8, 1924, the defendant filed a motion for a reconsideration,which was denied, and from an order approving the allowance of the committee on claims, thedefendant prosecutes this appeal, assigning the following errors:.

I. The Court of First Instance erred and exceeded its jurisdiction in entering the order of August21, 1924, reappointing the committee on claims and appraisals in the above-entitled

proceeding, for the purpose of hearing and deciding the claim of Vicente E. Reyes against theestate.

II. The Court of First Instance erred in entering the order of November 18, 1924, declaring theappeal of the executor from the decision of the committee allowing the claim of Vicente E.Reyes to have been presented out of time, and ordering the executor to pay the said claim ofVicente E. Reyes out of the funds of the estate.

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JOHNS, J.: There is no dispute about any material fact. The question presented is a legal one whichinvolves the construction of section 708 of the Code of Civil Procedure, which is as follows:

Mortgage debt due from estate. A creditor holding a claim against the deceased, secured bymortgage or other collateral security, may abandon the security and prosecute his claim beforethe committee, and share in the general distribution of the assets of the estate; or he mayforeclose his mortgage or realize upon his security, by ordinary action in court, making theexecutor or administrator a party defendant; and if there is a judgment for a deficiency, after thesale of the mortgaged premises, or the property pledged, in the foreclosure or other proceedingto realize upon the security, he may prove his deficiency judgment before the committee againstthe estate of the deceased; or he may rely upon his mortgage or other security alone, andforeclose the same at any time, within the period of the statute of limitations, and in that eventhe shall not be admitted as a creditor, and shall receive no share in the distribution of the otherassets of the estate; but nothing herein contained shall prohibit the executor or administrator

from redeeming the property mortgaged or pledged, by paying the debt for which it is held assecurity, under the direction of the court, if the court shall adjudge it to be for the best interest ofthe estate that such redemption shall be made.It is important to note that the original judgment against Elser was rendered on April 30, 1923,and that he was living at the time it was rendered, and that he died on June 18, 1923, pendinghis appeal to this court, or forty-nine days after the rendition of the judgment.

This section provides for three separate distinct proceedings. First, a creditor holding a claimagainst the deceased, secured by mortgage or other collateral security, may abandon hissecurity and prosecute his claim before the committee and share in the general distribution ofthe assets of the estate; or, second, he may foreclose his mortgage or realize upon his security,by an ordinary action in court, making the executor or administrator a party defendant; and ifthere is a deficiency judgment, after the sale of the mortgaged property, he may prove hisdeficiency judgment before the committee on claims against the estate of the deceased, or,third, he may rely exclusively upon his mortgage and foreclose it at any time, within the period ofthe statute of limitations, and if he relies exclusively upon the mortgage, he shall not be admittedas a creditor of the estate, and shall not share in the distribution of the assets of the estate.

In the instant case, the plaintiff proceeded under and fully complied with all of the requirementsof the second provision. He obtained his judgment and decree of foreclosure during the lifetimeof the deceased.On his own motion and as executor of the estate, Rosenstock was substitutedas a defendant and prosecuted the appeal. After the judgment was affirmed, the plaintiffpromptly issued an execution and sold the property. After applying the proceeds of the sale tothe satisfaction of the judgment, the plaintiff promptly applied for and obtained a deficiency

judgment. When the deficiency judgment was obtained, the plaintiff petitioned the court toappoint a committee on claims. His petition was granted and the committee was appointed. Theplaintiff then appeared before the committee and presented his claim based upon the deficiency

judgment, and it was allowed, and the allowance of his claim was confirmed by the court. Thedefendant had notice of all of such proceedings, to all of which he objected and duly excepted.



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Hence, plaintiff's claim comes squarely under the second provision of section 708 of the Codeof Civil Procedure above quoted.Defendant contends that the claim in question is a contingent claim, and that as such it shouldhave been presented to the original committee on claims of the estate, and that because it wasnot presented it is barred.

In his brief appellant says:

At all times prior to May 17, 1924, his deficiency judgment, his present claim, was amere contingent claim. The holder of a contingent claim is not a creditor and it is not known untilthe happening of the contingency, that he will become one; the Code nowhere calls him a"creditor;" he is merely "a person" who has a contingent claim (see section 746, Code of CivilProcedure). It is true that claimant-appellee during all of "the time previously limited" was amortgage creditor of the estate, but as such creditor, he elected not to surrender and prove hisclaim as he might have done under section 708, or to present the possibility of his requiring adeficiency judgment, to the committee in the form of a contingent claim. But claimant-appellee,on August 2, 1924, when he applied to the court to have the committee recommissioned did notapply as a creditor with a mortgage credit which he had failed to present, but he applied as theholder of a claim which had been contingent during all of "the time previously limited" and hadnot been presented as required by section 746 of the Code of Civil Procedure, and which hadthen become absolute, after the expiration of the "time previously limited." There is no remedy insection 690 for a holder of a contingent claim who has not presented it before the "timepreviously limited" has expired. Section 690, as we have seen, is a remedy for a "creditor" of anestate, who was a creditor before the expiration of the "time previously limited;" but to havebeen a creditor, he must have had a claim which he could have presented and proved, beforethe committee; moreover, it must have been the same claim which he now seeks to haveallowed and not a mere contingent claim. The holder of a contingent claim is not a creditor .Therefore it must be concluded that section 690 does not provide for recommissioning thecommittee to hear a contingent claim that has become absolute. Provision for that proceeding ismade in section 748 of the Code of Civil Procedure, but a jurisdictional fact required by thatsection is that the contingent claim must have been presented to the committee before theexpiration of the "time previously limited" and mentioned in the committee's report as provided insection 746 of the Code.Let it be said again that before the court can have jurisdiction under section 690 torecommission the committee, an application must be made by a creditor who was a creditorbefore the expiration of "the time previously limited," and is a creditor at the time the applicationis made, by virtue of one and the same claim. But claimant-appellee does not fit thatrequirement. In so far his present claim was concerned, he was a mere contingent claimant and

therefore not a creditor of the estate, prior to the expiration of "the time previously limited."Words & Phrases, volume 2, page 1498, says:

A "contingent claim" is one which has not accrued, and which is dependent on the happening ofsome future event.

A "contingent claim," within the rule that claims against an estate which are not contingent arebarred if not presented within a certain time, is one depending upon something thereafter tohappen. Such a claim is not contingent after the happening of the event.













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A "contingent claim," within Comp. St., c. 23, secs. 258 et seq., is a claim against a decedent,not absolute or certain, but depending upon some event after the death of the testator orintestate which may or may not happen. A subsisting demand against the estate of a deceasedperson which had matured and was capable of being enforced during the lifetime of thedeceased is not a contingent claim.

Plaintiff's claim comes squarely within the last definition.

Defendant's contention that the claim of the plaintiff is a contingent one is not tenable.

In Hinlo vs. De Leon (18 Phil., 221), this court, on page 230 of the opinion, says:If there is a judgment for a deficiency, continues the section above quoted, "after the sale of themortgaged premises, or the property pledged, in the foreclosure or other proceeding to realizeupon the security, he may prove his deficiency judgment, before the committee against theestate of the deceased. . . ."

In Osorio vs. San Agustin (25 Phil., 404), this court, on page 409 of the opinion, says:.. . . . In view of the fact that the plaintiff had elected to abandon the security given him by hismortgage and to prosecute his claim before the committee, he forfeited his right to bring an

action upon the security in another separate and distinct action. . . .There is a clear distinction between the facts in that and this case. In pointing out the distinction,Justice Carson, in his concurring opinion on page 409 says:

I concur in the disposition of this case.

Merely to avoid possibility of misunderstanding, I think it well to point out that under theprovisions of section 708 of Act No. 190, part of which is quoted in the opinion, it would appearthat in case a creditor elects to rely upon his mortgage he may foreclose his mortgage or realizeupon the security by an ordinary action in court, making the executor or administrator a party

defendant; and if there is a judgment for a deficiency after the sale of the mortgaged premisesor the other property pledged in the foreclosure or other proceeding, he may prove hisdeficiency judgment before the committee and to that amount he may share in the generalassets of the estate of the deceased. In other words, a creditor holding a claim against thedeceased person secured by mortgage or other collateral security may rely upon his securityand institute an ordinary action based thereon without abandoning his right to present his claimto the committee should the security not be sufficient to pay the debt.That is this case. The construction for which the defendant contends would nullify the secondprovision of section 708 of the Code of Civil Procedure, and leave it without any legal force andeffect.The Code of Civil Procedure provides as follows:.Sec. 689. Court to limit time for presenting claims. The court shall allow such time as the

circumstances of the case require for the creditors to present their claims to the committee forexamination and allowance; but not, in the first instance, more than twelve months, or less thansix months; and the time allowed shall be stated in the commission. The court may extend thetime as circumstances require, but not so that the whole time shall exceed eighteen months.

Sec. 690. When time may be extended. On application of a creditor who has failed to presenthis claim, if made within six months after the time previously limited, or, if a committee fails togive the notice required by this chapter, and such application is made before the final settlement

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ManilaEN BANC

July 21, 1928G.R. No. 27701THE BANK OF THE PHILIPPINE ISLANDS, plaintiff-appellant,vs.V. CONCEPCION E HIJOS, INC., and VENANCIO CONCEPCION, defendants-appellants. HENRY W. ELSER, defendant-appellee.

Araneta & Zaragoza for plaintiff-appellant.

No appearance for defendants-appellants.

DeWitt, Perkins & Brady for defendant-appellee. OSTRAND, J.: It appears from the record that on July 6, 1921, the defendants Concepcion executed apromissory note in favor of the plaintiff for the sum of P342,372.64, payable on demand, and assecurity for payment, deposited 700 shares of the Philippine National Bank as collateral with theplaintiff and gave it a mortgage on 5,680 square meters of land, with improvements, situated onR. Hidalgo Street in Manila. The defendants Concepcion defaulted in the payment of the note,and on February 3, 1922, the plaintiff bank instituted the present foreclosure proceedings.

Shortly afterwards, Henry W. Elser entered into negotiations with the Concepcions and offeredto take over the mortgaged property and assume the mortgage debt. To this the Concepcionsagreed on the condition that they be relieved of all liability for the debt.

On March 23, 1922, Elser wrote the plaintiff bank the following letter:

DEAR SIR: Confirming our conversation of this morning, I take pleasure in advising you that Ihave made arrangements with Mssrs. Puno & Concepcion to take over their property on CalleR. Hidalgo, consisting of 5,680 square meters, including all improvements thereon, and also 700shares in the Philippine National Bank mortgaged to you in the total sum of P342,000, and bywhich arrangement I am to be substituted in the place and stead of Messrs. Puno & Concepcionin the obligation to your bank.

I have present prospects of renting the entire property and in consideration thereof I willundertake to pay to the bank on the obligation thus undertaken by me, the sum of not less thanfive thousand pesos (P5,000) monthly on the principal, together with interest every six months. I

will also reduce the mortgage not less than 25 per cent during the first year, not less than 50 percent during the second year, and the balance within the third year, without prejudice, however,to my right to mortgage the property to any bonding institution or to take up the mortgage myselfat any time during the three years period mentioned above, which I expect that I may be in aposition to do.

Yours very truly,(Sgd.) H. W. ELSER

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No answer to this letter was given by the bank, and it clearly appears from the allegations in itsamended complaint, and from the evidence, that it was unwilling to release the Concepcionsfrom their liability for the mortgage debt and insisted on their confessing a judgment in theforeclosure proceedings. This the Concepcions refused to do unless the bank would agree tobid in the mortgage property for the full amount of the judgment.

After further conversations with the representatives of the plaintiff bank, Elser on April 21, 1922,wrote in the following letter:

DEAR SIRS (Attention of Mr. Zaragoza): With reference to our recent conversation regardingthe R. Hidalgo property belonging to Venancio Concepcion (Puno & Concepcion), I respectfullyrequest that you confirm in writing your verbal agreement that should the property in questionbecome the property of your bank, in the amount of P342,000 plus interest to date, that you willsell the same to me for the same amount.

This information is desired by the Attorneys for Venancio Concepcion, Mr. R. M. Calvo, in orderto satisfy himself that in case Messrs. Puno & Concepcion accept judgment, turning over theproperty to you, that you in return will sell the property to me for the above mentioned sum, andnot less than that sum.

Trusting you will see your way clear to furnish this confirmation, in accordance with ourconversation, we are

Very truly,(Sgd.) H. W. ELSER

It must be inferred from this letter that Elser had been led to understand that the bank would bidin the land at the foreclosure sale for the full amount of the judgment and sell it to him for the

same price. It will be readily seen that this proposition is entirely different from that contained inthe letter of March 23d.

The plaintiff made no direct reply to the letter of April 21st, but Calvo, testifying for the plaintiff,stated that on April 28, Elser invited him to a conference with Nolting, the president of the bank,in regard to the matter; that on meeting Nolting, Elser said: "Mr. Nolting, do you still adhere toyour acceptation of the offer I have made you in writing?" to which Nolting answered that he didnot think that there was any reason for him to go back on his word. He thereupon referred Elserand Calvo to Zaragoza, who in some matters appears to have acted as counsel for the bank, forfurther conferences. The negotiations did not lead to any action on the part of the bank, but onMay 5, 1922, Elser entered into an agreement in the form of bilateral deed of sale, with V.

Concepcion & Hijos, Inc., and Venancio Concepcion which appears in the record as Exhibit Cand reads as follows in translation from Spanish:

DEED OF PURCHASE AND SALE

This deed of purchase and sale executed in the City of Manila, P.I., this fifth day of May 1922 A.D., by and between V. Concepcion & Hijos, Inc., a domestic corporation duly organized underthe laws of Philippine Islands domiciled at No. 861 Calle R. Hidalgo, District of Quiapo, City of

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Manila, represented herein by the president, Mr. Venancio Concepcion, by virtue of the powersgranted him by the Board of Directors of said corporation in a resolution dated May 2, 1922, acopy of which duly certified, is attached hereto and made a part hereof, and Mr. VenancioConcepcion, of age, married with Mrs. Rosario San Agustin and resident of City of Manila, hisplace of residence being in the municipality of San Juan, Province of Rizal, P.I., as party of the

first part, and Mr. Henry W. Elser, of age, married with Mrs. Elaine Childs Elser, and a residentof City of Manila, with her place of residence at No. 600 Calle M. H. del Pilar, District of Malate,as party of the second part,WITNESSETH:

Whereas, V. Concepcion e Hijos, Inc., is at present indebted to the Bank of the PhilippineIslands, in the sum of P342,372.64, Philippine currency with interest thereon at the rate of 9 percent per annum from September 30, 1921, to secure the payment of which, the firm of V.Concepcion e Hijos, Inc., and Mr. Venancio Concepcion as joint land several obligors, haveexecuted in favor of the creditor bank on the 6th of July, 1921, a deed of mortgage and one ofpledge upon the following properties:

A tract of land with the buildings of strong materials erected thereon, situated on Calle Sa nSebastian, District of Quiapo. Bounded on the N. by Calle San Sebastian; on the E. by propertyMaximino Paterno and Manuel Zamora; on the S. by property of the City of Manila; and on W.by the Estero de Curtidor; containing an area of 5,686.80 square meters, more or less, of whichland, buildings and improvements, the aforesaid Venancio Concepcion is the registered ownerin accordance with the Land Registration Act, according to transfer certificate of title No. 14019,issued by the registrar of deeds of the City of Manila.

Seven hundred shares of stock of the Philippine National Bank, belonging to Mr. VenancioConcepcion, issued to him and indorsed in the blank in favor of the Bank of the PhilippineIslands, described as follows: (Here follows the numbers and amounts of the certificates ofshares.)

Whereas on January 20, 1922, Mr. Venancio Concepcion, owner of the property abovedescribed, in consideration of the fact that they were subject to the payment of the sum ofP342,372.64 with interest thereon at the rate of 9 per cent per annum, which was owing from V.Concepcion e Hijos, Inc., to the Bank of Philippine Islands, as per deeds of mortgage and ofpledge executed on July 6, 1921, has sold, assigned, and transferred to said firm of V.Concepcion e Hijos, Inc., the aforesaid properties for the sum of P290,000 Philippine currency,the agreed and stipulated price of the urban property being P220,000, Philippine currency, andthat of the 700 shares of stock of the Philippine National Bank, the sum of P70,000 Philippinecurrency, as per public document executed on said date before Mr. Recaredo Ma. Calvo, a

notary public in and for the City of Manila.

Whereas, on February 28, 1922 the Bank of the Philippine Islands, filed with the clerk's office ofthe Court of First Instance of Manila, under No. 21537, a complaint, against V. Concepcion eHijos, Inc., and Venancio Concepcion for the recovery of its mortgage credit evidenced by thedeeds of mortgage and of pledge executed on July 6, 1921, notwithstanding the offer made byV. Concepcion e Hijos, Inc., to assign absolutely and forever to said creditor entity the

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properties which are the subject matter of the mortgage and pledge in full and total payment oftheir obligation.

Whereas, Mr. Henry W. Elser is willing to subrogate himself to the obligation of V. Concepcion eHijos, Inc., and Venancio Concepcion in favor of the Bank of Philippine Islands and release

them from the total of said obligation contracted by them on July 6, 1921, as per deeds ofmortgage and of pledge executed on said date, in consideration of the sale, assignment andtransfer in his favor of all the rights, interest, action or share that they have or may have uponthe properties described in said deeds of mortgage and pledge;

Now, therefore, we, V. Concepcion e Hijos, Inc., and Venancio Concepcion, in consideration ofthe sum of one peso (P1) Philippine currency, which we have this day and which we declarewas paid to us to our complete satisfaction, and of other important considerations, especially thesubrogation into our joint and several obligations in favor of the Bank of the Philippine Islands,amounting to P342,372.64, Philippine currency, with interest thereon at the rate of 9 per centper annum from September 30, 1921, which said Mr. Henry W. Elser hereby makes, bindinghimself, moreover, to release us from our obligation contracted in favor of the Bank of thePhilippine Islands on July 6, 1921, do hereby sell, assign, and transfer absolutely and forever tosaid Mr. Henry W. Elser, his heirs and successors in interest the properties described hereinwith the incumbrances created and existing in favor of the Bank of the Philippine Islands.

That I, Henry W. Elser, accept this contract upon the precise terms in which it is executed.

In testimony whereof , we sign third presents in place and on the date above-mentioned.V. CONCEPCION E HIJOS, INC.

(Sgd.) V. CONCEPCION(Sgd.) V. CONCEPCION

(Sgd.) H. W. ELSER

Signed in the presence of:

(Sgd.) ERNESTO Ma. CALVOGREGORIO BUHAY

The bank never gave notice of its conformity with the agreement above quoted but of June 15,1922, it petitioned the court to include Henry W. Elser as defendant in the complaint, on thestrength of the obligations assumed by him in said agreement.

On June 23, 1922, the defendants Concepcion answered said petition praying that instead ofmerely being included, said Elser be substituted in their place as defendants, on the ground thatthe plaintiff had accepted the substitution of Elser in their place as its debtor.

On June 27, 1922, the trial court entered an order including Henry W. Elser as defendant andone month later, the plaintiff filed an amended complaint against the defendants Concepcionand Elser asking for a joint and several judgment against them in the amount prayed for in theoriginal complaint and for the foreclosure of the mortgage securing the same.

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third year, when, as a matter of fact, the plaintiff had not agreed hereto or accepted said termsof payment, as the Concepcions well knew, and had never accepted Elser's offer to the plaintiffmade pursuant to said representations, and praying for the reasons stated, that the deed fromthe Concepcions to Elser, wherein he assumed the obligations of the former to the plaintiff becancelled. These allegations were denied by the plaintiff and the defendants Concepcion in their

replies.

Elser died on June 18, 1923, and on January 4, 1924, the plaintiff suggested the death of thedefendant Elser, and asked that the administrator of the estate, C. W. Rosenstock, besubstituted in his place as defendants, and that the action be continued against Rosenstock inthe capacity on the ground that this action is for the foreclosure of a mortgage

On January 11, 1924, the attorneys of record for the defendant Elser filed an opposition to theapplication to have the action continued against Rosenstock, in substitution of Elser, this is not aforeclosure action, and hence this action, as to him, abated by reason of his death, and anyclaim of the plaintiff against him should be presented to the committee on claims and appraisalsof his estate.

This objection was overruled and Rosenstock, as Elser's administrator, was substituted in hisplace as defendant, by order of the court dated January 14, 1924, and exception thereto wasduly taken. Subsequently, Rosenstock became the executor of Elser's estate, and as such, filedvarious amended answers and cross-complaints.

The last amended cross-complaint was filed by him on August 9, 1924 in case No. 24485 of theCourt of First Instance of Manila, in which the estate of the deceased Elser was beingadministered. He repeated therein the allegations and prayer of his cross-complaint as guardianfiled on April 2, 1923, and referred to above. The last amended answer was filed by him on

August 21, 1925. It consisted of denial of the allegations of the complaint and of the authenticity

of the document whereby Elser is alleged to have assumed the obligations of the defendantsConcepcion to the plaintiff; an allegation that at the time of execution thereof, Elser was ofunsound mind; and a statement of willingness to relinquished and abandon any rights Elsermight have acquired under said document in favor of the plaintiff.

After a lengthy trial, the court below, on January 22, 1927, rendered its decision absolving theElser estate from the complaint, ordering the Concepcions to pay the plaintiff the sum ofP342,372.64, with interest of 9 per cent and costs, and providing for the sale of the mortgagedproperty, in case of non-payment of the judgment.

Both the plaintiff and the defendants Concepcion excepted to this judgment and moved for a

new trial on the usual statutory grounds. The motions were denied and exceptions noted.

The case is now before this court on a joint bill of exceptions presented by the plaintiff and thedefendants Concepcion pursuant to stipulation. No briefs have been filed by the Concepcions.

From the facts stated and from the pleadings it will be readily seen that as far as the defendantElser is concerned, the plaintiff alleged cause of action rests exclusively on the deed of contractExhibit C. The well known general rule is that a contract affects only the parties and privies

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thereto. But there are exceptions to this rule and the plaintiff contends that though it is neither aparty nor a privy to the contract here in question, the subrogation of Elser to the obligations ofthe Concepcions in favor of the plaintiff as provided for in the contract, is a stipulation pour

autrui upon which the plaintiff may maintain its actionThe nature and reach of the doctrine of the stipulations pour autrui is so thoroughly discussed in

the case of Uy Tam and Uy Yet vs. Leonard (30 Phil., 471), that no further discussion thereof ishere necessary. We wish , however, to emphasize the fact that it was there held that in order toconstitute a valid stipulation pour autrui, it must be the purpose and intent of the stipulatingparties to benefit the third person may be incidentally benefited by stipulation. This conclusion issupported by numerous authorities and is in complete harmony with the second paragraph ofarticle 1257 of the Civil Code, which reads as follows:Should the contract contain any stipulation in favor of the third person, he may demand itsfulfillment, provided he has given notice of his acceptance to the person bound before thestipulation has been revoked.

Applying this test, it seems clear that neither Exhibit C nor any other agreement between the

Concepcion and the Elser contained any stipulation pour autrui in favor of the plaintiff. As statedin the appellee's brief:The Concepcion owed the plaintiff a large sum of money and wanted to be relieved of thatobligation. Elser wanted the property which he had been mortgaged to secure that obligation,and had to assume the obligation and agree to secure the discharge of the Concepciontherefrom, in order to get the property. Neither of them had any desire to confer any benefit tothe bank. Neither of them entered into the contract for the sake of the bank. It is obvious thateach entered into the contract impelled by the advantage accruing to him personally as a resultthereof.

We may add that the stipulation here in question is not merely for the assumption of themortgaged debt by Elser, but is a provision for the subrogation of Elser to the Concepcionobligations to the plaintiff. Inasmuch as the mere assumption of the mortgage debt by thepurchaser of the mortgaged land does not relieved the mortgagor from his liability, it might besaid that some show of reason that by such an arrangement the mortgagee will have twodebtors for the same debt instead of only one and that this furnishes additional security and is tothe creditor's advantage and for his benefit. But such is not the case where, as here, thestipulation is for the subrogation of the purchasers to the obligation of the original debtor; if sucha stipulation is duly accepted by the creditor, it works a novation of the original agreement andreleases the original debtor from further liability. Such subrogation is rarely for the benefit of thecreditor and that, in the present case, it was not believed to be of any advantage to the bank iswell shown by the fact that the parties were unable to obtain its written consent to the

stipulation.But assuming that the stipulation is for the benefit of a third person, the plaintiff is neverthelessnot in position to maintain its action against Elser. In order to be enforceable, such stipulationsmust be accepted by the third person and not has not been done here. The plaintiff asserts thatit accepted the stipulations in part, but that is not a sufficient acceptance. The ordinary rules ofoffer and acceptance are applicable, and it is a cardinal rule of the law of contracts that in orderto create a binding agreement, the acceptance must be absolute, unconditional, and identical

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with the terms of the offer; otherwise there is no meeting of the minds or an expression of oneand the same common intention, one of the essential elements of a valid contract (Civil Code,art., 1257; Page on Contracts, sec. 1308, and authorities there cited).

But the plaintiff argues that in American jurisprudence, the purchaser of the mortgaged property

who assumes the payment of the mortgage debt, may for the reason alone sued for the debt bythe creditor and that the rule is applicable in this jurisdiction. Aside from the fact that we are notdealing with a mere assumption of the debt, but with a subrogation, it may be noted that thiscourt has already held that the American doctrine in this respect is not in harmony with the spiritof our legislation and has not been adopted in this country. In the case of E.C. McCullough &Co. vs. Veloso and Serna (46 Phil., 1), the court. speaking through its present Chief Justice,said:The effects of transfer of a mortgaged property to a third person are well determined by the CivilCode. According to article 1879 of this Code, the creditor may demand of the third person inpossession of the property mortgaged payment of such part of the debt, as is secured by theproperty in his possession, in the manner and form established by law. The Mortgage Law in

force at the promulgation of the Civil Code and referred to in the latter, exacted, among otherconditions, also the circumstance that after judicial or notarial demand, the original debtor hadfailed to make payment of the debt at maturity. (Art. 135 of the Mortgage Law of the Philippinesof 1889.) According to this, the obligation of the new possessor to pay the debt originated fromthe right of the creditor to demand payment of him, it being necessary that a demand forpayment should have previously been made upon the debtor and the latter should have failed topay. And even if these requirements were complied with, still the third possessor might abandon

the property mortgaged, and in that case it is considered to be in the possession of the debtor .(Art. 136 of the same law.) This clearly shows that the spirit of the Civil Code is to let theobligation of the debtor to pay the debt stand although the property mortgaged to securepayment of said debt may have been transferred to a third person. While the Mortgage Law of

1893 eliminated this provisions, it contained nothing indicating any change in the spirit of the lawin this respect. Article 129 of this law, which provides for the substitution of the debtor by thethird person in possession of the property, for the purposes of giving notice, does not show thischange and has reference to a case where the action is directed only against the propertyburdened with the mortgage. (Art. 168 of the Regulation.)From what we have said it follows that the plaintiff can have no cause of action against Elser, orrather against his estate. Assuming that Elser was of sound mind at the time of the execution ofExhibit C ? and that is a much debated question ? the Concepcion, and not the plaintiff mighthave maintained an action against the Elser state; but that action is now barred through theirfailure to present their claim and appraisal in the probate proceedings, and the plaintiff cantherefore, not successfully invoked article 1111 of the Civil Code, which in effect provides that

after exhausting the property of which the debtor may be in possession, the creditor may haverecourse to the debtor's credit and choses an action for the collection of unpaid portion of thedebt.

Counsel for the appellee also argue that the bank, having failed to present its claim to thecommittee on claims and appraisal, it must be regarded as having elected to rely on itsmortgage alone and therefore can have no personal judgement against the Elser estate. That isgood law. Section 708 of the Code of Civil Procedure provides as follows:

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SEC. 708. Mortgage debt due from estate. ? A creditor holding a claim against the deceased,secured by mortgage or other collateral security, may abandon the security and prosecute hisclaim before the committee, and share in the general distribution of the assets of the estate; orhe may foreclose his mortgage or realize upon security, by ordinary action in court, making theexecutor or administrator a party defendant; and if there is a judgment for a deficiency, after the

sale of the mortgaged premises, or the property pledge, in the foreclosure or other proceedingsto realize upon the security, he any prove his deficiency judgment before the committee againstthe estate of the deceased; or he may rely upon his mortgage or other security alone, andforeclose the same at any time, within the period of statute of limitations, and in that event heshall not be admitted as an creditor, and shall receive no share in the distribution of the otherassets of the estate;

As will be seen, the mortgagee has the election of one out of three courses: (1) He mayabandon his security and share in the general distribution of the assets of the estate, or (2) hemay foreclose, secure a deficiency judgment and prove his deficiency judgment before thecommittee, or (3) he may rely upon his security alone, in which case he can receive no share inthe distribution of the assets of the estate.

In this case the bank did not abandon the security and took no steps of any sort before thecommittee within the time limit provided by the sections 689 and 690 of the Code of CivilProcedure. The committed ceased to function long ago, and the bank has now nothing to relyon except the mortgage. Internationally or not, it has bought itself within the third courseprovided for in section 708; it has no alternative.But counsel for the plaintiff say that the amount of the deficiency, if any, could not be provedbefore the foreclosure sale and had been effected; that section 708 expressly provide for theproof of the deficiency judgment before the committee after the sale of the mortgaged property;that this provisions must be construed to mean that the presentation and prosecution of theclaim of the deficiency must be made after, not before, the sale; and that if the mortgagee

presents his claim from a deficiency before a deficiency judgment have been rendered, he willloose his rights under the mortgage and be regarded as having abandon his security.

This clearly a misconception of the statute, and the cases cited by the appellant in support for itscontention are not in point. Until the foreclosure sale is made, the demand for the payment ofdeficiency is a contingent claim within the meaning of sections 746, 747, and 748 of the Code ofCivil Procedure, which sections reads as follows:SEC. 746. Claims may be presented to committee. ? If a person is liable as surety for thedeceased, or has other contingent claims against his estate which cannot be proved as a debtbefore the committee, the same may be presented with the proof, to the committee, who shallstate in their report that such claim was presented to them.

SEC. 747. Estate to be retained to meet claims. ? If the court is satisfied from the report of thecommittee, or from proofs exhibited to it, that such contingent claim is valid, it may order theexecutor or administrator to retains in his hands sufficient estate to pay such contingent claim,when the same becomes absolute, or if the estate is insolvent, sufficient to pay a portion equalto the dividend of the other creditors.SEC. 748. Claim becoming absolute in two years, how allowed . ? If such contingent claimsbecomes absolute and is presented to the court, or to the executor or administrator, within twoyears from the time limited for other creditors to present their claims, it may be allowed by the









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court if not disputed by the executor or administrator, and, if disputed, it may be proved that thecommittee already appointed, or before others to be appointed, for the purpose, as if presentedfor allowance before the committee had made its report.These sections are in entire harmony with section 708; the amount of the deficiency cannot beascertained or proven until the foreclosure proceedings have terminated, but the claim for the

deficiency must be presented to the committee within the period fixed by sections 689 and 690of the Code. The committee does not then pass upon the validity of the claim but reports it tothe court. If the court "from the report of the committee" or from "the proofs exhibited to it" issatisfied that the contingent claim is valid, the executor or administrator may be required toretain in his possession sufficient assets to pay the claim when it becomes absolute, or enoughto pay the creditor his proportionate share if the assets of the estate are insufficient to pay thedebts. When the contingent claim has become absolute, its amount may be ascertained andestablished in the manner indicated by sections 748 and 749. As will be seen, the bank bothcould and should have presented its claim to the committee within the time prescribed by thelaw. The concurring opinion of Justices Malcolm and Fisher in the case of Jaucian vs. Querol(38 Phil., 707), contains a very lucid expositions of the law on the subject and further comment

is therefore unnecessary.The appeal is without merit and the judgment of the court below is affirmed with the costsagainst the plaintiff-appellant. So ordered.

Johnson, Street, Malcolm, Johns, Romualdez, and Villa-Real, JJ., concur.

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SECOND DIVISION

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

UNION BANK OF THE PHILIPPINES, peti t ioner, vs . EDMUND SANTIBAÑEZ andFLORENCE SANTIBAÑEZ ARIOLA, respondents .

D E C I S I O N

CALLEJO, SR., J .:

Before us is a petition for review on certiorari under Rule 45 of the Revised Rules of Courtwhich seeks the reversal of the Decision[1] of the Court of Appeals dated May 30, 2001 in CA-G.R. CV No. 48831 affirming the dismissal[2] of the petitioner‘s complaint in Civil Case No.

18909 by the Regional Trial Court (RTC) of Makati City, Branch 63.The antecedent facts are as follows:

On May 31, 1980, the First Countryside Credit Corporation (FCCC) and Efraim M.Santibañez entered into a loan agreement[3] in the amount of P128,000.00. The amount wasintended for the payment of the purchase price of one (1) unit Ford 6600 Agricultural All-Purpose Diesel Tractor. In view thereof, Efraim and his son, Edmund, executed a promissorynote in favor of the FCCC, the principal sum payable in five equal annual amortizationsof P43,745.96 due on May 31, 1981 and every May 31st thereafter up to May 31, 1985.

On December 13, 1980, the FCCC and Efraim entered into another loan agreement,[4] thistime in the amount of P123,156.00. It was intended to pay the balance of the purchase price ofanother unit of Ford 6600 Agricultural All-Purpose Diesel Tractor, with accessories, and one (1)

unit Howard Rotamotor Model AR 60K. Again, Efraim and his son, Edmund, executed apromissory note for the said amount in favor of the FCCC. Aside from such promissory note,they also signed a Continuing Guaranty Agreement[5] for the loan dated December 13, 1980.

Sometime in February 1981, Efraim died, leaving a holographic will.[6] Subsequently inMarch 1981, testate proceedings commenced before the RTC of Iloilo City, Branch 7, docketedas Special Proceedings No. 2706. On April 9, 1981, Edmund, as one of the heirs, wasappointed as the special administrator of the estate of the decedent.[7] During the pendency ofthe testate proceedings, the surviving heirs, Edmund and his sister Florence Santibañez Ariola,executed a Joint Agreement[8]dated July 22, 1981, wherein they agreed to divide betweenthemselves and take possession of the three (3) tractors; that is, two (2) tractors for Edmundand one (1) tractor for Florence. Each of them was to assume the indebtedness of their late

father to FCCC, corresponding to the tractor respectively taken by them.On August 20, 1981, a Deed of Assignment with Assumption of Liabilities [9] was executed

by and between FCCC and Union Savings and Mortgage Bank, wherein the FCCC as theassignor, among others, assigned all its assets and liabilities to Union Savings and MortgageBank.

Demand letters[10] for the settlement of his account were sent by petitioner Union Bank ofthe Philippines (UBP) to Edmund, but the latter failed to heed the same and refused to pay.Thus, on February 5, 1988, the petitioner filed a Complaint[11] for sum of money against the heirs

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heirs, particularly respondent Florence S. Ariola, in the present ordinary civil action wastantamount to a waiver to re-litigate the claim in the estate proceedings.

On the other hand, respondent Florence S. Ariola maintained that the money claim of thepetitioner should have been presented before the probate court.[17]

The appellate court found that the appeal was not meritorious and held that the petitioner

should have filed its claim with the probate court as provided under Sections 1 and 5, Rule 86 ofthe Rules of Court. It further held that the partition made in the agreement was null and void,since no valid partition may be had until after the will has been probated. According to the CA,page 2, paragraph (e) of the holographic will covered the subject properties (tractors) in genericterms when the deceased referred to them as ―all other properties.‖ Moreover, the activeparticipation of respondent Florence S. Ariola in the case did not amount to a waiver. Thus, theCA affirmed the RTC decision, viz.:

WHEREFORE, premises considered, the appealed Decision of the Regional Trial Court ofMakati City, Branch 63, is hereby AFFIRMED in toto.

SO ORDERED.[18]

In the present recourse, the petitioner ascribes the following errors to the CA:

I.

THE HONORABLE COURT OF APPEALS ERRED IN FINDING THAT THE JOINT AGREEMENT SHOULD BE APPROVED BY THE PROBATE COURT.

II.

THE COURT OF APPEALS ERRED IN FINDING THAT THERE CAN BE NO VALIDPARTITION AMONG THE HEIRS OF THE LATE EFRAIM SANTIBAÑEZ UNTIL AFTER THEWILL HAS BEEN PROBATED.

III.

THE COURT OF APPEALS ERRED IN NOT FINDING THAT THE RESPONDENT HADWAIVED HER RIGHT TO HAVE THE CLAIM RE-LITIGATED IN THE ESTATE PROCEEDING.

IV.

RESPONDENTS CAN, IN FACT, BE HELD JOINTLY AND SEVERALLY LIABLE WITH THEPRINCIPAL DEBTOR THE LATE EFRAIM SANTIBAÑEZ ON THE STRENGTH OF THE

CONTINUING GUARANTY AGREEMENT EXECUTED IN FAVOR OF PETITIONER- APPELLANT UNION BANK.

V.

THE PROMISSORY NOTES DATED MAY 31, 1980 IN THE SUM OF P128,000.00 ANDDECEMBER 13, 1980 IN THE AMOUNT OF P123,000.00 CATEGORICALLY ESTABLISHEDTHE FACT THAT THE RESPONDENTS BOUND THEMSELVES JOINTLY AND SEVERALLY









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LIABLE WITH THE LATE DEBTOR EFRAIM SANTIBAÑEZ IN FAVOR OF PETITIONERUNION BANK.[19]

The petitioner claims that the obligations of the deceased were transmitted to the heirs asprovided in Article 774 of the Civil Code; there was thus no need for the probate court toapprove the joint agreement where the heirs partitioned the tractors owned by the deceased

and assumed the obligations related thereto. Since respondent Florence S. Ariola signed the joint agreement without any condition, she is now estopped from asserting any position contrarythereto. The petitioner also points out that the holographic will of the deceased did not includenor mention any of the tractors subject of the complaint, and, as such was beyond the ambit ofthe said will. The active participation and resistance of respondent Florence S. Ariola in theordinary civil action against the petitioner‘s claim amounts to a waiver of the right to have theclaim presented in the probate proceedings, and to allow any one of the heirs who executed the

joint agreement to escape liability to pay the value of the tractors under consideration would beequivalent to allowing the said heirs to enrich themselves to the damage and prejudice of thepetitioner.

The petitioner, likewise, avers that the decisions of both the trial and appellate courts failed

to consider the fact that respondent Florence S. Ariola and her brother Edmund executed loandocuments, all establishing the vinculum juris or the legal bond between the late EfraimSantibañez and his heirs to be in the nature of a solidary obligation. Furthermore, thePromissory Notes dated May 31, 1980 and December 13, 1980 executed by the late EfraimSantibañez, together with his heirs, Edmund and respondent Florence, made the obligationsolidary as far as the said heirs are concerned. The petitioner also proffers that, considering theexpress provisions of the continuing guaranty agreement and the promissory notes executed bythe named respondents, the latter must be held liable jointly and severally liable thereon. Thus,there was no need for the petitioner to file its money claim before the probate court. Finally, thepetitioner stresses that both surviving heirs are being sued in their respective personalcapacities, not as heirs of the deceased.

In her comment to the petition, respondent Florence S. Ariola maintains that the petitioner is

trying to recover a sum of money from the deceased Efraim Santibañez; thus the claim shouldhave been filed with the probate court. She points out that at the time of the execution of the

joint agreement there was already an existing probate proceedings of which the petitioner knewabout. However, to avoid a claim in the probate court which might delay payment of theobligation, the petitioner opted to require them to execute the said agreement.

According to the respondent, the trial court and the CA did not err in declaring that theagreement was null and void. She asserts that even if the agreement was voluntarily executedby her and her brother Edmund, it should still have been subjected to the approval of the courtas it may prejudice the estate, the heirs or third parties. Furthermore, she had not waived anyrights, as she even stated in her answer in the court a quo that the claim should be filed with theprobate court. Thus, the petitioner could not invoke or claim that she is in estoppel.

Respondent Florence S. Ariola further asserts that she had not signed any continuingguaranty agreement, nor was there any document presented as evidence to show that she hadcaused herself to be bound by the obligation of her late father.

The petition is bereft of merit.

The Court is posed to resolve the following issues: a) whether or not the partition in the Agreement executed by the heirs is valid; b) whether or not the heirs‘ assumption of the





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indebtedness of the deceased is valid; and c) whether the petitioner can hold the heirs liable onthe obligation of the deceased.

At the outset, well-settled is the rule that a probate court has the jurisdiction to determine allthe properties of the deceased, to determine whether they should or should not be included inthe inventory or list of properties to be administered.[20] The said court is primarily concerned

with the administration, liquidation and distribution of the estate.[21]

In our jurisdiction, the rule is that there can be no valid partition among the heirs until after

the will has been probated:

In testate succession, there can be no valid partition among the heirs until after the will hasbeen probated. The law enjoins the probate of a will and the public requires it, because unlessa will is probated and notice thereof given to the whole world, the right of a person to dispose ofhis property by will may be rendered nugatory. The authentication of a will decides no otherquestion than such as touch upon the capacity of the testator and the compliance with thoserequirements or solemnities which the law prescribes for the validity of a will.[22]

This, of course, presupposes that the properties to be partitioned are the same propertiesembraced in the will.[23] In the present case, the deceased, Efraim Santibañez, left a holographicwill[24] which contained, inter alia, the provision which reads as follows:

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

We agree with the appellate court that the above-quoted is an all-encompassing provisionembracing all the properties left by the decedent which might have escaped his mind at thattime he was making his will, and other properties he may acquire thereafter. Included thereinare the three (3) subject tractors. This being so, any partition involving the said tractors among

the heirs is not valid. The joint agreement

[25]

executed by Edmund and Florence, partitioning thetractors among themselves, is invalid, specially so since at the time of its execution, there wasalready a pending proceeding for the probate of their late father ‘s holographic will covering thesaid tractors.

It must be stressed that the probate proceeding had already acquired jurisdiction over allthe properties of the deceased, including the three (3) tractors. To dispose of them in any waywithout the probate court‘s approval is tantamount to divesting it with jurisdiction which the Courtcannot allow.[26] Every act intended to put an end to indivision among co-heirs and legatees ordevisees is deemed to be a partition, although it should purport to be a sale, an exchange, acompromise, or any other transaction.[27] Thus, in executing any joint agreement which appearsto be in the nature of an extra-judicial partition, as in the case at bar, court approval isimperative, and the heirs cannot just divest the court of its jurisdiction over that part of the

estate. Moreover, it is within the jurisdiction of the probate court to determine the identity of theheirs of the decedent.[28] In the instant case, there is no showing that the signatories in the jointagreement were the only heirs of the decedent. When it was executed, the probate of the willwas still pending before the court and the latter had yet to determine who the heirs of thedecedent were. Thus, for Edmund and respondent Florence S. Ariola to adjudicate untothemselves the three (3) tractors was a premature act, and prejudicial to the other possible heirsand creditors who may have a valid claim against the estate of the deceased.





































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The question that now comes to f ore is whether the heirs‘ assumption of the indebtednessof the decedent is binding. We rule in the negative. Perusing the joint agreement, it providesthat the heirs as parties thereto ―have agreed to divide between themselves and take

possession and use the above-described chattel and each of them to assume the indebtednesscorresponding to the chattel taken as herein after stated which is in favor of First CountrysideCredit Corp.‖[29] The assumption of liability was conditioned upon the happening of an event,

that is, that each heir shall take possession and use of their respective share under theagreement. It was made dependent on the validity of the partition, and that they were to assumethe indebtedness corresponding to the chattel that they were each to receive. The partitionbeing invalid as earlier discussed, the heirs in effect did not receive any such tractor. It followsthen that the assumption of liability cannot be given any force and effect.

The Court notes that the loan was contracted by the decedent. The petitioner, purportedly acreditor of the late Efraim Santibañez, should have thus filed its money claim with the probatecourt in accordance with Section 5, Rule 86 of the Revised Rules of Court, which provides:

Section 5. Claims which must be filed under the notice. If not filed barred; exceptions . — Allclaims for money against the decedent, arising from contract, express or implied, whether the

same be due, not due, or contingent, all claims for funeral expenses for the last sickness of thedecedent, and judgment for money against the decedent, must be filed within the time limited inthe notice; otherwise they are barred forever, except that they may be set forth as counterclaimsin any action that the executor or administrator may bring against the claimants. Where anexecutor or administrator commences an action, or prosecutes an action already commencedby the deceased in his lifetime, the debtor may set forth by answer the claims he has againstthe decedent, instead of presenting them independently to the court as herein provided, andmutual claims may be set off against each other in such action; and if final judgment is renderedin favor of the defendant, the amount so determined shall be considered the true balanceagainst the estate, as though the claim had been presented directly before the court in theadministration proceedings. Claims not yet due, or contingent, may be approved at their presentvalue.

The filing of a money claim against the decedent‘s estate in the probate court ismandatory.[30] As we held in the vintage case of Py Eng Chong v. Herrera:[31]

… This requirement is for the purpose of protecting the estate of the deceased by informing theexecutor or administrator of the claims against it, thus enabling him to examine each claim andto determine whether it is a proper one which should be allowed. The plain and obvious designof the rule is the speedy settlement of the affairs of the deceased and the early delivery of theproperty to the distributees, legatees, or heirs. `The law strictly requires the prompt presentationand disposition of the claims against the decedent's estate in order to settle the affairs of theestate as soon as possible, pay off its debts and distribute the residue.[32]

Perusing the records of the case, nothing therein could hold private respondent Florence S. Ariola accountable for any liability incurred by her late father. The documentary evidencepresented, particularly the promissory notes and the continuing guaranty agreement, wereexecuted and signed only by the late Efraim Santibañez and his son Edmund. As the petitionerfailed to file its money claim with the probate court, at most, it may only go after Edmund as co-maker of the decedent under the said promissory notes and continuing guaranty, of course,subject to any defenses Edmund may have as against the petitioner. As the court had notacquired jurisdiction over the person of Edmund, we find it unnecessary to delve into the matterfurther.

















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We agree with the finding of the trial court that the petitioner had not sufficiently shown thatit is the successor-in-interest of the Union Savings and Mortgage Bank to which the FCCCassigned its assets and liabilities.[33] The petitioner in its complaint alleged that ―by virtue of theDeed of Assignment dated August 20, 1981 executed by and between First Countryside CreditCorporation and Union Bank of the Philippines…‖[34] However, the documentaryevidence[35] clearly reflects that the parties in the deed of assignment with assumption of

liabilities were the FCCC, and the Union Savings and Mortgage Bank, with the conformity ofBancom Philippine Holdings, Inc. Nowhere can the petitioner‘s participation therein as a partybe found. Furthermore, no documentary or testimonial evidence was presented during trial toshow that Union Savings and Mortgage Bank is now, in fact, petitioner Union Bank of thePhilippines. As the trial court declared in its decision:

… [T]he court also finds merit to the contention of defendant that plaintiff failed to prove or didnot present evidence to prove that Union Savings and Mortgage Bank is now the Union Bank ofthe Philippines. Judicial notice does not apply here. ―The power to take judicial notice is to [be]exercised by the courts with caution; care must be taken that the requisite notoriety exists; andevery reasonable doubt upon the subject should be promptly resolved in the negative.‖(Republic vs. Court of Appeals, 107 SCRA 504).[36]

This being the case, the petitioner‘s personality to file the complaint is wanting.Consequently, it failed to establish its cause of action. Thus, the trial court did not err indismissing the complaint, and the CA in affirming the same.

IN LIGHT OF ALL THE FOREGOING, the petition is hereby DENIED. The assailed Courtof Appeals Decision is AFFIRMED. No costs.

SO ORDERED.

Puno, (Chairman), Austria-Martinez, Tinga, and Chico-Nazario, JJ., concur .
















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ManilaEN BANC

December 28, 1929G.R. No. 31454Estate of the deceased Francisco Arquiza. ISIDRA GAAS, ET AL., petitioners-appellees,vs.PILAR FORTICH, administratrix-appellant.Orbeta and Ozamiz, Rodriguez and Zacarias, and Camus and Delgado for appellant.

MacVean and Ingalls for appellees. STATEMENT

January 23, 1926, Francisco Arquiza, of Cebu, made his last will and testament in which,subject to certain devises, he bequeathed all of his property to Pilar Fortich his then wife. Later,upon his death, this will was admitted to probate as his last will and testament. Pending theadministration of his estate, Isidra Gaas filed the following petition:

1. That she is of legal age and a resident of the municipality of Oroquieta, Province of Misamis,Philippine Islands.2. That the petitioner was married to one Federico Arquiza now deceased, during the year 1908as appears by a true copy of a marriage certificate filed herewith and made a part hereofmarked Exhibit A, and as a result of said marriage there were born to said Federico Arquiza andthis petitioner three children namely Felicisimo Arquiza, Dioscoro Arquiza deceased, andSoledad Arquiza.

3. That Federico Arquiza died intestate in the municipality of Aluran, Province of Misamis,

Philippine Islands, during the month of January, 1914, leaving surviving him as his heirs at lawFelicisimo Arquiza, Dioscoro Arquiza and Soledad Arquiza.

4. That the said Dioscoro Arquiza died at the age of 2 years and said Felicisimo Arquiza is now18 years of age and the said Soledad Arquiza is now 13 years of age.

5. That the said Federico Arquiza was born out of wedlock the son of the deceased Francisco Arquiza and Antolia Asilo, both of whom at the time of the conception of the said Federico Arquiza were single and could have married with or without dispensation and that the saidFrancisco Arquiza formally recognized the said Federico Arquiza as his natural son as appearsby a birth certificate of date November 6, 1880, a copy of which is filed herewith, made a part

hereof and marked Exhibit B and also a certificate of recognition of date November 6, 1880, acopy of which is filed herewith, made a part hereof and marked Exhibit C.

6. That the deceased Francisco Arquiza is survived by his widow, Pilar Fortich but left nolegitimate children or descendants nor did the said deceased leave legitimate parents orascendants.

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7. That the minors, Felicisimo Arquiza and Soledad Arquiza are therefore the legitimate childrenof the deceased, Federico Arquiza and the petitioner herein, Isidra Gaas and as such are byrepresentation the duly constituted legal heirs of the deceased Don Francisco Arquiza asprovided by the Civil Code.

Wherefore, petitioner as natural guardian of the minors, Felicisimo Arquiza and Soledad Arquiza, respectfully prays this honorable court to declare said minors to be the legal heirs ofthe deceased Francisco Arquiza and for such other and further relief to which they may beentitled.

To which the executrix made a general and specific denial, and alleged the following specialdefenses:

First special defense, alleges: That the petitioners Soledad and Felicisimo, surnamed Arquiza, alleged acknowledged naturalchildren of the deceased Francisco Arquiza, represented by their guardian ad litem Isidra Gaas,have no right to succeed in the properties of the herein deceased Francisco Arquiza; and asSecond special defense, alleges: That assuming that there is merit in the petition which is objected to by this pleading, the actionto acknowledge the aforesaid minors Soledad and Felicisimo, surnamed Arquiza, as naturalchildren, has prescribed .In view of the foregoing, it is hereby prayed to the court that the petition of Isidra Gaas on behalfof the aforesaid minors Soledad and Felicisimo, surnamed Arquiza, be dismissed, with costs.

In a well considered and exhaustive opinion, the lower court sustained the petition and foundthat all of the legal rights of Federico Arquiza was vested in the petitioners, who were hislegitimate children, and that, as such, they were entitled to one-third of the estate left byFrancisco Arquiza, from which on appeal, the executrix and appellant assigns the following

errors:

I. The lower court erred in reopening the case motu propio so as to enable the petitioners-appellees to introduce further evidence to cure the insufficiency of their evidence alreadypresented after they had already voluntarily rested their case and the appellant has moved forthe dismissal of the petition for lack of sufficient evidence to support the same.II. The lower court erred in holding that the alleged signature of Francisco Arquiza in the originalExhibit C is genuine.

III. The lower court erred in holding that Federico Arquiza, father of the appellees Felicisimo andSoledad Arquiza, was a natural son of the deceased Francisco Arquiza.

IV. The lower court erred in holding that Francisco Arquiza had duly and legally acknowledgedFederico Arquiza as his natural son.

V. The lower court erred in declaring them entitled to one-third of the estate left by him, and innot dismissing the petition of the appellees.

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JOHNS, J.: The reopening of the case by the court on its own motion was largely a matter in its discretionand for the orderly administration of justice, and there is no merit in the first assignment of error.

The storm center of this case is whether or not the signature of Francisco Arquiza which

appears on Exhibit C is true and genuine.Exhibit B, which is a certified copy of the archives of the Catholic Church, is as follows:

I, Father Gregorio Lofranco, Parish Priest of Calape, Province of Bohol, Diocese of Cebu, P. I.

Certify: That the following entry appears on page 89 of Baptismal Book 8 of this parish:

Upon the sixth day of November, eighteen hundred and eighty, in the Church under my charge,I, the undersigned Parish Priest of Calape, solemnly christened and anointed a boy namedFederico Arquiza, born at seven o'clock in the morning of the first day of this month, toFrancisco Arquiza, single, a normal teacher and a native of La Mercedes, Province of

Zamboanga, and Anatolia Asilo, single, a weaver residing in this town, belonging to clan(Caveseria) No. 35 of Pablo Bulala. Grandparents on the father's side: Francisco Arquiza andEugenia Sapanta, natives, now deceased. Grandparents on the mother's side: Gregorio Asilo,native, and Cornelia Enriquez, half Spaniard, belonging to the clan (Caveseria) of Pablo Bulala.Godfather: Eusebio Gonzalez, a native farmer who was advised of the spiritual relationship andobligations he contracted. Witnesses of the baptism and of this entry: Romualdo Cuario, anative of this parish, and Hilario Crusit, a native and resident of this town, and chief sexton ofthis church. In witness whereof, I sign. — Fr. BERNARDO MENENDEZ DE LA DOLOROSA.

I certify that this is a faithful copy of the original, and at the request of the interested party, I signand issue these presents, in the presbytery of Calape, Bohol, on the ninth day of September,

1927.

(Sgd.) GREGORIO LOFRANCOParish Priest (One 20-cents documentary stamp affixed)

Seal of the Church.

As to the authenticity of Exhibit C, there was a sharp conflict in the evidence.

Professor Jose I. del Rosario, who qualified as an expert, testified that in his opinion it was aforgery. A. D. Calhoun, the manager of the Cebu branch of the International BankingCorporation, and a man, who through his business, has had a large experience in the matter ofsignatures, testified that the signature was true and genuine, and even Professor Del Rosarioadmitted that there was a similarity between the writing in the body of Exhibit C and that of theunquestioned signature of Francisco Arquiza of about forty years later.

Upon the question of the signature, the lower court says:

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As to the fifth assignment of error, the lower court cites and relies upon the case ofLarena andLarena vs. Rubio (43 Phil., 1017), and says:This is not an action to compel the recognition of Federico Arquiza under the provisions of theCivil Code. Such an action is barred. This is a proceeding to obtain a declaration of the rights ofthe petitioners as the legitimate children of Federico Arquiza to inherit in representation of their

father from their grandfather. It was not necessary for Federico Arquiza to bring an action forrecognition because he had acquired the status of a recognized natural child under Law 11 ofToro by the tacit recognition of his father. His vested rights were transmitted to his legitimatechildren, and they had no need to bring an action against Francisco Arquiza or his heirs tocompel the recognition of their father, Federico Arquiza, as the natural son of Francisco Arquiza.

If Federico Arquiza were still living, he could intervene in these proceedings for the distributionof the estate of his natural father, without the necessity of a proceeding to compel hisrecognition, as is required by the Civil Code; and Francisco Arquiza having left no legitimatedescendants, or ascendants, Federico Arquiza, if he had survived his father, would have beenentitled to one-third of the latter's estate.

Article 842 of the Civil Code provides:

If the testator leaves no legitimate ascendants or descendants, the acknowledged naturalchildren shall be entitled to a third of the estate.

And article 843 provides:

The rights granted natural children by the preceding articles are transmitted on their death totheir legitimate descendants.

The facts found by the trial court and sustained by the evidence bring the appellees within those

provisions.

The well written opinion of the lower court in all things and respects is affirmed, with costs. Soordered.

Avanceña, C.J., Johnson, Street, Malcolm, Ostrand, Romualdez and Villa-Real, JJ., concur.

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Manila

FIRST DIVISION

G.R. No. 163707 September 15, 2006

MICHAEL C. GUY, petitioner,vs.HON. COURT OF APPEALS, HON. SIXTO MARELLA, JR., Presiding Judge, RTC, Branch138, Makati City and minors, KAREN DANES WEI and KAMILLE DANES WEI, representedby their mother, REMEDIOS OANES, respondents.

D E C I S I O N

YNARES-SANTIAGO, J .:

This petition for review on certiorari assails the January 22, 2004 Decision1 of the Court of Appeals in CA-G.R. SP No. 79742, which affirmed the Orders dated July 21, 20002 and July 17,20033 of the Regional Trial Court of Makati City, Branch 138 in SP Proc. Case No. 4549 denyingpetitioner's motion to dismiss; and its May 25, 2004 Resolution4 denying petitioner's motion forreconsideration.

The facts are as follows:

On June 13, 1997, private respondent-minors Karen Oanes Wei and Kamille Oanes Wei,represented by their mother Remedios Oanes (Remedios), filed a petition for letters ofadministration5 before the Regional Trial Court of Makati City, Branch 138. The case was

docketed as Sp. Proc. No. 4549 and entitled Intestate Estate of Sima Wei (a.k.a. Rufino GuySusim).

Private respondents alleged that they are the duly acknowledged illegitimate children of SimaWei, who died intestate in Makati City on October 29, 1992, leaving an estate valued atP10,000,000.00 consisting of real and personal properties. His known heirs are his survivingspouse Shirley Guy and children, Emy, Jeanne, Cristina, George and Michael, all surnamedGuy. Private respondents prayed for the appointment of a regular administrator for the orderlysettlement of Sima Wei's estate. They likewise prayed that, in the meantime, petitioner MichaelC. Guy, son of the decedent, be appointed as Special Administrator of the estate. Attached toprivate respondents' petition was a Certification Against Forum Shopping6 signed by theircounsel, Atty. Sedfrey A. Ordoñez.

In his Comment/Opposition,7 petitioner prayed for the dismissal of the petition. He asserted thathis deceased father left no debts and that his estate can be settled without securing letters ofadministration pursuant to Section 1, Rule 74 of the Rules of Court. He further argued thatprivate respondents should have established their status as illegitimate children during thelifetime of Sima Wei pursuant to Article 175 of the Family Code.

The other heirs of Sima Wei filed a Joint Motion to Dismiss8 on the ground that the certificationagainst forum shopping should have been signed by private respondents and not their counsel.

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They contended that Remedios should have executed the certification on behalf of her minordaughters as mandated by Section 5, Rule 7 of the Rules of Court.

In a Manifestation/Motion as Supplement to the Joint Motion to Dismiss,9 petitioner and his co-heirs alleged that private respondents' claim had been paid, waived, abandoned or otherwiseextinguished by reason of Remedios' June 7, 1993 Release and Waiver of Claim stating that in

exchange for the financial and educational assistance received from petitioner, Remedios andher minor children discharge the estate of Sima Wei from any and all liabilities.

The Regional Trial Court denied the Joint Motion to Dismiss as well as the Supplemental Motionto Dismiss. It ruled that while the Release and Waiver of Claim was signed by Remedios, it hadnot been established that she was the duly constituted guardian of her minor daughters. Thus,no renunciation of right occurred. Applying a liberal application of the rules, the trial court alsorejected petitioner's objections on the certification against forum shopping.

Petitioner moved for reconsideration but was denied. He filed a petition for certiorari before theCourt of Appeals which affirmed the orders of the Regional Trial Court in its assailed Decisiondated January 22, 2004, the dispositive portion of which states:

WHEREFORE, premises considered, the present petition is hereby DENIED DUECOURSE and accordingly DISMISSED, for lack of merit. Consequently, the assailedOrders dated July 21, 2000 and July 17, 2003 are hereby both AFFIRMED. RespondentJudge is hereby DIRECTED to resolve the controversy over the illegitimate filiation of theprivate respondents (sic) minors [-] Karen Oanes Wei and Kamille Oanes Wei who areclaiming successional rights in the intestate estate of the deceased Sima Wei, a.k.a.Rufino Guy Susim.

SO ORDERED.10

The Court of Appeals denied petitioner's motion for reconsideration, hence, this petition.

Petitioner argues that the Court of Appeals disregarded existing rules on certification againstforum shopping; that the Release and Waiver of Claim executed by Remedios released anddischarged the Guy family and the estate of Sima Wei from any claims or liabilities; and thatprivate respondents do not have the legal personality to institute the petition for letters ofadministration as they failed to prove their filiation during the lifetime of Sima Wei in accordancewith Article 175 of the Family Code.

Private respondents contend that their counsel's certification can be considered substantialcompliance with the rules on certification of non-forum shopping, and that the petition raises nonew issues to warrant the reversal of the decisions of the Regional Trial Court and the Court of

Appeals.

The issues for resolution are: 1) whether private respondents' petition should be dismissed forfailure to comply with the rules on certification of non-forum shopping; 2) whether the Releaseand Waiver of Claim precludes private respondents from claiming their successional rights; and3) whether private respondents are barred by prescription from proving their filiation.

The petition lacks merit.









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Rule 7, Section 5 of the Rules of Court provides that the certification of non-forum shoppingshould be executed by the plaintiff or the principal party. Failure to comply with the requirementshall be cause for dismissal of the case. However, a liberal application of the rules is properwhere the higher interest of justice would be served. InSy Chin v. Court of Appeals,11 we ruledthat while a petition may have been flawed where the certificate of non-forum shopping wassigned only by counsel and not by the party, this procedural lapse may be overlooked in the

interest of substantial justice.12 So it is in the present controversy where the merits13 of the caseand the absence of an intention to violate the rules with impunity should be considered ascompelling reasons to temper the strict application of the rules.

As regards Remedios' Release and Waiver of Claim, the same does not bar privaterespondents from claiming successional rights. To be valid and effective, a waiver must becouched in clear and unequivocal terms which leave no doubt as to the intention of a party togive up a right or benefit which legally pertains to him. A waiver may not be attributed to aperson when its terms do not explicitly and clearly evince an intent to abandon a right.14

In this case, we find that there was no waiver of hereditary rights. The Release and Waiver ofClaim does not state with clarity the purpose of its execution. It merely states that Remedios

received P300,000.00 and an educational plan for her minor daughters "by way of financialassistance and in full settlement of any and all claims of whatsoever nature and kind x x xagainst the estate of the late Rufino Guy Susim."15 Considering that the document did notspecifically mention private respondents' hereditary share in the estate of Sima Wei, it cannotbe construed as a waiver of successional rights.

Moreover, even assuming that Remedios truly waived the hereditary rights of privaterespondents, such waiver will not bar the latter's claim. Article 1044 of the Civil Code, provides:

ART. 1044. Any person having the free disposal of his property may accept or repudiatean inheritance.

Any inheritance left to minors or incapacitated persons may be accepted by theirparents or guardians. Parents or guardians may repudiate the inheritance left totheir wards only by judicial authorization.

The right to accept an inheritance left to the poor shall belong to the persons designatedby the testator to determine the beneficiaries and distribute the property, or in theirdefault, to those mentioned in Article 1030. (Emphasis supplied)

Parents and guardians may not therefore repudiate the inheritance of their wards without judicialapproval. This is because repudiation amounts to an alienation of property16 which must passthe court's scrutiny in order to protect the interest of the ward. Not having been judicially

authorized, the Release and Waiver of Claim in the instant case is void and will not bar privaterespondents from asserting their rights as heirs of the deceased.

Furthermore, it must be emphasized that waiver is the intentional relinquishment of a knownright. Where one lacks knowledge of a right, there is no basis upon which waiver of it can rest.Ignorance of a material fact negates waiver, and waiver cannot be established by a consentgiven under a mistake or misapprehension of fact.17





























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In the present case, private respondents could not have possibly waived their successionalrights because they are yet to prove their status as acknowledged illegitimate children of thedeceased. Petitioner himself has consistently denied that private respondents are his co-heirs. Itwould thus be inconsistent to rule that they waived their hereditary rights when petitioner claimsthat they do not have such right. Hence, petitioner's invocation of waiver on the part of privaterespondents must fail.

Anent the issue on private respondents' filiation, we agree with the Court of Appeals that aruling on the same would be premature considering that private respondents have yet to presentevidence. Before the Family Code took effect, the governing law on actions for recognition ofillegitimate children was Article 285 of the Civil Code, to wit:

ART. 285. The action for the recognition of natural children may be brought only duringthe lifetime of the presumed parents, except in the following cases:

(1) If the father or mother died during the minority of the child, in which case thelatter may file the action before the expiration of four years from the attainment ofhis majority;

(2) If after the death of the father or of the mother a document should appear of whichnothing had been heard and in which either or both parents recognize the child.

In this case, the action must be commenced within four years from the finding of thedocument. (Emphasis supplied)

We ruled in Bernabe v. Alejo18 that illegitimate children who were still minors at the time theFamily Code took effect and whose putative parent died during their minority are given the rightto seek recognition for a period of up to four years from attaining majority age. This vested rightwas not impaired or taken away by the passage of the Family Code .19

On the other hand, Articles 172, 173 and 175 of the Family Code, which superseded Article 285of the Civil Code, provide:

ART. 172. The filiation of legitimate children is established by any of the following:

(1) The record of birth appearing in the civil register or a final judgment; or

(2) An admission of legitimate filiation in a public document or a private handwritteninstrument and signed by the parent concerned.

In the absence of the foregoing evidence, the legitimate filiation shall be proved by:

(1) The open and continuous possession of the status of a legitimate child; or

(2) Any other means allowed by the Rules of Court and special laws.

ART. 173. The action to claim legitimacy may be brought by the child during his or herlifetime and shall be transmitted to the heirs should the child die during minority or in a








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state of insanity. In these cases, the heirs shall have a period of five years within whichto institute the action.

The action already commenced by the child shall survive notwithstanding the death ofeither or both of the parties.

ART. 175. Illegitimate children may establish their illegitimate filiation in the same wayand on the same, evidence as legitimate children.

The action must be brought within the same period specified in Article 173, except whenthe action is based on the second paragraph of Article 172, in which case the action maybe brought during the lifetime of the alleged parent.

Under the Family Code, when filiation of an illegitimate child is established by a record of birthappearing in the civil register or a final judgment, or an admission of filiation in a publicdocument or a private handwritten instrument signed by the parent concerned, the action forrecognition may be brought by the child during his or her lifetime. However, if the action isbased upon open and continuous possession of the status of an illegitimate child, or any othermeans allowed by the rules or special laws, it may only be brought during the lifetime of thealleged parent.

It is clear therefore that the resolution of the issue of prescription depends on the type ofevidence to be adduced by private respondents in proving their filiation. However, it would beimpossible to determine the same in this case as there has been no reception of evidence yet.This Court is not a trier of facts. Such matters may be resolved only by the Regional Trial Courtafter a full-blown trial.

While the original action filed by private respondents was a petition for letters of administration,the trial court is not precluded from receiving evidence on private respondents' filiation. Its

jurisdiction extends to matters incidental and collateral to the exercise of its recognized powersin handling the settlement of the estate, including the determination of the status of eachheir .20 That the two causes of action, one to compel recognition and the other to claiminheritance, may be joined in one complaint is not new in our jurisprudence.21 As held in Briz v.Briz :22

The question whether a person in the position of the present plaintiff can in any eventmaintain a complex action to compel recognition as a natural child and at the same timeto obtain ulterior relief in the character of heir, is one which in the opinion of this courtmust be answered in the affirmative, provided always that the conditions justifying the

joinder of the two distinct causes of action are present in the particular case. In otherwords, there is no absolute necessity requiring that the action to compel

acknowledgment should have been instituted and prosecuted to a successful conclusionprior to the action in which that same plaintiff seeks additional relief in the character ofheir. Certainly, there is nothing so peculiar to the action to compel acknowledgment as torequire that a rule should be here applied different from that generally applicable in othercases. x x x

The conclusion above stated, though not heretofore explicitly formulated by this court, isundoubtedly to some extent supported by our prior decisions. Thus, we have held innumerous cases, and the doctrine must be considered well settled, that a natural child













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having a right to compel acknowledgment, but who has not been in fact acknowledged,may maintain partition proceedings for the division of the inheritance against his coheirs(Siguiong vs. Siguiong, 8 Phil., 5; Tiamson vs. Tiamson, 32 Phil., 62); and the sameperson may intervene in proceedings for the distribution of the estate of his deceasednatural father, or mother (Capistrano vs. Fabella, 8 Phil., 135; Conde vs. Abaya, 13 Phil.,249; Ramirez vs. Gmur, 42 Phil., 855). In neither of these situations has it been thought

necessary for the plaintiff to show a prior decree compelling acknowledgment. Theobvious reason is that in partition suits and distribution proceedings the other personswho might take by inheritance are before the court; and the declaration of heirship isappropriate to such proceedings.

WHEREFORE, the instant petition is DENIED. The Decision dated January 22, 2004 of theCourt of Appeals in CA-G.R. SP No. 79742 affirming the denial of petitioner's motion to dismiss;and its Resolution dated May 25, 2004 denying petitioner's motion for reconsideration,are AFFIRMED. Let the records be REMANDED to the Regional Trial Court of Makati City,Branch 138 for further proceedings.

SO ORDERED.

Panganiban, C.J., Chairperson, Austria-Martinez, Callejo, Sr., Chico-Nazario, J.J., concur.

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Rule 87


ManilaEN BANC

March 21, 1910

G.R. No. 5480RICARDO LOPEZ, ET AL., plaintiffs-appellants,vs.ADOLFO OLBES, executor of the estate of Martina Lopez, defendant-appellee.C. M. Villareal, for appellants.

Manly & McMahon, for appellees. TORRES, J.: On October 13, 1908, Ricardo Lopez, in his own behalf Josefina Lopez y Jaucian and her

husband, Ceferino M. Villareal, and Encarnacion, Jose, and Amparo Lopez y Jaucian broughtsuit against Adolfo Olbes, the testamentary executor of the deceased Martina Lopez, alleging intheir complaint that the latter, on the 14th of May, 1907, executed a public instrument before thenotary Felix Samson whereby she donated to the plaintiffs a parcel of hemp land situated at theplace called Ali, in the pueblo of Guinobatan, Albay, containing an area of 162 hectares, 2areas, and 50 centares, the boundaries of which are expressed in the said instrument; that thisproperty was inscribed in the registry of property of Albay in the name of the deceased AntonioLopez, the predecessor in interest of the said Martina Lopez, also deceased; that, by virtue ofthe said donation, Ricardo Lopez was entitled to the usufruct of the real property concerned,and that the other plaintiffs, Josefina, Encarnacion, Jose, and Amparo, all surnamed Lopez yJaucian, were the equal owners thereof in fee simple; that on the same date, May 14, 1907, the

said donation was accepted by Ricardo Lopez on his own behalf and in representation of theminor children above designated, and the donor, Martina Lopez, on the same date, was dulynotified of the said acceptance; that the said Martina Lopez was the legitimate mother of theplaintiff Ricardo Lopez, and the other plaintiffs, Josefina, Encarnacion, Jose, and Amparo, thelegitimate children of Ricardo Lopez, were her ligitimate grandchildren; that Adolfo Olbes wasthe testamentary executor duly appointed by order issued by the Court of First Instance, on April22, 1908, in proceedings No. 918, entitled: In the matter of the estate of the deceased MartinaLopez; that the said Olbes, as executor, claimed to have rights of ownership and possession tothe aforementioned land adverse to those then held by the plaintiffs, inasmuch as the saidestate still continued to belong to the deceased Martina Lopez and was then in charge of atrustee by virtue of an agreement had between the attorneys of the executor and the plaintiffRicardo Lopez, on April 18, and of the order issued by the court on the same date in theaforesaid probate proceedings; and the complaint concluded by asking that a guardian ad

litem be appointed, who should be the plaintiffs; that judgment be rendered in the latter's favorand against the defendant for the ownership and possession of the said land, and that thetrusteeship over the same be declared dissolved and the trustee be ordered to render anaccounting, and that the amounts or products which he might have in his possession beadjudicated to the plaintiffs, with the costs against the defendant.

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The defendant, having been summoned, filed a demurrer in writing, on November 23, 1908,alleging that the facts set forth in the complaint did not constitute a right of action, inasmuch asthe plaintiffs, as the heirs or donees, could not maintain any suit against the testamentaryexecutor to recover the title or possession of the land so long as the court had not adjudicatedthe estate to them or until the time allowed for paying the debts should have expired, unless

they be give possession of the said land by the executor.

Counsel for the plaintiffs, in answer to the demurrer, set forth that the terms of section 704 ofthe Code of Civil Procedure do not comprise donees, but merely heirs or devisees, because,although in the first part of the said section the word donatario (donee) appears, the subsequentparagraphs contain only the words heredero o' legatario (heir or devisee), it appearing to beevident that the Spanish translation of the said section is not correct; the English text thereof isgiven wherein the word "donee" does not appear, only the words "heir" and "devisee," whichmean heredero and legatario; this is apparently confirmed by the precedents of existinglegislation, quoted by counsel, and therefore the prohibition contained in the aforesaid section ofthe Code of Civil Procedure only refers to the heir or devisee, and in nowise to the donee,

whose title is derived from a donation inter vivos, the legal effects of which are those of a realcontract which is binding on the donor from the moment of its acceptance; that the donationswhich are to become effective inter vivos are governed by the provisions concerning contractsand obligations (art. 621, Civil Code), and that the rule that the plaintiffs' right cannot beenforced in an ordinary action, but in probate proceedings only, solely refers to the questionsinvolving the status of heirs and their share in the inheritance and not to that class of actionsprovided for in section 699 of the Code of Civil Procedure, counsel citing decisions rendered insuits against testamentary executors or administrators, as the case of Hijos de I. de la Rama vs.

The Estate of Benedicto (5 Phil. Rep., 512), and that of Sunico vs. Chuidian (9 Phil. Rep., 625);and for all the foregoing reasons the plaintiffs requested that the demurrer interposed by thedefendant be dismissed and that he be ordered to answer the complaint within the period

allowed by law.The demurrer having been heard, the judge, on February 26, 1909, issued an order sustainingthe said demurrer and directing that the same, as an incidental proceeding, be attached to therecord of the probate proceedings of the deceased Martina Lopez.

By virtue of the petition presented by the plaintiffs asking for final judgment and the appointmentof Ricardo Lopez as guardian ad litem of the other plaintiff minors, the judge issued an order onMarch 6, 1909, amending the preceding one by admitting the demurrer authorizing the plaintiffto amend his complaint, with the understanding that should be not file an amended complaintwithin the time allowed by law the case would be dismissed, with the costs against the plaintiff;this order was attached to the record of the said probate proceedings, and he appointed Ricardo

Lopez guardian ad litem to represent the minor plaintiffs in the litigation.On March 9, 1909, the plaintiffs filed a written amended complaint, a reproduction of theprevious one, although this was done by Ricardo Lopez on his own behalf and in representationof his minor children, also plaintiffs, as their guardian ad litem, and by Ceferino M. Villareal asthe husband of the plaintiff Josefina Lopez.The defendant, being informed of the foregoing amended complaint, again demurred to thesame on the grounds that the facts therein alleged did not constitute a right of action, inasmuchas in the amended complaint, which is a reproduction of the previous one, no new allegation




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was made that might supply the deficiency of right of action on the part of the plaintiffs in theirendeavor to obtain a reversal of the judgment rendered, without employing legal remediesagainst the order of March 6; wherefore the defendant prated the court to allow this newdemurrer, to dismiss the amended complaint, and to adjudge the plaintiffs to pay the costs.

The hearing on this demurrer having been had, the judge, by order of March 24, 1909,sustained the same and dismissed the case with the costs against the plaintiffs, and providedthat this question should be determined in the hearing on the said probate proceedings.

In another document of the date of March 26, 1909, counsel for the plaintiffs stated to the courtthat the latter desired to appeal from the said ruling to the Supreme Court, and prayed that final

judgment be rendered in the case in conformity with section 101 of the Code of CivilProcedure and the doctrine established in the case of Serrano vs. Serrano (Phil. Rep., 142), inorder that he might perfect and duly submit his appeal; but court, by an order of the 27th of thesame month, ruled that the case having been dismissed, with the costs against the plaintiffs, inthe ruling on the last demurrer of March 24, this decision was final and appealable. From thisruling counsel for the plaintiffs appeal and stated in writing that the latter also appealed from therulings of February 26 and March 24, 1909, and announced their intention to file the requisite billof exceptions.The court, by order of May 8, 1909, on the grounds therein set fourth and in view of plaintiffs'written petition of March 26, rendered judgment against the plaintiffs and in favor of thedefendant, and, finding that the allegations made in the complaint were not sufficient toconstitute an action, dismissed the complaint with the costs against the plaintiffs, and ordered,moreover, that after the parties had been notified of this judgment a copy thereof, as an integralpart of the bill of exceptions submitted, be forwarded to the Supreme Court.

This is question of maintaining the rights acquired by the plaintiffs by virtue of a donation of landsituated at the place called Ali, in the pueblo of Guinobatan, Albay, the boundaries of which areexpressed in the complaint, against the claims of the testamentary administrator of the propertyleft by the late Martina Lopez, who was the donor of the said land.

Although in paragraph No. 5 of the amended complaint the donees affirm that they tookpossession of the land in question, it is certain that the executor, who claims to have rights assuch to the possession of the said land, succeeded in having the same placed in trust,inasmuch as one of the petitions of the plaintiffs is to request that the trusteeship over theproperty be declared dissolved. The Civil Code provides as follows:

ART. 618 A gift is an act of liberality by which a person disposes gratuitously of a thing in favorof another, who accepts it.

ART. 624 All persons who can contract and dispose of their property may bestow gifts.

ART. 625 All persons who are not especially disqualified by law therefor may accept gifts.

ART. 620 Gifts which are to become effective upon the death of the donor partake of the natureof provisions by last will and shall be governed by the laws established for testamentarysuccession.





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(These gifts are denominated in law mortis causa.) ART. 621 Gifts which are to produce their effects inter vivos shall be governed by the generalprovisions of contracts and obligations in all that is not determined in this title.

ART. 623 A gift is consummated upon the donor having knowledge of its acceptance by thedonee.

ART. 633 In order that a gift of real property may be valid it shall be made in a public instrument,stating therein in detail the property bestowed as a gift and the amount of the charges, whichthe donee must satisfy.

The acceptance may be made in the same instrument bestowing the gift or in a different one;but it shall produce no effect if not made during the life of the donor.

If made in a different instrument the acceptance shall be communicated to the donor in anauthentic manner, and this proceeding shall be recorded in both instruments.

The action exercised by Ricardo Lopez in his own behalf and as guardian of his minor children,

and by Josefina Lopez, assisted by her husband Ceferino M. Villareal, in their character ofdonees, is based on the rights which as such donees they had acquired by virtue of thedonation inter vivos made by Martina Lopez during her lifetime in favor of the plaintiffs by aninstrument executed by the donor before a notary on May 14, 1907, a donation expresslyaccepted on the same date by the donees and of which acceptance the donor was alsoinformed on the same date; wherefore, these requirements of the law having been compliedwith, it is unquestionable that the dominion over the land donated was property transmitted tothe donees who in fact and by operation of the law acquired the ownership of the property, ascustomarily occurs in all contracts of transfer of dominion.

The said action with its motive and grounds may be impugned for any reason based on the

nullity or on the irregular nature of the donation, tending to make it inefficacious or to reduce it;but these exceptions, as well as those founded on some defect or vice, which affect theessential nature and formalities of the act or contract or the main questions relative thereto,must be heard and argued in an ordinary action, and must be decided in accordance with law bya final judgment, and not by a ruling on a demurrer which ordinarily occurs in connection with anincidental motion concerning mere formalities of procedure and not in a full trial or due processof law wherein the rights of the contestant have been examined, argued, and proved.

Property of the testate estate of the deceased Martina Lopez is not here concerned. During herlifetime she gave away the land mentioned, in the exercise of a right that pertained to her asowner thereof. By virtue of the said donation the sole and true owners of the land donated are

the plaintiffs, so long as the said donation is not proven to be null, inefficacious, or irregular. Allthe questions which by reason of the same are raised by the interested parties must be heard ina regular trial and decided by a final judgmet absolutely independent of the probate proceedingsconcerning the estate of the deceased, who was the previous owner of the land concerned; andtherefore the complaint of the donees should not have been dismissed, but the trial should havebeen proceeded with to final judgment. The prima facie donation inter vivos and its acceptanceby the donees having been proved by means of a public instrument, and the donor having beenduly notified of said acceptance, the contract is perfect and obligatory and its perfectly in order

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to demand its fulfillment, unless an exception is proved which is based on some legal reasonopportunely alleged by the donor or her heirs.So long as the donation in question has not been judicially proved and declared to be null,inefficacious, or irregular, the land donated is of the absolute ownership of the donees and,consequently, does not form a part of the property of the estate of the deceased Martina Lopez;

wherefore the action instituted demanding compliance with the contract, the delivery by thedeforciant of the land donated, or that it be prohibited to disturb the right of the donees, shouldnot be considered as incidental to the probate proceedings aforementioned.

The question as to whether the provisions of articles 634, 636, and 643 of the Civil Code wereobserved or violated should be tried and decided in an ordinary action.

With respect to whether the donees inter vivos are or are not comprised within the provisions ofsection 704 of the Code of Civil Procedure , the English text of the said section, which, in caseof disagreement with the Spanish, is the one that must prevail and be observed, in accordancewith Act. No. 63 of the Philippine Commission, conclusively proves that an important mistakewas made in the draft of the Spanish text, by using the word donatario (donee), which is notexpressed in the English text, the exact translation of which into Spanish could not comprise thedonee among the heirs and devisees, as was improperly done; wherefore the demurrer shouldhave been overruled, as it is based on an error so notably unmaintainable under the generalprinciples of law, and in particular taking into account the legal provisions relative to therespective character, condition, and juridical conception of heir, devisee, and donee.For the foregoing reasons, we hold that the orders of February 26, March 6, 24, and 27,together with the additional order of May 8, 1909, should be and are hereby revoked, and thecase shall be returned to the Court of First Instance in order that the defendant may answer theamended complaint within the regular legal period and the trial may them be had in all itsproceedings and in accordance with law. So ordered.

Johnson, Carson and Moreland, JJ., concur.





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Rule 88


ManilaEN BANC

March 18, 1907

G.R. No. 3083RAFAELA PAVIA, ET AL., plaintiffs-appellees,vs.BIBIANA DE LA ROSA, ET AL., defendants-appellants.R. Salinas for appellants.

Thos. D. Aitken for appellees. TORRES, J.: By an amended complaint filed on the 23rd of November, 1904, in the Court of First Instance of

Manila, the plaintiffs prayed that a judgment be rendered in their favor and against thedefendants for the sum of 15,000 pesos, Philippine Currency, as damages, together with costsof action, alleging in effect that by reason of the death of the testator, Pablo Linart e Iturralde,Francisco Granda e Iturralde was appointed executor under the will of the said deceased, inwhich will the minor Carmen Linart y Pavia was made the only universal heir, and that owing tothe death of the executor Francisco Granda toward the end of December, 1893, there wassubstituted as executor Jose de la Rosa, who took possession of the personal property of thestate, amounting to 10,673 pesos, Mexican Currency, as well as the property situated at No. 27Calle Solana, Walled City, likewise the property of the testator; that during the month of April,1904, the plaintiff, Rafaela Pavia, in her own behalf, and as guardian of Carmen Linart y Pavia,executed a power of attorney in behalf of the aforesaid Jose de la Rosa with the powers therein

expressed, and the attorney having accepted such power proceeded to administer the aforesaidestate in a careless manner until the 20th of August, 1903, neglecting the interests of theplaintiffs and wasting the capital, and causing damages amounting to over 15,000 pesos,Philippine currency, owing to the fact of having retired or disposed of without any necessity thesum of 7,207 pesos Mexican currency, together with interest thereon amounting to 360.25pesos, which amounts would have produced 12,321.90 pesos, Mexican currency, for theplaintiffs; that the executor and attorney De la Rosa neglected to appraise, count, and divide theestate of Linart, deceased, notwithstanding it was his duty to do so, and leased the aforesaidhouse No. 27 Calle Solana to his relatives from December, 1893, to August, 1903, at a muchlower rental than could have been obtained, thereby causing the plaintiffs losses amounting to6,570 pesos, Mexican Currency; that the aforesaid Jose de la Rosa died on the 14th ofSeptember, 1903, leaving the defendants Bibiana and Salud de la Rosa as his only heirs andrepresentatives, Eusebio Canals being the husband of the said Bibiana.

The demurrer filed by the defendants was overruled and through their attorney, Ramon Salinas,they answered the former amended complaint praying judgment in their behalf, as against theplaintiffs for the payment of the sum of 1,794.42 5/8 pesos, Mexican currency, as acounterclaim, and for the costs, and denying specifically facts 1, 2, and 9 of the amendedcomplaint; admitting facts 3, 4, 6, 7, 10, and 11 of the same; that they admit the facts stated in

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paragraph 5 and 8, respectively, in that the said De la Rosa at the death of said Grandasubstituted him, the said Granda, as executor, and the fact regarding the omission of themaking of the partition of the properties pertaining to the estate deceased, and denying allothers referring to the properties taken charge of by the said De la Rosa and the rendering ofaccounts; that in their special defense they allege that they, the defendants, are not responsible

for the personal actions of the person from whom they deprived their possession and title,against whom the plaintiffs neglected to bring action during his lifetime, and even then beingwithout any justifiable reason as they now actually pretented; that the deceased De la Rosaupon his taking charge of the properties of the said estate only received from the window of theformer execution the draft of payment on the Caja de Depositos (Savings Bank) for the saidsum of 7,207 pesos together with interest at the rate of 5 per cent, and not the amount referredto by the plaintiffs, as well as taking over the charge of the said property at No. 27.They further admitted that in 1894, De al Rosa, duly authorized by the plaintiff Rafaela Paviaand with the formalities of law and in order to attend to the maintenance or subsistence of same(the plaintiffs) who were them in Spain, withdrew from the Caja de Depositos (Saving Bank) thesaid capital, together with interest thereon, which two sums together with the rentals of the

aforesaid house have been paid out in full by De la Rosa in the maintenance and support of theplaintiffs and in the care of the building and property and other expenses well known to thesame plaintiffs; that, during the time of his administration, De la Rosa rendered accounts on twodifferent occasions, which said accounts showed all transactions had during the entire period ofhis administration; that Señora Pavia did not object to the first account rendered although shehad the same in her possession for three years; that the rents mentioned were adequate withrespect to the value of the building erected on land belonging to some other person; that havingpaid out in expenses all of the money belonging to the estate, of which estate the daughter ofthe testator is the only heir and the owner of the said house, the partition of same was thereforeimpracticable, and that the plaintiffs were then indebted to De la Rosa in the amount claimed inthe counterclaim and which amount is the balance due to De la Rosa and mentioned in the last

account rendered. After hearing the oral testimony presented by both parties, including the documentary evidenceattached to the record herein, the court below, on October 13, 1905, rendered judgment in favorof the plaintiffs and against the defendants for 3,488.27 pesos, Mexican currency, equivalent toP3,171.09, Philippine currency, together with interest thereon at rate of 6 per cent per annumfrom the 27th day of June, 1904, and the costs of the action, from which judgment thedefendants filed an exceptions and moved for a new trial, which motion was also denied.

The action brought by the plaintiffs, as has been seen, has for its object that of making effective,or of collecting by means of a judgment of the court, the amount of damages alleged to havebeen caused by De la Rosa, now deceased, to the plaintiffs in the performance of his duties

during his lifetime, as attorney for Rafaela Pavia, guardian of the minor Carmen Linart.

The defendants, Bibiana and Salud de la Rosa and her husband, in answering the complaintsfiled by the plaintiffs allege, among other reasons, that they are not responsible for the personalacts of De la Rosa, now deceased, and from whom they derived their right and title; andperhaps owing to this allegation the plaintiffs, with the consent of the court, filed in writing theadditional pleading on March 10, 1905, in the Court of First Instance, amending their amendedcomplaint in the following terms:

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That the aforesaid Jose de la Rosa on September 14, 1903, leaving as his only heirs andrepresentatives the defendants Bibiana and Salud de la Rosa and that said defendants Bibianaand Salud de la Rosa received and accepted from the estate of the said Jose de la Rosa theaforesaid inheritance without benefit of inventory and received and divided among and betweenthemselves, as such heirs, all of the estate, property, and effects left by the aforesaid deceased

Jose de la Rosa.

It has not been shown, as appears by the record in this cause, that the estate or the intestatesuccession of the deceased, Jose de la Rosa, was ever opened or that an such inventory everbeen presented in evidence in this cause, notwithstanding that at the time of the death of De laRosa, on the 14th day of September, 1903, the Code of Civil Procedure — that is, Act No.190 — was already in force, and that in accordance with its provisions the estate of thedeceased should have been administered and liquidated.The provisions of this law of procedure have abrogated, among others, the provisions of article1003 of the Civil Code and other in relation to the same article with regard to the simpleacceptance of the estate of a deceased person, or to that made with benefit of inventory and the

consequences thereof.In accordance with the provisions of the aforesaid Act No. 190 it is understood that a estate orintestate succession of a deceased person is always accepted and received with benefit ofinventory, and his heirs, even after having taken possession of the estate of the deceased, donot make themselves responsible for the debts of said deceased with their own property, butsolely with that property coming from the estate or intestate succession of said deceased.The Code of Civil Procedure now in force makes necessary the opening of a testate or intestatesuccession immediately after the death of the person whose estate is to be administered, theappointment of an executor or administrator, the taking of an inventory of the estate of thedeceased, and the appointment of two or more commissioners for the purpose of appraising theproperty of the estate and deciding as to the claims against said estate (Secs. 641, 642, 656,660, 668, 669, Code of Civil Procedure.)Section 596 of the aforesaid code provides, nevertheless, for the extrajudicial division of anintestate estate among the heirs of legal age, whether the succession is free from debts orwhenever such debts have been paid by the heirs, without proceedings in court, and withoutprejudice to the right of any creditor therein within the period of two years commencing from thedate of the partition of the property belonging to the estate, a right recognized in section 597 ofthe said code.

The powers and duties of the commissioners are established in section 686, and thosefollowing, of the Code of Civil Procedure, which sections determine the proceedings which mustbe followed to admit, hear, and examine all claims filed against the estate of the deceased.With regard to the executor or administrator of the estate of the deceased, section 702 ofthe Code of Civil Procedure provides:

An executor or administrator may commence, prosecute, or defend, in the right of the deceased,actions which survive to such executor or administrator and are necessary for the recovery andprotection of the property or rights of the deceased, and may prosecute or defend such actionsor suits commenced in the lifetime of the deceased.

















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From the above-quoted, as well as from the following sections and others included in Part II ofthe aforesaid Code of Civil Procedure, it is deduced that after the death of a person the onlyentity which may lawfully represent a testate or intestate succession is the executor oradministrator appointed by the court charged to care for, maintain, and administer the estate ofthe deceased in such of lands, or for damages done to such lands, shall be instituted or

maintained against him by an heir or devisee, until such time as there is entered s decree of thecourt assigning such lands to the heir or devisee, or until the time or period allowed for payingthe debts of the estate has expired, unless the executor or administrator surrenders thepossession of the lands to the heir or devisee. (Sec. 704, Code of Civil Procedure.)

And lastly for the partition of the properties belonging to the estate, section 753 of said codeprovides:

After payment of the debts, funeral charges, and expenses of administration, and theallowances, if any, made for the expense of maintenance of the family of the deceased, thecourt shall assign the residue of the estate to the person entitled to the same, and the court inits decree shall name the persons and proportions or parts to which each is entitled, and such

persons may demand and recover their respective shares from the executor or administrator, orfrom any other person having the same in his possession.

From the legal provisions contained in the aforesaid code with regard to estate or intestatesuccession, it is deduced that the heir lawfully succeeds the deceased from whom he deriveshis inheritance only after the liquidation of the estate, the payment of the debts of same and theadjudication of the residue of the estate of said deceased, and in the meantime the only personin charge by law to consider all claims against the estate of the deceased and to attend to orconsider the same is the executor or administrator appointed by a competent judge or court.

From the above it appears evident that whatever may be the rights of action on the part ofRafaela Pavia and the minor, Carmen Linart, the latter represented by the former as guardian,as to the obligations assumed by Jose de la Rosa, now deceased, it must be prosecutedagainst the executor or administrator of the estate of said deceased Jose de la Rosa, whoseexecutor or administrator is at this time the only representative of the estate or intestatesuccession of said deceased; and that in view of this fact and considering the law before us,they should not have brought action against Bibiana and Salud de la Rosa for the mere fact thatthey were the sisters of said deceased Jose de la Rosa, inasmuch as it is actually shown thatthe defendant De la Rosa died intestate or left during his lifetime any will, or that the twodefendants are the heirs of the deceased by virtue of an executed will or by reason of existinglaw, or whether or not the deceased has left properties, or who is the executor or administratorof the said properties, or whether the properties belonging to the estate of the deceased brotherof the defendants were ever adjudicated or partitioned by virtue of an order of court in favor ofthe defendants.

Wherefore, taking into consideration the reasons and facts hereinbefore given, we reverse the judgment appealed from, and find for the defendants Bibiana and Salud de la Rosa, andEusebio Canals, without special finding as to the costs herein, reserving to the plaintiffs to rightto institute proper action against the executor or administrator of the properties of the estate ofthe deceased, Jose de la Rosa, in accordance with the provisions of the Code of CivilProcedure now in force covering the subject-matter herein.









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After the expiration of twenty days from the date of the notification of this decision, let judgmentbe entered in accordance herewith, and ten days thereafter let the case be remanded to thecourt from whence it came for proper action. So ordered.

Arellano, C.J., Mapa, Johnson, Willard, and Tracey, JJ., concur.

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Registry of Deeds of Davao City, while the remaining two (2) parcels by TCTs No. (3918) 1081and (T-2947) 562 of the Registry of Deeds of Davao del Norte and Davao del Sur, respectively.

On July 16, 1973, Agustin filed with the intestate court a Petition for Authority ToIncrease Mortgage on the above mentioned properties of the estate.

In an Order dated July 18, 1973, the intestate court granted said petition.

On October 5, 1974, Agustin again filed with the intestate court another petition, Petitionfor Declaration of Heirs And For Authority To Increase Indebtedness , whereunder healleged the necessity for an additional loan from PNB to capitalize the business of the estate,the additional loan to be secured by additional collateral in the form of a parcel of land coveredby Original Certificate of Title (OCT) No. P-7131 registered in the name of Heirs of MelitonaPahamotang. In the same petition, Agustin prayed the intestate court to declare him and Ana,Genoveva, Isabelita, Corazon, Susana, Concepcion and herein petitioners Josephine andEleonor as the only heirs of Melitona.

In an Order of October 19, 1974, the intestate court granted Agustin authority to seekadditional loan from PNB in an amount not exceeding P5,000,000.00 to be secured by the landcovered by OCT No. P-7131 of the Registry of Deeds of Davao Oriental, but denied Agustin‘s

prayer for declaration of heirs for being premature.

On October 22, 1974, a real estate mortgage contract for P4,500,000.00 was executed byPNB and Agustin in his several capacities as: (1) administrator of the estate of his late wife; (2)general manager of PLEI; (3) attorney-in-fact of spouses Isabelita Pahamotang and OrlandoRuiz, and spouses Susana Pahamotang and Octavio Zamora; and (4) guardian of daughtersConcepcion and Genoveva and petitioners Josephine and Eleonor. Offered as securities for theadditional loan are three (3) parcels of registered land covered by TCTs No. T-21132, 37786and 43264.

On February 19, 1980, Agustin filed with the intestate court a Petition (Request forJudicial Authority To Sell Certain Properties of the Estate), therein praying for authority tosell to Arturo Arguna the properties of the estate covered by TCTs No. 7443, 8035, 11465,24326 and 31226 of the Registry of Deeds of Davao City, and also TCT No. (T-3918) T-1081 ofthe Registry of Deeds of Davao del Norte.

On February 27, 1980, Agustin yet filed with the intestate court another petition, this timea Petition To Sell the Properties of the Estate, more specifically referring to the propertycovered by OCT No. P-7131, in favor of PLEI.

In separate Orders both dated February 25, 1980, the intestate court granted Agustinauthority to sell estate properties, in which orders the court also required all the heirs of Melitonato give their express conformity to the disposal of the subject properties of the estate and to signthe deed of sale to be submitted to the same court. Strangely, the two (2) orders were datedtwo (2) days earlier than February 27, 1980, the day Agustin supposedly filed his petition.

In a motion for reconsideration, Agustin prayed the intestate court for the amendment ofone of its February 25, 1980 Orders by canceling the requirement of express conformity of theheirs as a condition for the disposal of the aforesaid properties.

In its Order of January 7, 1981, the intestate court granted Agustin‘s prayer.

Hence, on March 4, 1981, estate properties covered by TCTs No. 7443,11465, 24326,31226, 8035, (T-2947) 662 and (T-3918) T-1081, were sold to respondentArturo Arguna, whilethe property covered by OCT No. P-7131 was sold to PLEI. Consequent to such sales,

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sale/transfer of the real properties described therein to defendant Arturo S. Arguna,as null and void ab initio;

4.) Declaring the Deed of Absolute Sale, Doc. No. 474; Page No. 96, Book No. VIII,series of 1981 of the Notarial Registry of Paquito G. Balasabas of Davao City,evidencing the sale/transfer of real properties to PLEI as null and void ab initio;

5.) For defendants to pay plaintiffs moral damages in such sums as may be found to be just and equitable under the premises;

6.) For defendants to pay plaintiffs, jointly and severally, the expenses incurred inconnection with this litigation;

7.) For defendants to pay plaintiffs, jointly and severally attorney's fees in an amount tobe proven during the trial;

8.) For defendants to pay the costs of the suit‖.[4]

PNB moved to dismiss the complaint, which the trial court granted in its Order of January11, 1985.

However, upon motion of the plaintiffs, the trial court reversed itself and ordered defendantPNB to file its answer.

Defendant PNB did file its answer with counterclaim, accompanied by a cross-claim againstco-defendants Agustin and PLEI.

During the ensuing pre-trial conference, the parties submitted the following issues for theresolution of the trial court, to wit:

"1. Whether or not the Real Estate Mortgage contracts executed on July 6, 1973 andOctober 2, 1974 (sic) by and between defendants Pahamotang Logging Enterprises,Inc. and the Philippine National Bank are null and void?

2. Whether or not the foreclosure proceedings conducted by defendants-Sheriffs, insofaras they affect the assets of the Estate of Melitona Pahamotang, including the publicauction sales thereof, are null and void?

3. Whether or not the Deed of Absolute Sale in favor of defendant Arturo Arguna enteredas Doc. No. 473; Page No. 96; Book No. VIII, series of 1981 of the Notarial Register ofNotary Public Paquito Balasabas is null and void?

4. Whether or not the Deed of Absolute Sale in favor of defendant Pahamotang LoggingEnterprises, Inc. entered as Doc. No. 474; Page No. 96; Book No. VIII, series of 1981of the Notarial Register of Notary Public Paquito Balasabas is null and void?

5. On defendant PNB's cross-claim, in the event the mortgage contracts and theforeclosure proceedings are declared null and void, whether or not defendantPahamotang Logging Enterprises, Inc. is liable to the PNB?

6. Whether or not the defendants are liable to the plaintiffs for damages?

http://sc.judiciary.gov.ph/jurisprudence/2005/mar2005/156403.htm#_ftn4




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2. Order dated October 19, 1974, denying Agustin‘s petition for declaration of heirs butgiving him authority to seek additional loan from PNB;

3. Order dated February 25, 1980, giving Agustin permission to sell properties of theestate to Arturo Arguna and PLEI; and

4. Order dated January 7, 1981, canceling the requirement of express conformity by theheirs as a condition for the disposal of estate properties.

To the appellate court, petitioners committed a fatal error of mounting a collateral attack on theforegoing orders instead of initiating a direct action to annul them. Explains the Court of

Appeals:

"A null and void judgment is susceptible to direct as well as collateral attack. A direct attackagainst a judgment is made through an action or proceeding the main object of which is toannul, set aside, or enjoin the enforcement of such judgment, if not carried into effect; or if theproperty has been disposed of, the aggrieved party may sue for recovery. A collateral attack ismade when, in another action to obtain a different relief, an attack on the judgment is made asan incident in said action. This is proper only when the judgment, on its fact, is null and void, aswhere it is patent that the court which rendered such judgment has no jurisdiction. A judgmentvoid on its face may also be attacked directly.

xxx xxx xxx

Perusing the above arguments and comparing them with the settled ruling, the plaintiffs-appellees [now petitioners], we believe had availed themselves of the wrong remedy before thetrial court. It is clear that they are collaterally attacking the various orders of the intestate courtin an action for the nullification of the subject mortgages, and foreclosure proceedings in favor ofPNB, and the deeds of sale in favor of Arguna. Most of their arguments stemmed from their

allegations that the various orders of the intestate court were issued without a notification givento them. An examination, however, of the July 18, 1973 order shows that the heirs of Melitonahave knowledge of the petition to increase mortgage filed by Agustin, thus:

`The petitioner testified that all his children including those who are of age have no objection tothis petition and, as matter of fact, Ana Pahamotang, one of the heirs of Melitona Pahamotang,who is the vice-president of the logging corporation, is the one at present negotiating for theincrease of mortgage with the Philippine National Bank.'

The presumption arising from those statements of the intestate court is that the heirs werenotified of the petition for the increase of mortgage.

The same can be seen in the October 19, 1974 order:

`The records show that all the known heirs, namely Ana, Isabelita, Corazon, Susana, includingthe incompetent Genoveva, and the minors Josephine, Eleanor and Concepcion all surnamedwere notified of the hearing of the petition.'

On the other hand, the February 25, 1980 order required Agustin to obtain first expressconformity from the heirs before the subject property be sold to Arguna. The fact that this wasreconsidered by the intestate court in its January 07, 1981 is of no moment. The questioned

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orders are valid having been issued in accordance with law and procedure. The problem withthe plaintiffs-appellees is that, in trying to nullify the subject mortgages and the foreclosureproceedings in favor of PNB and the deeds of sale in favor of Arguna, they are assailing theaforesaid orders of the intestate court and in attacking the said orders, they attached documentsthat they believe would warrant the conclusion that the assailed orders are null and void. This isa clear collateral attack of the orders of the intestate court which is not void on its face and

which cannot be allowed in the present action. The defects alleged by the plaintiff-appellees arenot apparent on the face of the assailed orders. Their recourse is to ask for the declaration ofnullity of the said orders, not in a collatera l manner, but a direct action to annul the same‖.[8]

The same court added that petitioners‘ failure to assail said orders at the most opportune timeconstitutes laches:

"In their complaint below, plaintiffs, appellees are assailing in their present action, four orders ofthe intestate court namely: July 18, 1973, October 19, 1974, February 25, 1980 and January 07,1981 orders which were then issued by Judge Martinez. It should be recalled that except for theJanuary 07, 1981 order, Judge Jacinto, upon taking over Sp. No. 1792, denied the motion of theplaintiffs-appellees to set aside the aforesaid orders. Aside from their motion before Judge

Jacinto, nothing on the records would show that the plaintiffs-appellees availed of otherremedies to set aside the questioned orders. Further, the records would not show that theplaintiffs-appellees appealed the order of Judge Jacinto. If an interval of two years, sevenmonths and ninety nine days were barred by laches, with more reason should the same doctrineapply to the present case, considering that the plaintiffs-appellees did not avail of the remediesprovided by law in impugning the various orders of the intestate court. Thus, the questionedorders of the intestate court, by operation of law became final. It is a fundamental principle ofpublic policy in every jural system that at the risk of occasional errors, judgments of courtsshould become final at some definite time fixed by law (interest rei publicae ut finis sit litum).The very object of which the courts were constituted was to put an end to controversies. Oncea judgment or an order of a court has become final, the issues raised therein should be laid torest. To date, except as to the present action which we will later discuss as improper, the

plaintiff-appellees have not availed themselves of other avenues to have the orders issued byJudge Martinez and Judge Jacinto annulled and set aside. In the present case, when JudgeJacinto denied the motion of the plaintiffs-appellees, the latter had remedies provided by therules to assail such order. The ruling by Judge Jacinto denying plaintiffs-appellees motion to setaside the questioned orders of Judge Martinez has long acquired finality. It is well embedded inour jurisprudence, that judgment properly rendered by a court vested with jurisdiction, like theRTC, and which has acquired finality becomes immutable and unalterable, hence, may nolonger be modified in any respect except only to correct clerical errors or mistakes. Litigationmust have and always has an end. If not, judicial function will lose its relevance‖.

In time, petitioners moved for a reconsideration but their motion was denied by theappellate court in its Resolution of November 20, 2002.

Hence, petitioners‘ present recourse, basically praying for the reversal of the CA decisionand the reinstatement of that of the trial court.

We find merit in the petition.

It is petitioners‘ posture that the mortgage contracts dated July 6, 1973 and October 22,1974 entered into by Agustin with respondent PNB, as well as his subsequent sale of estateproperties to PLEI and Arguna on March 4, 1981, are void because they [petitioners] neverconsented thereto. They assert that as heirs of their mother Melitona, they are entitled to notice





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of Agustin's several petitions in the intestate court seeking authority to mortgage and sell estateproperties. Without such notice, so they maintain, the four orders of the intestate courtdated July 18, 1973, October 19, 1974, February 25, 1980 and January 7, 1981, whichallowed Agustin to mortgage and sell estate properties, are void on account of Agustin‘s non -compliance with the mandatory requirements of Rule 89 of the Rules of Court.

Prescinding from their premise that said orders are completely void and hence, could notattain finality, petitioners maintain that the same could be attacked directly or collaterally,anytime and anywhere.

For its part, respondent PNB asserts that petitioners cannot raise as issue in thisproceedings the validity of the subject orders in their desire to invalidate the contracts ofmortgage entered into by Agustin. To PNB, the validity of the subject orders of the intestatecourt can only be challenged in a direct action for such purpose and not in an action to annulcontracts, as the petitioners have done. This respondent adds that the mortgage on the subjectproperties is valid because the same was made with the approval of the intestate court and withthe knowledge of the heirs of Melitona, petitioners included.[9]

Upon the other hand, respondent Heirs of Arturo Arguna likewise claim that petitioners

knew of the filing with the intestate court by Agustin of petitions to mortgage and sell the estateproperties. They reecho the CA‘s ruling that petitioners are barred by laches in filing Civil CaseNo. 16,802.[10]

As we see it, the determinative question is whether or not petitioners can obtain relief fromthe effects of contracts of sale and mortgage entered into by Agustin without first initiating adirect action against the orders of the intestate court authorizing the challenged contracts.

We answer the question in the affirmative.

It bears emphasizing that the action filed by the petitioners before the trial court in CivilCase No. 16,802 is for the annulment of several contracts entered into by Agustin for and inbehalf of the estate of Melitona, namely: (a) contract of mortgage in favor of respondent PNB,(b) contract of sale in favor of Arguna involving seven (7) parcels of land; and (c) contract ofsale of a parcel of land in favor of PLEI.

The trial court acquired jurisdiction over the subject matter of the case upon the allegationsin the complaint that said contracts were entered into despite lack of notices to the heirs of thepetition for the approval of those contracts by the intestate court.

Contrary to the view of the Court of Appeals, the action which petitioners lodged with thetrial court in Civil Case No. 16,802 is not an action to annul the orders of the intestate court,which, according to CA, cannot be done collaterally. It is the validity of the contracts ofmortgage and sale which is directly attacked in the action.

And, in the exercise of its jurisdiction, the trial court made a factual finding in its decision of August 7, 1998 that petitioners were, in fact, not notified by their father Agustin of the filing of his

petitions for permission to mortgage/sell the estate properties. The trial court made the correctconclusion of law that the challenged orders of the intestate court granting Agus tin‘s petitionswere null and void for lack of compliance with the mandatory requirements of Rule 89 of theRules of Court, particularly Sections 2, 4, 7 thereof, which respectively read:

―Sec. 2. When court may authorize sale, mortgage, or other encumbrance of realty to pay debtsand legacies through personalty not exhausted . - When the personal estate of the deceased isnot sufficient to pay the debts, expenses of administration, and legacies, or where the sale of









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such personal estate may injure the business or other interests of those interested in the estate,and where a testator has not otherwise made sufficient provision for the payment of such debts,expenses, and legacies, the court, on the application of the executor or administrator andon written notice to the heirs, devisees, and legatees residing in the Philippines, mayauthorize the executor or administrator to sell, mortgage, or otherwise encumber so much asmay be necessary of the real estate, in lieu of personal estate, for the purpose of paying such

debts, expenses, and legacies, if it clearly appears that such sale, mortgage, or encumbrancewould be beneficial to the persons interested; and if a part cannot be sold, mortgaged, orotherwise encumbered without injury to those interested in the remainder, the authority may befor the sale, mortgage, or other encumbrance of the whole of such real estate, or so muchthereof as is necessary or beneficial under the circumstances‖.

―Sec. 4. When court may authorize sale of estate as beneficial to interested persons. Disposalof proceeds. - When it appears that the sale of the whole or a part of the real or personal estate,will be beneficial to the heirs, devisees, legatees, and other interested persons, the court may,upon application of the executor or administrator and on written notice to the heirs, deviseesand legatees who are interested in the estate to be sold, authorize the executor oradministrator to sell the whole or a part of said estate, although not necessary to pay debts,

legacies, or expenses of administration; but such authority shall not be granted if inconsistentwith the provisions of a will. In case of such sale, the proceeds shall be assigned to the personsentitled to the estate in the proper proportions‖.

―Sec. 7. Regulations for granting authority to sell, mortgage, or otherwise encumber estate. -The court having jurisdiction of the estate of the deceased may authorize the executor oradministrator to sell personal estate, or to sell, mortgage, or otherwise encumber real estate; incases provided by these rules and when it appears necessary or beneficial, under the followingregulations:

(a) The executor or administrator shall file a written petition setting forth the debts duefrom the deceased, the expenses of administration, the legacies, the value of thepersonal estate, the situation of the estate to be sold, mortgaged, or otherwiseencumbered, and such other facts as show that the sale, mortgage, or otherencumbrance is necessary or beneficial;

(b) The court shall thereupon fix a time and place for hearing such petition,and cause notice stating the nature of the petition, the reason for the same, andthe time and place of hearing, to be given personally or by mail to the personsinterested, and may cause such further notice to be given, by publication orotherwise, as it shall deem proper; (Emphasis supplied)‖.

xxx xxx xxx

Settled is the rule in this jurisdiction that when an order authorizing the sale orencumbrance of real property was issued by the testate or intestate court without previousnotice to the heirs, devisees and legatees as required by the Rules, it is not only the contractitself which is null and void but also the order of the court authorizing the same.[11]

Thus, in Maneclang vs. Baun,[12] the previous administrator of the estate filed a petitionwith the intestate court seeking authority to sell portion of the estate, which the court granteddespite lack of notice of hearing to the heirs of the decedent. The new administrator of theestate filed with the Regional Trial Court an action for the annulment of the sales made by the









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previous administrator. After trial, the trial court held that the order of the intestate court grantingauthority to sell, as well as the deed of sale, were void. On appeal directly to this Court, We heldthat without compliance with Sections 2, 4 and 7 of Rule 89 of the Rules of Court, “the authorityto sell, the sale itself and the order approving it would be null and void ab initio” .

In Liu vs. Loy, Jr .,[13] while the decedent was still living, his son and attorney-in-fact sold in

behalf of the alleged decedent certain parcels of land to Frank Liu. After the decedent died, theson sold the same properties to two persons. Upon an ex parte motion filed by the 2nd set ofbuyers of estate properties, the probate court approved the sale to them of said properties.Consequently, certificates of title covering the estate properties were cancelled and new titlesissued to the 2nd set of buyers. Frank Liu filed a complaint for reconveyance/ annulment of titlewith the Regional Trial Court. The trial court dismissed the complaint and the Court of Appealsaffirmed the dismissal. When the case was appealed to us, we set aside the decision of theappellate court and declared the probate court's approval of the sale as completely void due tothe failure of the 2nd set of buyers to notify the heir-administratrix of the motion and hearing forthe sale of estate property.

Clearly, the requirements of Rule 89 of the Rules of Court are mandatory and failure to givenotice to the heirs would invalidate the authority granted by the intestate/probate court to

mortgage or sell estate assets.

Here, it appears that petitioners were never notified of the several petitions filed by Agustinwith the intestate court to mortgage and sell the estate properties of his wife.

According to the trial court, the “[P]etition for Authority to IncreaseMortgage” and “[P]etition for Declaration of Heirs and for Authority to IncreaseIndebte dness” , filed by Agustin on July 16, 1973 and October 5, 1974, respectively, do notcontain information that petitioners were furnished with copies of said petitions. Also, notices ofhearings of those petitions were not sent to the petitioners.[14] The trial court also found in CivilCase No. 16,802 that Agustin did not notify petitioners of the filing of his petitions for judicialauthority to sell estate properties to Arturo Arguna and PLEI.[15]

As it were, the appellate court offered little explanation on why it did not believe the trialcourt in its finding that petitioners were ignorant of Agustin‘s scheme to mortgage and sell theestate properties.

Aside from merely quoting the orders of July 18, 1973 and October 19, 1974 of theintestate court, the Court of Appeals leaves us in the dark on its reason for disbelieving the trialcourt. The appellate court did not publicize its appraisal of the evidence presented by theparties before the trial court in the matter regarding the knowledge, or absence thereof, by thepetitioners of Agustin‘s petitions. The appellate court cannot casually set aside the findings ofthe trial court without stating clearly the reasons therefor. Findings of the trial court are entitledto great weight, and absent any indication to believe otherwise, we simply cannot adopt theconclusion reached by the Court of Appeals.

Laches is negligence or omission to assert a right within a reasonable time, warranting thepresumption that the party entitled to assert it has either abandoned or declined the right.[16] Theessential elements of laches are: (1) conduct on the part of the defendant, or of one underwhom he claims, giving rise to the situation of which complaint is made and for which thecomplaint seeks a remedy; (2) delay in asserting the complainant's rights, the complainanthaving had knowledge or notice of the defendant's conduct and having been afforded anopportunity to institute a suit; (3) lack of knowledge or notice on the part of the defendant thatthe complainant would assert the right on which he bases his suit; and (4) injury or prejudice tothe defendant in the event relief is accorded to the complainant, or the suit is not held barred.[17]





















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In the present case, the appellate court erred in appreciating laches against petitioners. Theelement of delay in questioning the subject orders of the intestate court is sorely lacking.Petitioners were totally unaware of the plan of Agustin to mortgage and sell the estateproperties. There is no indication that mortgagor PNB and vendee Arguna had notifiedpetitioners of the contracts they had executed with Agustin. Although petitioners finally obtainedknowledge of the subject petitions filed by their father, and eventually challenged the July 18,

1973, October 19, 1974, February 25, 1980 and January 7, 1981 orders of the intestate court, itis not clear from the challenged decision of the appellate court when they (petitioners) actuallylearned of the existence of said orders of the intestate court. Absent any indication of the pointin time when petitioners acquired knowledge of those orders, their alleged delay in impugningthe validity thereof certainly cannot be established. And the Court of Appeals cannot simplyimpute laches against them.

WHEREFORE, the assailed issuances of the Court of Appeals are hereby REVERSED andSET ASIDE and the decision dated August 7, 1998 of the trial court in its Civil Case No. 16,802REINSTATED.

SO ORDERED.

Panganiban, (Chairman), Sandoval-Gutierrez, Corona, and Carpio-Morales, JJ., concur.

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Rule 90


Manila

THIRD DIVISION

RICARDO S. SILVERIO, JR. G.R. No. 178933 Petitioner,

Present:

YNARES-SANTIAGO, J .,Chairperson,

- versus - VELASCO, JR.,NACHURA,

LEONARDO-DE CASTRO,*

andPERALTA, JJ.

COURT OF APPEALS (Fifth Division) Promulgated:and NELIA S. SILVERIO-DEE,

Respondents. September 16, 2009x-----------------------------------------------------------------------------------------x

D E C I S I O N

VELASCO, JR., J.:

The Case

This Petition for Review on Certiorari under Rule 65 seeks the reversal of the May 4,2007 Resolution[1] and July 6, 2007 Decision[2] of the Court of Appeals (CA) in CA-G.R. SP No.98764, entitled Nelia S. Silverio-Dee and Ricardo C. Silverio, Sr. (impleaded as necessary

party) v. Reinato G. Quilala, in his capacity as Presiding Judge of the RTC of Makati, Branch 57,Ricardo S. Silverio, Jr., Edmundo S. Silverio, represented by Nestor Dela Merced II, and SheriffVillamor R. Villegas.

The assailed resolution granted private respondent‘s prayer for the issuance of aTemporary Restraining Order against public respondent Judge Quilala. On the other hand, theassailed decision set aside the Writ of Execution dated April 17, 2007 and the Notice to Vacatedated April 19, 2007 while directing the respondent lower court to give due course to the appealof herein private respondent.

The Facts

http://sc.judiciary.gov.ph/jurisprudence/2009/september2009/178933.htm#_ftn1











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Meanwhile, on January 6, 2006, Nelia Silverio-Dee filed a Notice of Appeal datedJanuary 5, 2006[8] from the Order dated December 12, 2005 while the Record on Appeal datedJanuary 20, 2006[9] was filed on January 23, 2006.

Thereafter, on October 23, 2006, Ricardo Silverio, Jr. filed a Motion to Dismiss Appealand for Issuance of a Writ of Execution[10] against the appeal of Nelia Silverio-Dee on the ground

that the Record on Appeal was filed ten (10) days beyond the reglementary period pursuant toSection 3, Rule 41 of the Rules of Court.

Thus, on April 2, 2007, the RTC issued an Order [11] denying the appeal on the groundthat it was not perfected within the reglementary period. The RTC further issued a writ ofexecution for the enforcement of the Order dated May 31, 2005 against private respondent tovacate the premises of the property located at No. 3, Intsia, Forbes Park, Makati City. The writof execution was later issued on April 17, 2007[12] and a Notice to Vacate[13] was issued on April19, 2007 ordering private respondent to leave the premises of the subject property within ten(10) days.

Consequently, private respondent filed a Petition for Certiorari and Prohibition (WithPrayer for TRO and Writ of Preliminary Injunction) dated May 2, 2007[14] with the CA.

On May 4, 2007, the CA issued the assailed Resolution granting the prayer for theissuance of a TRO. In issuing the TRO, the CA ruled that the Notice of Appeal was filed withinthe reglementary period provided by the Rules of Court applying the ―fresh rule period‖enunciated by this Court in Neypes v. Court of Appeals[15] as reiterated in Sumaway v. UnionBank .[16]

Afterwards, on July 6, 2007, the CA issued the assailed decision granting the petition ofprivate respondent. The dispositive portion reads:

WHEREFORE, in view of the foregoing, the instant petitionis GRANTED and GIVEN DUE COURSE. Accordingly, the Order , dated April 2,2007, the writ of execution, dated April 17, 2007, and the Notice to Vacate,dated April 19, 2007, are ANNULLED AND SET ASIDE. Further, the court a quois hereby directed to give due course to the appeal of Nelia S. Silverio-Dee.

SO ORDERED.

Hence, the instant petition.

The Issues

-A-

The Omnibus Order dated May 31, 2005 (Annex G of Annex C) and theOrder dated December 12, 2005 are Interlocutory Orders which are not subjectto appeal under Sec. 1 of Rule 41;



































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-B-

The respondent Court seriously erred and/or committed grave abuse of

discretion amounting to lack of or excess of jurisdiction, in deliberately failing todecide that the basis of the occupancy of Nelia S. Silverio-Dee are fraudulentdocuments, without any authority from the Intestate Court;

-C-

The respondent Court seriously erred and/or committed grave abuse ofdiscretion amounting to lack of or excess of jurisdiction, in issuing precipitatelythe temporary restraining order (TRO) in its Resolution dated May 4, 2007(Annex A-1);

-D-

The respondent Court seriously erred and/or committed grave abuse ofdiscretion amounting to lack of or excess of jurisdiction in annulling the Orderdated April 2, 2007, the Writ of Execution dated April 17, 2007, and the Notice toVacate dated April 19, 2007 because the respondent Silverio-Dee‘s occupancy ofthe Intestate property located at No. 3 Intsia Road, Forbes Park, Makati City(Annex N of Annex C) will prevent the sale authorized by the Order datedOctober 31, 2006 to secure funds for the payment of taxes due which are nowhigh and rapidly increasing payment of which must not be enjoined.[17]

The Court’s Ruling

This petition is meritorious.

The May 31, 2005 Order of the RTC Is an Interlocutory Order, Not Subject to an Appeal

To recapitulate, the relevant facts to the instant issue are as follows:

On May 31, 2005, the RTC issued an Omnibus Order ordering Nelia Silverio-Dee tovacate the premises of the property located at No. 3, Intsia Road,Forbes Park, Makati City. Shereceived a copy of the said Order on June 8, 2005. Instead of filing a Notice of Appeal and

Record on Appeal, private respondent filed a motion for reconsideration of the Order. Thismotion for reconsideration was denied in an Order dated December 12, 2005. This Order wasreceived by private respondent on December 22, 2005. On January 6, 2006, private respondentfiled her Notice of Appeal while she filed her Record on Appeal on January 23, 2006.

Thus, in denying due course to the Notice/Record on Appeal, the RTC, in its Order dated April 2, 2007, ruled:





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Verily, the appeal taken by the movant Nelia Silverio-Dee from the Orderof this Court dated December 12, 2005 denying the Motion for Reconsideration ismisplaced as no appeal may be taken from the order denying the motion forreconsideration (see Section 1, Rule 41 of the 1997 Rules of Civil Procedure inrelation to Section 1(f), Rule 109 of the Rules of Court). Furthermore, assumingthat what said movant had appealed is the final Order dated May 31, 2005, still,

the appeal cannot be given due course as the Record on Appeal had been filedbeyond the thirty-day period to appeal (see Section 3 Rule 41 of the Rules ofCourt)

WHEREFORE, the appeal filed by Nelia Silverio is hereby DENIED duecourse.

Let a writ of execution issue to enforce the Order dated May 31,2005 against Nelia Silverio-Dee requiring her to vacate the premises at No. 3Intsia, Forbes Park,Makati City.

SO ORDERED.

Thus, the denial of due course by the RTC was based on two (2) grounds: (1) that NeliaSilverio-Dee‘s appeal was against an order denying a motion for reconsideration which isdisallowed under Sec. 1(a), Rule 41 of the Rules of Court; and (2) that Nelia Silverio-Dee‘sRecord on Appeal was filed beyond the reglementary period to file an appeal provided underSec. 3 of Rule 41.

Sec. 1(a), Rule 41 of the Rules of Court provides:

RULE 41 APPEAL FROM THE REGIONAL TRIAL COURTS

SECTION 1. Subject of appeal.— An appeal may be taken from a judgment or final order that completely disposes of the case, or of a particularmatter therein when declared by these Rules to be appealable.

No appeal may be taken from:

(a) An order denying a motion for new trial or reconsideration;

x x x x

In all the above instances where the judgment or final order is not

appealable, the aggrieved party may file an appropriate special civil action underRule 65.

Petitioner argues that because private respondent filed a Notice of Appeal from theOrder dated December 12, 2005 which denied her motion for reconsideration of the OmnibusOrder dated May 31, 2005, her appeal is of an order denying a motion for reconsideration.Thus, petitioner alleges that private respondent employed the wrong remedy in filing a notice of

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appeal and should have filed a petition for certiorari with the CA under Rule 65 of the Rules ofCourt instead.

The CA, however, ruled that the filing of the Notice of Appeal in this case was propersaying that the appeal pertained to the earlier Omnibus Order dated May 31, 2005. The CA,citing Apuyan v. Haldeman,[18] argued that an order denying a motion for reconsideration maybe appealed as such order is the ―final order‖ which disposes of the case. In that case, westated:

In the recent case of Quelnan v. VHF Philippines, Inc., We held, thus:

… [T]his Court finds that the proscription against appealing froman order denying a motion for reconsideration refers to an interlocutoryorder, and not to a final order or judgment. That that was the intention ofthe above-quoted rules is gathered from Pagtakhan v. CIR, 39 SCRA 455(1971), cited in above-quoted portion of the decision in Republic, in whichthis Court held that an order denying a motion to dismiss an action is

interlocutory, hence, not appealable.

The rationale behind the rule proscribing the remedy of appealfrom an interlocutory order is to prevent undue delay, useless appealsand undue inconvenience to the appealing party by having to assailorders as they are promulgated by the court, when they can be contestedin a single appeal. The appropriate remedy is thus for the party to wait forthe final judgment or order and assign such interlocutory order as an errorof the court on appeal.

The denial of the motion for reconsideration of an order ofdismissal of a complaint is not an interlocutory order, however, but

a final order as it puts an end to the particular matter resolved, orsettles definitely the matter therein disposed of, and nothing is leftfor the trial court to do other than to execute the order.

Not being an interlocutory order, an order denying a motion forreconsideration of an order of dismissal of a complaint is effectively anappeal of the order of dismissal itself.

The reference by petitioner, in his notice of appeal, to the March12, 1999 Order denying his Omnibus Motion—Motion for Reconsiderationshould thus be deemed to refer to the January 17, 1999 Order whichdeclared him non-suited and accordingly dismissed his complaint.

If the proscription against appealing an order denying a motion forreconsideration is applied to any order, then there would have been noneed to specifically mention in both above-quoted sections of the Rules―final orders or judgments‖ as subject to appeal. In other words, from theentire provisions of Rule 39 and 41, there can be no mistaking that whatis proscribed is to appeal from a denial of a motion for reconsideration ofan interlocutory order. (Emphasis supplied.)





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Thus, the question posed is whether the Omnibus Order dated May 31, 2005 is an

interlocutory order.

On this aspect, the CA ruled that the Omnibus Order dated May 31, 2005 was a finalorder, to wit:

We note that the Order, dated December 12, 2005, is an offshoot of theOmnibus Order, dated May 31, 2005. In the Omnibus Order, the court a quoruled that the petitioner, as an heir of the late Beatriz S. Silverio, had no right touse and occupy the property in question despite authority given to her by RicardoSilverio, Sr. when it said, thus:

x x x In the first place, Nelia S. Silverio-Dee cannot occupy theproperty in Intsia, Forbes Park, admittedly belonging to the conjugalestate and subject to their proceedings without authority of the Court.Based on the pretenses of Nelia Silverio-Dee in her memorandum, it isclear that she would use and maintain the premises in the concept of a

distributee. Under her perception, Section 1 Rule 90 of the Revised Rulesof Court is violated. x x x

x x x x

For the property at Intsia, Forbes Park cannot be occupied orappropriated by, nor distributed to Nelia S. Silverio-Dee, since nodistribution shall be allowed until the payment of the obligationsmentioned in the aforestated Rule is made. In fact, the said property maystill be sold to pay the taxes and/or other obligations owned by the estate,which will be difficult to do if she is allowed to stay in the property.

Moreover, the alleged authority given by SILVERIO, SR. for NeliaS. Silverio-Dee to occupy the property dated May 4, 2004, assuming it isnot even antedated as alleged by SILVERIO, JR., is null and void sincethe possession of estate property can only be given to a purported heir byvirtue of an Order from this Court (see Sec. 1 Rule 90, supra; and Sec. 2Rule 84, Revised Rules of Court). In fact, the Executor or Administratorshall have the right to the possession and management of the real as wellas the personal estate of the deceased only when it is necessary for thepayment of the debts and expenses of administration (See Sec. 3 Rule84, Revised Rules of Court). With this in mind, it is without an iota ofdoubt that the possession by Nelia S. Silverio-Dee of the property inquestion has absolutely no legal basis considering that her occupancy

cannot pay the debts and expenses of administration, not to mention thefact that it will also disturb the right of the new Administrator to possessand manage the property for the purpose of settling the estate‘s legitimateobligations.

In the belated Memorandum of Nelia Silverio-Dee, she enclosed astatement of the expenses she incurred pertaining to the houserenovation covering the period from May 26, 2004 to February 28, 2005 inthe total amount of Php12,434,749.55, which supports this Court‘s

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conclusion that she is already the final distributee of the property. Repairsof such magnitude require notice, hearing of the parties and approval ofthe Court under the Rules. Without following this process, the acts ofNelia Silverio-Dee are absolutely without legal sanction.

To our mind, the court a quo’s ruling clearly constitutes a final

determination of the rights of the petitioner as the appealing party. Assuch, the Omnibus Order, dated May 31, 2002 (the predecessor of the Orderdated December 12, 2002) is a final order; hence, the same may beappealed, for the said matter is clearly declared by the rules as appealableand the proscription does not apply.[19] (Emphasis supplied.)

An interlocutory order, as opposed to a final order, was defined in Tan v. Republic :[20]

A final order is one that disposes of the subject matter in its entirety orterminates a particular proceeding or action, leaving nothing else to be done butto enforce by execution what has been determined by the court, while aninterlocutory order is one which does not dispose of the case completely

but leaves something to be decided upon. (Emphasis supplied.)

Additionally, it is only after a judgment has been rendered in the case that the ground forthe appeal of the interlocutory order may be included in the appeal of the judgment itself. Theinterlocutory order generally cannot be appealed separately from the judgment. It is only whensuch interlocutory order was rendered without or in excess of jurisdiction or with grave abuse ofdiscretion that certiorari under Rule 65 may be resorted to.[21]

In the instant case, Nelia Silverio-Dee appealed the May 31, 2005 Order of the RTC onthe ground that it ordered her to vacate the premises of the property located at No. 3 IntsiaRoad, Forbes Park, Makati City. On that aspect the order is not a final determination of the caseor of the issue of distribution of the shares of the heirs in the estate or their rights therein. It must

be borne in mind that until the estate is partitioned, each heir only has an inchoate right to theproperties of the estate, such that no heir may lay claim on a particular property. In Alejandrinov. Court of Appeals, we succinctly ruled:

Art. 1078 of the Civil Code provides that where there are two or moreheirs, the whole estate of the decedent is, before partition, owned in common bysuch heirs, subject to the payment of the debts of the deceased. Under a co-ownership, the ownership of an undivided thing or right belongs to differentpersons. Each co-owner of property which is held pro indiviso exercises his rightsover the whole property and may use and enjoy the same with no other limitationthan that he shall not injure the interests of his co-owners. The underlyingrationale is that until a division is made, the respective share of each

cannot be determined and every co-owner exercises, together with his co-participants, joint ownership over the pro indiviso property, in addition tohis use and enjoyment of the same.

Although the right of an heir over the property of the decedent is inchoateas long as the estate has not been fully settled and partitioned, the law allows aco-owner to exercise rights of ownership over such inchoate right. Thus, the CivilCode provides:













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Art. 493. Each co-owner shall have the full ownership of his part

and of the fruits and benefits pertaining thereto, and he may thereforealienate, assign or mortgage it, and even substitute another person in itsenjoyment, except when personal rights are involved. But the effect of thealienation or the mortgage, with respect to the co-owners, shall be limited

to the portion which may be allotted to him in the division upon thetermination of the co-ownership.[22] (Emphasis supplied.)

Additionally, the above provision must be viewed in the context that the subject propertyis part of an estate and subject to intestate proceedings before the courts. It is, thus, relevant tonote that in Rule 84, Sec. 2 of the Rules of Court, the administrator may only deliver propertiesof the estate to the heirs upon order of the Court. Similarly, under Rule 90, Sec. 1 of the Rulesof Court, the properties of the estate shall only be distributed after the payment of the debts,funeral charges, and other expenses against the estate, except when authorized by the Court.

Verily, once an action for the settlement of an estate is filed with the court, the propertiesincluded therein are under the control of the intestate court. And not even the administrator may

take possession of any property that is part of the estate without the prior authority of the Court.

In the instant case, the purported authority of Nelia Silverio-Dee, which she allegedlysecured from Ricardo Silverio, Sr., was never approved by the probate court. She, therefore,never had any real interest in the specific property located at No. 3 IntsiaRoad, Forbes Park, Makati City. As such, the May 31, 2005 Order of the RTC must beconsidered as interlocutory and, therefore, not subject to an appeal.

Thus, private respondent employed the wrong mode of appeal by filing a Notice of Appeal with the RTC. Hence, for employing the improper mode of appeal, the case should havebeen dismissed.[23]

The implication of such improper appeal is that the notice of appeal did not toll thereglementary period for the filing of a petition for certiorari under Rule 65, the proper remedy inthe instant case. This means that private respondent has now lost her remedy of appeal fromthe May 31, 2005 Order of the RTC.

Therefore, there is no longer any need to consider the other issues raised in the petition.

WHEREFORE, the May 4, 2007 Resolution and July 6, 2007 Decision of the CA in CA-G.R. SP No. 98764 are REVERSED and SET ASIDE. Thus, the Decision dated April 2, 2007 ofthe RTC denying due course to the appeal of Nelia Silverio-Dee; the Writ of Execution dated

April 17, 2007; and the Notice to Vacate dated April 19, 2007 are hereby REINSTATED.

No costs.SO ORDERED.









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Manila

EN BANC

G.R. No. L-10010 October 31, 1957

Intestate Estate of Antonio Zuzuarregui. PILAR I. DE ZUZUARREGUI administratrix, BEATRIZZ. DE REYES, ET AL., appellees,vs.ENRIQUE ZUZUARREGUI ET AL., appellants.

Bausa and Ampil and Mariano Z. Sunga for appellants.Engracio F. Clemena for appellees.

BAUTISTA ANGELO, J .:

On March 3, 1953, a petition was filed in the Court of First Instance of Quezon City by PilarIbañez de Zuzuarregui for the administration and settlement of the estate of Antonio deZuzuarregui who died intestate on February 22, 1953. In said petition it was prayed that lettersof administration be issued in favor of Antonio de Zuzuarregui, Jr., but due to the opposition ofBeatriz de Zuzuarregui, the court appointed Pilar Ibañez, the widow, as regular administratrix.

On August 25, 1954, Enrique de Zuzuarregui, brother of the deceased, Maria Theresa SanMateo, Mercedes San Mateo and Jose San Mateo, half sisters and half brother, respectively, ofthe deceased, filed their opposition impugning the declaration of Beatriz, Antonio, Jr., Enriqueand Jose, all surnamed De Zuzuarregui, as heirs contending that they are not related to thedeceased either by affinity or by consanguinity. The latter filed their reply and a motion to

dismiss the opposition. This motion was denied for lack of merit. Forthwith, an amended answerto the opposition was filed by the alleged heirs, to which the oppositors filed a reply. After theoppositors had made of record their opposition to the prosecution of any evidence tending toshow that the alleged heirs were related by affinity or consanguinity to the deceased, the casewas tried on the merits during which the parties presented their evidence. On August 22, 1955,the court rendered decision declaring Beatriz, Antonio, Jr., Enrique and Jose, all surnamed DeZuzuarregui, as the illegitimate (spurious) children of the deceased and heirs of his estate inconjunction with the widow Pilar Ibañez to the exclusion of the collateral relatives. In due time,the oppositors took the present appeal.

Antonio de Zuzuarregui died without a will in Quezon City, Philippines, on February 22, 1953.On April 12, 1917, he contracted marriage with Pilar Ibañez who did not bear him any issue. He

is survived by his widow and the herein claimants Beatriz, Antonio, Jr., Enrique and Jose, whoclaim to be his illegitimate (spurious) children.

The evidence shows that Beatriz is the illegitimate (spurious) child of the deceased had with awoman who was then his tenant; that when she was born the widow took her from the custodyof her mother and since then she lived continuously in the family residence until she reachedthe age of the majority when she got married and lived with her husband; that since herchildhood, Beatriz was considered as a member of the family, was given the family name, wassupported and sent to school at the expense of the deceased. In the income tax returns

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submitted by the deceased. In the income tax returns submitted by the deceased for the years1938, 1947 and 1948, he declared under oath that Beatriz was one of his children (Exhibits H,H-1, and I).

The evidence further shows that claimants Antonio Jr., Enrique and Jose, all surnamed DeZuzuarregui, were the children of Pacita Javier had with the deceased. Pacita Javier is a cousin

of the widow Pilar Ibañez. When she became orphan, the widow invited her and her mother tolive them in the conjugal residence sometime in 1930. While living with them she gave birth to ababy boy on August 17, 1931 in a maternity hospital who was given by the deceased the nameof Antonio, Jr., and the family name of De Zuzuarregui. This boy was reared and brought up asa member of the family by the spouses. He was supported and educated by the deceased. OnMay 5, 1948, Pacita also gave birth to a twin had with the deceased, who arranged for theirbaptism and gave them the names of Jose and Enrique and the family name of De Zuzuarregui.These twins also lived the spouses in the conjugal dwelling and were always considered asmembers of the family. In the baptismal certificate of Antonio de Zuzuarregui, Jr., the deceaseddeclared under his signature that he was his father (Exhibit A). The same admission was madeby the deceased into two public documents executed by him before a notary public where hestated under his signature that Antonio, Jr., was his son (Exhibits D and E). And in the income

tax returns the deceased submitted for the years 1937, 1938, 1946, 1947 and 1948 he likewisestated under oath that Antonio, Jr. was his son. With regard to Jose and Enrique, the deceasedalso stated under his signature in their certificates of birth that he was their father (Exhibits Band C). Likewise, in the income tax returns the deceased submitted for 1949, 1950, 1951 and1952, he stated under oath that he was the father of said Jose and Enrique.

The question to be determined is whether the claimants can be considered as heirs of theestate upon the claim that they are the legitimate (spurious) children of the deceased.

Previous to the approval of the new Civil Code, illegitimate children who did not have the statusof natural, like spurious, were entitled to support only. They were not entitled to succeed ascompulsory heirs as were the acknowledged natural children. Under the present law however,they are not only given support but are, entitled to a certain share of the inheritance, the lawaccording to them the same liberal attitude accorded to natural children. In introducing thisinnovation, the Code Commission gives this justification. "The transgressions of socialconventions committed by the parents should not be the illegitimate children. The law should notbe too severe upon these illegitimate children, be they natural or otherwise, because they doneed the special protection of the State. They are born with a social handicap and the lawshould help them to surmount the disadvantages facing them through the misdeeds of theirparent." (Report of the Code Commission on the Proposed Civil Code of the Philippines, p. 89.)

Thus, article 287 of the new Civil Code provides "Illegitimate children other than natural inaccordance with article 269 and other than natural children by legal fiction are entitled to supportand such successional rights as are granted in this Code." And in article 887 these illegitimatechildren are considered as compulsory heirs, although they come fifth in the order thereinmentioned.

It appearing from the overwhelming evidence submitted by the claimants which was not in anyway contradicted by the oppositors that from their birth they had enjoyed the status ofillegitimate (spurious) children of the deceased, it is evident that the lower court did not err indeclaring them as heirs entitled to inherit from the deceased under the law.

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Appellants, however, claim that before these illegitimate children may inherit under the presentlaw it is yet necessary that they establish that they were recognized by their putative father, orthat they had brought an action for recognition has not been established and their action toestablish it has already prescribed, it is contended that they cannot now claim any successionalright under the law. This claim is disputed by appellees who contended that, to establish theirright to inherit, their recognition is not necessary, it being sufficient that their filiation be proved.

We find merit in this contention of appellees. There is nothing in the new law from which we mayinfer that in order that an illegitimate child may enjoy his successional right he must first bring anaction for recognition during the lifetime of the putative father as required by article 285 withregard to natural children. Neither is there any provision which requires that he be recognizedas such before he can be accorded such successional right. All what the law providesconcerning recognition refers to natural children (Chapter 4 Title VIII, new Civil Code.) On theother hand, article 887, when speaking of illegitimate children as compulsory heirs, containsonly the following condition: "their filiation must be duly proved." It does not say that they mustfirst be recognized by their putative parents. The reason perhaps behind this liberal treatment isthat, because they are spurious or offsprings of illicit relations, it would be obnoxious to obligethem to bring an action for recognition during the lifetime of their putative parents, let alone the

embarrassment and scandal that such action would bring to all parties concerned.

That such interpretation is correct can be inferred from the following comment of the CodeCommission on the matter: "in the proposed Code, illegitimate children other than natural maysucceed as compulsory heirs provided that their filiation is duly proved " (Report of the CodeCommission on the Proposed Civil Code of the Philippines, p. 113). (Emphasis supplied.) AndMr. Arturo M. Tolentino, a former member of the Code Commissioner makes this comment onthe same point: "This article merely allows investigation of paternity or maternity of theillegitimate child, but does not require that these should be a recognition before such child canclaim his rights. Apparently, this places the illegitimate child in a better position than a naturalchild. In reality, however, such difference can hardly be said to exist, because the natural childcan always bring a complex action in which he asks both for recognition and for his rights, either

to support or to inheritance" (Tolentino, Civil Code of the Philippines, Vol. I, p. 567). (Emphasissupplied.).

But, even if we uphold the theory that recognition still necessary to accord to appellate the rightto inherit, we may say that the evidence on record more than sufficiently establishes thatappellees had been recognized by the deceased as his illegitimate children. As we have alreadystated elsewhere, the deceased has in more than one occasion acknowledged under oathdeclared under his signature in public or official documents that appellees are his children. Thisevidence is sufficient to entitle them to the successional rights granted by law.

Wherefore, the decision appealed from is affirmed, with costs against appellants.

Paras, C. J., Bengzon, Padilla, Endencia, and Felix, JJ., concur.Labrador, J., concurs in the result.

REYES, A., J., concurring:

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I concur in so far as the majority opinion holds that those of the appellees who claim to bespurious children of the deceased Antonio de Zuzuarregui should be adjudged entitled to thesuccessional rights given to illegitimate children of that class by Article 287 of the New CivilCode, it appearing that their filiation is acknowledged in the authentic writing by their presumedfather, But I must reserve my vote on the broader question of whether spurious children not soacknowledged may, after the death of their alleged parents, bring an action for declaration of

paternity under article 289. Resolution of that question is not necessary to the adjudication ofthe present case, and anyway the members of the Court are divided on that point.

CONCEPCION, J., concurring in part and dissenting in part:

I share the opinion of the majority and that of Mr. Justice Reyes (J.B.L.) to the effect thatappellees Antonio Jr., Jose, Enrique and Beatriz, all surnamed Zuzuarregui, are entitled to thesuccessional rights granted by the Civil Code of the Philippines to illegitimate children who arenot natural, it appearing that their father Antonio Zuzuarregui had, during his lifetime, voluntarilyacknowledged them, in public instruments, as his children.

However, I do not deem it advisable to pass, in the case at bar, upon the question whetherspurious children, not so acknowledged voluntarily, may bring all action for declaration orinvestigation of paternity, after the death of their parents much less to decide such question inthe affirmative.

To begin with, it is not necessary for Us to do so, in view of said voluntary acknowledgmentmade in public instruments. Secondly, the issue is transcendental in character and far reachingin its consequences it affects the philosophy of our law on Persons and Family Relations and isfraught with possibilities of the gravest nature. Thirdly, the reasons given in the concurring anddissenting opinion of Mr. Justice Reyes (J. B. L.), in support of the negative view, are so strongthat the Court should, to my mind, give itself more time to deliberate on said issue, consider itfrom a long range view point and get the right perspective thereof, as well as wait for a morepropitious occasion to decide it.

Personally, I am not prepared, as yet, to vote thereon in the affirmative.

MONTEMAYOR, J., concurring:

I concur in the concurring and dissenting opinion of Mr. Justice Concepcion.

REYES, J.B.L., concurring in part and dissenting in part:

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I agree that since the paternity of Antonio Zuzuarregui has been voluntarily admitted by him inpublic documents executed his lifetime, such as his income tax return the appellees herein,

Antonio, Jr., Jose, Enrique and Beatriz Zuzuarregui, albeit illegitimate children not natural ofsaid deceased, have become entitled to the successional rights granted them as such by theCivil Code (Article 278). While the Code is silent as to the forms of voluntary acknowledgmentby a parent of the filiation of his spurious children (illegitimates not natural) there is no good

reason to doubt that the forms of voluntary acknowledgment that suffice for illegitimate naturalchildren under Article 278 of the new Civil Code (i.e., record of birth, will or testament, statementa court of record or authentic writing) should also suffice for children that are illegitimates notnatural, the rights conferred upon the latter being inferior to those of natural children. An actionto establish paternity is totally superflous where the parent spontaneously and publicly admitsthe illegitimate relationship.

But I can not subscribe to the ruling that spurious children who are already of age, but have notbeen voluntarily acknowledged as such, may bring an action for declaration or investigation oftheir paternity even after the death of their progenitors. Such a holding seems to me subversiveof the principles and plan of the Civil Code on the matter.

Like its predecessor, the Spanish Code of 1889, the new Civil Code of the Philippinesestablishes a gradation in the rights of children according to the circumstances that surroundtheir conception. The greatest sum of rights corresponds to the legitimates, i,e., those,conceived in valid matrimony; while of the illegitimates, those that are natural (actually or byfiction) enjoy greater rights than the illigitimate not natural (adulterous or incestuous).

Thus, the successional rights of the three classes of children vary in the proportions 10:5:4,since the legitime of the acknowledged natural children is merely one half of that of thelegitimates; while the legitime of an illegitimate child not natural is four fifths (4/5ths) of that of anacknowledged natural child (Article 895), i,e., it is only 2/5ths as large as the legitime child.These proportions are preserved even in intestate succession (Article 983).

And this graduation is followed other rights as well. The right of action to claim legitimacy lastsduring the whole lifetime of the child and can be brought against the presumed parents, if alive,and against their heirs if the parents are no longer living (Article 268); while the action to compelacknowledgment of an illegitimate natural child may be brought only during the lifetime of thepresumed parents and therefore not against the parent's heirs) except two cases: (1) where theparent has died during the minority of the child, or (2) when a hitherto unknown document ofrecognition is discovered after the parent's death (Article 285). Furthermore, while an action toclaim legitimacy may exceptionally pass to the heirs of the child claimant (as when he diesinsane or still a minor) (Article 268), the right to compel recognition never passes to the heirs ofthe natural child (Conde vs. Abaya, 13 Phil. 249).

On the other hand, as between the two classes of illegitimates, only those that are natural canbe elevated to the category of legitimates by the process of legitimation; while those that are notnatural are denied this improvement of their condition (Article 269).

Let us now examine the question of the time for the exercise by legitimates not natural of theirright to assert their filiation bearing in mind this progressive diminution of the rights of illegitimatechildren. The new Code only provides in this regard:

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natural children. Likewise, what the Code denies to illegitimate natural children, it denies tothose illegitimates not natural. Wherefore, the silence of the Code on the period during whichthe illegitimate children not natural may bring an action to investigate (and prove) their paternitycan not be said to authorize a longer period of action than in the case of illegitimate naturalchildren, since the Civil Code favors the latter over the former class.

We should not overlook that a natural child's conception may take place under circumstancesthat render it practically indistinguishable from that of a legitimate child, except for the absenceof a marriage ceremony between the parents. In fact a natural child may be "natus et conceptusex unica concubina, in domo retenta et utroque soluta, ex quibus indubitanter videatur pro-creatus", as formulated in the Authenticum cited by Pacheco in his commentary to the Law XI ofToro. To hold that such a child's action to claim his due is limited by the life span of the parent,while the claims of a child conceived in adultery or incest are not so limited is to step from thebounds of law into the realm of sentimental romance.

A second factor to be borne in mind is that illegitimate children (natural or not natural) are theresult of extra-matrimonial activities usually kept hidden from the legitimate family. Hence it isbut just that the investigation of the parental relation should take place while the alleged parent

is alive; for only the parent is in a position to reveal the true facts surrounding the claimant'sconception. To allow the action to be brought against the heirs of the parent is to open the doorto false claims and blackmail suits.

There is nothing in the Report of the Code Commission to indicate that the new Civil Codeintended to make actions for investigation of the paternity (or maternity) of illegitimate childrennot natural survive the presumed parent. As we have shown, precisely the same reason existsto grant the parents an opportunity to defend the action in person when the claimant is a naturalchild as when he is not natural.

The new Civil Code allows an unlimited investigation of paternity, predicated on "any evidenceor proof that the defendant is his (the claimant's) father" Article 283). This very facility demandsthat the action should not be directed against the parent's heirs, who are ordinarily kept in thedark as to the extra-matrimonial activities of their predecessor. It should be recalled that,historically, the refusal of the Code Napoleon and the Spanish Civil Code of 1889 to allow a freeinvestigation of illegitimate paternity was not motivated by a desire to cover up the debauchariesof the ruling aristocracy, as is commonly believed, but to avoid its being used as a weapon forextortion. Under the French monarchy, that regime of privilege, illegitimate paternity could beinvestigated practically without restriction. It was the French Revolution, the revolution of theguillotine and the Rights of Man, the destroyer of feudal and aristocratic privileges, thatprohibited inquires on illegitimate paternity by the Law of the 12 Brumaire, An II, at the sametime that it enlarged the successional rights of bastards; and the then restrictive spirit of thatLaw was carried into the subsequent Codes of France and Spain. The underlying reasons wereexpressed in the deliberations on the Code Napoleon as preserved in the collections (Recueilsof Fenet and Locre (2 Planiol-Ripert, Derecho Civil Frances, p. 567; I De Page, Droit, CivilBelge, p. 1124-1125). Scaevola (Codigo Civil, Vol. III, 2d ed.) pp. 400-401) quotes from BigotPreameneu, Lahary and Duveyrier, their denunciations against the system of unlimitedinvestigations of paternity during the ancien regime:

Desde largo tiempo, en el antiguo regimen, un grito general se elevo contra dichasinvestigaciones. Estas exponian a los Tribunales a los pleitos mas escandalosos, a los

juicios mas arbitrarios y a la jurisprudencia mas variable. El hombre de conducta mas

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intachable, aquel cuyos cabellos habian encanecido en el ejercicio de todos las virtudes,no estaba al abrigo del ataque de una mujer impudica o de hijos que le eran extranos.Este genero de calumnia dejaba siempre consecuencias dolorosas. Las investigacionesde la paternidad se consideraban como una plaga de la sociedad.

Nada mas frecuente en otros tiempos que estas audaces reclamaciones de estado que

asediaban por todas partes a los Tribunales. Cuintas mujeres impudicas osabanpublicar su debilidad bajo el pretexto de recobrar su honor! Cuantos intrigantes, nacidosen la condicion mas abyecta, tenian el inconcebible atrevimiento de istentar introducirseen las familias mas distirguidas y, sobre todo mas opulentas!

. . ., Al lado de una desgraciada que reclamaba auxilios en ombre y a expensas delhonor, mil prostitutas especulaban con la publicidad de su vida licenciosa y subastabanla paternidad de que disponian. Se buscaba un padre al hijo que podia ser reclamadopor veinte, y se elegia siempre que era posible al mas virtuoso, al mas honrado y rico,para fijar el precio de susilencio por la importancia del escandalo.

These ideas are echoed in the decision of this Supreme Court in Serrano vs. Aragon, 22 Phil. p.18:

Illegitimate children should not be admitted into the home of a legitimate family unlessthe proof is strong and convincing, showing that every requirement of the law has beenstrictly complied with. The writers of the code no doubt had in mind that there wouldarise instances where certain illegitimate children, on account of the strong temptationdue to the large estates left by deceased persons, would attempt to establish that theywere natural children of such persons in order to get part of the property; andfurthermore, they considered that it is nothing but just and right that alleged parentsshould have a personal opportunity to be heard. It was for these reasons and othersequally as well founded that article 137 was enacted.

Certainly the dangers pointed out apply to all illegitimate paternity actions, whether the plaintiffclaims to be a natural child or one not natural. In truth, a charge of adulterous or incestuousrelations involves more danger of chantage, because the greater threatened scandal heightensthe natural desire of the family of the alleged parent to protect his memory.

It is argued in the appealed decision that the time limitation established by natural children tocompel their acknowledgment or recognition, can not apply to spurious children for the reasonthat the latter can not be, or do not need to be, acknowledged or recognized. This argumentstops at the terminology of the Code and does not look at the facts that lie behind the words. Itis thinking at a purely verbalistic level.

What, in fact, is the voluntary acknowledgment or recognition of a natural child? Nothing but anadmission of the fact of paternity or maternity by the presumed parent, expressed in the formprescribed by the Code. Its essence lies in the avowal of the parent of that the child is his; theformality is added to make the admission incontestable, in view of its consequences. If in certaincases (Article 281) the law demands the admission of the paternity or maternity approved by theCourt, it does so merely to assure that the effects of the acknowledgment will not be detrimentalto the child. But there is nothing in the nature of a voluntary acknowledgment or recognition thatwould make its application to illegitimate children not natural contrary to law, morals or publicpolicy. If the Code fails to mention such recognition in connection with these children it is not

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Jose later filed before the appellate court a ―Motion to Withdraw Petition‖ which his co-

heirs-oppositors-herein petitioners opposed on the ground that,inter alia, a grant thereof would―end‖ the administration proceedings. The appellate court, by Resolution of January 18,2008,[8] granted the withdrawal on the ground that it would ―not prejudice the rights of theoppositors.‖

Petitioners‘ motion for reconsideration of the appellate court‘s grant of Jose‘s Motion toWithdraw Petition was, by Resolution of November 6, 2008,[9]denied in this wise:

x x x x

In the instant case, the Probate Court found that the parties of the caseinterposed no objection to the non-inclusion of Lot No. 829-B-4-B in the inventoryof the estate of Casimiro V. Madarang, in effect, they have consented thereto. x xx

x x x x

Moreover , [herein petitioners] in their appeal brief, ha[ve]extensively argued that . . . Vicente Madarang [to whom the questioned lotwas donated] and his family have been in continuous, actual and physicalpossession of the donated lot for over twenty (20) years, even before theexecution of the so called donation inter vivos in 1992. . . . Vicente Madarang hashis residential house thereon and that his ownership over the donated lot hasbeen fully recognized by the entire Madarang Clan, including all his brothers andsisters, except the much belated objection by the appellant (Jose), allegedlyresorted to as an act of harassment. [10] (emphasis and underscoring supplied),

thus affirming the RTC order of exclusion of the questioned lot.Hence, the present petition for review filed by the oppositors-herein

petitioners. Casimiro, Jr. having died during the pendency of the case, he was substituted byhis wife petitioner Estrelita and co-petitioners children Consuelo, Casimiro IV, and JaneMargaret.

Petitioners contend that since the only issue for consideration by the appellate court wasthe merit of Jose‘s ―Motion to Withdraw Petition,‖ it exceeded its jurisdiction when it passedupon the merits of Jose‘s appeal from the RTC order excluding Lot 829-B-4-B from theInventory.

Petitioners‘ contention does not lie.

In their Motion for Reconsideration of the appellate court‘s grant of Jose‘s ―Motion toWithdraw Petition,‖ petitioners, oddly denying the existence of a ―petition,‖ raised the issue ofthe propriety of the RTC Order excluding Lot 829-B-4-B from the Inventory. Their prayer in theirMotion clearly states so:

http://sc.judiciary.gov.ph/jurisprudence/2010/february2010/185226.htm#_ftn8











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WHEREFORE, premises considered, Oppositors-Appellees [petitioners]respectfully PRAY for this Honorable Court to RECONSIDER its questionedResolution and rendering [sic ], forthwith, a decision resolving the merits of thePartial Appeal of petitioner-appellant Jose Madarang.[11] (capitalization in theoriginal; emphasis supplied)

The appellate court did not thus err in passing on the said issue.

More specifically, petitioners question the appellate court‘s finding that as the parties―interposed no objection to the non-inclusion of Lot No. 829-B-4-B in the inventory of the estateof Casimiro V. Madarang, in effect, they have consented thereto.‖[12]

A review of the voluminous records of the case shows that, indeed, there was no accordamong the parties respecting the exclusion of Lot 829-B-4-B.

While a probate court, being of special and limited jurisdiction, cannot act on questions oftitle and ownership, it can, for purposes of inclusion or exclusion in the inventory of properties of

a decedent, make a provisional determination of ownership, without prejudice to a finaldetermination through a separate action in a court of general jurisdiction.

The facts obtaining in the present case, however, do not call for the probate court to makea provisional determination of ownership of Lot 829-B-4-B. It bears stress that the question isone of collation or advancement by the decedent to an heir over which the question of title andownership can be passed upon by a probate court.[13]

As earlier reflected, Vicente‘s claim of ownership over Lot 829-B-4-B rests upon a deed ofdonation by his father (decedent) and his mother.

Article 1061 of the Civil Code expressly provides:

Article 1061. Every compulsory heir, who succeeds with other compulsory heirs,must bring into the mass of the estate any property or right which he mayhave received from the decedent, during the lifetime of the latter, by way ofdonation, or any other gratuitous title, in order that it may be computed in thedetermination of the legitime of each heir and in the account ofpartition. (underscoring supplied)

in relation to which, Section 2, Rule 90 of the Rules of Court provides:

Sec. 2. Questions as to advancement to be determined . – Questions asto advancement made, or alleged to have been made, by the deceased to anyheir may be heard and determined by the court having jurisdiction of the estateproceedings; and the final order of the court thereon shall be binding on theperson raising the questions and on the heir. (emphasis and underscoringsupplied)













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By express provision of law then, Lot 829-B-4-B, which was alleged to have been donated

by the decedent and his wife to their son-respondent Vicente, should not be excluded from theinventory of the properties of the decedent.

WHEREFORE, the petition is GRANTED. The assailed November 6, 2008 Resolution of

the Court of Appeals is SET ASIDE. Petitioner Corazon M. Gregorio and her co-administratrixDolores Madarang are DIRECTED to include Lot 829-B-4-B in the Inventory of the properties ofthe intestate estate of Casimiro V. Madarang, Sr.

Let the records of the case be remanded to the court of origin,the Regional Trial Court of Cebu City, Branch 57, which is DIRECTED to proceed with thedisposition of the case with dispatch.

SO ORDERED.

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Manila

THIRD DIVISION

G.R. No. 45425 March 27, 1992

CELSA L. VDA. DE KILAYKO, ENCARNACION L. VDA. DE PANLILIO and REMEDIOS L.VDA. DE GUINTO,petitioners,vs.HON. JUDGE ERNESTO TENGCO of the Court of First Instance of Negros Occidental,Bacolod City, Branch IV and RODOLFO LIZARES and AMELO LIZARES, as JudicialAdministrators of the Estate of the late EUSTAQUIA LIZARES, respondents.

G.R. No. 45965 March 27, 1992

ROLDOFO LIZARES and AMELO LIZARES, as Judicial Administrators of the ESTATE OFEUSTAQUIA LIZARES, petitioners,vs.HON. JUDGE ERNESTO TENGCO, CELSA L. VDA. DE KILAYKO, ENCARNACION L. VDA.DE PANLILIO and REMEDIOS VDA. DE GUINTO, respondents.

ROMERO, J.:

These consolidated cases seek to annul the orders1

dated September 20, 1976, January 7,1977 and January 31, 1977 of the then Court of First Instance of Negros Occidental, Branch, IVrespectively, cancelling the notice of lis pendens filed by Celsa L. Vda. de Kilayko, et al. with theRegister of Deeds of Negros Occidental, denying the motion for reconsideration of the orderdated September 20, 1976 filed by Celsa L. Vda. de Kilayko, et al., and holding in abeyance theresolution of defendants' motion to dismiss.

The undisputed facts of the case are as follows:

On November 20, 1962, the late Maria Lizares y Alunan executed a "Testamento" 2 whichcontains among its provisions, the following:

DECIMA — Asimismo, ordeno y dispongo que mi participacion consistente enuna tercera parte (1/3) de una catorce (1/14) avas partes proindivisas de la Hda.Minuluan, que he adquirido mediante permuta de mi hermano Dr. Antonio A.Lizares, se adjudique, como por el presente se adjudica, a mi sobrina EustaquiaLizares; ENTENDIENDOSE, sin embargo, que en el caso de que mi citadasobrina Eustaquia Lizares muera soltera o sin descendientes legitimos, mireferida participacion en la Hda. Minuluan se adjudicara a mi hermano Antonio A.Lizares que me sobrevivan.

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UNDECIMA — Tambien ordeno y dispongo que el resto de todas mispropiendades, incluyendo mis participaciones, derechos e intereses (nodispuestos mas arriba) an las Haciendas "Minuluan" (Lotes Nos. 439, 403, 1273,1274, 1278, 1279 y 1280 del Catastro de Talisay, Negros Occidental), y "Matab-ang" (Lotes Nos. 514, 550, 552, 553 y 1287-C del Catastrado de Talisay, NegrosOccidental), situadas en el Municipio de Talisay, Provincia de Negros Occidental,

I.F., el resto de mis acciones en la Central Talisay-Silay Milling Co., Inc. (unas2,860 acciones) y de la Financing Corporation of the Philippines (unas 53,636acciones), registradas a mi nombre y no heredadas de mi difunta madre Dña.Enrica A. Vda. de Lizares, mis acciones en la Central Bacolod-Murcia MillingCo., Inc., Negros Navigation Co. y otras Compañas Mineras, y todos los demasbienes no mencionados en este testamento y que me pertenezcan en la fechade mi muerte, se adjudiquen, como por el presente adjudico, a mi sobrina Srta.Eusaquia Lizares, hija de mi difunto hermano Don Simplicio Lizares cuidadosque mi citada sobrina me ha prestado y signe prestandome hasta ahora.Ordeno, sin embargo, a mi referida sobrina, Srta. Eustaquia Lizares, que ella sehaga cargo de pagar todas las obligaciones que tengo y que gravan sobre laspropriedades adjudicadas a la misma. Asimismo ordeno a mi citada sobrina que

ella mande celebrar una Misa Gregoriana cada año en sufragio de mi alma, ymisas ordinarias en sufragio de las almas de mi difunto Padre y de mi difuntaMadre, el 6 de Marzo y 17 de Deciembre de cada año, respectivamente, ymande celebrar todos los años la fiesta de San Jose en Talisay como lo hagohasta ahora. En el caso de que mi citada sobrina, Srta. Eustaquia Lizares,falleciere sin dejar descendientes legitimos, ordeno y dispongo que mi

participacion consistente en una sexta parte (1/6) de la Hda. Matab-ang, con sucorrespondiente cuota de azucar y otros mejoras, se adjudique a mis hermanasy hermano antes mencionados y que me sobrevivan (Emphasis supplied)

On January 28, 1968, Maria Lizares y Alunan died without any issue leaving said "testamento"in the possession and custody of her niece, Eustquia Lizares. 3 On February 6, 1968, Eustaquia

filed a petition for the settlement of the testate estate of Maria Lizares y Alunan, before theCourt of First Instance of Negros Occidental, Branch IV, docketed as Special Proceedings No.8452. 4

The required publication of the notice of hearing of the petition having been made, in duecourse, the probate court issued an order declaring the will probated and appointing Eustaquiaas the executrix of the estate of Maria Lizares. 5

On July 10, 1968, Eustaquia filed a project of partition 6 which was granted by the probate courtin an order dated January 8, 1971. Simultaneously, said court declared the heirs, devisees,legatees and usufructuaries mentioned in the project of partition as the only heirs, devisees,legatees and usufructuaries of the estate; adjudicated to them the properties repectively

assigned to each and every one of them, and ordered the Register of Deeds of NegrosOccidental and Bacolod City to effect the corresponding transfer of the real properties to saidheirs as well as the transfer of shares, stocks, and dividends in different corporations,companies and partnerships in the name of Maria Lizares to the heirs and legatees, and theclosure of the testate proceedings of Maria Lizares. 7

Thereafter, Eustaquia filed an urgent motion to reopen the testate proceedings in order thatsome properties of Maria Lizares which had been omitted in the partition be adjudicated to

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her. 8 The Court granted the motion and correspondingly reopened the testate proceedings. Itadjudicated to Eustaquia certain shares of stocks, a revolving fund certificate, plantation creditsand sugar quota allocations, and real or personal properties of Maria Lizares which were notgiven by her to any other person in her last will and testament. 9

On November 28, 1972, the heirs of Maria Lizares, namely: Encarnacion L. Vda. de Panlilio,

Remedios L. Vda. de Guinto, Felicidad Paredes Llopez, Rosario Paredes Mendoza andEustaquia Lizares executed an agreement of partition and subdivision, thereby terminating theirco-ownership over Lots Nos. 550, 514, 553, 1287-C of plan SWO-7446, and 552, all of theCadastral Survey of Talisay covered by Transfer Certificates of Title Nos. T-65004, T-65005; T-65006, T-65007, and T-65008. 10

A year later or on November 23, 1973, Eustquia Lizares died single without anydescendant. 11 In due time, Rodolfo Lizares and Amelo Lizares were appointed jointadministrators of Eustquia's intestate estate.

On the strength of the testamentary provisions contained in paragraphs 10 and 11 of the will ofMaria Lizares, which were allegedly in the nature of a simple substitution, Celsa Vda. deKilayko, Encarnacion Vda. de Panlilio, and Remedios Vda. de Guinto (hereinafter collectivelyreferred to as Celsa L. Vda. de Kilayko, et al.) filed a motion in Special Proceedings No. 8452 toreopen once again the testate estate proceedings of Maria Lizares. They prayed among othersthat a substitute administrator be appointed; that the order dated January 8, 1971 bereconsidered and amended by declaring them as heirs to 1/3 of 1/14 of Hda. Minuluan and to1/6 of Hda. Matab-ang, both of which form an aggregate area of 33 hectares; that the Registerof Deeds of Negros Occidental, after such amendment, be ordered to register at the back oftheir respective certificates of title, the order of probate and a "declaration" that movants are theheirs of said properties, and correspondingly issue new certificates of title in their names. 12

Two (2) sets of intestate heirs of the deceased Eustaquia Lizares namely: Socorro L. Vda. deEscario, Rodolfo Lizares, Mario Lizares, Lucrecia Gustilo, and Aurora Lizares Wagner opposedthe aforesaid motion. They alleged that the court had no more jurisdiction to reopen the testateestate proceedings of Maria Lizares as the order of closure had long become final and that thetestamentary provisions sought to be enforced are null and void. 13

On April 6, 1974, the Court issued an order denying the motion to reopen the testateproceedings and holding that inasmuch as the settlement of an estate is a proceeding in rem,the judgment therein is binding against the whole world. It observed that inspite of the fact thatthe movants knew that the court had jurisdiction over them, they did not take part in theproceedings nor did they appeal the order of January 8, 1971. Thus, the court concluded, evenif the said order was erroneous, and since the error was not jurisdictional, the same could havebeen corrected only by a regular appeal. The period for filing a motion for reconsiderationhaving expired, the court opined that the movants could have sought relief from judgment underRule 38 of the Rules of Court, but unfortunately for the movants, the period for filing suchremedy had also elapsed. 14

Celsa L. Vda. de Kilayko, et al. then filed a motion for reconsideration of said order. It wasdenied on June 17, 1974. 15 Hence, on October 14, 1974, the said movants filed a complaint forrecovery of ownership and possession of real property against the joining administrators of theestate of Eustaquia Lizares, Rodolfo and Amelo Lizares. It was docketed as Civil Case No.11639 with the then Court of First Instance of Negros Occidental, Branch IV. 16 On the same

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date, they availed of their rights under Rule 14, Section 24 of Rules of Courtby filing a notice of lis pendens with the Register of Deeds of Negros Occidental. 17

As duly appointed judicial joint administrators of the estate of the late Eustaquia Lizares,Rodolfo Lizares and Amelo Lizares (the joint administrators for brevity), filed a motion to dismissalleging that the court had no jurisdiction over the subject matter or nature of the case; the

cause of action was barred by prior judgment, and the complaint stated no cause ofaction. 18 This motion was opposed by the plaintiffs.

On January 23, 1975, the joint administrators filed a motion for the cancellation of the noticeof lis pendens on the contentions that there existed exceptional circumstances which justifiedthe cancellation of the notice of lis pendens and that no prejudice would be caused to theplaintiffs. 19 The latter opposed said motion. The defendants having filed a reply thereto, theplaintiffs filed a rejoinder reiterating their arguments in their opposition to the motion forcancellation of notice of lis pendens. 20

On September 20, 1976, respondent judge issued an order granting the motion for cancellationof notice of lis pendens. 21 The court simultaneously held in abeyance the resolution of themotion to dismiss the complaint.

The joint administrators filed the answer to the complaint in Civil Case No. 11639. 22 Thereafter,they filed a motion for preliminary hearing on affirmative defenses. 23 Celsa L. Vda. de Kilayko,et al. vigorously opposed said motion. 24

On November 3, 1976, Celsa L. Vda. de Kilayko, et al. filed a motion praying for thereconsideration of the order dated September 20, 1976. 25 The joint administrators having filedan opposition thereto, 26 on January 7, 1977 the lower court denied the aforesaid motion forreconsideration. 27 It held that while a notice of lis pendens would serve as notice to strangersthat a particular property was under litigation, its annotation upon the certificates of title to theproperties involved was not necessary because such properties, being in custodia legis, couldnot just be alienated without the approval of the court. Moreover, the court added, a notice of lis

pendens would prejudice any effort of the estate to secure crop loans which were necessary forthe viable cultivation and production of sugar to which the properties were planted.

Upon receipt of a copy of said order, Celsa L. Vda. de Kilayko, et al. filed in this Court a motionfor extension of time to file a petition for review on certiorari . Docketed as G.R No. L-45425, thepetition contends that the grounds of lis pendens, namely, that the properties are in custodialegis and the lending institutions would not grant crop loans to the estate, are not the legalgrounds provided for under Sec. 24, Rule 14 of the Rules of Court for the cancellation of anotice of lis pendens.

Meanwhile, on January 31, 1977, the lower court issued an order stating that since onSeptember 21, 1976 it had held in abeyance the resolution of the motion to dismiss, it was alsoproper to suspend the resolution of the affirmative defenses interposed by the defendants untilafter trial on the merits of the case. Accordingly, the court set the date of pre-trial for March 24,1977. 28

On April 13, 1977, the joint administrators filed before this Court a petition for certiorari ,prohibition and/or mandamus with prayer for a writ of preliminary injunction. It was docketed asG.R. No. L-45965. Petitioners contend that the lower court had no jurisdiction over Civil Case

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No. 11639 as it involves the interpretation of the will of Maria Lizares, its implementation and/orthe adjudication of her properties. They assert that the matter had been settled in SpecialProceedings No. become final and unappealable long before the complaint in Civil Case No.8452 which had become final and unappealable long before the complaint in Civil Case No.11639 was filed, and therefore, the cause of action in the latter case was barred by the principleof res judicata. They aver that the claim of Celsa, Encarnacion and Remedios, sisters of Maria

Lizares, over the properties left by their niece Eustaquia and which the latter had inherited bywill from Maria Lizares, was groundless because paragraphs 10 and 11 of Maria's will on whichCelsa L. Vda. de Kilayko, et al. base their claim, conceived of a fideicommissary substitution ofheirs. Petitioners contend that said provisions of the will are not valid because under Article 863of the Civil code, they constitute an invalid fideicommissary substitution of heirs.

On April 26, 1977, this Court issued a temporary restraining order enjoining the lower court fromfurther proceeding with the trial of Civil Case No. 11639. 29 After both G.R. Nos. L-45425 and L-45965 had been given due course and submitted for decision, on January 20, 1986, the twocases were consolidated.

The petition in G.R. No. L-45965 is impressed with merit.

In testate succession, there can be no valid partition among the heirs until after the will hasbeen probated. 30 The law enjoins the probate of a will and the public requires it, becauseunless a will is probated and notice thereof given to the whole world, the right of a person todispose of his property by will may be rendered nugatory. 31 The authentication of a will decidesno other question than such as touch upon the capacity of the testator and the compliance withthose requirements or solemnities which the law prescribes for the validity of a will. 32

Pertinent to the issue interposed by the petitioners in G.R. No. L-45965 is Section 1, Rule 90 ofthe Rules of Court which reads:

Sec. 1. When order for distribution of residue made. — When the debts, funeralcharges, and expenses of administration, the allowance to the widow, andinheritance tax, if any, chargeable to the estate in accordance with law, havebeen paid, the court, on application of the executor or administrator, or of aperson interested in the estate, and after hearing upon notice, shall assign theresidue of the estate to the persons entitled to the same, naming them and theproportions or parts, to which each is entitled, and such persons may demandand recover their respective shares from the executor or administrator, or anyother person having the same in his possession. If there is a controversy beforethe court as to who are the lawful heirs of the deceased person or as to thedistributive shares to which each person is entitled under the law, the controversyshall be heard and decided as in ordinary cases.

No distribution shall be allowed until the payment of the obligations above-mentioned has been made or provided for, unless the distributees, or any ofthem give a bond, in a sum to be fixed by the court, conditioned for the paymentof said obligations within such time as the court directs.

Applying this rule, in the cases of De Jesus v. Daza, 33 and Torres v. Encarnacion, 34 the Courtsaid:

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. . . (T)he probate court, having the custody and control of the entire estate, is themost logical authority to effectuate this provision, within the estate proceeding,said proceeding being the most convenient one in which this power and functionof the court can be exercised and performed without the necessity of requiringthe parties to undergo the incovenience and litigate an entirely different action.

Some decisions of the Court pertinent to the issue that the probate court has the jurisdiction tosettle the claims of an heir and the consequent adjudication of the properties, are worthmentioning. In the cases of Arroyo v. Gerona,35 and Benedicto v. Javellana, 36 this Court said:

. . . any challenge to the validity of a will, any objection to the authenticationthereof, and everydemand or claim which any heir, legatee or party interested ina testate or intestate succession may make, must be acted upon and decidedwithin the same special proceedings, not in a separate action, and the same

judge having jurisdiction in the administration of the estate shall take cognizanceof the question raised, inasmuch as when the day comes he will be called uponto make distribution and adjudication of the property to the interested parties. . . .(Emphasis supplied)

The probate court, in the exercise of its jurisdiction to distribute the estate, has the power todetermine the proportion or parts to which each distributee is entitled . . .. 37 A project of partitionis merely a proposal for the distribution of the heredity estate which the court may accept orreject. It is the court that makes that distribution of the estate and determines the personsentitled thereto. 38

In the instant case, the records will show that in the settlement of the testate estate of MariaLizares, the executrix, Eustaquia Lizares submitted on January 8, 1971, a project of partition inwhich the parcels of land, subject matters of the complaint for reconveyance, were included asproperty of the estate and assigned exclusively to Eustaquia as a devisee of Maria Lizares. Inaccordance with said project of partition which was approved by the probate court, EncarnacionLizares Vda. de Panlilio, Remedios Lizares Vda. de Guinto, Felicidad Paredes Llopez, RosarioParedes Mendoza and Eustaquia Lizares executed an Agreement of Partition and Subdivisionon November 28, 1972, whereby they agreed to terminate their co-ownership over Lots Nos.550, 514, 553, 1287-C of SWO-7446 and 552 covered by Transfer Certificates of Title Nos. T-65004, T-65005, T-65006, T-65007 and T-65008. These facts taken altogether show that theLizares sisters recognized the decree of partition sanctioned by the probate court and in factreaped the fruits thereof.

Hence, they are now precluded from attacking the validity of the partition or any part of it in theguise of a complaint for reconveyance. A party cannot, in law and in good conscience beallowed to reap the fruits of a partition, agreement or judgment and repudiate what does not suithim. 39 Thus, where a piece of land has been included in a partition and there is no allegationthat the inclusion was affected through improper means or without petitioner's knowledge, the

partition barred any further litigation on said title and operated to bring the property under thecontrol and jurisdiction of the court for its proper disposition according to the tenor of thepartition. 40 The question of private respondents title over the lots in question has beenconcluded by the partition and became a closed matter.

The admission made by Celsa L. Vda. de Kilayko, et al. in their complaint, Civil Case No.11639, that Eustaquia had been in possession of the questioned lots since March 2, 1971 up to

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administrators that paragraphs 10 and 11 of Maria Lizares' last will and testament conceives ofa fideicommissary substitution under Article 863 of the Civil Code is also baseless as saidparagraphs do not impose upon Eustaquia a clear obligation to preserve the estate in favor ofCelsa L. Vda. de Kilayko, et al., neither may said paragraphs be considered as providing for avulgar or simple substitution.

It should be remembered that when a testator merely names an heir and provides that if suchheir should die a second heir also designated shall succeed, there is no fideicommissarysubstitution. The substitution should then be construed as a vulgar or simple substitution under

Art. 859 of the Civil Code but it shall be effective only if the first heir dies before thetestator. 47 In this case, the instituted heir, Eustaquia, survived the testatrix, Maria Lizares.Hence, there can be no substitution of heirs for, upon Maria Lizares' death, the propertiesinvolved unconditionally devolved upon Eustaquia. Under the circumstances, the sisters ofMaria Lizares could only inherit the estate of Eustaquia by operation of the law of intestacy.

With respect to the cancellation of the notice of lis pendens on the properties involved, there isno merit in the contention of Celsa L. Vda. de Kilayko, et al., that the lower court acted contraryto law and/or gravely abused its discretion in cancelling the notice of lis pendens. The

cancellation of such a precautionary notice, being a mere incident in an action, may be orderedby the court having jurisdiction over it at any given time. 48 Under Sec. 24, Rule 14 of the Rulesof Court, a notice of lis pendens may be cancelled "after proper showing that the notice is forthe purpose of molesting the adverse party, or that it is not necessary to protect the rights of theparty who caused it to be recorded." 49 In this case, the lower court ordered the cancellation ofsaid notice on the principal reason that the administrators of the properties involved are subjectto the supervision of the court and the said properties are under custodia legis. Therefore, suchnotice was not necessary to protect the rights of Celsa L. Vda. de Kilayko, et al. More so in thiscase where it turned out that their claim to the properties left by Eustaquia is without any legalbasis.

WHEREFORE, the petition for review on certiorari in L-45425 is hereby DENIED but the petitionfor certiorari and prohibition and/or mandamus in L-45965 is GRANTED. The temporaryrestraining order of April 26, 1977 which was issued by the Court in L-45965 is madePERMANENT. Costs against the petitioners in L-45425.

SO ORDERED.

Gutierrez, Jr., Bidin and Davide, Jr., JJ., concur.

Feliciano, J., is on leave.

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Manila

EN BANC

G.R. No. L-26695 January 31, 1972

JUANITA LOPEZ GUILAS, petitioner,vs.JUDGE OF THE COURT OF FIRST INSTANCE OF PAMPANGA AND ALEJANDROLOPEZ respondents .

Filemon Cajator for petitioner.

Eligio G. Lagman for respondent Alejandro Lopez.

MAKASIAR, J.: p

It appears from the records that Jacinta Limson de Lopez, of Guagua, Pampanga was marriedto Alejandro Lopez y Siongco. They had no children.

On April 28, 1936, Jacinta executed a will instituting her husband Alejandro as her sole heir andexecutor (pp. 20-21, rec.).

In a Resolution dated October 26, 1953 in Sp. Proc. No. 894 entitled "En el Asunto de la Adopcion de la Menor Juanita Lopez y Limson" (pp. 92-94, 103, rec.), herein petitioner JuanitaLopez, then single and now married to Federico Guilas, was declared legally adopted daughterand legal heir of the spouses Jacinta and Alejandro. After adopting legally herein petitionerJuanita Lopez, the testatrix Doña Jacinta did not execute another will or codicil so as to includeJuanita Lopez as one of her heirs.

In an order dated March 5, 1959 in Testate Proceedings No. 1426, the aforementioned will wasadmitted to probate and the surviving husband, Alejandro Lopez y Siongco, was appointedexecutor without bond by the Court of First Instance of Pampanga (Annexes "A" and "B", pp.18-23, rec.). Accordingly, Alejandro took his oath of office as executor (Annex "C", p. 24, rec.).

Nevertheless, in a project of partition dated March 19, 1960 executed by both Alejandro Lopezand Juanita Lopez Guilas, the right of Juanita Lopez to inherit from Jacinta was recognized andLots Nos. 3368 and 3441 (Jacinta's paraphernal property), described and embraced in OriginalCertificate of Title No. 13092, both situated in Bacolor Pampanga — Lot 3368 with an area of68,141 square meters and Lot 3441 with an area of 163,231 square meters, then assessedrespectively at P3,070.00 and P5,800.00 (Annex "D", pp. 27-36, rec.) — were adjudicated toJuanita Lopez-Guilas as her share free from all liens, encumbrances and charges, with theexecutor Alejandro Lopez, binding himself to free the said two parcels from such liens,

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encumbrances and charges. The rest of the estate of the deceased consisting of 28 otherparcels of lands with a total assessed valuation of P69,020.00 and a combined area of743,924.67 square meters, as well as personal properties including a 1953 Buick car valued atP2,500.00 were allotted to Don Alejandro who assumed all the mortgage liens on the estate(Annex "D", pp. 25-37, rec.).

In an order dated April 23, 1960, the lower court approved the said project of partition anddirected that the records of the case be sent to the archives, upon payment of the estate andinheritance taxes (Annex "E", p. 38, rec.). Upon ex-parte petition of the adjudicatees AlejandroLopez and Juanita Lopez-Guilas dated August 25, 1961 (Annex "F", pp. 39-40, rec.), the lowercourt in an order dated August 28, 1961, approved the correction of clerical errors appearing inthe project of partition (Annex "G", p. 41, rec.).

On April 10, 1964, herein petitioner Juanita Lopez-Guilas filed a separate ordinary action to setaside and annul the project of partition, which case was docketed as Civil Case 2539 entitled"Juanita Lopez-Guilas vs. Alejandro Lopez" in the Court of First Instance of Pampanga, on theground of lesion, perpetration and fraud, and pray further that Alejandro Lopez be ordered tosubmit a statement of accounts of all the crops and to deliver immediately to Juanita lots nos.

3368 and 3441 of the Bacolor Cadastre, which were allocated to her under the project ofpartition (p. 132, rec.).

Meanwhile, in Testate Proceedings No. 1426, Juanita filed a petition dated July 20, 1964praying that Alejandro Lopez be directed to deliver to her the actual possession of said lots nos.3368 and 3441 as well as the 1,216 caverns of palay that he collected from the ten (10) tenantsor lessees of the said two lots (Annex "H", pp. 42-44, rec.).

In his opposition dated August 5, 1964 to the said petition, Alejandro Lopez claims that, byvirtue of the order dated April 23, 1960 which approved the project of partition submitted by both

Alejandro and Juanita and directed that the records of the case be archived upon payment ofthe estate and inheritance taxes, and the order of December 15, 1960 which "ordered closedand terminated the present case", the testate proceedings had already been closed andterminated; and that he ceased as a consequence to be the executor of the estate of thedeceased; and that Juanita Lopez is guilty of laches and negligence in filing the petition of thedelivery of her share 4 years after such closure of the estate, when she could have filed apetition for relief of judgment within sixty (60) days from December 15, 1960 under Rule 38 ofthe old Rules of Court (Annex "I") citing A. Austria vs. Heirs of Antonio Ventenilla, L-100808,Sept. 18, 1956 (pp. 45-48, rec.).

In her reply dated November 17, 1965 to said opposition, Juanita contends that the actualdelivery and distribution of the hereditary shares to the heirs, and not the order of the courtdeclaring as closed and terminated the proceedings, determines the termination of the probateproceedings (citing Intestate estate of the deceased Mercedes Cano, Timbol vs. Cano, 59 O.G.No. 30, pp. 46-73, April 29, 1961, where it was ruled that "the probate court loses jurisdiction ofan estate under administration only after the payment of all the taxes, and after the remainingestate is delivered to the heirs entitled to receive the same"); that the executor Alejandro isestopped from opposing her petition because he was the one who prepared, filed and securedcourt approval of, the aforesaid project of partition, which she seeks to be implemented; that sheis not guilty of laches, because when she filed on July 20, 1964, her petition for he delivery ofher share allocated to her under the project of partition, less than 3 years had elapsed from

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The position of petitioner Juanita Lopez-Guilas should be sustained and the writs prayed forgranted.

The probate court loses jurisdiction of an estate under administration only after the payment ofall the debts and the remaining estate delivered to the heirs entitled to receive the same. Thefinality of the approval of the project of partition by itself alone does not terminate the probate

proceeding (Timbol vs. Cano, 1 SCRA 1271, 1276, L-15445, April 29, 1961; Siguiong vs.Tecson, 89 Phil., pp. 28-30). As long as the order of the distribution of the estate has not beencomplied with, the probate proceedings cannot be deemed closed and terminated Siguiong vs.Tecson, supra.); because a judicial partition is not final and conclusive and does not prevent theheir from bringing an action to obtain his share, provided the prescriptive period therefor has notelapsed (Mari vs. Bonilla, 83 Phil., 137). The better practice, however, for the heir who has notreceived his share, is to demand his share through a proper motion in the same probate oradministration proceedings, or for re-opening of the probate or administrative proceedings if ithad already been closed, and not through an independent action, which would be tried byanother court or Judge which may thus reverse a decision or order of the probate on intestatecourt already final and executed and re-shuffle properties long ago distributed and disposed of(Ramos vs. Ortuzar, 89 Phil., 730, 741-742; Timbol vs. Cano, supra.; Jingco vs. Daluz, L-5107,

April 24, 1953, 92 Phil. 1082; Roman Catholic vs. Agustines, L-14710, March 29, 1960, 107Phil., 455, 460-461).

Section 1 of Rule 90 of the Revised Rules of Court of 1964 as worded, which secures for theheirs or legatees the right to "demand and recover their respective shares from the executor oradministrator, or any other person having the same in his possession", re-states the aforeciteddoctrines.

The case of Austria vs. Heirs of Ventenilla (99 Phil. 1068) does not control the presentcontroversy; because the motion filed therein for the removal of the administratrix and theappointment of a new administrator in her place was rejected by the court on the ground oflaches as it was filed after the lapse of about 38 years from October 5, 1910 when the courtissued an order settling and deciding the issues raised by the motion (L-10018, September 19,1956, 99 Phil., 1069-1070). In the case at bar, the motion filed by petitioner for the delivery ofher share was filed on July 20, 1964, which is just more than 3 years from August 28, 1961when the amended project of partition was approve and within 5 years from April 23, 1960 whenthe original project of partition was approved. Clearly, her right to claim the two lots allocated toher under the project of partition had not yet expired. And in the light of Section 1 of Rule 90 ofthe Revised Rules of Court of 1964 and the jurisprudence above cited, the order datedDecember 15, 1960 of the probate court closing and terminating the probate case did not legallyterminate the testate proceedings, for her share under the project of partition has not beendelivered to her.

While it is true that the order dated October 2, 1964 by agreement of the parties suspendedresolution of her petition for the delivery of her shares until after the decision in the civil actionfor the annulment of the project of partition (Civil Case 2539) she filed on April 10, 1964; thesaid order lost its validity and efficacy when the herein petitioner filed on June 11, 1965 anamended complaint in said Civil Case 2539 wherein she recognized the partial legality andvalidity of the said project of partition insofar as the allocation in her favor of lots Nos. 3368 and3441 in the delivery of which she has been insisting all along (pp. 106-107, rec.).

WHEREFORE, judgment is hereby rendered:

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1. Granting the writs prayed for;

2. Setting aside the orders of the respondent court dated October 2, 1964 and April 27, 1966, asnull and void; and, without prejudice to the continuance of Civil Case No. 2539, which, byreason of this decision, involves no longer Lots 3368 and 3441 of the Bacolor Cadastre, .

3. Directing.

(a) the Register of Deeds of Pampanga to cancel TCT No. 26638-R covering theaforesaid lots Nos. 3368 and 3441 of the Bacolor Cadastre and to issue anewTransfer Certificate of Title covering the said two lots in the name of hereinpetitioner Juanita Lopez Guilas; and

(b) the respondent Alejandro Lopez

(1) to deliver to herein petitioner Juanita Lopez Guilas the possession of lots Nos.3368 and 3441;

(2) to deliver and/or pay to herein, petitioner all the rents, crops or incomecollected by him from said lots Nos. 3368 and 3441 from April 23, 1960 until thepossession of the two aforementioned lots is actually delivered to her, or theirvalue based on the current market price; and

(3) to pay the costs.

So ordered.

Concepcion, C.J., Reyes, J.B.L., Makalintal, Zaldivar, Castro, Fernando, Teehankee, Barredoand Villamor, JJ., concur.

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Manila

SECOND DIVISION

G.R. No. 124862 December 22, 1998

FE D. QUITA, petitioner,vs.COURT OF APPEALS and BLANDINA DANDAN, * respondents.

BELLOSILLO, J.:

FE D. QUITA and Arturo T. Padlan, both Filipinos, were married in the Philippines on 18 May1941. They were not however blessed with children. Somewhere along the way theirrelationship soured. Eventually Fe sued Arturo for divorce in San Francisco, California, U.S.A.She submitted in the divorce proceedings a private writing dated 19 July 1950 evidencing theiragreement to live separately from each other and a settlement of their conjugal properties. On23 July 1954 she obtained a final judgment of divorce. Three (3) weeks thereafter she married acertain Felix Tupaz in the same locality but their relationship also ended in a divorce. Still in theU.S.A., she married for the third time, to a certain Wernimont.

On 16 April 1972 Arturo died. He left no will. On 31 August 1972 Lino Javier Inciong filed apetition with the Regional Trial Court of Quezon City for issuance of letters of administration

concerning the estate of Arturo in favor of the Philippine Trust Company. Respondent BlandinaDandan (also referred to as Blandina Padlan), claiming to be the surviving spouse of ArturoPadlan, and Claro, Alexis, Ricardo, Emmanuel, Zenaida and Yolanda, all surnamed Padlan,named in the children of Arturo Padlan opposed the petition and prayed for the appointmentinstead of Atty. Leonardo Casaba, which was resolved in favor of the latter. Upon motion of theoppositors themselves, Atty. Cabasal was later replaced by Higino Castillon. On 30 April 1973the oppositors (Blandina and Padlan children) submitted certified photocopies of the 19 July1950 private writing and the final judgment of divorce between petitioner and Arturo. LaterRuperto T. Padlan, claiming to be the sole surviving brother of the deceased Arturo, intervened.

On 7 October 1987 petitioner moved for the immediate declaration of heirs of the decedent andthe distribution of his estate. At the scheduled hearing on 23 October 1987, private respondent

as well as the six (6) Padlan children and Ruperto failed to appear despite due notice. On thesame day, the trial court required the submission of the records of birth of the Padlan childrenwithin ten (10) days from receipt thereof, after which, with or without the documents, the issueon the declaration of heirs would be considered submitted for resolution. The prescribed periodlapsed without the required documents being submitted.

The trial court invoking Tenchavez v. Escaño 1 which held that "a foreign divorce betweenFilipino citizens sought and decreed after the effectivity of the present Civil Code (Rep. Act 386)was not entitled to recognition as valid in this jurisdiction," 2 disregarded the divorce between

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petitioner and Arturo. Consecuently, it expressed the view that their marriage subsisted until thedeath of Arturo in 1972. Neither did it consider valid their extrajudicial settlement of conjugalproperties due to lack of judicial approval. 3 On the other hand, it opined that there was noshowing that marriage existed between private respondent and Arturo, much less was it shownthat the alleged Padlan children had been acknowledged by the deceased as his children withher. As regards Ruperto, it found that he was a brother of Arturo. On 27 November 1987 4 only

petitioner and Ruperto were declared the intestate heirs of Arturo. Accordingly, equaladjudication of the net hereditary estate was ordered in favor of the two intestate heirs. 5

On motion for reconsideration, Blandina and the Padlan children were allowed to present proofsthat the recognition of the children by the deceased as his legitimate children, except Alexis whowas recognized as his illegitimate child, had been made in their respective records of birth. Thuson 15 February 1988 6 partial reconsideration was granted declaring the Padlan children, withthe exception of Alexis, entitled to one-half of the estate to the exclusion of Ruperto Padlan, andpetitioner to the other half. 7 Private respondent was not declared an heir. Although it was statedin the aforementioned records of birth that she and Arturo were married on 22 April 1947, theirmarriage was clearly void since it was celebrated during the existence of his previous marriageto petitioner.

In their appeal to the Court of Appeals, Blandina and her children assigned as one of the errorsallegedly committed by the trial court the circumstance that the case was decided without ahearing, in violation of Sec. 1, Rule 90, of the Rules of Court, which provides that if there is acontroversy before the court as to who are the lawful heirs of the deceased person or as to thedistributive shares to which each person is entitled under the law, the controversy shall be heardand decided as in ordinary cases.

Respondent appellate court found this ground alone sufficient to sustain the appeal; hence, on11 September 1995 it declared null and void the 27 November 1987 decision and 15 February1988 order of the trial court, and directed the remand of the case to the trial court for furtherproceedings. 8 On 18 April 1996 it denied reconsideration.9

Should this case be remanded to the lower court for further proceedings? Petitioner insists thatthere is no need because, first, no legal or factual issue obtains for resolution either as to theheirship of the Padlan children or as to the decedent; and, second, the issue as to who betweenpetitioner and private respondent is the proper hier of the decedent is one of law which can beresolved in the present petition based on establish facts and admissions of the parties.

We cannot sustain petitioner. The provision relied upon by respondent court is clear: If there isa controversy before the court as to who are the lawful heirs of the deceased person or as to thedistributive shares to which each person is entitled under the law, the controversy shall be heardand decided as in ordinary cases.

We agree with petitioner that no dispute exists either as to the right of the six (6) Padlan childrento inherit from the decedent because there are proofs that they have been duly acknowledgedby him and petitioner herself even recognizes them as heirs of Arturo Padlan; 10 nor as to theirrespective hereditary shares. But controversy remains as to who is the legitimate survivingspouse of Arturo. The trial court, after the parties other than petitioner failed to appear duringthe scheduled hearing on 23 October 1987 of the motion for immediate declaration of heirs anddistribution of estate, simply issued an order requiring the submission of the records of birth of

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the Padlan children within ten (10) days from receipt thereof, after which, with or without thedocuments, the issue on declaration of heirs would be deemed submitted for resolution.

We note that in her comment to petitioner's motion private respondent raised, among others, theissue as to whether petitioner was still entitled to inherit from the decedent considering that shehad secured a divorce in the U.S.A. and in fact had twice remarried. She also invoked the above

quoted procedural rule. 11 To this, petitioner replied that Arturo was a Filipino and as suchremained legally married to her in spite of the divorce they obtained. 12Reading between thelines, the implication is that petitioner was no longer a Filipino citizen at the time of her divorcefrom Arturo. This should have prompted the trial court to conduct a hearing to establish hercitizenship. The purpose of a hearing is to ascertain the truth of the matters in issue with the aidof documentary and testimonial evidence as well as the arguments of the parties eithersupporting or opposing the evidence. Instead, the lower court perfunctorily settled her claim inher favor by merely applying the ruling in Tenchavez v. Escaño.

Then in private respondent's motion to set aside and/or reconsider the lower court's decisionshe stressed that the citizenship of petitioner was relevant in the light of the ruling in Van Dornv. Romillo Jr. 13 that aliens may obtain divorces abroad, which may be recognized in the

Philippines, provided they are valid according to their national law. She prayed therefore that thecase be set for hearing. 14 Petitioner opposed the motion but failed to squarely address theissue on her citizenship. 15 The trial court did not grant private respondent's prayer for a hearingbut proceeded to resolve her motion with the finding that both petitioner and Arturo were"Filipino citizens and were married in the Philippines." 16 It maintained that their divorce obtainedin 1954 in San Francisco, California, U.S.A., was not valid in Philippine jurisdiction. We deducethat the finding on their citizenship pertained solely to the time of their marriage as the trial courtwas not supplied with a basis to determine petitioner's citizenship at the time of their divorce.The doubt persisted as to whether she was still a Filipino citizen when their divorce wasdecreed. The trial court must have overlooked the materiality of this aspect. Once proved thatshe was no longer a Filipino citizen at the time of their divorce, Van Dorn would becomeapplicable and petitioner could very well lose her right to inherit from Arturo.

Respondent again raised in her appeal the issue on petitioner's citizenship; 17 it did not meritenlightenment however from petitioner. 18 In the present proceeding, petitioner's citizenship isbrought anew to the fore by private respondent. She even furnishes the Court with the transcriptof stenographic notes taken on 5 May 1995 during the hearing for the reconstitution of theoriginal of a certain transfer certificate title as well as the issuance of new owner's duplicatecopy thereof before another trial court. When asked whether she was an American citizenpetitioner answered that she was since 1954.19 Significantly, the decree of divorce of petitionerand Arturo was obtained in the same year. Petitioner however did not bother to file a replymemorandum to erase the uncertainty about her citizenship at the time of their divorce, a factualissue requiring hearings to be conducted by the trial court. Consequently, respondent appellatecourt did not err in ordering the case returned to the trial court for further proceedings.

We emphasize however that the question to be determined by the trial court should be limitedonly to the right of petitioner to inherit from Arturo as his surviving spouse. Private respondent'sclaim to heirship was already resolved by the trial court. She and Arturo were married on 22

April 1947 while the prior marriage of petitioner and Arturo was subsisting thereby resulting in abigamous marriage considered void from the beginning under Arts. 80 and 83 of the Civil Code.Consequently, she is not a surviving spouse that can inherit from him as this statuspresupposes a legitimate relationship. 20

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As regards the motion of private respondent for petitioner and a her counsel to be declared incontempt of court and that the present petition be dismissed for forum shopping, 21 the samelacks merit. For forum shopping to exist the actions must involve the same transactions andsame essential facts and circumstances. There must also be identical causes of action, subjectmatter and issue. 22 The present petition deals with declaration of heirship while the subsequentpetitions filed before the three (3) trial courts concern the issuance of new owner's duplicate

copies of titles of certain properties belonging to the estate of Arturo. Obviously, there is noreason to declare the existence of forum shopping.

WHEREFORE, the petition is DENIED. The decision of respondent Court of Appeals orderingthe remand of the case to the court of origin for further proceedings and declaring null and voidits decision holding petitioner Fe D. Quita and Ruperto T. Padlan as intestate heirs is

AFFIRMED. The order of the appellate court modifying its previous decision by granting one-half (1/2) of the net hereditary estate to the Padlan children, namely, Claro, Ricardo, Emmanuel,Zenaida and Yolanda, with the exception of Alexis, all surnamed Padlan, instead of Arturo'sbrother Ruperto Padlan, is likewise AFFIRMED. The Court however emphasizes that thereception of evidence by the trial court should he limited to the hereditary rights of petitioner asthe surviving spouse of Arturo Padlan.

The motion to declare petitioner and her counsel in contempt of court and to dismiss the presentpetition for forum shopping is DENIED.

SO ORDERED.

Puno, Mendoza and Martinez, JJ., concur.

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THIRD DIVISION

[G.R. No. 127920. August 9, 2005]

EMILIO B. PACIOLES, JR., IN HIS CAPACITY AS ADMINISTRATOR AND HEIR OF THEINTESTATE ESTATE OF MIGUELITA CHING-PACIOLES, peti t ioner, vs. MIGUELACHUATOCO-CHING, respondent .

D E C I S I O N

SANDOVAL-GUTIERREZ, J .:

Oftentimes death brings peace only to the person who dies but not to the people he leavesbehind. For in death, a person‘s estate remains, providing a fertile ground for discords that

break the familial bonds. Before us is another case that illustrates such reality. Here, ahusband and a mother of the deceased are locked in an acrimonious dispute over the estate oftheir loved one.

This is a petition for review on certiorari filed by Emilio B. Pacioles, Jr., herein petitioner,against Miguela Chuatoco-Ching, herein respondent, assailing the Court of AppealsDecision[1] dated September 25, 1996 and Resolution [2] dated January 27, 1997 in CA-G.R. SPNo. 41571.[3] The Appellate Court affirmed the Order dated January 17, 1996 of the RegionalTrial Court (RTC), Branch 99, Quezon City denying petitioner‘s motion for partition anddistribution of the estate of his wife, Miguelita Ching-Pacioles; and his motion forreconsideration.

The facts are undisputed.

On March 13, 1992, Miguelita died intestate, leaving real properties with an estimated valueof P10.5 million, stock investments worth P518,783.00, bank deposits amounting to P6.54million, and interests in certain businesses. She was survived by her husband, petitionerherein, and their two minor children.

Consequently, on August 20, 1992, petitioner filed with the RTC a verified petition [4] for thesettlement of Miguelita‘s estate. He prayed that (a) letters of administration be issued in hisname, and (b) that the net residue of the estate be divided among the compulsory heirs.

Miguelita‘s mother, Miguela Chuatoco-Ching, herein respondent, filed an opposition,specifically to petitioner‘s prayer for the issuance of letters of administration on the groundsthat (a) petitioner is incompetent and unfit to exercise the duties of an administrator; and (b) thebulk of Miguelita‘s estate is composed of ―paraphernalproperties.‖ Respondent prayed that the

letters of administration be issued to her instead.[5] Afterwards, she also filed a motion for herappointment as special administratrix.[6]

Petitioner moved to strike out respondent‘s opposition, alleging that the latter has no directand material interest in the estate, she not being a compulsory heir, and that he, being thesurviving spouse, has the preferential right to be appointed as administrator under the law.[7]

Respondent countered that she has direct and material interest in the estate because shegave half of her inherited properties to Miguelita on condition that both of them ―would

http://sc.judiciary.gov.ph/jurisprudence/2005/aug2005/127920.htm#_ftn1


























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undertake whatever business endeavor they decided to, in the capacity of businesspartners.‖[8]

In her omnibus motion[9] dated April 23, 1993, respondent nominated her son EmmanuelChing to act as special administrator.

On April 20, 1994, the intestate court issued an order appointing petitioner and Emmanuel

as joint regular administrators of the estate.[10] Both were issued letters of administration aftertaking their oath and posting the requisite bond.

Consequently, Notice to Creditors was published in the issues of the Manila Standard onSeptember 12, 19, and 26, 1994. However, no claims were filed against the estate within theperiod set by the Revised Rules of Court.

Thereafter, petitioner submitted to the intestate court an inventory of Miguelita‘sestate.[11] Emmanuel did not submit an inventory.

On May 17, 1995, the intestate court declared petitioner and his two minor children as theonly compulsory heirs of Miguelita.[12]

On July 21, 1995, petitioner filed with the intestate court an omnibus motion[13] praying,among others, that an Order be issued directing the: 1) payment of estate taxes; 2) partitionand distribution of the estate among the declared heirs; and 3) payment of attorney‘s fees.

Respondent opposed petitioner‘s motion on the ground that the partition and distribution ofthe estate is ―premature and precipitate,‖ considering that there is yet no determination―whether the properties specified in the inventory are conjugal, paraphernal or owned in a jointventure.‖[14] Respondent claimed that she owns the bulk of Miguelita’s estate as an “heirand co-owner.” Thus, she prayed that a hearing be scheduled.

On January 17, 1996, the intestate court allowed the payment of the estate taxes andattorney’s fees but denied petitioner‘s prayer for partition and distribution of the estate, holdingthat it is indeed ―premature.‖ The intestate court ratiocinated as follows:

―On the partition and distribution of the deceased‘s properties, among the declared heirs, theCourt finds the prayer of petitioner in this regard to be premature. Thus, a hearing onoppositor‘s claim as indicated in her opposition to the instant petition is necessary to determine‗whether the properties listed in the amended complaint filed by petitioner are entirelyconjugal or the paraphernal properties of the deceased, or a co-ownership between theoppositor and the petitioner in their partnership venture.‘‖

Petitioner filed a motion for reconsideration but it was denied in the Resolution dated May 7,1996.

Forthwith, petitioner filed with the Court of Appeals a petition for certiorari seeking to annuland set aside the intestate court‘s Order dated January 17, 1996 and Resolution dated May 7,

1996 which denied petitioner‘s prayer for partition and distribution of the estate for beingpremature, indicating that it (intestate court) will first resolve respondent‘s claim of ownership.

The Appellate Court dismissed the petition for certiorari , holding that in issuing thechallenged Order and Resolution, the intestate court did not commit grave abuse of discretion.

The Appellate Court ruled:





























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probate court may pass upon the title thereto, but such determination is provisional, notconclusive, and is subject to the final decision in a separate action to resolve title.‖

The Court of Appeals relied heavily on the above principle in sustaining the jurisdiction ofthe intestate court to conduct a hearing on respondent‘s claim. Such reliance is misplaced.Under the said principle, the key consideration is that the purpose of the intestate or probate

court in hearing and passing upon questions of ownership is merely to determine whether ornot a property should be included in the inventory. The facts of this case show that suchwas not the purpose of the intestate court.

First , the inventory was not disputed. In fact, in her Manifestation and Opposition[18] datedSeptember 18, 1995, respondent expressly adopted the inventory prepared by petitioner, thus:

―6. She adopts the inventory submitted by the petitioner in his Amended Compliancedated October 6, 1994, and filed only on November 4, 1994 not October 5, 1995 aserroneously asserted in Par. 12 of the Omnibus Motion. Oppositor, however, takes exception tothe low valuation placed on the real estate properties and reserves her right to submit a moreaccurate and realistic pricing on each.‖

Respondent could have opposed petitioner‘s inventory and sought the exclusion of thespecific properties which she believed or considered to be hers. But instead of doing so,she expressly adopted the inventory, taking exception only to the low valuation placed on thereal estate properties.

And second , Emmanuel, respondent‘s son and representative in the settlement ofMiguelita‘s estate, did not submit his own inventory. His mandate, as co-administrator, is ―tosubmit within three (3) months after his appointment a true inventory and appraisal of all the realand personal estate of the deceased which have come into his possession or knowledge.‖[19] Hecould have submitted an inventory, excluding therefrom those properties whichrespondent considered to be hers. The fact that he did not endeavor to submit oneshows that he acquiesced with petitioner’s inventory.

Obviously, respondent‘s purpose here was not to obtain from the intestate court a ruli ng ofwhat properties should or should not be included in the inventory. She wanted something else,i.e., to secure from the intestate court a final determination of her claim of ownershipover properties comprising the bulk of Miguelita’s estate. The intestate court went alongwith respondent on this point as evident in its Resolution [20] dated May 7, 1996, thus:

―On petitioner‘s motion for partition and distribution of the estate of the late Miguelita ChingPacioles, it is believed that since oppositor had interposed a claim against the subject estate,the distribution thereof in favor of the heirs could not possibly be implemented as there is still aneed for appropriate proceedings to determine the propriety of oppositor‘s claim. It must bementioned that if it is true that oppositor owns the bulk of the properties, which she allegedly

placed/registered in the name of the deceased for convenience, Oppositor, therefore, has amaterial and direct interest in the estate and hence, should be given her day in Court.‖

It is apparent from the foregoing Resolution that the purpose of the hearing set by theintestate court was actually to ―determine the propriety of oppositor’s (respondent’s) claim.‖

According to the intestate court, ―if it is true that the oppositor (respondent) owns the bulkof (Miguelita’s) properties,” then it means that she has a “material and direct interest in theestate” and, hence, “she should be given her day in court.” The intended ―day in court‖ or











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hearing is geared towards resolving the propriety of respondent‘s contention that she is the trueowner of the bulk of Miguelita‘s estate.

Surely, we cannot be deluded by respondent‘s ingenious attempt to secure a proceeding forthe purpose of resolving her blanket claim against Miguelita‘s estate. Although, she made itappear that her only intent was to determine the accuracy of petitioner‘s inventory, however, a

close review of the facts and the pleadings reveals her real intention.Clearly, the RTC, acting as an intestate court, had overstepped its jurisdiction. Its proper

course should have been to maintain a hands-off stance on the matter. It is well-settled in this jurisdiction, sanctioned and reiterated in a long line of decisions, that when a question arises asto ownership of property alleged to be a part of the estate of the deceased person, but claimedby some other person to be his property, not by virtue of any right of inheritance from thedeceased but by title adverse to that of the deceased and his estate, such question cannot bedetermined in the course of an intestate or probate proceedings. The intestate or probatecourt has no jurisdiction to adjudicate such contentions, which must be submitted to thecourt in the exercise of its general jurisdiction as a regional trial court.[21]Jurisprudenceteaches us that:

―[A] probate court or one in charge of proceedings whether testate or intestate cannotadjudicate or determine title to properties claimed to be a part of the estate and which areclaimed to belong to outside parties. All that the said court could do as regards saidproperties is to determine whether they should or should not be included in the inventory or listof properties to be administered by the administrator. If there is no dispute, well and good,but if there is, then the parties, the administrator, and the opposing parties have to resortto an ordinary action for a final determination of the conflicting claims of title becausethe probate court cannot do so.‖[22]

Hence, respondent‘s recourse is to file a separate action with a court of general jurisdiction. The intestate court is not the appropriate forum for the resolution of her adverseclaim of ownership over properties ostensibly belonging to Miguelita's estate.

Now, even assuming that the intestate court merely intended to make a provisional or primafacie determination of the issue of ownership, still respondent‘s claim cannot prosper. It bearsstressing that the bulk of Miguelita‘s estate, as stated in petitioner‘s inventory, comprises realestates covered by the Torrens System which are registered either in the name of Miguelitaalone or with petitioner. As such, they are considered the owners of the properties untiltheir title is nullified or modified in an appropriate ordinary action. We find this Court‘spronouncement in Bolisay vs. Alcid [23] relevant, thus:

―It does not matter that respondent-administratrix has evidence purporting to support her claimof ownership, for, on the other hand, petitioners have a Torrens title in their favor, which underthe law is endowed with incontestability until after it has been set aside in the manner indicated

in the law itself, which, of course, does not include, bringing up the matter as a mereincident in special proceedings for the settlement of the estate of deceased persons. x xx

x x x In regard to such incident of inclusion or exclusion, We hold that if a property covered byTorrens Title is involved, the presumptive conclusiveness of such title should be given dueweight, and in the absence of strong compelling evidence to the contrary, the holder thereofshould be considered as the owner of the property in controversy until his title is












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nullified or modified in an appropriate ordinary action, particularly, when as in the case atbar, possession of the property itself is in the persons named in the title. x x x‖

Corrolarily, P.D. 1529, otherwise known as, ―The Property Registration Decree,‖ proscribescollateral attack against Torrens Title, hence:

―Section 48. Certificate not subject to collateral attack.

A certificate of title shall not be subject to collateral attack. It cannot be altered, modifiedor cancelled except in a direct proceeding in accordance with law.‖

Significantly, a perusal of the records reveals that respondent failed to present convincingevidence to bolster her bare assertion of ownership. We quote her testimony, thus:

―Q: I now direct your attention to paragraph (5) appearing on page 1 of this swornstatement of yours which I quote:‖ In accordance with the Chinese tradition andculture in the distribution of properties to the legal heirs, we decided to give only atoken to our daughter Miguelita and leave the rest to our only son Emmanuel, with

the undertaking that being the son he will take full responsibility of the rest of thefamily despite his marriage. Madame witness, do you recall having stated that inyour sworn statement?

A: Yes sir, but it was not carried out.

Q What was actually given to your daughter Miguelita is only a token, is that right?

A: Not a token, sir, but one half of the share of the estate was given to Lita and theother half was given to Emmanuel.

Q: What went to Emmanuel was also ½, is that right?

A: Yes, sir.

Q: What makes up the one half share of Lita, if you recall?

A: What was given to her were all checks, sir, but I cannot remember any morethe amount.

x x x x x x

Q: Summing up your testimony, Madame, you cannot itemize the one half shareof the estate of Miguelita, is that right?

A: Yes, sir.

Q: Was there any document covering this partition of the estate among you,

Emmanuel and Miguelita with respect to the estate of your late husband?

A: If I only knew that this will happen…

Q: Samakatuwid po ay walang dokumento?

A: Wala po.‖[24]

She further testified as follows:





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“Q: Among the properties listed like the various parcels of land, stocks,investments, bank accounts and deposits both here and abroad, interestsand participation in IFS Pharmaceuticals and Medical Supplies, Inc. andvarious motor vehicles, per your pleasure, Madam Witness, how shouldthese properties be partitioned or what should be done with theseproperties? According to you earlier, you are agreeable for the partition of

the said properties with Emil on a 50-50 basis, is that right?

A: Kung ano po ang sa akin, iyon ang dapat na bumalik sa akin, sir.

Q Halimbawa ay ano po iyon? Real estate properties, parcels of land located inPag-Asa, in Silangan, in San Lazaro, in Sta. Cruz, in San Francisco del Monteand shares of stock. Alinsunod sa inyo, paano po ang dapat na partihan ohatian ninyo ni Emil?

A: Kung ano ang sa akin…

x x x x x x

Q Ang tanong ko po sa inyo ay ganito, ito po ba ang inyong iminungkahi kayEmil? Ito po ba ang inyong paghahatian or hindi?

A: Iyo akin talaga na hindi nila pinaghirapan, sir.” [25]

Unfortunately, respondent could not even specify which of the properties listed inpetitioner‘s inventory belong to her. Neither could she present any document to prove her claimof ownership. The consistently changing basis of her claim did nothing to improve her posture.Initially, she insisted that the bulk of Miguelita‘s estate is composed of paraphernalproperties.[26] Sensing that such assertion could not strengthen her claim of ownership, sheopted to change her submission and declare that she and Miguelita were ―business partners‖and that she gave to the latter most of her properties to be used in a joint businessventure.[27] Respondent must have realized early on that if the properties listed in petitioner‘s

inventory are paraphernal, then Miguelita had the absolute title and ownership over them andupon her death such properties would be vested to her compulsory heirs petitioner herein and












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