1 DE LA CERNA SPECPRO DIGESTS 2011 AMIN | CHA | JANZ | KRIZEL | VIEN

Romualdez et. al. v. Tiglao et. al.

Abad-Santos, J: Quickie: Romualdez attained judgment against Tiglao. Since the judgment was not satisfied, Romualdez sought to revive the judgment. At this time, Tiglao was already dead. Tiglaos administrator contends that the claim should have been filed in the SpecPro and not in a separate suit, essentially for the recovery of a sum of money. Court held that since the judgment has become stale because of non-execution, it cant be presented in the SpecPro without first being revived. Nature: an appeal by the Estate of Felisa Tiglao from a decision in Civil Case No. Q-14424 of the Court of First Instance of Rizal which revived a judgment rendered in Civil Case No.Q-5055 also of the Court of First Instance of Rizal. Facts: March 15, 1960 Paz G. Romualdez and others sued Antonio Tiglao for the payment of unpaid rentals for the lease of a hacienda and its sugar quota . o Included in the suit were Felisa Tiglao and others who had guaranteed the payment of the rents jointly and severally with Antonio Tiglao. CFI of Rizal rendered decision in favor of plaintiffs The judgment was not satisfied notwithstanding a writ of execution to enforce it. Accordingly, on May 18, 1970, Paz G. Romualdez, et al. filed Civil Case No. Q-14424 in the Court of First Instance of Rizal against Antonio Tiglao and his sureties in order to revive the judgment above quoted. It should be stated that when the suit to revive judgment was filed, Felisa F. Tiglao had died and her estate was being settled in Special Proc. No. Q-10731 of the Court of First Instance of Rizal. Accordingly, the one who was made defendant was her estate represented by the Special Administratrix Maningning Tiglao-Naguiat, In several motions (including the Answer) the administratrix questioned the jurisdiction of the court a quo to entertain the suit to revive judgment. She invoked Sec. 1 of Rule 87 of the Rules of Court that, "No action upon a claim for the recovery of money or debt or interest thereon shall be commenced against the executor or administrator; ... " Brushing aside the posture of the administratrix, the court a quo rendered a decision on January 21, 1974 ordering the revival of judgment. Issue/Held: W/N the present action is one for the recovery of a sum of money so that it is barred by Sec. I of Rule 87 of the Rules of Court and that the remedy of the appellees is to present their claim in Special Proc. No. Q-10731 of the Court of First Instance of Rizal. NO, NOT BARRED. Ratio: The original judgment which was rendered on May 31, 1960, has become stale because of its non-execution after the lapse of five years. (Sec. 6, Rule 39 of the Rules of Court.) Accordingly, it cannot be presented against the Estate of Felisa Tiglao unless it is first revived by action. o

105 SCRA 762 (1981)

This is precisely why the appellees have instituted the second suit whose object is not to make the Estate of Felisa Tiglao pay the sums of money adjudged in the first judgment but merely to keep alive said judgment so that the sums therein awarded can be presented as claims against the estate in Special Proc. No. Q-10731 of the Court of First Instance of Rizal.

Aquino, J., concurring: Felisa Tiglao died on December 4, 1966. Special Proceeding No. Q-10731 of Branch V of the Court of First Instance of Quezon City, the testamentary proceeding for the settlement of her estate, was filed on January 18, 1967 It is a fact that when the ten-year period for enforcing the judgment of Judge Nicasio Yatco dated May 31, 1960 against the Tiglao defendants was about to expire, there was as yet no notice to creditors in Special Proceeding No. Q10731 and no regular administrator had been appointed. hence, the judgment creditors could not file a claim against the testate estate for the amount of the unsatisfied judgment. The judgment creditors had no alternative but to file an action for revival of judgment to prevent its extinguishment by prescription. It is true that, as a general rule, "no action upon a claim for the recovery of money or debt or interest thereon shall be commenced against the executor or administrator" because the creditor's remedy is to file the proper claim in the proceeding for the settlement of the deceased debtor's estate within the period fixed in the Statute of Nonclaims (Secs. 2 and 5, Rule 86 and sec. 1, Rule 87, Rules of Court). o But the instant case, because of the singular circumstances recounted above, is an exception to that general rule. At any rate, the judgment creditors filed on August 20, 1971 in the testate proceeding already mentioned the corresponding claim (p. 44, Record on Appeal). The lower court's judgment in this case, which is being assailed on appeal, is simply a confirmation of that claim which was based on Judge Yatco's 1960 judgment. The confirmation was necessary to forestall extinctive prescription of the judgment

2 DE LA CERNA SPECPRO DIGESTS 2011 AMIN | CHA | JANZ | KRIZEL | VIEN

Pascual v. Pascual
Endencia, J. QUICKIE: Plaintiff filed a case against Ponciano Pascual for the annulment of a contract of sale of a fishpond. TC granted MTD the ground that the action should have been brought by the executor or administrator of the estate left by the deceased. The Court held that although the general rule is that actions for the recovery or protection of the property or rights of the deceased for causes which survive may be prosecuted or defended by his executor or administrator, the case at bar falls under the exceptions because the executor or administrator is unwilling or fails or refuses to act, in which event to heirs may act in his place. Here, the fictitious sale is alleged to have been made to the defendants, one of them, Miguel S. Pascual, being the executor appointed by the probate court. Such executor naturally would not bring an action against himself for recovery of the fishpond. His refusal to act may, therefore, be implied. Facts: plaintiff, Sinforoso Pascual, instituted in the Court of First Instance of Pampanga against Ponciano S. Pascual and others, an action for the annulment of a contract of sale of a fishpond supposedly executed without consideration by said deceased in her lifetime in favor of the defendants plaintiff and defendants are all residents of Malabon, Rizal, and are legitimate children of the testratix, Eduarda de los Santos Defendants filed a MTD TC: granted the motion on the ground that the action should have been brought by the executor or administrator of the estate left by the deceased, and directed the plaintiff to amend his complaint within five days. Issue 2: Wrong Venue? No. Ratio:

73 Phil 561 (1942)

the sale is alleged to be fictitious, with absolutely no consideration, it should be regarded as a non-existent, not merely null, contract. And there being no contract between the deceased and the defendants, there is in truth nothing to annul by action. The action brought cannot thus be for annulment of contract, but is one for recovery of a fishpond, a real action that should be, as it has been, brought in Pampanga, where the property is located

Issue 1: WON the action should have been brought by the executor or administrator of the estate left by the deceased NO Ratio: Under Rule 86, section 1, of the new Rules of Court, actions for the recovery or protection of the property or rights of the deceased for causes which survive may be prosecuted or defended by his executor or administrator. Upon the commencement of the testate or intestate proceedings the heirs have no standing in court in actions of the above character, except when the executor or administrator is unwilling or fails or refuses to act, in which event to heirs may act in his place. Here, the fictitious sale is alleged to have been made to the defendants, one of them, Miguel S. Pascual, being the executor appointed by the probate court. Such executor naturally would not bring an action against himself for recovery of the fishpond. His refusal to act may, therefore, be implied. And this brings the case under the exception. It should be noted that in the complaint the prayer is that the fishpond be delivered not to the plaintiff but to the executor, thus indicating that the action is brought in behalf of the estate of the deceased.

3 DE LA CERNA SPECPRO DIGESTS 2011 AMIN | CHA | JANZ | KRIZEL | VIEN

Velasquez et. al. v. George et. al.

Gutierrez, Jr. J: Nature: appeal from CFI; certified by CA to SC Quickie: Heirs v administrator corporation, disputing because of the Deed of First Real estate mortgage in favor of Villanueva . Issues are whether the dispute is within the jurisdiction of the SEC and whether the heirs are the proper parties to bring the case. SC said it is within the jurisdiction of the trial court and the heirs are the proper parties. What the complaint sought to annul were documents of title which vested ownership over the three parcels of land in question to defendant-mortgagee Villanueva, who is neither an officer, a stockholder nor a director of the corporation, but a third party. Clearly, the lower court had jurisdiction over the controversy. The fact that the plaintiffsappellants subsequently questioned the legality of the constitution of the board of directors of the corporation did not divest the court of its jurisdiction. The case should fall under the exception, rather than the general rule that pending proceedings for the settlement of the estate, the heirs have no right to commence an action arising out of the rights belonging to the deceased." The case at bar falls under such an exception. Facts: The plaintiffs-appellants are the widow and legitimate children of the late Benjamin B. George whose estate is under intestate proceedings. In their complaint, the plaintiffs-appellants alleged that the five defendantsmortgagors are officers of the Island Associates Inc. Andres Muoz, aside from being the treasurer-director of said corporation, was also appointed and qualified as administrator of the estate of Benjamin George in the above special proceedings. In life, the latter owned 64.8 percent or 636 shares out of the outstanding 980 shares of stock in the corporation. Without the proper approval from the probate court and without notice to the heirs and their counsel, the defendants-mortgagors executed a Deed of First Real Estate Mortgage in favor of the defendant-mortgagee Erlinda Villanueva, covering three parcels of land owned by Island Associates. In said Deed, the defendants-mortgagors also expressly waived their right to redeem the said parcels. Subsequently, a power of attorney was executed by the defendants-mortgagors in favor of Villanueva whereby the latter was given the full power and authority to cede, transfer, and convey the parcels of land within the reglementary period provided by law for redemption. A certificate of sale was executed in favor of Villanueva by the Provincial Sheriff of Bulacan after she submitted the highest bids at the public auction. This led to the execution of a Deed of Sale and Affidavit of Consolidation of Ownership by virtue of which Transfer Certificates of Titles were issued in favor of Villanueva. The plaintiffs-appellants, therefore, filed the complaint for the annulment of the 1.) Deed of First Real Estate Mortgage; 2.) Power of Attorney; 3.) Certificate of Sale; 4.) Amended Certificate of Sale; 5.) Affidavit of Consolidation of Ownership; and 6.) Transfer Certificates of Title Nos. T-239674 and T-239675.

125 SCRA 456 (1983)

The plaintiffs-appellants contend that the resolution of the validity of a mortgage contract is within the original and exclusive jurisdiction of civil courts, and certainly not within the jurisdiction of the Securities and Exchange Commission and that once jurisdiction of the civil court whether in a civil or a criminal case, has properly attached, the same cannot be ousted, divested or removed. The appellants state that the questioned composition of the board of directors, is merely incidental to the determination of the main issue and is insufficient cause for the trial court to divest itself of its original and exclusive jurisdiction that has already been acquired. The defendants-appellees, on the other hand maintain that since the complaint questions the validity of a corporate contract which the appellants contend to have been entered into as a fraudulent and surreptitious scheme and devise to defraud them, this issue places the entire case outside the jurisdiction of the civil courts. According to them, Presidential Decree No. 902-A gives the SEC exclusive jurisdiction over such a controversy. The relevant provision reads: o Sec. 5. In addition to the regulatory and adjudicative functions of the Securities and Exchange Commission over corporations, partnerships and other forms of associations registered with it as expressly granted under existing laws and decrees, it shall have original and exclusive jurisdiction to hear and decide cases involving: Devices or schemes employed by any acts of the board of directors, business associations, its officers or partners amounting to fraud and misrepresentation which may be detrimental to the interest of the public and/or of the stockholder, partner, members of associations or organizations registered with the Commission ... Villanueva further contends that the plaintiffs-appellants have no capacity to file the complaint because the general rule laid down in Rule 87, Section 3 of the Rules of Court states that only the administrator or executor of the estate may bring actions of such nature as the one in the case at bar. The only exception is when the executor or administrator is unwilling or fails or refuses to act, which exception according to the mortgagee-appellee does not apply in the present case.

Issues/Held: (1) WON the case is within the exclusive jurisdiction of SEC- NO (2) WON the plaintiffs have capacity to file the complaint- YES Ratio: We agree with the plaintiffs-appellants. What the complaint sought to annul were documents of title which vested ownership over the three parcels of land in question to defendant-mortgagee Villanueva, who is neither an officer, a stockholder nor a director of the corporation, but a third party. Clearly, the lower court had jurisdiction over the controversy. The fact that the plaintiffs-appellants subsequently questioned the legality of the constitution of the board of directors of the corporation did not divest the court of

4 DE LA CERNA SPECPRO DIGESTS 2011 its jurisdiction to take cognizance of the case. What determines jurisdiction of the court are the allegations in the complaint. If from the same, the court has already acquired jurisdiction over the subject-matter, jurisdiction is retained up to the end of the litigation. (See Lat v. Phil. Long Distance Co., 67 SCRA 425). Whether or not the mortgage contract, with an unusual provision whereby the mortgagors waived their right to redeem the mortgaged property, could be executed without proper approval of the probate court and without notice to the widow and legitimate children of the deceased is a matter clearly within the authority of a trial court to decide. If in the course of trial, the court believes that the validity of the composition of the board of directors is absolutely necessary for resolution of the issues before it, the remedy is, at most, to require that one issue to be threshed out before the Securities and Exchange Commission and to hold in abeyance, the trial on the merits of the principal issues in the meantime. Certainly, the solution is not for the lower court to surrender its judicial questions to an administrative agency for resolution. We also find without merit the defendant-mortgagee's contention that the proper party to file the complaint is the administrator of the estate of Benjamin George. The administrator, Andres Muoz, is the same person charged by the plaintiffsappellants to have voted in the board of directors without securing the proper authority from the probate court to which he is accountable as administrator. In Ramirez v. Baltazar (24 SCRA 918), we ruled that "since the ground for the present action to annul the aforesaid foreclosure proceedings is the fraud resulting from such insidious machinations and collusion in which the administrator has allegedly participated, it would be far fetched to expect the said administrator himself to file the action in behalf of the estate. And who else but the heirs, who have an interest to assert and to protect, would bring the action? Inevitably, this case should fall under the exception, rather than the general rule that pending proceedings for the settlement of the estate, the heirs have no right to commence an action arising out of the rights belonging to the deceased." The case at bar falls under such an exception. AMIN | CHA | JANZ | KRIZEL | VIEN

5 DE LA CERNA SPECPRO DIGESTS 2011 AMIN | CHA | JANZ | KRIZEL | VIEN

Valero et. al. v. Inserto et. al.

Narvasa, J. Quickie: In the settlement proceedings of the Sps. Valera, the heirs of Teresa Garin (predeceased daughter of Sps. Valera) moved to cite in contempt the administrators of the estate of the Sps. Valera for failing to render accounting of their administration. In response to the contempt charge, the administrators alleged that no accounting could be submitted unless Jose Garin, husband of Teresa Garin, reconveyed to the estate of the Sps. Valera a fishpond presently in his possession but actually belonging to the estate. Thus, the administrators moved that the fishpond be reverted to the estate. Judge Adil of the probate court viewed both motions from the heirs of Garin and the administrators as an action for the recovery of an asset of the estate under Rule 87, Sec. 6. After hearing, the probate court ordered the fishpond to be included in the inventory of the estate belonging to the Sps. Valera. Pending appeal, a writ of execution was issued by Judge Adil which was served upon Fabiana (current lessee of the fishpond) who voluntarily relinquished possession of the fishpond. Later, however, Fabiana moved to intervene in the settlement proceedings with the view of protecting his leasehold rights over the subject fishpond. His motion was denied by Judge Adil. This prompted Fabiana to file for an injunction case with the CFI Iloilo. Meanwhile, Garin heirs appealed the probate courts order for the reconveyance of the fishpond to the estate of the Sps. Valera, maintaining their claim of ownership and title thereto. Procedurally, the cases here intertwined became convoluted especially after the CFI Iloilo handed down a TRO enjoining the administrators of Sps. Valeras estate from disturbing Fabianas possession of the fishpond. Eventually, with their own separate petitions for review, certiorari, mandamus and prohibition, the cases were consolidate in the CA. The CA ruled against the administrators and in favor of Garin heirs/Fabiana. Then, the cases found their way to the SC This function of resolving whether or not property should be included in the estate inventory is, to be sure, one clearly within the Probate Court's competence, although the Court's determination is only provisional in character, not conclusive, and is subject to the final decision in a separate action that may be instituted by the parties. Resulting from the exercise of primary jurisdiction over the question of ownership involving estate property claimed by the estate, the decision of the court where the separate action is filed must be deemed superior to otherwise contrary orders issued by the Probate Court in the exercise of what may be, regarded as merely secondary, or provisional, jurisdiction over the same question. Nature: Consolidated petitions for review and original petitions for Certiorari and Mandamus with Preliminary Injunction. Conflicting claims over a fishpond asserted by the administrators of the estate of deceased spouses, on the one hand, and by the heirs of a daughter of said spouses and their lessee, on the other, have given rise to these proceedings. Facts: In the proceedings for the settlement of the intestate estate of the Spouses Rafael and Consolacion Valera, Eumelia Cabado and Pompiro Valera had been appointed administrators.

149 SCRA 532 (1987)

In the same proceedings, the heirs of the deceased daughter of the Sps. Valera, Teresa Garin, filed a motion asking that the Administratrix be declared in contempt for failure to render an accounting of her administration. Administratrix replied that no accounting could be submitted unless Jose Garin, Teresa's husband, delivered to the administrator an 18-hectare fishpond in Baras, Barotoc Nuevo, Iloilo, belonging to the estate. Thus the administratrix in turn moved for the return thereof to the estate so that it might be partitioned among the decedents' heirs. Jose Garin opposed the plea for the fishpond's return to the estate, asserting that the property was owned by his children and this was why it had never been included in any inventory of the estate. The probate court, presided over by Judge Adil, viewed the Garin Heirs' motion for contempt, as well as Cabado's prayer for the fishpond's return to the estate, as having given rise to a claim for the recovery of an asset of the estate within the purview of Section 6, Rule 87. After hearing, Judge Adil issued an Order commanding the Heirs of Teresa Garin "to reconvey immediately the fishpond in question to the intestate Estate of the Spouses Valera The probate court found that the fishpond originally belonged to the Government, and had been given in lease to Rafael Valera in his lifetime. Rafael ostensibly sold his leasehold rights in the fishpond to his daughter, Teresa Garin; but the sale was fictitious, having been resorted to merely so that she might use the property to provide for her children's support and education, and was subject to the resolutory term that the fishpond should revert to Rafael Valera upon completion of the schooling of Teresa Garin's Children. But with income generated by the fishpond, the property was eventually purchased from the Government by the Heirs of Teresa Garin, collectively obtaining title over said fishpond in their favor. Upon these facts, Judge Adil ruled that an implied trust had been created, obligating Teresa Garin's heirs to restore the property to the Valera Spouses' Estate, in accordance with Articles 1453 and 1455 of the Civil Code. The probate court's pronouncement regarding the estate's title to the fishpond was merely provisional in character, made solely to determine whether or not the fishpond should be included in the inventory of estate assets. Judge Adil afterwards granted the administrators' motion for execution of the order pending appeal, and directed the sheriff to enforce reconveyance of the fishpond to the estate of Sps. Valera. The writ of execution was served on Manuel Fabiana, the caretaker/lessee of the fishpond. Voicing no objection to the writ, and declaring to the sheriff that he was a mere lessee, Fabiana voluntarily relinquished possession of the fishpond to the sheriff and the latter, in turn, delivered it to the administrators Later however, Fabiana filed a complaint-in-intervention with the Probate Court seeking vindication of his right to the possession of the fishpond, based on a contract of lease between himself, as lessee, and Jose Garin, as lessor. But Judge Adil dismissed his complaint for having been filed out of time (judgment had been rendered and execution had already taken place); and because the lease contract had not been registered and hence was not binding as against the estate

6 DE LA CERNA SPECPRO DIGESTS 2011 Fabiana thereupon instituted a separate action for injunction and damages, with application for a preliminary injunction with the Iloilo CFI, presided by Judge Inserto Judge Inserto issued a TRO enjoining estate administrators from disturbing Fabiana in the possession of the fishpond, as lessee Judge Insertos Orders caused the administrators to file a motion to dismiss the complaint and to dissolve the TRO, averring that the action was barred by the Probate Court's prior judgment which had exclusive jurisdiction over the issue of the lease, and that the act sought to be restrained had already been accomplished, Fabiana having voluntarily surrendered possession of the fishpond to the sheriff BUT even before Judge Inserto could act on their motion, the administrators filed with the Supreme Court a special civil action for certiorari and mandamus, with a prayer for Preliminary mandatory injunction and temporary restraining order. In their petition, the administrators contended that the Iloilo CFI (Judge Inserto, presiding) could not and should not interfere with the Probate Court (Judge Adil, presiding) in the legitimate exercise of its jurisdiction over the proceedings for the Settlement of the estate of the Valera Spouses In the meantime, Jose Garin, having filed an MR from the order of Judge Adil declaring the estate to be the owner of the fishpond, in which he asserted that the Probate Court, being of limited jurisdiction, had no competence to decide the ownership of the fishpond, which motion had been denied, filed a notice of appeal from said Order. But he quickly abandoned the appeal when Judge Adil authorized execution of the order pending appeal. Instead, he initiated a special action for certiorari, prohibition and mandamus with prayer for preliminary injunction in the CA Fabiana followed suit. He instituted in the CA his own action for certiorari and injunction, this, notwithstanding the pendency in Judge Inserto's sala of the case he had earlier filed These two special civil actions were jointly decided by the CA. The Court granted the petitions. The CA found that the Probate Court possessed no jurisdiction to resolve the issue of ownership under Section 6, Rule 87. Also, the CA ruled that the OCT and TCT covering the fishpond were in the names of the Heirs of Teresa Garin, and therefore no presumption that the estate owns the fishpond is warranted to justify return of the property on the theory that it had merely been borrowed; and even assuming the Probate Court's competence to resolve the ownership question, the estate administrators would have to recover possession of the fishpond by separate action, in view of the lessee's claim of right to superior possession, as lessee thereof From said CA judgment, the administrators have taken separate appeals to this Court by certiorari. All related and separate petitions for review, certiorari, mandamus and prohibition taken by the administrators, Fabiana and the heirs of Teresa Garin have been consolidated~ 3) AMIN | CHA | JANZ | KRIZEL | VIEN WON there was undue interference by the CFI Iloilo with the Probate Court NO!

Issues and Held: 1) WON the Probate Court (Judge Adil, Presiding) had no jurisdiction to take cognizance of and decide the issue of title covering a fishpond YES, probate court has no jurisdiction 2) Who should have possession over the fishpond pending determination of the title thereto? The one having title to the fishpond!

Ratio: 1) Settled is the rule that a CFI (now RTC), acting as a Probate Court, exercises but limited jurisdiction, and thus has no power to take cognizance of and determine the issue of title to property claimed by a third person adversely to the decedent, UNLESS the claimant and all the other parties having legal interest in the property consent, expressly or impliedly, to the submission of the question to the Probate Court for judgment, or the interests of third persons are not thereby prejudiced The reason for the exception is that the question of WON a particular matter should be resolved by the trial court in the exercise of its general jurisdiction or of its limited jurisdiction as a special court (e.g., probate), is in reality not a jurisdictional but in essence of procedural one, involving a mode of practice which may be waived The facts obtaining in this case, however, do not call for the application of the said exception. Thus, the Probate Court cannot and should not have determined the issue of title to the fishpond! It was at all times clear to the Probate Court as well as to the parties that if cognizance was being taken of the question of title over the fishpond, it was NOT for the purpose of settling the issue definitely and permanently, and writing "finis" thereto, but merely to determine whether it should or should not be included in the inventory. This function of resolving whether or not property should be included in the estate inventory is, to be sure, one clearly within the Probate Court's competence, although the Court's determination is only provisional in character, not conclusive, and is subject to the final decision in a separate action that may be instituted by the parties. The same norm governs Section 6, Rule 87 expressly invoked by the Probate Court in justification of its holding a hearing on the issue arising from the parties' conflicting claims over the fishpond. The examination provided in the cited section is intended merely to elicit evidence relevant to property of the decedent from persons suspected of having possession or knowledge thereof, or of having concealed, embezzled, or conveyed away the same. Of course, if the latter lays no claim to the property and manifests willingness to turn it over to the estate, no difficulty arises; the Probate Court simply issues the appropriate direction for the delivery of the property to the estate. On the other hand, if the third person asserts a right to the property contrary to the decedent's, the Probate Court would have no authority to resolve the issue; a separate action must be instituted by the administrator to recover the property Parenthetically, the Probate Court should have first obtained the consent of all interested parties to its assumption of jurisdiction over the question of title to the fishpond, or ascertaining the absence of objection thereto. But it did not. This was a patent error. 2) Since the determination by the Probate Court of the question of title to the fishpond was merely provisional, not binding on the property with any character of authority,

7 DE LA CERNA SPECPRO DIGESTS 2011 definiteness or permanence, having been made only for purposes of inclusion in the inventory, it cannot and should not be subject of execution, as against its possessor who has set up title in himself (or in another) adversely to the decedent, and whose right to possess has not been ventilated and adjudicated in an appropriate action. The Torrens title to the property is not in the decedents' names but in others and in regard to such incident of inclusion or exclusion, if a property covered by Torrens title is involved, the presumptive conclusiveness of such title should be given due weight, and in the absence of strong compelling evidence to the contrary, the holder thereof should be consider as the owner of the property in controversy until his title is nullified or modified in an appropriate ordinary action, particularly, when as in the case at bar, possession of the property itself is in the persons named in the title. 3) Since title to the fishpond could only be appropriately determined in a separate action, the actual filing of such a separate action should have been anticipated, and should not therefore have come as a surprise, to the Probate Court. Judgment of the court in which the separate action is filed over the issue of title is deemed superior in authority than that of the Probate Court with limited jurisdiction THUS, orders coming from the courts in which a separate action is filed cannot in any sense be considered as undue interference with the jurisdiction of the Probate Court. Resulting from the exercise of primary jurisdiction over the question of ownership involving estate property claimed by the estate, they must be deemed superior to otherwise contrary orders issued by the Probate Court in the exercise of what may be, regarded as merely secondary, or provisional, jurisdiction over the same question. AMIN | CHA | JANZ | KRIZEL | VIEN

8 DE LA CERNA SPECPRO DIGESTS 2011 AMIN | CHA | JANZ | KRIZEL | VIEN

Rioferio et. al. v. CA

Tinga, J. Quickie: Legit family v. Mistress and children. Father died without a will. Legit children discovered that the mistress and children executed an extrajudicial settlement of estate and real estate mortgage involving the properties of their father Pending issuance of letters of administration in favour of a legit child, legit children filed a complaint of the annulment of the extra judicial settlement, real estate mortgage and cancellation of transfer of CTCs. Petitioners argued that respondents are not the real parties-in-interest but rather the Estate of Alfonso in view of the pendency of the administration proceedings. HELD: The rules permitting an executor or administrator to represent or to bring suits on behalf of the deceased, do not prohibit the heirs from representing the deceased. These rules are easily applicable to cases in which an administrator has already been appointed. But no rule categorically addresses the situation in which special proceedings for the settlement of an estate have already been instituted, yet no administrator has been appointed. The rule that the heirs have no legal standing to sue for the recovery of property of the estate during the pendency of administration proceedings has three exceptions, the third being when there is no appointed administrator such as in this case. Nature: Petition for Review on Certiorari, under Rule 45 of the Rules of Court Facts: 1960 Alfonso Orfinada, Jr. married Esperanza with whom he had 7 children namely: Lourdes, Alfonso "Clyde", Nancy, Alfonso, Christopher, Alfonso Mike (deceased) and Angelo. 1965 Alfonso entered into an extra-marital relationship with Teodora Riofero with whom he had 3 children namely: Veronica, Alberto and Rowena Petitioners Teodora and children Respondents: Esperanza and children May 1995 - Alfonso P. Orfinada, Jr. died without a will in Angeles City leaving several personal and real properties located in Angeles City, Dagupan City and Kalookan City. Nov. 1995 - Alfonso James and Lourdes discovered that on June 1995, Teodora and her children executed an Extrajudicial Settlement of Estate of a Deceased Person with Quitclaim involving the properties of the estate of the decedent located in Dagupan City and that accordingly, the Registry of Deeds in Dagupan issued CTCs in favor of petitioners. They also found out that petitioners were able to obtain a loan of P700k from the Rural Bank of Mangaldan Inc. by executing a Real Estate Mortgage over the properties subject of the extra-judicial settlement. Dec. 1995 - Alfonso "Clyde" filed a Petition for Letters of Administration before the RTC of Angeles City, praying that letters of administration be issued to him.

419 SCRA 54 (2004)

Respondents filed a Complaint for the Annulment/Rescission of Extra Judicial Settlement of Estate of a Deceased Person with Quitclaim, Real Estate Mortgage and Cancellation of Transfer CTCs and Other Related Documents with Damages against petitioners, the Rural Bank of Mangaldan, Inc. and the Register of Deeds of Dagupan City before the RTC, Dagupan City. Petitioners Answer - the property subject of the contested deed of extra-judicial settlement pertained to the properties originally belonging to the parents of Teodora and that the titles thereof were delivered to her as an advance inheritance but the decedent had managed to register them in his name. Respondents are not the real parties-in-interest but rather the Estate of Alfonso in view of the pendency of the administration proceedings. Petitioners filed a Motion to Set Affirmative Defenses for Hearing denied on the ground that respondents, as heirs, are the real parties-in-interest especially in the absence of an administrator who is yet to be appointed. MR denied. CA No grave abuse of discretion amounting to lack or excess of jurisdiction by the public respondent judge when he denied petitioners motion to set affirmative defenses for hearing in view of its discretionary nature. MR denied.

Issue/Held: WON the heirs may bring suit to recover property of the estate pending the appointment of an administrator is the issue in this case. YES Ratio: It must be stressed that the holding of a preliminary hearing on an affirmative defense lies in the discretion of the court. Rule 16, Sec. 5 provides that any of the grounds for dismissal provided for in this rule, except improper venue, may be pleaded as an affirmative defense, and a preliminary hearing may be had thereon as if a motion to dismiss had been filed. The incorporation of the word "may" in the provision is clearly indicative of the optional character of the preliminary hearing. The word denotes discretion and cannot be construed as having a mandatory effect. Subsequently, the electivity of the proceeding was firmed up beyond cavil by the 1997 Rules of Civil Procedure with the inclusion of the phrase "in the discretion of the Court", apart from the retention of the word "may" in Section 6, in Rule 16 thereof. Just as no blame of abuse of discretion can be laid on the lower courts doorstep for not hearing petitioners affirmative defense, it cannot likewise be faulted for recognizing the legal standing of the respondents as heirs to bring the suit. Pending the filing of administration proceedings, the heirs without doubt have legal personality to bring suit in behalf of the estate of the decedent in accordance with the provision of Art. 777 CC that the rights to succession are transmitted from the moment of the death of the decedent." The provision in turn is the foundation of the principle that the property, rights and obligations to the extent and value of the inheritance of a person are transmitted through his death to another or others by his will or by operation of law.

9 DE LA CERNA SPECPRO DIGESTS 2011 Even if administration proceedings have already been commenced, the heirs may still bring the suit if an administrator has not yet been appointed. This is the proper modality despite the total lack of advertence to the heirs in the rules on party representation, namely Sec. 3, Rule 3 and Sec. 2, Rule 87 RoC. The rules permitting an executor or administrator to represent or to bring suits on behalf of the deceased, do not prohibit the heirs from representing the deceased. These rules are easily applicable to cases in which an administrator has already been appointed. But no rule categorically addresses the situation in which special proceedings for the settlement of an estate have already been instituted, yet no administrator has been appointed. In such instances, the heirs cannot be expected to wait for the appointment of an administrator; then wait further to see if the administrator appointed would care enough to file a suit to protect the rights and the interests of the deceased; and in the meantime do nothing while the rights and the properties of the decedent are violated or dissipated. Even if there is an appointed administrator, jurisprudence recognizes two exceptions (1) if the executor or administrator is unwilling or refuses to bring suit; (2) when the administrator is alleged to have participated in the act complained of and he is made a party defendant. The necessity for the heirs to seek judicial relief to recover property of the estate is as compelling when there is no appointed administrator, if not more, as where there is an appointed administrator but he is either disinclined to bring suit or is one of the guilty parties himself. The rule that the heirs have no legal standing to sue for the recovery of property of the estate during the pendency of administration proceedings has three exceptions, the third being when there is no appointed administrator such as in this case. AMIN | CHA | JANZ | KRIZEL | VIEN

10 DE LA CERNA SPECPRO DIGESTS 2011 AMIN | CHA | JANZ | KRIZEL | VIEN

De la Cruz v. de la Cruz
Goddard, J. DISCLAIMER: Guys, some are in Spanish. GoogleTranslate has done its best. I can only hope its correct, or at least the closest translation. Kaya din puro basically ang digest na ito. hahaha. Quickie: Administrator asked Court to permit him to sell two parcels of land from estate of deceased. Lower Court granted. Heirs (sons) sought to have the order annulled on ground that petition did not comply with the requirements set forth in the law. Court held that the averment as to the value of the personal estate of a deceased person, in a probate proceeding, is an essential and necessary requisite to a petition for the sale of real estate and that a Court of First Instance acquires no jurisdiction to order such sale if that averment does not appear in the petition; that such an order is void and that a sale of real estate by virtue of such an order is null and void. Nature: appeal Facts: In this intestate proceeding the administrator filed the following petition requesting autorization for the administrator to sell two parcels of land of the estate for the ff. Reasons: (a) that at present the administration of this Intestate no funds; (b) That the expenditure of this administration to date amount to the sum of P343.10; (c) That this Honorable Court has ordered the administrator to pay the sum of P48 as Commissioners' fees in the Valuation and Intestate Claims, but that the Administrator has been unable so far to comply with that order for lack of funds ; (d) The administrator has been recently licensed for print or SHARE to collect on behalf of the Intestate credits valued at the sum of P1, 220, the administrator will have to file three lawsuits against three debtors and to this end need the sum of P36.80 for the registration of the three cases and Sheriff's fees for locations, plus the sum of one hundred pesos for the partial payment of travel expenses and attorney's fees that will address these issues. (e) The administrator wants to pay even part of the costs of travel and attorney's fees of the administrator of the Intestate for his senicios it has provided to date. On Feruary 18, 1933, the lower court authorized the sale of the two parcels of land On March 11, 1933, the administrator executed a deed of sale in favor of Tomas de Guzman and Benita de la Roma in which it appears that said parcels were sold at private sale for the sum of P600. Later Igmidio de la Cruz and Pedro de la Cruz, legitimate sons of Gregorio de la Cruz, filed a petition in which basically praying for the annulment of t he Feb. 18 order and consequently the deed of sale in favor of de Guzman and de la Rama basically on the ground that their written consent as heirs werent sought.

60 Phil 577 (1934)

The lower court denied the petition of Igmidio and Pedro de la Cruz. Hence this appeal

Issue/Held: W/N the order of the trial court was proper NO. Ratio: The appellants overlooked the fact that section 714, as amended by Act No. 3882, now reads as follows: SEC. 714. Realty may be sold or encumbered.When there is no personal estate of the deceased or when, though there be such, its sale would redound to the detriment of the interests of the participants in the estate and the deceased has left no testamentary disposition for the payment of his debts and charges of administration, the court, on application of the executor or administrator, and on written notice to the heirs, devisees, and other persons interested, may grant him a license to sell, mortgage or otherwise encumber for that purpose real estate, if it clearly appears that such sale, mortgaging or encumbrance would be beneficial to the persons interested and will not defeat any devise of land; in which case the assent of the devisee shall be required. In view of amendment the court may grant a license to an executor or administrator to sell real property, in lieu of personal estate, for the payment of debts and charges of an estate without the consent of the heirs, "if it clearly appears that such a sale would be beneficial to the persons interested and will not defeat any devise of land; in which case the assent of the devisee shall be required." The record shows that the date of the hearing of the petition was known to appellants as they appeared and filed an opposition in writing and that copies of the petition were sent to them. As to their contention that the notice was not published in a newspaper three weeks successively previous to the hearing, paragraph 3 of section 722, Code of Civil Procedure, also provides that if personal notice is given to the persons interested, the public notice may be dispensed with. As to requiring the administrator to give a new bond before license to sell is granted, paragraph 4 of the same section provides: "If the court requires it, the executor or administrator, before license is granted, shall give a new bond, . . ." It is evident that the court may use its discretion and may or may not require a new bond. Therefore, none of the above contentions of the appellants has any merit whatsoever. Section 7181 of the Code of Civil Procedure is not applicable to the facts in this case.

Estate may be sold when beneficial to heirs.When it appears to the court that it will be beneficial to the heirs, devisees, or legatees, and those interested in an estate, by reason of their residing out of the Islands or otherwise, that a part or the whole of the personal estate, or a part or the whole of the real estate, or both the real and personal estate, should be sold, the court may, upon application of
1

11 DE LA CERNA SPECPRO DIGESTS 2011 Section 714, as amended, quoted above, provides, among other things, that when there is no persona estate of the deceased or when, though there be such, its sale would redound to the detriment of the interests of the participants in the estate . . . the court on application of the executor or administrator . . . may grant him a license to sell . . . real estate for the purposes mentioned in that section. Section 7222 provides, among other things, that when an executor or administrator considers it necessary or beneficial to sell real or personal estate . . . he may make application to the court having jurisdiction of the estate, and such court may grant license . . . under the following regulations: AMIN | CHA | JANZ | KRIZEL | VIEN The executor or administrator shall present to the court his petition in writing, setting forth the amount of debts due from the deceased, with charges of administration, the value of the personal estate, situation of the estate to be sold, or such other facts as show that the sale is necessary or beneficial; The petition of the administrator in this case does not set forth the value of the personal estate nor does it allege that there is no personal estate nor that if there be such its sale would redound to the detriment of the interests of the participants therein. Buenaventura and Del Rosario vs. Ramos [before section 714 was amended] executor or administrator of the estate of a deceased person is without authority to sell real estate, when there are no debts or obligations existing against the estate, without the consent and approbation, in writing, of the heirs who are interested in the estate to be sold. Estate of Gamboa Carpizo vs. Floranza: an order made by a Court of First Instance, in probate proceedings, for the sale of real property belonging to the estate of a deceased person, is avoid when no notice of the hearing upon the petition for such sale is given, as required by section 722 of the Code of Civil Procedure. It will be noted that when the first case, cited above, was decided the production of the consent in writing of the heirs was required by regulation No. 2 of section 722. Notice by publication or personal notice to the persons interested is still required by regulation No. 3 of section 722. Surely the requirement in regulation No. 1 of section 722 as to the setting forth of the value of the personal estate of the deceased is just as important as the others mentioned in the case cited above. This conclusion is inevitable if regulation No. 7 of section 722 means anything. This regulation provides that "The record of the order of sale in the court, and the copy or the certificate of such order furnished the executor or administrator, shall state that such of the requisites prescribed in the first four subdivisions of this section, as are required in the case, are complied with; . . . The authorities are practically unanimous in holding that one of the requisites averments of petitions for the sale of a decedent's lands is that there is not sufficient personality to cover the amount of the debts or charges of administration. In view of the provisions of our Code of Civil Procedure the holdings of this court in the two cases cited above and the jurisprudence copied from Ruling Case Law, it is held that the averment as to the value of the personal estate of a deceased person, in a probate proceeding, is an essential and necessary requisite to a petition for the sale of real estate and that a Court of First Instance acquires no jurisdiction to order such sale if that averment does not appear in the petition; that such an order is void and that a sale of real estate by virtue of such an order is null and void. 1.

the administrator or executor, with the consent and approbation, in writing, of the heirs, devisees, and legatees who are interested in the estate to be sold, grant license to sell the whole or a part of said estate, although not necessary to pay debts, legacies, or charges of administration; but such license shall not be granted if inconsistent with the provisions of a will. In case of such sale, the proceeds shall be decreed and assigned to the persons entitled to the estate, and in the same proportions. 2 Regulations for license to sell.When an executor or administrator considers it necessary or beneficial to sell real or personal estate, in cases provided by law, he may make application to the court having jurisdiction of the estate, and such court may grant license, when it appears necessary or beneficial, under the following regulations: 1. The executor or administrator shall present to the court his petition in writing, setting forth the amount of debts due from the deceased, with charges of administration, the value of the personal estate, situation of the estate to be sold, or such other facts as show that the sale is necessary or beneficial; 2. In cases where the consent of heirs, devisees, and legatees is required, the executor or administrator shall produce to the court their assent in writing, and signed by such heirs, devisees, or legatees, or by the guardians of such as are minors or otherwise under guardianship; 3. The court shall thereupon appoint a time and place of hearing for deciding upon such application, and shall require notice to be given of such application, and of the time and place of hearing to the persons interested; which notice shall state the nature of the application and the reason for the same, the time and place of hearing, and shall be published three weeks successively previous thereto, in a newspaper of general circulation in the neighborhood of those interested, to be designated by the court; and the court may order such further notice as is adjudged proper. If personal notice is given to the persons interested, the public notice may be dispensed with; 4. If the court requires it, the executor or administrator, before license is granted, shall give a new bond, in such sum and with such sureties as the court directs, conditioned that such executor or administrator shall account for the proceeds of such sale; 5. If the proof produce satisfies the court and if the regulations in the first four subdivisions of this section are complied with, the court may, by decree, authorize the executor or administrator to sell such part of the estate as is deemed necessary, either at public or private sale, as would be most beneficial to all parties concerned, and furnish the executor or administrator with certified copy of such license or order or sale; 6. If the order is to sell the estate at auction, the court shall designate the mode of giving notice of the time and place of the sale, which shall be stated in the copy or certificate of such order furnished the executor or administrator; 7. The record of the order of sale in the court, and the copy or the certificate of such order furnished the executor or administrator, shall state that such of the requisites prescribed in the first four subdivisions of this section, as required in the case, are complied with; and such certificate or copy of the order of sale shall be recorded in the office of the Registrar of Land Titles of the province in which the lands thus to be sold are situated.

The orders of the lower court, dated February 18, 1933, and December 6, 1933, are set aside and the sale of the two parcels of land made by virtue of said orders is declared null and void. Malcolm and Villa-Real, J., dissenting:

12 DE LA CERNA SPECPRO DIGESTS 2011 It is customary for appellate courts to decide cases on the points specially relied upon by the parties. A reading of the three scanty pages which make up the brief of the appellants will disclose that the word "jurisdiction" nowhere appears in that brief. A reading of the brief of the appellee will disclose that counsel for the appellee was unadvised that the question of jurisdiction was at issue, and so contended himself with answering the argument of the appellants addressed to section 714 of the Code Civil Procedure. But this is not all. While the bill of exceptions is silent as to the exact ground for opposition to the confirmation of the sale of the realty, even now no showing is made that there is any personalty available for sale. It is a general rule that when a court has acted on a petition and ordered a sale, the sale will be sustained in spite of informalities or statements merely defective. It has often been held that jurisdiction will be presumed from the fact that the court made the order. We are opposed to making out cases for attorneys which they do not make out themselves. We are opposed to sanctioning technicalities. We are opposed to authorizing the eating up of small estates of deceased persons, like the one before us, in useless litigation. By the time the courts get through with this little estate, there will be no estate to be distributed. AMIN | CHA | JANZ | KRIZEL | VIEN does not appear in the petition; that such an order is void and that a sale of real estate by virtue of such an order is null and void." Under section 714 of the Code of Civil Procedure, as amended, the court may, upon application by the executor or administrator, authorize the sale of the real estate, even if there is a personal estate, if it clearly appears that such sale would be beneficial to the persons interested and will not defeat any devise of land. It is thus seen that the jurisdictional fact which is the ground-work of the proceeding and which, when made to appear to the court by an appropriate petition, is sufficient to set in motion the exercise of jurisdiction, is not the existence or value of the personal estate, but the fact that the sale of the real estate would be beneficial to the persons interested. The general rule is that, where the court has jurisdiction of the parties and the subject matter of the action, its judgment is not open to attack or impeachment by parties or privies in any collateral action or proceeding. In the instant case, the petition to have declared null and void both the order of the lower court of February, 18, 1933, and the sale made thereunder, was tantamount to a collateral attack upon a judgment or decree, since it was filed long after the order sought to be annulled became final, and the sale made in accordance therewith was approved by the court. As stated by the court in King vs. Kent's Heirs (29 Ala., 542): ". . . When the petition is directly assailed, the question is one of pleading, and the intendments are made against the pleader; but a different rule prevails, when the proceedings have gone into a decree, under which rights of property have attached. Then every reasonable intendment in the construction of the language of the petition, must be in favor of the validity of the paper. Under a different rule, designing persons might withhold objections for amendable defects, until after the proceedings had terminated, and rights had attached, and then vitiate the whole proceeding; thus converting a court of justice into a snare."

Abad Santos, J., dissenting: I believe that it sets a dangerous precedent. To realize fully the importance of the principle involved in this case, it is necessary to advert to certain salient, facts. In the first place, it should be noted that the petition for the sale of the real estate was filed by the administrator on January 17, 1933. As stated in the majority opinion, "The record shows that the date of the hearing of the petition was known to appellants as they appeared and filed an opposition in writing and that copies of the petition were sent to them." After considering the petition and the objections made thereto by the appellants, the lower court, on February 18, 1933, issued an order authorizing the sale. Pursuant to this order the property was sold to the spouses Tomas de Guzman and Benita de la Roma on March 11, 1933, which sale was duly approved by the court. Instead of appealing from the order of the lower court of February 18, 1933, authorizing the sale, the appellants did nothing until long after the order had become final and the sale made thereunder had been approved by the court, that is to say, until May 5, 1933, when they filed a petition praying that both said order and the deed of sale executed by the administrator on March 11, 1933, be declared null and of no effect. Appellants made it appear in their petition that they were ignorant of the petition for the sale of the real estate filed by the administrator on January 17, 1933, but, as already indicated, the majority of the court correctly found that this representation made under oath by the appellants is completely belied by the record. Notwithstanding this fact, however, and also notwithstanding the fact that, after due consideration, the petition to annul the sale denied by the lower court on December 6, 1933, this court, by the decision of the majority, now sets aside the orders of the lower court dated February 18, 1933 and December 6, 1933, and declares null and void the sale on the ground that "the averment as to the value of the personal estate of a deceased person, in a probate proceeding, is an essential and necessary requisite to a petition for the sale of real estate and that a Court of First Instance acquires no jurisdiction to order such sale if that averment

13 DE LA CERNA SPECPRO DIGESTS 2011 AMIN | CHA | JANZ | KRIZEL | VIEN

Godoy v. Orellano et. al.

Villamor, J. QUICKIE: Pangilinan was an administrator of property who gave Godoy an option to buy a dredge. Pangilinan failed to deliver the dredge. Defendants argue that because the dredge in question was the property of the intestate estate of Julio Orellano, pending in the CFI of Manila, and under the administration of Felisa Pangilinan, the said dredge is under judicial control and could not be disposed of without judicial authority. The Court held that a sale by an administrator of property of the deceased, which is not authorized by the probate court is null and void and title does not pass to the purchaser. Facts: in consideration P1,000 received by her, a document was executed by Felisa Pagilinan giving Eusebio A. Godoy an option to buy for the sum of P10,000, a dredge which was alleged to be a common property of the vendor and of the Orellano siblings One of the conditions was that Godoy was to pay the whole price of the dredge within twenty days It was also provided that said option was granted in accordance with the power of attorney executed by Pagilinan's coowners who reserved the right to ratify whatever sale might be made, or option granted by her, their attorney-in-fact. Pagilinan's coowners did not ratify the option contract. Before the expiration of twenty days, Godoy was ready to make complete payment of the price, but Pagilinan failed to deliver the dredge. Godoy brought suit in the CFI against Pagilinan and Orellano siblings praying that they be ordered to deliver the dredge, upon payment by him of the sum of P9,000 Argument of defendants: the dredge in question was the property of the intestate estate of Julio Orellano, pending in the CFI of Manila, and under the administration of Felisa Pangilinan; that the said dredge is under judicial control and could not be disposed of without judicial authority, and that the court has never authorized the sale Arguments of Pangilinan (a) That the dredge which was the subject-matter of the option is property of the intestate estate of Julio Orellano, of which she is the administratrix; (b) that the plaintiff, as well as the defendants, and the notary who prepared the aforesaid option sale, were all aware of these facts, and they led her to believe that she had the authority to dispose of the dredge in her name and by themselves

42 Phil 347 (1921)

Ratio: In the sale of the property of an intestate estate for the benefit of the heirs, it is necessary to comply with the provisions of sections 717, 718, and 722 of the Code of Civil Procedure. The said sections prescribed the proceedings to be had before an administrator of an intestate or testate estate may sell personal or real property and also the conditions under which the personal or real property pertaining to an estate may be sold or disposed of by the administrator. A sale and conveyance by executors without an order of the probate court, under a will devising property to them in trust, but not authorizing any sale of the realty, otherwise than by a direction to pay the debts of the testator, is void, and passes no title to the purchase. (Huse vs. Den, 85 Cal., 390.) A sale by an administrator of the personal property of the estate, without the authority of an order of court, or of a will, or under an order of court which is void for want of jurisdiction, does not confer on the purchaser a title which is available against a succeeding administrator. (Wyatt's Adm'r vs. Rambo, 29 Ala., 510.) Under the law, the court has exclusive jurisdiction to authorize the sale of properties like the one under consideration and the power of attorney executed by the heirs of Orellano in favor of the administratrix, without authority of court, has no legal effect, and this is the more so, since two of the said heirs are under age, and the others did not ratify the option contract, as provided in the aforesaid power of attorney. Pagilinan was not, in her capacity as judicial administratrix of the intestate estate of Julio Orellano, legally authorized to sell, or contract to sell, any property belonging to said estate without the authority of the court, and the contract entered into by her with the plaintiff, without this authority, is null and void.

Issue: WON Pagilinan, in her capacity as judicial administratrix of the estate of Julio Orelleno, was authorized to sell the dredge belonging to said estate NO

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Manotok Realty v. CA
GUTIERREZ, JR., J.: Nature: petition for certiorari Quickie: Case of husband of deceased disposing lot. Issue was the capacity of the husband in disposing said lot. SC said he did the act not as administrator, thus sale was void. There is nothing in the records that will show that Don Vicente Legarda was the administrator of the paraphernal properties of Dona Clara Tambunting during the lifetime of the latter. Thus, it cannot be said that the sale which was entered into by the private respondent and Don Vicente Legarda had its inception before the death of Dona Clara Tambunting and was entered into by the former for and on behalf of the latter, but was only consummated after her death. Facts: The private respondent Felipe Madlangawa claims that he has been occupying a parcel of land in the Clara de Tambunting de Legarda Subdivision since 1949 upon permission being obtained from Andres Ladores, then an overseer of the subdivision, with the understanding that the respondent would eventually buy the lot. The owner of the lot, Clara Tambunting, died and her entire estate, including her paraphernal properties which covered the lot occupied by the private respondent were placed under custodia legis. On April 22, 1950, the private respondent made a deposit for the said lot in the sum of P1,500.00 which was received by Vicente Legarda, husband of the late owner. As evidenced by the receipt issued by Vicente Legarda, the lot consisted of an area of 240 square meters and was sold at P30.00 per square meter. There, thus, remained an unpaid balance of P5,700.00 but the private respondent did not pay or was unable to pay this balance because after the death of the testatrix, Clara Tambunting de Legarda, her heirs could not settle their differences. Apart from the initial deposit, no further payments were made from 1950. Don Vicente Legarda was appointed as a special administrator of the estate. Meanwhile the private respondent remained in possession of the lot in question. Subsequently, the petitioner became the successful bidder and vendee of the Tambunting de Legarda Subdivision consisting of 44 parcels of land spread out in the districts of Tondo and Sta. Cruz, Manila, pursuant to the deeds of sale executed in its favor by the Philippine Trust Company as administrator of the Testate Estate of Clara Tambunting de Legarda The lot in dispute was one of those covered by the sale. In its effort to clear the Tambunting Subdivision of its squatters and occupants, the petitioner caused the publication of several notices in the Manila Times and the Taliba issues , advising the occupants to vacate their respective premises, otherwise, court action with damages would follow. In addition to these notices by publication, the petitioner sent circulars to the occupants to vacate. The private respondent was one of the many occupants who refused to vacate the lots they were occupying, so that the petitioner filed the action below to recover the said lot.

149 SCRA 174 (1987)

TC- dismissed the petitioner's action after finding that the Identity of the parcel of land described in the complaint had not been sufficiently established as the very same piece of land in the material and physical possession of the private respondent. CA- found the Identity of the lot sought to be recovered by the petitioner to be the same as that in the physical possession of the private respondent and ruled that the only right remaining to the petitioner is to enforce the collection of the balance because accordingly, it stepped into the shoes of its predecessor Issue/Held: In what capacity did the husband of the deceased, Don Vicente Legarda, dispose of the lot? NOT as administrator, thus, the sale is void Ratio: Articles 136 and 137 of the Civil Code of the Philippines provide: o Art. 136. The wife retains the ownership of the paraphernal property. o Art. 137. The wife shall have the administration of the paraphernal property, unless she delivers the same to the husband by means of a public instrument empowering him to administer it. o In this case, the public instrument shall be recorded in the Registry of Property. As for the movables, the husband shall give adequate security. There is nothing in the records that will show that Don Vicente Legarda was the administrator of the paraphernal properties of Dona Clara Tambunting during the lifetime of the latter. Thus, it cannot be said that the sale which was entered into by the private respondent and Don Vicente Legarda had its inception before the death of Dona Clara Tambunting and was entered into by the former for and on behalf of the latter, but was only consummated after her death. Don Vicente Legarda, therefore, could not have validly disposed of the lot in dispute as a continuing administrator of the paraphernal properties of Dona Clara Tambunting. It is also undisputed that the probate court appointed Don Vicente Legarda as administrator of the estate only on August 28, 1950, more than three months after the questioned sale had taken place. We are, therefore, led to the inevitable conclusion that the sale between Don Vicente Legarda and the private respondent is void ab initio, the former being neither an owner nor administrator of the subject property. Such being the case, the sale cannot be the subject of the ratification by the Philippine Trust Company or the probate court. As was held in the case of Arsenal v. Intermediate Appellate Court (143 SCRA 40, 49): Under the provisions of the Civil Code, a void contract is inexistent from the beginning. It cannot be ratified neither can the right to set up the defense of its illegality be waived. (Art. 1409, Civil Code .) The right to set up the nullity of a void or non-existent contract is not limited to the parties as in the case of annuable or voidable contracts, it is extended to third persons who are directly affected by the contract. (Tolentino, Civil Code of the Philippines, Vol. IV, p. 604, [1973]).

15 DE LA CERNA SPECPRO DIGESTS 2011 Any person may invoke the inexistence of the contract whenever juridical affects founded thereon are asserted against him. (Id. P. 595). Section 1, Rule 89 of the Revised Rules of Court provides for the procedure on how a property in custodia legis can be disposed of by sale: Order of sale of personalty. Upon the application of the executor or administrator, and on written notice to the heirs and other persons interested, the court may order the whole or a part of the personal estate to be sold, if it appears necessary for the purpose of paying debts, expenses of administration, or legacies, or for the preservation of the property. After the appointment of Don Vicente Legarda as administrator of the estate of Dona Clara Tambunting, he should have applied before the probate court for authority to sell the disputed property in favor of the private respondent. If the probate court approved the request, then Don Vicente Legarda would have been able to execute a valid deed of sale in favor of the respondent. Unfortunately, there was no effort on the part of the administrator to comply with the above-quoted rule of procedure nor on that of the respondent to protect his interests or to pay the balance of the installments to the court appointed administrator. o As was held in Kline v. Shoup (226 Pacific Reporter 729, 731), which we find applicable in the case at bar: There are, however, certain steps to be taken in the administration of an estate which the law deems of sufficient importance to have placed without the power of the probate court to effect under the jurisdiction acquired over the general subject matter by law and over the estate and those interested therein, by the filing and due service of the petition for the appointment of an administrator and the order of appointment and issuance of letters, and at least one of such steps is the sale of the real property of an estate for the payment of the debts of the deceased Considering the location of the disputed lot, we find a monthly rental of Twenty Centavos (P0.20) per square meter to be more than fair to the private respondent for his use of the premises. The petitioner, however, should return the P 1,500.00 received by Mr. Legarda, with legal interest, to the respondent. AMIN | CHA | JANZ | KRIZEL | VIEN

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Rafols et. al. v. Barba

Vasquez, J. Quickie: Nicolas Rafols died testate. He was survived by wife and 4 children, herein petitioners (Rafols, et al.). Vidal Montayre was administrator of his estate. Montayre sought authority from the probate court to sell a parcel of cogon land belonging to the estate in order to pay taxes, expenses of administration, and other indebtedness of the estate. Granted. But it took 3 years before the land was finally sold to herein respondent Marcelo Barba, since there was a lack of interested buyers. Sale was approved by the probate court and the deed of sale was eventually executed in due course. 15 years later, Rafols, et al. filed this suit seeking the declaration of the nullity of the said deed of sale on the ground that they (Rafols, et al.) being the heirs of Nicolas were not properly notified of the said sale, contrary to the requisites laid down by the Rules. Barba, for his part, moved for the dismissal of the case mainly on the ground of prescription. In his answer, he also raised as affirmative defenses estoppel and buyer-in-good-faith. CFI dismissed the case~ hence this appeal the appeal must FAIL. It is true that when an application is made by an administrator to sell real property of the estate for the payment of debts, expenses and other obligations of the estate, an application must be filed with the probate court which may grant the same on written notice to the heirs, devices and legatees (Section 2, Rule 89). It is also the rule that a sale of property of the estate without such notice to the heirs, devices and legatees is void. Equally unassailable is the statutory pronouncement that an action declaring the inexistence of a void contract does not prescribe. (Art. 1410, New Civil Code). But Rafols, et al. cannot rely on these established legal rules because none applies in the case at bar. Rafols, et al. FAILED to present any conclusive proof that no notice was indeed served or given to them. In the absence of a positive showing that the requirements for securing the authority to sell had not been complied with, it is appropriate to apply the presumptions that the law had been obeyed; that official duty has been regularly performed; and that private transactions had been fair and regular. (Sec. 5, pars. m. p and ff. Rule 131) When, by the order of the court, a property of the estate is sold under this provision, the purchaser in good faith may rest on he presumption of the legality of the court's order. (presumption of regularity) Nature: Appeal from the Order of CFI Cebu dismissing Rafols, et al.s complai nt for the declaration of the nullity of a deed of sale covering a parcel of land belonging to the estate of their predecessor sold by the administrator to Barba. Facts: Nicolas Rafols, a resident of Cebu City, died testate on May 2, 1947. He left behind a widow (Francisca) and 4 children (Floracion, Amparo, Crisostomo, and Ricardo), collectively Rafols, et al., herein petitioners.

119 SCRA 146 (1982)

Nicolass estate was the subject of administration by Vital T. Montayre. In 1948, Montayre sought authority from the probate court to sell a parcel of land belonging to the estate in order to pay taxes, expenses of administration and other indebtedness of the estate. The said motion was granted. The land authorized to be sold was a parcel of cogon land with an area of approximately 100 hectares assesed at 7,800. The sale of the said parcel of land, however, was not effected despite the lapse of more than three (3) years from the time that the court had authorized the sale allegedly due to the lack of interested buyers. Finally, in 1951, herein respondent Marcelo A. Barba purchased the land for the stated consideration of P18,000. The deed of sale executed in his favor by administrator Montayre was submitted to the probate court for approval and was approved in due course. In 1966, or more than fifteen (15) years after the execution of the deed of sale in favor of Barba, Rafols, et al. instituted the present case in the Cebu CFI against Barba for the declaration of the nullity of the said deed of sale and for the recovery of damages and attorney's fees. The complaint contends that the sale was null and void inasmuch as Rafols, et al., as heirs of Nicolas, were not notified of the hearing of the application to sell the said parcel of land, nor of the order and the approval of the sale Barba, for his part, filed an answer alleging the affirmative defenses that he bought the land in good faith, that Rafols, et al. are in estoppel, and that the action had already prescribed. Subsequently, he filed a motion to dismiss the complaint on the following grounds, to wit, (1) Rafols, et al. have no legal capacity to sue; and (2) the cause of action is barred by the statute of limitations. CFI dismissed the case on the grounds that it is barred by the statute of limitations and by estoppel by laches~ hence, this appeal Rafols, et al. assailed the dismissal of the trial court by alluding to the decisions of the Supreme Court in a line of cases which held that the sale of properties pertaining to an estate must be done only upon prior compliance with the requisites provided for in the Rules, such as written notice to the heirs, devices and legatees of the application to sell and of the time and place for the hearing thereof; and that without compliance therewith, the authority to sell itself and the order approving it would be null and void. They further argue that an action to declare the inexistence of such a void contract is inprescriptible pursuant to Article 1410 of the new Civil Code. Answering these contentions, Barba argues that Rafols, et al. are already in estoppel by their inaction and failure to question the sale despite the lapse of more than fifteen (15) years from the time of its execution and by conducting themselves in a manner as to show consent and assent to the consummation of the sale; and that he (Barba) acquired the land in good faith with judicial approval and for valuable consideration. Moreover, assuming that Rafols, et al. may have a good cause of action, the same had already prescribed.

Issue and Held: WON the suit for nullification of the deed of sale was properly dismissed YES!

17 DE LA CERNA SPECPRO DIGESTS 2011 Ratio: It is true that when an application is made by an administrator to sell real property of the estate for the payment of debts, expenses and other obligations of the estate, an application must be filed with the probate court which may grant the same on written notice to the heirs, devices and legatees (Section 2, Rule 89). It is also the rule that a sale of property of the estate without such notice to the heirs, devices and legatees is void. Equally unassailable is the statutory pronouncement that an action declaring the inexistence of a void contract does not prescribe. (Art. 1410, New Civil Code) NEVERTHELESS, Rafols, et al.'s cause of action may not derive support from the aforementioned doctrines for the simple reason that there is no clear showing that the authority granted by the probate court to sell the parcel of land in question was without written notice to the heirs, devices and legatees. Rafols, et al. offered no proof as to such alleged lack of notice. Rafols, et al. rely solely on the evidence presented not by them but by Barba during the hearing of the motion to dismiss to support their contention of lack of notice. Rafols, et al. contend that the motion of the administrator Montayre praying to be authorized to sell the land in question, or the order of probate Judge granting said authority, or the motion praying that the sale in favor of Barba be approved, or even the deed of sale itself indicate that any notice was served or given to the heirs this contention is specious The lack of any indication on the documents mentioned that they (the heirs) were served with copies of the same does not necessarily mean that they had no notice thereof. In the absence of a positive showing that the requirements for securing the authority to sell had not been complied with, it is appropriate to apply the presumptions that the law had been obeyed; that official duty has been regularly performed; and that private transactions had been fair and regular. (Sec. 5, pars. m. p and ff. Rule 131, Rules of Court.) When, by the order of the court, a property of the estate is sold under this provision, the purchaser in good faith may rest on he presumption of the legality of the court's order. (presumption of regularity) Estoppel by Laches The record reveals sufficient indicia that Rafols, et al. were fully aware of the sale of the subject land in favor of Barba despite which they questioned the validity of the same only after the lapse of fifteen (15) years from its execution. They could not have been ignorant of the fact that the estate of their deceased father was under settlement proceedings with a court-appointed administrator who is required by law to render an accounting of his administration. The record shows that in 1951 or just three (3) days after the execution of the deed of sale in favor of Barba, Rafols, et al. filed a motion praying that the administrator be ordered to pay each of them the sum of P1,000, plus P600.00 for their lawyer. It also appears that after the death of Montayre, he was substituted in such capacity by Ricardo Rafols, one of the petitioners In 1954, Ricardo as administrator filed a "REPORT ON THE PRESENT STATUS OF THE ESTATE OF NICOLAS RAFOLS and in the said report, mention is expressly made of the sale of the parcel of land in question in favor of Barba. AMIN | CHA | JANZ | KRIZEL | VIEN Rafols, et al. NEVER claimed that they had no notice in such report, nor in the final accounting and motion for closing of administration in 1962. It was not until Nov1966 that they commenced the present action. Also, there was an indication (admission) in the record that the heirs of Nicolas had sufficient notice of the sale as early as 1951. This was contained in Ricardo Rafols affidavit of withdrawal as party in this suit. The infirmity of the subject deed of sale is premised on the alleged nullity of the order of the court authorizing the sale. The validity of said order may not be attacked in a collateral proceeding, the supposed ground for declaring it void for lack of jurisdiction not being apparent on the face thereof. To enable Rafols, et al. to rely on the rule that the action to declare the inexistence of a contract does not prescribe, it must first be shown that the subject contract is indeed null and void. As aforesaid, the alleged nullity had not been adequately shown. All considered, Rafols, et al. are guilty of laches. While it is true that the action to annul a void or inexistent contract does not prescribe, it may nonetheless be barred by laches. The defense of laches applies independently of prescription. (IN CASE ITANONG NI MAM) Laches is different from prescription. Prescription is concerned with the fact of delay, whereas laches is concerned with the effect of delay. Prescription is a matter of time; laches is principally a question of inequity of permitting a claim to be enforced, this inequity being founded on the same change in the condition of the property or the relation of the parties. Prescription is statutory; laches is not. Laches applies in equity, whereas prescription applies at law. The essential elements of the principle of laches are all present herein, to wit: (1) conduct on the part of the defendant, or one under whom he claims, giving rise to the situation that led to the complaint and for which the complaint seeks a remedy; (2) delay in asserting the complainant's rights, the complainant having had knowledge or notice of the defendant's conduct and having been afforded an opportunity to institute a suit; (3) lack of knowledge or notice on the part of the defendant that the complainant would assert the right on which he bases his suit; and (4) injury or prejudice to the defendant in the event relief is accorded to the complainant or the suit it not held barred. (1) Barba purchased the parcel of land in question giving rise to the complaint of Rafols; (2) The latter delayed the assertion of their supposed right to annul the sale for a period of over fifteen (15) years despite knowledge or notice of such sale. They had all the opportunity within that period of time to take action to set aside or annul the sale; (3) Barba was never apprised of arty intention on the part of Rafols to annul the sale until this action was filed; and (4) Barba stands to lose the property in question if the suit filed against him by plaintiffs-appellants shall not be deemed barred.

Dispositif: The order (of dismissal) appealed from is hereby AFFIRMED.

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WT Construction v. Caete
Azcuna, J. Quickie: Ciriaco, administrator, was granted the authority of sell one of the properties of the estate. He entered into an Agreement for Sale of Land with WT Construction. WT Construction paid the down payment. It was discovered that Ciriaco did not inform his co-heirs of the sale and that he appropriated the amount. The new administrator and her co-heirs demanded the payment of the balance. WT Construction refused to pay. A writ of execution was issued in favour of the heirs. HELD: It is but logical that probate/estate courts can enforce obligations under such a deed of sale. Otherwise, they would not be able to secure the proceeds to pay for the taxes and this would defeat the purpose of the proceedings to settle the estate. Stated otherwise, the power to enforce obligations under the deed of sale of a property ordered sold to pay debts of the estate is but a necessary incident of the power of a probate/estate court to order and effect such sale in the first place Nature: petition for review of the Decision and Resolution of the Court of Appeals Facts: Juliana Cabahug filed a case for the settlement of the estate of her deceased husband, Alberto Cabahug, before the RTC of Mandaue City, Branch 55, presided by Judge Ulric R. Caete. Ciriaco Cabahug, the administrator of the estate and heir of Alberto, was granted the authority to sell one of the properties of the estate to defray the expenses for the payment of taxes due from the estate. The property to be sold was the parcel of land subject of the petition, situated in Looc, Mandaue City. Ciriaco entered into an Agreement for Sale of Land with Downpayment with WT Construction for P8,691,000. WT Construction made a down payment of 50% of the purchase price or P4,431,600 [should be P4,345,500]. The balance was to be paid immediately after the land is free from all occupants/obstructions. The contract stipulated the following: o That the seller shall undertake the clearing of the land of its present occupants and/or eject the squatters therein within a period of 1 year reckoned from the receipt of the advance payment, provided however, that if the buyer will be the one to handle the clearing or ejectment of occupants, all the expenses incurred thereto shall be charged to and be deducted from the remaining balance payable. o Upon receipt of the 50% advance payment of the purchase price, the buyer shall be authorized to enter the property, utilize the same and introduce improvements thereon WT Construction took steps in clearing the property of its occupants by filing a complaint for ejectment with the MTCC, Mandaue City. It was later discovered that Ciriaco did not inform his co-heirs of the sale. He appropriated the amount.

544 SCRA 455 (2008)

Judge Ulric R. Caete issued an Order relieving Ciriaco of his functions as administrator and directing him to render an accounting of all the properties and assets of the estate. Administrator Linda Cabahug-Antigue, along with her co-heirs, demanded from WT Construction the payment of the balance of the purchase price. WT Construction refused to pay the remaining balance since the payment of the balance of the purchase price conditioned upon the removal of occupants and obstructions in the property. Judge Caete issued an Order directing WT Construction to manifest in court within 5 days whether it wants the Contract of Sale rescinded. If no manifestation is filed within said period, WT Construction is further ordered to pay the estate of Alberto the amount of P4,259,400 less expenses incurred in the ejectment case within a period of 15 days, otherwise, failure to do so will prompt the court to issue a writ of execution. WT Construction filed a MR and/or Extension of Time to Manifest Option to Rescind denied. A Writ of Execution was issued. The writ commanded the sheriff to satisfy the amount with the personal properties of WT Construction. WT Construction filed an Urgent Motion to Quash the Writ of Execution claiming that the issuance of the writ is premature for the following reasons: (1) the expenses to be deducted from the purchase price could not be ascertained as there are still squatters on the land who have yet to be evicted; (2) the existence of an action for Quieting of Title, Injunction and Damages for ownership and possession of a portion of the property; and (3) the balance of the purchase price would be significantly reduced if the claim will be granted. During the pendency of the motion, the plaintiffs in the action for quieting of filed a Motion for Leave to Intervene contending that they have a right to a portion of the subject lot. The group also moved for the quashing of the writ of execution. Judge Caete denied the motion. MR denied. CA dismissed the petition for certiorari filed by WT Construction. o The assailed Order being merely a resolution of the motion to quash the writ of execution, is neither a decision nor a final order on the merits. o The Order in question does not purport to settle a right but assumes it already. It was the Order that settled the rights of the parties to the matter of the balance of the purchase price and became the subject of the writ of execution. The intervening proceeding was nothing more than an attempt by the trial court to thresh out a settlement by the parties, which did not push through because of the intransigence of the petitioner, leaving the court no choice but to enforce the terms of the original order upon motion of the estate. On the basis of present jurisprudential trends, the expression no merit may safely be used for ordinary motions such as the one in issue here. o Neither may it be said that the writ had been prematurely issued, simply because the ejectment case, the expenses of which were to be deducted from the balance of the purchase price, was not yet terminated. The respondent

19 DE LA CERNA SPECPRO DIGESTS 2011 estate had correctly pointed out that the litigation expenses could be determined beforehand. As to the intervention of other parties - it appears in their pleading, these parties expect to be prejudiced by the turnover of the purchase price to the estate. They can take care of themselves, and evidently, they are doing so by such intervention. AMIN | CHA | JANZ | KRIZEL | VIEN incident of the power of a probate/estate court to order and effect such sale in the first place

Issues/Held: (1) WON the trial court delegated the authority to hear and determine the amount to be levied in a writ of execution to the sheriff. NO Arguments of WT Construction the writ of execution sought to be quashed by petitioner is inherently defective, as it gives the sheriff the authority to determine the amount to be levied in violation of the mandatory provision of Sec. 8(e), Rule 39 RoC the quashal of the writ of execution is necessary and proper because, aside from being inherently defective, it is the product of a null and void proceedings because the jurisdiction to determine the rights and obligations of petitioner and private respondent under the "Agreement for Sale of Land with Downpayment" exclusively belongs to courts of general jurisdiction; the writ of execution sought to be quashed not one of those allowed to be issued by probate courts under Sec. 6, Rule 88; Sec. 3, Rule 90 and Sec. 13, Rule 142 RoC; the writ of execution violates the doctrine that a contract is the law between parties, and courts have no choice but to enforce such contract so long as it is not contrary to law, morals, customs or public policy; there was a supervening cause which made the implementation of the subject writ of execution unjust and inequitable; There was no discretion given to the sheriff as to the amount to be paid or executed on under the writ of execution. While the writ of execution did say "the sum of P4,259,400.00,minus the expenses incurred by WT Construction in ejecting the occupants of the land," this simply means that petitioner was being given a chance by the court to reduce the aforementioned amount upon proof of said deductible expenses, after which an alias writ would be issued. In the absence of such proof, the sheriff would have to execute for the full amount. And as noted by the CA, petitioner failed to prove such expenses within the period given by the probate/estate court. The issue is, therefore, moot. (2) WON a probate court has the jurisdiction to determine the rights and obligations of the parties in a contract, one of which is a private corporation. YES This was a new issue not raised in the probate/estate court. Furthermore, the deed of sale in question is the sale of the property of the estate to pay for taxes, a matter definitely within the power of the probate/estate court to order. It is but logical that probate/estate courts can enforce obligations under such a deed of sale. Otherwise, they would not be able to secure the proceeds to pay for the taxes and this would defeat the purpose of the proceedings to settle the estate. Stated otherwise, the power to enforce obligations under the deed of sale of a property ordered sold to pay debts of the estate is but a necessary

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Pahamotang et. al v. PNB et. al.

Garcia, J.: Quickie: Dad prayed for and was granted by the intestate court the allowance to enter into several mortgages and authority to sell properties of the estate of deceased Mom. Children assails that such were null and void because they were never notified. TC ruled in favor of children. CA reversed. SC said TC was correct. Nowhere in the evidence was there any indication that the children as heirs were properly notified in compliance with Rule 89. Nature: appeal by way of a petition for review on certiorari under Rule 45 Facts: July 1, 1972 Melitona Pahamotang died. She was survived by her husband Agustin Pahamotang, and their eight (8) children, namely: Ana, Genoveva, Isabelita, Corazon, Susana, Concepcion and herein petitioners Josephine and Eleonor, all surnamed Pahamotang. September 15, 1972 husband filed with CFI Davao City a petition for issuance of letters administration over the estate of his deceased wife. o In his petition, Agustin identified petitioners Josephine and Eleonor as among the heirs of his deceased spouse. It appears that Agustin was appointed petitioners' judicial guardian in an earlier case December 7, 1972 the intestate court issued an order granting Agustins petition. July 6, 1973 respondent PNB and Agustin executed an Amendment of Real and Chattel Mortgages with Assumption of Obligation. o It appears that earlier, or on December 14, 1972 , the intestate court approved the mortgage to PNB of certain assets of the estate to secure an obligation in the amount of P570,000.00. o Agustin signed the document in behalf of (1) the estate of Melitona; (2) daughters Ana and Corazon; and (3) a logging company named Pahamotang Logging Enterprises, Inc. (PLEI) which appeared to have an interest in the properties of the estate. o Offered as securities are twelve (12) parcels of registered land July 16, 1973 Agustin filed with the intestate court a Petition for Authority To Increase Mortgage on the above mentioned properties of the estate, which the intestate court granted October 5, 1974 Agustin again filed with the intestate court another petition, Petition for Declaration of Heirs And For Authority To Increase Indebtedness , whereunder he alleged the necessity for an additional loan from PNB to capitalize the business of the estate, the additional loan to be secured by additional collateral in the form of a parcel of land registered in the name of Heirs of Melitona Pahamotang. o In the same petition, Agustin prayed the intestate court to declare him and Ana, Genoveva, Isabelita, Corazon, Susana, Concepcion and herein petitioners Josephine and Eleonor as the only heirs of Melitona.

454 SCRA 681 (2005)

In an Order of October 19, 1974, the intestate court granted Agustin authority to seek additional loan from PNB in an amount not exceeding P5,000,000.00 to be secured by the land covered by OCT No. P-7131 of the Registry of Deeds of Davao Oriental, but denied Agustins prayer for declaration of heirs for being premature. October 22, 1974 a real estate mortgage contract for P4,500,000.00 was executed by PNB and Agustin in his several capacities as: (1) administrator of the estate of his late wife; (2) general manager of PLEI; (3) attorney-in-fact of spouses Isabelita Pahamotang and Orlando Ruiz, and spouses Susana Pahamotang and Octavio Zamora; and (4) guardian of daughters Concepcion and Genoveva and petitioners Josephine and Eleonor. Offered as securities for the additional loan are three (3) parcels of registered land covered by TCTs No. T-21132, 37786 and 43264. February 19, 1980 Agustin filed with the intestate court a Petition (Request for Judicial Authority To Sell Certain Properties of the Estate) , therein praying for authority to sell to Arturo Arguna the properties of the estate covered by TCTs No. 7443, 8035, 11465, 24326 and 31226 of the Registry of Deeds of Davao City, and also TCT No. (T-3918) T-1081 of the Registry of Deeds of Davao del Norte. February 27, 1980 Agustin yet filed another petition, this time a Petition To Sell the Properties of the Estate, more specifically referring to the property covered by OCT No. P-7131, in favor of PLEI. In separate Orders both dated February 25, 1980, the intestate court granted Agustin authority to sell estate properties, in which orders the court also required all the heirs of Melitona to give their express conformity to the disposal of the subject properties of the estate and to sign the deed of sale to be submitted to the same court. Strangely, the two (2) orders were dated two (2) days earlier than February 27, 1980, the day Agustin supposedly filed his petition. In a motion for reconsideration, Agustin prayed the intestate court for the amendment of one of its February 25, 1980 Orders by canceling the requirement of express conformity of the heirs as a condition for the disposal of the aforesaid properties, which the intestate court also granted. Hence, on March 4, 1981, estate properties were sold to respondent Arturo Arguna, while the property covered by OCT No. P-7131 was sold to PLEI. Consequent to such sales, vendees Arguna and PLEI filed with the intestate court a motion for the approval of the corresponding deeds of sale in their favor. And, in an Order dated March 9, 1981, the intestate court granted the motion. Thereafter, three (3) daughters of Agustin, namely, Ana, Isabelita and Corazon petitioned the intestate court for the payment of their respective shares from the sales of estate properties, which was granted. Meanwhile, the obligation secured by mortgages on the subject properties of the estate was never satisfied. Hence, on the basis of the real estate mortgage contracts dated July 6, 1973 and October 22, 1974, mortgagor PNB filed a petition for the extrajudicial foreclosure of the mortgage.

21 DE LA CERNA SPECPRO DIGESTS 2011 Petitioner Josephine filed a motion with the intestate court for the issuance of an order restraining PNB from extrajudicially foreclosing the mortgage, but this was denied. Hence, PNB was able to foreclose the mortgage in its favor. Petitioners Josephine and Eleanor, together with their sister Susana PahamatongZamora, filed motions with the intestate court to set aside its Orders of December 14, 1972 [Note: the order dated July 18, 1973 contained reference to an order dated December 14, 1972 approving the mortgage to PNB of certain properties of the estate], July 18, 1973, October 19, 1974 and February 25, 1980. In an Order dated September 5, 1983, the intestate court denied the motions on the ground that the supposed defects/irregularities complained of are merely procedural and not substantial So, on March 20, 1984, in the RTC Davao City, petitioners Josephine and Eleanor, together with their sister Susana, filed their complaint for Nullification of Mortgage Contracts and Foreclosure Proceedings and Damages against Agustin, PNB, Arturo Arguna, PLEI, the Provincial Sheriff of Mati, Davao Oriental, the Provincial Sheriff of Tagum, Davao del Norte and the City Sheriff of Davao City. o PNB moved to dismiss the complaint, which the trial court granted o However, upon motion of the plaintiffs, the trial court reversed itself and ordered defendant PNB to file its answer. o Defendant PNB did file its answer with counterclaim, accompanied by a crossclaim against co-defendants Agustin and PLEI. o With defendant Arturo Argunas death on October 31, 1990, the trial court ordered his substitution by his heirs: Heirs of Arturo Alguna. In a Decision dated August 7, 1998, the trial court in effect rendered judgment for the plaintiffs, thereby declaring the mortgage contracts, the foreclosure proceedings, and the deeds of sale as void insofar as it affects the plaintiffs Naturally, PNB, PLEI and the Heirs of Arturo Arguna went on appeal, which was not in vain as the CA reversed the TCs decision. o The appellate court ruled that petitioners, while ostensibly questioning the validity of the contracts of mortgage and sale entered into by their father Agustin, were essentially attacking collaterally the validity of the four (4) orders of the intestate court in Special Case No. 1792. To the appellate court, petitioners committed a fatal error of mounting a collateral attack on the foregoing orders instead of initiating a direct action to annul them. In time, petitioners moved for a reconsideration but their motion was denied by the appellate court in its Resolution of November 20, 2002. AMIN | CHA | JANZ | KRIZEL | VIEN because they [petitioners] never consented thereto. They assert that as heirs of their mother Melitona, they are entitled to notice of Agustin's several petitions in the intestate court seeking authority to mortgage and sell estate properties. Without such notice, so they maintain, the four orders of the intestate court dated July 18, 1973, October 19, 1974, February 25, 1980 and January 7, 1981, which allowed Agustin to mortgage and sell estate properties, are void on account of Agustins non compliance with the mandatory requirements of Rule 89 of the Rules of Court. o Prescinding from their premise that said orders are completely void and hence, could not attain finality, petitioners maintain that the same could be attacked directly or collaterally, anytime and anywhere. It bears emphasizing that the action filed by the petitioners before the trial court in Civil Case No. 16,802 is for the annulment of several contracts entered into by Agustin for and in behalf of the estate of Melitona, namely: (a) contract of mortgage in favor of respondent PNB, (b) contract of sale in favor of Arguna involving seven (7) parcels of land; and (c) contract of sale of a parcel of land in favor of PLEI. The trial court acquired jurisdiction over the subject matter of the case upon the allegations in the complaint that said contracts were entered into despite lack of notices to the heirs of the petition for the approval of those contracts by the intestate court. Contrary to the view of the Court of Appeals, the action which petitioners lodged with the trial court in Civil Case No. 16,802 is not an action to annul the orders of the intestate court, which, according to CA, cannot be done collaterally. It is the validity of the contracts of mortgage and sale which is directly attacked in the action. o And, in the exercise of its jurisdiction, the trial court made a factual finding in its decision of August 7, 1998 that petitioners were, in fact, not notified by their father Agustin of the filing of his petitions for permission to mortgage/sell the estate properties. The trial court made the correct conclusion of law that the challenged orders of the intestate court granting Agustins petitions were null and void for lack of compliance with the mandatory requirements of Rule 89 of the Rules of Court, particularly Sections 2, 4, 7 thereof Settled is the rule in this jurisdiction that when an order authorizing the sale or encumbrance of real property was issued by the testate or intestate court without previous notice to the heirs, devisees and legatees as required by the Rules, it is not only the contract itself which is null and void but also the order of the court authorizing the same. o Maneclang vs. Baun the previous administrator of the estate filed a petition with the intestate court seeking authority to sell portion of the estate, which the court granted despite lack of notice of hearing to the heirs of the decedent. The new administrator of the estate filed with the Regional Trial Court an action for the annulment of the sales made by the previous administrator. After trial, the trial court held that the order of the intestate court granting authority to sell, as well as the deed of sale, were void. On appeal directly to this Court, We held that without compliance with Sections 2, 4 and 7 of Rule 89 of the Rules of Court, the authority to sell, the sale itself and the order approving it would be null and void ab initio.

Issue/Held: W/N the CA erred in reversing the decision of the trial court, i.e, whether or not petitioners can obtain relief from the effects of contracts of sale and mortgage entered into by Agustin without first initiating a direct action against the orders of the intestate court authorizing the challenged contracts. YES. Ratio: It is petitioners posture that the mortgage contracts dated July 6, 1973 and October 22, 1974 entered into by Agustin with respondent PNB, as well as his subsequent sale of estate properties to PLEI and Arguna on March 4, 1981, are void

22 DE LA CERNA SPECPRO DIGESTS 2011 o Liu vs. Loy, Jr. while the decedent was still living, his son and attorney-infact sold in behalf of the alleged decedent certain parcels of land to Frank Liu. After the decedent died, the son sold the same properties to two persons. Upon an ex parte motion filed by the 2nd set of buyers of estate properties, the probate court approved the sale to them of said properties. Consequently, certificates of title covering the estate properties were cancelled and new titles issued to the 2nd set of buyers. Frank Liu filed a complaint for reconveyance/ annulment of title with the Regional Trial Court. The trial court dismissed the complaint and the Court of Appeals affirmed the dismissal. When the case was appealed to us, we set aside the decision of the appellate court and declared the probate court's approval of the sale as completely void due to the failure of the 2nd set of buyers to notify the heir-administratrix of the motion and hearing for the sale of estate property. Clearly, the requirements of Rule 89 of the Rules of Court are mandatory and failure to give notice to the heirs would invalidate the authority granted by the intestate/probate court to mortgage or sell estate assets. Here, it appears that petitioners were never notified of the several petitions filed by Agustin with the intestate court to mortgage and sell the estate properties of his wife. According to the trial court, the [P]etition for Authority to Increase Mortgage and [P]etition for Declaration of Heirs and for Authority to Increase Indebtedness, filed by Agustin on July 16, 1973 and October 5, 1974, respectively, do not contain information that petitioners were furnished with copies of said petitions. Also, notices of hearings of those petitions were not sent to the petitioners. The trial court also found in Civil Case No. 16,802 that Agustin did not notify petitioners of the filing of his petitions for judicial authority to sell estate properties to Arturo Arguna and PLEI. As it were, the appellate court offered little explanation on why it did not believe the trial court in its finding that petitioners were ignorant of Agustins scheme to mortgage and sell the estate properties. o Aside from merely quoting the orders of July 18, 1973 and October 19, 1974 of the intestate court, the Court of Appeals leaves us in the dark on its reason for disbelieving the trial court. The appellate court did not publicize its appraisal of the evidence presented by the parties before the trial court in the matter regarding the knowledge, or absence thereof, by the petitioners of Agustins petitions. The appellate court cannot casually set aside the findings of the trial court without stating clearly the reasons therefor. Findings of the trial court are entitled to great weight, and absent any indication to believe otherwise, we simply cannot adopt the conclusion reached by the Court of Appeals. o In the present case, the appellate court erred in appreciating laches against petitioners. The element of delay in questioning the subject orders of the intestate court is sorely lacking. Petitioners were totally unaware of the plan of Agustin to mortgage and sell the estate properties. There is no indication that mortgagor PNB and vendee Arguna had notified petitioners of the contracts they had executed with Agustin. Although petitioners finally obtained knowledge of the subject petitions filed by their father, and eventually challenged the July 18, 1973, October 19, 1974, February AMIN | CHA | JANZ | KRIZEL | VIEN 25, 1980 and January 7, 1981 orders of the intestate court, it is not clear from the challenged decision of the appellate court when they (petitioners) actually learned of the existence of said orders of the intestate court. Absent any indication of the point in time when petitioners acquired knowledge of those orders, their alleged delay in impugning the validity thereof certainly cannot be established. And the Court of Appeals cannot simply impute laches against them. WHEREFORE, the assailed issuances of the Court of Appeals are hereby REVERSED and SET ASIDE and the decision dated August 7, 1998 of the trial court in its Civil Case No. 16,802 REINSTATED. SO ORDERED.

23 DE LA CERNA SPECPRO DIGESTS 2011 AMIN | CHA | JANZ | KRIZEL | VIEN

Dael et. al. v. IAC

Regalado, J. Quickie: Cabutihan was first married to Bienvenida Durana. She died. Cesario married her sister, Victorina Durana. Cesario died followed by Victorina Durana who died intestate. Carmencita Cabutihan filed a petition for the settlement of the intestate estate of Victorina Durana, wherein she also prayed for her appointment as administratrix. Petitioners herein filed an opposition, asking that the letters of administration be issued instead to herein petitioner Lucilda Dael. A "Supplementary Inventory" was filed by the special administrator covering other real properties of the estate of Victorina, consisting of the undivided shares in the inheritance of Cesario Cabutihan from his parents. Respondents moved for the disapproval of said inventories claiming that the properties listed therein were either acquired during the first marriage of Cesario Cabutihan or were merely the products or fruits of the properties of said first union or otherwise acquired through the funds thereof. To determine, therefore, the extent of the estate of Victorina, the conjugal estate of Cesario Cabutihan and Bienvenida Durana must be settled or liquidated first. The probate court thereby disapproved both inventories and annulled the extrajudicial settlement and deed of sale. Carmencita filed a "motion for authority to withdraw funds" from the estate, in the amount of P90,000.00 to be partitioned among the heirs in accordance with the proportion provided for in the aforesaid decision of the probate court. The Court held that the lower court did not err in allowing the withdrawal of funds for distribution to the heirs as advance inheritance. The respondent court correctly held than "if oppositors would stand to share more in the inheritance than what was fixed for them in the appealed judgment, the estate has sufficient assets to ensure an equitable distribution of the inheritance in accordance with law and final judgment in the proceedings." Also, it does not appear that there are unpaid obligations, as contemplated in Rule 90, for which provisions should have been made or a bond required. It is clear that the provisions of the Rules of Court, as well as the jurisprudence thereon, were followed in this particular incident. Facts: Cesario Cabutihan was first married to Bienvenida Durana. The first marriage of Cesario produced legitimate children who are the intervenors in the case although Carmencita Cabutihan instituted the case as petitioner. When the latter died, Cesario married her sister, Victorina Durana. Cesario died followed by Victorina Durana who died intestate.The second marriage of Cesario with Victorina did not produce any issue; however, the latter's heirs are the children of her two sisters and a brother including the petitioner and the intervenors who are all the children of Bienvenida. Argument of the oppositors: they are entitled to 2/3 portion of the estate of Victorina Durana considering that their predecessors-in-interest are the brother and sister of Victorina Durana; while the remaining 1/3 portion should devolve to the petitioner and the intervenors who represent their mother Bienvenida Durana and the other sister of Victorina Durana.

171 SCRA 524 (1989)

During the second marriage of Cesario and Victorina, they were engaged in a copra business and a public transportation business, with Victorina managing the former. After the demise of Cesario, Victorina and the private respondents entered into a extra-judicial settlement of his estate. Part of the properties adjudicated to Victorina include the copra business as well as some of the vehicles used in the transportation business. Subsequently, however, the vehicles were transferred to the private respondents by virtue of a "deed of sale". Carmencita Cabutihan filed a petition for the settlement of the intestate estate of Victorina Durana, wherein she also prayed for her appointment as administratrix. Petitioners herein filed an opposition, asking that the letters of administration be issued instead to herein petitioner Lucilda Dael. The other private respondents, on their motion, intervened in the case. Court below appointed Amado Zoleta as special administrator of the estate of the late Victorina Durana . Said special administrator, upon order of the probate court, submitted an inventory of the properties of the estate . A "Supplementary Inventory" was filed by the special administrator covering other real properties of the estate of Victorina, consisting of the undivided shares in the inheritance of Cesario Cabutihan from his parents. Respondents moved for the disapproval of said inventories claiming that the properties listed therein were either acquired during the first marriage of Cesario Cabutihan or were merely the products or fruits of the properties of said first union or otherwise acquired through the funds thereof. TC: Victorina had no paraphernal properties brought or contributed to her marriage with Cesario; that the copra business was formed during the first marriage. All the properties listed in the inventories in her name or jointly with Cesario do not belong to her exclusively; these properties in are either the assets of Bienvenida as her paraphernal property or as the conjugal partnership assets of spouses Cesario or the latter's capital. To determine, therefore, the extent of the estate of Victorina, the conjugal estate of Cesario Cabutihan and Bienvenida Durana must be settled or liquidated first; of the conjugal estate shall be inherited by Cesario Cabutihan and his 5 children; the inheritance of Cesario in the Estate of Bienvenida in addition to the other half shall constitute Cesario's estate which shall be inherited by his second wife and his legitimate children. The probate court thereby disapproved both inventories and annulled the extrajudicial settlement and deed of sale. The latter two were annulled for being simulated or fictitious and for involving conjugal properties of the first marriage, including properties of Bienvenida, to which Victorina is not an heir. Petitioners appealed to the IAC. Carmencita filed a "motion for authority to withdraw funds" from the estate, in the amount of P90,000.00 to be partitioned among the heirs in accordance with the proportion provided for in the aforesaid decision of the probate court. Motion was granted. IAC: affirmed decision of lower court.

24 DE LA CERNA SPECPRO DIGESTS 2011 Issues: 1. WON the copra business, as well as the properties listed in the inventories as acquired during the second marriage, are assets of the conjugal partnership of the first marriage between Cesario and Bienvenida. NO. 2. How will the properties involved between the two conjugal partnerships be apportioned. the total mass of the partnership property shall be divided between the different partnerships in proportion to the duration of each and to the property belonging to the respective spouses. 3. WON the court erred in allowing the withdrawal of funds for distribution to the heirs as advance inheritance. NO Ratio: 1. When Bienvenida died, the first conjugal partnership was automatically dissolved. That conjugal partnership was then converted into an implied ordinary coownership. It was also at this point in time that the inheritance was transmitted to the heirs of Bienvenida. Thus, her heirs, acquired respective and definite rights over-one-half of the conjugal partnership property which pertained to Bienvinida. Consequently, whatever fruits or income may thereafter be derived from the properties, including the copra business, would no longer be conjugal but would belong in part to the heirs in proportion to their respective shares. The fruits and income of the other half of the property of the conjugal partnership would exclusively belong to Cesario. The marriage of Cesario and Victorina also produced the corresponding legal consequences. From that moment on, the fruits or income of the separate properties of the spouses would be conjugal, including those acquired through their industry. Hence, the fruits and income of Cesario's share in the inheritance from Bienvenida and of his conjugal share in the property of the first conjugal partnership would form part of the conjugal partnership properties of the second marriage. The fruits and income derived or acquired through these last-mentioned properties would likewise be conjugal in nature. It would have been ideal had there been a liquidation of the conjugal partnership properties of the first marriage between Cesario and Bienvenida. Unfortunately, the Court cannot determine from the records the amount of such properties at the time of Bienvenida's demise. What appears evident, however, is that, considering the continuity in the operation of the two businesses during the marital coverture between Cesario and Victorina which spanned a period of 14 years, and the fact that after Cesario's death Victorina still actively engaged in the same business until her own death 5 years later, the properties enumerated in the aforesaid inventories submitted to the probate court could not all have been properties of the first marriage. Guidance should be sought from the provisions of the Civil Code to the effect that whenever the liquidation of the partnership of two or more marriages contracted by AMIN | CHA | JANZ | KRIZEL | VIEN the same person should be carried out at the same time and there is no evidence to show the capital or the conjugal property belonging to each of the partnerships to be liquidated, the total mass of the partnership property shall be divided between the different partnerships in proportion to the duration of each and to the property belonging to the respective spouses. The first marriage existed for approximately 15 years while the second marriage lasted for about 14 years . Applying the aforestated rule, the first conjugal partnership will be prorated a share of 15/29 of the properties included in the inventory while the second conjugal partnership will get 14/29 thereof. Not to be included, however, are the real properties listed in the supplementary inventory because they definitely belong to the estate of Cesario as the latter's inheritance from his parents. 1/2 of the properties that pertain to the first conjugal partnership belong to Cesario as his conjugal share therein, while the other half shall be considered as inherited by him and his five children as the heirs of Bienvenida. The properties pertaining to the second partnership shall also be equally divided, 1/2 to belong to Cesario and the other to Victorina as their respective shares in their conjugal partnership properties. The share of Cesario should then be divided among his heirs, namely, Victorina and his 5 children. To recapitulate, the estate of Victorina for distribution to her heirs shall consist of her 1/2 share in the conjugal properties of the aforesaid second marriage and her one-sixth (1/6) share in the estate of Cesario as an heir. 3. Said order is within the contemplation and authority of Rule 109, Section 2 whereof provides that notwithstanding a pending controversy or appeal in proceedings to settle the estate of a decedent, the court may, in its discretion and upon such terms as it may deem proper and just, permit that such part of the estate as may not be affected by the controversy or appeal be distributed among the heirs or legatees, upon compliance with the conditions set forth in Rule 90 of these rules. Rule 90, on the other hand, provides in part that "no distribution shall be allowed until the payment of the obligations above mentioned has been made or provided for, unless the distributes or any of them, give a bond, in a sum to be fixed by the court, conditioned for the payment of said obligations within such time as the court directs." It is true that "partial distribution of the decedent's estate pending the final termination of the testate or intestate proceedings should as much as possible be discouraged by the courts and, unless in extreme cases, such form of advances of inheritance should not be countenanced. The reason for this strict rule is obvious - courts should guard with utmost zeal and jealousy the estate of the decedent to the end that the creditors thereof be adequately protected and all the rightful heirs assured of their shares in the inheritance."
The respondent court correctly held than "if oppositors would stand to share more in the inheritance than what was fixed for them in the appealed judgment, the estate has sufficient assets to ensure an equitable distribution of the inheritance in accordance with law and final judgment in the proceedings." Also, it does not appear that there are unpaid obligations, as contemplated in Rule 90, for which provisions should have been made or a bond required. It is clear that the provisions of the Rules of Court, as well as the jurisprudence thereon, were followed in this particular incident.

2.

25 DE LA CERNA SPECPRO DIGESTS 2011 AMIN | CHA | JANZ | KRIZEL | VIEN

Camia de Reyes v. Reyes de Ilano

Villareal, J.: Nature: appeal from CFI Quickie: Husband had 2 wives. Wife 1 died. Then husband died. Wife 2 qualified as executrix then filed her first account. Reyes de Ilano filed her opposition saying that the expenses in the report are unnecessary and inaccurate. SC said Reyes de Ilano can indeed impugn the report of the committee on claims and appraisals because the same is not conclusive and the courts are not bound by it. But the expenses therein (except for the copies of the assessed value of properties) are necessary because Camia de Reyes is a widow of a decedent of good standing. The court also clarified that the properties in question constitute conjugal property of the husband with his first wife because they were acquired during the marriage. The ultimate effect was that there was no error in the courts act of approving the counterproject of partition proposed by the oppositor. Facts: Andres Reyes and Luciana Farlin were married in the year 1893, having had six children, three of whom died without heirs before their parents' death, and two died also without heirs after the death of their mother Luciana Farlin, leaving the herein oppositor-appellee Juana Reyes de Ilano as their only surviving child. About said year 1893, the parents of Andres Reyes leased certain parcels of land from the Spanish government. Upon their death during the Spanish regime, their son Andres Reyes succeeded them in said lease and the latter afterwards purchased said leased lands as friar lands from the Insular Government Luciana Farlin also acquired by purchase from the Insular Government certain parcels of friar land After the death of Luciana Farlin on November 12, 1922, her surviving spouse, Andres Reyes, contracted a second marriage with the herein applicant-appellant Felisa Camia. A son named Bibiano Reyes was born of said second marriage. During her marriage to Andres Reyes, Felisa Camia also purchased a parcel of friar land , and another from her husband Andres Reyes, who had, acquired it by purchase from the Insular Government, as part of the friar lands Andres Reyes died on April 20, 1932, leaving a will which was duly probated He was survived by his wife, the herein executrix and appellant Felisa Camia, his only son had with her, named Bibiano Reyes, and his daughter by his first marriage, the herein oppositor-appellee Juana Reyes de Ilano. Felisa Camia qualified as executrix of the estate left by the deceased husband Andres Reyes. Severo Abellara and Luis Gaerlan were appointed commissioners on claims and appraisal and, after having qualified for their post, they presented their final report.

63 Phil 629 (1936)

The herein appellant Felisa Camia filed her first account, as administratrix The appellee Juana Reyes de Ilano filed her opposition to this account in her pleadings, claiming that some of the items of expenses stated therein are unnecessary and inaccurate. Executrix-appellant presented the second account of her administration which was likewise opposed by the oppositor-appellee Juana Reyes de Ilano on the ground that, according to her, it is incomplete and that certain items of expenses and income, which are enumerated in her pleading of opposition, are vague, unnecessary and inaccurate. Felisa Camia de Reyes filed a project of partition, which was also opposed by the oppositor-appellee Juana Reyes de Ilano in a pleading alleging, among other things, that the valuation of the properties made by the commissioners on claims and appraisal is inadequate and unjust; that said project does not contain all the properties that should be partitioned; that it contains properties belonging to the conjugal partnership of the first marriage; and that said project is based upon the will, some of the provisions of which are inofficious and illegal; at the same time submitting a counterproject of partition with an appraisal of the properties therein enumerated, which appraisal is different from that made by the commissioners on claims and appraisal. This counterproject of partition presented by the oppositorappellee is the one admitted and approved by the court.

Issue/Held and Ratio: WON the oppositor-appellee Juana Reyes de Ilano is still entitled to impugn, by means of the testimony of the witness Benedicto A. Ilano, the valuation or appraisal of the properties of the deceased Andres Reyes, made by the commissioners on claims and appraisal - YES It is inferred from the order that what was declared final and conclusive was the report of the commissioners on claims and appraisal with respect to the claims of Albino Galeca, Rafaela Dominguez, Raymundo Samson, Filomena Dominguez and Felisa Camaa, who took no appeal from the resolution of said commissioners rejecting the claims in question. Section 773 of the Code of Civil Procedure grants the creditor of a deceased person the right to appeal to the competent Court of First Instance from the disallowance, in whole or in part, of his claim by the committee, on claims and appraisal, and failure to exercise this right within the period and in the manner prescribed by section 775 of said Code makes the committee's resolution final and prevents the court from acquiring jurisdiction over the matter (Kette vs. Suarez, 55 Phil., 712). In the case of Siy Chong Keng, vs. Collector of Internal Revenue (60 Phil., 493), this court laid down the following doctrine: Apparently the statute does not require approval of the committee's appraisals by the court; but doubtless exceptions thereto might be taken by the executor or administrator upon whom a copy was served. The purpose of the inventory and appraisal of the estate of the decedent is to aid the court in revising the accounts and determining the liabilities of the executor

26 DE LA CERNA SPECPRO DIGESTS 2011 or administrator and in making a final and equitable distribution (partition) of the estate and otherwise to facilitate the administration of the estate. It is very clear, therefore, that the committee's appraisal of the estate of the deceased is not conclusive and the court is not bound to adopt it Therefore, the court a quo committed no error in permitting Benedicto A. Ilano to testify for the purpose of impugning the committee's appraisal of the estate of the deceased. AMIN | CHA | JANZ | KRIZEL | VIEN The item of expenses for the novenary or vigil for the soul of the deceased Andres Reyes, as well as for the funeral and religious ceremonies enjoined by the deceased in his will to be celebrated in accordance with his social standing of the deceased in the Province of Cavite.

WON the lower court erred in rejecting certain items (transportation and subsistence) contained in the two accounts of the executrix Felisa Camia de Reyes YES, they should have been approved (except for the certified copies of the assessed value of the property) The expenses for transportation and subsistence refer to the trips made by the executrix, accompanied by her mother and son, to the Court of First Instance of Cavite to attend the hearings in connection with the testamentary proceedings; to the hacienda belonging to the estate under her administration; and to Manila in order to interview her attorney also in connection with the testamentary proceedings. All these expenses were necessary for the care and administration of the estate and should, therefore, be approved. To all appearances the company of the mother of the executrix Felisa Camia de Reyes, surviving spouse of the deceased whose testamentary estate is under consideration, and that of her minor son were unnecessary. Taking into consideration, however, that the executrix is only 31 years of age and is the widow of a decedent who, in life, had been a good social standing, Philippine idiosyncrasy and tradition demand that she be surrounded by every protection and care needed by a widow of good reputation, in respect of the memory of her deceased husband. For these reasons this court is of the opinion that the company of the mother and son of the executrix during the trips which she had to make in connection with the affairs of the estate of which she was the testamentary executrix, is justified and, consequently , the expenses for transportation and subsistence incurred by her and her companions should be approved. However, with respect to the items of June 23 and 25, 1932, which consist of transportation expenses to Cavite of the executrix, her mother and son for the purpose of looking for a surety, and the sum of P1.50 paid for certified copies of the assessed value of the property of the sureties, which expenses amount to P4.20, they should be rejected in accordance with the doctrine laid down in Sulit vs. Santos As to the sum of P6 which the executrix paid for medicine used for her minor child, Bibiano Reyes, while it is true that the sum of P25 a month, chargeable to the estate, is allotted to said minor for his education and support, this court is of the opinion that the extra payment of P6 for medicine is not unwarranted and should, therefore, be also approved. At the time of the death of Andres Reyes, he was living with his wife by his second marriage, Felisa Camia de Reyes, and his son also by his second marriage, Bibiano Reyes, and it was natural that she should continue living with her said son in said house, not only because it is their home but also to watch over and preserve it, as testamentary executrix, and an expense of P3.19 a month for electricity for the preservation of the house under administration, is not excessive and should be approved.

WON the parcels of land designated by the letters e, f , g, h, i, j, k, l and m in the inventory of the executrix-appellant Felisa Camia de Reyes are private properties of the deceased Andres Reyes or are properties of his conjugal partnership with his wife by his first marriage, Luciana Farlin.- CONJUGAL It appears uncontroverted from the oral as well as the documentary evidence presented at the trial that said parcels were originally friar lands which the parents of Andres Reyes leased from the Government during the Spanish regime. Andres Reyes succeeded his parents in said lease and later acquired said leased lands by absolute purchase from the Insular Government on different dates, that is, he purchased one parcel on May 9, another ,and the rest on April 5, 1911. All these parcels were acquired by said Andres Reyes during the existence of his first marriage to Luciana Farlin, who died on November 12, 1922. It does not appear that a liquidation has been made of the ganancial property belonging to the conjugal partnership of Andres Reyes and Luciana Farlin. Article 1407 of the Civil Code provides as follows:ART. 1407. All the property of the spouses shall be deemed partnership property in the absence of proof that it belongs exclusively to the husband or to the wife. In the case of Guinguing vs. Abuton and Abuton (48 Phil., 144), this court laid down the following doctrine:HUSBAND AND WIFE; CONJUGAL PROPERTY; TITLE IN NAME OF ONE SPOUSE ONLY. Property acquired by the spouses during marriage pertains to the conjugal partnership regardless of the form in which the title is taken; and the fact that a composition title to the property has been, taken in the name of one of the spouses only, whether husband or wife, does not change the character of the property. Therefore, according to law and jurisprudence, it is sufficient to prove that the property was acquired during the marriage in order that the same may be deemed conjugal property. In this case the parties admit that the parcels of land under consideration were purchased by the deceased Andres Reyes during his marriage to his first wife Luciana Farlin. The mere fact that Andres Reyes appears as purchaser in the certificates of sale and in the certificates of titles does not change the ganacial nature of said lands Therefore, the court a quo committed no error in declaring that the abovestated parcels belong to the conjugal partnership of the deceased Andres Reyes and his first wife Luciana Farlin. With respect the parcels of land described in Exhibits O and N, which are the subject matter of the eighth assignment of alleged error, they appear to have been purchased by Felisa Camia during her marriage to the deceased Andres Reyes,. Inasmuch as these parcels were acquired under the same circumstances as those stated in the seventh assignment of alleged error, all that has been said in connection with the latter is applicable to them. Therefore, they are also on conjugal property of the spouses Andres Reyes and Felisa Camia de Reyes.

27 DE LA CERNA SPECPRO DIGESTS 2011 Furthermore, on page 210 of the file of exhibits of this case, there is a copy of an affidavit of the deceased Andres Reyes, wherein the deponent states that he was selling lot No. 6327 to his wife Felisa Camia by means of the certificate of sale, Exhibit O, for the sole purpose of transferring said lot in his wife's name because he had a daughter by his first wife and a son by his second wife, and because he had no time to administer it, but that the first installment was paid with the money belonging to both (Andres Reyes and Felisa Camia). This sale is, of course, null and void in accordance with the provisions of article 1458 of the Civil Code, it not appearing that a separation of property has been agreed upon; but this nullity does not change the nature of said lands as conjugal property of the spouses Andres Reyes and Felisa Camia. As to the ninth assignment of alleged error, the question whether the land described on page 2, paragraph 2, letter m, of the will is conjugal property or private property of Andres Reyes has already been decided upon in discussing the seventh assignment of alleged error. This land is the same lot No. 1686 and it has been stated that it is conjugal property of Andres Reyes and his wife by his first marriage, Luciana Farlin, having been purchased in his name during his marriage to Luciana Farlin, as shown by certificate of sale No. 4320 (Exhibits M, 24 and 31). With respect to the house mentioned on page 3 of the inventory, its ganancial nature has been established by Petrona Reyes, younger sister of Andres Reyes, in her deposition of October 24, 1933. This witness testified that said house was constructed one year after the death of her sister-in-law Luciana Farlin with money left by the latter upon her death, which was deposited with said witness; that Andres Reyes took from her the money needed by him for the construction of the house; and that said house cost P10,000. The executrix-appellant does not question the ganancial nature of said house of the spouses Andres Reyes and Luciana Farlin but merely alleges that the above-stated deposition of Petrona Reyes, which is the only evidence upon which the lower court bases its opinion that it is conjugal property, is not admissible as evidence because when she was notified of the taking thereof, the only opposition in the case under consideration was that of the oppositor Juana Reyes de Ilano to the first rendition of accounts of said executrix, dated May 13, 1933, and consequently, every deposition taken not referring exclusively to said account is impertinent and irrelevant. This The record shows that the attorney for the executrix does not deny but, on the contrary, admits as true the testimony of the attorney for the oppositor during the trial of this case that three days prior to the day set for the taking of the deposition, the executrix had been notified of the date thereof, and two days before the date in question she had been served by mail with a copy of the opposition to the second or final account, together with a copy of the opposition to the project of partition and a copy of the counterproject of partition made by said attorney for the oppositor. On page 10 of the appellee's brief it is stated that the originals of said pleadings were mailed to the office of the clerk of the Court of First Instance of Cavite on October 20, 1933, it being presumed that they were received by said office on the following day, October 21, 1933. The deposition in question took place on the 24th and 25th of said month and year. Furthermore, said deposition contains the statement of the attorney for the executrix that he received said copies of the oppositor's opposition to the second account and to the project of partition, and her counterproject of partition at 4.50 p. AMIN | CHA | JANZ | KRIZEL | VIEN m. on October 23, 1933, or one day before the taking of the deposition which, as stated, took place on the 24th of said month and year, at 4:30 p. m. The deposition in question was continued on the following day, October 25, 1933, and said attorney for the executrix had opportunity to cross-examine, and in fact he cross-examined the deponent. In the opinion of this court, these facts are sufficient to show that the admission of said deposition as evidence by the lower court did not constitute an error inasmuch as in the taking thereof there were no defects or irregularities that might have affected the rights of any of the parties. In the case of Lim Cuan Sy vs. Northern Assurance Co. (55 Phil., 248), this court laid down the following doctrine:A deposition taken, under the conditions prescribed by law, and upon due notice, allowing two full days, exclusive of Sunday, to the opposite party, should not be suppressed merely because the attorney for such party may have been unable to attend at the time fixed for the taking of the deposition.

WON the lower court erred in accepting the counterproject of partition presented by the oppositor-appellee Juana Reyes de Ilano- NO There is nothing in the law imposing upon the executor or administrator the obligation to present a project of partition for the distribution of the estate of a deceased person. Section 753 of the Code of Civil Procedure authorizes the court to assign ". . . the residue of the estate to the persons entitled to the same, and in its order the court shall name the persons and proportions, or parts, to which each is entitled . . ." (See also article 1052, Civil Code.) It is referred from these legal provisions that it is the Court of First Instance of Cavite alone that may make the distribution of his estate and determine the persons entitled, and it may require the executrix to present a project of partition to better inform itself of the condition of the estate to be distributed and so facilitate the prompt distribution thereof. The project of partition that the executor or administrator might have presented would not be conclusive and the interested parties could oppose the approval thereof and enter their counterproject of partition which the court might accept and approve, as it did in this case. In adopting the project of partition of the oppositor-appellee Juana Reyes de Ilano, said court acted within its discretionary power and committed no error of law. In view of the foregoing considerations, and with the sole modification that the estate of the deceased Andres Reyes reimburse the executrix-appellant in the sum of P690.57, plus the sum of P81.94 as commission, the resolution appealed from is affirmed in all other respects, without special pronouncement as to the costs. So ordered.

28 DE LA CERNA SPECPRO DIGESTS 2011 AMIN | CHA | JANZ | KRIZEL | VIEN

Garcia v. Orozco
Guerrero, J. Quickie: Epifanio Orozco died. He was survived by wife Albina Garcia, sister of herein petitioners Juan and Baldomera Garcia. Epifanio was also survived by his declared natural children, herein respondents (Orozco siblings). After the death of Epifanio, Albina sold lands situated in Mataguisi and Malobogo, Albay, to her siblings Juan and Baldomera. Thus, in the subsequent intestate proceedings for the settlement of the estate of Epifanio, where Serafin Orozco (eldest of the Orozco siblings) was appointed administrator, the said sale was questioned. The probate court provisionally ruled that the Mataguisi and Malobago properties belonged to the estate of Epifanio. In a separate case (1932 judgment/case), pursuant to a compromise agreement, the lower court definitively ruled that the said property belonged to Epifanios estate, while Albina was awarded other properties as her share in the conjugal property. At that time (alas, this is not so stated with clarity, so we simply assume), the properties of the conjugal partnership was already partitioned and liquidated. Execution was subsequently had and the lands in litigation were ordered reconveyed to the estate. Not long thereafter, the Garcias wrestled possession over the lands from the Orozcos claiming title over the same. Finally, in 1942, the Orozcos filed a case against the Garcias, seeking recovery of the lands in litigation. Orozcos won. Garcias appealed, but not perfected because of the war. Records of the case was obliterated, hence, the trial court ruled to try the case de novo. Still, Garcias lost. Appealed to the CA, still lost~ hence, this appeal The lands belong to the Orozcos. The Garcias have no valid claim over them because the sale made by Albina in favor of Juan and Baldomera Garcia of the subject parcels of land is VOID for not having complied with the requisites provided by the rules respecting dispositions and conveyances of property belonging to the conjugal partnership by the surviving spouse upon the other spouses death. After the death of one of the spouses, in case it is necessary to sell any portion of the community property in order to pay outstanding obligations of the conjugal partnership, such sale must be made in the manner and with the formalities established by the Rules of Court for the sale of the property of deceased persons (e.g. written notice to heirs, etc). Any sale, transfer, alienation or disposition of said property effected without d formalities shall be null and void, except as regards the portion that belongs to the vendor as determined in the liquidation and partition. Pending the liquidation, the disposition must be considered as to the only to the contingent share or interest of the vendor in the particular property involved, but not to the corpus of the property. Such disposition cannot include the half that may be adjudicated to the heirs of the deceased spouse.This rule applies, not only to sale, but also to mortgages. The alienation, mortgage or disposal of the conjugal property without the required formality, is not, however, null ab initio, for the law recognizes their validity, so long as they do not exceed the portion which, after liquidation and partition, should pertain to the surviving spouse who made the contract. Of course, before liquidation and partition have been completed, such portion cannot be determined. Nature: Petition for review on certiorari of the decision of the Court of Appeals, which affirmed the decision of the trial court

85 SCRA 69 (1978)
Facts: Respondents Serafin, Carmen, Merced and Arsenio, all surnamed Orozco, are brothers and sisters. They were declared the natural children of the deceased Epifanio Orozco by the lower court in March 1906 Meanwhile, Epifanio Orozco was married to Albina Garcia, sister of the herein petitioners, Juan and Baldomera Garcia. The marriage was not blessed with a child. During the marriage, Epifanio acquired several parcels of land situated in Mataguisi and Malobago, Guinobatan, Albay When Epifanio died in August 1917, he was survived by Albina, his widow, and the Orozco siblings, his acknowledged natural children. After the death of Epifanio, Albina executed the deed of sale conveying the lands in Mataguisi and Malobago to her siblings Juan and Baldomera Garcia for a consideration of P4,400 Thus, in the intestate estate proceedings for the settlement of the estate of Epifanio, in which one of his acknowledged natural children, Serafin Orozco, was appointed as administrator, as judicial administrator, Serafin brought an action for the recovery of the said lands located in Mataguisi and Malobago The lower court rendered judgment adjudicating the parcels of lands in Mataguisi and Malobago as belonging to the intestate estate of Epifanio. Meanwhile, such other properties were given to Albina as her share in the conjugal partnership. The decision expressly stated that Albina Garcia no longer had the usufructuary right as a widow of the deceased Epifanio in view of her waiver By virtue of the writ of execution issued to enforce the judgment, Serafin as administrator was placed in possession of the lands adjudicated to the estate. However, not long thereafter, Juan Garcia re-entered the lands in question and extrajudicially ejected therefrom Serafin. Since that date until the present, Orozco had not been able to possess said lands. In a subsequent decision (1932, separate case), pursuant to a compromise agreement, the ownership of the parcels of land involved in the instant case were determinatively adjudicated as belonging to the estate of Epifanio Orozco. 10 years later, in Dec. 1942, an action was filed by the Orozco siblings against the Garcias in the CFI of Albay. They seek to recover two parcels of land, one situated at Mataguisi and the other situated at Malobago The Orozco siblings alleged that they are the absolute owners of the parcels of land in question and that the defendants (Garcias) in bad faith dispossessed them of their possession thereof. Instead of answering the complaint, the Garcias flied a motion to Quash (Dismiss) the complaint on the ground of prescription. Motion to dismiss was denied. Thus, the Garcias seasonably filed their answer to the complaint, alleging among other things, absolute ownership, continuous possession of the contested parcels of land in the concept of owners for more than the period for acquisitive prescription. In March 1943, the Orozcos again filed two actions, one for the declaration of defendant Baldomera Garcia in default and the other to order Juan Garcia also one of the defendants to make his answer specific. The motion to declare Baldomera Garcia

29 DE LA CERNA SPECPRO DIGESTS 2011 in default was denied but in the same order, defendant Juan Garcia was required to make specific the allegations of his answer. Thus, the Garcias amended their answer After the case had been heard on the merits, the court a quo rendered a decision, declaring the Orozcos as joint owners of the lands in question, and ordering the Garcias to deliver the possession of said lands to the former. Garcias interposed an appeal. However, before the records of the case could be elevated to the Court of Appeals, the same was destroyed when the provincial capitol building where the court house was located was destroyed by bombs and fire during the liberation of Albay. Thus, in 1946, a petition for the reconstitution of the record of the case was filed by the Orozcos. As the petition was granted, the parties were ordered to bring all pleadings, documents and papers which they may have in their possession for the reconstitution of the records. However, only the record on appeal was reconstituted. For this reason, the lower court ordered that the case will be tried de novo. Owing to the death of some of the parties to the case, the Orozcos filed an amended complaint. However, the Garcias filed a motion to strike out on the ground that the order of the lower court only authorized the plaintiffs to amend the party defendant in the complaint due to the death of the original defendant Juan Garcia but paragraph 4 in the amended complaint increases the amount of damages claimed. The lower court admitted the amended complaint. Consequently, the Garcias filed their answer to the amended complaint After trial, decision was rendered declaring the Orozcos as absolute owners and entitled to the possession of the lands in question and awarded damages. The Garciass were ordered to vacate the lands in question and to deliver the same to the Orozcos Not satisfied with the decision of the trial court, the Garcias appealed to the Court of Appeals. The appellate court affirmed the judgment of the lower court. MR having been denied, hence, this petition~ AMIN | CHA | JANZ | KRIZEL | VIEN final and executory. Considering that the petitioners Baldomera and Juan Garcia are the sister and brother of the widow Albina, and that Juan lived with his sister Albina and that Juan merely administered the properties for her, Baldomera and Juan Garcia were not strangers to nor third parties in the proceedings against their sister, Albina Garcia. The former are therefore charged with knowledge of and are bound by the decision rendered in said 1932 judgment. Moreover, the records show that Baldomera attempted to intervene in the 1932 case but was denied by the court. She did not appeal from said denial nor pursue any other remedy or action to protect her rights. Consequently, Baldomera and her successors-in-interest may NOT now claim on appeal that their rights and interest have been prejudiced thereby. For whatever right or interest Baldomera had in the contested properties which she claims were prejudiced by the act of her sister in renouncing her rights to the Mataguisi and Malobago properties and further agreeing accordingly to the compromise agreement which became the basis of the 1932 judgment, Baldomera Garcia's right of action was against her own sister, the widow Albina Garcia, as the vendor thereof. The law then governing the dissolution and liquidation of conjugal partnership was the Code of Civil Procedure. Accordingly, when the marriage is dissolved by the death of the husband or wife, the community property shall be inventoried, administered and liquidated, and the debts thereof shall be paid in the testamentary or intestate proceedings of the deceased spouse, in accordance with the provisions relative to the administration and liquidation of the estates of deceased persons, or in an ordinary liquidation and partition proceedings, unless the parties being all of age and legally capacitated, avail themselves of the right for proceeding to an extrajudicial partition and liquidation of said property. After the death of one of the spouses, in case it is necessary to sell any portion of the community property in order to pay outstanding obligations of the conjugal partnership, such sale must be made in the manner and with the formalities established by the Rules of Court for the sale of the property of deceased persons. Any sale, transfer, alienation or disposition of said property effected without d formalities shall be null and void, except as regards the portion that belongs to the vendor as determined in the liquidation and partition. Pending the liquidation, the disposition must be considered as to the only to the contingent share or interest of the vendor in the particular property involved, but not to the corpus of the property. Such disposition cannot include the half that may be adjudicated to the heirs of the deceased spouse. This rule applies, not only to sale, but also to mortgages. The alienation, mortgage or disposal of the conjugal property without the required formality, is not, however, null ab initio, for the law recognizes their validity, so long as they do not exceed the portion which, after liquidation and partition, should pertain to the surviving spouse who made the contract. Of course, before liquidation and partition have been completed, such portion cannot be determined. Manifestly, when third persons are in connivance with the husband or knowingly lend their aid, directly or indirectly to the commission of fraudulent acts by the husband, the court will see to it that they do not profit by their

Issues and Held: (In essence, WON the lands in litigation truly belonged to the Orozcos YES!) 1) WON the sale by Albina to Baldomera and Juan Garcia of the lands in question was valid and binding and vested legal title upon the buyers insofar as 1/2 of it was concerned for being Albinas share in the conjugal property? NO! 2) WON the Garcias have acquired, through acquisitive prescription, ownership of the other half of the contested property or of the whole of it for that matter, assuming that Albinas sale cannot be sustained even as to her 1/2 share in the conjugal property? 3) WON it was within the lower court's discretion to permit the filing of an amended complaint because at the time the amended complaint was filed, when the only purpose of the pending proceedings was to reconstitute the destroyed evidence? Ratio: 1) Recall that in a 1932 judgment, Serafin Orozco and his co-heirs were awarded the ownership of the Mataguisi and Malobago properties, while the other properties were given to Albina Garcia as her share in the conjugal partnership, the decision expressly stating that Albina no longer had the usufructuary right as widow of the deceased Epifanio Orozco in view of her waiver. This judgment had long become

30 DE LA CERNA SPECPRO DIGESTS 2011 misconduct, and the fraud to which they are parties will vitiate and annul all their transactions." IN THE CASE AT BAR, the formalities required by the law were not followed by the widow Albina. Here the assets of the conjugal partnership consisted of numerous lots and properties aside from the Mataguisi and Malobago lands, and until a liquidation and partition was made upon the death of Epifanio, no particular lot or property can be said to appertain to the widow Albina or to the heirs of the deceased husband who are his acknowledged natural children. At the time of the sale, the rights of the widow and the heirs were not yet fully vested in the particular lot or property in specific metes and bounds. Since the sale executed by Albina Garcia was after the death of her husband, and was prior to the liquidation and partition of the conjugal partnership, said disposition which specifically transferred the two lots in Mataguisi rather than the conceptual interest or contingent share of the surviving spouse in these conjugal properties was ineffective because the Mataguisi lots were not adjudicated to the surviving spouse at the time the liquidation and partition was made, as provided in the law. The sale in favor of Baldomera was a mere subterfuge resorted to in anticipation of the possible claims that may be made by the natural children and was intended to defeat said claims and prevent the latter from obtaining what is justly their due, indeed, the said sale is not effective. This ruling was affirmed by the Court of Appeals. We find no error in the affirmance. Under the particular facts and circumstances of this Case, We hold that Baldomera Garcia cannot be considered a third party insofar as the proceedings for the partition and liquidation of the conjugal partnership is concerned The ruling in said Antioho and Corpus do not apply to the case at bar because in those cases, the facts show that the property sold constituted the entire asset of the conjugal partnership, i.e. a single parcel of land is the whole conjugal property. As opposed to the case at bar, there are numerous lots and properties constituting the assets of the conjugal partnership and until a liquidation and partition is made in the manner and with the formalities required by the law, the particular and corporeal share of the surviving spouse could not yet be determined. At any rate, when the widow agreed to the partition of the properties left by her husband and accepted other lots instead of those in Mataguisi and Malobago which she had previously sold to her sister, Baldomera Garcia, the latter had a right of action against Albina. She did not act so. To uphold the validity of the sale made by the widow in favor of her sister would give more share to the widow than she was entitled to and had agreed upon with the heirs of her husband. AMIN | CHA | JANZ | KRIZEL | VIEN in favor of the Orozcos, while Baldomera Garcia, as discussed above, had knowledge of the existence of 1932 Case. For being in bad faith, the Garcias are not entitled to reimbursements for whatever improvements they might have introduced thereon. Being fully aware that the court had adjudicated ownership of the lands to the Orozco heirs, consequently, the Garcias cannot claim on of the land in the concept of owner as then and there the flaw in his title was apparent and patent! Even as they continued in possession of the land from 1933 to the action of the instant case in 1942, his on could not ripen to ownership through acquisitive proportion, considering that the period when the courts in Albay were closed from Dec 1941 to August 1942, and that the ten-year period to file the case had not prescribed. ALSO, there can be no sanction to the Garcias clear illegal possession of the subject property, such ouster being committed in bad faith and in flagrant defiance of the writ of execution issued by the court. 3) As far as the amended complaint is concerned, the records show that the amended complaint was filed after the case was set for trial de novo, which means a new trial upon the merits without regard to the proof presented in the trial court or the conclusions reached by it, whereby the court will make its own findings, lay down its own conclusions, and dispose of the case as if the same had never been tried before, and had been commenced therein. IT IS CRYSTAL CLEAR that the lower court did not lose jurisdiction over the case after perfection of the appeal when admittedly, the records of the same had been destroyed on account of war! In the case at bar, the intended appeal was quite impossible in view of the destruction of the court records, including the documentary and testimonial evidence which need to be elevated to the Court of Appeals. The perfection of the appeal through the filing of the record on appeal and the corresponding appeal bond therefore, would serve no purpose as the jurisdiction of the Court of Appeals to review the legal and factual issues would certainly be rendered useless with nothing more than the record on appeal which is but a chronological compendum of pleadings and court orders. Moreover, on grounds of fairness and impartiality, the Garcias are estopped to question the updating of the amount of damages originally prayed for by the Orozco siblings, because in their corresponding amended answer, the Garcias also raised their counterclaim and prayed for a higher amount! Kapal ng mukha! IN ANY CASE, plaintiffs had the right to update their claim of damages which by the passing of the years since had increased. The trial court acted with fairness and due process whereby BOTH parties were allowed equal opportunity to replead and re-estimate their pecuniary interests which were both availed of. The trial court committed no error in conducting a trial de novo and in rendering a new judgment. The reconstitution of the evidence was proper since counsels for both parties, upon inquiry of the court, manifested that they did not have a transcript of the destroyed stenographic notes taken in the previous trial nor copies of the documents presented therein as evidence. Act 3110 provides the procedure for the reconstruction of the records of pending judicial proceedings, and requires that the testimony of witnesses taken in civil cases

2)

The estate of the deceased Epifanio Orozco was the owner of the parcels of land herein involved, and the Orozco siblings are the successors interest of said Epifanio. In a decision by the probate court, the real properties were delivered to Serafin Orozco BUT Juan Garcia occupied said properties two months after delivery to Serafin Orozco, and, for which, Juan Garcia was cited for contempt. THEREFORE, it could not be said that the Garcias ever possessed the parcels of land in good faith. Juan Garcia was contemptuous, thus knowledgeable of the award of the lands in question

31 DE LA CERNA SPECPRO DIGESTS 2011 shall be reconstituted by means of an authentic copy thereof or a new transcript of the stenographic notes and if no authentic copy can be obtained and the stenographic notes have also been destroyed, as in the case at bar, the cases shall be tried de novo as if called for trial for the first time The trial court, in reconstituting the records of the instant case, followed the procedure provided under Act 3110 since it was necessary under the circumstances to reconstitute the evidence originally presented in the first trial of the case. AT ANY RATE, the Garcias participated in the new trial by presenting NEW witnesses as well as NEW documentary exhibits. They also cross-examined the witnesses of the Orozcos. The Garcias had not complained of any irregularity much less raised or protested any proceedings or process prejudicial to their interest during the trial de novo, hence they cannot, at this late hour, be allowed to complain that there should have been no trial and that there should have been no judgment at all. AMIN | CHA | JANZ | KRIZEL | VIEN

Dispositif: The judgment appealed from is hereby AFFIRMED.

32 DE LA CERNA SPECPRO DIGESTS 2011 AMIN | CHA | JANZ | KRIZEL | VIEN

Sanchez v. CA
Panganiban, J. Quickie: Legit child and grandchildren v. Illegit children. Rosalia was appointed as administratrix of the intestate estate of her mother. Her father died. Illegit children filed a petition for letter of administration over the intestate estate of the father. Rosalia and petitioners executed a compromise agreement wherein they agreed to divide the properties enumerated therein of the late Juan. Rosalia and petitioners executed a memorandum of agreement which modified the compromise agreement. 9 years later, petitioners filed a motion to defer approval of the compromise agreement and prayed for its annulment. HELD: Although denominated a compromise agreement, the document in this case is essentially a deed of partition, pursuant to Art. 1082 CC which provides that every act which is intended to put an end to indivision among co-heirs and legatees or devisees is deemed to be a partition, although it should purport to be a sale, an exchange, a compromise, or any other transaction. For a partition to be valid, Section 1, Rule 74 RoC, requires the concurrence of the following conditions: (1) the decedent left no will; (2) the decedent left no debts, or if there were debts left, all had been paid; (3) the heirs and liquidators are all of age, or if they are minors, the latter are represented by their judicial guardian or legal representatives; and (4) the partition was made by means of a public instrument or affidavit duly filed with the Register of Deeds. All the foregoing requisites are present in this case. Therefore the compromise agreement/partition in this case is valid. Under Section 1, Rule 90 RoC, an order for the distribution of the estate may be made when the "debts, funeral charges, and expenses of administration, the allowance to the widow, and inheritance tax, if any," had been paid. This order for the distribution of the estate's residue must contain the names and shares of the persons entitled thereto. A perusal of the whole record reveals that all the foregoing requirements already concurred in this case. Facts: Rosalia (RESPONDENT) S. Lugod is the only child of Sps. Juan and Maria Sanchez. Arturo S. Lugod, Evelyn L. Ranises and Roberto S. Lugod are the legitimate children of Rosalia. (RESPONDENTS) Rolando, Florida Mierly, Alfredo and Myrna, all surnamed Sanchez, are the illegitimate children of Juan C. Sanchez.(PETITIONERS) Maria died. Rosalia filed a petition for letters of administration over the estate of her mother and the estate of her father, Juan C. Sanchez, who was at the time in state of senility. Rosalia, as administratrix of the intestate estate of her mother, submitted an inventory and appraisal of the real and personal estate of her late mother. Before the administration proceedings could formally be terminated and closed, Juan died Petitioners, as heirs of Juan, filed a petition for letters of administration over the intestate estate of Juan, which petition was opposed by Rosalia. Rosalia and petitioners executed a compromise agreement wherein they agreed to divide the properties enumerated therein of the late Juan.

279 SCRA 647 (1997)

Rosalia was appointed by the trial court, and took her oath as the administratrix of her father's intestate estate. Petitioners filed a motion to require administratrix, Rosalia, to deliver deficiency of 24 hectares and or to set aside compromise agreement. Rosalia and petitioners entered into and executed a memorandum of agreement which modified the compromise agreement 9 years later, petitioners filed a motion to require Rosalia to submit a new inventory and to render an accounting over properties not included in the compromise agreement. They likewise filed a motion to defer the approval of the compromise agreement in which they prayed for the annulment of the compromise agreement on the ground of fraud. Counsel for petitioners moved to withdraw his appearance and the two motions he flied. The trial court issued an order directing Rosalia to submit a new inventory of properties under her administration and an accounting of the fruits thereof, which prompted Rosalia to file a rejoinder. Petitioners, thru new counsel, filed a motion to change administratrix to which Rosalia filed an opposition. The trial court promulgated its decision declaring and ordering: That the entire intestate estate of Maria consists of all her paraphernal properties and 1/2 of the conjugal properties which must be divided equally between Rosalia and Juan; That the entire intestate estate of Juan consists of all his capital properties, 1/2 from the conjugal partnership of gains and 1/2 of the intestate estate of Maria That 1/2 of the entire intestate estate of Juan shall be inherited by his only legitimate daughter, Rosalia while the other 1/2 shall be inherited and be divided equally by, between and among the 6 illegitimate children That all the Deed of Absolute Sales executed by Juan and Maria in favor of Rosalia, Arturo, Evelyn and Roberto are all declared simulated and fictitious and must be subject to collation and partition among all heirs; Rosalia is ordered to prepare a project of partition of the intestate estate of Juan and distribute and deliver to all heirs their corresponding shares. If she fails to do so, then a Board of Commissioners is hereby constituted, who are all entitled to honorarium and per diems and other necessary expenses chargeable to the estate to be paid by Administratrix Rosalia, appointing the CENRO of Gingoog City as members thereof, with the task to prepare the project of partition and deliver to all heirs their respective shares within 90 days from the finality of said decision; Administratrix Rosalia is ordered to submit 2 separate certified true and correct accounting, one for the income of all the properties of the entire intestate estate of Maria and another for the properties of the entire intestate estate of Juan duly both signed by her and both verified by a CPA and distribute and deliver to her 6 illegitimate brothers and sisters in equal shares, 1/2 of the net income of the estate of Juan from Oct., 1968 up to the finality of this decision;

33 DE LA CERNA SPECPRO DIGESTS 2011 For failure to render an accounting report and failure to give cash advances to the illegitimate children of Juan during their minority and hour of need from the net income of the estate of Juan, which adversely prejudiced their social standing and pursuit of college education, Rosalia is ordered to pay to them P500k as exemplary damages, and also P150k for attorney's fees; Rosalia filed MR. Petitioners filed a motion for execution and opposition to Rosalia's MR. The trial court issued an Omnibus Order declaring, among other things, that the decision at issue had become final and executory. Rosalia then filed a MR of said Omnibus Order. Denied. CA rendered a decision setting aside the trial court's decision and declaring the modified compromise agreement valid and binding. AMIN | CHA | JANZ | KRIZEL | VIEN that the properties covered by the said sales must be subject to collation. Citing Article 1409 (2) of the Civil Code, the lower court nullified said deeds of sale and determined with finality the ownership of the properties subject thereof. In doing so, it clearly overstepped its jurisdiction as a probate court. Furthermore, the trial court committed grave abuse of discretion when it rendered its decision in disregard of the parties' compromise agreement. Such disregard, on the ground that the compromise agreement was nor approved by the court, is tantamount to an evasion of positive duty or to a virtual refusal to perform the duty enjoined or to act in contemplation and within the bounds of law. The foregoing issues clearly involve not only the correctness of the trial court's decision but also the latter's jurisdiction. They encompass plain errors of jurisdiction and grave abuse of discretion, not merely errors of judgment. Since the trial court exceeded its jurisdiction, a petition for certiorari is certainly a proper remedy. Indeed, it is well-settled that an act done by a probate court in excess of its jurisdiction may be corrected by certiorari.

Issues/Held: (1) Is a petition for certiorari, in lieu of appeal, the proper remedy to correct orders of a probate court nullifying certain deeds of sale and, thus, effectively passing upon title to the properties subject of such deeds? YES Doctrinally entrenched is the general rule that certiorari is not a substitute for a lost appeal. However, Regalado lists several exceptions to this rule, viz.: (1) where the appeal does not constitute a speedy and adequate remedy, as where 33 appeals were involved from orders issued in a single proceeding which will inevitably result in a proliferation of more appeals (2) where the orders were also issued either in excess of or without jurisdiction for certain special consideration, as public welfare or public policy (3) where in criminal actions, the court rejects rebuttal evidence for the prosecution as, in case of acquittal, there could be no remedy (4) where the order is a patent nullity (5) where the decision in the certiorari case will avoid future litigations Even in a case where the remedy of appeal was lost, the Court has issued the writ of certiorari where the lower court patently acted in excess of or outside its jurisdiction, as in the present case. A petition for certiorari under Rule 65 of the Rules of Court is appropriate and allowable when the following requisites concur: (1) the writ is directed against a tribunal, board or officer exercising judicial or quasi-judicial functions; (2) such tribunal, board or officer has acted without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction; and (3) there is no appeal or any plain, speedy and adequate remedy in the ordinary course of law. In the CAB, all these requirements were met. As a probate court, the trial court was exercising judicial functions when it issued its assailed resolution. The said court had jurisdiction to act in the intestate proceedings involved in this case with the caveat that, due to its limited jurisdiction, it could resolve questions of title only provisionally. It is hornbook doctrine that in a special proceeding for the probate of a will, the question of ownership is an extraneous matter which the probate court cannot resolve with finality. This pronouncement no doubt applies with equal force to an intestate proceeding as in the case at bar. In the instant case, the trial court rendered a decision declaring as simulated and fictitious all the deeds of absolute sale which Juan and Maria executed in favor of their daughter, Rosalia; and grandchildren. The trial court ruled further

(2) WON the compromise agreement partitioning inherited properties valid even without the approval of the trial court hearing the intestate estate of the deceased owner? YES Art. 2028 CC defines a compromise agreement as "a contract whereby the parties, by making reciprocal concessions, avoid a litigation or put an end to one already commenced." Being a consensual contract, it is perfected upon the meeting of the minds of the parties. Judicial approval is not required for its perfection. In the case before us, it is ineludible that the parties knowingly and freely entered into a valid compromise agreement. Adequately assisted by their respective counsels, they each negotiated its terms and provisions for 4 months; in fact, said agreement was executed only after the 4th draft. Since this compromise agreement was the result of a long drawn out process, with all the parties ably striving to protect their respective interests and to come out with the best they could, there can be no doubt that the parties entered into it freely and voluntarily. Accordingly, they should be bound thereby. To be valid, it is merely required under the law to be based on real claims and actually agreed upon in good faith by the parties thereto. Indeed, compromise is a form of amicable settlement that is not only allowed but also encouraged in civil cases. Art. 2029 CC mandates that a court shall endeavor to persuade the litigants in a civil case to agree upon some fair compromise. Although denominated a compromise agreement, the document in this case is essentially a deed of partition, pursuant to Art. 1082 CC which provides that every act which is intended to put an end to indivision among co-heirs and legatees or devisees is deemed to be a partition, although it should purport to be a sale, an exchange, a compromise, or any other transaction. For a partition to be valid, Section 1, Rule 74 RoC, requires the concurrence of the following conditions: (1) the decedent left no will; (2) the decedent left no debts, or if there were debts left, all had been paid; (3) the heirs and liquidators are all of age, or if they are minors, the latter are represented by their judicial guardian or legal representatives; and (4) the partition was made by means of a public instrument or affidavit duly filed with the Register of Deeds. All the foregoing requisites are present in this case. Therefore the compromise agreement/partition in this case is valid.

34 DE LA CERNA SPECPRO DIGESTS 2011 In any event, petitioners neither raised nor ventilated this issue in the trial court. An issue raised for the first time on appeal and not raised timely in the proceedings in the lower court is barred by estoppel. Questions raised on appeal must be within the issues framed by the parties and, consequently, issues not raised in the trial court cannot be raised for the first time on appeal. The assailed waiver pertained to their hereditary right to properties belonging to the decedent's estate which were not included in the inventory of the estate's properties. It also covered their right to other properties originally belonging to the Sps. Sanchez which have been transferred to other persons. In addition, the parties agreed in the compromise to confirm and ratify said transfers. The waiver is valid because the parties waived a known and existing interest their hereditary right which was already vested in them by reason of the death of their father. There is no legal obstacle to an heir's waiver of his/her hereditary share even if the actual extent of such share is not determined until the subsequent liquidation of the estate. At any rate, such waiver is consistent with the intent and letter of the law advocating compromise as a vehicle for the settlement of civil disputes. Not only did the parties knowingly enter into a valid compromise agreement; they even amended it when they realized some errors in the original. Such correction emphasizes the voluntariness of said deed. It is also significant that all the parties, including the then minors, had already consummated and availed themselves of the benefits of their compromise. This Court has consistently ruled that "a party to a compromise cannot ask for a rescission after it has enjoyed its benefits. By their acts, the parties are ineludibly estopped from questioning the validity of their compromise agreement. Bolstering this conclusion is the fact that petitioners questioned the compromise only nine years after its execution, when they filed with the trial court their Motion to Defer Approval of Compromise Agreement. Under Section 1, Rule 90 RoC, an order for the distribution of the estate may be made when the "debts, funeral charges, and expenses of administration, the allowance to the widow, and inheritance tax, if any," had been paid. This order for the distribution of the estate's residue must contain the names and shares of the persons entitled thereto. A perusal of the whole record reveals that all the foregoing requirements already concurred in this case. The payment of the indebtedness of the estates of Juan and Maria was shouldered by Rosalia, who also absorbed or charged against her share the advances of Rolando, in compliance with Art. 1061 CC on collation. Furthermore, the compromise of the parties, which is the law between them, already contains the names and shares of the heirs to the residual estate, which shares had also been delivered. Petitioners have been in possession and ownership of their respective distributive shares as early as Oct. 1969 and they have received other properties in addition to their distributive shares in consideration of the compromise agreement which they now assail. The probate court had essentially finished said intestate proceedings which, consequently, should be deemed closed and terminated. AMIN | CHA | JANZ | KRIZEL | VIEN certification and the sketch of the lot in question, and who could have provided evidence for the petitioners, "to bring records of his relocation survey." However, Geodetic Engineer Idulsa did not comply with the court's subpoena duces tecum and ad testificandum. Neither did he furnish the required relocation survey. There is no evidence to support petitioners' allegations of fraud against Rosalia. Similarly, petitioners' allegations of fraud in the execution of the questioned deeds of sale are bereft of substance, in view of the palpable absence of evidence to support them. The legal presumption of validity of the questioned deeds of absolute sale, being duly notarized public documents, has not been overcome. On the other hand, fraud is not presumed. It must be proved by clear and convincing evidence, and not by mere conjectures or speculations. We stress that these deeds of sale did not involve gratuitous transfers of future inheritance; these were contracts of sale perfected by the decedents during their lifetime. Hence, the properties conveyed thereby are not collationable because, essentially, collation mandated under Art. 1061 CC contemplates properties conveyed inter vivos by the decedent to an heir by way of donation or other gratuitous title. In any event, these alleged errors and deficiencies regarding the delivery of shares provided in the compromise, concealment of properties and fraud in the deeds of sale are factual in nature which, as a rule, are not reviewable by this Court in petitions under Rule 45. Petitioners have failed to convince us that this case constitutes an exception to such rule

(3) WON there is fraud in the execution of the compromise and/or collation of the properties sold. NO The trial court noted Rosalia's willingness to reimburse any deficiency actually proven to exist. It subsequently ordered the geodetic engineer who prepared the

35 DE LA CERNA SPECPRO DIGESTS 2011 AMIN | CHA | JANZ | KRIZEL | VIEN

De Leon et. al. v. CA

Austria-Martinez, J.: Quickie: Daddy and Mommy died. Their specpro cases consolidated. One of the daughters (de Leon) was the administrator. Then son Ramon moved for some properties to be collated (succession stuff, you know why and when properties should be collated. Hahaha.) TC granted. De Leon moved for reconsideration, but TC said it is within its jurisdiction to determine whether titled properties should be collated in accordance with Sec. 2 of Rule 90. But then, it issued another Order asking for Ramon to PROVE that the properties sought to be collated should indeed be collated. At the CA level, CA said that the order of collation has already become final. SC said that actually, this is not an order for collation but merely an order including the subject properties in the inventory of the estate of the deceased. As such, it is only an interlocutory order. GUYS, HINDI KO NAIINTINDIHAN ANG DIFFERENCE. HAHAHAHA. KAYA MEDYO SUPER COPY-PASTE ang RATIO. BUT, I think that collation is only to be done at the latter stages of the proceeding and not in its early stages, or something like that. Sorry! Nature: petition for review on certiorari under Rule 45 of the Rules of Court which prays that the Decision dated February 28, 1997 and the Resolution dated April 3, 1997 issued by the Court of Appeals in CA-G.R. SP No. 42958, be set aside; and, that another judgment be entered ordering the Presiding Judge of Branch 123 of the Regional Trial Court of Caloocan City to give due course to petitioners notice of appeal, to approve their record on appeal and to elevate the records of Sp. Proc. No. C-1679 to respondent appellate court for further proceedings. Facts: Herein petitioner Teresita N. de Leon was appointed administratrix of the estate of Rafael C. Nicolas o Said case was subsequently consolidated with Sp. Proc No. C-1810 and Civil Case No. C-17407. o Deceased spouses Rafael and Salud Nicolas were the parents of petitioner Teresita N. de Leon, Estrellita N. Vizconde, Antonio Nicolas (deceased husband of petitioner Zenaida Nicolas and predecessor of the petitioners Heirs of Antonio Nicolas), Ramon Nicolas and Roberto Nicolas. September 19, 1994 private respondent Ramon G. Nicolas, an oppositor applicant in the intestate proceedings, filed a Motion for Collation, claiming that deceased Rafael Nicolas, during his lifetime, had given the certain real properties to his children by gratuitous title and that administratrix-petitioner Teresita failed to include the same in the inventory of the estate of the decedent September 27, 1994 RTC issued an Order directing Ramon to submit pertinent documents relative to the transfer of the properties from the registered owners during their lifetime for proper determination of the court if such properties should be collated, and set it for hearing with notice to the present registered owners to show cause why their properties may not be included in the collation of properties.

386 SCRA 216 (2002)

October 10, 1994, respondent Ramon filed an Amended Motion for Collation specifying the properties to be collated and attaching to said motion, the documents in support thereof A comparison with the original motion for collation reveals that the amended motion refers to the same real properties enumerated in the original except for two items which are not found in the original motion. November 11, 1994 the RTC issued an Order granting the motion and directing that MOST of the properties be collated to the estate properties. We note that only those lots described under paragraphs 3.1.2, 3.2 and 4 of the Amended Motion for Collation were ordered included for collation. November 18, 1994 petitioner Teresita N. de Leon filed a Motion for Reconsideration alleging that the properties subject of the Order were already titled in their names years ago and that titles may not be collaterally attacked in a motion for collation. o February 23, 1995, the RTC denied said motion, ruling that it is within the jurisdiction of the court to determine whether titled properties should be collated, citing Section 2, Rule 90 of the Rules of Court which provides that the final order of the court concerning questions as to advancements made shall be binding on the person raising the question and on the heir. On July 18, 1995, the RTC issued an Order, pertinent portions of which read: o Foremost to be resolved is the issue of collation of the properties of the deceased Rafael Nicolas which were disposed by the latter long before his death. The oppositor-applicant Ramon Nicolas should prove to the satisfaction of the Court whether the properties disposed of by the late Rafael Nicolas before the latters death was gratuitous or for valuable consideration. The Court believes that he or she who asserts should prove whether the disposition of the properties was gratuitously made or for valuable consideration. November 4, 1996 the RTC removed petitioner from her position as administratrix on ground of conflict of interest considering her claim that she paid valuable consideration for the subject properties acquired by her from their deceased father and therefore the same should not be included in the collation November 28, 1996 acting on the impression that the collation of the real properties enumerated in the Order dated November 11, 1994 is maintained by the RTC, petitioner Teresita N. de Leon filed a Motion for Reconsideration praying that her appointment as administratrix be maintained; and that the properties covered by TCT Nos. T-36989, T-33658, T-36987, T-40333, T-10907 and a portion of TCT No. T-13206 described as Lot 4-A with 4,009 square meters be declared and decreed as the exclusive properties of the registered owners mentioned therein and not subject to collation. DENIED Petitioners Teresita N. de Leon, Zenaida Nicolas (the surviving spouse of Antonio Nicolas) and the Heirs of Antonio Nicolas filed with the Court of Appeals a petition for certiorari, prohibition and mandamus with prayer for a temporary restraining order and writ of preliminary injunction

36 o DE LA CERNA SPECPRO DIGESTS 2011 After private respondent Ramon had filed his comment, and petitioners, their reply, and after hearing the oral arguments of the parties, the Special Fourth Division of the Court of Appeals found the petition devoid of merit, ruling that the Order dated November 11, 1994 directing the inclusion of the properties therein enumerated in the estate of the deceased Rafael Nicolas had already become final for failure of petitioners to appeal from the order of collation; that the appeal of the petitioner from the Orders dated November 4, 1996 and December 3, 1996 removing petitioner as administratrix is timely appealed, so RTC should act upon that. AMIN | CHA | JANZ | KRIZEL | VIEN A probate court, whether in a testate or intestate proceeding, can only pass upon questions of title provisionally. Guided by the above jurisprudence, it is clear that the Court of Appeals committed an error in considering the assailed Order dated November 11, 1994 as final or binding upon the heirs or third persons who dispute the inclusion of certain properties in the intestate estate of the deceased Rafael Nicolas. Under the foregoing rulings of the Court, any aggrieved party, or a third person for that matter, may bring an ordinary action for a final determination of the conflicting claims. Private respondents reliance on Section 2, Rule 90 of the Rules of Court, to wit: SEC. 2. Questions as to advancement to be determined. Questions as to advancement made, or alleged to have been made, by the deceased to any heir may be heard and determined by the court having jurisdiction of the estate proceedings; and the final order of the court thereon shall be binding on the person raising the question and on the heir. in support of his claim that the assailed Order is a final order and therefore appealable and that due to petitioners failure to appeal in due time, they are now bound by said Order, is not feasible. What seems to be a conflict between the above-quoted Rule and the aforediscussed jurisprudence that the Order in question is an interlocutory and not a final order is more apparent than real. This is because the questioned Order was erroneously referred to as an order of collation both by the RTC and the appellate court. For all intents and purposes, said Order is a mere order including the subject properties in the inventory of the estate of the decedent. Valero Vda. de Rodriguez v. CA: that the order of exclusion (or inclusion) is not a final order; that it is interlocutory in the sense that it did not settle once and for all the title to the subject lots; that the prevailing rule is that for the purpose of determining whether a certain property should or should not be included in the inventory, the probate court may pass upon the title thereto but such determination is not conclusive and is subject to the final decision in a separate action regarding ownership which may be instituted by the parties. In the Rodriguez case, the Court distinguished between an order of collation and an order of exclusion from or inclusion in the estates inventory, thus: The issue of collation was not yet justiciable at that early stage of the testate proceeding. It is not necessary to mention in the order of exclusion the controversial matter of collation. Whether collation may exist with respect to the two lots and whether Mrs. Rustias Torrens titles thereto are indefeasible are matters that may be raised later or may not be raised at all. How those issues should be resolved, if and when they are raised, need not be touched upon in the adjudication of this appeal. The intestate and testate proceedings for the settlement of the estates of the deceased Valero spouses were consolidated, as ordered by the lower court on November 21, 1974, so that the conjugal estate of the deceased spouses may be properly liquidated, as contemplated in section 2, Rule 73 of the Rules of Court and Act No. 3176. We have examined the expedientes of the two cases. We found that the proceedings have not yet reached the stage when the question of collation

Issue/Held: W/N the order for collation has become final No. Actually, this is not an order for collation but merely an order including the subject properties in the inventory of the estate of the deceased. As such, it is only an interlocutory order (GUYS, HINDI KO NAIINTINDIHAN ANG DIFFERENCE. HAHAHAHA. KAYA MEDYO SUPER COPY-PASTE ang RATIO.) Ratio: Petitioners claim that private respondent never presented any document to prove that the properties transferred by their deceased parents to petitioners are by gratuitous title; private respondent never notified petitioner of any hearing on said documents to give them opportunity to show cause why their properties should not be collated; the assailed Order dated November 11, 1994 is arbitrary, capricious, whimsical, confiscatory, depriving them of due process; the said order is interlocutory in nature and therefore non-appealable; the properties acquired by petitioner Teresita N. de Leon and her deceased brother Antonio Nicolas, married to petitioner Zenaida C. Nicolas and their children, were sold to them as evidenced by public documents; and, the properties were already titled in their respective names or sold to third persons. 1. Contrary to the finding of the Court of Appeals that the Order of November 11, 1994 had become final for failure of petitioners to appeal therefrom in due time, we hold that said Order is interlocutory in nature. Garcia v. Garcia The court which acquires jurisdiction over the properties of a deceased person through the filing of the corresponding proceedings, has supervision and control over the said properties, and under the said power, it is its inherent duty to see that the inventory submitted by the administrator appointed by it contains all the properties, rights and credits which the law requires the administrator to set out in his inventory. In compliance with this duty the court has also inherent power to determine what properties, rights and credits of the deceased should be included in or excluded from the inventory. Should an heir or person interested in the properties of a deceased person duly call the courts attention to the fact that certain properties, rights or credits have been left out in the inventory, it is likewise the courts duty to hear the observations, with power to determine if such observations should be attended to or not and if the properties referred to therein belong prima facie to the intestate, but no such determination is final and ultimate in nature as to the ownership of the said properties. (Emphasis supplied)

37 DE LA CERNA SPECPRO DIGESTS 2011 or advancement to an heir may be raised and decided . The numerous debts of the decedents are still being paid. The net remainder ( remanente liquido) of their conjugal estate has not yet been determined. On the other hand, up to this time, no separate action has been brought by the appellants to nullify Mrs. Rustias Torrens titles to the disputed lots or to show that the sale was in reality a donation. In the light of the foregoing, Section 2, Rule 90 should be interpreted in the context of Section 1 of the same Rule, to wit: Section 1. When order for distribution of residue made. When the debts, funeral charges, and expenses of administration, the allowance to the widow, and inheritance tax, if any, chargeable to the estate in accordance with law, have been paid, the court, on the application of the executor or administrator, or of a person interested in the estate, and after hearing upon notice, shall assign the residue of the estate to the persons entitled to the same, naming them and the proportions, or parts, to which each is entitled, and such person may demand and recover their respective shares from the executor or administrator, or any other person having the same in his possession. If there is a controversy before the court as to who are the lawful heirs of the deceased person or as to the distributive shares to which each person is entitled under the law, the controversy shall be heard and decided as in ordinary cases. No distribution shall be allowed until the payment of the obligations above mentioned has been made or provided for, unless the distributes, or any of them, give a bond, in a sum to be fixed by the court, conditioned for the payment of said obligations within such time as the court directs. Based thereon, we find that what the parties and the lower courts have perceived to be as an Order of Collation is nothing more than an order of inclusion in the inventory of the estate which, as we have already discussed, is an interlocutory order. The motion for collation was filed with the probate court at the early stage of the intestate estate proceedings. We have examined the records of the case and we found no indication that the debts of the decedents spouses have been paid and the net remainder of the conjugal estate have already been determined, and the estates of the deceased spouses at the time filing of the motion for collation were ready for partition and distribution. In other words, the issue on collation is still premature. And even if we consider, en arguendo, that said assailed Order is a collation order and a final order, still, the same would have no force and effect upon the parties. It is a hornbook doctrine that a final order is appealable. As such, the Order should have expressed therein clearly and distinctly the facts and the laws on which it is based fail. o The assailed Order did not state the reasons for ordering the collation of the properties enumerated therein. The Order simply directed the inclusion of certain real properties in the estate of the deceased. o It did not declare that the properties enumerated therein were given to the children of the deceased gratuitously, despite the title in the childrens names or deeds of sale in their favor. AMIN | CHA | JANZ | KRIZEL | VIEN Moreover, in his Comment, private respondent makes mention of the testimonies of his witnesses but these were not even mentioned in the Order of November 11, 1994. Petitioner would have been deprived of due process as they would be divested of the opportunity of being able to point out in a motion for reconsideration or on appeal, any errors of facts and/or law considering that there were no facts or laws cited in support of the assailed Order of collation. As a final Order, it is, on its face patently null and void. It could have never become final. Either way therefore, whether the Order in question is a final or interlocutory order, it is a reversible error on the part of the appellate court to rule that the so-called order of collation dated November 11, 1994 had already attained finality. As to the prayer of petitioners that the RTC be ordered to give due course to their notice of appeal from the Orders dated November 4, 1996 and December 23, 1996 removing petitioner Teresita N. de Leon as administratrix of the estate of private parties deceased parents, to approve their record on appeal and to elevate the records of Special Proceeding No. C-1679 to the Court of Appeals It is not disputed by the parties that said Orders are appealable. In fact, the Court of Appeals had correctly directed the RTC to give due course to petitioners appeal and this is not assailed by the private respondent. But, the approval or disapproval of the record on appeal is not a proper subject matter of the present petition for review on certiorari as it is not even a subjectmatter in CA-G.R. SP No. 42958. Whether or not the record on appeal should be approved is a matter that is subject to the sound discretion of the RTC, provided that Sections 6 to 9, Rule 41 of the Rules of Court are observed by appellant. Finally, the elevation of the records of Special Proceedings No. C-1679 to the Court of Appeals for the purpose of petitioners appeal from the order removing the administratrix is unnecessary where a record on appeal is allowed under the Rules of Court. The court a quo loses jurisdiction over the subject of the appeal upon the approval of the record on appeal and the expiration of the time to appeal of the other parties; but retains jurisdiction over the remaining subject matter not covered by the appeal. o

WHEREFORE, the petition is partly GRANTED. The assailed Decision dated February 28, 1997 and Resolution dated April 3, 1997 of the Court of Appeals are MODIFIED. The Order dated November 11, 1994 issued by the Regional Trial Court and all other orders of said court emanating from said Order which involve the properties enumerated therein are considered merely provisional or interlocutory, without prejudice to any of the heirs, administrator or approving parties to resort to an ordinary action for a final determination of the conflicting claims of title. The Regional Trial Court of Caloocan City (Branch 123) is directed to immediately act, without further delay, on petitioners appeal from the Orders dated November 4, 1996 and December 23, 1996, subject to Sections 6 to 9, Rule 41 of the Rules of Court.

38 DE LA CERNA SPECPRO DIGESTS 2011 AMIN | CHA | JANZ | KRIZEL | VIEN

Municipal Council of San Pedro v. Castillo

Imperial, J.: Quickie: Government instituted a case with Colegio de San Jose and Carlos Young as defendants. Petitioner municipality of San Pedro filed a complaint in intervention against all the parties alleging that the land sought to be expropriated by the Government belonged to the Philippine State by right of escheat. The Court held that petitioner can either obstruct the expropriation proceedings nor prevent the court from naming commissioners on appraisal pursuant to the provisions of section 243 of the Code of Civil Procedure. The present case, the Colegio de San Jose and Carlos Young, the defendants, expressly admitted in their answers the right of the Government of the Philippines to expropriate the portion of land described in the complaint and in the plan attached thereto, for which reason the respondent judge was perfectly authorized to proceed with the appointment of commissioners. While it is true that the petitioner, as intervenor in said case, claimed to the holder of rights adverse to those of the Colegio de San Jose and Carlos Young, all the right invoked by it consists in that of an alleged beneficiary Facts: Government of the Commonwealth of the Philippines instituted civil case No. 6875 in the Court of First Instance of Laguna, with the Colegio de San Jose and Carlos Young as defendants Colegio de San Jose claimed to be the owner of the big tract of land known as Hacienda de San Pedro Tunasan; Carlos Young claimed to be entitled to the possession thereof and that the government desired to expropriate a big parcel included in said hacienda, occupied by about 1,160 tenants; and it was prayed that the sum of P171,808 be provisionally fixed as the value of the land; that the deposit of this sum be authorized, and that delivery to the plaintiff government of the possession of the parcel of land sought to be expropriated be forthwith ordered, without prejudice to the immediate appointment of commissioners on appraisal who would proceed to appraise and determine the correct value of the land. the petitioner municipality of San Pedro, with authority of the court, filed a complaint in intervention against all the parties, the Hacienda de San Pedro Tunasan, as well as the big parcel of land sought to be expropriated by the Commonwealth Government, belonged to the latter, or as alleged by it, to the Philippine State by right of escheat; o that it was and is the beneficiary of the entire hacienda and of the big parcel in question, and that the value of said big parcel of land is merely P60,000; o and by way of remedies, asked for the appointment of Jose H. Guevara as commissioner to represent it and for the delivery and payment to it, instead of the defendants, of any amount of money the court may fix as the value of or indemnity for the land expropriated. Arguments of the Colegio de San Jose and Carlos Young: o the value thereof is P1,000,000, and that the amount of the damages that such expropriation would cause would not be less than P500.000. o

65 Phil 819 (1937)

Carlos Young asked that he be finally adjudicated the sum of P750,000 to which he was entitled by way of damages incurred by him by reason of the expropriation and that the provisional value of the land fixed by the court be raised to P1,500,000. The Colegio de San Jose absolutely denied that the municipality of San Pedro had any right or interest in the hacienda or in the portion thereof sought to be expropriated by the government it is the registered owner of the entire Hacienda de San Pedro Tunasan and that its title and possession have been recognized from time immemorial. Carlos Young likewise impugned the right claimed by the petitioner alleging that he is the lessee of the Hacienda de San Pedro Tunasan by virtue of a contract entered into between him and Colegio de San Jose which is the true and only owner of the entire hacienda. the court denied the petitions of the Colegio de San Jose and of Carlos Young for the delivery of them of the sum of P171,808 deposited by the government as provisional value of the land sought to be expropriated, on the ground that the ownership thereof was in dispute between the petitioner and the Colegio de San Jose.

Issue: WON petitioner can either obstruct the expropriation proceedings or prevent the court from naming commissioners on appraisal pursuant to the provisions of section 243 of the Code of Civil Procedure.--> YES. Ratio: SEC. 243. Appointment of commissioners. If the defendant concede that the right of condemnation exists on the part of the plaintiff, or if, upon trial, the court finds that such right exists, the court shall appoint three judicious and disinterested landowners of the province in which the land to be condemned, or some portion of the same, is situated, to be commissioners to hear the parties and view the premises, and assess damages to be paid for the condemnation, and to report their proceedings in full to the court, and shall issue a commission under the seal of the court to the commissioners authorizing the performance of the duties herein prescribed. when the defendant acknowledges the plaintiff's right to expropriate, the court may immediately appoint the commissioners to assess the properties and determine the damages. In the present case, the Colegio de San Jose and Carlos Young, the defendants, expressly admitted in their answers the right of the Government of the Philippines to expropriate the portion of land described in the complaint and in the plan attached thereto, for which reason the respondent judge was perfectly authorized to proceed with the appointment of commissioners.

39 DE LA CERNA SPECPRO DIGESTS 2011 While it is true that the petitioner, as intervenor in said case, claimed to the holder of rights adverse to those of the Colegio de San Jose and Carlos Young, all the right invoked by it consists in that of an alleged beneficiary From the beginning of the expropriation proceedings to date the petition admits that the ownership of or title to the Hacienda de San Pedro Tunasan resides in the Commonwealth of the Philippines. On the other hand, the Commonwealth of the Philippines has instituted this expropriation proceeding recognizing the Colegio de San Jose as the owner of Hacienda de San Pedro Tunasan and of the portion it seeks to expropriate. Under such circumstances this court deems it clear and so holds that the petitioner can either obstruct the expropriation proceedings nor prevent the court from naming commissioners on appraisal pursuant to the provisions of section 243 of the Code of Civil Procedure. The respondent judge had jurisdiction and neither exceeded the same nor abused his sound discretion in issuing the order of August 31, 1937, appointing the commissioners on appraisal. Argument of petitioner: the fact that the respondent judge did not appoint commissioner the person proposed by it Section 243 of the Code of Civil Procedure leaves the selection of the persons who should be appointed commissioners entirely to the sound discretion of the court having jurisdiction over an expropriation case.--> NO! Court: All that is required is that the persons appointed be competent and disinterested landowners. Said section does confer upon the parties to an expropriation proceeding the right to select the commissioners. Argument of petitioner: the respondent judge should not have appointed the commissioner until after he has decided the controversy between it, on the one hand, and the Colegio de San Jose and Carlos Young, on the other, and that it lies to compel him to decide controversy beforehand. AMIN | CHA | JANZ | KRIZEL | VIEN

Court: In view of the fact that the petitioner has never questioned and does not dispute the right of the Government of the Government of the Commonwealth of the Philippines to expropriate the big portion of the Hacienda de San Pedro Tunasan, and making into consideration furthermore the fact that the petitioner does not invoke any right of ownership over said hacienda or any portion thereof, this court holds that, under said section 243, the respondent judge is not obliged to decide before hand the controversy between the said parties.

40 DE LA CERNA SPECPRO DIGESTS 2011 AMIN | CHA | JANZ | KRIZEL | VIEN

In re Estate of Lao Sayco

TORRES, J.: Nature: appeal from CFI Quickie: Municipality of Mambajao wants to revert to itself the property of Rafanan. Court said the reversion is not proper because the municipality failed to observe the requirements laid down by Sec. 750 of the Code of Civil Procedure. Facts: Counsel for the municipal president of the pueblo of Mambajao, complying with a resolution of the council of the said pueblo, set forth in an undate petition filed with the Court of First Instance of Misamis: o That, on January 23, 1906, the municipal council of Mambajao appeared in the said proceedings and prayed that, since Bernardo Rafanan died in that pueblo without leaving any known legitimate successor, the real and personal property left by the said decedent within the district of the property left by the said decedent within the district of the aforementioned municipality be awarded to the latter, pursuant to the provisions of section 571 ( sic) of Act No. 190, which property was specified in the inventory presented by the testamentary executor, Lao Chiaman, and that no ruling had been made on the said petition; that on October 19 of the same year, the administrator, Lao Chiaman, filed a written petition wherein he alleged that there were no longer any debts to pay any debts to pay and therefore requested that, upon the approval of his final account, his administration be closed, and, as the guardian of the Chiaman Lay Chuyting, requested that the property referred to be delivered to the latter as the son and sole heir of the decedent Rafanan; that the municipal council of Mambajao, which believed that it was entitled to the said property, opposed its delivery to the alleged heir, whose character as such was denied by the petitioner, who therefore prayed that he admitted as a party to the proceedings and that a day be set for the hearing of the case, in order that the alleged heir, Lay Chuyting, might prove his right, and should he fail so to do, then that the right of the municipal council of Mambajao be recognized, with such other findings, in addition, as law and justice might demand. Lao Chiaman, administrator of the property of the decedent Rafanan and guardian of the minor Lay Chuyting, opposed in writing the petition of the municipality of Mambajao, on the ground that the said decedent left a legal heir, the minor Lay Chuyting, residing in China, who was a son of the deceased Lao Ta, the latter a brother of the decedent Bernardo Rafanan Lao Sayco, and that, therefore, Lay Chuyting was the latter's nephew, and not his son, as previously erroneously stated in the course of these proceedings. Petitioner stated that he desired to take the depositions of witnesses in the city of Cebu, in order to establish the facts set forth by him and asked that the hearing of the case be set for the month of June, 1907. A hearing in these proceedings was had on February 20, 1908, after notice had been served on all who might have any interest in the intestate succession concerned, and after the publication of the decrees for three weeks prior to the date set.

21 Phil 445 (1912)

In view of the dispositions of witnesses presented at the trial, the court, on March 5, 1908, rendered judgment ordering that the property left by the decedent, Bernardo Rafanan Lao Sayco, known by the name of Saya, be assigned to the municipality of Mambajao, Province of Misamis, to be administered by its municipal council and placed at the disposal of the school in the same manner as other property intended for the same use. It was further ordered that the administrator of the intestate estate, after paying the actual expenses and debts chargeable thereto, deliver the remainder to the municipality of Mambajao, and afterwards report to the Court of First Instance his compliance with and fulfillment of the order. From this judgment the said administrator and guardian of the minor Lay Chuyting appealed

Issue/Held: WON the properties in question should be assigned to the municipality NO Ratio: This case concerns the revision to the State of certain property which was left at death by the Chinaman Bernardo Rafanan Lao Sayco, alias Saya, who died in the pueblo of Mambajao, Province of Misamis apparently without having executed any will during his lifetime and without leaving any known heirs in said locality. Section 750 of the Code of Civil Procedure, applicable to the case, reads as follows: o When a person dies intestate, seized of real or personal property in the Philippine Islands, leaving no heir or person by law entitled to the same, the president and municipal council of the municipality where the deceased last resided, if he was an inhabitant of these Islands, or of the municipality in which he had estate, if he resided out of the Islands, may, on behalf of the municipality, file a petition with the Court of First Instance of the province for an inquisition in the premises; the court shall thereupon appoint a time and place of hearing and deciding on such petition, and cause a notice thereof to be published in some newspaper of general circulation in the province of which the deceased was last an inhabitant, if within the Philippine Islands, and if not in some newspaper of general circulation in the province in which he had estate. The notice shall recite the substance of the facts and request set forth in the petition, the time and place at which persons claiming the estate may appear and be heard before the court, and shall be published at least six weeks successively, the last of which publications shall be at least six weeks before the time appointed by the court to make inquisition. From the record of these proceedings it does not appear that there was made, at the request of counsel for the president and the municipal council of Mambajao, the inquisition provided by law, specified in the preinserted section, for the record is not accompanied by any certified copy of the investigatory of the real and personal property that belonged to the said decedent, with a statement of the places where the realty is located. Neither is it shown to have ascertained whether the deceased Chinaman executed any will during his lifetime, or whether the deceased Chinaman executed any will during his lifetime, or whether he left in Mambajao or in any other place in these

41 DE LA CERNA SPECPRO DIGESTS 2011 Islands any relative entitled to inherit from him, information in regard to which points might be furnished by those who were his friends or with whom he had friendly dealings during his lifetime. Moreover, the notice summoning the persons who believed they were entitled to his property should have been published for at least six consecutive weeks, and not for three as was directed in the order of December 16, 1907. In order that the property which belonged to the decedent Bernardo Rafanan Lao Sayco, situated in these Islands, may be decreed to have reverted to the Senate, pursuant to the provisions of section 751 of the Code of Civil Procedure, it is indispensable that the requirements contained in the above-quoted section of the said code should have been complied with by making the inquisition with regard to the matters specified, at the instance of the interested municipality. Furthermore, the person who lays claim to the property left by the decedent at death, as the latter's successor or heir, must prove his identity and rights. Counsel for the municipality of Mambajao merely prayed for an order of reversion and for the adjudication in behalf of the municipality of the property aforementioned; he did not comply with the provisions of the law by furnishing the required proofs in regard to the matters hereinabove indicated, which must be the subject of an investigation. For the reasons aforestated, it is proper, in our opinion, to reverse the judgment appealed from, and we dismiss those proceedings, without prejudice to any rights that may pertain to the parties with respect to the property in question. No express finding is made of the costs. AMIN | CHA | JANZ | KRIZEL | VIEN

42 DE LA CERNA SPECPRO DIGESTS 2011 AMIN | CHA | JANZ | KRIZEL | VIEN

De Leon v. Molo-Peckson
Bautista Angelo, J. Quickie: Juana executed a will naming as devisee the mother of DE LEON ET AL and PILAR NABLE. Thereafter, Juana executed a donation inter vivos in favour MOLOPECKSON ET AL. Juana died. Emiliana Molo-Peckson and Nable executed a mutual agreement which provides that the 10 lots will be sold to DE LEON ET AL at one peso each. MOLO-PECKSON ET AL executed another document revoking the mutual agreement. DE LEON ET AL filed a complaint to compel MOLO-PECKSON ET AL to convey to them the land in accordance with the mutual agreement. HELD: A declaration of trust has been defined as an act by which a person acknowledges that the property, title to which he holds, is held by him for the use of another. This is precisely the nature of the will of the donor: to convey the titles of the lands to appellants with the duty to hold them in trust for the appellees. Appellants complied with this duty by executing the document under consideration. The document in question clearly and unequivocally declares the existence of the trust even if the same was executed subsequent to the death of the trustor, Juana, for it has been held that the right creating or declaring a trust need not be contemporaneous or inter-parties. It was even held that an express trust maybe declared by a writing made after the legal estate has been vested in the trustee. It is true that the alleged declaration of trust was revoked, and having been revoked it cannot be accepted, but the attempted revocation did not have any legal effect. The rule is that in the absence of any reservation of the power to revoke a voluntary trust is irrevocable without the consent of the beneficiary. Facts: Jan. 1941 - Mariano Molo died leaving a will wherein he bequeathed his entire estate to his wife, Juana Juan. This will was probated in the CFI of Pasay City, Rizal, which was affirmed by the SC. May 1948 - Juana Juan in turn executed a will naming therein many devisees and legatees, one of whom is Guillermo San Rafael, mother of DE LEON ET AL and defendant Pilar Perez Nable. June 1948 - Juana executed a donation inter vivos in favor of Emiliana Molo-Peckson and Pilar Perez Nable of almost all of her entire property leaving only about P16k worth of property for the devisees mentioned in the will. Among the properties conveyed to the donees are the 10 parcels of land subject of the present action. May 1950 Juana Juan died. Dec. 1950 - Molo-Peckson and Nable executed a document which they called "MUTUAL AGREEMENT" which provides that: (1) the lots in Pasay City should be sold at ONE PESO each to the following persons and organization: (a) To JUSTA DE LEON 5 Lots. (b) To RESURRECCION DE LEON, the remaining 5 Lots. (2) this agreement is made in conformity with the verbal wish of the late Mariano Molo and the late Juana. These obligations were repeatedly told to Emiliana, before their death and that same should be fulfilled after their death.

6 SCRA 978 (1962)

Aug. 9, 1956 MOLO-PECKSON, assisted by their husbands, executed another document in which they revoked the so-called mutual agreement mentioned above, and another relating to the same subject matter, stating therein that the parties realized that the above-mentioned public instruments do not represent their true and correct interpretation of the verbal wishes of the late spouses Molo. Aug. 11, 1956 - the beneficiary Resurreccion de Leon and Justa de Leon, thru their counsel demanded the conveyance to them of the 10 parcels of land for the consideration of P1.00 per parcel as stated in the document. And having MOLOPECKSON refused to do so, said beneficiaries consigned the amount of P10.00 as the consideration of the 10 parcels of land. Nov. 1958 - Resurreccion De Leon, et al. filed before the CFI of Rizal a complaint seeking to compel Emiliana Molo-Peckson, et al. to convey to the former 10 parcel of land upon payment of P1 per parcel. MOLO-PEKSON - disclaimed any legal obligation alleging that if they executed the document on the mistaken assumption that their foster parents had requested them and that they executed on Aug. 1956 a document revoking said donation which was acknowledged before Notary Public Leoncio C. Jimenez. No testimonial evidence was presented by either party. Instead, both agreed to submit the case upon the presentation of their respective exhibits which were all admitted by the trial court. Sept. 1960 CFI held that trust has been constituted by the late spouses Mariano Molo and Juana Juan over the 10 parcels of land in question in favor of DE LEON as beneficiaries and, as a consequence concluded: o MOLO-PECKSON jointly and severally to free the said 10 parcels of land from the mortgage lien in favor of the Rehabilitation Finance Corporation (now DBP) and Claro Cortez, and thereafter to sign and execute in favor of DE LEON a deed of absolute sale of the said properties for and in consideration of P10 already deposited in Court; o in the event MOLO-PECKSON shall refuse to execute and perform the above, they are ordered, jointly and severally, to pay the value of said 10 parcels of land in question, the amount to be assessed by the City of Pasay City as the fair market value of the same, upon orders of the Court to assess said value; o pay Attorney's fees in the amount of P3,000.00 o to render an accounting of the fruits of said 10 parcels of land from the time DE LEON demanded the conveyance of said parcels of land on Aug. 1956 in accordance with the Art. 1164 CC and to pay the costs.

Issues/Held: (1) WON Sps. Molo constituted a trust over the properties in question with DE LEON as beneficiaries. YES The document was executed MOLO-PECKSON on Dec. 1950 or about 2 years and 6 months from the time they acquired title to the lands by virtue of the donation inter vivos executed in their favor by their foster mother Juana Juan and 6 months after the death of the donor. There is nobody who could cajole them to execute it, nor is

43 DE LA CERNA SPECPRO DIGESTS 2011 there any force that could coerce them to make the declaration therein expressed, except the constraining mandat3 of their conscience to comply with the obligations to convey after their death said ten parcels of land at P1.00 a parcel to DE LEON. In fact, the acknowledgement appended to the document they subscribed states that it was their own free act and voluntary deed. It is to be supposed that MOLO-PECKSON understood and comprehended the legal import of said documents when they executed it more so when both of them had studied in reputable centers of learning (a pharmacist and the other a member of the bar). They have more than ample time (6 months intervening between the death of the donor and the execution of the document) to ponder not only wish of their predecessors-in-interest but also on the propriety of putting in writing the mandate they have received. It is reasonable to presume that that document represents the real wish of appellants' predecessors-in-interest and that the only thing to be determined is its real import and legal implications. A declaration of trust has been defined as an act by which a person acknowledges that the property, title to which he holds, is held by him for the use of another (Griffith v. Maxfield). This is precisely the nature of the will of the donor: to convey the titles of the lands to appellants with the duty to hold them in trust for the appellees. Appellants complied with this duty by executing the document under consideration. To establish a trust the proof must be clear, satisfactory and convincing. It cannot rest on vague, uncertain evidence, or on a loose, equivocal or indefinite declaration (In re Tuttle's Estate)) The document in question clearly and unequivocally declares the existence of the trust even if the same was executed subsequent to the death of the trustor, Juana, for it has been held that the right creating or declaring a trust need not be contemporaneous or inter-parties (Stephenson v. Stephenson). It was even held that an express trust maybe declared by a writing made after the legal estate has been vested in the trustee (Kurtz v. Robinson). The contention, therefore, that the will and the donation executed by their predecessors-in-interest were absolute for it did not contain a hint that the lots in question will be held in trust by them does not merit weight because the fact that an express trust was created by a deed which was absolute on its face may be shown by a writing separate from the deed itself (Mugan v. Wheeler). The fact that the beneficiaries were not notified of the existence of the trust or that the latter have not been given an opportunity to accept it is of no importance, for it is not essential to the existence of a valid trust and to the right of the beneficiaries to enforce the same that they had knowledge thereof the time of its creation (Stoehr v. Miller).Neither is it necessary that the beneficiary should consent to the creation of the trust (Wockwire-Spencer Steel Corporation v. United Spring Mfg. Co.). In fact it has been held that in case of a voluntary trust the assent of the beneficiary is not necessary to render it valid because as a general rule acceptance by the beneficiary is presumed (Art. 1446, new Civil Code; Cristobal v. Gomez). AMIN | CHA | JANZ | KRIZEL | VIEN It is true that the alleged declaration of trust was revoked, and having been revoked it cannot be accepted, but the attempted revocation did not have any legal effect. The rule is that in the absence of any reservation of the power to revoke a voluntary trust is irrevocable without the consent of the beneficiary (Allen v. Safe Deposit and Trust Co.of Baltimore). It cannot be revoked by the creator alone, nor by the trustee (Fricke v. Weber, C.C.A. Ohio). Here, there is no such reservation.

(3) WON court erred in applying Articles 1440, 1441, 1449, 1453 and 1457 of the New Civil Code. YES This is correct. The express trust was constituted during the lifetime of the predecessor-in-interest of appellants, that is, before the effectivity of the new Civil Code, although the instrument recognizing and declaring such trust was executed on Dec. 5, 1950, after the effectivity of said Code. The Civil Code of 1889 and previous laws and authorities on the matter, therefore, should govern the herein trust under the provisions of Art 2253 of the new Civil code. But the Civil Code of 1889 contains no specific provisions on trust as does the new Civil Code. Neither does the Code of Civil Procedure of 1901 for the same merely provides for the proceeding to be followed relative to trusts and trustees (Chapter XVIII). This silence, however, does not mean that the juridical institution of trust was then unknown in this jurisdiction, for the principles relied upon by the Supreme Court before the effectivity of the new Civil Code were those embodied in AngloAmerican jurisprudence as derived from the Roman and Civil Law principles (Government v. Abadilla).And these are the same principles on which we predicate our ruling and on which we now rely for the validity of trust in question. (4) WON MOLO-PECKSON should render an accounting of the fruit of the properties. YES Even if appellees did not expressly ask for it in their prayer for relief, however, this is covered by the general prayer "for such other relief just and equitable under the premises."What is important is to know from what what date the accounting should bemade. The trial court ordered that the accounting be made from the time appellees demanded the conveyance of the ten parcels of land on August 11, 1956, in accordance with Art. 1164 of the new Civil Code which provides that the creditor has a right to the fruit of the thing from thetime the obligation to deliver it arises. But this cannot be done without first submitting proof that the conditions stated in the mutual agreement hadbeen complied with. And this only happened when the decision of the Supreme Court became final and executory. The ruling of the trial court in this respect should therefore be modified in the sense that the accounting should be made from the date of the finality of the said decision. WON MOLO-PECKSON should free the properties from the mortgage liens in favour of DBP and Cortez. YES, as trustees it is their duty to deliver the properties to the cestui que trust free from all liens and encumbrances.

(2) WON MOLO-PECSON had a right to revoke the trust. NO

44 DE LA CERNA SPECPRO DIGESTS 2011 AMIN | CHA | JANZ | KRIZEL | VIEN

Heirs of Lorenzo Yap v. CA

Vitug, J.: Quickie: Land + building. Lorenzos heirs are contending that the properties were only in Ramons name because at the time of the sale, Lorenzo was still a Chinese citizen so he asked his brother if he could use his name instead, and there was a condition that upon his naturalization, the property would be transferred in Lorenzos name or in the event of his death, to his heirs upon their naturalization. So, in effect, they were contending that there was an implied trust. Court said there was none. Petitioners were nt able to prove by clear and convincing evidence of the existence of such trust. Nature: appeal Facts: Sometime in February 1966, Ramon Yap purchased a parcel of land situated at 123 (formerly 75) Batanes Street, Galas, Quezon City, covered by Transfer Certificate of Title No. 82001/T-414, from the spouses Carlos and Josefina Nery. o The lot was thereupon registered in the name of Ramon Yap under Transfer Certificate of Title No. 102132; forthwith, he also declared the property in his name for tax purposes and paid the real estate taxes due thereon from 1966 to 1992. In 1967, o Ramon Yap constructed a two-storey 3-door apartment building for the use of the Yap family. One-fifth (1/5) of the cost of the construction was defrayed by Ramon Yap while the rest was shouldered by Chua Mia, the mother of Lorenzo, Benjamin and Ramon. Upon its completion, the improvement was declared for real estate tax purposes in the name of Lorenzo Yap in deference to the wishes of the old woman. Lorenzo Yap died on 11 July 1970. A few months later, his heirs (herein petitioners) left their family dwelling in Lucena City to reside permanently in Manila. Ramon Yap allowed petitioners to use one unit of the apartment building. On 18 March 1992, Ramon Yap sold the land and his share of the 3-door apartment to his brother, his herein co-respondent Benjamin Yap, for the sum of P337,500.00 pursuant to a Deed of Sale, recorded on even date in the Memorandum of Encumbrances of the title to said property. Transfer Certificate of Title No. 73002 was in due time issued in the name of Benjamin Yap. The controversy started when herein petitioners, by a letter of 08 June 1992, advised respondents of the former's claim of ownership over the property and demanded that respondents execute the proper deed necessary to transfer the title to them. At about the same time, petitioners filed a case for ejectment against one of the bonafide tenants of the property. 29 July 1992 respondents filed an action with the RTC of Quezon City for quieting of title against petitioners. o

312 SCRA 603 (1999)

In their answer, petitioners averred that sometime in 1966 the spouses Carlos and Josefina Nery offered to sell the disputed parcel of land to their predecessor-in-interest, Lorenzo Yap, for the sum of P15,000.00. Since Lorenzo and his wife Sally Yap were at that time Chinese citizens, Lorenzo requested his brother Ramon to allow the use of the latter's name in the purchase, registration, and declaration for tax purposes of the subject lot to which Ramon Yap consented. o It was agreed that the property would remain registered in the name of Ramon Yap until such time as Lorenzo would have acquired Philippine citizenship but that, should Lorenzo predecease, the lot would then be transferred to Lorenzo's heirs upon the latter's naturalization. o Petitioners contended that it was Lorenzo who had caused the construction of the 3-door apartment on the property, merely entrusting the money therefor to Ramon Yap. The death of Lorenzo in 1970 prompted petitioners to move in and occupy the apartment and the lot, without any objection from Ramon and Benjamin, although the latter were allowed to stay in the premises since they had no other place to live in. In 1991, petitioners acquired Philippine citizenship and, forthwith, they requested Ramon Yap to have the title to the lot transferred to their names but to their chagrin they discovered that Ramon had sold the lot to his co-respondent Benjamin. Assessing the evidence before it, the trial court found for the respondents and adjudged Benjamin Yap to be the true and lawful owner of the disputed property. On appeal, the Court of Appeals affirmed the decision of the trial court and debunked the claim of petitioners that Ramon Yap was merely so used as a dummy by Lorenzo Yap. Giving full weight and credit to the Deed of Sale executed by the Nery spouses in favor of Ramon Yap, the appellate court stressed that to overcome the presumption of regularity in the execution of a public document, the evidence to the contrary should be clear and convincing even as it was equally incumbent upon petitioners to show that the subsequent sale of the property to Benjamin had only been simulated and fictitious.

Issue/Held: W/N there was an implied trust NO. Ratio: To begin with, a brief discussion on the trust relation between two parties could be helpful. (remember Property, but I will still include the discussion here.) o A trust may either be express or implied. o Express trusts are those which are created by the direct and positive acts of the parties, by some writing or deed, or will, or by words evincing an intention to create a trust. o Implied trusts are those which, without being express, are deducible from the nature of the transaction as matters of intent or, independently of the particular intention of the parties, as being superinduced on the transaction by operation of law basically by reason of equity.

45 DE LA CERNA SPECPRO DIGESTS 2011 These species of implied trust are ordinarily subdivided into resulting and constructive trusts. A resulting trust is one that arises by implication of law and presumed always to have been contemplated by the parties, the intention as to which can be found in the nature of their transaction although not expressed in a deed or instrument of conveyance. Resulting trusts are based on the equitable doctrine that it is the more valuable consideration that the legal title that determines the equitable interest in property. Upon the other hand, a constructive trust is a trust not created by any word or phrase, either expressly or impliedly, evincing a direct intention to create a trust, but one that arises in order to satisfy the demands of justice. It does not come about by agreement or intention but in main by operation of law construed against one who, by fraud, duress or abuse of confidence, obtains or holds the legal right to property which he ought not, in equity and good conscience, to hold. One basic distinction between an implied trust and an express trust is that while the former may be established by parol evidence, the latter cannot. o Even then, in order to establish an implied trust in real property by parol evidence, the proof should be as fully convincing as if the acts giving rise to the trust obligation are proven by an authentic document. An implied trust, in fine, cannot be established upon vague and inconclusive proof. Unfortunately for petitioners, the issues they submit in the case at bar boil down to the appreciation of the evidence presented. The Court of Appeals, sustaining the court a quo, has found the evidence submitted by petitioners to be utterly wanting, consisting mainly of the self-serving testimony of Sally Yap. She herself admitted that the business establishment of her husband Lorenzo was razed by fire in 1964 that would somehow place to doubt the claim that he indeed had the means to purchase the subject land about two years later from the Nery spouses. Upon the other hand, Ramon Yap was by then an accountant with apparent means to buy the property himself. At all events, findings of fact by the Court of Appeals, particularly when consistent with those made by the trial court, should deserve utmost regard when not devoid of evidentiary support. No cogent reason had been shown by petitioners for the Court to now hold otherwise. Not to be dismissed, furthermore, is the long standing and broad doctrine of clean hands that will not allow the creation or the use of a juridical relation, a trust whether express or implied included, to perpetrate fraud or tolerate bad faith nor to subvert, directly or indirectly, the law. The trust agreement between Ramon and Lorenzo, if indeed extant, would have been in contravention of, in fact the fundamental law. Then Section 5, Article XIII, of the 1935 Constitution has provided that Save in cases of hereditary succession, no private agricultural land shall be transferred or assigned except to individuals, corporations, or associations, qualified to acquire or hold lands of the public domain in the Philippines. The mandate has also been adopted in Section 14, Article XIV, of the 1973 Constitution and now reiterated under Section 7, Article XII, of the 1987 AMIN | CHA | JANZ | KRIZEL | VIEN Constitution. A trust or a provision in the terms of a trust would be invalid if the enforcement of the trust or provision is against the law even though its performance does not involve the commission of a criminal or tortuous act. It likewise must follow that what the parties are not allowed to do expressly is one that they also may not do impliedly as, for instance, in the guise of a resulting trust.13 The foregoing disquisition renders unnecessary the resolution of the incidental issues raised in the petition. WHEREFORE, the instant petition is DENIED, and the decision of the respondent Court of Appeals of 08 January 1998 in C.A.-G.R. CV No. 46838 is AFFIRMED. Costs against petitioners. SO ORDERED.