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Alvarez vs. Intermediate Appellate Court G.R. No. 68053. May 7, 1990.

FACTS: The real properties involved are two parcels of land identified as Lot 773-A and Lot 773-B which were originally known as Lot 773 of the cadastral survey of Murcia, Negros Occidental. Lot 773, with an area of 156,549 square meters, was registered in the name of the heirs of Aniceto Yanes under Original Certificate of Title No. RO-4858 (8804) issued on October 9, 1917 by the Register of Deeds of Occidental Negros (Exh. A). Aniceto Yanes was survived by his children , Rufino, Felipe and Teodora. Herein private respondents, Estelita, Iluminado and Jesus, are the children of Rufino who died in 1962 while the other private respondents, Antonio and Rosario Yanes, are children of Felipe. Teodora was survived by her child, Jovita (Jovito) Alib.1 It is not clear why the latter is not included as a party in this case. Aniceto left his children Lots 773 and 823. Teodora cultivated only three hectares of Lot 823 as she could not attend to the other portions of the two lots which had a total area of around twenty-four hectares. The record does not show whether the children of Felipe also cultivated some portions of the lots but it is established that Rufino and his children left the province to settle in other places as a result of the outbreak of World War II. According to Estelita, from the Japanese time up to peace time, they did not visit the parcels of land in question but after liberation, when her brother went there to get their share of the sugar produced therein, he was informed that Fortunato Santiago, Fuentebella (Puentevella) and Alvarez were in possession of Lot 773.2 It is on record that on May 19, 1938, Fortunato D. Santiago was issued Transfer Certificate of Title No. RF 2694 (29797) covering Lot 773-A with an area of 37,818 square meters.3 TCT No. RF 2694 describes Lot 773A as a portion of Lot 773 of the cadastral survey of Murcia and as originally registered under OCT No. 8804. The bigger portion of Lot 773 with an area of 118,831 square meters was also registered in the name of Fortunato D. Santiago on September 6, 1938 under TCT No. RT-2695 (28192).4 Said transfer certificate of title also contains a certification to the effect that Lot 773-B was originally registered under OCT No. 8804. On May 30, 1955, Santiago sold Lots 773-A and 773-B to Monico B. Fuentebella, Jr. in consideration of the sum of P7,000.00.5 Consequently, on February 20, 1956, TCT Nos. T-19291 and T-19292 were issued in Fuentebellas name.6 After Fuentebellas death and during the settlement of his estate, the administratrix thereof (A rsenia R. Vda. de Fuentebella, his wife) filed in Special Proceedings No. 4373 in the Court of First Instance of Negros Occidental, a motion requesting authority to sell Lots 773-A and 773-B.7 By virtue of a court order granting said motion,8 on March 24, 1958, Arsenia Vda. de Fuentebella sold said lots for P6,000.00 to Rosendo Alvarez.9 Hence, on April 1, 1958. TCT Nos. T-23165 and T-23166 covering Lots 773-A and 773-B were respectively issued to Rosendo Alvarez.10 Two years later or on May 26, 1960, Teodora Yanes and the children of her brother Rufino, namely, Estelita, Iluminado and Jesus, filed in the Court of First Instance of Negros Occidental a complaint against Fortunato Santiago, Arsenia Vda. de Fuentebella, Alvarez and the Register of Deeds of Negr os Occidental for the return of the ownership and possession of Lots 773 and 823. They also prayed that an accounting of the produce of the land from 1944 up to the filing of the complaint be made by the defendants, that after court approval of said accounting, the share or money equivalent due the plaintiffs be delivered to them, and that defendants be ordered to pay plaintiffs P500.00 as damages in the form of attorneys fees.11

During the pendency in court of said case or on November 13, 1961, Alvarez sold Lots 773-A, 773-B and another lot for P25,000.00 to Dr. Rodolfo Siason.12 Accordingly, TCT Nos. 30919 and 30920 were issued to Siason,13 who, thereafter, declared the two lots in his name for assessment purposes.14 Meanwhile, on November 6, 1962, Jesus Yanes, in his own behalf and in behelf of the other plaintiffs, and assisted by their counsel, filed a manifestation in Civil Case No. 5022 stating that the therein plaintiffs renounce, forfeit and quitclaims (sic) any claim, monetary or otherwise, agai nst the defendant Arsenia Vda. de Fuentebella in connection with the above-entitled case.15 On October 11, 1963, a decision was rendered by the Court of First Instance of Negros Occidental in Civil Case No. 5022, the dispositive portion of which reads: WHEREFORE, judgment is rendered, ordering the defendant Rosendo Alvarez to reconvey to the plaintiffs lots Nos. 773 and 823 of the Cadastral Survey of Murcia, Negros Occidental, now covered by Transfer Certificates of Title Nos. T-23165 and T-23166 in the name of said defendant, and thereafter to deliver the possession of said lots to the plaintiffs. No special pronouncement as to costs. SO ORDERED. ISSUE: HELD: Civil Procedure; Judgments; Decision in Civil Case No. 5022 having long become final and executory is the law of the case between the parties thereto.As correctly ruled by the Court of Appeals, it is powerless and for that matter so is the Supreme Court, to review the decision in Civil Case No. 5022 ordering Alvarez to reconvey the lots in dispute to herein private respondents. Said decision had long become final and executory and with the possible exception of Dr. Siason, who was not a party to said case, the decision in Civil Case No. 5022 is the law of the case between the parties thereto. It ended when Alvarez or his heirs failed to appeal the decision against them. Same; Same; Same; It is axiomatic that when a right or fact has been judicially tried and determined by a court of competent jurisdiction, so long as it remains unreversed, it should be conclusive upon the parties and those in privity with them in law or estate. Thus, it is axiomatic that when a right or fact has been judicially tried and determined by a court of competent jurisdiction, so long as it remains unreversed, it should be conclusive upon the parties and those in privity with them in law or estate. As consistently ruled by this Court, every litigation must come to an end. Access to the court is guaranteed. But there must be a limit to it. Same; Same; Reconveyance; The sole remedy of the landowner whose property has been wrongfully or erroneously registered in anothers name is to bring an ordinary action in the ordinary court of justice for reconveyance or if the property has passed into the hands of an innocent purchaser for value, for damages. As to the propriety of the present case, it has long been established that the sole remedy of the landowner whose property has been wrongfully or erroneously registered in anothers name is to bring an ordinary action in the ordinary court of justice for reconveyance or, if the property has passed into the hands of an innocent purchaser for value, for damages. It is one thing to protect an innocent third party; it is entirely a different matter and one devoid of justification if deceit would be rewarded by allowing the perpetrator to enjoy the fruits of his nefarious deed. As clearly revealed by the undeviating line of decisions coming from this Court, such an undesirable eventuality is precisely sought to be guarded against. Civil Law; Succession; Contention that the liability arising from the sale of Lots Nos. 773-A and 773-B made by Rosendo Alvarez to Dr. Rodolfo Siason should be the sole liability of the late Rosendo Alvarez or of his estate after his death is untenable.Petitioners further contend that the liability arising from the sale of said Lots Nos. 773-A and 773-B made by Rosendo Alvarez to Dr. Rodolfo Siason should be the sole liability of the late Rosendo Alvarez or of his estate, after his death. Such contention is untenable for it overlooks the doctrine

obtaining in this jurisdiction on the general transmissibility of the rights and obligations of the deceased to his legitimate children and heirs. Same; Same; Same; The general rule is that a partys contractual rights and obli gations are transmissible to the successors.The binding effect of contracts upon the heirs of the deceased party is not altered by the provision of our Rules of Court that money debts of a deceased must be liquidated and paid from his estate before the residue is distributed among said heirs (Rule 89). The reason is that whatever payment is thus made from the state is ultimately a payment by the heirs or distributees, since the amount of the paid claim in fact diminishes or reduces the shares that the heirs would have been entitled to receive. Under our law, therefore, the general rule is that a partys contractual rights and obligations are transmissible to the successors. The rule is a consequence of the progressive depersonalization of patrimonial rig hts and duties that, as observed by Victorio Polacco, has characterized the history of these institutions. From the Roman concept of a relation from person to person, the obligation has evolved into a relation from patrimony to patrimony, with the persons occupying only a representative position, barring those rare cases where the obligation is strictly personal, i.e., is contracted intuitu personae, in consideration of its performance by a specific person and by no other. x x x

Lim vs. Court of Appeals G.R. No. 124715. January 24, 2000. RUFINA LUY LIM, petitioner, vs. COURT OF APPEALS, AUTO TRUCK TBA CORPORATION, SPEED DISTRIBUTING, INC., ACTIVE DISTRIBUTORS, ALLIANCE MARKETING CORPORATION, ACTION COMPANY, INC., respondents. FATCS: Petitioner Rufina Luy Lim is the surviving spouse of the late Pastor Y. Lim whose estate is the subject of probate proceedings in Special Proceedings Q-95-23334, entitled, In Re: Intestate Estate of Pastor Y. Lim Rufina Luy Lim, represented by George Luy, Petitioner. Private respondents Auto Truck Corporation, Alliance Marketing Corporation, Speed Distributing, Inc., Active Distributing, Inc. and Action Company are corporations formed, organized and existing under Philippine laws and which owned real properties covered under the Torrens system. On 11 June 1994, Pastor Y. Lim died intestate. Herein petitioner, as surviving spouse and duly represented by her nephew George Luy, filed on 17 March 1995, a joint petition5 for the administration of the estate of Pastor Y. Lim before the Regional Trial Court of Quezon City. Private respondent corporations, whose properties were included in the inventory of the estate of Pastor Y. Lim, then filed a motion6 for the lifting of lis pendens and motion7 for exclusion of certain properties from the estate of the decedent. In an order8 dated 08 June 1995, the Regional Trial Court of Quezon City, Branch 93, sitting as a probate court, granted the private respondents twin motions, in this wise: Wherefore, the Register of Deeds of Quezon City is hereby ordered to lift, expunge or delete the annotation of lis pendens on Transfer Certificates of Title Nos. 116716, 116717, 116718, 116719 and 5182 and it is hereby further ordered that the properties covered by the same titles as well as those properties by (sic) Transfer Certificate of Title Nos. 613494, 363123, 236236 and 263236 are excluded from these proceedings. SO ORDERED.

ISSUE: May a corporation, in its universality, be the proper subject of and be included in the inventory of the estate of a deceased person? HELD: Succession; Testate and Intestate Proceedings; Probate Courts; Jurisdiction; The determination of which court exercises jurisdiction over matters of probate depends upon the gross value of the estate of the decedent. The determination of which court exercises jurisdiction over matters of probate depends upon the gross value of the estate of the decedent. Same; Same; Corporation Law; Ownership; Land Titles; Where real properties included in the inventory of the estate of a decedent are in the possession of and are registered in the name of corporations, in the absence of any cogency to shred the veil of corporate fiction, the presumption of conclusiveness of said titles in favor of said corporations should stand undisturbed.Inasmuch as the real properties included in the inventory of the estate of the late Pastor Y. Lim are in the possession of and are registered in the name of private respondent corporations, which under the law possess a personality separate and distinct from their stockholders, and in the absence of any cogency to shred the veil of corporate fiction, the presumption of conclusiveness of said titles in favor of private respondents should stand undisturbed. Corporation Law; Piercing the Veil of Corporate Fiction Doctrine; Rudimentary is the rule that a corporation is invested by law with a personality distinct and separate from its stockholders or members by legal fiction and convenience it is shielded by a protective mantle and imbued by law with a character alien to the persons comprising it.It is settled that a corporation is clothed with personality separate and distinct from that of the persons composing it. It may not generally be held liable for that of the persons composing it. It may not be held liable for the personal indebtedness of its stockholders or those of the entities connected with it. Rudimentary is the rule that a corporation is invested by law with a personality distinct and separate from its stockholders or members. In the same vein, a corporation by legal fiction and convenience is an entity shielded by a protective mantle and imbued by law with a character alien to the persons comprising it. Same; Same; Piercing the veil of corporate fiction requires the court to see through the protective shroud which exempts its stockholders from liabilities that ordinarily, they could be subject to, or distinguishes one corporation from a seemingly separate one, were it not for the existing corporate fiction. Nonetheless, the shield is not at all times invincible. Thus, in First Philippine International Bank vs. Court of Appeals, We enunciated: x x x When the fiction is urged as a means of perpetrating a fraud or an illegal act or as a vehicle for the evasion of an existing obligation, the circumvention of statutes, the achievement or perfection of a monopoly or generally the perpetration of knavery or crime, the veil with which the law covers and isolates the corporation from the members or stockholders who compose it will be lifted to allow for its consideration merely as an aggregation of individuals, x x xPiercing the veil of corporate entity requires the court to see through the protective shroud which exempts its stockholders from liabilities that ordinarily, they could be subject to, or distinguishes one corporation from a seemingly separate one, were it not for the existing corporate fiction. The corporate mask may be lifted and the corporate veil may be pierced when a corporation is just but the alter ego of a person or of another corporation. Where badges of fraud exist; where public convenience is defeated; where a wrong is sought to be justified thereby, the corporate fiction or the notion of legal entity should come to naught. Same; Same; Test in determining the applicability of the doctrine of piercing the veil of corporate fiction. The test in determining the applicability of the doctrine of piercing the veil of corporate fiction is as follows: (1) Control, not mere majority or complete stock control, but complete domination, not only of finances but of policy and business practice in respect to the transaction attacked so that the corporate entity as to this transaction had at the time no separate mind, will or existence of its own; (2) Such control must have been used by the defendant to commit fraud or wrong, to perpetuate the violation of a statutory or other positive legal duty, or dishonest and unjust act in contravention of plaintiffs legal right; and (3) The aforesaid control and breach of duty must proximately cause the injury or unjust loss complained of. The absence of any of these elements prevent piercing the corporate veil.

Same; Same.Mere ownership by a single stockholder or by another corporation of all or nearly all of the capital stock of a corporation is not of itself a sufficient reason for disregarding the fiction of separate corporate personalities. Same; Same.Moreover, to disregard the separate juridical personality of a corporation, the wrong-doing must be clearly and convincingly established. It cannot be presumed. Same; Same; Evidence; Hearsay Rule; Affidavits; Affidavits are inadmissible in evidence where the affiants were not presented during the course of the proceedings. Granting arguendo that the Regional Trial Court in this case was not merely acting in a limited capacity as a probate court, petitioner nonetheless failed to adduce competent evidence that would have justified the court to impale the veil of corporate fiction. Truly, the reliance reposed by petitioner on the affidavits executed by Teresa Lim and Lani Wenceslao is unavailing considering that the aforementioned documents possess no weighty probative value pursuant to the hearsay rule. Besides it is imperative for us to stress that such affidavits are inadmissible in evidence inasmuch as the affiants were not at all presented during the course of the proceedings in the lower court. To put it differently, for this Court to uphold the admissibility of said documents would

DKC Holdings Corporation vs. Court of Appeals G.R. No. 118248. April 5, 2000 DKC HOLDINGS CORPORATION, petitioner, vs. COURT OF APPEALS, VICTOR U. BARTOLOME and REGISTER OF DEEDS FOR METRO MANILA, DISTRICT III, respondents. FACTS: The subject of the controversy is a 14,021 square meter parcel of land located in Malinta, Valenzuela, Metro Manila which was originally owned by private respondent Victor U. Bartolomes deceased mother, Encarnacion Bartolome, under Transfer Certificate of Title No. B-37615 of the Register of Deeds of Metro Manila, District III. This lot was in front of one of the textile plants of petitioner and, as such, was seen by the latter as a potential warehouse site. On March 16, 1988, petitioner entered into a Contract of Lease with Option to Buy with Encarnacion Bartolome, whereby petitioner was given the option to lease or lease with purchase the subject land, which option must be exercised within a period of two years counted from the signing of the Contract. In turn, petitioner undertook to pay P3,000.00 a month as consideration for the reservation of its option. Within the two-year period, petitioner shall serve formal written notice upon the lessor Encarnacion Bartolome of its desire to exercise its option. The contract also provided that in case petitioner chose to lease the property, it may take actual possession of the premises. In such an event, the lease shall be for a period of six years, renewable for another six years, and the monthly rental fee shall be P15,000.00 for the first six years and P18,000.00 for the next six years, in case of renewal. Petitioner regularly paid the monthly P3,000.00 provided for by the Contract to Encarnacion until her death in January 1990. Thereafter, petitioner coursed its payment to private respondent Victor Bartolome, being the sole heir of Encarnacion. Victor, however, refused to accept these payments. Meanwhile, on January 10, 1990, Victor executed an Affidavit of Self-Adjudication over all the properties of Encarnacion, including the subject lot. Accordingly, respondent Register of Deeds cancelled Transfer Certificate of Title No. B-37615 and issued Transfer Certificate of Title No. V-14249 in the name of Victor Bartolome. On March 14, 1990, petitioner served upon Victor, via registered mail, notice that it was exercising its option to lease the property, tendering the amount of P15,000.00 as rent for the month of March. Again, Victor refused to accept the tendered rental fee and to surrender possession of the property to petitioner.

Petitioner thus opened Savings Account No. 1-04-02558-I-1 with the China Banking Corporation, Cubao Branch, in the name of Victor Bartolome and deposited therein the P15,000.00 rental fee for March as well as P6,000.00 reservation fees for the months of February and March. Petitioner also tried to register and annotate the Contract on the title of Victor to the property. Although respondent Register of Deeds accepted the required fees, he nevertheless refused to register or annotate the same or even enter it in the day book or primary register. Thus, on April 23, 1990, petitioner filed a complaint for specific performance and damages against Victor and the Register of Deeds,3 docketed as Civil Case No. 3337-V-90 which was raffled off to Branch 171 of the Regional Trial Court of Valenzuela. Petitioner prayed for the surrender and delivery of possession of the subject land in accordance with the Contract terms; the surrender of title for registration and annotation thereon of the Contract; and the payment of P500,000.00 as actual damages, P500,000.00 as moral damages, P500,000.00 as exemplary damages and P300,000.00 as attorneys fees. Meanwhile, on May 8, 1990, a Motion for Intervention with Motion to Dismiss4 was filed by one Andres Lanozo, who claimed that he was and has been a tenant-tiller of the subject property, which was agricultural riceland, for forty-five years. He questioned the jurisdiction of the lower court over the property and invoked the Comprehensive Agrarian Reform Law to protect his rights that would be affected by the dispute between the original parties to the case. On May 18, 1990, the lower court issued an Order5 referring the case to the Department of Agrarian Reform for preliminary determination and certification as to whether it was proper for trial by said court. On July 4, 1990, the lower court issued another Order6 referring the case to Branch 172 of the RTC of Valenzuela which was designated to hear cases involving agrarian land, after the Department of Agrarian Reform issued a letter-certification stating that referral to it for preliminary determination is no longer required. On July 16, 1990, the lower court issued an Order denying the Motion to Intervene,7 holding that Lanozos rights may well be ventilated in another proceeding in due time. After trial on the merits, the RTC of Valenzuela, Branch 172 rendered its Decision on January 4, 1993, dismissing the Complaint and ordering petitioner to pay Victor P30,000.00 as attorneys fees. On appeal to the CA, the Decision was affirmed in toto. ISSUE: whether or not the Contract of Lease with Option to Buy entered into by the late Encarnacion Bartolome with petitioner was terminated upon her death or whether it binds her sole heir, Victor, even after her demise? HELD: Succession; Contracts; The general rule, therefore, is that heirs are bound by contracts entered into by their predeccesors-in-interest except when the rights and obligations arising therefrom are not transmissible by (1) their nature, (2) stipulation or (3) provision of law. The general rule, therefore, is that heirs are bound by contracts entered into by their predecessors-in-interest except when the rights and obligations arising therefrom are not transmissible by (1) their nature, (2) stipulation or (3) provision of law. In the case at bar, there is neither contractual stipulation nor legal provision making the rights and obligations under the contract intransmissible. More importantly, the nature of the rights and obligations therein are, by their nature, transmissible. Same; Same; Intransmissible Rights; Nature.The nature of intransmissible rights as explained by Arturo Tolentino, an eminent civilist, is as follows: Among contracts which are intransmissible are those which are purely personal, either by provision of law, such as in cases of partnerships and agency, or by the very nature of the obligations arising therefrom, such as those requiring special personal qualifications of the obligor. It may also be stated that contracts for the payment of money debts are not transmitted to the heirs of a party,

but constitute a charge against his estate. Thus, where the client in a contract for professional services of a lawyer died, leaving minor heirs, and the lawyer, instead of presenting his claim for professional services under the contract to the probate court, substituted the minors as parties for his client, it was held that the contract could not be enforced against the minors; the lawyer was limited to a recovery on the basis of quantum meruit.In American jurisprudence, (W)here acts stipulated in a contract require the exercise of special knowledge, genius, skill, taste, ability, experience, judgment, discretion, integrity, or other personal qualification of one or both parties, the agreement is of a personal nature, and terminates on the death of the party who is required to render such service. Same; Same; There is privity of interest between an heir and his deceased predecessor he only succeeds to what rights his predecessor had and what is valid and binding against the latter is also valid and binding as against the former.It is futile for Victor to insist that he is not a party to the contract because of the clear provision of Article 1311 of the Civil Code. Indeed, being an heir of Encarnacion, there is privity of interest between him and his deceased mother. He only succeeds to what rights his mother had and what is valid and binding against her is also valid and binding as against him. Same; Same; Lease; The death of a party does not excuse nonperformance of a contract which involves a property right, and the rights and obligations thereunder pass to the personal representatives of the deceased.In the case at bar, the subject matter of the contract is likewise a lease, which is a property right. The death of a party does not excuse nonperformance of a contract which involves a property right, and the rights and obligations thereunder pass to the personal representatives of the deceased. Similarly, nonperformance is not excused by the death of the party when the other party has a property interest in the subject matter of the contract.

San Agustin vs. Court of Appeals G.R. No. 121940. December 4, 2001 JESUS SAN AGUSTIN, petitioner, vs. HON. COURT OF APPEALS and MAXIMO MENEZ, JR., respondents. FACTS: On February 11, 1974, the Government Service Insurance System (GSIS) sold to a certain Macaria Vda. de Caiquep, a parcel of residential land with an area of 168 square meters located in Rosario, Pasig City and denominated as Lot 13, Block 7, Pcs-5816 of the Government Service and Insurance System Low Cost Housing Project (GSIS-LCHP). The sale is evidenced by a Deed of Absolute Sale.2 On February 19, 1974, the Register of Deeds of Rizal issued in the name of Macaria Vda. de Caiquep, Transfer Certificate of Title (TCT) No. 436465 with the following encumbrance annotated at the back of the title: This Deed of Absolute Sale is subject to the conditions enumerated below which shall be permanent encumbrances on the property, the violation of any of which shall entitle the vendor to cancel x x x this Deed of Absolute Sale and reenter the property; The purpose of the sale be to aid the vendee in acquiring a lot for himself/themselves and not to provide him/them with a means for speculation or profit by a future assignment of his/their right herein acquired or the resale of the lot through rent, lease or subletting to others of the lot and subject of this deed, and therefore, the vendee shall not sell, convey, lease or sublease, or otherwise encumber the property in favor of any other party within five (5) years from the date final and absolute ownership thereof becomes vested in the vendee, except in cases of hereditary succession or resale in favor of the vendor; A day after the issuance of TCT No. 436465, or on February 20, 1974, Macaria Vda. de Caiquep sold the subject lot to private respondent, Maximo Menez, Jr., as evidenced by a Deed of Absolute Sale (Exhibit D).4 This deed was notarized but was not registered immediately upon its execution in 1974 because GSIS

prohibited him from registering the same in view of the five-year prohibition to sell during the period ending in 1979. Sometime in 1979, for being suspected as a subversive, an Arrest, Search and Seizure Order (ASSO) was issued against private respondent. Military men ransacked his house in Cainta, Rizal. Upon learning that he was wanted by the military, he voluntarily surrendered and was detained for two (2) years. When released, another order for his re-arrest was issued so he hid in Mindanao for another four (4) years or until March 1984. In December of 1990, he discovered that the subject TCT was missing. He consulted a lawyer but the latter did not act immediately on the matter. Upon consulting a new counsel, an Affidavit of Loss5 was filed with the Register of Deeds of Pasig and a certified copy6 of TCT No. 436465 was issued. Private respondent also declared the property for tax purposes and obtained a certification thereof from the Assessors Office.7 Private respondent sent notices to the registered owner at her address appearing in the title and in the Deed of Sale. And, with his counsel, he searched for the registered owner in Metro Manila and Rizal and as far as Samar, Leyte, Calbayog City, Tacloban City, and in Eastern and Northern Samar. However, their search proved futile. On July 8, 1992, private respondent filed a petition docketed as LRC Case No. R-4659 with the RTC, Branch 154, Pasig, Metro Manila for the issuance of owners duplicate copy of TCT No. 436465 to replace the lost one. To show he was the owner of the contested lot, he showed the Deed of Absolute Sale, Exhibit D. Th e petition was set for hearing and the courts order dated July 10, 1992 was published once in Malaya, a nationally circulated newspaper in the Philippines.8 During the hearing on September 3, 1992, only Menez and his counsel appeared. The Register of Deeds who was not served notice, and the Office of the Solicitor General and the Provincial Prosecutor who were notified did not attend. On September 18, 1992, there being no opposition, Menez presented his evidence ex-parte. The trial court granted his petition in its decision9 dated September 30, 1992, the dispositive portion of which reads: WHEREFORE, the petition is hereby GRANTED and the Registry of Deeds of Pasig, Metro Manila, is hereby directed to issue a new Owners Duplicate Copy of Transfer Certifica te of Title No. 436465 based on the original thereon filed in his office which shall contain the memorandum of encumbrance and an additional memorandum of the fact that it was issued in place of the lost duplicate and which shall, in all respect, be entitled to like faith and credit as the original duplicate, for all legal intents and purposes. ISSUE: HELD: Land Titles; Reconstitution of Title; Parties; In a petition for reconstitution of a duplicate certificate of title lost or destroyed, it is sufficient that the notice under Section 109 of P.D. 1529 (Property Registration Decree) is sent to the Register of Deeds and to those persons who are known to have, or appear to have, an interest in the property as shown in the Memorandum of encumbrances at the back of the original or transfer certificate of title on file in the office of the Register of Deeds.In Office of Court Administrator vs. Matas, A.M. No. RTJ92-836, 247 SCRA 9, 16-17 (1995), we held: In the case at bar, the respective certificate of title of the properties in question on file with the Register of Deeds are existing, and it is the owners copy of the certificate of title that was alleged to have been lost or destroyed. Thus, it is Section 109 of P.D. 1529 which was approved on June 11, 1978 that becomes effective and is applicable, a reading of which shows that it is practically the same as Section 109 of Act No. 496, governing reconstitution of a duplicate certificate of title lost or destroyed. Consequently, it is sufficient that the notice under Section 109 is sent to the Register of Deeds and to those persons who are known to have, or appear to have, an interest in the property as shown in the Memorandum of encumbrances at the back of the original or transfer certificate of title on file in the office of the Register of Deeds. From a legal standpoint, there are no other interested parties who should be notified, except those abovementioned since they are the only ones who may be deemed to have a claim to the

property involved. A person dealing with registered property is not charged with notice of encumbrances not annotated on the back of the title. Same; Same; Same; Publication of the petition for reconstitution in a newspaper of general circulation is sufficient notice to the public at large. Here, petitioner does not appear to have an interest in the property based on the memorandum of encumbrances annotated at the back of the title. His claim that he is an heir (nephew) of the original owner of the lot covered by the disputed lot and the present occupant thereof is not annotated in the said memorandum of encumbrances. Neither was his claim entered on the Certificate of Titles in the name of their original/former owners on file with the Register of Deeds at the time of the filing or pendency of LRC Case No. R-4659. Clearly, petitioner is not entitled to notice. Noteworthy is the fact that there was compliance by private respondent of the RTCs order of publication of the petition in a newspaper of general circulation. This is sufficient notice of the petition to the public at large. Same; Same; Under Republic Act. No. 26, reconstitution is validly made only in case the original copy of the certificate of title with the Register of Deeds is lost or destroyed.Under Republic Act No. 26, reconstitution is validly made only in case the original copy of the certificate of title with the Register of Deeds is lost or destroyed. And if no notice of the date of hearing of a reconstitution case is served on a possessor or one having interest in the property involved, he is deprived of his day in court and the order of reconstitution is null and void. The case at bar is not for reconstitution, but merely for replacement of lost duplicate certificate. Same; Homesteads; The proscription under Com. Act No. 141 on sale within the 5-year restrictive period refers to homestead lands only.We find petitioners contention less than meritorious. We agree with respondent court that the proscription under Com. Act No. 141 on sale within the 5-year restrictive period refers to homestead lands only. Here the lot in dispute is not a homestead land, as found by the trial and appellate courts. Said lot is owned by GSIS, under TCT No. 10028 in its proprietary capacity. Same; Contracts; Succession; Heirs are bound by contracts entered into by their predecessors-in-interest.In this case, the GSIS has not filed any action for the annulment of Exhibit D, nor for the forfeiture of the lot in question. In our view, the contract of sale remains valid between the parties, unless and until annulled in the proper suit filed by the rightful party, the GSIS. For now, the said contract of sale is binding upon the heirs of Macaria Vda. de Caiquep, including petitioner who alleges to be one of her heirs, in line with the rule that heirs are bound by contracts entered into by their predecessors-in-interest. Same; Same; Pari Delicto; Estoppel; Where both parties are equally guilty, neither is entitled to complain against the otherhaving entered into the transaction with open eyes, and having benefit from it, said parties should be held in estoppel to assail and annul their own deliberate acts. More in point, however, is the fact that, following Sarmiento v. Salud, Even if the transaction between the original awardee and herein petitioner were wrongful, still, as between themselves, the purchaser and the seller were both in part delicto, being participes criminis as it were. As in Sarmiento, in this case both were aware of the existence of the stipulated condition in favor of the original seller, GSIS, yet both entered into an agreement violating said condition and nullifying its effects. Similarly, as Acting Chief Justice JBL Reyes concluded in Sarmiento, Both parties being equally guilty, neither is entitled to complain against the other. Having entered into the transaction with open eyes, and having benefited from it, said parties should be held in estoppel to assail and annul their own deliberate acts. Rioferio vs. Court of Appeals G.R. No. 129008. January 13, 2004.* TEODORA A. RIOFERIO, VERONICA O. EVANGELISTA assisted by her husband ZALDY EVANGELISTA, ALBERTO ORFINADA, and ROWENA O. UNGOS, assisted by her husband BEDA UNGOS, petitioners, vs. COURT OF APPEALS, ESPERANZA P. ORFINADA, LOURDES P. ORFINADA, ALFONSO ORFINADA, NANCY P. ORFINADA, ALFONSO JAMES P. ORFINADA, CHRISTOPHER P. ORFINADA and ANGELO P. ORFINADA, respondents. FACTS:

On May 13, 1995, Alfonso P. Orfinada, Jr. died without a will in Angeles City leaving several personal and real properties located in Angeles City, Dagupan City and Kalookan City.3 He also left a widow, respondent Esperanza P. Orfinada, whom he married on July 11, 1960 and with whom he had seven children who are the herein respondents, namely: Lourdes P. Orfinada, Alfonso Clyde P. Orfinada, Nancy P. Orfinada -Happenden, Alfonso James P. Orfinada, Christopher P. Orfinada, Alfonso Mike P. Orfinada (deceased) and Angelo P. Orfinada.4 Apart from the respondents, the demise of the decedent left in mourning his paramour and their children. They are petitioner Teodora Riofero, who became a part of his life when he entered into an extra-marital relationship with her during the subsistence of his marriage to Esperanza sometime in 1965, and copetitioners Veronica,5 Alberto and Rowena.6 On November 14, 1995, respondents Alfonso James and Lourdes Orfinada discovered that on June 29, 1995, petitioner Teodora Rioferio and her children executed an Extrajudicial Settlement of Estate of a Deceased Person with Quitclaim involving the properties of the estate of the decedent located in Dagupan City and that accordingly, the Registry of Deeds in Dagupan issued Certificates of Titles Nos. 63983, 63984 and 63985 in favor of petitioners Teodora Rioferio, Veronica Orfinada-Evangelista, Alberto Orfinada and Rowena Orfinada-Ungos. Respondents also found out that petitioners were able to obtain a loan of P700,000.00 from the Rural Bank of Mangaldan Inc. by executing a Real Estate Mortgage over the properties subject of the extrajudicial settlement.7 On December 1, 1995, respondent Alfonso Clyde P. Orfinada III filed a Petition for Letters of Administration docketed as S.P. Case No. 5118 before the Regional Trial Court of Angeles City, praying that letters of administration encompassing the estate of Alfonso P. Orfinada, Jr. be issued to him.8 On December 4, 1995, respondents filed a Complaint for the Annulment/Rescission of Extra Judicial Settlement of Estate of a Deceased Person with Quitclaim, Real Estate Mortgage and Cancellation of Transfer Certificate of Titles with Nos. 63983, 63985 and 63984 and Other Related Documents with Damages against petitioners, the Rural Bank of Mangaldan, Inc. and the Register of Deeds of Dagupan City before the Regional Trial Court, Branch 42, Dagupan City.9 On February 5, 1996, petitioners filed their Answer to the aforesaid complaint interposing the defense that the property subject of the contested deed of extra-judicial settlement pertained to the properties originally belonging to the parents of Teodora Riofero10 and that the titles thereof were delivered to her as an advance inheritance but the decedent had managed to register them in his name.11 Petitioners also raised the affirmative defense that respondents are not the real parties-in-interest but rather the Estate of Alfonso O. Orfinada, Jr. in view of the pendency of the administration proceedings.12 On April 29, 1996, petitioners filed a Motion to Set Affirmative Defenses for Hearing13 on the aforesaid ground. The lower court denied the motion in its Order14 dated June 27, 1996, on the ground that respondents, as heirs, are the real parties-in-interest especially in the absence of an administrator who is yet to be appointed in S.P. Case No. 5118. Petitioners moved for its reconsideration15 but the motion was likewise denied.16 This prompted petitioners to file before the Court of Appeals their Petition for Certiorari under Rule 65 of the Rules of Court docketed as CA G.R. S.P. No. 42053.17 Petitioners averred that the RTC committed grave abuse of discretion in issuing the assailed order which denied the dismissal of the case on the ground that the proper party to file the complaint for the annulment of the extrajudicial settlement of the estate of the deceased is the estate of the decedent and not the respondents.18 The Court of Appeals rendered the assailed Decision19 dated January 31, 1997, stating that it discerned no grave abuse of discretion amounting to lack or excess of jurisdiction by the public respondent judge when he denied petitioners motion to set affirmative defenses for hearing in view of its discretionary nature.

ISSUE: Whether the heirs may bring suit to recover property of the estate pending the appointment of an administrator. whether the heirs have legal standing to prosecute the rights belonging to the deceased subsequent to the commencement of the administration proceedings. HELD: Remedial Law; Actions; Party-in-interest; Pending the filing of administration proceedings, the heirs without doubt have legal personality to bring suit in behalf of the estate of the decedent in accordance with the provision of Article 777 of the New Civil Code.Pending the filing of administration proceedings, the heirs without doubt have legal personality to bring suit in behalf of the estate of the decedent in accordance with the provision of Article 777 of the New Civil Code that (t)he rights to succession are transmitted from the moment of the death of the decedent. The provision in turn is the found ation 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. Same; Same; Same; Court recognized the legal standing of the heirs to represent the rights and properties of the decedent under administration pending the appointment of an administrator. Even if administration proceedings have already been commenced, the heirs may still bring the suit if an administrator has not yet been appointed. This is the proper modality despite the total lack of advertence to the heirs in the rules on party representation, namely Section 3, Rule 3 and Section 2, Rule 87 of the Rules of Court. In fact, in the case of Gochan v. Young, this Court recognized the legal standing of the heirs to represent the rights and properties of the decedent under administration pending the appointment of an administrator.