THURSDAY, JULY 8, 2010

ANCHETA V. GUERSEY-DALAYGON (Succession)

Binding Effect of Judgments
490 SCRA 140
June 8, 2006
Facts: Spouses Audrey ONeill (Audrey) and W. Richard Guersey (Richard) were American citizens who
have resided in the Philippines for 30 years. They have an adopted daughter, Kyle Guersey Hill (Kyle).
Audrey died in 1979. She left a will wherein she bequeathed her entire estate to Richard consisting of
Audreys conjugal share in real estate improvements at Forbes Park, current account with cash balance and
shares of stock in A/G Interiors. Two years after her death, Richard married Candelaria Guersey-Dalaygon.
Four years thereafter, Richard died and left a will wherein he bequeathed his entire estate to respondent,
except for his shares in A/G, which he left to his adopted daughter.
Petitioner, as ancillary administrator in the court where Audreys will was admitted to probate, filed a
motion to declare Richard and Kyle as heirs of Audrey and a project of partition of Audreys estate. The
motion and project of partition were granted. Meanwhile, the ancillary administrator with regards to
Richards will also filed a project of partition, leaving 2/5 of Richards undivided interest in the Forbes
property was allocated to respondent Candelaria, while 3/5 thereof was allocated to their three children.
Respondent opposed on the ground that under the law of the State of Maryland, where Richard was a native
of, a legacy passes to the legatee the entire interest of the testator in the property subject to the legacy.
Issue: Whether or not the decree of distribution may still be annulled under the circumstances.
Held: A decree of distribution of the estate of a deceased person vests the title to the land of the estate in the
distributees, which, if erroneous may be corrected by a timely appeal. Once it becomes final, its binding
effect is like any other judgment in rem.
However, in exceptional cases, a final decree of distribution of the estate may be set aside for lack of
jurisdiction or fraud. Further, in Ramon vs. Ortuzar, the Court ruled that a party interested in a probate
proceeding may have a final liquidation set aside when he is left out by reason of circumstances beyond his
control or through mistake or inadvertence not imputable to negligence.
Petitioners failure to proficiently manage the distribution of Audreys estate according to the terms of her
will and as dictated by the applicable law amounted to extrinsic fraud. Hence the CA Decision annulling
the RTC Orders dated February 12, 1988 and April 7, 1988, must be upheld.
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SPECIAL PROCEEDINGS
QUASHA ANCHETA PEA AND NOLASCO LAW OFFICE V.LCN CONSTRUCTION CORP.G.R.
No. 174873; AUGUST 26, 2008
Raymond Triviere passed away on 14 December 1987. On 13 January 1988, proceedings for the settlement
of his intestate estate were instituted by his widow, Amy Consuelo Triviere, before the Regional Trial Court
(RTC) of MakatiCity, Branch 63 of the National Capital Region (NCR), docketed as Special Proceedings
Case No. M-1678. Atty. Enrique P. Syquia (Syquia) and Atty. William H. Quasha (Quasha) of the Quasha
Law Office, representing the widow and children of the late Raymond Triviere, respectively, were
appointed administrators of the estate of the deceased in April 1988. As administrators, Atty. Syquia and
Atty. Quasha incurred expenses for the payment of real estate taxes, security services, and the preservation
and administration of the estate, as well as litigation expenses.
In February 1995, Atty. Syquia and Atty. Quasha filed before the RTC a Motion for Payment of their
litigation expenses. Citing their failure to submit an accounting of the assets and liabilities of the estate
under administration, the RTC denied in May 1995 the Motion for Payment of Atty. Syquia and Atty.
Quasha.
In 1996, Atty. Quasha also passed away. Atty. Redentor Zapata (Zapata), also of the Quasha Law Office,
took over as the counsel of the Triviere children, and continued to help Atty. Syquia in the settlement of the
estate.
On 6 September 2002, Atty. Syquia and Atty. Zapata filed another Motion for Payment, for their own behalf
and for their respective clients, claiming for the payment of attorneys fees and litigation expenses.
LCN, as the only remaining claimant against the Intestate Estate of the Late Raymond Triviere in Special
Proceedings Case No. M-1678, filed its Comment on/Opposition to the afore-quoted Motion on 2 October
2002. LCN countered that the RTC had already resolved the issue of payment of litigation expenses when it
denied the first Motion for Payment filed by Atty. Syquia and Atty. Quasha for failure of the administrators
to submit an accounting of the assets and expenses of the estate as required by the court. LCN also averred
that the administrators and the heirs of the late Raymond Triviere had earlier agreed to fix the former's fees
at only 5% of the gross estate, based on which, per the computation of LCN, the administrators were even
overpaid P55,000.00. LCN further asserted that contrary to what was stated in the second Motion for
Payment, Section 7, Rule 85 of the Revised Rules of Court was inapplicable, since the administrators failed
to establish that the estate was large, or that its settlement was attended with great difficulty, or required a
high degree of capacity on the part of the administrators. Finally, LCN argued that its claims are still
outstanding and chargeable against the estate of the late Raymond Triviere; thus, no distribution should be
allowed until they have been paid.
WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED INRULING THAT THE
AWARD IN FAVOR OF THE HEIRS OF THE LATERAYMOND TRIVIERE IS ALREADY A
DISTRIBUTION OF THE RESIDUE OFTHE ESTATE.
No. While the awards in favor of petitioner children and widow made in the RTC Order dated 12 June 2003
was not yet a distribution of the residue of the estate, given that there was still a pending claim against the
estate, still, they did constitute a partial and advance distribution of the estate. Virtually, the petitioner
children and widow were already being awarded shares in the estate, although not all of its obligations had
been paid or provided for. Section 2, Rule 109 of the Revised Rules of Court expressly recognizes advance
distribution of the estate, thus:

Section 2.Advance distribution in special proceedings . - Notwithstanding a pending

controversy or appeal in proceedings to settle the estate of a decedent ,the court may, in its
discretion and upon such terms as it may deem proper and just, permit that such part of the estate
as may not be affected by the controversy or appeal be distributed among the heirs or legatees,
upon compliance with the conditions set forth in Rule 90of these rules. (Emphases supplied.)
The second paragraph of Section 1 of Rule 90 of the Revised Rules of Court allows the
distribution of the estate prior to the payment of the obligations mentioned therein, provided that
"the distributees, or any of them, gives a bond ,in a sum to be fixed by the court, conditioned for
the payment of said obligations within such time as the court directs."
In sum, although it is within the discretion of the RTC whether or not topermit the advance distribution of
the estate, its exercise of such discretion should be qualified by the following: (1) only part of the estate
that is not affected by any pending controversy or appeal may be the subject of advance
distribution(Section 2, Rule 109); and (2) the distributees must post a bond, fixed by the court, conditioned
for the payment of outstanding obligations of the estate(second paragraph of Section 1, Rule 90). There is
no showing that the RTC, in awarding to the petitioner children and widow their shares in the estate prior to
the settlement of all its obligations, complied with these two requirements or, at the very least, took the
same into consideration. Its Order of 12 June 2003 is completely silent on these matters. It justified its grant
of the award in a single sentence which stated that petitioner children and widow had not yet received their
respective shares from the estate after all these years. Taking into account that the claim of LCN against the
estate of the late Raymond Triviere allegedly amounted to P6,016,570.65, already in excess of the
P4,738,558.63 reported total value of the estate, the RTC should have been more prudent in approving the
advance distribution of the same.
Hence, the Court does not find that the Court of Appeals erred in disallowing the advance award of shares
by the RTC to petitioner children and widow of the late Raymond Triviere.
WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED INNULLIFYING THE
AWARD OF ATTORNEY'S FEES IN FAVOR OF THE CO-ADMINISTRATORS.
No. Nothing in the records, however, reveals that any one of the lawyers of Quasha Law Office was indeed
a substitute administrator for Atty. Quasha upon his death.
The court has jurisdiction to appoint an administrator of an estate by granting letters of administration to a
person not otherwise disqualified or incompetent to serve as such, following the procedure laid down in
Section 6,Rule 78 of the Rules of Court.
Corollary thereto, Section 2, Rule 82 of the Rules of Court provides in clear and unequivocal terms the
modes for replacing an administrator of an estate upon the death of an administrator, to wit:
Section 2.Court may remove or accept resignation of executor or administrator.
Proceedings upon death, resignation, or removal . x x x.
When an executor or administrator dies, resigns, or is removed the remaining executor or administrator
may administer the trust alone, unless the court grants letters to someone to act with him. If there is
no remaining executor or administrator, administration may be granted to any suitable person.

The records of the case are wanting in evidence that Quasha Law Office or any of its lawyers substituted
Atty. Quasha as co-administrator of the estate. None of the documents attached pertain to the issuance of
letters of administration to petitioner Quasha Law Office or any of its lawyers at any time after the demise
of Atty. Quasha in 1996. This Court is thus inclined to give credence to petitioner's contention that while it
rendered legal services for the settlement of the estate of Raymond Triviere since the time of Atty. Quasha's
death in 1996, it did not serve as co-administrator thereof, granting that it was never even issued letters
of administration.
The attorney's fees, therefore, cannot be covered by the prohibition in the third paragraph of Section 7, Rule
85 of the Revised Rules of Court against an attorney, to charge against the estate professional fees for legal
services rendered by them.
However, while petitioner Quasha Law Office, serving as counsel of the Triviere children from the time of
death of Atty. Quasha in 1996, is entitled to attorney's fees and litigation expenses of P100,000.00 as prayed
for in the Motion for Payment dated 3 September 2002, and as awarded by the RTC in its 12 June2003
Order, the same may be collected from the shares of the Triviere children upon final distribution of the
estate, in consideration of the fact that the QuashaLaw Office, indeed, served as counsel (not anymore as
co-administrator),representing and performing legal services for the Triviere children in the settlement of
the estate of their deceased father.

Gabriel vs Bilon
G.R. No. 146989: MELENCIO GABRIEL represented by Flordeliza Gabriel vs NELSON
BILON, ANGEL BRAZIL, & ERNESTO PAGAYGAY
7 February 2007 l Labor Standards
Illegal Dismissal Separation Pay Appeal by Employer Death of a Party Strained Relations Principle
Employer-employee Relationship
Bilon, Brazil and Pagaygay are jeepney drivers driving jeepneys owned by Melencio Gabriel. They are
paying P400/day for their boundary. Later, the drivers were required to pay an additional P50.00 to cover
police protection, car wash, deposit fee, and garage fees.
The three drivers refused to pay the additional P50.00. On April 30, 1995, when the drivers reported to
work, they were not given any jeepney to drive. Eventually, they were dismissed. The three drivers sued
Gabriel for illegal dismissal.
The Labor Arbiter ruled in favor of the drivers and ordered Gabriel to pay the drivers their backwages and
their separation pay amounting to about a total of P1.03M.
On April 18, 1997, the LA promulgated its decision and on the same day sent a copy thereof to Gabriel but
Flordeliza (wife of Gabriel) refused to receive the copy. Apparently, Gabriel died on April 4, 1997. The
copy was resent via registered mail on May 28, 1997. Flordeliza appealed to the LA on June 5, 1997.
The LA dismissed the appeal; it ruled that the appeal was not on time because the promulgation was made
on April 18, 1997 and that the appeal on June 5, 1997 was already beyond the ten day period required for
appeal.
The National Labor Relations Commission reversed the LA. It ruled that there was no employee-employer
relationship between the drivers and Gabriel. The Court of Appeals reversed the NLRC but it ruled that the
separation pay should not be awarded but rather, the employees should be reinstated.
ISSUE: Whether or not the appeal before the LA was made on time. Whether or not there was an
employer-employee relationship between the drivers and Gabriel. Whether or not there was a strained
relation between Gabriel and the drivers.
HELD: The appeal was made on time because when the promulgation was made Gabriel is already dead.
The ten day requirement to make an appeal is not applicable in this situation because Gabriel was not yet
properly substituted by the wife. The counting of the period should be made starting from the date when the
copy was sent via registered mail. Therefore, the appeal filed on June 5 was made on time.
There exists an employer-employee relationship between the drivers and Gabriel. The fact that the drivers
do not receive fixed wages but get only that in excess of the so-called boundary [that] they pay to the
owner/operator is not sufficient to withdraw the relationship between them from that of employer and
employee.

The award of the separation pay is not proper. It was not shown that there was a strained relationship
between Gabriel and the drivers so as to cause animosity if they are reinstated. The Strained Relations
Principle is only applied if it is shown that reinstatement would only cause antagonism between the
employer and the employee; and that the only solution is separation and the payment of separation pay.

HEIRS OF ELIAS LORILLA VS. CA G.R. NO. 118655 (2000)

Facts:
The RTC rendered judgment in favor of P. Ds counsel received a copy of the decisionbut did not interpose
an appeal therefrom. A writ of execution was issued. The Heirs of P filed amotion to quash the writ of
execution on the ground that D died before the RTC rendered itsdecision.
Issue:
Whether the motion should be granted.
Held:
No. Ds counsel failed in his duty to promptly inform the court of the death of his client, asthe Rules
require. As far as the RTC was concerned, until the Writ of Execution was issued, Dc o n t i n u e d t o b e
r e p r e s e n t e d b y c o u n s e l o f r e c o r d a n d t h a t u p o n s e r v i c e o f a c o p y o f t h e decision
on said counsel, D was deemed to have been validly served notice of judgment. Thefailure of Ds counsel
to serve notice on the court and the adverse parties regarding his clientsdeath binds the Heirs as much as D himself
could be bound

Heirs of Sandejas vs Alex Lina

Chester Cabalza recommends his visitors to please read the original & full text of the case cited. Xie xie!
Heirs of Sandejas vs Alex Lina
G.R. No. 141634
February 5, 2001
Facts:
The facts of the case, as narrated by the Court of Appeals (CA). On February 17, 1981, Eliodoro Sandejas,
Sr. filed a petition, in the lower court praying that letters of administration be issued in his favor for the
settlement of the estate of his wife, Remedios Sandejas, who died on April 17, 1955.
On July 1, 1981, Letters of Administration were issued by the lower court appointing Eliodoro Sandejas, Sr.
as administrator of the estate of the late Remedios Sandejas. Likewise on the same date, Eliodoro Sandejas,
Sr. took his oath as administrator.
On November 19, 1981, the 4th floor of Manila City Hall was burned and among the records burned were
the records of Branch XI of the Court of First Instance of Manila. As a result, he filed a Motion for
Reconstitution of the records of the case on February 9, 1983. On February 16, 1983, the lower court in its
Order granted the said motion.
On April 19, 1983, an Omnibus Pleading for motion to intervene and petition-in-intervention was filed by
Movant Alex A. Lina alleging among others that on June 7, 1982, movant and administrator Eliodoro P.
Sandejas, in his capacity as seller, bound and obligated himself, his heirs, administrators, and assigns, to
sell forever and absolutely and in their entirety the following parcels of land which formed part of the estate
of the late Remedios R. Sandejas.
It showed that there was receipt of money with promise to sell and to buy with the sum of P100,000.00
Issues:
a) Whether or not Eliodoro P. Sandejas Sr. is legally obligated to convey title to the property referred to in
the subject document which was found to be in the nature of a contract to sell where court approval was not
complied with?
b) Whether or not he was guilty of bad faith despite the conclusion of the CA that he [bore] the burden of
proving that a motion for authority to sell had been filed in court?
c) Whether or not undivided shares of Eliodoro in the subject property is (3/5) and the administrator of the
latter should execute deeds of conveyance within thirty days from receipt of the balance of the purchase
price from the respondent?
d)Whether or not the respondent's petition-in-intervention was converted to a money claim and whether the
[trial court] acting as a probate court could approve the sale and compel the petitioners to execute [a] deed
of conveyance even for the share alone of Eliodoro P. Sandejas Sr.?
Held:

The Petition is partially meritorious.

Obligation With a Suspensive Condition
Petitioners argue that the CA erred in ordering the conveyance of the disputed 3/5 of the parcels of land,
despite the nonfulfillment of the suspensive condition -- court approval of the sale -- as contained in the
"Receipt of Earnest Money with Promise to Sell and to Buy" (also referred to as the "Receipt"). Instead,
they assert that because this condition had not been satisfied, their obligation to deliver the disputed parcels
of land was converted into a money claim.
The agreement between Eliodoro Sr. and respondent is subject to a suspensive condition -- the procurement
of a court approval, not full payment. There was no reservation of ownership in the agreement. In
accordance with paragraph 1 of the Receipt, petitioners were supposed to deed the disputed lots over to
respondent. This they could do upon the court's approval, even before full payment. Hence, their contract
was a conditional sale, rather than a contract to sell as determined by the CA.
When a contract is subject to a suspensive condition, its birth or effectivity can take place only if and when
the condition happens or is fulfilled. Thus, the intestate court's grant of the Motion for Approval of the sale
filed by respondent resulted in petitioners' obligation to execute the Deed of Sale of the disputed lots in his
favor. The condition having been satisfied, the contract was perfected. Henceforth, the parties were bound
to fulfill what they had expressly agreed upon.
Court approval is required in any disposition of the decedent's estate per Rule 89 of the Rules of Court.
Reference to judicial approval, however, cannot adversely affect the substantive rights of heirs to dispose of
their own pro indiviso shares in the co-heirship or co-ownership. In other words, they can sell their rights,
interests or participation in the property under administration. A stipulation requiring court approval does
not affect the validity and the effectivity of the sale as regards the selling heirs. It merely implies that the
property may be taken out of custodia legis, but only with the court's permission. It would seem that the
suspensive condition in the present conditional sale was imposed only for this reason.
First Collateral Issue: Jurisdiction of Settlement Court
Petitioners also fault the CA Decision by arguing, inter alia, (a) jurisdiction over ordinary civil action
seeking not merely to enforce a sale but to compel performance of a contract falls upon a civil court, not
upon an intestate court; and (b) that Section 8 of Rule 89 allows the executor or administrator, and no one
else, to file an application for approval of a sale of the property under administration.
In the present case, the Motion for Approval was meant to settle the decedent's obligation to respondent;
hence, that obligation clearly falls under the jurisdiction of the settlement court. To require respondent to
file a separate action -- on whether petitioners should convey the title to Eliodoro Sr.'s share of the disputed
realty -- will unnecessarily prolong the settlement of the intestate estates of the deceased spouses.
Second Collateral Issue: Intervenor's Standing
Petitioners contend that under said Rule 89, only the executor or administrator is authorized to apply for the
approval of a sale of realty under administration. Hence, the settlement court allegedly erred in entertaining
and granting respondent's Motion for Approval.
Third Collateral Issue: Bad Faith
Petitioners assert that Eliodoro Sr. was not in bad faith, because (a) he informed respondent of the need to
secure court approval prior to the sale of the lots, and (2) he did not promise that he could obtain the
approval. However, Eliodoro Sr. did not misrepresent these lots to respondent as his own properties to
which he alone had a title in fee simple. The fact that he failed to obtain the approval of the conditional sale
did not automatically imply bad faith on his part. The CA held him in bad faith only for the purpose of

binding him to the conditional sale. This was unnecessary because his being bound to it is, as already
shown, beyond cavil.
Fourth Collateral Issue: Computation of Eliodoro's Share
Petitioners aver that the CA's computation of Eliodoro Sr.'s share in the disputed parcels of land was
erroneous because, as the conjugal partner of Remedios, he owned one half of these lots plus a further one
tenth of the remaining half, in his capacity as a one of her legal heirs. Hence, Eliodoro's share should be
11/20 of the entire property. Respondent poses no objection to this computation.
On the other hand, the CA held that, at the very least, the conditional sale should cover the one half (1/2)
pro indiviso conjugal share of Eliodoro plus his one tenth (1/10) hereditary share as one of the ten legal
heirs of the decedent, or a total of three fifths (3/5) of the lots in administration.
Petitioners' correct. The CA computed Eliodoro's share as an heir based on one tenth of the entire disputed
property. It should be based only on the remaining half, after deducting the conjugal share.
Ruling
The proper determination of the seller-heir's shares requires further explanation. Succession laws and
jurisprudence require that when a marriage is dissolved by the death of the husband or the wife, the
decedent's entire estate - under the concept of conjugal properties of gains -- must be divided equally, with
one half going to the surviving spouse and the other half to the heirs of the deceased.25 After the settlement
of the debts and obligations, the remaining half of the estate is then distributed to the legal heirs, legatees
and devices. We assume, however, that this preliminary determination of the decedent's estate has already
been taken into account by the parties, since the only issue raised in this case is whether Eliodoro's share is
11/20 or 3/5 of the disputed lots.
WHEREFORE, The Petition is hereby PARTIALLY GRANTED. The appealed Decision and Resolution
are AFFIRMED with the MODIFICATION that respondent is entitled to only a pro-indiviso share
equivalent to 11/20 of the disputed lots. SO ORDERED.

G.R. No. 145982 July 3, 2003

FRANK N. LIU, deceased, substituted by his surviving spouse Diana Liu, and children, namely:
Walter,Milton, Frank, Jr., Henry and Jockson, all surnamed Liu, Rebecca Liu Shui
and Pearl Liu Rodriguez,
petitioners,vs.
ALFREDO LOY, JR., TERESITAA. LOY and ESTATE OF JOSE VAO,
respondents.
FACTS:
On 13 January 1950, Teodoro Vao, as attorney-in-fact of Jose Vao, sold seven lots of the Banilad Estate
locatedin Cebu City to Benito Liu and Cirilo Pangalo.
Teodoro Vao dealt with Frank Liu, the brother of Benito Liu, in thesale of the lots. The lots sold to Benito Liu were Lot Nos. 5, 6,
13, 14, and 15 of Block 12 for a total price of P4,900.Benito Liu gave a down payment of P1,000, undertaking to pay the balance
of P3,900 in monthly installments of P100 beginning at the end of January 1950. The lots sold to Cirilo Pangalo were Lot Nos. 14
and 15 of Block 11 for a total price of P1,967.50. Cirilo Pangalo gave P400 as down payment, undertaking to pay the balance of
P1,567.50in monthly installments of P400 beginning at the end of January 1950. Meanwhile, Jose Vao
passed away.Benito Liu subsequently paid installments totaling P2,900, leaving a balance of P1,000.
Apparently, Benito Liustopped further payments because Teodoro Vao admitted his inability to transfer the lot titles to Benito Liu.
Later,in a letter dated 16 October 1954, Teodoro Vao informed Frank Liu that the Supreme Court had
already declaredvalid the will of his father Jose Vao. Thus, Teodoro Vao could transfer the titles to the buyers names
upon payment of the balance of the purchase price. When Benito Liu failed to reply, Teodoro Vao sent him another
letter,reminding him of his outstanding balance. It appears that it was only after nine years that
Frank Liu responded through a letter. In the letter, Frank Liu informedTeodoro Vao that he was ready to pay the
balance of the purchase price of the seven lots. He requested for theexecution of a deed of sale of the lots in his
name and the delivery of the titles to him.On 22 April 1966, Benito Liu sold to Frank Liu the five lots (Lot Nos. 5, 6, 13,
14 and 15 of Block 12) which BenitoLiu purchased from Teodoro Vao. Frank Liu assumed the balance of P1,000 for the five
lots. Cirilo Pangalolikewise sold to Frank Liu the two lots (Lot Nos. 14 and 15 of Block 11) that Pangalo purchased from
TeodoroVao. Frank Liu likewise assumed the balance of P417 for the two lots.Frank Liu reiterated in a letter his request
for Teodoro Vao to execute the deed of sale covering the seven lots so hecould secure the corresponding
certificates of title in his name. He also requested for the construction of thesubdivision roads pursuant to
the original contract. In the letter, Frank Liu referred to another letter, which heallegedly sent to Teodoro Vao.
According to Frank Liu, he enclosed PBC Check No. D-782290 for P1,417, whichis the total balance of the accounts of
Benito Liu and Cirilo Pangalo on the seven lots.On 19 August 1968, Teodoro Vao sold Lot No. 6 to respondent Teresita Loy for
P3,930. The Register of Deeds of Cebu City entered this sale in the Daybook on 24 February 1969.On 16 December 1969,
Teodoro Vao sold Lot No. 5 to respondent Alfredo Loy for P3,910. The Register of Deedsof Cebu City entered this sale in
the Daybook on 16 January 1970.Teodoro Vao died. His widow, Milagros Vao, succeeded as administratrix of the Estate
of Jose Vao.The probate court approved the claim of Frank Liu. Thus, Milagros Vao executed a deed of
conveyance coveringthe seven lots in favor of Frank Liu, in compliance with the probate courts order. The
deed of conveyance includedLot Nos. 5 and 6, the same lots Teodoro Vao sold to Alfredo Loy, Jr. and to Teresita Loy
The probate court, upon an ex-parte motion filed by Teresita Loy, issued an Order
approving the sale by TeodoroVao of Lot No. 6 in her favor likewise, approving the sale of Lot No. 5 by Teodoro Vao in his
favor.The Register of Deeds of Cebu City issued a new title in the name of Alfredo Loy, Jr. and Perfeccion V. Loylikewise, in the

name of Teresita A. Loy on Lot Nos. 5 and 6 respectively.On 3 June 1976, Milagros Vao filed a motion for
reconsideration of the Orders of the probate court. She contendedthat she already complied with the probate
courts Order to execute a deed of sale covering the seven lots, includingLot Nos. 5 and 6, in favor of Frank Liu.
She also stated that no one notified her of the motion of the Loys, and if theLoys or the court notified her, she would have objected
to the sale of the same lots to the Loys.Frank Liu then filed a complaint for reconveyance or annulment of title of
Lot Nos. 5 and 6.The probate court denied the motion for reconsideration of Milagros Vao on the
ground that the conflicting claimsregarding the ownership of Lot Nos. 5 and 6 were already under
litigation.The Regional Trial Court rendered judgment against Frank Liu.Frank Liu appealed to the Court of
Appeals, which affirmed in toto the decision of the trial court. Frank Liu filed amotion for reconsideration but the Court
of Appeals denied the same.Hence, the instant petition.
ISSUES:
1.Whether or not there is unilateral extrajudicial rescission of the contract to sell between Teodoro Vao
andFrank Liu?
2.Whether or not the subsequent sales to Alfredo Loy, Jr. and Teresita Loy of Lot Nos. 5 and 6,
respectively,were valid?
HELD:
On the first issue, there was no valid cancellation of the contract to sell because there was no written notice of thecancellation to
Benito Liu or Frank Liu. There was even no implied cancellation of the contract to sell. The letter does not mention anything
about rescinding or cancelling the contract to sell.Although the law allows the extra-judicial cancellation of a contract to
sell upon failure of one party to comply withhis obligation, notice of such cancellation must still be given to the
party who is at fault. The notice of cancellationto the other party is one of the requirements for a valid cancellation of a
contract to sell, aside from the existence of a lawful cause.The fact that Teodoro Vao advised Frank Liu to file his
claim with the probate court is certainly not the conduct of one who supposedly unilaterally rescinded the
contract with Frank Liu.In this case, there was prior delay or default by the seller. As admitted by Teodoro Vao, he could not
deliver thetitles because of a case questioning the authenticity of the will of his father.On the second issue,
a prior contract to sell made by the decedent prevails over the subsequent contract of sale made by the
administrator without probate court approval. The administrator cannot unilaterally cancel a contract to
sellmade by the decedent in his lifetime. Any cancellation must observe all legal requisites, like written
notice of cancellation based on lawful cause.

SALE IN PROBATE
Natalia Opulencia v. Court of Appeals, Aladin Simundac and Miguel Olivan G.R. Mo.125835; July 30,
1998
Facts:
PRs Aladin Simundac and Miguel Oliven filed a complaint for specific performance again NataliaCarpena Opulencia on the
ground that the latter executed in their favor a 'contract to sell' of lot 2125.The defendant, despite demands, failed to comply with
her obligations under the contract. The defendant averred that the property subject of the contract formed part of the Estate of
Demetrio Carpena, in respect of which a petition for probate was filed with the RTC of Binan. The court ordered the parties to
submit their evidence. Pet, instead of submitting evid, filed a demurrer. Moreover, the pet maintained that the contract was null and
void for want of approval of the probate court.Meanwhile, the court a quo granted the demurrer and dismissed the complaint. On
appeal, theappellate court set aside hte trial court's dismissal of the complaint.
Issue:
WON a contract to sell a real property involved in estate proceedings valid and binding without the approval of the probate court.
Ruling:
Yezz naman. Hereditary rights are vested in the heir or heirs from the moment of the decedent's
death. Petitioner, therefore, became the owner of her hereditary share the moment her father died. Thus, the
lack of judicial approval does not invalidate the Contract to Sell, because the petitioner has the substantive
right to sell the whole or a part of her share in the estate of her late father.
Petitioner contends that "[t]o sanction the sale at this stage would bring about a partial distribution of the
decedent's estate pending the final termination of the testate proceedings." Petitioner's contention is not
convincing. The Contract to Sell stipulates that petitioner's offer to sell is contingent on the "complete
clearance of the court on the Last Will Testament of her father." Consequently, although the Contract to Sell
was perfected between the petitioner and private respondents during the pendency of the probate
proceedings, the consummation of the sale or the transfer of ownership over the parcel of land to the private
respondents is subject to the full payment of the purchase price and to the termination and outcome of the
testate proceedings. Therefore, there is no basis for petitioner's apprehension that the Contract to Sell may
result in a premature partition and distribution of the properties of the estate. Indeed, it is settled that "the
sale made by an heir of his share in an inheritance, subject to the pending administration, in no wise stands
in the way of such administration.

Stronghold Insurance v Republic Asahi

Facts: Republic Asahi Glass contracts with JDS for the construction of roadways and drainage systems in
RAG's compound. JDS does so and files the required compliance bond with Stronghold Insurance acting as
surety. The contract is 5.3M the bond is 795k. JDS falls woefully behind schedule, prompting RAG to
rescind the contract and demand the compliance bond. The owner of JDS dies and JDS disappears. SHI
refuses to pay the bond claiming that the death of JDS owner extinguishes the obligation. Is SHI right?
Held: As a general rule, the death of either the creditor or the debtor does not extinguish the obligation.[8]Obligations are
transmissible to the heirs, except when the transmission is prevented by the law, the stipulations of the parties, or the nature of the
obligation.[9]Only obligationst hat are personal[10] or are identified with the persons themselves are extinguished
by death.[11] Furthermore, The liability of petitioner is contractual in nature, because it executed a
performance bond, As a surety, petitioner is solidarily liable with Santos in accordance with the Civil Code
|
SPECIAL PROCEEDINGS
TAN V. GEDORIO JR.G.R. NO. 166520; MARCH 14, 2008
Gerardo Tan died, leaving no will. The private respondents, being illegitimate children of the deceased,
filed with the RTC of Ormoc a petition for the issuance of letters of administration and moved for the
appointment of attorney-in-fact Romualdo Lim as the special administrator of the deceased estate. It was
opposed by petitioners, claiming to be the legitimate children of Gerardo Tan and moved for the
appointment of Vilma Tan as already acting as de facto administratrix of Gerardos estate. The court
appointed Vilma Tan as the de facto administrator, however due to the fact that she did not comply with her
duties, Romualdo Lim was appointed as the special administrator of Gerardos estate.
Petitioner filed a motion for reconsideration for Vilmas appointment contending that they should be given
priority in the administration of the estate since they are allegedly the legitimate heirs of the late Gerardo as
opposed to private respondents who purportedly to be illegitimate children, but it was denied.
WHETHER OR NOT THE COURT ERRED IN DENYING PETITIONERS PLEA TO BE GIVEN
PRIMACY IN THE ADMINISTRATION OF THEIR FATHERS HEIR
No. The order of preference in the appointment of a regular administrator provision does not apply to the
selection of a special administrator. The order of preference petitioners speak of is found in Section 6, Rule
78 of the Rules of Court, which provides:
SEC. 6.When and to whom letters of administration granted. If no executoris named
in the will, or the executor or executors are incompetent, refuse the trust, or fail to give bond, or a
person dies intestate, administration shall be granted:
(a) To the surviving husband or wife, as the case may be, or next of kin,or both, in the discretion of
the court, or to such person as such surviving husband or wife, or next of kin, requests to have
appointed, if competent and willing to serve;
(b) If such surviving husband or wife, as the case may be, or next of kin, or the person selected by
them, be incompetent or unwilling, or if the husband or widow, or next of kin, neglects for thirty
(30) days after the death of the person toapply for administration or to request that administration
be granted to some other person, it may be granted to one or more of the principal creditors,
if competent and willing to serve;
(c) If there is no such creditor competent and willing to serve, it may be granted to such other
person as the court may select.

However, this Court has consistently ruled that the order of preference in the appointment of a regular
administrator as provided in the afore-quoted provision does not apply to the selection of a special
administrator. The preference under Section 6, Rule 78 of the Rules of Court for the next of kin refers to the
appointment of a regular administrator, and not of a special administrator, as the appointment of the
latter lies entirely in the discretion of the court, and is not appealable.
Not being appealable, the only remedy against the appointment of a special administrator is Certiorari
under Rule 65 of the Rules of Court, which was what petitioners filed with the Court of Appeals.
Certiorari, however, requires nothing less than grave abuse of discretion, a term which implies such
capricious and whimsical exercise of judgment which is equivalent to an excess or lack of jurisdiction. The
abuse of discretion must be so patent and gross as to amount to an evasion of a positive duty or a virtual
refusal to perform a duty enjoined bylaw, or to act at all in contemplation of law.

SUPPORT
VICTORIA TAYAG vs. FELICIDAD A. TAYAG-GALLOR G.R. 174680; March 24, 2008
On 15 January 2001, respondent herein, Felicidad A. Tayag-Gallor, filed a petition for the issuance of
letters of administration over the estate of Ismael Tayag. Respondent alleged in the petition, docketed as
Special Proceeding No.5994, that she is one of the three (3) illegitimate children of the late Ismael Tayag
and Ester C. Angeles. The decedent was married to petitioner herein, Victoria C.Tayag, but the two
allegedly did not have any children of their own.
On 7 September 2000, Ismael Tayag died intestate, leaving behind two (2)real properties both of which are
in the possession of petitioner, and a motor vehicle which the latter sold on 10 October 2000 preparatory to
the settlement of the decedents estate. Petitioner allegedly promised to give respondent and her brothers
P100,000.00 each as their share in the proceeds of the sale. However, petitioner only gave each of them half
the amount she promised.
Respondent further averred that on 20 November 2000, petitioner has caused the annotation of 5 September
1984 affidavit executed by Ismael Tayag declaring the properties to be the paraphernal properties of
petitioner. The latter allegedly intends to dispose of these properties to the respondents and her brothers
prejudice.
Petitioner opposed the petition, asserting that she purchased the properties subject of the petition using her
own money. She claimed that she and Ismael Tayag got married in Las Vegas, Nevada, USA on 25 October
1973, and that they have an adopted daughter, Carmela Tayag, who is presently residing inthe USA. It is
allegedly not true that she is planning to sell the properties. Petitioner prayed for the dismissal of the suit
because respondent failed to state a cause of action.
In a Motion dated 31 August 2001, petitioner reiterated her sole ownership of the properties and presented
the transfer certificates of title thereof in her name. She also averred that it is necessary to allege that
respondent was acknowledged and recognized by Ismael Tayag as his illegitimate child. There being no
such allegation, the action becomes one to compel recognition which cannot be brought after the death of
the putative father. To prevent further encroachment upon the courts time, petitioner moved for a hearing
on her affirmative defenses.
WHETHER RESPONDENTS PETITION FOR THE ISSUANCE OF LETTERS OFADMINISTRATION
SUFFICIENTLY STATES A CAUSE OF ACTIONCONSIDERING THAT RESPONDENT MERELY
ALLEGED THEREIN THATSHE IS AN ILLEGITIMATE CHILD OF THE DECEDENT, WITHOUT

STATINGTHAT SHE HAD BEEN ACKNOWLEDGED OR RECOGNIZED AS SUCH BYTHE

LATTER.
Yes. The allegation that respondent is an illegitimate child of the decedent suffices even without further
stating that she has been so recognized or acknowledged.
A petition for the issuance of letters of administration must be filed by an interested person. In Saguinsin v.
Lindayag, the Court defined an interested party as one who would be benefited by the estate, such as an
heir, or one who has a claim against the estate, such as a creditor. This interest, furthermore, must be
material and direct, not merely indirect or contingent.
Essentially, the petition for the issuance of letters of administration is a suit for the settlement of the
intestate estate of Ismael Tayag. The right of respondent to maintain such a suit is dependent on whether
she is entitled to successional rights as an illegitimate child of the decedent which, in turn, may be
established through voluntary or compulsory recognition.
Voluntary recognition must be express such as that in a record of birth appearing in the civil register, a final
judgment, a public instrument or private handwritten instrument signed by the parent concerned. The
voluntary recognition of an illegitimate child by his or her parent needs no further court action and is,
therefore, not subject to the limitation that the action for recognition be brought during the lifetime of the
putative parent. Judicial or compulsory recognition, on the other hand, may be demanded by the
illegitimate child of his parents and must be brought during the lifetime of the presumed parents.
Respondent in this case had not been given the opportunity to present evidence to show whether she had
been voluntarily recognized and acknowledged by her deceased father because of petitioners opposition to
her petition and motion for hearing on affirmative defenses. There is, as yet, no way to determine if her
petition is actually one to compel recognition which had already been foreclosed by the death of her father,
or whether indeed she has a material and direct interest to maintain the suit by reason of the decedents
voluntary acknowledgment or recognition of her illegitimate filiation.
We find, therefore, that the allegation that respondent is an illegitimate child of the decedent suffices even
without further stating that she has been so recognized or acknowledged. A motion to dismiss on the ground
of failure to state a cause of action in the complaint hypothetically admits the truth of the facts alleged
therein. Assuming the fact alleged to be true, i.e., that respondent is the decedents illegitimate child, her
interest in the estate as such would definitely be material and direct. The appellate court was, therefore,
correct in allowing the proceedings to continue, ruling that, respondent still has the duty to prove the
allegation (that she is an illegitimate child of the decedent), just as the petitioner has the right to disprove it,
in the course of the settlement proceedings.