[January 29, 1996] Estate of Hilario Ruiz, Edmund Ruiz, executor,

petitioner, vs. The CA, Maria Pilar Ruiz-Montes, et al., respondents.

Facts: In 1987, Hilario executed a holographic will naming as his heirs his only son,
Edmond, his adopted daughter, Maria Pilar, and his three granddaughters, Maria
Cathryn, Candice Albertine and Maria Angeline, all children of Edmond Ruiz. The
testator bequeathed to his heirs substantial cash, personal and real properties and
named Edmond executor of his estate. On April 12, 1988, Hilario Ruiz died.
Immediately thereafter, the cash component of his estate was distributed among
Edmond and Maria Pilar et al. in accordance with the decedent's will.
For unknown reasons, Edmond, did not take any action for the probate of his
father's holographic will. In 1992, four years after the testator's death, it was Maria
Pilar who filed before the RTC of Pasig, a petition for the probate and approval of
Hilario's will and for the issuance of letters testamentary to Edmond. On May 18,
1993, the probate court admitted the will to probate and ordered the issuance of
letters testamentary to Edmond conditioned upon the filing of a bond in the amount
of P50,000.00. The letters testamentary were issued on June 23, 1993.
On July 28, 1993, Hilario as executor, filed an Ex-Parte Motion for Release of Funds.
It prayed for the release of the rent payments deposited with the Court. Maria Pilar
opposed the motion and concurrently filed a Motion for Release of Funds to Certain
Heirs and Motion for Issuance of Certificate of Allowance of Probate Will. She prayed
for the release of the said rent payments to Maria Cathryn, Candice Albertine and
Maria Angeline and for the distribution of the testator's properties, specifically the
Valle Verde property and the Blue Ridge apartments, in accordance with the
provisions of the holographic will.
The probate court, on December 22, 1993, ordered the release of the funds to
Edmond but only such amount as may be necessary to cover the expenses of
administration and allowances for support of the testator's three granddaughters
subject to collation and deductible from their share in the inheritance. The court,
however, held in abeyance the release of the titles to Maria Pilar and the three
granddaughters until the lapse of six months from the date of first publication of the
notice to creditors. Edmond assailed this decision to the CA which affirmed the trial
court. Hence, this recourse to the SC.
ISSUEs: WoN the probate court, after admitting the will to probate but before
payment of the estates debts and obligations, has the authority to: a) grant an
allowance from the funds of the estate for the support of the testator's
grandchildren; b) order the release of the titles to certain heirs; and c) grant
possession of all properties of the estate to the executor of the will
Ruling: a) NO. It is settled that allowances for support under Section 3 of Rule 83
should not be limited to the minor or incapacitated children of the deceased. Article
1813 of the Civil Code of the Philippines, the substantive law in force at the time of

the testator's death, provides that during the liquidation of the conjugal partnership,
the deceased's legitimate spouse and children, regardless of their age, civil status
or gainful employment, are entitled to provisional support from the funds of the
estate. The law is rooted on the fact that the right and duty to support, especially
the right to education, subsist even beyond the age of majority.
Be that as it may, grandchildren are not entitled to provisional support from
the funds of the decedents estate. The law clearly limits the allowance to widow
and children and does not extend it to the deceaseds grandchildren, regardless of
their minority or incapacity. It was error, therefore, for the appellate court to sustain
the probate court's order granting an allowance to the grandchildren of the testator
pending settlement of his estate.
b) NO. An order releasing titles to properties of the estate amounts to an advance
distribution of the estate which is allowed upon compliance with the conditions set
forth in Rule 90 of the Rules. Thus, "no distribution shall be allowed until the
payment of the obligations enumerated (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) has been made or provided for, unless the
distributees, 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." The latter part means that, before payment of the said obligations, the
distribution of the estate properties may be made, but only if the distributees or any
of them gives a bond in a sum fixed by the court conditioned upon the payment of
said obligations within such time as the court directs, or when provision is made to
meet those obligations.
In the case at bar, the probate court ordered the release of the titles to the Valle
Verde property and the Blue Ridge apartments to the private respondents after the
lapse of six months from the date of first publication of the notice to creditors. The
questioned order speaks of notice to creditors, not payment of debts and
obligations. It was also too early in the day for the probate court to order the
release of the titles six months after admitting the will to probate.
c) NO. Edmond cannot correctly claim that the assailed order deprived him of his
right to take possession of all the real and personal properties of the estate. The
right of an executor or administrator to the possession and management of the real
and personal properties of the deceased is not absolute and can only be exercised
so long as it is necessary for the payment of the debts and expenses of
administration.
Edmond must be reminded that his right of ownership over the properties of his
father is merely inchoate as long as the estate has not been fully settled and
partitioned. As executor, he is a mere trustee of his fathers estate. The funds of the
estate in his hands are trust funds and he is held to the duties and responsibilities of

a trustee of the highest order. He cannot unilaterally assign to himself and possess
all his parents properties and the fruits thereof without first submitting an inventory
and appraisal of all real and personal properties of the deceased, rendering a true
account of his administration, the expenses of administration, the amount of the
obligations and estate tax, all of which are subject to a determination by the court
as to their veracity, propriety and justness.

[October 23, 1997] Heirs of Pedro Escanlar, et al., petitioners, vs. The CA,
Generosa Martinez, et al., respondents.
Facts: Spouses Guillermo Nombre and Victoriana Cari-an died without issue in 1924
and 1938, respectively. Nombre's heirs include his nephews and grandnephews
which, for brevity, will be referred to as private respondents Cari-an. Two parcels of
land, denominated as Lot No. 1616 and 1617 of the Kabankalan Cadastre with an
area of 29,350 square meters and 460,948 square meters, respectively, formed part
of the estate of Nombre and Cari-an. On September 15, 1978, Cari-an's heirs
executed a Deed of Sale of Rights, Interests and Participation in favor of Petitioners
Escanlar and Francisco Holgado, who were concurrently the lessees of the lots
referred to above. The sale was for and in consideration of the sum of P50,000.00,
the balance of P225,000.00 to be paid by the vendees on or before May, 1979.
Petitioners were unable to pay Cari-an heirs individual shares, amounting to
P55,000.00 each, by the due date. However, said heirs received at least 12
installments from them after May 1979. By 1982, 5 of them were already fully paid.
Being former lessees, Petitioners continued in possession of Lot Nos. 1616 and
1617. Interestingly, they continued to pay rent based on their lease contract. On
September 10, 1981, they moved to intervene in the probate proceedings of
Nombre and Cari-an as the buyers of private respondent Cari-ans' share in Lot Nos.
1616 and 1617. However, their motion for approval of the sale before the same
court was opposed by the Cari-ans.
On September 16, 1982, the probate court approved a motion filed by the heirs of
Cari-an and Nombre to sell their respective shares in the estate. On September 21,
1982, private respondents Cari-an, in addition to some heirs of Guillermo Nombre,
sold their shares in eight parcels of land including Lot Nos. 1616 and 1617 to the
spouses Ney Sarrosa Chua and Paquito Chua for P1,850,000.00. One week later, the
vendor-heirs, including private respondents Cari-an, filed a motion for approval of
sale of hereditary rights, i.e. the sale made on September 21, 1982 to the Chuas.
Private respondents Cari-an instituted this case for cancellation of sale against
Escanlar and Holgado on November 3, 1982. They complained of petitioners' failure

to pay the balance of the purchase price by May 31, 1979 and alleged that they
only received a total of P132,551.00 in cash and goods. Petitioners replied that the
Cari-ans, having been paid, had no right to resell the subject lots; that the Chuas
were purchasers in bad faith; and that the court approval of the sale to the Chuas
was subject to their existing claim over said properties.
The seminal case at bar was resolved by the trial court in favor of cancellation of
the September 15, 1978 sale. Said transaction was nullified because it was not
approved by the probate court as required by the contested deed of sale of rights,
interests and participation and because the Cari-ans were not fully paid.
Consequently, the Deed of Sale executed by the heirs of Nombre and Cari-an in
favor of Paquito and Ney Chua, which was approved by the probate court, was
upheld. From this, the petitioners appealed to the CA, which court affirmed the trial
court's decision. Thus, the petitioners sought this recourse to the SC.
ISSUEs: WoN: a) the sale to petitioners was a contract to sell which reserved the
ownership of the property to the sellers until full payment of the purchase price; b)
the the deed of sale is null and void for not having been approved by the probate
court; c) there was a valid recission of the sale by the private repondents Cari-an
Ruling: a) NO. In contracts to sell, ownership is retained by the seller and is not to
pass until the full payment of the price. Such payment is a positive suspensive
condition, the failure of which is not a breach of contract but simply an event that
prevented the obligation of the vendor to convey title from acquiring binding force.
The September 15, 1978 sale of rights, interests and participation as to 1/2 portion
pro indiviso of the two subject lots is a contract of sale for the following reasons:
First, private respondents as sellers did not reserve unto themselves the ownership
of the property until full payment of the unpaid balance of P225,000.00. Second,
there is no stipulation giving the sellers the right to unilaterally rescind the contract
the moment the buyer fails to pay within the fixed period. In a contract of sale, the
non-payment of the price is a resolutory condition which extinguishes the
transaction that, for a time, existed and discharges the obligations created
thereunder. The remedy of an unpaid seller in a contract of sale is to seek either
specific performance or rescission.
b) NO. There has arisen here a confusion in the concepts of validity and the efficacy
of a contract. Under Art. 1318 of the Civil Code, the essential requisites of a contract
are: consent of the contracting parties; object certain which is the subject matter of
the contract and cause of the obligation which is established. Absent one of the
above, no contract can arise. Conversely, where all are present, the result is a valid
contract. In the instant case, the Deed of Sale, complying as it does with the
essential requisites, is a valid one. However, it did not bear the stamp of approval of
the court. This notwithstanding, the contracts validity was not affected, only the
effectivity and not the validity of the contract is affected. Then, too, petitioners are
correct in saying that the need for approval by the probate court exists only where

specific properties of the estate are sold and not when only ideal and indivisible
shares of an heir are disposed of, which was what precisely happened in this case.
From the foregoing, it is clear that hereditary rights in an estate can be validly sold
without need of court approval and that when private respondents Cari-an sold their
rights, interests and participation in Lot Nos. 1616 and 1617, they could legally sell
the same without the approval of the probate court.
c) NO. In the instant case, the sellers gave the buyers until May 1979 to pay the
balance of the purchase price. After the latter failed to pay installments due, the
former made no judicial demand for rescission of the contract nor did they execute
any notarial act demanding the same, as required under Article 1592.
Consequently, the buyers could lawfully make payments even after the May 1979
deadline, as in fact they paid several installments to the sellers which the latter
accepted. Thus, upon the expiration of the period to pay, the sellers made no move
to rescind but continued accepting late payments, an act which cannot but be
construed as a waiver of the right to rescind. When the sellers, instead of availing of
their right to rescind, accepted and received delayed payments of installments
beyond the period stipulated, and the buyers were in arrears, the sellers in effect
waived and are now estopped from exercising said right to rescind. (Though the sale
to petitioners was held valid, it must be emphasized that what was sold was only
the Cari-ans' hereditary shares being held pro indiviso by them and is a conveyance
only of said ideal shares. Specific or designated portions of land were not involved.)