G.R. No.

L-68053 May 7, 1990

LAURA ALVAREZ, FLORA ALVAREZ and RAYMUNDO ALVAREZ, petitioners,
vs.
THE HONORABLE INTERMEDIATE APELLATE COURT and JESUS YANES, ESTELITA YANES, ANTONIO YANES, ROSARIO YANES, and ILUMINADO
YANES, respondents.
FERNAN, C.J.:
This is a petition for review on certiorari seeking the reversal of: (a) the decision of the Fourth Civil Cases Division of the Intermediate Appellate Court dated August
31, 1983 in AC-G.R. CV No. 56626 entitled "Jesus Yanes et al. v. Dr. Rodolfo Siason et al." affirming the decision dated July 8, 1974 of the Court of First Instance of
Negros Occidental insofar as it ordered the petitioners to pay jointly and severally the private respondents the sum of P20,000.00 representing the actual value of
Lots Nos. 773-A and 773-B of the cadastral survey of Murcia, Negros Occidental and reversing the subject decision insofar as it awarded the sums of P2,000.00,
P5,000.00 and P2,000.00 as actual damages, moral damages and attorney's fees, respectively and (b) the resolution of said appellate court dated May 30, 1984,
denying the motion for reconsideration of its decision.
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 773-A 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 Fuentebella's name. 6
After Fuentebella's death and during the settlement of his estate, the administratrix thereof (Arsenia 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 Negros 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 attorney's 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 behalf 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, against 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. 16
It will be noted that the above-mentioned manifestation of Jesus Yanes was not mentioned in the aforesaid decision.
However, execution of said decision proved unsuccessful with respect to Lot 773. In his return of service dated October 20, 1965, the sheriff stated that he
discovered that Lot 773 had been subdivided into Lots 773-A and 773-B; that they were "in the name" of Rodolfo Siason who had purchased them from Alvarez, and
that Lot 773 could not be delivered to the plaintiffs as Siason was "not a party per writ of execution." 17
The execution of the decision in Civil Case No. 5022 having met a hindrance, herein private respondents (the Yaneses) filed on July 31, 1965, in the Court of First
Instance of Negros Occidental a petition for the issuance of a new certificate of title and for a declaration of nullity of TCT Nos. T-23165 and T-23166 issued to
Rosendo Alvarez. 18 Thereafter, the court required Rodolfo Siason to produce the certificates of title covering Lots 773 and 823.

Expectedly, Siason filed a manifestation stating that he purchased Lots 773-A, 773-B and 658, not Lots 773 and 823, "in good faith and for a valuable consideration
without any knowledge of any lien or encumbrances against said properties"; that the decision in the cadastral proceeding 19 could not be enforced against him as he
was not a party thereto; and that the decision in Civil Case No. 5022 could neither be enforced against him not only because he was not a party-litigant therein but
also because it had long become final and executory. 20 Finding said manifestation to be well-founded, the cadastral court, in its order of September 4, 1965, nullified
its previous order requiring Siason to surrender the certificates of title mentioned therein. 21
In 1968, the Yaneses filed an ex-parte motion for the issuance of an alias writ of execution in Civil Case No. 5022. Siason opposed it. 22 In its order of September 28,
1968 in Civil Case No. 5022, the lower court, noting that the Yaneses had instituted another action for the recovery of the land in question, ruled that at the judgment
therein could not be enforced against Siason as he was not a party in the case. 23
The action filed by the Yaneses on February 21, 1968 was for recovery of real property with damages. 24 Named defendants therein were Dr. Rodolfo Siason, Laura
Alvarez, Flora Alvarez, Raymundo Alvarez and the Register of Deeds of Negros Occidental. The Yaneses prayed for the cancellation of TCT Nos. T-19291 and 19292
issued to Siason (sic) for being null and void; the issuance of a new certificate of title in the name of the Yaneses "in accordance with the sheriffs return of service
dated October 20, 1965;" Siason's delivery of possession of Lot 773 to the Yaneses; and if, delivery thereof could not be effected, or, if the issuance of a new title
could not be made, that the Alvarez and Siason jointly and severally pay the Yaneses the sum of P45,000.00. They also prayed that Siason render an accounting of
the fruits of Lot 773 from November 13, 1961 until the filing of the complaint; and that the defendants jointly and severally pay the Yaneses moral damages of
P20,000.00 and exemplary damages of P10,000.00 plus attorney's fees of P4, 000.00. 25
In his answer to the complaint, Siason alleged that the validity of his titles to Lots 773-A and 773-B, having been passed upon by the court in its order of September
4, 1965, had become res judicata and the Yaneses were estopped from questioning said order. 26 On their part, the Alvarez stated in their answer that the Yaneses'
cause of action had been "barred by res judicata, statute of limitation and estoppel." 27
In its decision of July 8, 1974, the lower court found that Rodolfo Siason, who purchased the properties in question thru an agent as he was then in Mexico pursuing
further medical studies, was a buyer in good faith for a valuable consideration. Although the Yaneses were negligent in their failure to place a notice of lis
pendens"before the Register of Deeds of Negros Occidental in order to protect their rights over the property in question" in Civil Case No. 5022, equity demanded
that they recover the actual value of the land because the sale thereof executed between Alvarez and Siason was without court approval. 28 The dispositive portion of
the decision states:
IN VIEW OF THE FOREGOING CONSIDERATION, judgment is hereby rendered in the following manner:
A. The case against the defendant Dr. Rodolfo Siason and the Register of Deeds are (sic) hereby dismmissed,
B. The defendants, Laura, Flora and Raymundo, all surnamed Alvarez being the legitimate children of the deceased Rosendo Alvarez are
hereby ordered to pay jointly and severally the plaintiffs the sum of P20,000.00 representing the actual value of Lots Nos. 773-A and 773-B of
Murcia Cadastre, Negros Occidental; the sum of P2,000.00 as actual damages suffered by the plaintiff; the sum of P5,000.00 representing
moral damages and the sum of P2.000 as attorney's fees, all with legal rate of interest from date of the filing of this complaint up to final
payment.
C. The cross-claim filed by the defendant Dr. Rodolfo Siason against the defendants, Laura, Flora and Raymundo, all surnamed Alvarez is
hereby dismissed.
D. Defendants, Laura, Flora and Raymundo, all surnamed Alvarez are hereby ordered to pay the costs of this suit.
SO ORDERED. 29
The Alvarez appealed to the then Intermediate Appellate Court which in its decision of August 31, 1983 30 affirmed the lower court's decision "insofar as it ordered
defendants-appellants to pay jointly and severally the plaintiffs-appellees the sum of P20,000.00 representing the actual value of Lots Nos. 773-A and 773-B of the
cadastral survey of Murcia, Negros Occidental, and is reversed insofar as it awarded the sums of P2,000.00, P5,000.00 and P2,000.00 as actual damages, moral
damages and attorney's fees, respectively." 31 The dispositive portion of said decision reads:
WHEREFORE, the decision appealed from is affirmed insofar as it ordered defendants-appellants to pay jointly and severally the plaintiffsappellees the sum of P20,000.00 representing the actual value of Lots Nos. 773-A and 773-B of the cadastral survey of Murcia, Negros
Occidental, and is reversed insofar as it awarded the sums of P2,000.00, P5,000.00 and P2,000.00 as actual damages, moral damages and
attorney's fees, respectively. No costs. SO ORDERED. 32
Finding no cogent reason to grant appellants motion for reconsideration, said appellate court denied the same.
Hence, the instant petition. ln their memorandum petitioners raised the following issues:
1. Whethere or not the defense of prescription and estoppel had been timely and properly invoked and raised by the petitioners in the lower
court.
2. Whether or not the cause and/or causes of action of the private respondents, if ever there are any, as alleged in their complaint dated
February 21, 1968 which has been docketed in the trial court as Civil Case No. 8474 supra, are forever barred by statute of limitation and/or
prescription of action and estoppel.
3. Whether or not the late Rosendo Alvarez, a defendant in Civil Case No. 5022, supra and father of the petitioners become a privy and/or party
to the waiver (Exhibit 4-defendant Siason) in Civil Case No. 8474, supra where the private respondents had unqualifiedly and absolutely
waived, renounced and quitclaimed all their alleged rights and interests, if ever there is any, on Lots Nos. 773-A and 773-B of Murcia Cadastre
as appearing in their written manifestation dated November 6, 1962 (Exhibits "4" Siason) which had not been controverted or even impliedly or
indirectly denied by them.

4. Whether or not the liability or liabilities of Rosendo Alvarez arising from the sale of Lots Nos. 773-A and 773-B of Murcia Cadastre to Dr.
Rodolfo Siason, if ever there is any, could be legally passed or transmitted by operations (sic) of law to the petitioners without violation of law
and due process . 33
The petition is devoid of merit.
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. 34
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. 35 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. Once a litigant's right has been adjudicated in a valid final judgment of a competent court, he should not be
granted an unbridled license to return for another try. The prevailing party should not be harassed by subsequent suits. For, if endless litigation were to be allowed,
unscrupulous litigations will multiply in number to the detriment of the administration of justice. 36
There is no dispute that the rights of the Yaneses to the properties in question have been finally adjudicated in Civil Case No. 5022. As found by the lower court, from
the uncontroverted evidence presented, the Yaneses have been illegally deprived of ownership and possession of the lots in question. 37 In fact, Civil Case No. 8474
now under review, arose from the failure to execute Civil Case No. 5022, as subject lots can no longer be reconveyed to private respondents Yaneses, the same
having been sold during the pendency of the case by the petitioners' father to Dr. Siason who did not know about the controversy, there being no lis pendens
annotated on the titles. Hence, it was also settled beyond question that Dr. Siason is a purchaser in good faith.
Under the circumstances, the trial court did not annul the sale executed by Alvarez in favor of Dr. Siason on November 11, 1961 but in fact sustained it. The trial court
ordered the heirs of Rosendo Alvarez who lost in Civil Case No. 5022 to pay the plaintiffs (private respondents herein) the amount of P20,000.00 representing the
actual value of the subdivided lots in dispute. It did not order defendant Siason to pay said amount. 38
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 another's 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. 39 "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 decided As clearly revealed by the undeviating line of decisions coming from this Court, such
an undesirable eventuality is precisely sought to be guarded against." 40
The issue on the right to the properties in litigation having been finally adjudicated in Civil Case No. 5022 in favor of private respondents, it cannot now be reopened
in the instant case on the pretext that the defenses of prescription and estoppel have not been properly considered by the lower court. Petitioners could have
appealed in the former case but they did not. They have therefore foreclosed their rights, if any, and they cannot now be heard to complain in another case in order to
defeat the enforcement of a judgment which has longing become final and executory.
Petitioners further contend that the liability arising from the sale of Lots No. 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. Thus, the pertinent provisions of the Civil Code state:
Art. 774. Succession is a mode of acquisition by virtue of which the property, rights and obligations to the extent of the value of the inheritance,
of a person are transmitted through his death to another or others either by his will or by operation of law.
Art. 776. The inheritance includes all the property, rights and obligations of a person which are not extinguished by his death.
Art. 1311. Contract stake effect only between the parties, their assigns and heirs except in case where the rights and obligations arising from
the contract are not transmissible by their nature, or by stipulation or by provision of law. The heir is not liable beyond the value of the property
received from the decedent.
As explained by this Court through Associate Justice J.B.L. Reyes in the case of Estate of Hemady vs. Luzon Surety Co., Inc. 41
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 party's contractual rights and obligations are transmissible to the successors.
The rule is a consequence of the progressive "depersonalization" of patrimonial rights 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.
xxx xxx xxx
Petitioners being the heirs of the late Rosendo Alvarez, they cannot escape the legal consequences of their father's transaction, which gave rise to the present claim
for damages. That petitioners did not inherit the property involved herein is of no moment because by legal fiction, the monetary equivalent thereof devolved into the
mass of their father's hereditary estate, and we have ruled that the hereditary assets are always liable in their totality for the payment of the debts of the estate. 42

It must, however, be made clear that petitioners are liable only to the extent of the value of their inheritance. With this clarification and considering petitioners'
admission that there are other properties left by the deceased which are sufficient to cover the amount adjudged in favor of private respondents, we see no cogent
reason to disturb the findings and conclusions of the Court of Appeals.
WHEREFORE, subject to the clarification herein above stated, the assailed decision of the Court of Appeals is hereby AFFIRMED. Costs against petitioners.
SO ORDERED.

G.R. No. 77029 August 30, 1990

BIENVENIDO, ESTELITA, MACARIO, LUIS, ADELAIDE, ENRIQUITA and CLAUDIO, all surnamed, GEVERO,petitioners,
vs.
INTERMEDIATE APPELLATE COURT and DEL MONTE DEVELOPMENT CORPORATION, respondents.
PARAS, J.:
This is a petition for review on certiorari of the March 20, 1988 decision 1 of the then Intermediate Appellate Court (now Court of Appeals) in AC-GR CV No. 69264,
entitled Del Monte Development Corporation vs. Enrique Ababa, et al., etc. affirming the decision 2 of the then Court of First Instance (now Regional Trial Court) of
Misamis Oriental declaring the plaintiff corporation as the true and absolute owner of that portion of Lot 476 of the Cagayan Cadastre, particularly Lot No. 2476-D of
the subdivision plan (LRC) Psd-80450, containing an area of Seven Thousand Eight Hundred Seventy Eight (7,878) square meters more or less.
As found by the Appellate Court, the facts are as follows:
The parcel of land under litigation is Lot No. 2476 of the Subdivision Plan Psd-37365 containing an area of 20,119 square meters and situated
at Gusa, Cagayan de Oro City. Said lot was acquired by purchase from the late Luis Lancero on September 15, 1964 as per Deed of Absolute
Sale executed in favor of plaintiff and by virtue of which Transfer Certificate of Title No. 4320 was issued to plaintiff (DELCOR for brevity). Luis
Lancero, in turn acquired the same parcel from Ricardo Gevero on February 5, 1952 per deed of sale executed by Ricardo Gevero which was
duly annotated as entry No. 1128 at the back of Original Certificate of Title No. 7610 covering the mother lot identified as Lot No. 2476 in the
names of Teodorica Babangha 1/2 share and her children: Maria; Restituto, Elena, Ricardo, Eustaquio and Ursula, all surnamed surnamed
Gevero, 1/2 undivided share of the whole area containing 48,122 square meters.
Teodorica Babangha died long before World War II and was survived by her six children aforementioned. The heirs of Teodorica Babangha on
October 17,1966 executed an Extra-Judicial Settlement and Partition of the estate of Teodorica Babangha, consisting of two lots, among them
was lot 2476. By virtue of the extra-judicial settlement and partition executed by the said heirs of Teodorica Babangha, Lot 2476-A to Lot 2476I, inclusive, under subdivision plan (LRC) Psd-80450 duly approved by the Land Registration Commission, Lot 2476-D, among others, was
adjudicated to Ricardo Gevero who was then alive at the time of extra-judicial settlement and partition in 1966. Plaintiff (private respondent
herein) filed an action with the CFI (now RTC) of Misamis Oriental to quiet title and/or annul the partition made by the heirs of Teodorica
Babangha insofar as the same prejudices the land which it acquired a portion of lot 2476.
Plaintiff now seeks to quiet title and/or annul the partition made by the heirs of Teodorica Babangha insofar as the same prejudices the land
which it acquired, a portion of Lot 2476. Plaintiff proved that before purchasing Lot 2476-A it first investigated and checked the title of Luis
Lancero and found the same to be intact in the office of the Register of Deeds of Cagayan de Oro City. The same with the subdivision plan
(Exh. "B"), the corresponding technical description (Exh. "P") and the Deed of Sale executed by Ricardo Gevero all of which were found to
be unquestionable. By reason of all these, plaintiff claims to have bought the land in good faith and for value, occupying the land since the sale
and taking over from Lancero's possession until May 1969, when the defendants Abadas forcibly entered the property. (Rollo, p. 23)
After trial the court a quo on July 18, 1977 rendered judgment, the dispositive portion of which reads as follows:
WHEREFORE, premises considered, judgment is hereby rendered declaring the plaintiff corporation as the true and absolute owner of that
portion of Lot No. 2476 of the Cagayan Cadastre, particularly Lot No. 2476-D of the subdivision plan (LRC) Psd-80450, containing an area of
SEVEN THOUSAND EIGHT HUNDRED SEVENTY EIGHT (7,878) square meters, more or less. The other portions of Lot No. 2476 are hereby
adjudicated as follows:
Lot No. 2476 B to the heirs of Elena Gevero;
Lot No. 2476 C to the heirs of Restituto Gevero;
Lot No. 2476 E to the defendant spouses Enrique C. Torres and Francisca Aquino;
Lot No. 2476 F to the defendant spouses Eduard Rumohr and Emilia Merida Rumohf ;
Lot Nos. 2476-H, 2476-I and 2476 G to defendant spouses Enrique Abada and Lilia Alvarez Abada.
No adjudication can be made with respect to Lot No. 2476-A considering that the said lot is the subject of a civil case between the Heirs of
Maria Gevero on one hand and the spouses Daniel Borkingkito and Ursula Gevero on the other hand, which case is now pending appeal
before the Court of Appeals. No pronouncement as to costs, SO ORDERED. (Decision, Record on Appeal, p. 203; Rollo, pp. 21-22)

From said decision, defendant heirs of Ricardo Gevero (petitioners herein) appealed to the IAC (now Court of Appeals) which subsequently, on March 20, 1986,
affirmed the decision appealed from.
Petitioners, on March 31, 1986, filed a motion for reconsideration (Rollo, p. 28) but was denied on April 21, 1986. Hence, the present petition.
This petition is devoid of merit.
Basically, the issues to be resolved in the instant case are: 1) whether or not the deed of sale executed by Ricardo Gevero to Luis Lancero is valid; 2) in
the affirmative, whether or not the 1/2 share of interest of Teodorica Babangha in one of the litigated lots, lot no. 2476 under OCT No. 7610 is included in
the deed of sale; and 3) whether or not the private respondents' action is barred by laches.
Petitioners maintain that the deed of sale is entirely invalid citing alleged flaws thereto, such as that: 1) the signature of Ricardo was forged without his knowledge of
such fact; 2) Lancero had recognized the fatal defect of the 1952 deed of sale when he signed the document in 1968 entitled "Settlement to Avoid the Litigation"; 3)
Ricardo's children remained in the property notwithstanding the sale to Lancero; 4) the designated Lot No. is 2470 instead of the correct number being Lot No. 2476;
5) the deed of sale included the share of Eustaquio Gevero without his authority; 6) T.C.T. No. 1183 of Lancero segregated the area of 20,119 square meters from the
bigger area (OCT No. 7616) without the consent of the other co-owners; 7) Lancero caused the 1952 Subdivision survey without the consent of the Geveros' to bring
about the segregation of the 20,119 square meters lot from the mother lot 2476 which brought about the issuance of his title T-1183 and to DELCOR's title T4320,
both of which were illegally issued; and 8) the area sold as per document is 20,649 square meters whereas the segregated area covered by TCT No. T-1183 of
Lancero turned out to be 20,119 square meters (Petitioners Memorandum, pp. 62-78).
As to petitioners' claim that the signature of Ricardo in the 1952 deed of sale in favor of Lancero was forged without Ricardo's knowledge of such fact (Rollo, p. 71) it
will be observed that the deed of sale in question was executed with all the legal formalities of a public document. The 1952 deed was duly acknowledged by both
parties before the notary public, yet petitioners did not bother to rebut the legal presumption of the regularity of the notarized document (Dy v. Sacay, 165 SCRA 473
[1988]); Nuguid v. C.A., G.R. No. 77423, March 13, 1989). In fact it has long been settled that a public document executed and attested through the intervention of
the notary public is evidence of the facts in clear, unequivocal manner therein expressed. It has the presumption of regularity and to contradict all these, evidence
must be clear, convincing and more than merely preponderant (Rebuleda v. I.A.C., 155 SCRA 520-521 [1987]). Forgery cannot be presumed, it must be proven
(Siasat v. IAC, No. 67889, October 10, 1985). Likewise, petitioners allegation of absence of consideration of the deed was not substantiated. Under Art. 1354 of the
Civil Code, consideration is presumed unless the contrary is proven.
As to petitioners' contention that Lancero had recognized the fatal defect of the 1952 deed when he signed the document in 1968 entitled "Settlement to Avoid
Litigation" (Rollo, p. 71), it is a basic rule of evidence that the right of a party cannot be prejudiced by an act, declaration, or omission of another (Sec. 28. Rule 130,
Rules of Court). This particular rule is embodied in the maxim "res inter alios acta alteri nocere non debet." Under Section 31, Rule 130, Rules of Court "where one
derives title to property from another, the act, declaration, or omission of the latter, while holding the title, in relation to the property is evidence against the former." It
is however stressed that the admission of the former owner of a property must have been made while he was the owner thereof in order that such admission may be
binding upon the present owner (City of Manila v. del Rosario, 5 Phil. 227 [1905]; Medel v. Avecilla, 15 Phil. 465 [1910]). Hence, Lanceros' declaration or acts of
executing the 1968 document have no binding effect on DELCOR, the ownership of the land having passed to DELCOR in 1964.
Petitioners' claim that they remained in the property, notwithstanding the alleged sale by Ricardo to Lancero (Rollo, p. 71) involves a question of fact already raised
and passed upon by both the trial and appellate courts. Said the Court of Appeals:
Contrary to the allegations of the appellants, the trial court found that Luis Lancero had taken possession of the land upon proper investigation
by plaintiff the latter learned that it was indeed Luis Lancero who was the owner and possessor of Lot 2476 D. . . . (Decision, C.A., p. 6).
As a finding of fact, it is binding upon this Court (De Gola-Sison v. Manalo, 8 SCRA 595 [1963]; Gaduco vs. C.A., 14 SCRA 282 [1965]; Ramos v. Pepsi-Cola, 19
SCRA 289 [1967]; Tan v. C.A., 20 SCRA 54 [1967]; Ramirez Tel. Co. v. Bank of America, 33 SCRA 737 [1970]; Lucero v. Loot, 25 SCRA 687 [1968]; Guerrero v. C.A.,
142 SCRA 130 [1986]).
Suffice it to say that the other flaws claimed by the petitioners which allegedly invalidated the 1952 deed of sale have not been raised before the trial court nor before
the appellate court. It is settled jurisprudence that an issue which was neither averred in the complaint nor raised during the trial in the court below cannot be raised
for the first time on appeal as it would be offensive to the basic rules of fair play, justice and due process. (Matienzo v. Servidad, 107 SCRA 276 [1981]; Dela Santa v.
C.A., 140 SCRA 44 [1985]; Dihiansan v. C.A., 157 SCRA 434 [1987]; Anchuelo v. IAC, 147 SCRA 434 [1987]; Dulos Realty and Development Corporation v. C.A.,
157 SCRA [1988]; Kamos v. IAC, G.R. No. 78282, July 5, 1989).
Petitioners aver that the 1/2 share of interest of Teodorica (mother of Ricardo) in Lot 2476 under OCT No. 7610 was not included in the deed of sale as it was
intended to limit solely to Ricardos' proportionate share out of the undivided 1/2 of the area pertaining to the six (6) brothers and sisters listed in the Title and that the
Deed did not include the share of Ricardo, as inheritance from Teodorica, because the Deed did not recite that she was deceased at the time it was executed (Rollo,
pp. 67-68).
The hereditary share in a decedents' estate is transmitted or vested immediately from the moment of the death of the "causante" or predecessor in interest (Civil
Code of the Philippines, Art. 777), and there is no legal bar to a successor (with requisite contracting capacity) disposing of his hereditary share immediately after
such death, even if the actual extent of such share is not determined until the subsequent liquidation of the estate (De Borja v. Vda. de Borja, 46 SCRA 577 [1972]).
Teodorica Babangha died long before World War II, hence, the rights to the succession were transmitted from the moment of her death. It is therefore incorrect to
state that it was only in 1966, the date of extrajudicial partition, when Ricardo received his share in the lot as inheritance from his mother Teodorica. Thus, when
Ricardo sold his share over lot 2476 that share which he inherited from Teodorica was also included unless expressly excluded in the deed of sale.
Petitioners contend that Ricardo's share from Teodorica was excluded in the sale considering that a paragraph of the aforementioned deed refers merely to the
shares of Ricardo and Eustaquio (Rollo, p. 67-68).
It is well settled that laws and contracts shall be so construed as to harmonize and give effect to the different provisions thereof (Reparations Commission v. Northern
Lines, Inc., 34 SCRA 203 [1970]), to ascertain the meaning of the provisions of a contract, its entirety must be taken into account (Ruiz v. Sheriff of Manila, 34 SCRA
83 [1970]). The interpretation insisted upon by the petitioners, by citing only one paragraph of the deed of sale, would not only create contradictions but also, render
meaningless and set at naught the entire provisions thereof.

Petitioners claim that DELCOR's action is barred by laches considering that the petitioners have remained in the actual, open, uninterrupted and adverse possession
thereof until at present (Rollo, p. 17).
An instrument notarized by a notary public as in the case at bar is a public instrument (Eacnio v. Baens, 5 Phil. 742). The execution of a public instrument is
equivalent to the delivery of the thing (Art. 1498, 1st Par., Civil Code) and is deemed legal delivery. Hence, its execution was considered a sufficient delivery of the
property (Buencamino v. Viceo, 13 Phil. 97; [1906]; Puato v. Mendoza, 64 Phil. 457 [1937]; Vda. de Sarmiento v. Lesaca, 108 Phil. 900 [1960]; Phil. Suburban
Development Corp. v. Auditor Gen., 63 SCRA 397 (1975]).
Besides, the property sold is a registered land. It is the act of registration that transfers the ownership of the land sold. (GSIS v. C.A., G.R. No. 42278, January 20,
1989). If the property is a registered land, the purchaser in good, faith has a right to rely on the certificate of title and is under no duty to go behind it to look for flaws
(Mallorca v. De Ocampo, No. L-26852, March 25, 1970; Unchuan v. C.A., 161 SCRA 710 [1988]; Nuguid v. CA-G.R. No. 77427, March 13, 1989).
Under the established principles of land registration law, the person dealing with registered land may generally rely on the correctness of its certificate of title and the
law will in no way oblige him to go behind the certificate to determine the condition of the property (Tiongco v. de la Merced, L-2446, July 25, 1974; Lopez vs. CA.,
G.R. No. 49739, January 20, 1989; Davao Grains Inc. vs. IAC, 171 SCRA 612 [1989]). This notwithstanding, DELCOR did more than that. It did not only rely on the
certificate of title. The Court of Appeals found that it had first investigated and checked the title (T.C.T. No. T-1183) in the name of Luis Lancero. It likewise inquired
into the Subdivision Plan, the corresponding technical description and the deed of sale executed by Ricardo Gevero in favor of Luis Lancero and found everything in
order. It even went to the premises and found Luis Lancero to be in possession of the land to the exclusion of any other person. DELCOR had therefore acted in
good faith in purchasing the land in question.
Consequently, DELCOR's action is not barred by laches.
The main issues having been disposed of, discussion of the other issues appear unnecessary.
PREMISES CONSIDERED, the instant petition is hereby DISMISSED and the decision of the Court of Appeals is hereby AFFIRMED. SO ORDERED.
G.R. No. 89783 February 19, 1992
MARIANO B. LOCSIN, JULIAN J. LOCSIN, JOSE B. LOCSIN, AUREA B. LOCSIN, MATILDE L. CORDERO, SALVADOR B. LOCSIN and MANUEL V. DEL
ROSARIO, petitioners,
vs.
THE HON. COURT OF APPEALS, JOSE JAUCIAN, FLORENTINO JAUCIAN, MERCEDES JAUCIAN ARBOLEDA, HEIRS OF JOSEFINA J. BORJA, HEIRS OF
EDUARDO JAUCIAN and HEIRS OF VICENTE JAUCIAN, respondents.
NARVASA, C.J.:
Reversal of the decision of the Court of Appeals in CA-G.R. No. CV-11186 affirming with modification the judgment of the Regional Trial Court of Albay in favor of
the plaintiffs in Civil Case No. 7152 entitled "Jose Jaucian, et al. v. Mariano B. Locsin, et al.," an action for recovery of real property with damages is sought. in
these proceedings initiated by petition for review on certiorari in accordance with Rule 45 of the Rules of Court.
The petition was initially denied due course and dismissed by this Court. It was however reinstated upon a second motion for reconsideration filed by the petitioners,
and the respondents were required to comment thereon. The petition was thereafter given due course and the parties were directed to submit their memorandums.
These, together with the evidence, having been carefully considered, the Court now decides the case.
First, the facts as the Court sees them in light of the evidence on record:
The late Getulio Locsin had three children named Mariano, Julian and Magdalena, all surnamed Locsin. He owned extensive residential and agricultural properties in
the provinces of Albay and Sorsogon. After his death, his estate was divided among his three (3) children as follows:
(a) the coconut lands of some 700 hectares in Bual, Pilar, Sorsogon, were adjudicated to his daughter, Magdalena Locsin;
(b) 106 hectares of coconut lands were given to Julian Locsin, father of the petitioners Julian, Mariano, Jose, Salvador, Matilde, and Aurea, all surnamed Locsin;
(c) more than forty (40) hectares of coconut lands in Bogtong, eighteen (18) hectares of riceland in Daraga, and the residential lots in Daraga, Albay and in Legazpi
City went to his son Mariano, which Mariano brought into his marriage to Catalina Jaucian in 1908. Catalina, for her part, brought into the marriage untitled properties
which she had inherited from her parents, Balbino Jaucian and Simona Anson. These were augmented by other properties acquired by the spouses in the course of
their union, 1 which however was not blessed with children.
Eventually, the properties of Mariano and Catalina were brought under the Torrens System. Those that Mariano inherited from his father, Getulio Locsin, were
surveyed cadastrally and registered in the name of "Mariano Locsin, married to Catalina Jaucian.'' 2
Mariano Locsin executed a Last Will and Testament instituting his wife, Catalina, as the sole and universal heir of all his properties. 3 The will was drawn up by his
wife's nephew and trusted legal adviser, Attorney Salvador Lorayes. Attorney Lorayes disclosed that the spouses being childless, they had agreed that their
properties, after both of them shall have died should revert to their respective sides of the family, i.e., Mariano's properties would go to his "Locsin relatives"
(i.e., brothers and sisters or nephews and nieces), and those of Catalina to her "Jaucian relatives." 4
Don Mariano Locsin died of cancer on September 14, 1948 after a lingering illness. In due time, his will was probated in Special Proceedings No. 138, CFI of Albay
without any opposition from both sides of the family. As directed in his will, Doa Catalina was appointed executrix of his estate. Her lawyer in the probate proceeding
was Attorney Lorayes. In the inventory of her husband's estate 5 which she submitted to the probate court for approval, 6Catalina declared that "all items mentioned
from Nos. 1 to 33 are the private properties of the deceased and form part of his capital at the time of the marriage with the surviving spouse, while items Nos. 34 to
42 are conjugal." 7

Among her own and Don Mariano's relatives, Doa Catalina was closest to her nephew, Attorney Salvador Lorayes, her nieces, Elena Jaucian, Maria LorayesCornelio and Maria Olbes-Velasco, and the husbands of the last two: Hostilio Cornelio and Fernando Velasco. 8 Her trust in Hostilio Cornelio was such that she
made him custodian of all the titles of her properties; and before she disposed of any of them, she unfailingly consulted her lawyer-nephew, Attorney Salvador
Lorayes. It was Atty. Lorayes who prepared the legal documents and, more often than not, the witnesses to the transactions were her niece Elena Jaucian, Maria
Lorayes-Cornelio, Maria Olbes-Velasco, or their husbands. Her niece, Elena Jaucian, was her life-long companion in her house.
Don Mariano relied on Doa Catalina to carry out the terms of their compact, hence, nine (9) years after his death, as if in obedience to his voice from the grave, and
fully cognizant that she was also advancing in years, Doa Catalina began transferring, by sale, donation or assignment, Don Mariano's as well as her own,
properties to their respective nephews and nieces. She made the following sales and donation of properties which she had received from her husband's estate, to his
Locsin nephews and nieces:
EXHIBIT DATE PARTICULARS AREA/SQ.M. PRICE WITNESSES
23 Jan. 26,
1957 Deed of Absolute Sale in 962 P 481
favor of Mariano Locsin

15 Nov. 26, 1975 Deed of Sale in favor of 261 P 4,930 - ditto Aurea Locsin

1-JRL Apr. 7, 1966 Deed of Sale in favor of 430,203 P 20,000

Jose R. Locsin

16 Oct. 17, 1975 Deed of Sale in favor of 533 P 2,000 Delfina Anson
Aurea Locsin M. Acabado

1-JJL Mar. 22, 1967 Deed of Sale in favor of 5,000 P 1,000 Hostilio Cornello
Julian Locsin (Lot 2020) Helen M. Jaucian

17 Nov. 26, 1975 Deed of Sale in favor of 373 P 1,000 Leonor Satuito
Aurea Locsin Mariano B. Locsin

1 Nov. 29, 1974 Deed of Donation in 26,509

favor Aurea Locsin,
Matilde L. Cordero
and Salvador Locsin

19 Sept. 1, 1975 Conditional Donation in 1,130 P 3,000 - ditto favor of Mariano Locsin

24 Feb. 12, 1973 Deed of Absolute Sale 100 P 1,000

in favor of Francisco M.
Maquiniana

26 July 15, 1973 Deed of Absolute Sale in 130 P 1,300

favor of Francisco
Maquiniana

27 May 3, 1973 Deed of Absolute Sale in 100 P 1,000

favor of Ireneo Mamia

2 Feb. 4, 1975 Deed of Donation in 34,045

favor Aurea Locsin,
Matilde L. Cordero
and Salvador Locsin

3 Sept. 9, 1975 Deed of Donation in (Lot 2059)

favor Aurea Locsin,
Matilde L. Cordero
and Salvador Locsin

4 July 15, 1974 Deed of Absolute Sale in 1,424 Hostilio Cornelio

favor of Aurea B. Locsin Fernando Velasco

5 July 15, 1974 Deed of Absolute Sale in 1,456 P 5,750 Hostilio Cornelio
favor of Aurea B. Locsin Elena Jaucian

28 May 3, 1973 Deed of Absolute Sale in 75 P 750

favor of Zenaida Buiza
1-MVRJ Dec. 29, 1972 Deed of Reconveyance 1,5110.66 P 1,000 Delfina Anson
in favor of Manuel V. del (Lot 2155) Antonio Illegible
Rosario whose maternal
grandfather was Getulio
Locsin

2-MVRJ June 30, 1973 Deed of Reconveyance 319.34 P 500 Antonio Illegible
in favor of Manuel V. del (Lot 2155) Salvador Nical
Rosario but the rentals
from bigger portion of
Lot 2155 leased to Filoil
Refinery were assigned to
Maria Jaucian Lorayes
Cornelio

Of her own properties, Doa Catalina conveyed the following to her own nephews
and nieces and others:

29 May 3, 1973 Deed of Absolute Sale in 150 P 1,500

favor of Felisa Morjella

30 Apr. 3, 1973 Deed of Absolute Sale in 31 P 1,000

favor of Inocentes Motocinos

31 Feb. 12, 1973 Deed of Absolute Sale in 150 P 1,500

favor of Casimiro Mondevil

32 Mar. 1, 1973 Deed of Absolute Sale in 112 P 1,200

favor of Juan Saballa

25 Dec. 28, 1973 Deed of Absolute Sale in 250 P 2,500

of Rogelio Marticio

EXHIBIT DATE PARTICULARS AREA/SQ.M. PRICE

6 July 15, 1974 Deed of Absolute Sale in 1,237 P 5,720 - ditto favor of Aurea B. Locsin

7 July 15, 1974 Deed of Absolute Sale in 1,404 P 4,050 - ditto favor of Aurea B. Locsin

Doa Catalina died on July 6, 1977.

2-JJL July 16, 1964 Deed of Sale in favor 5,000 P 1,000
Vicente Jaucian (lot 2020)
(6,825 sqm. when
resurveyed)

Four years before her death, she had made a will on October 22, 1973 affirming and ratifying the transfers she had made during her lifetime in favor of her
husband's, and her own, relatives. After the reading of her will, all the relatives agreed that there was no need to submit it to the court for probate because the
properties devised to them under the will had already been conveyed to them by the deceased when she was still alive, except some legacies which the executor of
her will or estate, Attorney Salvador Lorayes, proceeded to distribute.
In 1989, or six (6) years after Doa Catalina's demise, some of her Jaucian nephews and nieces who had already received their legacies and hereditary shares from
her estate, filed action in the Regional Trial Court of Legaspi City (Branch VIII, Civil Case No. 7152) to recover the properties which she had conveyed to the Locsins
during her lifetime, alleging that the conveyances were inofficious, without consideration, and intended solely to circumvent the laws on succession. Those who were
closest to Doa Catalina did not join the action.
After the trial, judgment was rendered on July 8, l985 in favor of the plaintiffs (Jaucian), and against the Locsin defendants, the dispositive part of which reads:
WHEREFORE, this Court renders judgment for the plaintiffs and against the defendants:
(1) declaring the, plaintiffs, except the heirs of Josefina J. Borja and Eduardo Jaucian, who withdrew, the rightful heirs and entitled to the entire
estate, in equal portions, of Catalina Jaucian Vda. de Locsin, being the nearest collateral heirs by right of representation of Juan and Gregorio,
both surnamed Jaucian, and full-blood brothers of Catalina;
(2) declaring the deeds of sale, donations, reconveyance and exchange and all other instruments conveying any part of the estate of Catalina
J. Vda. de Locsin including, but not limited to those in the inventory of known properties (Annex B of the complaint) as null and void ab-initio;
(3) ordering the Register of Deeds of Albay and/or Legazpi City to cancel all certificates of title and other transfers of the real properties, subject
of this case, in the name of defendants, and derivatives therefrom, and issue new ones to the plaintiffs;
(4) ordering the defendants, jointly and severally, to reconvey ownership and possession of all such properties to the plaintiffs, together with all
muniments of title properly endorsed and delivered, and all the fruits and incomes received by the defendants from the estate of Catalina, with
legal interest from the filing of this action; and where reconveyance and delivery cannot be effected for reasons that might have intervened and
prevent the same, defendants shall pay for the value of such properties, fruits and incomes received by them, also with legal interest from the
filing, of this case
(5) ordering each of the defendants to pay the plaintiffs the amount of P30,000.00 as exemplary damages; and the further sum of P20,000.00
each as moral damages; and

(6) ordering the defendants to pay the plaintiffs attorney's fees and litigation expenses, in the amount of P30,000.00 without prejudice to any
contract between plaintiffs and counsel.
Costs against the defendants. 9
The Locsins appealed to the Court of Appeals (CA-G.R. No. CV-11186) which rendered its now appealed judgment on March 14, 1989, affirming the trial court's
decision.
The petition has merit and should be granted.
The trial court and the Court of Appeals erred in declaring the private respondents, nephews and nieces of Doa Catalina J. Vda. de Locsin, entitled to inherit the
properties which she had already disposed of more than ten (10) years before her death. For those properties did not form part of her hereditary estate, i.e., "the
property and transmissible rights and obligations existing at the time of (the decedent's) death and those which have accrued thereto since the opening of the
succession." 10 The rights to a person's succession are transmitted from the moment of his death, and do not vest in his heirs until such time. 11 Property which Doa
Catalina had transferred or conveyed to other persons during her lifetime no longer formed part of her estate at the time of her death to which her heirs may lay
claim. Had she died intestate, only the property that remained in her estate at the time of her death devolved to her legal heirs; and even if those transfers were, one
and all, treated as donations, the right arising under certain circumstances to impugn and compel the reduction or revocation of a decedent's gifts inter vivos does not
inure to the respondents since neither they nor the donees are compulsory (or forced) heirs. 12
There is thus no basis for assuming an intention on the part of Doa Catalina, in transferring the properties she had received from her late husband to his nephews
and nieces, an intent to circumvent the law in violation of the private respondents' rights to her succession. Said respondents are not her compulsory heirs, and it is
not pretended that she had any such, hence there were no legitimes that could conceivably be impaired by any transfer of her property during her lifetime. All that the
respondents had was an expectancy that in nowise restricted her freedom to dispose of even her entire estate subject only to the limitation set forth in Art. 750, Civil
Code which, even if it were breached, the respondents may not invoke:
Art. 750. The donation may comprehend all the present property of the donor or part thereof, provided he reserves, in full ownership or in
usufruct, sufficient means for the support of himself, and of all relatives who, at the time of the acceptance of the donation, are by law entitled to
be supported by the donor. Without such reservation, the donation shall be reduced on petition of any person affected. (634a)
The lower court capitalized on the fact that Doa Catalina was already 90 years old when she died on July 6, 1977. It insinuated that because of her advanced years
she may have been imposed upon, or unduly influenced and morally pressured by her husband's nephews and nieces (the petitioners) to transfer to them the
properties which she had inherited from Don Mariano's estate. The records do not support that conjecture.
For as early as 1957, or twenty-eight (28) years before her death, Doa Catalina had already begun transferring to her Locsin nephews and nieces the properties
which she received from Don Mariano. She sold a 962-sq.m. lot on January 26, 1957 to his nephew and namesake Mariano Locsin II. 13 On April 7, 1966, or 19 years
before she passed away, she also sold a 43 hectare land to another Locsin nephew, Jose R. Locsin. 14 The next year, or on March 22, 1967, she sold a 5,000-sq.m.
portion of Lot 2020 to Julian Locsin. 15
On March 27, 1967, Lot 2020 16 was partitioned by and among Doa Catalina, Julian Locsin, Vicente Jaucian and Agapito Lorete. 17 At least Vicente Jaucian, among
the other respondents in this case, is estopped from assailing the genuineness and due execution of the sale of portions of Lot 2020 to himself, Julian Locsin, and
Agapito Lorete, and the partition agreement that he (Vicente) concluded with the other co-owners of Lot 2020.
Among Doa, Catalina's last transactions before she died in 1977 were the sales of property which she made in favor of Aurea Locsin and Mariano Locsin in 1975. 18
There is not the slightest suggestion in the record that Doa Catalina was mentally incompetent when she made those dispositions. Indeed, how can any such
suggestion be made in light of the fact that even as she was transferring properties to the Locsins, she was also contemporaneously disposing of her other properties
in favor of the Jaucians? She sold to her nephew, Vicente Jaucian, on July 16, 1964 (21 years before her death) one-half (or 5,000 sq.m.) of Lot 2020. Three years
later, or on March 22, 1967, she sold another 5000 sq.m. of the same lot to Julian Locsin. 19
From 1972 to 1973 she made several other transfers of her properties to her relatives and other persons, namely: Francisco Maquiniana, Ireneo Mamia, Zenaida
Buiza, Feliza Morjella, Inocentes Motocinos, Casimiro Mondevil, Juan Saballa and Rogelio Marticio. 20 None of those transactions was impugned by the private
respondents.
In 1975, or two years before her death, Doa Catalina sold some lots not only to Don Mariano's niece, Aurea Locsin, and his nephew, Mariano Locsin
II, 21 but also to her niece, Mercedes Jaucian Arboleda. 22 If she was competent to make that conveyance to Mercedes, how can there be any doubt that she was
equally competent to transfer her other pieces of property to Aurea and Mariano II?
The trial court's belief that Don Mariano Locsin bequeathed his entire estate to his wife, from a "consciousness of its real origin" which carries the implication that said
estate consisted of properties which his wife had inherited from her parents, flies in the teeth of Doa Catalina's admission in her inventory of that estate, that "items
1 to 33 are the private properties of the deceased (Don Mariano) and forms (sic) part of his capital at the time of the marriage with the surviving spouse, while items
34 to 42 are conjugal properties, acquired during the marriage." She would have known better than anyone else whether the listing included any of her paraphernal
property so it is safe to assume that none was in fact included. The inventory was signed by her under oath, and was approved by the probate court in Special
Proceeding No. 138 of the Court of First Instance of Albay. It was prepared with the assistance of her own nephew and counsel, Atty. Salvador Lorayes, who surely
would not have prepared a false inventory that would have been prejudicial to his aunt's interest and to his own, since he stood to inherit from her eventually.
This Court finds no reason to disbelieve Attorney Lorayes' testimony that before Don Mariano died, he and his wife (Doa Catalina), being childless, had agreed that
their respective properties should eventually revert to their respective lineal relatives. As the trusted legal adviser of the spouses and a full-blood nephew of Doa
Catalina, he would not have spun a tale out of thin air that would also prejudice his own interest.
Little significance, it seems, has been attached to the fact that among Doa Catalina's nephews and nieces, those closest to her: (a) her lawyer-nephew Attorney
Salvador Lorayes; (b) her niece and companion Elena Jaucian: (c) her nieces Maria Olbes-Velasco and Maria Lorayes-Cornelio and their respective husbands,
Fernando Velasco and Hostilio Cornelio, did not join the suit to annul and undo the dispositions of property which she made in favor of the Locsins, although it would
have been to their advantage to do so. Their desistance persuasively demonstrates that Doa Catalina acted as a completely free agent when she made the

conveyances in favor of the petitioners. In fact, considering their closeness to Doa Catalina it would have been well-nigh impossible for the petitioners to employ
"fraud, undue pressure, and subtle manipulations" on her to make her sell or donate her properties to them. Doa Catalina's niece, Elena Jaucian, daughter of her
brother, Eduardo Jaucian, lived with her in her house. Her nephew-in-law, Hostilio Cornelio, was the custodian of the titles of her properties. The sales and donations
which she signed in favor of the petitioners were prepared by her trusted legal adviser and nephew, Attorney Salvador Lorayes. The (1) deed of donation dated
November 19,
1974 23 in favor of Aurea Locsin, (2) another deed of donation dated February 4, 1975 24 in favor of Matilde Cordero, and (3) still another deed dated September 9,
1975 25 in favor of Salvador Lorayes, were all witnessed by Hostilio Cornelio (who is married to Doa Catalina's niece, Maria Lorayes) and Fernando Velasco who is
married to another niece, Maria Olbes. 26The sales which she made in favor of Aurea Locsin on July 15, 1974 27 were witnessed by Hostilio Cornelio and Elena
Jaucian. Given those circumstances, said transactions could not have been anything but free and voluntary acts on her part.
Apart from the foregoing considerations, the trial court and the Court of Appeals erred in not dismissing this action for annulment and reconveyance on the ground of
prescription. Commenced decades after the transactions had been consummated, and six (6) years after Doa Catalina's death, it prescribed four (4) years after the
subject transactions were recorded in the Registry of Property, 28 whether considered an action based on fraud, or one to redress an injury to the rights of the
plaintiffs. The private respondents may not feign ignorance of said transactions because the registration of the deeds was constructive notice thereof to them and the
whole world. 29
WHEREFORE, the petition for review is granted. The decision dated March 14, 1989 of the Court of Appeals in CA-G.R. CV No. 11186 is REVERSED and SET
ASIDE. The private respondents' complaint for annulment of contracts and reconveyance of properties in Civil Case No. 7152 of the Regional Trial Court, Branch VIII
of Legazpi City, is DISMISSED, with costs against the private respondents, plaintiffs therein.
SO ORDERED.

[G.R. No. 125835. July 30, 1998]

NATALIA CARPENA OPULENCIA, petitioner, vs. COURT OF APPEALS, ALADIN SIMUNDAC and MIGUEL OLIVAN, respondents.
DECISION
PANGANIBAN, J.
Is a contract to sell a real property involved in testate proceedings valid and binding without the approval of the probate court?
Statement of the Case
This is the main question raised in this petition for review before us, assailing the Decision [1] of the Court of Appeals[2] in CA-GR CV No. 41994 promulgated on
February 6, 1996 and its Resolution[3] dated July 19, 1996. The challenged Decision disposed as follows:
WHEREFORE, premises considered, the order of the lower court dismissing the complaint is SET ASIDE and judgment is hereby rendered declaring the
CONTRACT TO SELL executed by appellee in favor of appellants as valid and binding, subject to the result of the administration proceedings of the testate Estate of
Demetrio Carpena. SO ORDERED. [4]
Petitioners Motion for Reconsideration was denied in the challenged Resolution.[5]

The Facts
The antecedent facts, as succinctly narrated by Respondent Court of Appeals are:
In a complaint for specific performance filed with the court a quo [herein private respondents] Aladin Simundac and Miguel Oliven alleged that [herein petitioner]
Natalia Carpena Opulencia executed in their favor a CONTRACT TO SELL Lot 2125 of the Sta. Rosa Estate, consisting of 23,766 square meters located in Sta.
Rosa, Laguna at P150.00 per square meter; that plaintiffs paid a downpayment of P300,000.00 but defendant, despite demands, failed to comply with her obligations
under the contract. [Private respondents] therefore prayed that [petitioner] be ordered to perform her contractual obligations and to further pay damages, attorneys
fee and litigation expenses.
In her traverse, [petitioner] admitted the execution of the contract in favor of plaintiffs and receipt of P300,000.00 as downpayment. However, she put forward the
following affirmative defenses: that the property subject of the contract formed part of the Estate of Demetrio Carpena (petitioners father), in respect of which a
petition for probate was filed with the Regional Trial Court, Branch 24, Bian, Laguna; that at the time the contract was executed, the parties were aware of the
pendency of the probate proceeding; that the contract to sell was not approved by the probate court; that realizing the nullity of the contract [petitioner] had offered to
return the downpayment received from [private respondents], but the latter refused to accept it; that [private respondents] further failed to provide funds for the tenant
who demanded P150,00.00 in payment of his tenancy rights on the land; that [petitioner] had chosen to rescind the contract.
At the pre-trial conference the parties stipulated on [sic] the following facts:

1. That on February 3, 1989, [private respondents] and [petitioner] entered into a contract to sell involving a parcel of land situated in Sta. Rosa, Laguna, otherwise
known as Lot No. 2125 of the Sta. Rosa Estate.
2. That the price or consideration of the said sell [sic] is P150.00 per square meters;
3. That the amount of P300,000.00 had already been received by [petitioner];
4. That the parties have knowledge that the property subject of the contract to sell is subject of the probate proceedings;
5. That [as] of this time, the probate Court has not yet issued an order either approving or denying the said sale. (p. 3, appealed Order of September 15, 1992, pp.
109-112, record).
[Private respondents] submitted their evidence in support of the material allegations of the complaint. In addition to testimonies of witnesses, [private respondents]
presented the following documentary evidences: (1) Contract to Sell (Exh A); (2) machine copy of the last will and testament of Demetrio Carpena (defendants father)
to show that the property sold by defendant was one of those devised to her in said will (Exh B); (3) receipts signed by defendant for the downpayment in the total
amount of P300,000.00 (Exhs C, D & E); and (4) demand letters sent to defendant (Exhs F & G).
It appears that [petitioner], instead of submitting her evidence, filed a Demurrer to Evidence. In essence, defendant maintained that the contract to sell was null and
void for want of approval by the probate court. She further argued that the contract was subject to a suspensive condition, which was the probate of the will of
defendants father Demetrio Carpena. An Opposition was filed by [private respondents]. It appears further that in an Order dated December 15, 1992 the court a quo
granted the demurrer to evidence and dismissed the complaint. It justified its action in dismissing the complaint in the following manner:
It is noteworthy that when the contract to sell was consummated, no petition was filed in the Court with notice to the heirs of the time and place of hearing, to show
that the sale is necessary and beneficial. A sale of properties of an estate as beneficial to the interested parties must comply with the requisites provided by law,
(Sec. 7, Rule 89, Rules of Court) which are mandatory, and without them, the authority to sell, the sale itself, and the order approving it, would be null and void ab
initio. (Arcilla vs. David, 77 Phil. 718, Gabriel, et al., vs. Encarnacion, et al., L-6736, May 4, 1954; Bonaga vs. Soler, 2 Phil. 755) Besides, it is axiomatic that where
the estate of a deceased person is already the subject of a testate or intestate proceeding, the administrator cannot enter into any transaction involving it without prior
approval of the probate Court. (Estate of Obave, vs. Reyes, 123 SCRA 767).
As held by the Supreme Court, a decedents representative (administrator) is not estopped from questioning the validity of his own void deed purporting to convey
land. (Bona vs. Soler, 2 Phil, 755). In the case at bar, the [petitioner,] realizing the illegality of the transaction[,] has interposed the nullity of the contract as her
defense, there being no approval from the probate Court, and, in good faith offers to return the money she received from the [private respondents]. Certainly, the
administratrix is not estop[ped] from doing so and the action to declare the inexistence of contracts do not prescribe. This is what precipitated the filing of [petitioners]
demurrer to evidence.[6]
The trial courts order of dismissal was elevated to the Court of Appeals by private respondents who alleged:
1. The lower court erred in concluding that the contract to sell is null and void, there being no approval of the probate court.
2. The lower court erred in concluding that [petitioner] in good faith offers to return the money to [private respondents].
3. The lower court erred in concluding that [petitioner] is not under estoppel to question the validity of the contract to sell.
4. The lower court erred in not ruling on the consideration of the contract to sell which is tantamount to plain unjust enrichment of [petitioner] at the expense of [private respondents]. [7]
Public Respondents Ruling
Declaring the Contract to Sell valid, subject to the outcome of the testate proceedings on Demetrio Carpenas estate, the appellate court set aside the trial courts dismissal of the complaint and correctly
ruled as follows:
It is apparent from the appealed order that the lower court treated the contract to sell executed by appellee as one made by the administratrix of the Estate of Demetrio Carpena for the benefit of the estate. Hence,
its main reason for voiding the contract in question was the absence of the probate courts approval. Presumably, what the lower court had in mind was the sale of the estate or part thereof made by the
administrator for the benefit of the estate, as authorized under Rule 89 of the Revised Rules of Court, which requires the approval of the probate court upon application therefor with notice to the heirs, devisees
and legatees.
However, as adverted to by appellants in their brief, the contract to sell in question is not covered by Rule 89 of the Revised Rules of Court since it was made by appellee in her capacity as an heir, of a property
that was devised to her under the will sought to be probated. Thus, while the document inadvertently stated that appellee executed the contract in her capacity as executrix and administratrix of the estate, a
cursory reading of the entire text of the contract would unerringly show that what she undertook to sell to appellants was one of the other properties given to her by her late father, and more importantly, it was not
made for the benefit of the estate but for her own needs. To illustrate this point, it is apropos to refer to the preambular or preliminary portion of the document, which reads:
WHEREAS, the SELLER is the lawful owner of a certain parcel of land, which is more particularly described as follows:
xxxxxxxxx
WHEREAS, the SELLER suffers difficulties in her living and has forced to offer the sale of the above-described property, which property was only one among the other properties given to her by her late father, to
anyone who can wait for complete clearance of the court on the Last Will Testament of her father.
WHEREAS, the SELLER in order to meet her need of cash, has offered for sale the said property at ONE HUNDRED FIFTY PESOS (150.00) Philippine Currency, per square meter unto the BUYERS, and with this
offer, the latter has accepted to buy and/or purchase the same, less the area for the road and other easements indicated at the back of Transfer Certificate of Title No. 2125 duly confirmed after the survey to be
conducted by the BUYERs Licensed Geodetic Engineer, and whatever area [is] left. (Emphasis added).
To emphasize, it is evident from the foregoing clauses of the contract that appellee sold Lot 2125 not in her capacity as executrix of the will or administratrix of the estate of her father, but as an heir and more
importantly as owner of said lot which, along with other properties, was devised to her under the will sought to be probated. That being so, the requisites stipulated in Rule 89 of the Revised Rules of Court which
refer to a sale made by the administrator for the benefit of the estate do not apply.
xxxxxxxxx

It is noteworthy that in a Manifestation filed with this court by appellants, which is not controverted by appellee, it is mentioned that the last will and testament of Demetrio Carpena was approved in a final judgment
rendered in Special Proceeding No. B-979 by the Regional Trial Court, Branch 24 Binan, Laguna. But of course such approval does not terminate the proceeding[s] since the settlement of the estate will
ensue. Such proceedings will consist, among others, in the issuance by the court of a notice to creditors (Rule 86), hearing of money claims and payment of taxes and estate debts (Rule 88) and distribution of the
residue to the heirs or persons entitled thereto (Rule 90). In effect, the final execution of the deed of sale itself upon appellants payment of the balance of the purchase price will have to wait for the settlement or
termination of the administration proceedings of the Estate of Demetrio Carpena. Under the foregoing premises, what the trial court should have done with the complaint was not to dismiss it but to simply put on
hold further proceedings until such time that the estate or its residue will be distributed in accordance with the approved will.
The rule is that when a demurrer to the evidence is granted by the trial court but reversed on appeal, defendant loses the right to adduce his evidence. In such a case, the appellate court will decide the controversy
on the basis of plaintiffs evidence. In the case at bench, while we find the contract to sell valid and binding between the parties, we cannot as yet order appellee to perform her obligations under the contract
because the result of the administration proceedings of the testate Estate of Demetrio Carpena has to be awaited. Hence, we shall confine our adjudication to merely declaring the validity of the questioned
Contract to Sell.
Hence, this appeal.[8]
The Issue
Petitioner raises only one issue:
Whether or not the Contract to Sell dated 03 February 1989 executed by the [p]etitioner and [p]rivate [r]espondent[s] without the requisite probate court approval is valid.

The Courts Ruling

The petition has no merit.

Contract to Sell Valid

In a nutshell, petitioner contends that where the estate of the deceased person is already the subject of a testate or intestate proceeding, the administrator
cannot enter into any transaction involving it without prior approval of the Probate Court. [9] She maintains that the Contract to Sell is void because it was not approved
by the probate court, as required by Section 7, Rule 89 of the Rules of Court:
SEC. 7. Regulations for granting authority to sell, mortgage, or otherwise encumber estate. The court having jurisdiction of the estate of the deceased may authorize
the executor or administrator to sell, mortgage, or otherwise encumber real estate, in cases provided by these rules and when it appears necessary or beneficial,
under the following regulations:
xxx
Insisting that the above rule should apply to this case, petitioner argues that the stipulations in the Contract to Sell require her to act in her capacity as an
executrix or administratrix. She avers that her obligation to eject tenants pertains to the administratrix or executrix, the estate being the landlord of the said tenants.
[10]
Likewise demonstrating that she entered into the contract in her capacity as executor is the stipulation that she must effect the conversion of subject land from
irrigated rice land to residential land and secure the necessary clearances from government offices. Petitioner alleges that these obligations can be undertaken only
by an executor or administrator of an estate, and not by an heir.[11]
The Court is not persuaded. As correctly ruled by the Court of Appeals, Section 7 of Rule 89 of the Rules of Court is not applicable, because petitioner entered
into the Contract to Sell in her capacity as an heiress, not as an executrix or administratrix of the estate. In the contract, she represented herself as the lawful owner
and seller of the subject parcel of land.[12] She also explained the reason for the sale to be difficulties in her living conditions and consequent need of cash. [13] These
representations clearly evince that she was not acting on behalf of the estate under probate when she entered into the Contract to Sell. Accordingly, the
jurisprudence cited by petitioner has no application to the instant case.
We emphasize that hereditary rights are vested in the heir or heirs from the moment of the decedents death. [14] 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. [15] Thus, in Jakosalem vs. Rafols,[16] the Court resolved an identical issue under the old Civil
Code and held:
Article 440 of the Civil Code provides that the possession of hereditary property is deemed to be transmitted to the heir without interruption from the instant of the
death of the decedent, in case the inheritance be accepted. And Manresa with reason states that upon the death of a person, each of his heirs becomes the
undivided owner of the whole estate left with respect to the part or portion which might be adjudicated to him, a community of ownership being thus formed among
the coowners of the estate while it remains undivided. xxx And according to article 399 of the Civil Code, every part owner may assign or mortgage his part in the
common property, and the effect of such assignment or mortgage shall be limited to the portion which may be allotted him in the partition upon the dissolution of the
community. Hence, where some of the heirs, without the concurrence of the others, sold a property left by their deceased father, this Court, speaking thru its then
Chief Justice Cayetano Arellano, said that the sale was valid, but that the effect thereof was limited to the share which may be allotted to the vendors upon the
partition of the estate.

Administration of the Estate Not Prejudiced by the Contract to Sell

Petitioner further contends that [t]o sanction the sale at this stage would bring about a partial distribution of the decedents estate pending the final termination
of the testate proceedings.[17] This becomes all the more significant in the light of the trial courts finding, as stated in its Order dated August 20, 1997, that the legitime
of one of the heirs has been impaired.[18]
Petitioners contention is not convincing. The Contract to Sell stipulates that petitioners offer to sell is contingent on the complete clearance of the court on the
Last Will Testament of her father.[19] 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 petitioners 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.[20]
Estoppel
Finally, petitioner is estopped from backing out of her representations in her valid Contract to Sell with private respondents, from whom she had already
received P300,000 as initial payment of the purchase price. Petitioner may not renege on her own acts and representations, to the prejudice of the private
respondents who have relied on them.[21]Jurisprudence teaches us that neither the law nor the courts will extricate a party from an unwise or undesirable contract he
or she entered into with all the required formalities and with full awareness of its consequences.[22]
WHEREFORE, the petition is hereby DENIED and the assailed Decision of the Court of Appeals AFFIRMED. Costs against petitioner. SO ORDERED.
[G.R. No. 113725. June 29, 2000]
JOHNNY S. RABADILLA,[1] petitioner, vs. COURT OF APPEALS AND MARIA MARLENA[2] COSCOLUELLA Y BELLEZA
VILLACARLOS,respondents.
DECISION
PURISIMA, J.:
This is a petition for review of the decision of the Court of Appeals,[3] dated December 23, 1993, in CA-G.R. No. CV-35555, which set aside the decision of
Branch 52 of the Regional Trial Court in Bacolod City, and ordered the defendants-appellees (including herein petitioner), as heirs of Dr. Jorge Rabadilla,
to reconvey title over Lot No. 1392, together with its fruits and interests, to the estate of Aleja Belleza.
The antecedent facts are as follows:
In a Codicil appended to the Last Will and Testament of testatrix Aleja Belleza, Dr. Jorge Rabadilla, predecessor-in-interest of the herein petitioner, Johnny
S. Rabadilla, was instituted as a devisee of 511, 855 square meters of that parcel of land surveyed as Lot No. 1392 of the Bacolod Cadastre. The said
Codicil, which was duly probated and admitted in Special Proceedings No. 4046 before the then Court of First Instance of Negros Occidental, contained
the following provisions:
"FIRST
I give, leave and bequeath the following property owned by me to Dr. Jorge Rabadilla resident of 141 P. Villanueva, Pasay City:
(a) Lot No. 1392 of the Bacolod Cadastre, covered by Transfer Certificate of Title No. RT-4002 (10942), which is registered in my name
according to the records of the Register of Deeds of Negros Occidental.
(b) That should Jorge Rabadilla die ahead of me, the aforementioned property and the rights which I shall set forth hereinbelow, shall be
inherited and acknowledged by the children and spouse of Jorge Rabadilla.
xxx
FOURTH
(a)....It is also my command, in this my addition (Codicil), that should I die and Jorge Rabadilla shall have already received the ownership of the
said Lot No. 1392 of the Bacolod Cadastre, covered by Transfer Certificate of Title No. RT-4002 (10942), and also at the time that the lease of
Balbinito G. Guanzon of the said lot shall expire, Jorge Rabadilla shall have the obligation until he dies, every year to give to Maria Marlina
Coscolluela y Belleza, Seventy (75) (sic) piculs of Export sugar and Twenty Five (25) piculs of Domestic sugar, until the said Maria Marlina
Coscolluela y Belleza dies.
FIFTH
(a) Should Jorge Rabadilla die, his heir to whom he shall give Lot No. 1392 of the Bacolod Cadastre, covered by Transfer Certificate of Title
No. RT-4002 (10492), shall have the obligation to still give yearly, the sugar as specified in the Fourth paragraph of his testament, to Maria
Marlina Coscolluela y Belleza on the month of December of each year.
SIXTH
I command, in this my addition (Codicil) that the Lot No. 1392, in the event that the one to whom I have left and bequeathed, and his heir shall
later sell, lease, mortgage this said Lot, the buyer, lessee, mortgagee, shall have also the obligation to respect and deliver yearly ONE
HUNDRED (100) piculs of sugar to Maria Marlina Coscolluela y Belleza, on each month of December, SEVENTY FIVE (75) piculs of Export
and TWENTY FIVE (25) piculs of Domestic, until Maria Marlina shall die, lastly should the buyer, lessee or the mortgagee of this lot, not have
respected my command in this my addition (Codicil), Maria Marlina Coscolluela y Belleza, shall immediately seize this Lot No. 1392 from my
heir and the latter's heirs, and shall turn it over to my near desendants, (sic) and the latter shall then have the obligation to give the ONE
HUNDRED (100) piculs of sugar until Maria Marlina shall die. I further command in this my addition (Codicil) that my heir and his heirs of this
Lot No. 1392, that they will obey and follow that should they decide to sell, lease, mortgage, they cannot negotiate with others than my near
descendants and my sister."[4]

Pursuant to the same Codicil, Lot No. 1392 was transferred to the deceased, Dr. Jorge Rabadilla, and Transfer Certificate of Title No. 44498 thereto
issued in his name.
Dr. Jorge Rabadilla died in 1983 and was survived by his wife Rufina and children Johnny (petitioner), Aurora, Ofelia and Zenaida, all surnamed Rabadilla.
On August 21, 1989, Maria Marlena Coscolluela y Belleza Villacarlos brought a complaint, docketed as Civil Case No. 5588, before Branch 52 of the
Regional Trial Court in Bacolod City, against the above-mentioned heirs of Dr. Jorge Rabadilla, to enforce the provisions of subject Codicil. The Complaint
alleged that the defendant-heirs violated the conditions of the Codicil, in that:
1. Lot No. 1392 was mortgaged to the Philippine National Bank and the Republic Planters Bank in disregard of the testatrix's specific instruction
to sell, lease, or mortgage only to the near descendants and sister of the testatrix.
2. Defendant-heirs failed to comply with their obligation to deliver one hundred (100) piculs of sugar (75 piculs export sugar and 25 piculs
domestic sugar) to plaintiff Maria Marlena Coscolluela y Belleza from sugar crop years 1985 up to the filing of the complaint as mandated by
the Codicil, despite repeated demands for compliance.
3. The banks failed to comply with the 6th paragraph of the Codicil which provided that in case of the sale, lease, or mortgage of the property,
the buyer, lessee, or mortgagee shall likewise have the obligation to deliver 100 piculs of sugar per crop year to herein private respondent.
The plaintiff then prayed that judgment be rendered ordering defendant-heirs to reconvey/return-Lot No. 1392 to the surviving heirs of the late Aleja
Belleza, the cancellation of TCT No. 44498 in the name of the deceased, Dr. Jorge Rabadilla, and the issuance of a new certificate of title in the names of
the surviving heirs of the late Aleja Belleza.
On February 26, 1990, the defendant-heirs were declared in default but on March 28, 1990 the Order of Default was lifted, with respect to defendant
Johnny S. Rabadilla, who filed his Answer, accordingly.
During the pre-trial, the parties admitted that:
On November 15, 1998, the plaintiff (private respondent) and a certain Alan Azurin, son-in-law of the herein petitioner who was lessee of the property and
acting as attorney-in-fact of defendant-heirs, arrived at an amicable settlement and entered into a Memorandum of Agreement on the obligation to deliver
one hundred piculs of sugar, to the following effect:
"That for crop year 1988-89, the annuity mentioned in Entry No. 49074 of TCT No. 44489 will be delivered not later than January of 1989, more
specifically, to wit:
75 piculs of 'A' sugar, and 25 piculs of 'B' sugar, or then existing in any of our names, Mary Rose Rabadilla y Azurin or
Alan Azurin, during December of each sugar crop year, in Azucar Sugar Central; and, this is considered compliance of
the annuity as mentioned, and in the same manner will compliance of the annuity be in the next succeeding crop years.
That the annuity above stated for crop year 1985-86, 1986-87, and 1987-88, will be complied in cash equivalent of the number of piculs as
mentioned therein and which is as herein agreed upon, taking into consideration the composite price of sugar during each sugar crop year,
which is in the total amount of ONE HUNDRED FIVE THOUSAND PESOS (P105,000.00).
That the above-mentioned amount will be paid or delivered on a staggered cash installment, payable on or before the end of December of every sugar
crop year, to wit:
For 1985-86, TWENTY SIX THOUSAND TWO HUNDRED FIFTY (P26,250.00) Pesos, payable on or before December of crop year 1988-89;
For 1986-87, TWENTY SIX THOUSAND TWO HUNDRED FIFTY (P26,250.00) Pesos, payable on or before December of crop year 1989-90;
For 1987-88, TWENTY SIX THOUSAND TWO HUNDRED FIFTY (P26,250.00) Pesos, payable on or before December of crop year 1990-91; and
For 1988-89, TWENTY SIX THOUSAND TWO HUNDRED FIFTY (P26,250.00) Pesos, payable on or before December of crop year 1991-92." [5]
However, there was no compliance with the aforesaid Memorandum of Agreement except for a partial delivery of 50.80 piculs of sugar corresponding to
sugar crop year 1988 -1989.
On July 22, 1991, the Regional Trial Court came out with a decision, dismissing the complaint and disposing as follows:
"WHEREFORE, in the light of the aforegoing findings, the Court finds that the action is prematurely filed as no cause of action against the defendants has as yet
arose in favor of plaintiff. While there maybe the non-performance of the command as mandated exaction from them simply because they are the children of
Jorge Rabadilla, the title holder/owner of the lot in question, does not warrant the filing of the present complaint. The remedy at bar must fall. Incidentally, being in
the category as creditor of the left estate, it is opined that plaintiff may initiate the intestate proceedings, if only to establish the heirs of Jorge Rabadilla and in
order to give full meaning and semblance to her claim under the Codicil.
In the light of the aforegoing findings, the Complaint being prematurely filed is DISMISSED without prejudice. SO ORDERED."[6]
On appeal by plaintiff, the First Division of the Court of Appeals reversed the decision of the trial court; ratiocinating and ordering thus:
"Therefore, the evidence on record having established plaintiff-appellant's right to receive 100 piculs of sugar annually out of the produce of Lot No. 1392;
defendants-appellee's obligation under Aleja Belleza's codicil, as heirs of the modal heir, Jorge Rabadilla, to deliver such amount of sugar to plaintiff-appellant;
defendants-appellee's admitted non-compliance with said obligation since 1985; and, the punitive consequences enjoined by both the codicil and the Civil Code,
of seizure of Lot No. 1392 and its reversion to the estate of Aleja Belleza in case of such non-compliance, this Court deems it proper to order the reconveyance

of title over Lot No. 1392 from the estates of Jorge Rabadilla to the estate of Aleja Belleza. However, plaintiff-appellant must institute separate proceedings to reopen Aleja Belleza's estate, secure the appointment of an administrator, and distribute Lot No. 1392 to Aleja Belleza's legal heirs in order to enforce her right,
reserved to her by the codicil, to receive her legacy of 100 piculs of sugar per year out of the produce of Lot No. 1392 until she dies.
Accordingly, the decision appealed from is SET ASIDE and another one entered ordering defendants-appellees, as heirs of Jorge Rabadilla, to reconvey title over
Lot No. 1392, together with its fruits and interests, to the estate of Aleja Belleza. SO ORDERED."[7]
Dissatisfied with the aforesaid disposition by the Court of Appeals, petitioner found his way to this Court via the present petition, contending that the Court of Appeals erred in
ordering the reversion of Lot 1392 to the estate of the testatrix Aleja Belleza on the basis of paragraph 6 of the Codicil, and in ruling that the testamentary institution of Dr.
Jorge Rabadilla is a modal institution within the purview of Article 882 of the New Civil Code.
The petition is not impressed with merit.
Petitioner contends that the Court of Appeals erred in resolving the appeal in accordance with Article 882 of the New Civil Code on modal institutions and in deviating from the
sole issue raised which is the absence or prematurity of the cause of action. Petitioner maintains that Article 882 does not find application as there was no modal institution
and the testatrix intended a mere simple substitution - i.e. the instituted heir, Dr. Jorge Rabadilla, was to be substituted by the testatrix's "near descendants" should the
obligation to deliver the fruits to herein private respondent be not complied with. And since the testatrix died single and without issue, there can be no valid substitution and
such testamentary provision cannot be given any effect.
The petitioner theorizes further that there can be no valid substitution for the reason that the substituted heirs are not definite, as the substituted heirs are merely referred to
as "near descendants" without a definite identity or reference as to who are the "near descendants" and therefore, under Articles 843 [8] and 845[9] of the New Civil Code, the
substitution should be deemed as not written.
The contentions of petitioner are untenable. Contrary to his supposition that the Court of Appeals deviated from the issue posed before it, which was the propriety of the
dismissal of the complaint on the ground of prematurity of cause of action, there was no such deviation. The Court of Appeals found that the private respondent had a cause
of action against the petitioner. The disquisition made on modal institution was, precisely, to stress that the private respondent had a legally demandable right against the
petitioner pursuant to subject Codicil; on which issue the Court of Appeals ruled in accordance with law.
It is a general rule under the law on succession that successional rights are transmitted from the moment of death of the decedent [10] and compulsory heirs are called to
succeed by operation of law. The legitimate children and descendants, in relation to their legitimate parents, and the widow or widower, are compulsory heirs. [11] Thus, the
petitioner, his mother and sisters, as compulsory heirs of the instituted heir, Dr. Jorge Rabadilla, succeeded the latter by operation of law, without need of further proceedings,
and the successional rights were transmitted to them from the moment of death of the decedent, Dr. Jorge Rabadilla.
Under Article 776 of the New Civil Code, inheritance includes all the property, rights and obligations of a person, not extinguished by his death. Conformably, whatever rights
Dr. Jorge Rabadilla had by virtue of subject Codicil were transmitted to his forced heirs, at the time of his death. And since obligations not extinguished by death also form
part of the estate of the decedent; corollarily, the obligations imposed by the Codicil on the deceased Dr. Jorge Rabadilla, were likewise transmitted to his compulsory heirs
upon his death.
In the said Codicil, testatrix Aleja Belleza devised Lot No. 1392 to Dr. Jorge Rabadilla, subject to the condition that the usufruct thereof would be delivered to the herein
private respondent every year. Upon the death of Dr. Jorge Rabadilla, his compulsory heirs succeeded to his rights and title over the said property, and they also assumed his
(decedent's) obligation to deliver the fruits of the lot involved to herein private respondent. Such obligation of the instituted heir reciprocally corresponds to the right of private
respondent over the usufruct, the fulfillment or performance of which is now being demanded by the latter through the institution of the case at bar. Therefore, private
respondent has a cause of action against petitioner and the trial court erred in dismissing the complaint below.
Petitioner also theorizes that Article 882 of the New Civil Code on modal institutions is not applicable because what the testatrix intended was a substitution - Dr. Jorge
Rabadilla was to be substituted by the testatrix's near descendants should there be noncompliance with the obligation to deliver the piculs of sugar to private respondent.
Again, the contention is without merit.
Substitution is the designation by the testator of a person or persons to take the place of the heir or heirs first instituted. Under substitutions in general, the testator may either
(1) provide for the designation of another heir to whom the property shall pass in case the original heir should die before him/her, renounce the inheritance or be incapacitated
to inherit, as in a simple substitution,[12] or (2) leave his/her property to one person with the express charge that it be transmitted subsequently to another or others, as in a
fideicommissary substitution.[13] The Codicil sued upon contemplates neither of the two.
In simple substitutions, the second heir takes the inheritance in default of the first heir by reason of incapacity, predecease or renunciation. [14] In the case under consideration,
the provisions of subject Codicil do not provide that should Dr. Jorge Rabadilla default due to predecease, incapacity or renunciation, the testatrix's near descendants would
substitute him. What the Codicil provides is that, should Dr. Jorge Rabadilla or his heirs not fulfill the conditions imposed in the Codicil, the property referred to shall be seized
and turned over to the testatrix's near descendants.
Neither is there a fideicommissary substitution here and on this point, petitioner is correct. In a fideicommissary substitution, the first heir is strictly mandated to preserve
the property and to transmit the same later to the second heir.[15] In the case under consideration, the instituted heir is in fact allowed under the Codicil to alienate the
property provided the negotiation is with the near descendants or the sister of the testatrix. Thus, a very important element of a fideicommissary substitution is lacking; the
obligation clearly imposing upon the first heir the preservation of the property and its transmission to the second heir. "Without this obligation to preserve clearly imposed by
the testator in his will, there is no fideicommissary substitution."[16] Also, the near descendants' right to inherit from the testatrix is not definite. The property will only pass to
them should Dr. Jorge Rabadilla or his heirs not fulfill the obligation to deliver part of the usufruct to private respondent.
Another important element of a fideicommissary substitution is also missing here. Under Article 863, the second heir or the fideicommissary to whom the property is
transmitted must not be beyond one degree from the first heir or the fiduciary. A fideicommissary substitution is therefore, void if the first heir is not related by first degree to
the second heir.[17] In the case under scrutiny, the near descendants are not at all related to the instituted heir, Dr. Jorge Rabadilla.

The Court of Appeals erred not in ruling that the institution of Dr. Jorge Rabadilla under subject Codicil is in the nature of a modal institution and therefore,
Article 882 of the New Civil Code is the provision of law in point. Articles 882 and 883 of the New Civil Code provide:
Art. 882. The statement of the object of the institution or the application of the property left by the testator, or the charge imposed on him, shall
not be considered as a condition unless it appears that such was his intention.
That which has been left in this manner may be claimed at once provided that the instituted heir or his heirs give security for compliance with
the wishes of the testator and for the return of anything he or they may receive, together with its fruits and interests, if he or they should
disregard this obligation.

Art. 883. When without the fault of the heir, an institution referred to in the preceding article cannot take effect in the exact manner stated by the
testator, it shall be complied with in a manner most analogous to and in conformity with his wishes.
The institution of an heir in the manner prescribed in Article 882 is what is known in the law of succession as an institucion sub modo or a modal
institution. In a modal institution, the testator states (1) the object of the institution, (2) the purpose or application of the property left by the testator, or (3)
the charge imposed by the testator upon the heir.[18] A "mode" imposes an obligation upon the heir or legatee but it does not affect the efficacy of his rights to the
succession.[19] On the other hand, in a conditional testamentary disposition, the condition must happen or be fulfilled in order for the heir to be entitled to succeed the testator.
The condition suspends but does not obligate; and the mode obligates but does not suspend. [20] To some extent, it is similar to a resolutory condition.[21]
From the provisions of the Codicil litigated upon, it can be gleaned unerringly that the testatrix intended that subject property be inherited by Dr. Jorge Rabadilla. It is likewise
clearly worded that the testatrix imposed an obligation on the said instituted heir and his successors-in-interest to deliver one hundred piculs of sugar to the herein private
respondent, Marlena Coscolluela Belleza, during the lifetime of the latter. However, the testatrix did not make Dr. Jorge Rabadilla's inheritance and the effectivity of his
institution as a devisee, dependent on the performance of the said obligation. It is clear, though, that should the obligation be not complied with, the property shall be turned
over to the testatrix's near descendants. The manner of institution of Dr. Jorge Rabadilla under subject Codicil is evidently modal in nature because it imposes a charge upon
the instituted heir without, however, affecting the efficacy of such institution.
Then too, since testamentary dispositions are generally acts of liberality, an obligation imposed upon the heir should not be considered a condition unless it clearly appears
from the Will itself that such was the intention of the testator. In case of doubt, the institution should be considered as modal and not conditional. [22]
Neither is there tenability in the other contention of petitioner that the private respondent has only a right of usufruct but not the right to seize the property itself from the
instituted heir because the right to seize was expressly limited to violations by the buyer, lessee or mortgagee.
In the interpretation of Wills, when an uncertainty arises on the face of the Will, as to the application of any of its provisions, the testator's intention is to be ascertained from
the words of the Will, taking into consideration the circumstances under which it was made. [23] Such construction as will sustain and uphold the Will in all its parts must be
adopted.[24]
Subject Codicil provides that the instituted heir is under obligation to deliver One Hundred (100) piculs of sugar yearly to Marlena Belleza Coscuella. Such obligation is
imposed on the instituted heir, Dr. Jorge Rabadilla, his heirs, and their buyer, lessee, or mortgagee should they sell, lease, mortgage or otherwise negotiate the property
involved. The Codicil further provides that in the event that the obligation to deliver the sugar is not respected, Marlena Belleza Coscuella shall seize the property and turn it
over to the testatrix's near descendants. The non-performance of the said obligation is thus with the sanction of seizure of the property and reversion thereof to

the testatrix's near descendants. Since the said obligation is clearly imposed by the testatrix, not only on the instituted heir but also on his successors-ininterest, the sanction imposed by the testatrix in case of non-fulfillment of said obligation should equally apply to the instituted heir and his successors-ininterest.
Similarly unsustainable is petitioner's submission that by virtue of the amicable settlement, the said obligation imposed by the Codicil has been assumed
by the lessee, and whatever obligation petitioner had become the obligation of the lessee; that petitioner is deemed to have made a substantial and
constructive compliance of his obligation through the consummated settlement between the lessee and the private respondent, and having consummated
a settlement with the petitioner, the recourse of the private respondent is the fulfillment of the obligation under the amicable settlement and not the seizure
of subject property.
Suffice it to state that a Will is a personal, solemn, revocable and free act by which a person disposes of his property, to take effect after his death. [25] Since
the Will expresses the manner in which a person intends how his properties be disposed, the wishes and desires of the testator must be strictly followed.
Thus, a Will cannot be the subject of a compromise agreement which would thereby defeat the very purpose of making a Will.
WHEREFORE, the petition is hereby DISMISSED and the decision of the Court of Appeals, dated December 23, 1993, in CA-G.R. No. CV-35555
AFFIRMED. No pronouncement as to costs
SO ORDERED.
[G.R. No. 104482. January 22, 1996]
BELINDA TAREDO, for herself and in representation of her brothers and sisters, and TEOFILA CORPUZ TANEDO, representing her minor daughter
VERNA TANEDO, petitioners, vs. THE COURT OF APPEALS, SPOUSES RICARDO M. TAREDO AND TERESITA BARERA TAREDO, respondents.
DECISION
PANGANIBAN, J.:
Is a sale of future inheritance valid? In multiple sales of the same real property, who has preference in ownership? What is the probative value of the lower
courts finding of good faith in registration of such sales in the registry of property? These are the main questions raised in this Petition for review on certiorari under
Rule 45 of the Rules of Court to set aside and reverse the Decision 1 of the Court of Appeals2 in CA-G.R. CV NO. 24987 promulgated on September 26, 1991
affirming the decision of the Regional Trial Court, Branch 63, Third Judicial Region, Tarlac, Tarlac in Civil Case No. 6328, and its Resolution denying reconsideration
thereof, promulgated on May 27, 1992.
By the Courts Resolution on October 25, 1995, this case (along with several others) was transferred from the First to the Third Division and after due
deliberation, the Court assigned it to the undersigned ponenle for the writing of this Decision.
The Facts
On October 20, 1962, Lazardo Taedo executed a notarized deed of absolute sale in favor of his eldest brother, Ricardo Taedo, and the latters wife, Teresita
Barera, private respondents herein, whereby he conveyed to the latter in consideration of P1,500.00, one hectare of whatever share I shall have over Lot No. 191 of
the cadastral survey of Gerona, Province of Tarlac and covered by Title T-l3829 of the Register of Deeds of Tarlac, the said property being his future inheritance from
his parents (Exh. 1). Upon the death of his father Matias, Lazaro executed an Affidavit of Conformity dated February 28, 1980 (Exh. 3) to re-affirm, respect.
acknowledge and validate the sale I made in 1962. On January 13, 1981, Lazaro executed another notarized deed of sale in favor of private respondents covering
his undivided ONE TWELVE (1/12) of a parcel of land known asLot 191 x x (Exh. 4). He acknowledged therein his receipt of P 10,000.00 as consideration therefor. In
February 1981, Ricardo learned that Lazaro sold the same property to his children, petitioners herein, through a deed of sale dated December 29, 1980 (Exh. E). On
June 7, 1982, private respondents recorded the Deed of Sale (Exh. 4) in their favor in the Registry of Deeds and the corresponding entry was made in Transfer
Certificate of Title No. 166451 (Exh. 5).
Petitioners on July 16, 1982 filed a complaint for rescission (plus damages) of the deeds of sale executed by Lazaro in favor of private respondents covering
the property inherited by Lazaro from his father.

Petitioners claimed that their father, Lazaro, executed an Absolute Deed of Sale dated December 29, 1980 (Exit. E), conveying to his ten children his allotted
portion under the extrajudicial partition executed by the heirs of Matias, which deed included the land in litigation (Lot 191).
Petitioners also presented in evidence: (1) a private writing purportedly prepared and signed by Matias dated December 28, 1978, stating that it was his desire
that whatever inheritance Lazaro would receive from him should be given to his (Lazaros) children (Exh. A); (2) a typewritten document dated March 10, 1979 signed
by Lazaro in the presence of two witnesses, wherein he confirmed that he would voluntarily abide by the wishes of his father, Matias, to give to his (Lazaros) children
all the property he would inherit from the latter (Exh. B); and (3) a letter dated January 1, 1980 of Lazaro to his daughter, Carmela, stating that his share in the
extrajudicial settlement of the estate of his father was intended for his children, petitioners herein (Exh. C).
Private respondents, however presented in evidence a Deed of Revocation of a Deed of Sale dated March 12, 1981 (Exh. 6), wherein Lazaro revoked the sale
in favor of petitioners for the reason that it was simulated or fictitious - without any consideration whatsoever.
Shortly after the case a quo was filed, Lazaro executed a sworn statement (Exh. G) which virtually repudiated the contents of the Deed of Revocation of a
Deed of Sale (Exh. 6) and the Deed of Sale (Exh. 4) in favor of private respondents. However, Lazaro testified that he sold the property to Ricardo, and that it was a
lawyer who induced him to execute a deed of sale in favor of his children after giving him five pesos (P5.00) to buy a drink (TSN September 18, 1985, pp. 204-205).
The trial court decided in favor of private respondents, holding that petitioners failed to adduce a preponderance of evidence to support (their) claim. On
appeal, the Court of Appeals affirmed the decision of the trial court, ruling that the Deed of Sale dated January 13, 1981 (Exh. 9) was valid and that its registration in
good faith vested title in said respondents.
The Issues
Petitioners raised the following errors in the respondent Court, which they also now allege in the instant Petition:
I. The trial court erred in concluding that the Contract of Sale of October 20, 1962 (Exhibit 7, Answer) is merely voidable or annulable and not void ab initio pursuant to paragraph 2 of Article 1347 of the New Civil
Code involving as it does a future inheritance.
II. The trial court erred in holding that defendants-appellees acted in good faith in registering the deed of sale of January 13, 1981 (Exhibit 9) with the Register of Deeds of Tarlac and therefore ownership of the land
in question passed on to defendants-appellees.
III. The trial court erred in ignoring and failing to consider the testimonial and documentary evidence of plaintiffs-appellants which clearly established by preponderance of evidence that they are indeed the
legitimate and lawful owners of the property in question.
IV. The decision is contrary to law and the facts of the case and the conclusions drawn from the established facts are illogical and off-tangent.
From the foregoing, the issues may be restated as follows:
1. Is the sale of a future inheritance valid?
2. Was the subsequent execution on January 13, 1981 (and registration with the Registry of Property) of a deed of sale covering the same property to the same buyers valid?
3. May this Court review the findings of the respondent Court (a) holding that the buyers acted in good faith in registering the said subsequent deed of sale and (b) in failing to consider petitioners
evidence? Are the conclusions of the respondent Court illogical and off-tangent?

The Courts Ruling

At the outset, let it be clear that the errors which are reviewable by this Court in this petition for review on certiorari are only those allegedly committed by the
respondent Court of Appeals and not directly those of the trial court, which is not a party here. The assignment of errors in the petition quoted above are therefore
totally misplaced, and for that reason, the petition should be dismissed. But in order to give the parties substantial justice we have decided to delve into the issues as
above re-stated. The errors attributed by petitioners to the latter (trial) court will be discussed only insofar as they are relevant to the appellate courts assailed
Decision and Resolution.
The sale made in 1962 involving future inheritance is not really at issue here. In context, the assailed Decision conceded it may be legally correct that a
contract of sale of anticipated future inheritance is null and void.3
But to remove all doubts, we hereby categorically rule that, pursuant to Article 1347 of the Civil Code, (n)o contract may be entered into upon a future
inheritance except in cases expressly authorized by law.
Consequently, said contract made in 1962 is not valid and cannot be the source of any right nor the creator of any obligation between the parties.
Hence, the affidavit of conformity dated February 28, 1980, insofar as it sought to validate or ratify the 1962 sale, is also useless and, in the words of the
respondent Court, suffers from the same infirmity. Even private respondents in their memorandum 4 concede this.
However, the documents that are critical to the resolution of this case are: (a) the deed of sale of January 13, 1981 in favor of private respondents covering
Lazaros undivided inheritance of one-twelfth (1/12) share in Lot No. 191, which was subsequently registered on June 7, 1982; and (b) the deed of sale dated
December 29, 1980 in favor of petitioners covering the same property. These two documents were executed after the death of Matias (and his spouse) and after a
deed of extrajudicial settlement of his (Matias) estate was executed, thus vesting in Lazaro actual title over said property. In other words, these dispositions, though
conflicting, were no longer infected with the infirmities of the 1962 sale.
Petitioners contend that what was sold on January 13, 1981 was only one-half hectare out of Lot No. 191, citing as authority the trial courts decision. As earlier
pointed out, what is on review in these proceedings by this Court is the Court of Appeals decision - which correctly identified the subject matter of the January 13,
1981 sale to be the entire undivided 1/12 share of Lazaro in Lot No. 191 and which is the same property disposed of on December 29, 1980 in favor of petitioners.
Critical in determining which of these two deeds should be given effect is the registration of the sale in favor of private respondents with the register of deeds
on June 7, 1982.
Article 1544 of the Civil Code governs the preferential rights of vendees in cases of multiple sales, as follows:
Art. 1544. If the same thing should have been sold to different vendees, the ownership shall be transferred to the person who may have first taken possession thereof
in good faith, if it should be movable property.
Should it be immovable property, the ownership shall belong to the person acquiring it who in good faith first recorded it in the Registry of Property.
Should there be no inscription, the ownership shall pertain to the person who in good faith was first in the possession; and, in the absence thereof, to the person who
presents the oldest title, provided there is good faith.
The property in question is land, an immovable, and following the above-quoted law, ownership shall belong to the buyer who in good faith registers it first in
the registry of property. Thus, although the deed of sale in favor of private respondents was later than the one in favor of petitioners, ownership would vest in the
former because of the undisputed fact of registration. On the other hand, petitioners have not registered the sale to them at all.
Petitioners contend that they were in possession of the property and that private respondents never took possession thereof. As between two purchasers, the
one who registered the sale in his favor has a preferred right over the other who has not registered his title, even if the latter is in actual possession of the immovable
property.5
As to third issue, while petitioners conceded the fact of registration, they nevertheless contended that it was done in bad faith. On this issue, the respondent
Court ruled:

Under the second assignment of error, plaintiffs-appellants contend that defendants-appellees acted in bad faith when they registered the Deed of Sale in their favor
as appellee Ricardo already knew of the execution of the deed of sale in favor of the plaintiffs; appellants cite the testimony of plaintiff Belinda Tafledo to the effect
that defendant Ricardo Taedo called her up on January 4 or 5, 1981 to tell her that he was already the owner of the land in question but the contract of sale between
our father and us were (sic) already consumated (pp. 9-10, tsn, January 6, 1984). This testimony is obviously self-serving, and because it was a telephone
conversation, the deed of sale dated December 29, 1980 was not shown; Belinda merely told her uncle that there was already a document showing that plaintiffs are
the owners (p. 80). Ricardo Taedo controverted this and testified that he learned for the first time of the deed of sale executed by Lazaro in favor of his children about
a month or sometime in February 1981 (p. 111, tsn, Nov. 28, 1984). x x x6
The respondent Court, reviewing the trial courts findings, refused to overturn the latters assessment of the testimonial evidence, as follows:
We are not prepared to set aside the finding of the lower court upholding Ricardo Tanedos testimony, as it involves a matter of credibility of witnesses which the trial
judge, who presided at the hearing, was in a better position to resolve. (Court of Appeals Decision, p. 6.)
In this connection, we note the tenacious allegations made by petitioners, both in their basic petition and in their memorandum, as follows:
1. The respondent Court allegedly ignored the claimed fact that respondent Ricardo by fraud and deceit and with foreknowledge that the property in
question had already been sold to petitioners, made Lazaro execute the deed of January 13, 1981;
2. There is allegedly adequate evidence to show that only 1/2 of the purchase price of P10,000.00 was paid at the time of the execution of the deed of
sale, contrary to the written acknowledgment, thus showing bad faith;
3. There is allegedly sufficient evidence showing that the deed of revocation of the sale in favor of petitioners was tainted with fraud or deceit.
4. There is allegedly enough evidence to show that private respondents took undue advantage over the weakness and unschooled and pitiful situation
of Lazaro Tafledo . . . and that respondent Ricardo Taedo exercised moral ascendancy over his younger brother he being the eldest brother and
who reached fourth year college of law and at one time a former Vice-Governor of Tarlac, while his younger brother only attained first year high
school x x x ;
5. The respondent Court erred in not giving credence to petitioners evidence, especially Lazaro Taedos Sinumpaang Salaysay dated July 27,
1982 stating that Ricardo Taedo deceived the former in executing the deed of sale in favor of private respondents.
To be sure, there are indeed many conflicting documents and testimonies as well as arguments over their probative value and significance. Suffice it to say,
however, that all the above contentions involve questions of fact, appreciation of evidence and credibility of witnesses, which are not proper in this review. It is wellsettled that the Supreme Court is not a trier of facts. In petitions for review under Rule 45 of the Revised Rules of Court, only questions of law may be raised and
passed upon. Absent any whimsical or capricious exercise of judgment, and unless the lack of any basis for the conclusions made by the lower courts be amply
demonstrated, the Supreme Court will not disturb their findings. At most, it appears that petitioners have shown that their evidence was not believed by both the trial
and the appellate courts, and that the said courts tended to give more credence to the evidence presented by private respondents. But this in itself is not a reason for
setting aside such findings. We are far from convinced that both courts gravely abused their respective authorities and judicial prerogatives.
As held in the recent case of Chua Tiong Tay vs. Court of Appeals and Goidrock Construction and Development Corp.:7
The Court has consistently held that the factual findings of the trial court, as well as the Court of Appeals, are final and conclusive and may not be reviewed on
appeal. Among the exceptional circumstances where a reassessment of facts found by the lower courts is allowed are when the conclusion is a finding grounded
entirely on speculation, surmises or conjectures; when the inference made is manifestly absurd, mistaken or Impossible; when there is grave abuse of discretion in
the appreciation of facts; when the judgment is premised on a misapprehension of facts; when the findings went beyond the issues of the case and the same are
contrary to the admissions of both appellant and appellee. After a careful study of the case at bench, we find none of the above grounds present to justify the reevaluation of the findings of fact made by the courts below.
In the same vein, the ruling in the recent case of South Sea Surety and Insurance Company, Inc. vs. Hon. Court of Appeals, et al.[8] is equally applicable to the
present case:
We see no valid reason to discard the factual conclusions of the appellate court. x x x (I)t is not the function of this Court to assess and evaluate all over again the
evidence, testimonial and documentary, adduced by the parties, particularly where, such as here, the findings of both the trial court and the appellate court on the
matter coincide. (italics supplied)
WHEREFORE, the petition is DENIED and the assailed Decision of the Court of Appeals is AFFIRMED. No Costs.
SO ORDERED.
G.R. No. 162784

June 22, 2007

NATIONAL HOUSING AUTHORITY, petitioner,

vs.
SEGUNDA ALMEIDA, COURT OF APPEALS, and RTC of SAN PEDRO, LAGUNA, BR. 31, respondents.
DECISION
PUNO, C.J.:
This is a Petition for Review on Certiorari under Rule 45 filed by the National Housing Authority (NHA) against the Court of Appeals, the Regional Trial Court of San
Pedro Laguna, Branch 31, and private respondent Segunda Almeida.
On June 28, 1959, the Land Tenure Administration (LTA) awarded to Margarita Herrera several portions of land which are part of the Tunasan Estate in San Pedro,
Laguna. The award is evidenced by an Agreement to Sell No. 3787.1 By virtue of Republic Act No. 3488, the LTA was succeeded by the Department of Agrarian
Reform (DAR). On July 31, 1975, the DAR was succeeded by the NHA by virtue of Presidential Decree No. 757. 2 NHA as the successor agency of LTA is the
petitioner in this case.
The records show that Margarita Herrera had two children: Beatriz Herrera-Mercado (the mother of private respondent) and Francisca Herrera. Beatriz HerreraMercado predeceased her mother and left heirs.
Margarita Herrera passed away on October 27, 1971.3

On August 22, 1974, Francisca Herrera, the remaining child of the late Margarita Herrera executed a Deed of Self-Adjudication claiming that she is the only
remaining relative, being the sole surviving daughter of the deceased. She also claimed to be the exclusive legal heir of the late Margarita Herrera.
The Deed of Self-Adjudication was based on a Sinumpaang Salaysay dated October 7, 1960, allegedly executed by Margarita Herrera. The pertinent portions of
which are as follows:
SINUMPAANG SALAYSAY
SA SINO MAN KINAUUKULAN;
Akong si MARGARITA HERRERA, Filipina, may 83 taong gulang, balo, kasalukuyang naninirahan at tumatanggap ng sulat sa Nayon ng San Vicente, San Pedro Laguna, sa ilalim ng panunumpa ay
malaya at kusang loob kong isinasaysay at pinagtitibay itong mga sumusunod:
1. Na ako ay may tinatangkilik na isang lagay na lupang tirikan (SOLAR), tumatayo sa Nayon ng San Vicente, San Pedro, Laguna, mayroong PITONG DAAN AT PITUMPU'T ISANG (771)
METRONG PARISUKAT ang laki, humigit kumulang, at makikilala sa tawag na Lote 17, Bloke 55, at pag-aari ng Land Tenure Administration;
2. Na ang nasabing lote ay aking binibile, sa pamamagitan ng paghuhulog sa Land Tenure Administration, at noong ika 30 ng Julio, 1959, ang Kasunduang sa Pagbibile (AGREEMENT TO SELL No.
3787) ay ginawa at pinagtibay sa Lungsod ng Maynila, sa harap ng Notario Publico na si G. Jose C. Tolosa, at lumalabas sa kaniyang Libro Notarial bilang Documento No. 13, Pagina No. 4; Libro
No. IV, Serie ng 1959;
3. Na dahilan sa ako'y matanda na at walang ano mang hanap buhay, ako ay nakatira at pinagsisilbihan nang aking anak na si Francisca Herrera, at ang tinitirikan o solar na nasasabi sa unahan ay
binabayaran ng kaniyang sariling cuarta sa Land Tenure Administration;
4. Na alang-alang sa nasasaysay sa unahan nito, sakaling ako'y bawian na ng Dios ng aking buhay, ang lupang nasasabi sa unahan ay aking ipinagkakaloob sa nasabi kong anak na FRANCISCA
HERRERA, Filipina, nasa katamtamang gulang, kasal kay Macario Berroya, kasalukuyang naninirahan at tumatanggap ng sulat sa Nayong ng San Vicente, San Pedro Laguna, o sa kaniyang mga
tagapagmana at;
5. Na HINIHILING KO sa sino man kinauukulan, na sakaling ako nga ay bawian na ng Dios ng aking buhay ay KILALANIN, IGALANG at PAGTIBAYIN ang nilalaman sa pangalan ng aking anak na si
Francisca Herrera ang loteng nasasabi sa unahan.
SA KATUNAYAN NG LAHAT, ako ay nag-didiit ng hinlalaki ng kanan kong kamay sa ibaba nito at sa kaliwang gilid ng unang dahon, dito sa Lungsod ng Maynila, ngayong ika 7 ng Octubre, 1960. 4

The said document was signed by two witnesses and notarized. The witnesses signed at the left-hand side of both pages of the document with the said document
having 2 pages in total. Margarita Herrera placed her thumbmark5 above her name in the second page and at the left-hand margin of the first page of the document.
The surviving heirs of Beatriz Herrera-Mercado filed a case for annulment of the Deed of Self-Adjudication before the then Court of First Instance of Laguna, Branch
1 in Binan, Laguna (now, Regional Trial Court Branch 25). The case for annulment was docketed as Civil Case No. B-1263.6
On December 29, 1980, a Decision in Civil Case No. B-1263 (questioning the Deed of Self-Adjudication) was rendered and the deed was declared null and void.7
During trial on the merits of the case assailing the Deed of Self-Adjudication, Francisca Herrera filed an application with the NHA to purchase the same lots
submitting therewith a copy of the "Sinumpaang Salaysay" executed by her mother. Private respondent Almeida, as heir of Beatriz Herrera-Mercado, protested the
application.
In a Resolution8 dated February 5, 1986, the NHA granted the application made by Francisca Herrera, holding that:
From the evidence of the parties and the records of the lots in question, we gathered the following facts: the lots in question are portions of the lot
awarded and sold to the late Margarita Herrera on July 28, 1959 by the defunct Land Tenure Administration; protestant is the daughter of the late Beatriz
Herrera Mercado who was the sister of the protestee; protestee and Beatriz are children of the late Margarita Herrera; Beatriz was the transferee from
Margarita of Lot Nos. 45, 46, 47, 48 and 49, Block 50; one of the lots transferred to Beatriz, e.g. Lot 47, with an area of 148 square meters is in the name
of the protestant; protestant occupied the lots in question with the permission of the protestee; protestee is a resident of the Tunasan Homesite since birth;
protestee was born on the lots in question; protestee left the place only after marriage but resided in a lot situated in the same Tunasan Homesite; her
(protestee) son Roberto Herrera has been occupying the lots in question; he has been there even before the death of the late Margarita Herrera; on
October 7, 1960, Margarita Herrera executed a "Sinumpaang Salaysay" whereby she waived or transferred all her rights and interest over the
lots in question in favor of the protestee; and protestee had paid the lots in question in full on March 8, 1966 with the defunct Land Tenure
Administration.
This Office finds that protestee has a better preferential right to purchase the lots in question. 9
Private respondent Almeida appealed to the Office of the President.10 The NHA Resolution was affirmed by the Office of the President in a Decision dated January
23, 1987.11
On February 1, 1987, Francisca Herrera died. Her heirs executed an extrajudicial settlement of her estate which they submitted to the NHA. Said transfer of rights
was approved by the NHA.12 The NHA executed several deeds of sale in favor of the heirs of Francisca Herrera and titles were issued in their favor. 13 Thereafter, the
heirs of Francisca Herrera directed Segunda Mercado-Almeida to leave the premises that she was occupying.
Feeling aggrieved by the decision of the Office of the President and the resolution of the NHA, private respondent Segunda Mercado-Almeida sought the cancellation
of the titles issued in favor of the heirs of Francisca. She filed a Complaint on February 8, 1988, for "Nullification of Government Lot's Award," with the Regional
Trial Court of San Pedro, Laguna, Branch 31.
In her complaint, private respondent Almeida invoked her forty-year occupation of the disputed properties, and re-raised the fact that Francisca Herrera's declaration
of self-adjudication has been adjudged as a nullity because the other heirs were disregarded. The defendant heirs of Francisca Herrera alleged that the complaint
was barred by laches and that the decision of the Office of the President was already final and executory. 14 They also contended that the transfer of purchase of the
subject lots is perfectly valid as the same was supported by a consideration and that Francisca Herrera paid for the property with the use of her own money. 15 Further,
they argued that plaintiff's occupation of the property was by mere tolerance and that they had been paying taxes thereon. 16

The Regional Trial Court issued an Order dated June 14, 1988 dismissing the case for lack of jurisdiction.17 The Court of Appeals in a Decision dated June 26, 1989
reversed and held that the Regional Trial Court had jurisdiction to hear and decide the case involving "title and possession to real property within its jurisdiction." 18The
case was then remanded for further proceedings on the merits.
A pre-trial was set after which trial ensued.
On March 9, 1998, the Regional Trial Court rendered a Decision setting aside the resolution of the NHA and the decision of the Office of the President awarding the
subject lots in favor of Francisca Herrera. It declared the deeds of sale executed by NHA in favor of Herrera's heirs null and void. The Register of Deeds of Laguna,
Calamba Branch was ordered to cancel the Transfer Certificate of Title issued. Attorney's fees were also awarded to private respondent.
The Regional Trial Court ruled that the "Sinumpaang Salaysay" was not an assignment of rights but a disposition of property which shall take effect upon death. It
then held that the said document must first be submitted to probate before it can transfer property.
Both the NHA and the heirs of Francisca Herrera filed their respective motions for reconsideration which were both denied on July 21, 1998 for lack of merit. They
both appealed to the Court of Appeals. The brief for the heirs of Francisca Herrera was denied admission by the appellate court in a Resolution dated June 14, 2002
for being a "carbon copy" of the brief submitted by the NHA and for being filed seventy-nine (79) days late.
On August 28, 2003, the Court of Appeals affirmed the decision of the Regional Trial Court, viz:
There is no dispute that the right to repurchase the subject lots was awarded to Margarita Herrera in 1959. There is also no dispute that Margarita
executed a "Sinumpaang Salaysay" on October 7, 1960. Defendant NHA claims that the "Sinumpaang Salaysay" is, in effect, a waiver or transfer of rights
and interest over the subject lots in favor of Francisca Herrera. This Court is disposed to believe otherwise. After a perusal of the "Sinumpaang Salaysay"
of Margarita Herrera, it can be ascertained from its wordings taken in their ordinary and grammatical sense that the document is a simple disposition of
her estate to take effect after her death. Clearly the Court finds that the "Sinumpaang Salaysay" is a will of Margarita Herrera. Evidently, if the intention of
Margarita Herrera was to merely assign her right over the lots to her daughter Francisca Herrera, she should have given her "Sinumpaang Salaysay" to
the defendant NHA or to Francisca Herrera for submission to the defendant NHA after the full payment of the purchase price of the lots or even prior
thereto but she did not. Hence it is apparent that she intended the "Sinumpaang Salaysay" to be her last will and not an assignment of rights as what the
NHA in its resolution would want to make it appear. The intention of Margarita Herrera was shared no less by Francisca Herrera who after the former's
demise executed on August 22, 1974 a Deed of Self-Adjudication claiming that she is her sole and legal heir. It was only when said deed was questioned
in court by the surviving heirs of Margarita Herrera's other daughter, Beatriz Mercado, that Francisca Herrera filed an application to purchase the subject
lots and presented the "Sinumpaang Salaysay" stating that it is a deed of assignment of rights. 19
The Court of Appeals ruled that the NHA acted arbitrarily in awarding the lots to the heirs of Francisca Herrera. It upheld the trial court ruling that the "Sinumpaang
Salaysay" was not an assignment of rights but one that involved disposition of property which shall take effect upon death. The issue of whether it was a valid will
must first be determined by probate.
Petitioner NHA elevated the case to this Court.
Petitioner NHA raised the following issues:
A. WHETHER OR NOT THE RESOLUTION OF THE NHA AND THE DECISION OF THE OFFICE OF THE PRESIDENT HAVE ATTAINED FINALITY,
AND IF SO, WHETHER OR NOT THE PRINCIPLE OF ADMINISTRATIVE RES JUDICATA BARS THE COURT FROM FURTHER DETERMINING WHO
BETWEEN THE PARTIES HAS PREFERENTIAL RIGHTS FOR AWARD OVER THE SUBJECT LOTS;
B. WHETHER OR NOT THE COURT HAS JURISDICTION TO MAKE THE AWARD ON THE SUBJECT LOTS; AND
C. WHETHER OR NOT THE AWARD OF THE SUBJECT LOTS BY THE NHA IS ARBITRARY.
We rule for the respondents.
Res judicata is a concept applied in review of lower court decisions in accordance with the hierarchy of courts. But jurisprudence has also recognized the rule of
administrative res judicata: "the rule which forbids the reopening of a matter once judicially determined by competent authority applies as well to the judicial and
quasi-judicial facts of public, executive or administrative officers and boards acting within their jurisdiction as to the judgments of courts having general judicial
powers . . . It has been declared that whenever final adjudication of persons invested with power to decide on the property and rights of the citizen is examinable by
the Supreme Court, upon a writ of error or a certiorari, such final adjudication may be pleaded as res judicata."20 To be sure, early jurisprudence were already mindful
that the doctrine of res judicata cannot be said to apply exclusively to decisions rendered by what are usually understood as courts without unreasonably
circumscribing the scope thereof and that the more equitable attitude is to allow extension of the defense to decisions of bodies upon whom judicial powers have
been conferred.
In Ipekdjian Merchandising Co., Inc. v. Court of Tax Appeals,21 the Court held that the rule prescribing that "administrative orders cannot be enforced in the courts
in the absence of an express statutory provision for that purpose" was relaxed in favor of quasi-judicial agencies.
In fine, it should be remembered that quasi-judicial powers will always be subject to true judicial powerthat which is held by the courts. Quasi-judicial power is
defined as that power of adjudication of an administrative agency for the "formulation of a final order."22 This function applies to the actions, discretion and similar acts
of public administrative officers or bodies who are required to investigate facts, or ascertain the existence of facts, hold hearings, and draw conclusions from them, as
a basis for their official action and to exercise discretion of a judicial nature. 23 However, administrative agencies are not considered courts, in their strict sense. The
doctrine of separation of powers reposes the three great powers into its three (3) branchesthe legislative, the executive, and the judiciary. Each department is coequal and coordinate, and supreme in its own sphere. Accordingly, the executive department may not, by its own fiat, impose the judgment of one of its agencies,
upon the judiciary. Indeed, under the expanded jurisdiction of the Supreme Court, it is empowered to "determine whether or not there has been grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government." 24 Courts have an expanded role under the 1987
Constitution in the resolution of societal conflicts under the grave abuse clause of Article VIII which includes that duty to check whether the other branches of
government committed an act that falls under the category of grave abuse of discretion amounting to lack or excess of jurisdiction. 25

Next, petitioner cites Batas Pambansa Blg. 129 or the Judiciary Reorganization Act of 198026 where it is therein provided that the Intermediate Appellate Court (now,
Court of Appeals) shall exercise the "exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders or awards, of the Regional Trial Courts and
Quasi-Judicial agencies, instrumentalities, boards or commissions, except those falling within the jurisdiction of the Supreme Court in accordance with the
Constitution"27 and contends that the Regional Trial Court has no jurisdiction to rule over awards made by the NHA.
Well-within its jurisdiction, the Court of Appeals, in its decision of August 28, 2003, already ruled that the issue of the trial court's authority to hear and decide the
instant case has already been settled in the decision of the Court of Appeals dated June 26, 1989 (which has become final and executory on August 20, 1989 as per
entry of judgment dated October 10, 1989).28 We find no reason to disturb this ruling. Courts are duty-bound to put an end to controversies. The system of judicial
review should not be misused and abused to evade the operation of a final and executory judgment.29 The appellate court's decision becomes the law of the case
which must be adhered to by the parties by reason of policy.30
Next, petitioner NHA contends that its resolution was grounded on meritorious grounds when it considered the application for the purchase of lots. Petitioner argues
that it was the daughter Francisca Herrera who filed her application on the subject lot; that it considered the respective application and inquired whether she had all
the qualifications and none of the disqualifications of a possible awardee. It is the position of the petitioner that private respondent possessed all the qualifications
and none of the disqualifications for lot award and hence the award was not done arbitrarily.
The petitioner further argues that assuming that the "Sinumpaang Salaysay" was a will, it could not bind the NHA. 31 That, "insofar as [the] NHA is concerned, it is an
evidence that the subject lots were indeed transferred by Margarita Herrera, the original awardee, to Francisca Herrera was then applying to purchase the same
before it."32
We are not impressed. When the petitioner received the "Sinumpaang Salaysay," it should have noted that the effectivity of the said document commences at the
time of death of the author of the instrument; in her words "sakaling ako'y bawian na ng Dios ng aking buhay" Hence, in such period, all the interests of the person
should cease to be hers and shall be in the possession of her estate until they are transferred to her heirs by virtue of Article 774 of the Civil Code which provides
that:
Art. 774. Succession is a mode of acquisition by virtue of which the property, rights and obligations to the extent of the value of the inheritance, of a
person are transmitted through his death to another or others either by his will or by operation of law.33
By considering the document, petitioner NHA should have noted that the original applicant has already passed away. Margarita Herrera passed away on October 27,
1971.34 The NHA issued its resolution35 on February 5, 1986. The NHA gave due course to the application made by Francisca Herrera without considering that the
initial applicant's death would transfer all her property, rights and obligations to the estate including whatever interest she has or may have had over the disputed
properties. To the extent of the interest that the original owner had over the property, the same should go to her estate. Margarita Herrera had an interest in the
property and that interest should go to her estate upon her demise so as to be able to properly distribute them later to her heirsin accordance with a will or by
operation of law.
The death of Margarita Herrera does not extinguish her interest over the property. Margarita Herrera had an existing Contract to Sell 36 with NHA as the seller. Upon
Margarita Herrera's demise, this Contract to Sell was neither nullified nor revoked. This Contract to Sell was an obligation on both partiesMargarita Herrera and
NHA. Obligations are transmissible.37 Margarita Herrera's obligation to pay became transmissible at the time of her death either by will or by operation of law.
If we sustain the position of the NHA that this document is not a will, then the interests of the decedent should transfer by virtue of an operation of law and not by
virtue of a resolution by the NHA. For as it stands, NHA cannot make another contract to sell to other parties of a property already initially paid for by the decedent.
Such would be an act contrary to the law on succession and the law on sales and obligations.38
When the original buyer died, the NHA should have considered the estate of the decedent as the next "person"39likely to stand in to fulfill the obligation to pay the rest
of the purchase price. The opposition of other heirs to the repurchase by Francisca Herrera should have put the NHA on guard as to the award of the lots. Further,
the Decision in the said Civil Case No. B-1263 (questioning the Deed of Self-Adjudication) which rendered the deed therein null and void40 should have alerted the
NHA that there are other heirs to the interests and properties of the decedent who may claim the property after a testate or intestate proceeding is concluded. The
NHA therefore acted arbitrarily in the award of the lots.
We need not delve into the validity of the will. The issue is for the probate court to determine. We affirm the Court of Appeals and the Regional Trial Court which
noted that it has an element of testamentary disposition where (1) it devolved and transferred property; (2) the effect of which shall transpire upon the death of the
instrument maker.41
IN VIEW WHEREOF, the petition of the National Housing Authority is DENIED. The decision of the Court of Appeals in CA-G.R. No. 68370 dated August 28, 2003,
affirming the decision of the Regional Trial Court of San Pedro, Laguna in Civil Case No. B-2780 dated March 9, 1998, is hereby AFFIRMED.
No cost.
SO ORDERED.

G.R. No. 84450

February 4, 1991

PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. GLORIA UMALI y AMADO AND SUZETH UMALI y AMADO, defendants-appellants.
MEDIALDEA, J.: In Criminal Case No. 85-473 of the Regional Trial Court, Branch 53, Lucena City, Gloria Umali and Suzeth Umali were charged for violation of
Section 4, Article 1 of the Dangerous Drugs Act of 1972 under an information which reads:
That on or about the 22nd day of April, 1985, at Recto Street, Poblacion, Municipality of Tiaong, Province of Quezon, Philippines, and within the
jurisdiction of this Honorable Court, the abovenamed accused, conspiring and confederating together and mutually helping each other, did then and there

willfully, unlawfully and feloniously sell, deliver and give marijuana or Indian Hemp, a prohibited drug to one Francisco Manalo y Arellano, without authority
of law. Contrary to law. (Rollo, pp. 7-8)
Upon arraignment, Gloria Umali entered a plea of "not, guilty" as accused Suzeth Umali remained at large. After trial, the lower court rendered a decision on
September 9, 1987, the dispositive portion thereof states:
WHEREFORE, premises considered, this Court finds accused Gloria Umali guilty beyond reasonable doubt of violating Sec. 4, Art. 1 (sic) of RA 6425 as
amended, otherwise known as the Dangerous Drugs Act of 1972, and is hereby sentenced to suffer the penalty of Reclusion Perpetua. Accused being a
detention prisoner is entitled to enjoy the privileges of her preventive imprisonment. The case against Suzeth Umali, her co-accused in this case is hereby
ordered ARCHIVED to be revived until the arrest of said accused is effected. The warrant of arrest issued against her is hereby ordered reiterated. SO
ORDERED. (Rollo, p. 30)
Hence, this appeal from the lower court's decision with the following assignment of errors:
I
THE COURT A QUO GRAVELY ERRED IN GIVING WEIGHT AND CREDENCE TO THE BIASED TESTIMONY OF FRANCISCO MANALO
II
THE COURT A QUO GRAVELY ERRED IN ADMITTING THE PROSECUTION'S EVIDENCE WHICH WERE OBTAINED IN VIOLATION OF ACCUSED'S CONSTITUTIONAL RIGHTS AGAINST
ILLEGAL SEARCH AND SEIZURE
III
THE COURT A QUO GRAVELY ERRED IN DECLARING THAT ACCUSED NEVER DISPUTED THE CLAIM THAT SHE WAS THE SOURCE OF MARIJUANA LEAVES FOUND IN THE
POSSESSION OF FRANCISCO MANALO ON APRIL 5, 1985 AND THAT WHICH WAS USED BY PIERRE PANGAN RESULTING TO THE LATTER'S DRUG DEPENDENCY
IV
THE COURT A QUO GRAVELY ERRED IN FINDING ACCUSED GLORIA 1, GUILTY OF VIOLATION OF DANGEROUS DRUGS ACT OF 1972 ON THE BASIS OF MERE CONJECTURES AND
NOT ON FACTS AND CIRCUMSTANCES PROVEN
V
THE COURT A QUO GRAVELY ERRED IN NOT FINDING THAT THE GUILT OF THE ACCUSED DID NOT PASS THE TEST OF MORAL CERTAINTY. (Rollo, p. 49)

The antecedent facts of this case as recounted by the trial court are as follows:
On April 27, 1985 Pierre Pangan a minor was investigated by Pat. Felino Noguerra for drug dependency and for an alleged crime of robbery. In the course of the investigation, the
policemen discovered that Pierre Pangan was capable of committing crime against property, only if under the influence of drug (sic). As Pierre Pangan is a minor, the police investigators
sought the presence of his parents. Leopoldo Pangan, father of the minor was invited to the police headquarters and was informed about the problem of his son. Mr. Pangan asked the
police investigators if something could be done to determine the source of the marijuana which has not only socially affected his son, but other minors in the community. Previous to the
case of Pierre Pangan was the case of Francisco Manalo, who was likewise investigated by operatives of the Tiaong, Quezon Police Department and for which a case for violation of the
Dangerous Drug Act was filed against him, covered by Criminal Case No. 85-516 before Branch 60 of the Regional Trial Court of Lucena City. Aside from said case, accused Francisco
Manalo was likewise facing other charges such as concealment of deadly weapon and other crimes against property. Pat. Felino Noguerra went to the Tiaong Municipal Jail, and sought
the help of Francisco Manalo and told him the social and pernicious effect of prohibited drugs like marijuana being peddled to minors of Tiaong, Quezon. Manalo although a detention
prisoner was touched by the appeal made to him by the policeman and agreed to help in the identification of the source of the marijuana. In return he asked the policeman to help him in
some cases pending against him. He did not negotiate his case for violating the dangerous drug act, as he has entered a plea of guilty to the charged (sic) before the sala of Judge
Eriberto Rosario.
With the consent of Francisco Manalo, Pfc. Sarmiento, Chief of the Investigation Division gave him four (4) marked P5.00 bills to buy marijuana from sources known to him. The serial
numbers of the money was entered in the police blotter. The instruction was (sic) for Manalo to bring back the prohibited drug purchased by him to the police headquarters. Few minutes
there after (sic), Manalo returned with two (2) foils of dried marijuana which lie allegedly bought from the accused Gloria Umali. Thereafter, he was asked by the police investigators to
give a statement on the manner and circumstances of how he was able to purchase two (2) marijuana foils from accused Gloria Umali. With the affidavit of Francisco Manalo, supported
by the two (2) foils of marijuana. the Chief of the Investigation Division petitioned the Court for the issuance of a search warrant as a justification for them to search the house of Gloria
Umali located at Rector (sic) Street. Poblacion, Tiaong, Quezon. After securing the same, the police operatives, went to the house of Gloria Umali and served the search warrant on her.
Confiscated from the person of Gloria Umali were the four P5.00 bills with serial numbers BA26943, DT388005, CC582000 and EW69873, respectively as reflected in the police blotter.
Likewise, present in the four (4) P5.00 bills were the letters T which were placed by the police investigators to further identify the marked four (4) P5.00 bills. The searched (sic) in the
house was made in the presence of Brgy. Capt. Punzalan. The search resulted in the confiscation of a can of milo, containing sixteen (16) foils of dried marijuana leaves which were
placed in a tupperware and kept in the kitchen where rice was being stored. The return of the search warrant reads as follows:
DATE: 22 April 1985
WHAT: "RAID"
WHERE: Residence of Dr. Emiliano Umali
Poblacion, Tiaong, Quezon
WHO: MBRS. OF TIAONG INP
TIME STARTED/ARRIVED AT SAID PLACE:
221410H Apr '85

SERVED TO: MRS. GLORIA UMALI

MR. EMILIANO UMALI
PERSON APPREHENDED/PROPERTY
SEIZED/RECOVERED
Mrs. Gloria Umali 16 Aluminum Foils
of
Mr. Emiliano Umali Suspected
Marijuana leaves

TIME/DATE LEFT SAID PLACE: 221450H Apr '85

WITNESSES (sic) BY:
1. (Sgd) Reynaldo S. Pasumbal
2. (Sgd) Luisabel P. Punzalan
3. (Sgd) Arnulfo C. Veneracion
4. (Sgd) Isidro C. Capino

Samples of the marijuana leaves confiscated were submitted to the PC Came Laboratory for examination. Capt. Rosalinda Royales of the PC crime
Laboratory took the witness stand, testified and identified the marijuana submitted to her and in a written report which was marked as Exhibit "G" she gave
the following findings:
Qualitative examination conducted on the specimen mentioned above gave POSITIVE result to the tests fur marijuana.
In Criminal Case No. 85-516, Francisco Manalo was charged of having in his possession Indian Hemp on April 5, 1985, in violation of Section 8, Article 11
of Republic Act 6425 as amended, otherwise as the Dangerous Drugs Act of 1972. The Court in rendering against him disposed the case as follows:
In view of the foregoing, the Court hereby finds the accused Guilty beyond reasonable doubt of the crime of illegal possession of "Indian Hemp"
penalized under Sec. 8 of Article 6425 (sic); as amended otherwise known as the Dangerous Drugs Act of 1972 and the Court hereby
sentences him to suffer an imprisonment of two (2) years and four (4) months of prision correccional to six (6) years and one (1) day of Prision
Mayor and to pay a fine of Six Thousand Pesos (P6,000.00). Let the period of detention of the accused be credited to his sentence.
Accused never disputed the claim of Francisco Manalo that the marijuana found in his possession on April 5, 1985 in the municipality of Tiaong, Quezon
was sold to him by the accused Gloria Umali. The defense also did not dispute the claim of the prosecution that in the investigation of Pierre Pangan, the
police investigator came to know that Gloria Umali was the source of the marijuana leaves which he used and smoked resulting in his present drug
dependency. (Rollo, pp. 22-27)
The appellant vehemently denied the findings of the lower court and insisted that said court committed reversible errors in convicting her. She alleged that witness
Francisco Manalo is not reputed to be trustworthy and reliable and that his words should not be taken on its face value. Furthermore, he stressed that said witness
has several charges in court and because of his desire to have some of his cases dismissed, he was likely to tell falsehood.

However, the plaintiff-appellee through the Solicitor General said that even if Francisco Manalo was then facing several criminal charges when he testified, such fact
did not in any way disqualify him as a witness. "His testimony is not only reasonable and probable but more so, it was also corroborated in its material respect by the
other prosecution witnesses, especially the police officers." (Rollo, pp. 83-84)
The appellant also claimed that the marked money as well as the marijuana were confiscated for no other purpose than using them as evidence against the accused
in the proceeding for violation of Dangerous Drugs Act and therefore the search warrant issued is illegal from the very beginning. She stressed that there can be no
other plausible explanation other than that she was a victim of a frame-up.
In relation to this contention, the Solicitor General noted that it is not true that the evidences submitted by the prosecution were obtained in violation of her
constitutional right against illegal search and seizure.
Furthermore, the appellant contended that the essential elements of the crime of which she was charged were never established by clear and convincing evidence to
warrant the findings of the court a quo. She also stressed that the court's verdict of conviction is merely based on surmises and conjectures.
However, the Solicitor General noted that the positive and categorical testimonies of the prosecution witnesses who had personal knowledge of the happening
together with the physical evidence submitted clearly prove the guilt beyond reasonable doubt of accused-appellant for violation of the Dangerous Drugs Act.
Time and again, it is stressed that this Court is enjoined from casually modifying or rejecting the trial court's factual findings. Such factual findings, particularly the trial
judge's assessment of the credibility of the testimony of the witnesses are accorded with great respect on appeal for the trial judge enjoys the advantage of directly
and at first hand observing and examining the testimonial and other proofs as they are presented at the trial and is therefore better situated to form accurate
impressions and conclusions on the basis thereof (See People v. Bravo, G.R. No. 68422, 29 December, 1989,180 SCRA 694,699). The findings of the trial court are
entitled to great weight, and should not be disturbed on appeal unless it is shown that the trial court had overlooked certain facts of weight and importance, it being
acknowledged that the court below, having seen and heard the witnesses during the trial, is in a better position to evaluate their testimonies (People v. Alverez y
Soriano, G.R. No. 70831, 29 July 1988, 163 SCRA 745, 249; People v. Dorado, G.R. No. L-23464, October 31, 1969, 30 SCRA 53; People v. Espejo, G.R. No. L27708, December 19, 1970, 36 SCRA 400). Hence, in the absence of any showing that the trial court had overlooked certain substantial facts, said factual findings
are entitled to great weight, and indeed are binding even on this Court.
Rule 130, Section 20 of the Revised Rules of Court provides that:
Except as provided in the next succeeding section, all persons who can perceive, and perceiving can make known their perception to others may be witnesses.
Religious or political belief, interest in the outcome of the case, or conviction of a crime unless otherwise provided by law, shall not be a ground for disqualification.
The phrase "conviction of a crime unless otherwise provided by law" takes into account Article 821 of the Civil Code which states that persons 91 convicted of falsification of a document,
perjury or false testimony" are disqualified from being witnesses to a will." (Paras, RULES OF COURT ANNOTATED, Vol. IV First Ed., p. 44)
Since the witness Francisco Manalo is not convicted of any of the above-mentioned crimes to disqualify him as a witness and this case does not involve the probate of a will, We rule that
the fact that said witness is facing several criminal charges when he testified did not in any way disqualify him as a witness.
The testimony of a witness should be given full faith and credit, in the absence of evidence that he was actuated by improper motive (People v. Melgar, G.R. No. 75268,29 January 1988,
157 SCRA 718). Hence, in the absence of any evidence that witness Francisco Manalo was actuated by improper motive, his testimony must be accorded full credence.
Appellant's contention that she was a victim of a "frame-up" is devoid of merit.1wphi1 "Courts must be vigilant. A handy defense in such cases is that it is a frame-up and that the police
attempted to extort from the accused. Extreme caution must be exercised in appreciating such defense. It is just as easy to concoct as a frame-up. At all times the police, the prosecution
and the Courts must be always on guard against these hazards in the administration of criminal justice." (People v. Rojo, G.R. No. 82737, 5 July 1989, 175 SCRA 119)
The appellant's allegation that the search warrant is illegal cannot also be given any merit. "Where marked peso bills were seized by the police as a result of the search made on the
appellant, the admissibility of these marked peso bills hinges on the legality of the arrest and search on the person of the appellant" (People v. Paco, G.R. No. 76893, 27 February 1989,
170 SCRA 681). Since the search is predicated on a valid search warrant, absent any showing that such was procured maliciously the things seized are admissible in evidence.
Appellant argues that the lower court's verdict is based on surmises and conjectures, hence the essential elements of the crime were never established by clear and convincing evidence.
Conviction cannot be predicated on a presumption or speculation. A conviction for a criminal offense must be based on clear and positive evidence and not on mere presumptions
(Gaerlan v. Court of Appeals, G.R. No. 57876, 6 November 1989, 179 SCRA 20). The prosecution's evidence consisted of the testimony of witness Manalo and the law enforcers as well
as the physical evidence consisting of the seized marked peso bills, the two (2) foils of marijuana purchased and the can containing sixteen (16) aluminum foils of dried marijuana.
Credence is accorded to the prosecution's evidence more so as it consisted mainly of testimonies of policemen. Law enforcers are presumed to have regularly performed their duty in the
absence of proof to the contrary (People v. Tejada, G.R. No. 81520, 21 February 1989, 170 SCRA 497). Hence, in the absence of proof to the contrary, full credence should be accorded
to the prosecution's evidence. The evidence on record sufficiently established that Umali gave two (2) foils of marijuana to witness Manalo for which she was given and received four (4)
marked five peso (P5.00) bills, and fully supports conviction for drug pushing in violation of Section 4 Article II of the Dangerous Drugs Act.
Thus, the Court has no option but to declare that the trial court did not err in finding, on the basis of the evidence on record, that the accused-appellant Gloria Umali violated Section 4,
Article II of the Dangerous Drugs Act.
Pursuant to recent jurisprudence and law, the case is covered by Section 4 of Republic Act No. 6425 as amended by Presidential Decree No. 1675, effective February 17, 1980, which
raised the penalty for selling prohibited drugs from life imprisonment to death and a fine ranging from twenty to thirty thousand pesos (People v. Adriano, G.R. No. 65349, October 31,
1984, 133 SCRA 132) Thus, the trial court correctly imposed the penalty of life imprisonment but failed to impose a fine.
ACCORDINGLY, the appealed decision is AFFIRMED with the modification that a fine of twenty thousand pesos (P20,000.00) be imposed, as it is hereby imposed, on the accusedappellant. SO ORDERED.

[G.R. No. 126334. November 23, 2001]

EMILIO EMNACE, petitioner, vs. COURT OF APPEALS, ESTATE OF VICENTE TABANAO, SHERWIN TABANAO, VICENTE WILLIAM TABANAO, JANETTE
TABANAO DEPOSOY, VICENTA MAY TABANAO VARELA, ROSELA TABANAO and VINCENT TABANAO, respondents.
DECISION
YNARES-SANTIAGO, J.:
Petitioner Emilio Emnace, Vicente Tabanao and Jacinto Divinagracia were partners in a business concern known as Ma. Nelma Fishing Industry. Sometime in
January of 1986, they decided to dissolve their partnership and executed an agreement of partition and distribution of the partnership properties among them,

consequent to Jacinto Divinagracias withdrawal from the partnership.[1] Among the assets to be distributed were five (5) fishing boats, six (6) vehicles, two (2) parcels
of land located at Sto. Nio and Talisay, Negros Occidental, and cash deposits in the local branches of the Bank of the Philippine Islands and Prudential Bank.
Throughout the existence of the partnership, and even after Vicente Tabanaos untimely demise in 1994, petitioner failed to submit to Tabanaos heirs any
statement of assets and liabilities of the partnership, and to render an accounting of the partnerships finances. Petitioner also reneged on his promise to turn over to
Tabanaos heirs the deceaseds 1/3 share in the total assets of the partnership, amounting to P30,000,000.00, or the sum of P10,000,000.00, despite formal demand
for payment thereof.[2]
Consequently, Tabanaos heirs, respondents herein, filed against petitioner an action for accounting, payment of shares, division of assets and damages. [3] In
their complaint, respondents prayed as follows:
1. Defendant be ordered to render the proper accounting of all the assets and liabilities of the partnership at bar; and
2. After due notice and hearing defendant be ordered to pay/remit/deliver/surrender/yield to the plaintiffs the following:
A. No less than One Third (1/3) of the assets, properties, dividends, cash, land(s), fishing vessels, trucks, motor vehicles, and other forms and substance of treasures
which belong and/or should belong, had accrued and/or must accrue to the partnership;
B. No less than Two Hundred Thousand Pesos (P200,000.00) as moral damages;
C. Attorneys fees equivalent to Thirty Percent (30%) of the entire share/amount/award which the Honorable Court may resolve the plaintiffs as entitled to plus
P1,000.00 for every appearance in court.[4]
Petitioner filed a motion to dismiss the complaint on the grounds of improper venue, lack of jurisdiction over the nature of the action or suit, and lack of
capacity of the estate of Tabanao to sue. [5] On August 30, 1994, the trial court denied the motion to dismiss. It held that venue was properly laid because, while
realties were involved, the action was directed against a particular person on the basis of his personal liability; hence, the action is not only a personal action but also
an action in personam. As regards petitioners argument of lack of jurisdiction over the action because the prescribed docket fee was not paid considering the huge
amount involved in the claim, the trial court noted that a request for accounting was made in order that the exact value of the partnership may be ascertained and,
thus, the correct docket fee may be paid. Finally, the trial court held that the heirs of Tabanao had a right to sue in their own names, in view of the provision of Article
777 of the Civil Code, which states that the rights to the succession are transmitted from the moment of the death of the decedent. [6]
The following day, respondents filed an amended complaint,[7] incorporating the additional prayer that petitioner be ordered to sell all (the partnerships) assets
and thereafter pay/remit/deliver/surrender/yield to the plaintiffs their corresponding share in the proceeds thereof. In due time, petitioner filed a manifestation and
motion to dismiss,[8] arguing that the trial court did not acquire jurisdiction over the case due to the plaintiffs failure to pay the proper docket fees. Further, in a
supplement to his motion to dismiss,[9] petitioner also raised prescription as an additional ground warranting the outright dismissal of the complaint.
On June 15, 1995, the trial court issued an Order, [10] denying the motion to dismiss inasmuch as the grounds raised therein were basically the same as the
earlier motion to dismiss which has been denied. Anent the issue of prescription, the trial court ruled that prescription begins to run only upon the dissolution of the
partnership when the final accounting is done. Hence, prescription has not set in the absence of a final accounting. Moreover, an action based on a written contract
prescribes in ten years from the time the right of action accrues.
Petitioner filed a petition for certiorari before the Court of Appeals,[11] raising the following issues:
I. Whether or not respondent Judge acted without jurisdiction or with grave abuse of discretion in taking cognizance of a case despite the failure to pay
the required docket fee;
II. Whether or not respondent Judge acted without jurisdiction or with grave abuse of discretion in insisting to try the case which involve (sic) a parcel of
land situated outside of its territorial jurisdiction;
III. Whether or not respondent Judge acted without jurisdiction or with grave abuse of discretion in allowing the estate of the deceased to appear as
party plaintiff, when there is no intestate case and filed by one who was never appointed by the court as administratrix of the estates; and
IV. Whether or not respondent Judge acted without jurisdiction or with grave abuse of discretion in not dismissing the case on the ground of prescription.
On August 8, 1996, the Court of Appeals rendered the assailed decision, [12] dismissing the petition for certiorari, upon a finding that no grave abuse of
discretion amounting to lack or excess of jurisdiction was committed by the trial court in issuing the questioned orders denying petitioners motions to dismiss.
Not satisfied, petitioner filed the instant petition for review, raising the same issues resolved by the Court of Appeals, namely:
I. Failure to pay the proper docket fee;
II. Parcel of land subject of the case pending before the trial court is outside the said courts territorial jurisdiction;
III. Lack of capacity to sue on the part of plaintiff heirs of Vicente Tabanao; and
IV. Prescription of the plaintiff heirs cause of action.
It can be readily seen that respondents primary and ultimate objective in instituting the action below was to recover the decedents 1/3 share in the partnerships
assets. While they ask for an accounting of the partnerships assets and finances, what they are actually asking is for the trial court to compel petitioner to pay and
turn over their share, or the equivalent value thereof, from the proceeds of the sale of the partnership assets. They also assert that until and unless a proper
accounting is done, the exact value of the partnerships assets, as well as their corresponding share therein, cannot be ascertained. Consequently, they feel justified
in not having paid the commensurate docket fee as required by the Rules of Court.
We do not agree. The trial court does not have to employ guesswork in ascertaining the estimated value of the partnerships assets, for respondents
themselves voluntarily pegged the worth thereof at Thirty Million Pesos (P30,000,000.00). Hence, this case is one which is really not beyond pecuniary estimation,
but rather partakes of the nature of a simple collection case where the value of the subject assets or amount demanded is pecuniarily determinable. [13] While it is true
that the exact value of the partnerships total assets cannot be shown with certainty at the time of filing, respondents can and must ascertain, through informed and
practical estimation, the amount they expect to collect from the partnership, particularly from petitioner, in order to determine the proper amount of docket and other
fees.[14] It is thus imperative for respondents to pay the corresponding docket fees in order that the trial court may acquire jurisdiction over the action. [15]
Nevertheless, unlike in the case of Manchester Development Corp. v. Court of Appeals, [16] where there was clearly an effort to defraud the government in
avoiding to pay the correct docket fees, we see no attempt to cheat the courts on the part of respondents. In fact, the lower courts have noted their expressed desire
to remit to the court any payable balance or lien on whatever award which the Honorable Court may grant them in this case should there be any deficiency in the
payment of the docket fees to be computed by the Clerk of Court. [17] There is evident willingness to pay, and the fact that the docket fee paid so far is inadequate is
not an indication that they are trying to avoid paying the required amount, but may simply be due to an inability to pay at the time of filing. This consideration may
have moved the trial court and the Court of Appeals to declare that the unpaid docket fees shall be considered a lien on the judgment award.

Petitioner, however, argues that the trial court and the Court of Appeals erred in condoning the non-payment of the proper legal fees and in allowing the same
to become a lien on the monetary or property judgment that may be rendered in favor of respondents. There is merit in petitioners assertion. The third paragraph of
Section 16, Rule 141 of the Rules of Court states that:
The legal fees shall be a lien on the monetary or property judgment in favor of the pauper-litigant.
Respondents cannot invoke the above provision in their favor because it specifically applies to pauper-litigants. Nowhere in the records does it appear that
respondents are litigating as paupers, and as such are exempted from the payment of court fees.[18]
The rule applicable to the case at bar is Section 5(a) of Rule 141 of the Rules of Court, which defines the two kinds of claims as: (1) those which are
immediately ascertainable; and (2) those which cannot be immediately ascertained as to the exact amount. This second class of claims, where the exact amount still
has to be finally determined by the courts based on evidence presented, falls squarely under the third paragraph of said Section 5(a), which provides:
In case the value of the property or estate or the sum claimed is less or more in accordance with the appraisal of the court, the difference of fee shall be refunded or
paid as the case may be.(Underscoring ours)
In Pilipinas Shell Petroleum Corporation v. Court of Appeals, [19] this Court pronounced that the above-quoted provision clearly contemplates an initial payment
of the filing fees corresponding to the estimated amount of the claim subject to adjustment as to what later may be proved. [20] Moreover, we reiterated therein the
principle that the payment of filing fees cannot be made contingent or dependent on the result of the case. Thus, an initial payment of the docket fees based on an
estimated amount must be paid simultaneous with the filing of the complaint.Otherwise, the court would stand to lose the filing fees should the judgment later turn out
to be adverse to any claim of the respondent heirs.
The matter of payment of docket fees is not a mere triviality. These fees are necessary to defray court expenses in the handling of cases. Consequently, in
order to avoid tremendous losses to the judiciary, and to the government as well, the payment of docket fees cannot be made dependent on the outcome of the case,
except when the claimant is a pauper-litigant.
Applied to the instant case, respondents have a specific claim 1/3 of the value of all the partnership assets but they did not allege a specific amount. They did,
however, estimate the partnerships total assets to be worth Thirty Million Pesos (P30,000,000.00), in a letter [21] addressed to petitioner. Respondents cannot now say
that they are unable to make an estimate, for the said letter and the admissions therein form part of the records of this case. They cannot avoid paying the initial
docket fees by conveniently omitting the said amount in their amended complaint.This estimate can be made the basis for the initial docket fees that respondents
should pay. Even if it were later established that the amount proved was less or more than the amount alleged or estimated, Rule 141, Section 5(a) of the Rules of
Court specifically provides that the court may refund the excess or exact additional fees should the initial payment be insufficient. It is clear that it is only the
difference between the amount finally awarded and the fees paid upon filing of this complaint that is subject to adjustment and which may be subjected to a lien.
In the oft-quoted case of Sun Insurance Office, Ltd. v. Hon. Maximiano Asuncion,[22] this Court held that when the specific claim has been left for the
determination by the court, the additional filing fee therefor shall constitute a lien on the judgment and it shall be the responsibility of the Clerk of Court or his duly
authorized deputy to enforce said lien and assess and collect the additional fee. Clearly, the rules and jurisprudence contemplate the initial payment of filing and
docket fees based on the estimated claims of the plaintiff, and it is only when there is a deficiency that a lien may be constituted on the judgment award until such
additional fee is collected.
Based on the foregoing, the trial court erred in not dismissing the complaint outright despite their failure to pay the proper docket fees. Nevertheless, as in
other procedural rules, it may be liberally construed in certain cases if only to secure a just and speedy disposition of an action. While the rule is that the payment of
the docket fee in the proper amount should be adhered to, there are certain exceptions which must be strictly construed. [23]
In recent rulings, this Court has relaxed the strict adherence to the Manchester doctrine, allowing the plaintiff to pay the proper docket fees within a reasonable
time before the expiration of the applicable prescriptive or reglementary period.[24]
In the recent case of National Steel Corp. v. Court of Appeals,[25] this Court held that:
The court acquires jurisdiction over the action if the filing of the initiatory pleading is accompanied by the payment of the requisite fees, or, if the fees are not paid at
the time of the filing of the pleading, as of the time of full payment of the fees within such reasonable time as the court may grant, unless, of course, prescription has
set in the meantime.
It does not follow, however, that the trial court should have dismissed the complaint for failure of private respondent to pay the correct amount of docket
fees. Although the payment of the proper docket fees is a jurisdictional requirement, the trial court may allow the plaintiff in an action to pay the same within a
reasonable time before the expiration of the applicable prescriptive or reglementary period. If the plaintiff fails to comply within this requirement, the defendant should
timely raise the issue of jurisdiction or else he would be considered in estoppel. In the latter case, the balance between the appropriate docket fees and the amount
actually paid by the plaintiff will be considered a lien or any award he may obtain in his favor. (Underscoring ours)
Accordingly, the trial court in the case at bar should determine the proper docket fee based on the estimated amount that respondents seek to collect from
petitioner, and direct them to pay the same within a reasonable time, provided the applicable prescriptive or reglementary period has not yet expired. Failure to
comply therewith, and upon motion by petitioner, the immediate dismissal of the complaint shall issue on jurisdictional grounds.
On the matter of improper venue, we find no error on the part of the trial court and the Court of Appeals in holding that the case below is a personal action
which, under the Rules, may be commenced and tried where the defendant resides or may be found, or where the plaintiffs reside, at the election of the latter. [26]
Petitioner, however, insists that venue was improperly laid since the action is a real action involving a parcel of land that is located outside the territorial
jurisdiction of the court a quo. This contention is not well-taken. The records indubitably show that respondents are asking that the assets of the partnership be
accounted for, sold and distributed according to the agreement of the partners. The fact that two of the assets of the partnership are parcels of land does not
materially change the nature of the action. It is an action in personam because it is an action against a person, namely, petitioner, on the basis of his personal
liability. It is not an action in rem where the action is against the thing itself instead of against the person. [27] Furthermore, there is no showing that the parcels of land
involved in this case are being disputed. In fact, it is only incidental that part of the assets of the partnership under liquidation happen to be parcels of land.
The time-tested case of Claridades v. Mercader, et al.,[28] settled this issue thus:
The fact that plaintiff prays for the sale of the assets of the partnership, including the fishpond in question, did not change the nature or character of the action, such
sale being merely a necessary incident of the liquidation of the partnership, which should precede and/or is part of its process of dissolution.
The action filed by respondents not only seeks redress against petitioner. It also seeks the enforcement of, and petitioners compliance with, the contract that
the partners executed to formalize the partnerships dissolution, as well as to implement the liquidation and partition of the partnerships assets. Clearly, it is a personal
action that, in effect, claims a debt from petitioner and seeks the performance of a personal duty on his part. [29] In fine, respondents complaint seeking the liquidation
and partition of the assets of the partnership with damages is a personal action which may be filed in the proper court where any of the parties reside. [30] Besides,

venue has nothing to do with jurisdiction for venue touches more upon the substance or merits of the case. [31] As it is, venue in this case was properly laid and the
trial court correctly ruled so.
On the third issue, petitioner asserts that the surviving spouse of Vicente Tabanao has no legal capacity to sue since she was never appointed as
administratrix or executrix of his estate.Petitioners objection in this regard is misplaced. The surviving spouse does not need to be appointed as executrix or
administratrix of the estate before she can file the action. She and her children are complainants in their own right as successors of Vicente Tabanao. From the very
moment of Vicente Tabanaos death, his rights insofar as the partnership was concerned were transmitted to his heirs, for rights to the succession are transmitted
from the moment of death of the decedent.[32]
Whatever claims and rights Vicente Tabanao had against the partnership and petitioner were transmitted to respondents by operation of law, more particularly
by succession, which is a mode of acquisition by virtue of which the property, rights and obligations to the extent of the value of the inheritance of a person are
transmitted.[33] Moreover, respondents became owners of their respective hereditary shares from the moment Vicente Tabanao died. [34]
A prior settlement of the estate, or even the appointment of Salvacion Tabanao as executrix or administratrix, is not necessary for any of the heirs to acquire
legal capacity to sue. As successors who stepped into the shoes of their decedent upon his death, they can commence any action originally pertaining to the
decedent.[35] From the moment of his death, his rights as a partner and to demand fulfillment of petitioners obligations as outlined in their dissolution agreement were
transmitted to respondents. They, therefore, had the capacity to sue and seek the courts intervention to compel petitioner to fulfill his obligations.
Finally, petitioner contends that the trial court should have dismissed the complaint on the ground of prescription, arguing that respondents action prescribed
four (4) years after it accrued in 1986. The trial court and the Court of Appeals gave scant consideration to petitioners hollow arguments, and rightly so.
The three (3) final stages of a partnership are: (1) dissolution; (2) winding-up; and (3) termination. [36] The partnership, although dissolved, continues to exist
and its legal personality is retained, at which time it completes the winding up of its affairs, including the partitioning and distribution of the net partnership assets to
the partners.[37] For as long as the partnership exists, any of the partners may demand an accounting of the partnerships business. Prescription of the said right starts
to run only upon the dissolution of the partnership when the final accounting is done.[38]
Contrary to petitioners protestations that respondents right to inquire into the business affairs of the partnership accrued in 1986, prescribing four (4) years
thereafter, prescription had not even begun to run in the absence of a final accounting. Article 1842 of the Civil Code provides:
The right to an account of his interest shall accrue to any partner, or his legal representative as against the winding up partners or the surviving partners or the
person or partnership continuing the business, at the date of dissolution, in the absence of any agreement to the contrary.
Applied in relation to Articles 1807 and 1809, which also deal with the duty to account, the above-cited provision states that the right to demand an accounting
accrues at the date of dissolution in the absence of any agreement to the contrary. When a final accounting is made, it is only then that prescription begins to run. In
the case at bar, no final accounting has been made, and that is precisely what respondents are seeking in their action before the trial court, since petitioner has failed
or refused to render an accounting of the partnerships business and assets. Hence, the said action is not barred by prescription.
In fine, the trial court neither erred nor abused its discretion when it denied petitioners motions to dismiss. Likewise, the Court of Appeals did not commit
reversible error in upholding the trial courts orders. Precious time has been lost just to settle this preliminary issue, with petitioner resurrecting the very same
arguments from the trial court all the way up to the Supreme Court.The litigation of the merits and substantial issues of this controversy is now long overdue and must
proceed without further delay.
WHEREFORE, in view of all the foregoing, the instant petition is DENIED for lack of merit, and the case is REMANDED to the Regional Trial Court of Cadiz
City, Branch 60, which is ORDERED to determine the proper docket fee based on the estimated amount that plaintiffs therein seek to collect, and direct said plaintiffs
to pay the same within a reasonable time, provided the applicable prescriptive or reglementary period has not yet expired. Thereafter, the trial court is ORDERED to
conduct the appropriate proceedings in Civil Case No. 416-C.
Costs against petitioner.
SO ORDERED.

SPS. VIRGILIO F. SANTOS & ESPERANZA LATI SANTOS, SPS.VICTORINO F. SANTOS, & LAGRIMAS SANTOS, ERNESTO F. SANTOS, and TADEO F.
SANTOS,
Petitioners, - versus - SPS. JOSE LUMBAO and PROSERFINA LUMBAO, Respondents.
G.R. No. 169129/Promulgated: March 28, 2007
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
CHICO-NAZARIO, J.:

Before this Court is a Petition for Review on Certiorari under Rule 45 of the 1997 Revised Rules of Civil Procedure seeking to annul and set aside the Decision [1]and
Resolution[2] of the Court of Appeals in CA-G.R. CV No. 60450 entitled, Spouses Jose Lumbao and Proserfina Lumbao v. Spouses Virgilio F. Santos and Esperanza
Lati, Spouses Victorino F. Santos and Lagrimas F. Santos, Ernesto F. Santos and Tadeo F. Santos, dated 8 June 2005 and 29 July 2005, respectively, which granted
the appeal filed by herein respondents Spouses Jose Lumbao and Proserfina Lumbao (Spouses Lumbao) and ordered herein petitioners Spouses Virgilio F. Santos
and Esperanza Lati, Spouses Victorino F. Santos and Lagrimas F. Santos, Ernesto F. Santos and Tadeo F. Santos to reconvey to respondents Spouses Lumbao the
subject property and to pay the latter attorneys fees and litigation expenses, thus, reversing the Decision [3] of the Regional Trial Court (RTC) of Pasig City, dated 17
June 1998 which dismissed the Complaint for Reconveyance with Damages filed by respondents Spouses Lumbao for lack of merit.
Herein petitioners Virgilio, Victorino, Ernesto and Tadeo, all surnamed Santos, are the legitimate and surviving heirs of the late Rita Catoc Santos (Rita), who died
on20 October 1985. The other petitioners Esperanza Lati and Lagrimas Santos are the daughters-in-law of Rita.
Herein respondents Spouses Jose Lumbao and Proserfina Lumbao are the alleged owners of the 107-square meter lot (subject property), which they purportedly
bought from Rita during her lifetime.
The facts of the present case are as follows:
On two separate occasions during her lifetime, Rita sold to respondents Spouses Lumbao the subject property which is a part of her share in the estate of her
deceased mother, Maria Catoc (Maria), who died intestate on 19 September 1978. On the first occasion, Rita sold 100 square meters of her inchoate share in her
mothers estate through a document denominated as Bilihan ng Lupa, dated 17 August 1979.[4] Respondents Spouses Lumbao claimed the execution of the aforesaid
document was witnessed by petitioners Virgilio and Tadeo, as shown by their signatures affixed therein. On the second occasion, an additional seven square meters
was added to the land as evidenced by a document also denominated as Bilihan ng Lupa, dated 9 January 1981.[5]
After acquiring the subject property, respondents Spouses Lumbao took actual possession thereof and erected thereon a house which they have been occupying as
exclusive owners up to the present. As the exclusive owners of the subject property, respondents Spouses Lumbao made several verbal demands upon Rita, during
her lifetime, and thereafter upon herein petitioners, for them to execute the necessary documents to effect the issuance of a separate title in favor of respondents
Spouses Lumbao insofar as the subject property is concerned. Respondents Spouses Lumbao alleged that prior to her death, Rita informed respondent Proserfina
Lumbao she could not deliver the title to the subject property because the entire property inherited by her and her co-heirs from Maria had not yet been partitioned.
On 2 May 1986, the Spouses Lumbao claimed that petitioners, acting fraudulently and in conspiracy with one another, executed a Deed of Extrajudicial Settlement,
[6]
adjudicating and partitioning among themselves and the other heirs, the estate left by Maria, which included the subject property already sold to respondents
Spouses Lumbao and now covered by TCT No. 81729[7] of the Registry of Deeds of Pasig City.
On 15 June 1992, respondents Spouses Lumbao, through counsel, sent a formal demand letter [8] to petitioners but despite receipt of such demand letter,
petitioners still failed and refused to reconvey the subject property to the respondents Spouses Lumbao. Consequently, the latter filed a Complaint for Reconveyance
with Damages[9] before the RTC of Pasig City.
Petitioners filed their Answer denying the allegations that the subject property had been sold to the respondents Spouses Lumbao. They likewise denied
that the Deed of Extrajudicial Settlement had been fraudulently executed because the same was duly published as required by law. On the contrary, they prayed for
the dismissal of the Complaint for lack of cause of action because respondents Spouses Lumbao failed to comply with the Revised Katarungang Pambarangay Law
under Republic Act No. 7160, otherwise known as the Local Government Code of 1991, which repealed Presidential Decree No. 1508 [10] requiring first resort to
barangay conciliation.
Respondents Spouses Lumbao, with leave of court, amended their Complaint because they discovered that on 16 February 1990, without their
knowledge, petitioners executed a Deed of Real Estate Mortgage in favor of Julieta S. Esplana for the sum of P30,000.00. The said Deed of Real Estate Mortgage
was annotated at the back of TCT No. PT-81729 on 26 April 1991. Also, in answer to the allegation of the petitioners that they failed to comply with the mandate of
the Revised Katarungang Pambarangay Law, respondents Spouses Lumbao said that the Complaint was filed directly in court in order that prescription or the Statute
of Limitations may not set in.
During the trial, respondents Spouses Lumbao presented Proserfina Lumbao and Carolina Morales as their witnesses, while the petitioners presented
only the testimony of petitioner Virgilio.
The trial court rendered a Decision on 17 June 1998, the dispositive portion of which reads as follows:
Premises considered, the instant complaint is hereby denied for lack of merit.
Considering that [petitioners] have incurred expenses in order to protect their interest, [respondents spouses Lumbao] are hereby
directed to pay [petitioners], to wit: 1) the amount of P30,000.00 as attorneys fees and litigation expenses, and 2) costs of the suit.[11]
Aggrieved, respondents Spouses Lumbao appealed to the Court of Appeals. On 8 June 2005, the appellate court rendered a Decision, thus:
WHEREFORE, premises considered, the present appeal is hereby GRANTED. The appealed Decision dated June 17, 1998 of the
Regional Trial Court of Pasig City, Branch 69 in Civil Case No. 62175 is hereby REVERSED and SET ASIDE. A new judgment is hereby
entered ordering [petitioners] to reconvey 107 square meters of the subject [property] covered by TCT No. PT-81729 of the Registry of Deeds
of Pasig City, Metro Manila, and to pay to [respondents spouses Lumbao] the sum of P30,000.00 for attorneys fees and litigation expenses.
No pronouncement as to costs.[12]
Dissatisfied, petitioners filed a Motion for Reconsideration of the aforesaid Decision but it was denied in the Resolution of the appellate court dated 29 July
2005 for lack of merit.
Hence, this Petition.
The grounds relied upon by the petitioners are the following:
I.

THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR IN REVERSING THE DECISION OF THE TRIAL COURT, THEREBY CREATING A VARIANCE ON THE FINDINGS OF FACTS OF
TWO COURTS.

II.

THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR IN ORDERING THE PETITIONERS TO RECONVEY THE SUBJECT [PROPERTY] TO THE RESPONDENTS [SPOUSES LUMBAO]
AND IN NOT RULING THAT THEY ARE GUILTY OF LACHES, HENCE THEY CANNOT RECOVER THE LOTALLEGEDLY SOLD TO THEM.

III.

THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR IN NOT FINDING HEREIN PETITIONER[S] TO BE IN GOOD FAITH IN EXECUTING THE DEED OF EXTRAJUDICIAL SETTLEMENT
DATED [2 MAY 1986].

IV.

THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR IN NOT FINDING THAT PETITIONERS ARE NOT LEGALLY BOUND TO COMPLY WITH THE SUPPOSED BILIHAN NG LUPA DATED
[17 AUGUST 1979] AND [9 JANUARY 1981] THAT WERE SUPPOSEDLY EXECUTED BY THE LATE RITA CATOC.

V.

THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR IN NOT FINDING THAT RESPONDENTS [SPOUSES LUMBAOS] ACTION FOR RECONVEYANCE WITH DAMAGES CANNOT BE
SUPPORTED WITH AN UNENFORCEABLE DOCUMENTS, SUCH AS THE BILIHAN NG LUPA DATED [17 AUGUST 1979] AND [9 JANUARY 1981].

VI.

THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR IN NOT FINDING THAT RESPONDENTS [SPOUSES LUMBAOS] COMPLAINT FOR RECONVEYANCE IS DISMISSABLE (SIC) FOR
NON COMPLIANCE OF THE MANDATE OF [P.D. NO.] 1508, AS AMENDED BY Republic Act No. 7160.

VII.

THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR IN NOT FINDING THAT RESPONDENTS [SPOUSES LUMBAO] SHOULD BE HELD LIABLE FOR PETITIONERS CLAIM FOR
DAMAGES AND ATTORNEY[]S FEES.

Petitioners ask this Court to scrutinize the evidence presented in this case, because they claim that the factual findings of the trial court and the appellate
court are conflicting. They allege that the findings of fact by the trial court revealed that petitioners Virgilio and Tadeo did not witness the execution of the documents
known as Bilihan ng Lupa; hence, this finding runs counter to the conclusion made by the appellate court. And even assuming that they were witnesses to the
aforesaid documents, still, respondents Spouses Lumbao were not entitled to the reconveyance of the subject property because they were guilty of laches for their
failure to assert their rights for an unreasonable length of time. Since respondents Spouses Lumbao had slept on their rights for a period of more than 12 years
reckoned from the date of execution of the second Bilihan ng Lupa, it would be unjust and unfair to the petitioners if the respondents will be allowed to recover the
subject property.
Petitioners allege they are in good faith in executing the Deed of Extrajudicial Settlement because even respondents Spouses Lumbaos witness, Carolina
Morales, testified that neither petitioner Virgilio nor petitioner Tadeo was present during the execution of the Bilihan ng Lupa, dated 17 August 1979 and 9 January
1981. Petitioners affirm that the Deed of Extrajudicial Settlement was published in a newspaper of general circulation to give notice to all creditors of the estate
subject of partition to contest the same within the period prescribed by law. Since no claimant appeared to interpose a claim within the period allowed by law, a title to
the subject property was then issued in favor of the petitioners; hence, they are considered as holders in good faith and therefore cannot be barred from entering into
any subsequent transactions involving the subject property.
Petitioners also contend that they are not bound by the documents denominated as Bilihan ng Lupa because the same were null and void for the following
reasons: 1) for being falsified documents because one of those documents made it appear that petitioners Virgilio and Tadeo were witnesses to its execution and that
they appeared personally before the notary public, when in truth and in fact they did not; 2) the identities of the properties in the Bilihan ng Lupa, dated 17 August
1979 and 9 January 1981 in relation to the subject property in litigation were not established by the evidence presented by the respondents Spouses Lumbao; 3) the
right of the respondents Spouses Lumbao to lay their claim over the subject property had already been barred through estoppel by laches; and 4) the respondents
Spouses Lumbaos claim over the subject property had already prescribed.
Finally, petitioners claim that the Complaint for Reconveyance with Damages filed by respondents Spouses Lumbao was dismissible because they failed
to comply with the mandate of Presidential Decree No. 1508, as amended by Republic Act No. 7160, particularly Section 412 of Republic Act No. 7160.
Given the foregoing, the issues presented by the petitioners may be restated as follows:
I.
II.
III.

Whether or not the Complaint for Reconveyance with Damages filed by respondents spouses Lumbao is dismissible for their
failure to comply with the mandate of the Revised Katarungang Pambarangay Law under R.A. No. 7160.
Whether or not the documents known as Bilihan ng Lupa are valid and enforceable, thus, they can be the bases of the
respondents spouses Lumbaos action for reconveyance with damages.
Whether or not herein petitioners are legally bound to comply with the Bilihan ng Lupa dated 17 August 1979 and 9 January
1981 and consequently, reconvey the subject property to herein respondents spouses Lumbao.

It is well-settled that in the exercise of the Supreme Courts power of review, the court is not a trier of facts and does not normally undertake the reexamination of the evidence presented by the contending parties during the trial of the case considering that the findings of fact of the Court of Appeals are
conclusive and binding on the Court.[13] But, the rule is not without exceptions. There are several recognized exceptions[14] in which factual issues may be resolved by
this Court. One of these exceptions is when the findings of the appellate court are contrary to those of the trial court. This exception is present in the case at bar.
Going to the first issue presented in this case, it is the argument of the petitioners that the Complaint for Reconveyance with Damages filed by respondents Spouses
Lumbao should be dismissed for failure to comply with the barangay conciliation proceedings as mandated by the Revised Katarungang Pambarangay Law under
Republic Act No. 7160. This argument cannot be sustained.
Section 408 of the aforesaid law and Administrative Circular No. 14-93 [15] provide that all disputes between parties actually residing in the same city or municipality
are subject to barangay conciliation. A prior recourse thereto is a pre-condition before filing a complaint in court or any government offices. Non-compliance with the
said condition precedent could affect the sufficiency of the plaintiffs cause of action and make his complaint vulnerable to dismissal on ground of lack of cause of
action or prematurity; but the same would not prevent a court of competent jurisdiction from exercising its power of adjudication over the case before it, where the
defendants failed to object to such exercise of jurisdiction.[16]
While it is true that the present case should first be referred to the Barangay Lupon for conciliation because the parties involved herein actually reside in the same
city (Pasig City) and the dispute between them involves a real property, hence, the said dispute should have been brought in the city in which the real property,
subject matter of the controversy, is located, which happens to be the same city where the contending parties reside. In the event that respondents Spouses Lumbao
failed to comply with the said condition precedent, their Complaint for Reconveyance with Damages can be dismissed. In this case, however, respondents Spouses
Lumbaos non-compliance with the aforesaid condition precedent cannot be considered fatal. Although petitioners alleged in their answer that the Complaint for
Reconveyance with Damages filed by respondents spouses Lumbao should be dismissed for their failure to comply with the condition precedent, which in effect,
made the complaint prematurely instituted and the trial court acquired no jurisdiction to hear the case, yet, they did not file a Motion to Dismiss the said complaint.
Emphasis must be given to the fact that the petitioners could have prevented the trial court from exercising jurisdiction over the case had they filed a
Motion to Dismiss. However, instead of doing so, they invoked the very same jurisdiction by filing an answer seeking an affirmative relief from it. Worse, petitioners
actively participated in the trial of the case by presenting their own witness and by cross-examining the witnesses presented by the respondents Spouses Lumbao. It
is elementary that the active participation of a party in a case pending against him before a court is tantamount to recognition of that courts jurisdiction and a
willingness to abide by the resolution of the case which will bar said party from later on impugning the courts jurisdiction. [17] It is also well-settled that the non-referral
of a case for barangay conciliation when so required under the law is not jurisdictional in nature and may therefore be deemed waived if not raised seasonably in a
motion to dismiss.[18] Hence, herein petitioners can no longer raise the defense of non-compliance with the barangay conciliation proceedings to seek the dismissal of
the complaint filed by the respondents Spouses Lumbao, because they already waived the said defense when they failed to file a Motion to Dismiss.
As regards the second issue, petitioners maintain that the Bilihan ng Lupa, dated 17 August 1979 and 9 January 1981 are null and void for being falsified
documents as it is made to appear that petitioners Virgilio and Tadeo were present in the execution of the said documents and that the identities of the properties in
those documents in relation to the subject property has not been established by the evidence of the respondents Spouses Lumbao. Petitioners also claim that the
enforceability of those documents is barred by prescription of action and laches.
It is the petitioners incessant barking that the Bilihan ng Lupa documents dated 17 August 1979 and 9 January 1981 were falsified because it was made to
appear that petitioners Virgilio and Tadeo were present in the executions thereof, and their allegation that even respondents Spouses Lumbaos witness Carolina
Morales proved that said petitioners were not present during the execution of the aforementioned documents. This is specious.

Upon examination of the aforesaid documents, this Court finds that in the Bilihan ng Lupa, dated 17 August 1979, the signatures of petitioners Virgilio and
Tadeo appeared thereon. Moreover, in petitioners Answer and Amended Answer to the Complaint for Reconveyance with Damages, both petitioners Virgilio and
Tadeo made an admission that indeed they acted as witnesses in the execution of the Bilihan ng Lupa, dated 17 August 1979.[19] However, in order to avoid their
obligations in the said Bilihan ng Lupa, petitioner Virgilio, in his cross-examination, denied having knowledge of the sale transaction and claimed that he could not
remember the same as well as his appearance before the notary public due to the length of time that had passed. Noticeably, petitioner Virgilio did not categorically
deny having signed the Bilihan ng Lupa, dated 17 August 1979 and in support thereof, his testimony in the cross-examination propounded by the counsel of the
respondents Spouses Lumbao is quoted hereunder:
ATTY. CHIU:
Q. Now, you said, Mr. WitnessVirgilio Santos, that you
dont know about this document which was
marked as Exhibit A for the [respondents
spouses Lumbao]?
ATTY. BUGARING:
The question is misleading, your Honor. Counsel
premised the question that he does not
have any knowledge but not that he does
not know.
ATTY. CHIU:
Q. Being you are one of the witnesses of this
document? [I]s it not?
WITNESS:

A.
No, sir.
Q. I am showing to you this document, there is a
signature at the left hand margin of this
document Virgilio Santos, will you please go
over the same and tell the court whose
signature is this?
A. I dont remember, sir, because of the length of time
that had passed.
Q. But that is your signature?
A. I dont have eyeglasses My signature is different.
Q. You never appeared before this notary public
Apolinario Mangahas?
A. I dont remember.[20]

As a general rule, facts alleged in a partys pleading are deemed admissions of that party and are binding upon him, but this is not an absolute and
inflexible rule.An answer is a mere statement of fact which the party filing it expects to prove, but it is not evidence. [21] And in spite of the presence of judicial
admissions in a partys pleading, the trial court is still given leeway to consider other evidence presented. [22] However, in the case at bar, as the Court of Appeals
mentioned in its Decision, [herein petitioners] had not adduced any other evidence to override the admission made in their [A]nswer that [petitioners Virgilio and
Tadeo] actually signed the [Bilihan ng Lupa dated 17 August 1979] except that they were just misled as to the purpose of the document, x x x. [23] Virgilios answers
were unsure and quibbled. Hence, the general rule that the admissions made by a party in a pleading are binding and conclusive upon him applies in this case.
On the testimony of respondents Spouses Lumbaos witness Carolina Morales, this Court adopts the findings made by the appellate court. Thus [T]he trial court gave singular focus on her reply to a question during cross-examination if the [petitioners Virgilio and Tadeo] were not with her
and the vendor [Rita] during the transaction. It must be pointed out that earlier in the direct examination of said witness, she confirmed that
[respondents spouses Lumbao] actually bought the lot from [Rita] (nagkabilihan). Said witness positively identified and confirmed the two (2)
documents evidencing the sale in favor of [respondents spouse Lumbao]. Thus, her subsequent statement that the [petitioners Virgilio and
Tadeo] were not with them during the transaction does not automatically imply that [petitioners Virgilio and Tadeo] did not at any time sign as
witnesses as to the deed of sale attesting to their mothers voluntary act of selling a portion of her share in her deceased mothers property. The
rule is that testimony of a witness must be considered and calibrated in its entirety and not by truncated portions thereof or isolated passages
therein.[24]
Furthermore, both Bilihan ng Lupa documents dated 17 August 1979 and 9 January 1981 were duly notarized before a notary public. It is well-settled that
a document acknowledged before a notary public is a public document [25] that enjoys the presumption of regularity. It is a prima facie evidence of the truth of the facts
stated therein and a conclusive presumption of its existence and due execution. [26] To overcome this presumption, there must be presented evidence that is clear and
convincing. Absent such evidence, the presumption must be upheld. [27] In addition, one who denies the due execution of a deed where ones signature appears has
the burden of proving that contrary to the recital in the jurat, one never appeared before the notary public and acknowledged the deed to be a voluntary
act. Nonetheless, in the present case petitioners denials without clear and convincing evidence to support their claim of fraud and falsity were not sufficient to
overthrow the above-mentioned presumption; hence, the authenticity, due execution and the truth of the facts stated in the aforesaid Bilihan ng Lupa are upheld.
The defense of petitioners that the identities of the properties described in the Bilihan ng Lupa, dated 17 August 1979 and 9 January 1981 in relation to the
subject property were not established by respondents Spouses Lumbaos evidence is likewise not acceptable.
It is noteworthy that at the time of the execution of the documents denominated as Bilihan ng Lupa, the entire property owned by Maria, the mother of
Rita, was not yet divided among her and her co-heirs and so the description of the entire estate is the only description that can be placed in the Bilihan ng Lupa,
dated 17 August 1979 and 9 January 1981 because the exact metes and bounds of the subject property sold to respondents Spouses Lumbao could not be possibly
determined at that time. Nevertheless, that does not make the contract of sale between Rita and respondents Spouses Lumbao invalid because both the law and
jurisprudence have categorically held that even while an estate remains undivided, co-owners have each full ownership of their respective aliquots or undivided
shares and may therefore alienate, assign or mortgage them. [28] The co-owner, however, has no right to sell or alienate a specific or determinate part of the thing
owned in common, because such right over the thing is represented by an aliquot or ideal portion without any physical division. In any case, the mere fact that the
deed purports to transfer a concrete portion does not per se render the sale void. The sale is valid, but only with respect to the aliquot share of the selling coowner. Furthermore, the sale is subject to the results of the partition upon the termination of the co-ownership. [29]
In the case at bar, when the estate left by Maria had been partitioned on 2 May 1986 by virtue of a Deed of Extrajudicial Settlement, the 107- square meter
lot sold by the mother of the petitioners to respondents Spouses Lumbao should be deducted from the total lot, inherited by them in representation of their deceased
mother, which in this case measures 467 square meters. The 107-square meter lot already sold to respondents Spouses Lumbao can no longer be inherited by the
petitioners because the same was no longer part of their inheritance as it was already sold during the lifetime of their mother.
Likewise, the fact that the property mentioned in the two Bilihan ng Lupa documents was described as a portion of a parcel of land covered in Tax
Declarations No. A-018-01674, while the subject matter of the Deed of Extrajudicial Settlement was the property described in Transfer Certificate of Title (TCT) No.
3216 of the Registry of Deeds of the Province of Rizal in the name of Maria is of no moment because in the Bilihan ng Lupa, dated 17 August 1979 and 9 January
1981, it is clear that there was only one estate left by Maria upon her death. And this fact was not refuted by the petitioners. Besides, the property described in Tax
Declaration No. A-018-01674 and the property mentioned in TCT No. 3216 are both located in Barrio Rosario, Municipality of Pasig, Province of Rizal, and almost
have the same boundaries. It is, thus, safe to state that the property mentioned in Tax Declaration No. A-018-01674 and in TCT No. 3216 are one and the same.
The defense of prescription of action and laches is likewise unjustifiable. In an action for reconveyance, the decree of registration is respected as
incontrovertible. What is sought instead is the transfer of the property or its title which has been wrongfully or erroneously registered in another persons name to its
rightful or legal owner, or to the one with a better right. It is, indeed, true that the right to seek reconveyance of registered property is not absolute because it is
subject to extinctive prescription. However, when the plaintiff is in possession of the land to be reconveyed, prescription cannot set in. Such an exception is
based on the theory that registration proceedings could not be used as a shield for fraud or for enriching a person at the expense of another. [30]
In the case at bar, the right of the respondents Spouses Lumbao to seek reconveyance does not prescribe because the latter have been and are still in
actual possession and occupation as owners of the property sought to be reconveyed, which fact has not been refuted nor denied by the petitioners. Furthermore,
respondents Spouses Lumbao cannot be held guilty of laches because from the very start that they bought the 107-square meter lot from the mother of the
petitioners, they have constantly asked for the transfer of the certificate of title into their names but Rita, during her lifetime, and the petitioners, after the death of
Rita, failed to do so on the flimsy excuse that the lot had not been partitioned yet. Inexplicably, after the partition of the entire estate of Maria, petitioners still included
the 107-square meter lot in their inheritance which they divided among themselves despite their knowledge of the contracts of sale between their mother and the
respondents Spouses Lumbao.
Under the above premises, this Court holds that the Bilihan ng Lupa documents dated 17 August 1979 and 9 January 1981 are valid and enforceable and
can be made the basis of the respondents Spouses Lumbaos action for reconveyance. The failure of respondents Spouses Lumbao to have the said documents
registered does not affect its validity and enforceability. It must be remembered that registration is not a requirement for validity of the contract as between the parties,
for the effect of registration serves chiefly to bind third persons. The principal purpose of registration is merely to notify other persons not parties to a contract that a
transaction involving the property had been entered into. Where the party has knowledge of a prior existing interest which is unregistered at the time he acquired a
right to the same land, his knowledge of that prior unregistered interest has the effect of registration as to him. [31] Hence, the Bilihan ng Lupa documents dated 17
August 1979and 9 January 1981, being valid and enforceable, herein petitioners are bound to comply with their provisions. In short, such documents are absolutely
valid between and among the parties thereto.
Finally, the general rule that heirs are bound by contracts entered into by their predecessors-in-interest applies in the present case. Article 1311[32] of the
NCC is the basis of this rule. It is clear from the said provision that whatever rights and obligations the decedent have over the property were transmitted to the heirs
by way of succession, a mode of acquiring the property, rights and obligations of the decedent to the extent of the value of the inheritance of the heirs. [33] Thus, the
heirs cannot escape the legal consequence of a transaction entered into by their predecessor-in-interest because they have inherited the property subject to the
liability affecting their common ancestor. Being heirs, there is privity of interest between them and their deceased mother. They only succeed to what rights their
mother had and what is valid and binding against her is also valid and binding as against them. 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. [34]

In the end, despite the death of the petitioners mother, they are still bound to comply with the provisions of the Bilihan ng Lupa, dated 17 August
1979 and 9 January 1981. Consequently, they must reconvey to herein respondents Spouses Lumbao the 107-square meter lot which they bought from Rita,
petitioners mother.And as correctly ruled by the appellate court, petitioners must pay respondents Spouses Lumbao attorneys fees and litigation expenses for having
been compelled to litigate and incur expenses to protect their interest.[35] On this matter, we do not find reasons to reverse the said findings.
WHEREFORE, premises considered, the instant Petition is hereby DENIED. The Decision and Resolution of the Court of Appeals dated 8 June
2005 and 29 July 2005, respectively, are hereby AFFIRMED. Herein petitioners are ordered to reconvey to respondents Spouses Lumbao the subject property and to
pay the latter attorneys fees and litigation expenses. Costs against petitioners.
SO ORDERED.