THIRD DIVISION

[G.R. No. 133743. February 6, 2007.]

EDGAR SAN LUIS, petitioner, vs. FELICIDAD
SAN LUIS, respondent.
[G.R. No. 134029. February 6, 2007]
RODOLFO SAN LUIS, petitioner, vs. FELICIDAD
SAGALONGOS alias FELICIDAD SAN LUIS,
respondent.
DECISION
YNARES-SANTIAGO, J : p

Before us are consolidated petitions for review

assailing the February 4, 1998 Decision 1 of the Court
of Appeals in CA-G.R. CV No. 52647, which reversed
and set aside the September 12, 1995 2 and January
31, 1996 3 Resolutions of the Regional Trial Court of
Makati City, Branch 134 in SP. Proc. No. M-3708; and
its May 15, 1998 Resolution 4 denying petitioners'
motion for reconsideration.
The instant case involves the settlement of the estate
of Felicisimo T. San Luis (Felicisimo), who was the
former governor of the Province of Laguna. During his
lifetime, Felicisimo contracted three marriages. His
first marriage was with Virginia Sulit on March 17,
1942 out of which were born six children, namely:
Rodolfo, Mila, Edgar, Linda, Emilita and Manuel. On
August 11, 1963, Virginia predeceased Felicisimo.
Five years later, on May 1, 1968, Felicisimo married
Merry Lee Corwin, with whom he had a son, Tobias.
However, on October 15, 1971, Merry Lee, an
American citizen, filed a Complaint for Divorce 5
before the Family Court of the First Circuit, State of
Hawaii, United States of America (U.S.A.), which issued
a Decree Granting Absolute Divorce and Awarding
Child Custody on December 14, 1973. 6
On June 20, 1974, Felicisimo married respondent
Felicidad San Luis, then surnamed Sagalongos, before
Rev. Fr. William Meyer, Minister of the United
Presbyterian at Wilshire Boulevard, Los Angeles,
California, U.S.A. 7 He had no children with
respondent but lived with her for 18 years from the
time of their marriage up to his death on December
18, 1992.
Thereafter, respondent sought the dissolution of their
conjugal partnership assets and the settlement of
Felicisimo's estate. On December 17, 1993, she filed a
petition for letters of administration 8 before the
Regional Trial Court of Makati City, docketed as SP.
Proc. No. M-3708 which was raffled to Branch 146
thereof.
Respondent alleged that she is the widow of
Felicisimo; that, at the time of his death, the decedent
was residing at 100 San Juanico Street, New Alabang
Village, Alabang, Metro Manila; that the decedent's
surviving heirs are respondent as legal spouse, his six
children by his first marriage, and son by his second
marriage; that the decedent left real properties, both
conjugal and exclusive, valued at P30,304,178.00 more
or less; that the decedent does not have any unpaid
debts. Respondent prayed that the conjugal
partnership assets be liquidated and that letters of
administration be issued to her. TAaIDH

On February 4, 1994, petitioner Rodolfo San Luis, one

of the children of Felicisimo by his first marriage, filed
a motion to dismiss 9 on the grounds of improper
venue and failure to state a cause of action. Rodolfo
claimed that the petition for letters of administration
should have been filed in the Province of Laguna
because this was Felicisimo's place of residence prior
to his death. He further claimed that respondent has
no legal personality to file the petition because she
was only a mistress of Felicisimo since the latter, at
the time of his death, was still legally married to Merry
Lee.
On February 15, 1994, Linda invoked the same
grounds and joined her brother Rodolfo in seeking the
dismissal 10 of the petition. On February 28, 1994, the
trial court issued an Order 11 denying the two motions
to dismiss.
Unaware of the denial of the motions to dismiss,
respondent filed on March 5, 1994 her opposition 12
thereto. She submitted documentary evidence
showing that while Felicisimo exercised the powers of
his public office in Laguna, he regularly went home to
their house in New Alabang Village, Alabang, Metro
Manila which they bought sometime in 1982. Further,
she presented the decree of absolute divorce issued
by the Family Court of the First Circuit, State of Hawaii
to prove that the marriage of Felicisimo to Merry Lee
had already been dissolved. Thus, she claimed that
Felicisimo had the legal capacity to marry her by virtue
of paragraph 2, 13 Article 26 of the Family Code and
the doctrine laid down in Van Dorn v. Romillo, Jr. 14
Thereafter, Linda, Rodolfo and herein petitioner Edgar
San Luis, separately filed motions for reconsideration
from the Order denying their motions to dismiss. 15
They asserted that paragraph 2, Article 26 of the
Family Code cannot be given retroactive effect to
validate respondent's bigamous marriage with
Felicisimo because this would impair vested rights in
derogation of Article 256 16 of the Family Code.
On April 21, 1994, Mila, another daughter of Felicisimo
from his first marriage, filed a motion to disqualify
Acting Presiding Judge Anthony E. Santos from hearing
the case.
On October 24, 1994, the trial court issued an Order
17 denying the motions for reconsideration. It ruled
that respondent, as widow of the decedent, possessed
the legal standing to file the petition and that venue
was properly laid. Meanwhile, the motion for
disqualification was deemed moot and academic 18
because then Acting Presiding Judge Santos was
substituted by Judge Salvador S. Tensuan pending the
resolution of said motion.
Mila filed a motion for inhibition 19 against Judge
Tensuan on November 16, 1994. On even date, Edgar
also filed a motion for reconsideration 20 from the
Order denying their motion for reconsideration
arguing that it does not state the facts and law on
which it was based.
On November 25, 1994, Judge Tensuan issued an
Order 21 granting the motion for inhibition. The case
was re-raffled to Branch 134 presided by Judge Paul T.
Arcangel.
On April 24, 1995, 22 the trial court required the
parties to submit their respective position papers on
the twin issues of venue and legal capacity of
respondent to file the petition. On May 5, 1995, Edgar
manifested 23 that he is adopting the arguments and
evidence set forth in his previous motion for
reconsideration as his position paper. Respondent
and Rodolfo filed their position papers on June 14, 24
and June 20, 25 1995, respectively.
On September 12, 1995, the trial court dismissed the
petition for letters of administration. It held that, at
the time of his death, Felicisimo was the duly elected
governor and a resident of the Province of Laguna.
Hence, the petition should have been filed in Sta. Cruz,
Laguna and not in Makati City. It also ruled that
respondent was without legal capacity to file the
petition for letters of administration because her
marriage with Felicisimo was bigamous, thus, void ab
initio. It found that the decree of absolute divorce
dissolving Felicisimo's marriage to Merry Lee was not
valid in the Philippines and did not bind Felicisimo
who was a Filipino citizen. It also ruled that paragraph
2, Article 26 of the Family Code cannot be retroactively
applied because it would impair the vested rights of
Felicisimo's legitimate children.
CDTHSI

Respondent moved for reconsideration 26 and for the

disqualification 27 of Judge Arcangel but said motions
were denied. 28
Respondent appealed to the Court of Appeals which
reversed and set aside the orders of the trial court in
its assailed Decision dated February 4, 1998, the
dispositive portion of which states:
WHEREFORE, the Orders dated September 12, 1995
and January 31, 1996 are hereby REVERSED
and SET ASIDE; the Orders dated February
28 and October 24, 1994 are REINSTATED;
and the records of the case is REMANDED
to the trial court for further proceedings.
29
The appellate court ruled that under Section 1, Rule 73
of the Rules of Court, the term "place of residence" of
the decedent, for purposes of fixing the venue of the
settlement of his estate, refers to the personal, actual
or physical habitation, or actual residence or place of
abode of a person as distinguished from legal
residence or domicile. It noted that although
Felicisimo discharged his functions as governor in
Laguna, he actually resided in Alabang, Muntinlupa.
Thus, the petition for letters of administration was
properly filed in Makati City.
The Court of Appeals also held that Felicisimo had
legal capacity to marry respondent by virtue of
paragraph 2, Article 26 of the Family Code and the
rulings in Van Dorn v. Romillo, Jr. 30 and Pilapil v. Ibay-
Somera. 31 It found that the marriage between
Felicisimo and Merry Lee was validly dissolved by
virtue of the decree of absolute divorce issued by the
Family Court of the First Circuit, State of Hawaii. As a
result, under paragraph 2, Article 26, Felicisimo was
capacitated to contract a subsequent marriage with
respondent. Thus
With the well-known rule express mandate of
paragraph 2, Article 26, of the Family Code
of the Philippines, the doctrines in Van
Dorn, Pilapil, and the reason and
philosophy behind the enactment of E.O.
No. 227, there is no justiciable reason to
 sustain the individual view sweeping
statement of Judge Arc[h]angel, that
"Article 26, par. 2 of the Family Code,
contravenes the basic policy of our state
against divorce in any form whatsoever."
Indeed, courts cannot deny what the law
grants. All that the courts should do is to
give force and effect to the express
mandate of the law. The foreign divorce
having been obtained by the Foreigner on
December 14, 1992, 32 the Filipino
divorcee, "shall . . . have capacity to
remarry under Philippine laws". For this
reason, the marriage between the
deceased and petitioner should not be
denominated as "a bigamous marriage.

Therefore, under Article 130 of the Family Code,

the petitioner as the surviving spouse can
institute the judicial proceeding for the
settlement of the estate of the deceased. . .
. 33

Edgar, Linda, and Rodolfo filed separate motions for

reconsideration 34 which were denied by the Court of
Appeals.
On July 2, 1998, Edgar appealed to this Court via the
instant petition for review on certiorari. 35 Rodolfo
later filed a manifestation and motion to adopt the
said petition which was granted. 36
In the instant consolidated petitions, Edgar and
Rodolfo insist that the venue of the subject petition
for letters of administration was improperly laid
because at the time of his death, Felicisimo was a
resident of Sta. Cruz, Laguna. They contend that
pursuant to our rulings in Nuval v. Guray 37 and
Romualdez v. RTC, Br. 7, Tacloban City, 38 "residence"
is synonymous with "domicile" which denotes a fixed
permanent residence to which when absent, one
intends to return. They claim that a person can only
have one domicile at any given time. Since Felicisimo
never changed his domicile, the petition for letters of
administration should have been filed in Sta. Cruz,
Laguna.
Petitioners also contend that respondent's marriage
to Felicisimo was void and bigamous because it was
performed during the subsistence of the latter's
marriage to Merry Lee. They argue that paragraph 2,
Article 26 cannot be retroactively applied because it
would impair vested rights and ratify the void
bigamous marriage. As such, respondent cannot be
considered the surviving wife of Felicisimo; hence, she
has no legal capacity to file the petition for letters of
administration.
The issues for resolution: (1) whether venue was
properly laid, and (2) whether respondent has legal
capacity to file the subject petition for letters of
administration. DScTaC

The petition lacks merit.

Under Section 1, 39 Rule 73 of the Rules of Court, the
petition for letters of administration of the estate of
Felicisimo should be filed in the Regional Trial Court of
the province "in which he resides at the time of his
death." In the case of Garcia Fule v. Court of Appeals,
40 we laid down the doctrinal rule for determining the
residence as contradistinguished from domicile
of the decedent for purposes of fixing the venue of
the settlement of his estate:
[T]he term "resides" connotes ex vi termini "actual
residence" as distinguished from "legal
residence or domicile." This term "resides,"
like the terms "residing" and "residence," is
elastic and should be interpreted in the
light of the object or purpose of the statute
or rule in which it is employed. In the
application of venue statutes and rules
Section 1, Rule 73 of the Revised Rules of
Court is of such nature residence rather
than domicile is the significant factor. Even
 where the statute uses the word "domicile"
still it is construed as meaning residence
and not domicile in the technical sense.
Some cases make a distinction between
the terms "residence" and "domicile" but
as generally used in statutes fixing venue,
the terms are synonymous, and convey the
same meaning as the term "inhabitant." In
other words, "resides" should be viewed or
understood in its popular sense, meaning,
the personal, actual or physical
habitation of a person, actual
residence or place of abode. It
signifies physical presence in a place and
actual stay thereat. In this popular sense,
the term means merely residence, that is,
personal residence, not legal residence
or domicile. Residence simply requires
bodily presence as an inhabitant in a given
place, while domicile requires bodily
presence in that place and also an
intention to make it one's domicile. No
particular length of time of residence is
required though; however, the residence
must be more than temporary. 41
(Emphasis supplied) STIcEA

It is incorrect for petitioners to argue that "residence,"

for purposes of fixing the venue of the settlement of
the estate of Felicisimo, is synonymous with
"domicile." The rulings in Nuval and Romualdez are
inapplicable to the instant case because they involve
election cases. Needless to say, there is a distinction
between "residence" for purposes of election laws and
"residence" for purposes of fixing the venue of
actions. In election cases, "residence" and "domicile"
are treated as synonymous terms, that is, the fixed
permanent residence to which when absent, one has
the intention of returning. 42 However, for purposes
of fixing venue under the Rules of Court, the
"residence" of a person is his personal, actual or
physical habitation, or actual residence or place of
abode, which may not necessarily be his legal
residence or domicile provided he resides therein with
continuity and consistency. 43 Hence, it is possible
that a person may have his residence in one place and
domicile in another.
In the instant case, while petitioners established that
Felicisimo was domiciled in Sta. Cruz, Laguna,
respondent proved that he also maintained a
residence in Alabang, Muntinlupa from 1982 up to the
time of his death. Respondent submitted in evidence
the Deed of Absolute Sale 44 dated January 5, 1983
showing that the deceased purchased the aforesaid
property. She also presented billing statements 45
from the Philippine Heart Center and Chinese General
Hospital for the period August to December 1992
indicating the address of Felicisimo at "100 San
Juanico, Ayala Alabang, Muntinlupa." Respondent also
presented proof of membership of the deceased in
the Ayala Alabang Village Association 46 and Ayala
Country Club, Inc., 47 letter-envelopes 48 from 1988 to
1990 sent by the deceased's children to him at his
Alabang address, and the deceased's calling cards 49
stating that his home/city address is at "100 San
Juanico, Ayala Alabang Village, Muntinlupa" while his
office/provincial address is in "Provincial Capitol, Sta.
Cruz, Laguna."
From the foregoing, we find that Felicisimo was a
resident of Alabang, Muntinlupa for purposes of fixing
the venue of the settlement of his estate.
Consequently, the subject petition for letters of
administration was validly filed in the Regional Trial
Court 50 which has territorial jurisdiction over
Alabang, Muntinlupa. The subject petition was filed on
December 17, 1993. At that time, Muntinlupa was still
a municipality and the branches of the Regional Trial
Court of the National Capital Judicial Region which had
territorial jurisdiction over Muntinlupa were then
seated in Makati City as per Supreme Court
Administrative Order No. 3. 51 Thus, the subject
petition was validly filed before the Regional Trial
Court of Makati City.
Anent the issue of respondent Felicidad's legal
personality to file the petition for letters of
administration, we must first resolve the issue of
whether a Filipino who is divorced by his alien spouse
abroad may validly remarry under the Civil Code,
considering that Felicidad's marriage to Felicisimo was
solemnized on June 20, 1974, or before the Family
Code took effect on August 3, 1988. In resolving this
issue, we need not retroactively apply the provisions
of the Family Code, particularly Art. 26, par. (2)
considering that there is sufficient jurisprudential
basis allowing us to rule in the affirmative.
The case of Van Dorn v. Romillo, Jr. 52
involved a marriage between a foreigner and his
Filipino wife, which marriage was subsequently
dissolved through a divorce obtained abroad by
the latter. Claiming that the divorce was not valid
under Philippine law, the alien spouse alleged that
his interest in the properties from their conjugal
partnership should be protected. The Court,
however, recognized the validity of the divorce and
held that the alien spouse had no interest in the
properties acquired by the Filipino wife after the
divorce. Thus:

In this case, the divorce in Nevada released private

respondent from the marriage from the
 standards of American law, under which
divorce dissolves the marriage. As stated
by the Federal Supreme Court of the
United States in Atherton vs. Atherton, 45
L. Ed. 794, 799:

"The purpose and effect of a decree of divorce

from the bond of matrimony by a
competent jurisdiction are to change
the existing status or domestic
relation of husband and wife, and to
free them both from the bond. The
marriage tie, when thus severed as
to one party, ceases to bind either. A
husband without a wife, or a wife
without a husband, is unknown to
the law. When the law provides, in
the nature of a penalty, that the
guilty party shall not marry again,
that party, as well as the other, is still
absolutely freed from the bond of
the former marriage."

Thus, pursuant to his national law, private

respondent is no longer the husband of
petitioner. He would have no standing to
sue in the case below as petitioner's
 husband entitled to exercise control over
conjugal assets. As he is bound by the
Decision of his own country's Court, which
validly exercised jurisdiction over him, and
whose decision he does not repudiate, he
is estopped by his own representation
before said Court from asserting his right
over the alleged conjugal property. 53

As to the effect of the divorce on the Filipino wife, the

Court ruled that she should no longer be considered
married to the alien spouse. Further, she should not
be required to perform her marital duties and
obligations. It held:
To maintain, as private respondent does, that,
under our laws, petitioner has to be considered
still married to private respondent and still
subject to a wife's obligations under Article
109, et. seq. of the Civil Code cannot be just.
Petitioner should not be obliged to live together with,
observe respect and fidelity, and render support to
private respondent. The latter should not continue to be
one of her heirs with possible rights to conjugal property.
She should not be discriminated against in her
own country if the ends of justice are to be
served. 54 (Emphasis added) AcaEDC

This principle was thereafter applied in Pilapil v. Ibay-

Somera 55 where the Court recognized the validity of
a divorce obtained abroad. In the said case, it was
held that the alien spouse is not a proper party in
filing the adultery suit against his Filipino wife. The
Court stated that "the severance of the marital bond
had the effect of dissociating the former spouses from
each other, hence the actuations of one would not
affect or cast obloquy on the other." 56

Likewise, in Quita v. Court of Appeals, 57 the Court

stated that where a Filipino is divorced by his
naturalized foreign spouse, the ruling in Van Dorn
applies. 58 Although decided on December 22, 1998,
the divorce in the said case was obtained in 1954
when the Civil Code provisions were still in effect.
The significance of the Van Dorn case to the
development of limited recognition of divorce in the
Philippines cannot be denied. The ruling has long
been interpreted as severing marital ties between
parties in a mixed marriage and capacitating the
Filipino spouse to remarry as a necessary
consequence of upholding the validity of a divorce
obtained abroad by the alien spouse. In his treatise,
Dr. Arturo M. Tolentino cited Van Dorn stating that "if
the foreigner obtains a valid foreign divorce, the
Filipino spouse shall have capacity to remarry under
Philippine law." 59 In Garcia v. Recio, 60 the Court
likewise cited the aforementioned case in relation to
Article 26. 61
In the recent case of Republic v. Orbecido III, 62 the
historical background and legislative intent behind
paragraph 2, Article 26 of the Family Code were
discussed, to wit:
Brief Historical Background
On July 6, 1987, then President Corazon Aquino
signed into law Executive Order No. 209,
otherwise known as the "Family Code,"
which took effect on August 3, 1988. Article
26 thereof states:

All marriages solemnized outside the Philippines in

accordance with the laws in force in the
country where they were solemnized, and
valid there as such, shall also be valid in
this country, except those prohibited under
Articles 35, 37, and 38.

On July 17, 1987, shortly after the signing of the

original Family Code, Executive Order No.
227 was likewise signed into law, amending
Articles 26, 36, and 39 of the Family Code. A
second paragraph was added to Article 26.
As so amended, it now provides:
ART. 26. All marriages solemnized outside the
Philippines in accordance with the laws in
force in the country where they were
solemnized, and valid there as such, shall
also be valid in this country, except those
prohibited under Articles 35(1), (4), (5) and
(6), 36, 37 and 38.

Where a marriage between a Filipino citizen and a

foreigner is validly celebrated and a divorce is thereafter
validly obtained abroad by the alien spouse capacitating
him or her to remarry, the Filipino spouse shall have
capacity to remarry under Philippine law. (Emphasis
supplied)
xxx xxx xxx

Legislative Intent
Records of the proceedings of the Family Code
deliberations showed that the intent of
Paragraph 2 of Article 26, according to
Judge Alicia Sempio-Diy, a member of the
Civil Code Revision Committee, is to avoid
the absurd situation where the Filipino
spouse remains married to the alien
spouse who, after obtaining a divorce, is no
longer married to the Filipino spouse.
Interestingly, Paragraph 2 of Article 26 traces
its origin to the 1985 case of Van Dorn v.
Romillo, Jr. The Van Dorn case involved a
marriage between a Filipino citizen and a
foreigner. The Court held therein that a divorce
decree validly obtained by the alien spouse is
valid in the Philippines, and consequently, the
Filipino spouse is capacitated to remarry under
Philippine law. 63 (Emphasis added)
As such, the Van Dorn case is sufficient basis in
resolving a situation where a divorce is validly
obtained abroad by the alien spouse. With the
enactment of the Family Code and paragraph 2, Article
26 thereof, our lawmakers codified the law already
established through judicial precedent.HAaECD

Indeed, when the object of a marriage is defeated by

rendering its continuance intolerable to one of the
parties and productive of no possible good to the
community, relief in some way should be obtainable.
64 Marriage, being a mutual and shared commitment
between two parties, cannot possibly be productive of
any good to the society where one is considered
released from the marital bond while the other
remains bound to it. Such is the state of affairs where
the alien spouse obtains a valid divorce abroad
against the Filipino spouse, as in this case.
Petitioners cite Articles 15 65 and 17 66 of the Civil
Code in stating that the divorce is void under
Philippine law insofar as Filipinos are concerned.
However, in light of this Court's rulings in the cases
discussed above, the Filipino spouse should not be
discriminated against in his own country if the ends of
justice are to be served. 67 In Alonzo v. Intermediate
Appellate Court, 68 the Court stated:
But as has also been aptly observed, we test a law
by its results; and likewise, we may add, by
its purposes. It is a cardinal rule that, in
seeking the meaning of the law, the first
concern of the judge should be to discover
in its provisions the intent of the lawmaker.
Unquestionably, the law should never be
interpreted in such a way as to cause
injustice as this is never within the
legislative intent. An indispensable part of
that intent, in fact, for we presume the
good motives of the legislature, is to
render justice.

Thus, we interpret and apply the law not

independently of but in consonance with
justice. Law and justice are inseparable,
and we must keep them so. To be sure,
there are some laws that, while generally
valid, may seem arbitrary when applied in
a particular case because of its peculiar
circumstances. In such a situation, we are
not bound, because only of our nature and
 functions, to apply them just the same, in
slavish obedience to their language. What
we do instead is find a balance between
the word and the will, that justice may be
done even as the law is obeyed.

As judges, we are not automatons. We do not and

must not unfeelingly apply the law as it is
worded, yielding like robots to the literal
command without regard to its cause and
consequence. "Courts are apt to err by
sticking too closely to the words of a law,"
so we are warned, by Justice Holmes again,
"where these words import a policy that
goes beyond them."

xxx xxx xxx

More than twenty centuries ago, Justinian defined

justice "as the constant and perpetual wish
to render every one his due." That wish
continues to motivate this Court when it
assesses the facts and the law in every case
brought to it for decision. Justice is always
an essential ingredient of its decisions.
Thus when the facts warrants, we interpret
the law in a way that will render justice,
 presuming that it was the intention of the
lawmaker, to begin with, that the law be
dispensed with justice. 69

Applying the above doctrine in the instant case, the

divorce decree allegedly obtained by Merry Lee which
absolutely allowed Felicisimo to remarry, would have
vested Felicidad with the legal personality to file the
present petition as Felicisimo's surviving spouse.
However, the records show that there is insufficient
evidence to prove the validity of the divorce obtained
by Merry Lee as well as the marriage of respondent
and Felicisimo under the laws of the U.S.A. In Garcia v.
Recio, 70 the Court laid down the specific guidelines
for pleading and proving foreign law and divorce
judgments. It held that presentation solely of the
divorce decree is insufficient and that proof of its
authenticity and due execution must be presented.
Under Sections 24 and 25 of Rule 132, a writing or
document may be proven as a public or official record
of a foreign country by either (1) an official publication
or (2) a copy thereof attested by the officer having
legal custody of the document. If the record is not
kept in the Philippines, such copy must be (a)
accompanied by a certificate issued by the proper
diplomatic or consular officer in the Philippine foreign
service stationed in the foreign country in which the
record is kept and (b) authenticated by the seal of his
office. 71
With regard to respondent's marriage to Felicisimo
allegedly solemnized in California, U.S.A., she
submitted photocopies of the Marriage Certificate and
the annotated text 72 of the Family Law Act of
California which purportedly show that their marriage
was done in accordance with the said law. As stated in
Garcia, however, the Court cannot take judicial notice
of foreign laws as they must be alleged and proved. 73
Therefore, this case should be remanded to the trial
court for further reception of evidence on the divorce
decree obtained by Merry Lee and the marriage of
respondent and Felicisimo.
Even assuming that Felicisimo was not capacitated to
marry respondent in 1974, nevertheless, we find that
the latter has the legal personality to file the subject
petition for letters of administration, as she may be
considered the co-owner of Felicisimo as regards the
properties that were acquired through their joint
efforts during their cohabitation. TIEHDC

Section 6, 74 Rule 78 of the Rules of Court states that

letters of administration may be granted to the
surviving spouse of the decedent. However, Section 2,
Rule 79 thereof also provides in part:
SEC. 2. Contents of petition for letters of
administration. A petition for letters of
administration must be filed by an
 interested person and must show, as
far as known to the petitioner: . . . .

An "interested person" has been defined as one who

would be benefited by the estate, such as an heir, or
one who has a claim against the estate, such as a
creditor. The interest must be material and direct, and
not merely indirect or contingent. 75
In the instant case, respondent would qualify as an
interested person who has a direct interest in the
estate of Felicisimo by virtue of their cohabitation, the
existence of which was not denied by petitioners. If
she proves the validity of the divorce and Felicisimo's
capacity to remarry, but fails to prove that her
marriage with him was validly performed under the
laws of the U.S.A., then she may be considered as a
co-owner under Article 144 76 of the Civil Code. This
provision governs the property relations between
parties who live together as husband and wife without
the benefit of marriage, or their marriage is void from
the beginning. It provides that the property acquired
by either or both of them through their work or
industry or their wages and salaries shall be governed
by the rules on co-ownership. In a co-ownership, it is
not necessary that the property be acquired through
their joint labor, efforts and industry. Any property
acquired during the union is prima facie presumed to
have been obtained through their joint efforts. Hence,
the portions belonging to the co-owners shall be
presumed equal, unless the contrary is proven. 77

Meanwhile, if respondent fails to prove the validity of

both the divorce and the marriage, the applicable
provision would be Article 148 of the Family Code
which has filled the hiatus in Article 144 of the Civil
Code by expressly regulating the property relations of
couples living together as husband and wife but are
incapacitated to marry. 78 In Saguid v. Court of
Appeals, 79 we held that even if the cohabitation or
the acquisition of property occurred before the Family
Code took effect, Article 148 governs. 80 The Court
described the property regime under this provision as
follows:
The regime of limited co-ownership of property
governing the union of parties who are not
legally capacitated to marry each other, but
who nonetheless live together as husband
and wife, applies to properties acquired
during said cohabitation in proportion to
their respective contributions. Co-
ownership will only be up to the extent of
the proven actual contribution of money,
property or industry. Absent proof of the
extent thereof, their contributions and
corresponding shares shall be presumed to
 be equal.

xxx xxx xxx

In the cases of Agapay v. Palang, and Tumlos v.

Fernandez, which involved the issue of co-
ownership of properties acquired by the
parties to a bigamous marriage and an
adulterous relationship, respectively, we
ruled that proof of actual contribution in
the acquisition of the property is
essential. . . .

As in other civil cases, the burden of proof rests

upon the party who, as determined by the
pleadings or the nature of the case, asserts
an affirmative issue. Contentions must be
proved by competent evidence and
reliance must be had on the strength of the
party's own evidence and not upon the
weakness of the opponent's defense. . . . 81

In view of the foregoing, we find that respondent's

legal capacity to file the subject petition for letters of
administration may arise from her status as the
surviving wife of Felicisimo or as his co-owner under
Article 144 of the Civil Code or Article 148 of the
Family Code.
WHEREFORE, the petition is DENIED. The Decision of
the Court of Appeals reinstating and affirming the
February 28, 1994 Order of the Regional Trial Court
which denied petitioners' motion to dismiss and its
October 24, 1994 Order which dismissed petitioners'
motion for reconsideration is AFFIRMED. Let this case
be REMANDED to the trial court for further
proceedings.
SO ORDERED.

(San Luis v. San Luis, G.R. Nos. 133743 & 134029,

|||

[February 6, 2007], 543 PHIL 275-298)

 SECOND DIVISION
[G.R. No. 189121. July 31, 2013.]
AMELIA GARCIA-QUIAZON, JENNETH
QUIAZON and MARIA JENNIFER QUIAZON,
petitioners, vs. MA. LOURDES BELEN, for and
in behalf of MARIA LOURDES ELISE QUIAZON,
respondent.
DECISION
PEREZ, J :p

This is a Petition for Review on Certiorari filed

pursuant to Rule 45 of the Revised Rules of Court,
primarily assailing the 28 November 2008 Decision
rendered by the Ninth Division of the Court of Appeals
in CA-G.R. CV No. 88589, 1 the decretal portion of
which states:
WHEREFORE, premises considered, the appeal in
hereby DENIED. The assailed Decision dated March 11,
2005, and the Order dated March 24, 2006 of the
Regional Trial Court, Branch 275, Las Pias City are
AFFIRMED in toto. 2
The Facts

This case started as a Petition for Letters of

Administration of the Estate of Eliseo Quiazon (Eliseo),
filed by herein respondents who are Eliseo's common-
law wife and daughter. The petition was opposed by
herein petitioners Amelia Garcia-Quiazon (Amelia) to
whom Eliseo was married. Amelia was joined by her
children, Jenneth Quiazon (Jenneth) and Maria Jennifer
Quiazon (Jennifer).
Eliseo died intestate on 12 December 1992.
On 12 September 1994, Maria Lourdes Elise Quiazon
(Elise), represented by her mother, Ma. Lourdes Belen
(Lourdes), filed a Petition for Letters of Administration
before the Regional Trial Court (RTC) of Las Pias City.
3 In her Petition docketed as SP Proc. No. M-3957,
Elise claims that she is the natural child of Eliseo
having been conceived and born at the time when her
parents were both capacitated to marry each other.
Insisting on the legal capacity of Eliseo and Lourdes to
marry, Elise impugned the validity of Eliseo's marriage
to Amelia by claiming that it was bigamous for having
been contracted during the subsistence of the latter's
marriage with one Filipito Sandico (Filipito). To prove
her filiation to the decedent, Elise, among others,
attached to the Petition for Letters of Administration
her Certificate of Live Birth 4 signed by Eliseo as her
father. In the same petition, it was alleged that Eliseo
left real properties worth P2,040,000.00 and personal
properties worth P2,100,000.00. In order to preserve
the estate of Eliseo and to prevent the dissipation of
its value, Elise sought her appointment as
administratrix of her late father's estate.
Claiming that the venue of the petition was improperly
laid, Amelia, together with her children, Jenneth and
Jennifer, opposed the issuance of the letters of
administration by filing an Opposition/Motion to
Dismiss. 5 The petitioners asserted that as shown by
his Death Certificate, 6 Eliseo was a resident of Capas,
Tarlac and not of Las Pias City, at the time of his
death. Pursuant to Section 1, Rule 73 of the Revised
Rules of Court, 7 the petition for settlement of
decedent's estate should have been filed in Capas,
Tarlac and not in Las Pias City. In addition to their
claim of improper venue, the petitioners averred that
there are no factual and legal bases for Elise to be
appointed administratix of Eliseo's estate.
In a Decision 8 dated 11 March 2005, the RTC directed
the issuance of Letters of Administration to Elise upon
posting the necessary bond. The lower court ruled
that the venue of the petition was properly laid in Las
Pias City, thereby discrediting the position taken by
the petitioners that Eliseo's last residence was in
Capas, Tarlac, as hearsay. The dispositive of the RTC
decision reads:
Having attained legal age at this time and there
being no showing of any disqualification or
incompetence to serve as administrator, let
letters of administration over the estate of
the decedent Eliseo Quiazon, therefore, be
issued to petitioner, Ma. Lourdes Elise
Quiazon, after the approval by this Court of
a bond in the amount of P100,000.00 to be
posted by her. 9
On appeal, the decision of the trial court was affirmed
in toto in the 28 November 2008 Decision 10 rendered
by the Court of Appeals in CA-G.R. CV No. 88589. In
validating the findings of the RTC, the Court of Appeals
held that Elise was able to prove that Eliseo and
Lourdes lived together as husband and wife by
establishing a common residence at No. 26 Everlasting
Road, Phase 5, Pilar Village, Las Pias City, from 1975
up to the time of Eliseo's death in 1992. For purposes
of fixing the venue of the settlement of Eliseo's estate,
the Court of Appeals upheld the conclusion reached
by the RTC that the decedent was a resident of Las
Pias City. The petitioners' Motion for Reconsideration
was denied by the Court of Appeals in its Resolution 11
dated 7 August 2009.
The Issues

The petitioners now urge Us to reverse the assailed

Court of Appeals Decision and Resolution on the
following grounds:
I. THE COURT OF APPEALS GRAVELY ERRED IN
AFFIRMING THAT ELISEO QUIAZON
WAS A RESIDENT OF LAS PIAS AND
THEREFORE[,] THE PETITION FOR
LETTERS OF ADMINISTRATION WAS
PROPERLY FILED WITH THE [RTC] OF
LAS PIAS[;]
II. THE COURT OF APPEALS GRAVELY ERRED IN
DECLARING THAT AMELIA GARCIA-
QUIAZON WAS NOT LEGALLY
MARRIED TO ELISEO QUIAZON DUE
TO PRE-EXISTING MARRIAGE[;] [AND]

III. THE COURT OF APPEALS OVERLOOKED THE

FACT THAT ELISE QUIAZON HAS NOT
SHOWN ANY INTEREST IN THE
PETITION FOR LETTERS OF
ADMINISTRATION[.]12

The Court's Ruling

We find the petition bereft of merit.

Under Section 1, Rule 73 of the Rules of Court,the
petition for letters of administration of the estate of a
decedent should be filed in the RTC of the province
where the decedent resides at the time of his death:
Sec. 1. Where estate of deceased persons
settled. If the decedent is an inhabitant of the
Philippines at the time of his death, whether a citizen or
an alien, his will shall be proved, or letters of
administration granted, and his estate settled, in the
Court of First Instance [now Regional Trial Court] in
the province in which he resides at the time of
his death, and if he is an inhabitant of a foreign country,
the Court of First Instance [now Regional Trial Court] of
any province in which he had estate. The court first taking
cognizance of the settlement of the estate of a decedent,
shall exercise jurisdiction to the exclusion of all other
courts. The jurisdiction assumed by a court, so far as it
depends on the place of residence of the decedent, or of
the location of his estate, shall not be contested in a suit
or proceeding, except in an appeal from that court, in the
original case, or when the want of jurisdiction appears on
the record. (Emphasis supplied).
The term "resides" connotes ex vi termini "actual
residence" as distinguished from "legal residence or
domicile." This term "resides," like the terms "residing"
and "residence," is elastic and should be interpreted in
the light of the object or purpose of the statute or rule
in which it is employed. In the application of venue
statutes and rules Section 1, Rule 73 of the Revised
Rules of Court is of such nature residence rather
than domicile is the significant factor. 13 Even where
the statute uses the word "domicile" still it is
construed as meaning residence and not domicile in
the technical sense. 14 Some cases make a
distinction between the terms "residence"
and "domicile" but as generally used in
statutes fixing venue, the terms are
synonymous, and convey the same meaning
as the term "inhabitant." 15 In other words,
"resides" should be viewed or understood in
its popular sense, meaning, the personal,
actual or physical habitation of a person,
actual residence or place of abode. 16 It
signifies physical presence in a place and actual stay
thereat. 17 Venue for ordinary civil actions and that for
special proceedings have one and the same meaning.
18 As thus defined, "residence," in the
context of venue provisions, means nothing
more than a person's actual residence or
place of abode, provided he resides therein
with continuity and consistency. 19
Viewed in light of the foregoing principles, the Court of
Appeals cannot be faulted for affirming the ruling of
the RTC that the venue for the settlement of the estate
of Eliseo was properly laid in Las Pias City. It is
evident from the records that during his lifetime,
Eliseo resided at No. 26 Everlasting Road, Phase 5,
Pilar Village, Las Pias City. For this reason, the venue
for the settlement of his estate may be laid in the said
city.
In opposing the issuance of letters of administration,
the petitioners harp on the entry in Eliseo's Death
Certificate that he is a resident of Capas, Tarlac where
they insist his estate should be settled. While the
recitals in death certificates can be considered proofs
of a decedent's residence at the time of his death, the
contents thereof, however, is not binding on the
courts. Both the RTC and the Court of Appeals found
that Eliseo had been living with Lourdes, deporting
themselves as husband and wife, from 1972 up to the
time of his death in 1995. This finding is consistent
with the fact that in 1985, Eliseo filed an action for
judicial partition of properties against Amelia before
the RTC of Quezon City, Branch 106, on the ground
that their marriage is void for being bigamous. 20 That
Eliseo went to the extent of taking his marital feud
with Amelia before the courts of law renders
untenable petitioners' position that Eliseo spent the
final days of his life in Tarlac with Amelia and her
children. It disproves rather than supports petitioners'
submission that the lower courts' findings arose from
an erroneous appreciation of the evidence on record.
Factual findings of the trial court, when affirmed by
the appellate court, must be held to be conclusive and
binding upon this Court. 21
Likewise unmeritorious is petitioners' contention that
the Court of Appeals erred in declaring Amelia's
marriage to Eliseo as void ab initio. In a void marriage,
it was though no marriage has taken place, thus, it
cannot be the source of rights. Any interested party
may attack the marriage directly or collaterally. A void
marriage can be questioned even beyond the lifetime
of the parties to the marriage. 22 It must be pointed
out that at the time of the celebration of the marriage
of Eliseo and Amelia, the law in effect was the Civil
Code,and not the Family Code, making the ruling in
Nial v. Bayadog 23 applicable four-square to the case
at hand. In Nial, the Court, in no uncertain terms,
allowed therein petitioners to file a petition for the
declaration of nullity of their father's marriage to
therein respondent after the death of their father, by
contradistinguishing void from voidable marriages, to
wit:
[C]onsequently, void marriages can be
questioned even after the death of either
party but voidable marriages can be
assailed only during the lifetime of the
parties and not after death of either, in
which case the parties and their offspring
will be left as if the marriage had been
perfectly valid. That is why the action or
defense for nullity is imprescriptible,
unlike voidable marriages where the
action prescribes. Only the parties to a
voidable marriage can assail it but any
proper interested party may attack a void
marriage. 24

It was emphasized in Nial that in a void

marriage, no marriage has taken place and
it cannot be the source of rights, such that
any interested party may attack the
marriage directly or collaterally without
prescription, which may be filed even
beyond the lifetime of the parties to the
marriage. 25
Relevant to the foregoing, there is no doubt that Elise,
whose successional rights would be prejudiced by her
father's marriage to Amelia, may impugn the
existence of such marriage even after the death of her
father. The said marriage may be questioned directly
by filing an action attacking the validity thereof, or
collaterally by raising it as an issue in a proceeding for
the settlement of the estate of the deceased spouse,
such as in the case at bar. Ineluctably, Elise, as a
compulsory heir, 26 has a cause of action for the
declaration of the absolute nullity of the void marriage
of Eliseo and Amelia, and the death of either party to
the said marriage does not extinguish such cause of
action.
Having established the right of Elise to impugn Eliseo's
marriage to Amelia, we now proceed to determine
whether or not the decedent's marriage to Amelia is
void for being bigamous.
Contrary to the position taken by the petitioners, the
existence of a previous marriage between Amelia and
Filipito was sufficiently established by no less than the
Certificate of Marriage issued by the Diocese of Tarlac
and signed by the officiating priest of the Parish of San
Nicolas de Tolentino in Capas, Tarlac. The said
marriage certificate is a competent evidence of
marriage and the certification from the National
Archive that no information relative to the said
marriage exists does not diminish the probative value
of the entries therein. We take judicial notice of the
fact that the first marriage was celebrated more than
50 years ago, thus, the possibility that a record of
marriage can no longer be found in the National
Archive, given the interval of time, is not completely
remote. Consequently, in the absence of any showing
that such marriage had been dissolved at the time
Amelia and Eliseo's marriage was solemnized, the
inescapable conclusion is that the latter marriage is
bigamous and, therefore, void ab initio. 27
Neither are we inclined to lend credence to the
petitioners' contention that Elise has not shown any
interest in the Petition for Letters of Administration.
Section 6, Rule 78 of the Revised Rules of Court lays
down the preferred persons who are entitled to the
issuance of letters of administration, thus:
Sec. 6. When and to whom letters of
administration granted. If no executor is named
in the will, or the executor or executors are incompetent,
refuse the trust, or fail to give bond, or a person dies
intestate, administration shall be granted:
(a) To the surviving husband or wife, as the case
may be, or next of kin, or both, in the
discretion of the court, or to such person
as such surviving husband or wife, or next
of kin, requests to have appointed, if
 competent and willing to serve;

(b) If such surviving husband or wife, as the case

may be, or next of kin, or the person
selected by them, be incompetent or
unwilling, or if the husband or widow, or
next of kin, neglects for thirty (30) days
after the death of the person to apply for
administration or to request that
administration be granted to some other
person, it may be granted to one or more
of the principal creditors, if competent and
willing to serve;

(c) If there is no such creditor competent and

willing to serve, it may be granted to such
other person as the court may select.

Upon the other hand, Section 2 of Rule 79 provides

that a petition for Letters of Administration must be
filed by an interested person, thus:
Sec. 2. Contents of petition for letters of
administration. A petition for letters of
administration must be filed by an interested person and
must show, so far as known to the petitioner:
(a) The jurisdictional facts;
(b) The names, ages, and residences of the heirs,
and the names and
residences of the creditors, of
the decedent;

(c) The probable value and character of the

property of the estate;

(d) The name of the person for whom letters of

administration are prayed.

But no defect in the petition shall render void the

issuance of letters of administration.

An "interested party," in estate proceedings, is one

who would be benefited in the estate, such as an heir,
or one who has a claim against the estate, such as a
creditor. Also, in estate proceedings, the phrase "next
of kin" refers to those whose relationship with the
decedent is such that they are entitled to share in the
estate as distributees. 28
In the instant case, Elise, as a compulsory heir who
stands to be benefited by the distribution of Eliseo's
estate, is deemed to be an interested party. With the
overwhelming evidence on record produced by Elise
to prove her filiation to Eliseo, the petitioners'
pounding on her lack of interest in the administration
of the decedent's estate, is just a desperate attempt to
sway this Court to reverse the findings of the Court of
Appeals. Certainly, the right of Elise to be appointed
administratix of the estate of Eliseo is on good
grounds. It is founded on her right as a compulsory
heir, who, under the law, is entitled to her legitime
after the debts of the estate are satisfied. 29 Having a
vested right in the distribution of Eliseo's estate as one
of his natural children, Elise can rightfully be
considered as an interested party within the purview
of the law.
WHEREFORE, premises considered, the petition is
DENIED for lack of merit. Accordingly, the Court of
Appeals assailed 28 November 2008 Decision and 7
August 2009 Resolution, are AFFIRMED in toto.
SO ORDERED.
(Garcia-Quiazon v. Belen, G.R. No. 189121, [July 31,
|||

2013], 715 PHIL 678-691)

 SECOND DIVISION
[G.R. No. 177099. June 8, 2011.]
EDUARDO G. AGTARAP, petitioner, vs.
SEBASTIAN AGTARAP, JOSEPH AGTARAP,
TERESA AGTARAP, WALTER DE SANTOS, and
ABELARDO DAGORO, respondents.
[G.R. No. 177192. June 8, 2011.]
SEBASTIAN G. AGTARAP, petitioner, vs.
EDUARDO G. AGTARAP, JOSEPH AGTARAP,
TERESA AGTARAP, WALTER DE SANTOS, and
ABELARDO DAGORO, respondents.
DECISION
NACHURA, J : p

Before us are the consolidated petitions for

review on certiorari of petitioners Sebastian G.
Agtarap (Sebastian) 1 and Eduardo G. Agtarap
(Eduardo), 2 assailing the Decision dated November
21, 2006 3 and the Resolution dated March 27,
2007 4 of the Court of Appeals (CA) in CA-G.R. CV
No. 73916.

The antecedent facts and proceedings

On September 15, 1994, Eduardo filed with

the Regional Trial Court (RTC), Branch 114, Pasay
City, a verified petition for the judicial settlement of
the estate of his deceased father Joaquin Agtarap
(Joaquin). It was docketed as Special Proceedings
No. 94-4055. AacCIT
 The petition alleged that Joaquin died
intestate on November 21, 1964 in Pasay City
without any known debts or obligations. During his
lifetime, Joaquin contracted two marriages, first
with Lucia Garcia (Lucia), 5 and second with Caridad
Garcia (Caridad). Lucia died on April 24, 1924.
Joaquin and Lucia had three children Jesus (died
without issue), Milagros, and Jose (survived by
three children, namely, Gloria, 6 Joseph, and Teresa
7 ). Joaquin married Caridad on February 9, 1926.
They also had three children Eduardo, Sebastian,
and Mercedes (survived by her daughter Cecile). At
the time of his death, Joaquin left two parcels of
land with improvements in Pasay City, covered by
Transfer Certificates of Title (TCT) Nos. 873-(38254)
and 874-(38255). Joseph, a grandson of Joaquin,
had been leasing and improving the said realties
and had been appropriating for himself P26,000.00
per month since April 1994.

Eduardo further alleged that there was an

imperative need to appoint him as special
administrator to take possession and charge of the
estate assets and their civil fruits, pending the
appointment of a regular administrator. In
addition, he prayed that an order be issued (a)
confirming and declaring the named compulsory
heirs of Joaquin who would be entitled to
participate in the estate; (b) apportioning and
allocating unto the named heirs their aliquot
shares in the estate in accordance with law; and (c)
entitling the distributees the right to receive and
enter into possession those parts of the estate
individually awarded to them.

On September 26, 1994, the RTC issued an

order setting the petition for initial hearing and
directing Eduardo to cause its publication.

On December 28, 1994, Sebastian filed his

comment, generally admitting the allegations in the
petition, and conceding to the appointment of
Eduardo as special administrator.

Joseph, Gloria, and Teresa filed their

answer/opposition. They alleged that the two
subject lots belong to the conjugal partnership of
Joaquin with Lucia, and that, upon Lucia's death in
April 1924, they became the pro indiviso owners of
the subject properties. They said that their
residence was built with the exclusive money of
their late father Jose, and the expenses of the
extensions to the house were shouldered by Gloria
and Teresa, while the restaurant (Manong's
Restaurant) was built with the exclusive money of
Joseph and his business partner. They opposed the
appointment of Eduardo as administrator on the
 following grounds: (1) he is not physically and
mentally fit to do so; (2) his interest in the lots is
minimal; and (3) he does not possess the desire to
earn. They claimed that the best interests of the
estate dictate that Joseph be appointed as special
or regular administrator. DEICTS

On February 16, 1995, the RTC issued a

resolution appointing Eduardo as regular
administrator of Joaquin's estate. Consequently, it
issued him letters of administration.

On September 16, 1995, Abelardo Dagoro

filed an answer in intervention, alleging that
Mercedes is survived not only by her daughter
Cecile, but also by him as her husband. He also
averred that there is a need to appoint a special
administrator to the estate, but claimed that
Eduardo is not the person best qualified for the
task.

After the parties were given the opportunity

to be heard and to submit their respective
proposed projects of partition, the RTC, on October
23, 2000, issued an Order of Partition, 8 with the
following disposition

In the light of the filing by the heirs of their

respective proposed projects of partition
and the payment of inheritance taxes due
 the estate as early as 1965, and there being
no claim in Court against the estate of the
deceased, the estate of JOAQUIN AGTARAP
is now consequently ripe for
distribution among the heirs minus the
surviving spouse Caridad Garcia who died
on August 25, 1999. EcDTIH

Considering that the bulk of the estate property

were acquired during the existence of the
second marriage as shown by TCT No.
(38254) and TCT No. (38255) which showed
on its face that decedent was married to
Caridad Garcia, which fact oppositors failed
to contradict by evidence other than their
negative allegations, the greater part of the
estate is perforce accounted by the second
marriage and the compulsory heirs
thereunder.

The Administrator, Eduardo Agtarap rendered a

true and just accounting of his
administration from his date of
assumption up to the year ending
December 31, 1996 per Financial and
Accounting Report dated June 2, 1997
which was approved by the Court. The
 accounting report included the income
earned and received for the period and the
expenses incurred in the administration,
sustenance and allowance of the widow. In
accordance with said Financial and
Accounting Report which was duly
approved by this Court in its Resolution
dated July 28, 1998 the deceased
JOAQUIN AGTARAP left real properties
consisting of the following:

ILAND:

Two lots and two buildings with one garage quarter

located at #3030 Agtarap St., Pasay City,
covered by Transfer Certificate of Title Nos.
38254 and 38255 and registered with the
Registry of Deeds of Pasay City, Metro
Manila, described as follows:

TCT No. LOT No. AREA/SQ.M. ZO

38254 745-B-1 1,335 sq. m.

38255 745-B-2 1,331 sq. m.

TOTAL
II. BUILDINGS AND IMPROVEMENTS:

BUILDING I (Lot # 745-B-1)

BUILDING II (Lot # 745-B-2)
Building Improvements
Restaurant

TOTAL

TOTAL NET WORTH

WHEREFORE, the net assets of the estate of the late

JOAQUIN AGTARAP with a total value of
P14,177,500.00, together with whatever
interest from bank deposits and all other
incomes or increments thereof accruing
after the Accounting Report of December
31, 1996, after deducting therefrom the
compensation of the administrator and
other expenses allowed by the Court, are
hereby ordered distributed as follows:

TOTAL ESTATE P14,177,500.00

CARIDAD AGTARAP 1/2 of the estate as her

conjugal share P7,088,750.00, the other
 half of P7,088,750.00 to be divided
among the compulsory heirs as follows:

1) JOSE (deceased) P1,181,548.30

2) MILAGROS (deceased) P1,181,548.30
3) MERCEDES (deceased) P1,181,548.30
4) SEBASTIAN P1,181,548.30
5) EDUARDO P1,181,548.30
6) CARIDAD P1,181,548.30
The share of Milagros Agtarap as compulsory heir
in the amount of P1,181,548.30 and who
died in 1996 will go to Teresa Agtarap and
Joseph Agtarap, Walter de Santos and half
brothers Eduardo and Sebastian Agtarap in
equal proportions. ADCEcI

TERESA AGTARAP P236,291.66

JOSEPH AGTARAP P236,291.66
WALTER DE SANTOS P236,291.66
SEBASTIAN AGTARAP P236,291.66
EDUARDO AGTARAP P236,291.66
Jose Agtarap died in 1967. His compulsory heirs are
as follows:

COMPULSORY HEIRS:
1) GLORIA (deceased) represented by Walter de Santos

2) JOSEPH AGTARAP
3) TERESA AGTARAP
4) PRISCILLA AGTARAP
Hence, Priscilla Agtarap will inherit P295,364.57.

Adding their share from Milagros Agtarap, the

following heirs of the first marriage stand
to receive the total amount of:

HEIRS OF THE FIRST MARRIAGE:

1) JOSEPH AGTARAP P236,291.66 share from Mil
Agtarap
P295,364.57 as compulsory
Jose Agtarap

P531,656.23
2) TERESA AGTARAP P236,291.66 share from Mil
Agtarap
P295,364.57 as compulsory
Jose Agtarap

P531,656.23
3) WALTER DE SANTOS P236,291.66 share from Mil
Agtarap
P295,364.57 as compulsory
Jose Agtarap

 P531,656.23
HEIRS OF THE SECOND MARRIAGE:
a) CARIDAD AGTARAP died on Aug
P7,088,750.00 as conjugal
P1,181,458.30 as compulso

Total of P8,270,208.30
===========

b) SEBASTIAN AGTARAP P1,181,458.38 as compulso

P236,291.66 share from

c) EDUARDO AGTARAP P1,181,458.38 as compulso

P236,291.66 share from

d.) MERCEDES

P1,181,458.38
REMAINING HEIRS OF CARIDAD AGTARAP:
1) SEBASTIAN AGTARAP

2) EDUARDO AGTARAP

MERCEDES AGTARAP (Predeceased Caridad Agtarap)

In sum, Sebastian Agtarap and Eduardo Agtarap

stand to inherit:

SEBASTIAN P4,135,104.10 share from Caridad Garcia

 P1,181,458.30 as compulsory heir
P 236,291.66 share from Milagros


P5,522,854.06
===========
EDUARDO P4,135,104.10 share from Caridad Garcia
P1,181,458.30 as compulsory heir
P236,291.66 share from Milagros


P5,522,854.06
===========
SO ORDERED. 9

Eduardo, Sebastian, and oppositors Joseph and Teresa

filed their respective motions for reconsideration.
On August 27, 2001, the RTC issued a
resolution 10 denying the motions for
reconsideration of Eduardo and Sebastian, and
granting that of Joseph and Teresa. It also declared
that the real estate properties belonged to the
conjugal partnership of Joaquin and Lucia. It also
directed the modification of the October 23, 2000
Order of Partition to reflect the correct sharing of
the heirs. However, before the RTC could issue a
new order of partition, Eduardo and Sebastian
both appealed to the CA. ACIDTE
 On November 21, 2006, the CA rendered its
Decision, the dispositive portion of which reads

WHEREFORE, premises considered, the instant appeals

are DISMISSED for lack of merit. The assailed
Resolution dated August 27, 2001 is AFFIRMED and
pursuant thereto, the subject properties (Lot No. 745-B-1
[TCT No. 38254] and Lot No. 745-B-2 [TCT No. 38255]) and
the estate of the late Joaquin Agtarap are hereby
partitioned as follows:
The two (2) properties, together with their
improvements, embraced by TCT No.
38254 and TCT No. 38255, respectively, are
first to be distributed among the following:

Lucia Mendietta - 1/2 of the property. But since she is deceased,

Jose in equal shares.

Joaquin Agtarap - 1/2 of the property and 1/4 of the other half of

Jesus Agtarap - 1/4 of Lucia Mendietta's share. But since he is a

shall, in turn, be acquired by Joaquin Agtarap.

Milagros Agtarap - 1/4 of Lucia Mendietta's share. But since she d

inherited by Gloria (represented by her husban
Agtarap and Teresa Agtarap, (in representation
inherited by Mercedes (represented by her hus
Eduardo, all surnamed Agtarap.
Jose Agtarap - 1/4 of Lucia Mendietta's share. But since he die
and children Gloria (represented by her husba
Agtarap and Teresa in equal shares.

Then, Joaquin Agtarap's estate, comprising three-

fourths (3/4) of the subject properties and
its improvements, shall be distributed as
follows:

Caridad Garcia - 1/6 of the estate. But since she died in 1999, he
Agtarap (represented by her husband Abelardo
Eduardo Agtarap in their own right, dividing th

Milagros Agtarap - 1/6 of the estate. But since she died in 1996 wi
(represented by her husband Walter de Santos
Agtarap, (in representation of Milagros' brothe
(represented by her husband Abelardo Dagoro
surnamed Agtarap.

Jose Agtarap - 1/6 of the estate. But since he died in 1967, his
Gloria (represented by her husband Walter de
Teresa Agtarap in equal shares.

Mercedes - 1/6 of the estate. But since she died in 1984, he

Agtarap Dagoro and her daughter Cecile in equal share

Sebastian - 1/6 of the estate.

Agtarap

Eduardo Agtarap - 1/6 of the estate.

SO ORDERED. 11
Aggrieved, Sebastian and Eduardo filed their
respective motions for reconsideration.
In its Resolution dated March 27, 2007, the CA denied
both motions. Hence, these petitions ascribing to the
appellate court the following errors:
G.R. No. 177192
1.The Court of Appeals erred in not considering
the aforementioned important facts 12
which alter its Decision;

2.The Court of Appeals erred in not considering

the necessity of hearing the issue of
legitimacy of respondents as heirs;

3.The Court of Appeals erred in allowing violation

of the law and in not applying the doctrines
of collateral attack, estoppel, and res
judicata. 13

G.R. No. 177099

THE COURT OF APPEALS (FORMER TWELFTH
 DIVISION) DID NOT ACQUIRE JURISDICTION
OVER THE ESTATE OF MILAGROS G.
AGTARAP AND ERRED IN DISTRIBUTING
HER INHERITANCE FROM THE ESTATE OF
JOAQUIN AGTARAP NOTWITHSTANDING
THE EXISTENCE OF HER LAST WILL AND
TESTAMENT IN VIOLATION OF THE
DOCTRINE OF PRECEDENCE OF TESTATE
PROCEEDINGS OVER INTESTATE
PROCEEDINGS.

II.

THE COURT OF APPEALS (FORMER TWELFTH

DIVISION) ERRED IN DISMISSING THE
DECISION APPEALED FROM FOR LACK OF
MERIT AND IN AFFIRMING THE ASSAILED
RESOLUTION DATED AUGUST 27, 2001 OF
THE LOWER COURT HOLDING THAT THE
PARCELS OF LAND COVERED BY TCT NO.
38254 AND TCT (NO.) 38255 OF THE
REGISTRY OF DEEDS FOR THE CITY OF
PASAY BELONG TO THE CONJUGAL
PARTNERSHIP OF JOAQUIN AGTARAP
MARRIED TO LUCIA GARCIA MENDIETTA
NOTWITHSTANDING THEIR REGISTRATION
UNDER THEIR EXISTING CERTIFICATES OF
 TITLE AS REGISTERED IN THE NAME OF
JOAQUIN AGTARAP, CASADO CON
CARIDAD GARCIA. UNDER EXISTING
JURISPRUDENCE, THE PROBATE COURT
HAS NO POWER TO DETERMINE THE
OWNERSHIP OF THE PROPERTY DESCRIBED
IN THESE CERTIFICATES OF TITLE WHICH
SHOULD BE RESOLVED IN AN
APPROPRIATE SEPARATE ACTION FOR A
TORRENS TITLE UNDER THE LAW IS
ENDOWED WITH INCONTESTABILITY UNTIL
IT HAS BEEN SET ASIDE IN THE MANNER
INDICATED IN THE LAW ITSELF. 14

As regards his first and second assignments

of error, Sebastian contends that Joseph and
Teresa failed to establish by competent evidence
that they are the legitimate heirs of their father
Jose, and thus of their grandfather Joaquin. He
draws attention to the certificate of title (TCT No.
8026) they submitted, stating that the wife of their
father Jose is Presentacion Garcia, while they claim
that their mother is Priscilla. He avers that the
marriage contracts proffered by Joseph and Teresa
do not qualify as the best evidence of Jose's
marriage with Priscilla, inasmuch as they were not
authenticated and formally offered in evidence.
Sebastian also asseverates that he actually
questioned the legitimacy of Joseph and Teresa as
heirs of Joaquin in his motion to exclude them as
heirs, and in his reply to their opposition to the
said motion. He further claims that the failure of
Abelardo Dagoro and Walter de Santos to oppose
his motion to exclude them as heirs had the effect
of admitting the allegations therein. He points out
that his motion was denied by the RTC without a
hearing. SCETHa

With respect to his third assigned error,

Sebastian maintains that the certificates of title of
real estate properties subject of the controversy
are in the name of Joaquin Agtarap, married to
Caridad Garcia, and as such are conclusive proof of
their ownership thereof, and thus, they are not
subject to collateral attack, but should be threshed
out in a separate proceeding for that purpose. He
likewise argues that estoppel applies against the
children of the first marriage, since none of them
registered any objection to the issuance of the
TCTs in the name of Caridad and Joaquin only. He
avers that the estate must have already been
settled in light of the payment of the estate and
inheritance tax by Milagros, Joseph, and Teresa,
resulting to the issuance of TCT No. 8925 in
Milagros' name and of TCT No. 8026 in the names
of Milagros and Jose. He also alleges that res
judicata is applicable as the court order directing
the deletion of the name of Lucia, and replacing it
with the name of Caridad, in the TCTs had long
become final and executory.

In his own petition, with respect to his first

assignment of error, Eduardo alleges that the CA
erroneously settled, together with the settlement
of the estate of Joaquin, the estates of Lucia, Jesus,
Jose, Mercedes, Gloria, and Milagros, in
contravention of the principle of settling only one
estate in one proceeding. He particularly questions
the distribution of the estate of Milagros in the
intestate proceedings despite the fact that a
proceeding was conducted in another court for the
probate of the will of Milagros, bequeathing all to
Eduardo whatever share that she would receive
from Joaquin's estate. He states that this violated
the rule on precedence of testate over intestate
proceedings.

Anent his second assignment of error,

Eduardo contends that the CA gravely erred when
it affirmed that the bulk of the realties subject of
this case belong to the first marriage of Joaquin to
Lucia, notwithstanding that the certificates of title
were registered in the name of Joaquin Agtarap
casado con ("married to") Caridad Garcia.
According to him, the RTC, acting as an intestate
court with limited jurisdiction, was not vested with
the power and authority to determine questions of
ownership, which properly belongs to another
court with general jurisdiction. TacADE

The Court's Ruling

As to Sebastian's and Eduardo's common

issue on the ownership of the subject real
properties, we hold that the RTC, as an intestate
court, had jurisdiction to resolve the same.

The general rule is that the jurisdiction of the

trial court, either as a probate or an intestate court,
relates only to matters having to do with the
probate of the will and/or settlement of the estate
of deceased persons, but does not extend to the
determination of questions of ownership that arise
during the proceedings. 15 The patent rationale for
this rule is that such court merely exercises special
and limited jurisdiction. 16 As held in several cases,
17 a probate court or one in charge of estate
proceedings, whether testate or intestate, cannot
adjudicate or determine title to properties claimed
to be a part of the estate and which are claimed to
belong to outside parties, not by virtue of any right
of inheritance from the deceased but by title
adverse to that of the deceased and his estate. All
that the said court could do as regards said
properties is to determine whether or not they
should be included in the inventory of properties to
be administered by the administrator. If there is no
dispute, there poses no problem, but if there is,
then the parties, the administrator, and the
opposing parties have to resort to an ordinary
action before a court exercising general jurisdiction
for a final determination of the conflicting claims of
title.

However, this general rule is subject to

exceptions as justified by expediency and
convenience.

First, the probate court may provisionally

pass upon in an intestate or a testate proceeding
the question of inclusion in, or exclusion from, the
inventory of a piece of property without prejudice
to the final determination of ownership in a
separate action. 18 Second, if the interested parties
are all heirs to the estate, or the question is one of
collation or advancement, or the parties consent to
the assumption of jurisdiction by the probate court
and the rights of third parties are not impaired,
then the probate court is competent to resolve
issues on ownership. 19 Verily, its jurisdiction
extends to matters incidental or collateral to the
settlement and distribution of the estate, such as
the determination of the status of each heir and
whether the property in the inventory is conjugal
or exclusive property of the deceased spouse. 20

We hold that the general rule does not apply

to the instant case considering that the parties are
all heirs of Joaquin and that no rights of third
parties will be impaired by the resolution of the
ownership issue. More importantly, the
determination of whether the subject properties
are conjugal is but collateral to the probate court's
jurisdiction to settle the estate of Joaquin.

It should be remembered that when Eduardo

filed his verified petition for judicial settlement of
Joaquin's estate, he alleged that the subject
properties were owned by Joaquin and Caridad
since the TCTs state that the lots were registered in
the name of Joaquin Agtarap, married to Caridad
Garcia. He also admitted in his petition that
Joaquin, prior to contracting marriage with Caridad,
contracted a first marriage with Lucia. Oppositors
to the petition, Joseph and Teresa, however, were
able to present proof before the RTC that TCT Nos.
38254 and 38255 were derived from a mother title,
TCT No. 5239, dated March 17, 1920, in the name
 of FRANCISCO VICTOR BARNES Y JOAQUIN
AGTARAP, el primero casado con Emilia Muscat, y
el Segundo con Lucia Garcia Mendietta
(FRANCISCO VICTOR BARNES y JOAQUIN AGTARAP,
the first married to Emilia Muscat, and the second
married to Lucia Garcia Mendietta). 21 When TCT
No. 5239 was divided between Francisco Barnes
and Joaquin Agtarap, TCT No. 10864, in the name
of Joaquin Agtarap, married to Lucia Garcia
Mendietta, was issued for a parcel of land,
identified as Lot No. 745 of the Cadastral Survey of
Pasay, Cadastral Case No. 23, G.L.R.O. Cadastral
Record No. 1368, consisting of 8,872 square
meters. This same lot was covered by TCT No. 5577
(32184) 22 issued on April 23, 1937, also in the
name of Joaquin Agtarap, married to Lucia Garcia
Mendietta. HATICc

The findings of the RTC and the CA show that

Lucia died on April 24, 1924, and subsequently, on
February 9, 1926, Joaquin married Caridad. It is
worthy to note that TCT No. 5577 (32184)
contained an annotation, which reads

Ap-4966 NOTA: Se ha enmendado el presente

certificado de titulo, tal como aparece,
tanchando las palabras "con Lucia Garcia
Mendiet[t]a" y poniendo en su lugar, entre
lineas y en tinta encarnada, las palabras
 "en segundas nupcias con Caridad Garcia",
en complimiento de un orden de fecha 28
de abril de 1937, dictada por el Hon. Sixto
de la Costa, juez del Juzgado de Primera
Instancia de Rizal, en el expediente
cadastal No. 23, G.L.R.O. Cad. Record No.
1368; copia de cual orden has sido
presentada con el No. 4966 del Libro
Diario, Tomo 6.0 y, archivada en el Legajo
T-No. 32184. IATHaS

Pasig, Rizal, a 29 abril de 1937. 23

Thus, per the order dated April 28, 1937 of Hon.

Sixto de la Costa, presiding judge of the Court of
First Instance of Rizal, the phrase con Lucia Garcia
Mendiet[t]a was crossed out and replaced by en
segundas nuptias con Caridad Garcia, referring to
the second marriage of Joaquin to Caridad. It
cannot be gainsaid, therefore, that prior to the
replacement of Caridad's name in TCT No. 32184,
Lucia, upon her demise, already left, as her estate,
one-half (1/2) conjugal share in TCT No. 32184.
Lucia's share in the properly covered by the said
TCT was carried over to the properties covered by
the certificates of title derivative of TCT No. 32184,
now TCT Nos. 38254 and 38255. And as found by
both the RTC and the CA, Lucia was survived by her
compulsory heirs Joaquin, Jesus, Milagros, and
Jose.

Section 2, Rule 73 of the Rules of Court

provides that when the marriage is dissolved by
the death of the husband or the wife, the
community property shall be inventoried,
administered, and liquidated, and the debts
thereof paid; in the testate or intestate proceedings
of the deceased spouse, and if both spouses have
died, the conjugal partnership shall be liquidated in
the testate or intestate proceedings of either. Thus,
the RTC had jurisdiction to determine whether the
properties are conjugal as it had to liquidate the
conjugal partnership to determine the estate of the
decedent. In fact, should Joseph and Teresa
institute a settlement proceeding for the intestate
estate of Lucia, the same should be consolidated
with the settlement proceedings of Joaquin, being
Lucia's spouse. 24 Accordingly, the CA correctly
distributed the estate of Lucia, with respect to the
properties covered by TCT Nos. 38254 and 38255
subject of this case, to her compulsory heirs.

Therefore, in light of the foregoing evidence,

as correctly found by the RTC and the CA, the claim
of Sebastian and Eduardo that TCT Nos. 38254 and
38255 conclusively show that the owners of the
properties covered therein were Joaquin and
Caridad by virtue of the registration in the name of
Joaquin Agtarap casado con (married to) Caridad
Garcia, deserves scant consideration. This cannot
be said to be a collateral attack on the said TCTs.
Indeed, simple possession of a certificate of title is
not necessarily conclusive of a holder's true
ownership of property. 25 A certificate of title
under the Torrens system aims to protect
dominion; it cannot be used as an instrument for
the deprivation of ownership. 26 Thus, the fact that
the properties were registered in the name of
Joaquin Agtarap, married to Caridad Garcia, is not
sufficient proof that the properties were acquired
during the spouses' coverture. 27 The phrase
"married to Caridad Garcia" in the TCTs is merely
descriptive of the civil status of Joaquin as the
registered owner, and does not necessarily prove
that the realties are their conjugal properties. 28

Neither can Sebastian's claim that Joaquin's

estate could have already been settled in 1965
after the payment of the inheritance tax be upheld.
Payment of the inheritance tax, per se, does not
settle the estate of a deceased person. As provided
in Section 1, Rule 90 of the Rules of Court
SECTION 1.When order for distribution of residue
made. When the debts, funeral charges,
and expenses of administration, the
allowance to the widow, and inheritance
tax, if any, chargeable to the estate in
accordance with law, have been paid, the
court, on the application of the executor or
administrator, or of a person interested in
the estate, and after hearing upon notice,
shall assign the residue of the estate to the
persons entitled to the same, naming them
and the proportions, or parts, to which
each is entitled, and such persons may
demand and recover their respective
shares from the executor or administrator,
or any other person having the same in his
possession. If there is a controversy before
the court as to who are the lawful heirs of
the deceased person or as to the
distributive share to which each person is
entitled under the law, the controversy
shall be heard and decided as in ordinary
cases. cdrep

No distribution shall be allowed until the payment

of the obligations above mentioned has
been made or provided for, unless the
distributees, or any of them, give a bond, in
 a sum to be fixed by the court, conditioned
for the payment of said obligations within
such time as the court directs.

Thus, an estate is settled and distributed among the

heirs only after the payment of the debts of the
estate, funeral charges, expenses of
administration, allowance to the widow, and
inheritance tax. The records of these cases do not
show that these were complied with in 1965.

As regards the issue raised by Sebastian on

the legitimacy of Joseph and Teresa, suffice it to say
that both the RTC and the CA found them to be the
legitimate children of Jose. The RTC found that
Sebastian did not present clear and convincing
evidence to support his averments in his motion to
exclude them as heirs of Joaquin, aside from his
negative allegations. The RTC also noted the fact of
Joseph and Teresa being the children of Jose was
never questioned by Sebastian and Eduardo, and
the latter two even admitted this in their petitions,
as well as in the stipulation of facts in the August
21, 1995 hearing. 29 Furthermore, the CA affirmed
this finding of fact in its November 21, 2006
Decision. 30

Also, Sebastian's insistence that Abelardo

Dagoro and Walter de Santos are not heirs to the
estate of Joaquin cannot be sustained. Per its
October 23, 2000 Order of Partition, the RTC found
that Gloria Agtarap de Santos died on May 4, 1995,
and was later substituted in the proceedings below
by her husband Walter de Santos. Gloria begot a
daughter with Walter de Santos, Georgina
Samantha de Santos. The RTC likewise noted that,
on September 16, 1995, Abelardo Dagoro filed a
motion for leave of court to intervene, alleging that
he is the surviving spouse of Mercedes Agtarap and
the father of Cecilia Agtarap Dagoro, and his
answer in intervention. The RTC later granted the
motion, thereby admitting his answer on October
18, 1995. 31 The CA also noted that, during the
hearing of the motion to intervene on October 18,
1995, Sebastian and Eduardo did not interpose any
objection when the intervention was submitted to
the RTC for resolution. 32

Indeed, this Court is not a trier of facts, and

there appears no compelling reason to hold that
both courts erred in ruling that Joseph, Teresa,
Walter de Santos, and Abelardo Dagoro rightfully
participated in the estate of Joaquin. It was
incumbent upon Sebastian to present competent
evidence to refute his and Eduardo's admissions
that Joseph and Teresa were heirs of Jose, and thus
rightful heirs of Joaquin, and to timely object to the
participation of Walter de Santos and Abelardo
Dagoro. Unfortunately, Sebastian failed to do so.
Nevertheless, Walter de Santos and Abelardo
Dagoro had the right to participate in the estate in
representation of the Joaquin's compulsory heirs,
Gloria and Mercedes, respectively. 33

This Court also differs from Eduardo's

asseveration that the CA erred in settling, together
with Joaquin's estate, the respective estates of
Lucia, Jesus, Jose, Mercedes, and Gloria. A perusal
of the November 21, 2006 CA Decision would
readily show that the disposition of the properties
related only to the settlement of the estate of
Joaquin. Pursuant to Section 1, Rule 90 of the Rules
of Court, as cited above, the RTC was specifically
granted jurisdiction to determine who are the
lawful heirs of Joaquin, as well as their respective
shares after the payment of the obligations of the
estate, as enumerated in the said provision. The
inclusion of Lucia, Jesus, Jose, Mercedes, and Gloria
in the distribution of the shares was merely a
necessary consequence of the settlement of
Joaquin's estate, they being his legal heirs.

However, we agree with Eduardo's position

that the CA erred in distributing Joaquin's estate
 pertinent to the share allotted in favor of Milagros.
Eduardo was able to show that a separate
proceeding was instituted for the probate of the
will allegedly executed by Milagros before the RTC,
Branch 108, Pasay City. 34 While there has been no
showing that the alleged will of Milagros,
bequeathing all of her share from Joaquin's estate
in favor of Eduardo, has already been probated
and approved, prudence dictates that this Court
refrain from distributing Milagros' share in
Joaquin's estate.

It is also worthy to mention that Sebastian

died on January 15, 2010, per his Certificate of
Death. 35 He is survived by his wife Teresita B.
Agtarap (Teresita) and his children Joaquin Julian B.
Agtarap (Joaquin Julian) and Ana Ma. Agtarap
Panlilio (Ana Ma.).

Henceforth, in light of the foregoing, the

assailed November 21, 2006 Decision and the
March 27, 2007 Resolution of the CA should be
affirmed with modifications such that the share of
Milagros shall not yet be distributed until after the
final determination of the probate of her purported
will, and that Sebastian shall be represented by his
compulsory heirs. aACHDS

WHEREFORE, the petition in G.R. No. 177192 is

DENIED for lack of merit, while the petition in G.R.
No. 177099 is PARTIALLY GRANTED, such that the
Decision dated November 21, 2006 and the Resolution
dated March 27, 2007 of the Court of Appeals are
AFFIRMED with the following MODIFICATIONS:
that the share awarded in favor of Milagros Agtarap
shall not be distributed until the final determination of
the probate of her will, and that petitioner Sebastian
G. Agtarap, in view of his demise on January 15, 2010,
shall be represented by his wife Teresita B. Agtarap
and his children Joaquin Julian B. Agtarap and Ana Ma.
Agtarap Panlilio.
These cases are hereby remanded to the
Regional Trial Court, Branch 114, Pasay City, for
further proceedings in the settlement of the estate
of Joaquin Agtarap. No pronouncement as to costs.
SO ORDERED
(Agtarap v. Agtarap, G.R. No. 177099, 177192, [June
|||

8, 2011], 666 PHIL 452-476)

 SPECIAL SECOND DIVISION
[G.R. No. 183053. October 10, 2012.]
EMILIO A.M. SUNTAY III, petitioner, vs. ISABEL
COJUANGCO-SUNTAY, respondent.
RESOLUTION
PEREZ, J :p

The now overly prolonged, all-too familiar and too-

much-stretched imbroglio over the estate of Cristina
Aguinaldo-Suntay has continued. We issued a Decision
in the dispute as in Inter Caetera. 1 We now find a
need to replace the decision. cEaCTS

Before us is a Motion for Reconsideration filed by

respondent Isabel Cojuangco-Suntay (respondent
Isabel) of our Decision 2 in G.R. No. 183053 dated 16
June 2010, directing the issuance of joint letters of
administration to both petitioner Emilio A.M. Suntay III
(Emilio III) and respondent. The dispositive portion
thereof reads:
WHEREFORE, the petition is GRANTED. The Decision
of the Court of Appeals in CA-G.R. CV No. 74949 is
REVERSED and SET ASIDE. Letters of Administration
over the estate of decedent Cristina Aguinaldo-Suntay
shall issue to both petitioner Emilio A.M. Suntay III and
respondent Isabel Cojuangco-Suntay upon payment by
each of a bond to be set by the Regional Trial Court,
Branch 78, Malolos, Bulacan, in Special Proceeding Case
No. 117-M-95. The Regional Trial Court, Branch 78,
Malolos, Bulacan is likewise directed to make a
determination and to declare the heirs of decedent
Cristina Aguinaldo-Suntay according to the actual factual
milieu as proven by the parties, and all other persons
with legal interest in the subject estate. It is further
directed to settle the estate of decedent Cristina
Aguinaldo-Suntay with dispatch. No costs. 3
We are moved to trace to its roots the controversy
between the parties.
The decedent Cristina Aguinaldo-Suntay (Cristina) died
intestate on 4 June 1990. Cristina was survived by her
spouse, Dr. Federico Suntay (Federico) and five
grandchildren: three legitimate grandchildren,
including herein respondent, Isabel; and two
illegitimate grandchildren, including petitioner Emilio
III, all by Federico's and Cristina's only child, Emilio A.
Suntay (Emilio I), who predeceased his parents.
The illegitimate grandchildren, Emilio III and Nenita,
were both reared from infancy by the spouses
Federico and Cristina. Their legitimate grandchildren,
Isabel and her siblings, Margarita and Emilio II, lived
with their mother Isabel Cojuangco, following the
separation of Isabel's parents, Emilio I and Isabel
Cojuangco. Isabel's parents, along with her paternal
grandparents, were involved in domestic relations
cases, including a case for parricide filed by Isabel
Cojuangco against Emilio I. Emilio I was eventually
acquitted.
In retaliation, Emilio I filed a complaint for legal
separation against his wife, charging her among
others with infidelity. The trial court declared as null
and void and of no effect the marriage of Emilio I and
Isabel Cojuangco on the finding that: cEaSHC

From February 1965 thru December 1965 plaintiff

was confined in the Veterans memorial
Hospital. Although at the time of the trial of
parricide case (September 8, 1967) the
patient was already out of the hospital[,] he
continued to be under observation and
treatment.

It is the opinion of Dr. Aramil that the symptoms of

the plaintiffs mental aberration classified
as schizophernia (sic) had made
themselves manifest even as early as 1955;
that the disease worsened with time, until
1965 when he was actually placed under
expert neuro-psychiatrist (sic) treatment;
that even if the subject has shown marked
progress, the remains bereft of adequate
understanding of right and wrong.

There is no controversy that the marriage between

the parties was effected on July 9, 1958,
years after plaintiffs mental illness had set
in. This fact would justify a declaration of
 nullity of the marriage under Article 85 of
the Civil Code which provides:

Art. 95. (sic) A marriage may be annulled for any of

the following causes after (sic)
existing at the time of the marriage:

xxx xxx xxx

(3) That either party was of unsound mind, unless

such party, after coming to
reason, freely cohabited with
the other as husband or wife.

There is a dearth of proof at the time of the

marriage defendant knew about the
mental condition of plaintiff, and there is
proof that plaintiff continues to be without
sound reason. The charges in this very
complaint add emphasis to the findings of
the neuro-psychiatrist handling the patient,
that plaintiff really lives more in fancy than
in reality, a strong indication of
schizophernia (sic). 4
Intent on maintaining a relationship with their
grandchildren, Federico and Isabel filed a complaint
for visitation rights to spend time with Margarita,
Emilio II, and Isabel in the same special lower court.
The Juvenile Domestic Relations Court in Quezon City
(JDRC-QC) granted their prayer for one hour a month
of visitation rights which was subsequently reduced to
thirty minutes, and ultimately stopped, because of
respondent Isabel's testimony in court that her
grandparents' visits caused her and her siblings stress
and anxiety. 5
On 27 September 1993, more than three years after
Cristina's death, Federico adopted his illegitimate
grandchildren, Emilio III and Nenita.
CHcTIA

On 26 October 1995, respondent Isabel, filed before

the Regional Trial Court (RTC), Malolos, Bulacan, a
petition for the issuance of letters of administration
over Cristina's estate docketed as Special Proceeding
Case No. 117-M-95. Federico, opposed the petition,
pointing out that: (1) as the surviving spouse of the
decedent, he should be appointed administrator of
the decedent's estate; (2) as part owner of the mass of
conjugal properties left by the decedent, he must be
accorded preference in the administration thereof; (3)
Isabel and her siblings had been alienated from their
grandparents for more than thirty (30) years; (4) the
enumeration of heirs in the petition was incomplete
as it did not mention the other children of his son,
Emilio III and Nenita; (5) even before the death of his
wife, Federico had administered their conjugal
properties, and thus, is better situated to protect the
integrity of the decedent's estate; (6) the probable
value of the estate as stated in the petition was
grossly overstated; and (7) Isabel's allegation that
some of the properties are in the hands of usurpers is
untrue.
Federico filed a Motion to Dismiss Isabel's petition for
letters of administration on the ground that Isabel had
no right of representation to the estate of Cristina, she
being an illegitimate grandchild of the latter as a result
of Isabel's parents' marriage being declared null and
void. However, in Suntay v. Cojuangco-Suntay, we
categorically declared that Isabel and her siblings,
having been born of a voidable marriage as opposed
to a void marriage based on paragraph 3, Article 85 of
the Civil Code, were legitimate children of Emilio I,
who can all represent him in the estate of their
legitimate grandmother, the decedent, Cristina.
Undaunted by the set back, Federico nominated
Emilio III to administer the decedent's estate on his
behalf in the event letters of administration issues to
Federico. Consequently, Emilio III filed an Opposition-
in-Intervention, echoing the allegations in his
grandfather's opposition, alleging that Federico, or in
his stead, Emilio III, was better equipped than
respondent to administer and manage the estate of
the decedent, Cristina. AScHCD

On 13 November 2000, Federico died.

Almost a year thereafter or on 9 November 2001, the
trial court rendered a decision appointing Emilio III as
administrator of decedent Cristina's intestate estate:
WHEREFORE, the petition of Isabel
Cojuangco[-]Suntay is DENIED and the
Opposition[-]in[-]Intervention is GRANTED.

Accordingly, the Intervenor, Emilio A.M. Suntay, III

(sic) is hereby appointed administrator of
the estate of the decedent Cristina
Aguinaldo Suntay, who shall enter upon
the execution of his trust upon the filing of
a bond in the amount of P200,000.00,
conditioned as follows:

(1) To make and return within three (3) months, a

true and complete inventory;

(2) To administer the estate and to pay and

discharge all debts, legatees, and charge
on the same, or dividends thereon;
(3) To render a true and just account within one (1)
year, and at any other time when required
by the court, and

(4) To perform all orders of the Court.

Once the said bond is approved by the court, let

Letters of Administration be issued in his
favor. 6

On appeal, the Court of Appeals reversed and set

aside the decision of the RTC, revoked the Letters of
Administration issued to Emilio III, and appointed
respondent as administratrix of the subject estate:
WHEREFORE, in view of all the foregoing, the assailed
decision dated November 9, 2001 of Branch 78, Regional
Trial Court of Malolos, Bulacan in SPC No. 117-M-95 is
REVERSED and SET ASIDE and the letters of
administration issued by the said court to Emilio A.M.
Suntay III, if any, are consequently revoked. Petitioner
Isabel Cojuangco[-]Suntay is hereby appointed
administratrix of the intestate estate of Cristina Aguinaldo
Suntay. Let letters of administration be issued in her
favor upon her filing of a bond in the amount of Two
Hundred Thousand (P200,000.00) Pesos. 7
As previously adverted to, on appeal by certiorari, we
reversed and set aside the ruling of the appellate
court. We decided to include Emilio III as co-
administrator of Cristina's estate, giving weight to his
interest in Federico's estate. In ruling for co-
administration between Emilio III and Isabel, we
considered that: TaHIDS

1. Emilio III was reared from infancy by the decedent,

Cristina, and her husband, Federico, who both
acknowledged him as their grandchild;
2. Federico claimed half of the properties included in
the estate of the decedent, Cristina, as forming part of
their conjugal partnership of gains during the
subsistence of their marriage;
3. Cristina's properties, forming part of her estate, are
still commingled with those of her husband, Federico,
because her share in the conjugal partnership
remains undetermined and unliquidated; and
4. Emilio III is a legally adopted child of Federico,
entitled to share in the distribution of the latter's
estate as a direct heir, one degree from Federico, and
not simply in representation of his deceased
illegitimate father, Emilio I.
In this motion, Isabel pleads for total affirmance of the
Court of Appeals' Decision in favor of her sole
administratorship based on her status as a legitimate
grandchild of Cristina, whose estate she seeks to
administer.
Isabel contends that the explicit provisions of Section
6, Rule 78 of the Rules of Court on the order of
preference for the issuance of letters of
administration cannot be ignored and that Article 992
of the Civil Code must be followed. Isabel further
asserts that Emilio III had demonstrated adverse
interests and disloyalty to the estate, thus, he does
not deserve to become a co-administrator thereof.
Specifically, Isabel bewails that: (1) Emilio III is an
illegitimate grandchild and therefore, not an heir of
the decedent; (2) corollary thereto, Emilio III, not being
a "next of kin" of the decedent, has no interest in the
estate to justify his appointment as administrator
thereof; (3) Emilio III's actuations since his
appointment as administrator by the RTC on 9
November 2001 emphatically demonstrate the validity
and wisdom of the order of preference in Section 6,
Rule 78 of the Rules of Court; and (4) there is no basis
for joint administration as there are no "opposing
parties or factions to be represented."
To begin with, the case at bar reached us on the issue
of who, as between Emilio III and Isabel, is better
qualified to act as administrator of the decedent's
estate. We did not choose. Considering merely his
demonstrable interest in the subject estate, we ruled
that Emilio III should likewise administer the estate of
his illegitimate grandmother, Cristina, as a co-
administrator. In the context of this case, we have to
make a choice and therefore, reconsider our decision
of 16 June 2010. HSIaAT

The general rule in the appointment of administrator

of the estate of a decedent is laid down in Section 6,
Rule 78 of the Rules of Court:
SEC. 6. When and to whom letters of administration
granted. If no executor is named in the will, or the
executor or executors are incompetent, refuse the trust,
or fail to give bond, or a person dies intestate,
administration shall be granted:
(a) To the surviving husband or wife, as the case may be,
or next of kin, or both, in the discretion of the court, or to
such person as such surviving husband or wife, or next of
kin, requests to have appointed, if competent and willing
to serve;
(b) If such surviving husband or wife, as the case may be,
or next of kin, or the person selected by them, be
incompetent or unwilling, or if the husband or widow, or
next of kin, neglects for thirty (30) days after the death of
the person to apply for administration or to request that
administration be granted to some other person, it may
be granted to one or more of the principal creditors, if
competent and willing to serve;
(c) If there is not such creditor competent and willing to
serve, it may be granted to such other person as the
court may select.
Textually, the rule lists a sequence to be observed, an
order of preference, in the appointment of an
administrator. This order of preference, which
categorically seeks out the surviving spouse, the next
of kin and the creditors in the appointment of an
administrator, has been reinforced in jurisprudence. 8
The paramount consideration in the appointment of
an administrator over the estate of a decedent is the
prospective administrator's interest in the estate. 9
This is the same consideration which Section 6, Rule
78 takes into account in establishing the order of
preference in the appointment of administrator for
the estate. The rationale behind the rule is that those
who will reap the benefit of a wise, speedy and
economical administration of the estate, or, in the
alternative, suffer the consequences of waste,
improvidence or mismanagement, have the highest
interest and most influential motive to administer the
estate correctly. 10 In all, given that the rule speaks of
an order of preference, the person to be appointed
administrator of a decedent's estate must
demonstrate not only an interest in the estate, but an
interest therein greater than any other candidate. aTSEcA

To illustrate, the preference bestowed by law to the

surviving spouse in the administration of a decedent's
estate presupposes the surviving spouse's interest in
the conjugal partnership or community property
forming part of the decedent's estate. 11 Likewise, a
surviving spouse is a compulsory heir of a decedent 12
which evinces as much, if not more, interest in
administering the entire estate of a decedent, aside
from her share in the conjugal partnership or absolute
community property.
It is to this requirement of observation of the
order of preference in the appointment of
administrator of a decedent's estate, that the
appointment of co-administrators has been
allowed, but as an exception. We again refer to
Section 6 (a) of Rule 78 of the Rules of Court which
specifically states that letters of administration may
be issued to both the surviving spouse and the
next of kin. In addition and impliedly, we can refer
to Section 2 of Rule 82 of the Rules of Court which
say that ". . . [w]hen an executor or administrator
dies, resigns, or is removed, the remaining
executor or administrator may administer the trust
alone, . . . ."

In a number of cases, we have sanctioned the

appointment of more than one administrator for the
benefit of the estate and those interested therein. 13
We recognized that the appointment of administrator
of the estate of a decedent or the determination of a
person's suitability for the office of judicial
administrator rests, to a great extent, in the sound
judgment of the court exercising the power of
appointment. 14
Under certain circumstances and for various reasons
well-settled in Philippine and American jurisprudence,
we have upheld the appointment of co-
administrators: (1) to have the benefits of their
judgment and perhaps at all times to have different
interests represented; 15 (2) where justice and equity
demand that opposing parties or factions be
represented in the management of the estate of the
deceased; (3) where the estate is large or, from any
cause, an intricate and perplexing one to settle; 16 (4)
to have all interested persons satisfied and the
representatives to work in harmony for the best
interests of the estate; 17 and when a person entitled
to the administration of an estate desires to have
another competent person associated with him in the
office. 18
In the frequently cited Matias v. Gonzales, we dwelt on
the appointment of special co-administrators during
the pendency of the appeal for the probate of the
decedent's will. Pending the probate thereof, we
recognized Matias' special interest in the decedent's
estate as universal heir and executrix designated in
the instrument who should not be excluded in the
administration thereof. Thus, we held that justice and
equity demands that the two (2) factions among the
non-compulsory heirs of the decedent, consisting of
an instituted heir (Matias) and intestate heirs
(respondents thereat), should be represented in the
management of the decedent's estate. 19
Another oft-cited case is Vda. de Dayrit v. Ramolete,
where we held that "inasmuch as petitioner-wife owns
one-half of the conjugal properties and that she, too,
is a compulsory heir of her husband, to deprive her of
any hand in the administration of the estate prior to
the probate of the will would be unfair to her
proprietary interests." 20
Hewing closely to the aforementioned cases is our
ruling in Ventura v. Ventura 21 where we allowed the
appointment of the surviving spouse and legitimate
children of the decedent as co-administrators.
However, we drew a distinction between the heirs
categorized as next of kin, the nearest of kin in the
category being preferred, thus:
In the case at bar, the surviving spouse of the
deceased Gregorio Ventura is Juana
Cardona while the next of kin are:
Mercedes and Gregoria Ventura and Maria
and Miguel Ventura. The "next of kin"
has been defined as those persons
who are entitled under the statute
of distribution to the decedent's
property [citations omitted]. It is
generally said that "the nearest of
kin, whose interest in the estate is
more preponderant, is preferred in
 the choice of administrator. 'Among
members of a class the strongest
ground for preference is the
amount or preponderance of
interest. As between next of kin,
the nearest of kin is to be
preferred.'" [citations omitted]

As decided by the lower court and sustained by the

Supreme Court, Mercedes and Gregoria
Ventura are the legitimate children of
Gregorio Ventura and his wife, the late
Paulina Simpliciano. Therefore, as the
nearest of kin of Gregorio Ventura, they are
entitled to preference over the illegitimate
children of Gregorio Ventura, namely:
Maria and Miguel Ventura. Hence, under
the aforestated preference provided in
Section 6 of Rule 78, the person or persons
to be appointed administrator are Juana
Cardona, as the surviving spouse, or
Mercedes and Gregoria Ventura as nearest
of kin, or Juana Cardona and Mercedes and
Gregoria Ventura in the discretion of the
Court, in order to represent both interests.
22 (Emphasis supplied)

In Silverio, Sr. v. Court of Appeals, 23 we maintained

that the order of preference in the appointment of an
administrator depends on the attendant facts and
circumstances. In that case, we affirmed the legitimate
child's appointment as special administrator, and
eventually as regular administrator, of the decedent's
estate as against the surviving spouse who the lower
court found unsuitable. Reiterating Sioca v. Garcia 24
as good law, we pointed out that unsuitableness for
appointment as administrator may consist in adverse
interest of some kind or hostility to those immediately
interested in the estate.
EHSADc

In Valarao v. Pascual, 25 we see another story with a

running theme of heirs squabbling over the estate of a
decedent. We found no reason to set aside the
probate court's refusal to appoint as special co-
administrator Diaz, even if he had a demonstrable
interest in the estate of the decedent and represented
one of the factions of heirs, because the evidence
weighed by the probate court pointed to Diaz's being
remiss in his previous duty as co-administrator of the
estate in the early part of his administration.
Surveying the previously discussed cases of Matias,
Corona, and Vda. de Dayrit, we clarified, thus:
Respondents cannot take comfort in the cases of
Matias v. Gonzales, Corona v. Court of
Appeals, and Vda. de Dayrit v. Ramolete,
cited in the assailed Decision. Contrary
to their claim, these cases do not
 establish an absolute right
demandable from the probate
court to appoint special co-
administrators who would
represent the respective interests
of squabbling heirs. Rather, the
cases constitute precedents for the
authority of the probate court to
designate not just one but also two
or more special co-administrators
for a single estate. Now whether
the probate court exercises such
prerogative when the heirs are
fighting among themselves is a
matter left entirely to its sound
discretion.

Furthermore, the cases of Matias, Corona and Vda.

de Dayrit hinge upon factual circumstances
other than the incompatible interests of
the heirs which are glaringly absent from
the instant case. In Matias this Court
ordered the appointment of a special co-
administrator because of the applicant's
status as the universal heir and executrix
designated in the will, which we considered
to be a "special interest" deserving
protection during the pendency of the
appeal. Quite significantly, since the lower
court in Matias had already deemed it best
 to appoint more than one special
administrator, we found grave abuse of
discretion in the act of the lower court in
ignoring the applicant's distinctive status in
the selection of another special
administrator.

In Corona we gave "highest consideration" to the

"executrix's choice of Special
Administrator, considering her own
inability to serve and the wide latitude of
discretion given her by the testatrix in her
will," for this Court to compel her
appointment as special co-administrator. It
is also manifest from the decision in
Corona that the presence of conflicting
interests among the heirs therein was not
per se the key factor in the designation of a
second special administrator as this fact
was taken into account only to disregard
or, in the words of Corona, to
"overshadow" the objections to the
appointment on grounds of "impracticality
and lack of kinship."

Finally in Vda. de Dayrit we justified the designation

of the wife of the decedent as special co-
administrator because it was "our
considered opinion that inasmuch as
petitioner-wife owns one-half of the
conjugal properties and that she, too, is a
compulsory heir of her husband, to deprive
her of any hand in the administration of
the estate prior to the probate of the will
would be unfair to her proprietary
interests." The special status of a surviving
spouse in the special administration of an
estate was also emphasized in Fule v. Court
of Appeals where we held that the widow
would have more interest than any other
next of kin in the proper administration of
the entire estate since she possesses not
only the right of succession over a portion
of the exclusive property of the decedent
but also a share in the conjugal partnership
for which the good or bad administration
of the estate may affect not just the fruits
but more critically the naked ownership
thereof. And in Gabriel v. Court of Appeals
we recognized the distinctive status of a
surviving spouse applying as regular
administrator of the deceased spouse's
estate when we counseled the probate
court that "there must be a very strong
case to justify the exclusion of the widow
from the administration." caHASI
Clearly, the selection of a special co-
administrator in Matias, Corona and Vda. de
Dayrit was based upon the independent
proprietary interests and moral circumstances
of the appointee that were not necessarily
related to the demand for representation being
repeatedly urged by respondents. 26 (Emphasis
supplied)
In Gabriel v. Court of Appeals, we unequivocally
declared the mandatory character of the rule on the
order of preference for the issuance of letters of
administration:
Evidently, the foregoing provision of the Rules
prescribes the order of preference in the
issuance of letters of administration, it
categorically seeks out the surviving
spouse, the next of kin and the creditors,
and requires that sequence to be observed
in appointing an administrator. It would be
a grave abuse of discretion for the probate
court to imperiously set aside and
insouciantly ignore that directive without
any valid and sufficient reason therefor. 27

Subsequently, in Angeles v. Angeles-Maglaya, 28 we

expounded on the legal contemplation of a "next of
kin," thus:
Finally, it should be noted that on the matter of
 appointment of administrator of the estate
of the deceased, the surviving spouse is
preferred over the next of kin of the
decedent. When the law speaks of "next of
kin," the reference is to those who are
entitled, under the statute of distribution,
to the decedent's property; one whose
relationship is such that he is entitled to
share in the estate as distributed, or, in
short, an heir. In resolving, therefore, the
issue of whether an applicant for letters of
administration is a next of kin or an heir of
the decedent, the probate court perforce
has to determine and pass upon the issue
of filiation. A separate action will only
result in a multiplicity of suits. Upon this
consideration, the trial court acted within
bounds when it looked into and pass[ed]
upon the claimed relationship of
respondent to the late Francisco Angeles.
29

Finally, in Uy v. Court of Appeals, 30 we took into

consideration the size of, and benefits to, the estate
should respondent therein be appointed as co-
administrator. We emphasized that where the estate
is large or, from any cause, an intricate and perplexing
one to settle, the appointment of co-administrators
may be sanctioned by law.
In our Decision under consideration, we zeroed in on
Emilio III's demonstrable interest in the estate and
glossed over the order of preference set forth in the
Rules. We gave weight to Emilio III's demonstrable
interest in Cristina's estate and without a closer
scrutiny of the attendant facts and circumstances,
directed co-administration thereof. We are led to a
review of such position by the foregoing survey of
cases.cDIaAS

The collected teaching is that mere demonstration of

interest in the estate to be settled does not ipso facto
entitle an interested person to co-administration
thereof. Neither does squabbling among the heirs nor
adverse interests necessitate the discounting of the
order of preference set forth in Section 6, Rule 78.
Indeed, in the appointment of administrator of the
estate of a deceased person, the principal
consideration reckoned with is the interest in said
estate of the one to be appointed as administrator. 31
Given Isabel's unassailable interest in the estate as
one of the decedent's legitimate grandchildren and
undoubted nearest "next of kin," the appointment of
Emilio III as co-administrator of the same estate,
cannot be a demandable right. It is a matter left
entirely to the sound discretion of the Court 32 and
depends on the facts and the attendant circumstances
of the case. 33
Thus, we proceed to scrutinize the attendant facts and
circumstances of this case even as we reiterate
Isabel's and her sibling's apparent greater interest in
the estate of Cristina.
These considerations do not warrant the setting aside
of the order of preference mapped out in Section 6,
Rule 78 of the Rules of Court. They compel that a
choice be made of one over the other.
1. The bitter estrangement and long-standing
animosity between Isabel, on the one hand, and
Emilio III, on the other, traced back from the time their
paternal grandparents were alive, which can be
characterized as adverse interest of some kind by, or
hostility of, Emilio III to Isabel who is immediately
interested in the estate;
2. Corollary thereto, the seeming impossibility of
Isabel and Emilio III working harmoniously as co-
administrators may result in prejudice to the
decedent's estate, ultimately delaying settlement
thereof; and
3. Emilio III, for all his claims of knowledge in the
management of Cristina's estate, has not looked after
the estate's welfare and has acted to the damage and
prejudice thereof.
Contrary to the assumption made in the Decision that
Emilio III's demonstrable interest in the estate makes
him a suitable co-administrator thereof, the evidence
reveals that Emilio III has turned out to be an
unsuitable administrator of the estate. Respondent
Isabel points out that after Emilio III's appointment as
administrator of the subject estate in 2001, he has not
looked after the welfare of the subject estate and has
actually acted to the damage and prejudice thereof as
evidenced by the following: AHDaET

1. Emilio III, despite several orders from the probate

court for a complete inventory, omitted in the partial
inventories 34 he filed therewith properties of the
estate 35 including several parcels of land, cash, bank
deposits, jewelry, shares of stock, motor vehicles, and
other personal properties, contrary to Section 1, 36
paragraph a, Rule 81 of the Rules of Court.
2. Emilio III did not take action on both occasions
against Federico's settlement of the decedent's estate
which adjudicated to himself a number of properties
properly belonging to said estate (whether wholly or
partially), and which contained a declaration that the
decedent did not leave any descendants or heirs,
except for Federico, entitled to succeed to her estate.
37
In compliance to our Resolution dated 18 April 2012
requiring Emilio III to respond to the following
imputations of Isabel that:
1. [Emilio III] did not file an inventory of the assets
until November 14, 2002;
2. [T]he inventory [Emilio III] submitted did not
include several properties of the
decedent;

3. [T]hat properties belonging to the decedent have

found their way to different
individuals or persons; several
properties to Federico Suntay
himself; and

4. [W]hile some properties have found their way to

[Emilio III], by reason of falsified
documents; 38

Emilio III refutes Isabel's imputations that he was

lackadaisical in assuming and performing the
functions of administrator of Cristina's estate:

1. From the time of the RTC's Order appointing Emilio

III as administrator, Isabel, in her pleadings before the
RTC, had vigorously opposed Emilio III's assumption of
that office, arguing that "[t]he decision of the [RTC]
dated 9 November 2001 is not among the judgments
authorized by the Rules of Court which may be
immediately implemented or executed;"
2. The delay in Emilio III's filing of an inventory was
due to Isabel's vociferous objections to Emilio III's
attempts to act as administrator while the RTC
decision was under appeal to the Court of Appeals;
3. The complained partial inventory is only initiatory,
inherent in the nature thereof, and one of the first
steps in the lengthy process of settlement of a
decedent's estate, such that it cannot constitute a
complete and total listing of the decedent's
properties; and STIHaE

4. The criminal cases adverted to are trumped-up

charges where Isabel, as private complainant, has
been unwilling to appear and testify, leading the Judge
of the Regional Trial Court, Branch 44 of Mamburao,
Occidental Mindoro, to warn the prosecutor of a
possible motu propio dismissal of the cases.
While we can subscribe to Emilio III's counsel's
explanation for the blamed delay in the filing of an
inventory and his exposition on the nature thereof,
partial as opposed to complete, in the course of the
settlement of a decedent's estate, we do not find any
clarification on Isabel's accusation that Emilio III had
deliberately omitted properties in the inventory, which
properties of Cristina he knew existed and which he
claims to be knowledgeable about.
The general denial made by Emilio III does not erase
his unsuitability as administrator rooted in his failure
to "make and return . . . a true and complete
inventory" which became proven fact when he
actually filed partial inventories before the probate
court and by his inaction on two occasions of
Federico's exclusion of Cristina's other compulsory
heirs, herein Isabel and her siblings, from the list of
heirs.
As administrator, Emilio III enters into the office, posts
a bond and executes an oath to faithfully discharge
the duties of settling the decedent's estate with the
end in view of distribution to the heirs, if any. This he
failed to do. The foregoing circumstances of Emilio III's
omission and inaction become even more significant
and speak volume of his unsuitability as administrator
as it demonstrates his interest adverse to those
immediately interested in the estate of the decedent,
Cristina.
In this case, palpable from the evidence on record, the
pleadings, and the protracted litigation, is the
inescapable fact that Emilio III and respondent Isabel
have a deep aversion for each other. To our mind, it
becomes highly impractical, nay, improbable, for the
two to work as co-administrators of their
grandmother's estate. The allegations of Emilio III, the
testimony of Federico and the other witnesses for
Federico and Emilio III that Isabel and her siblings
were estranged from their grandparents further drive
home the point that Emilio III bears hostility towards
Isabel. More importantly, it appears detrimental to the
decedent's estate to appoint a co-administrator
(Emilio III) who has shown an adverse interest of some
kind or hostility to those, such as herein respondent
Isabel, immediately interested in the said estate.
Bearing in mind that the issuance of letters of
administration is simply a preliminary order to
facilitate the settlement of a decedent's estate, we
here point out that Emilio III is not without remedies
to protect his interests in the estate of the decedent.
In Hilado v. Court of Appeals, 39 we mapped out as
among the allowable participation of "any interested
persons" or "any persons interested in the estate" in
either testate or intestate proceedings: ECDAcS

xxx xxx xxx

4. Section 6 40 of Rule 87, which allows an

individual interested in the estate of the
deceased "to complain to the court of the
concealment, embezzlement, or
conveyance of any asset of the decedent,
or of evidence of the decedent's title or
interest therein;"

5. Section 10 41 of Rule 85, which requires notice of

 the time and place of the examination and
allowance of the Administrator's account
"to persons interested;"

6. Section 7(b) 42 of Rule 89, which requires the

court to give notice "to the persons
interested" before it may hear and grant a
petition seeking the disposition or
encumbrance of the properties of the
estate; and

7. Section 1, 43 Rule 90, which allows "any person

interested in the estate" to petition for
an order for the distribution of the
residue of the estate of the decedent,
after all obligations are either satisfied
or provided for. 44

In addition to the foregoing, Emilio III may likewise

avail of the remedy found in Section 2, Rule 82 of the
Rules of Court, to wit:
Sec. 2. Court may remove or accept resignation of
executor or administrator. Proceedings
upon death, resignation, or removal. If
an executor or administrator neglects to
 render his account and settle the estate
according to law, or to perform an order or
judgment of the court, or a duty expressly
provided by these rules, or absconds, or
becomes insane, or otherwise incapable or
unsuitable to discharge the trust, the court
may remove him, or, in its discretion, may
permit him to resign. When an executor or
administrator dies, resigns, or is removed,
the remaining executor or administrator
may administer the trust alone, unless the
court grants letters to someone to act with
him. If there is no remaining executor or
administrator, administration may be
granted to any suitable person.

Once again, as we have done in the Decision, we

exercise judicial restraint: we uphold that the question
of who are the heirs of the decedent Cristina is not yet
upon us. Article 992 of the Civil Code or the curtain
bar rule is inapplicable in resolving the issue of who is
better qualified to administer the estate of the
decedent.
Thus, our disquisition in the assailed Decision:
Nonetheless, it must be pointed out that judicial
restraint impels us to refrain from making
a final declaration of heirship and
distributing the presumptive shares of the
 parties in the estates of Cristina and
Federico, considering that the question on
who will administer the properties of the
long deceased couple has yet to be settled.

Our holding in Capistrano v. Nadurata on the same

issue remains good law:

[T]he declaration of heirs made by the lower court

is premature, although the evidence
sufficiently shows who are entitled
to succeed the deceased. The estate
had hardly been judicially opened,
and the proceeding has not as yet
reached the stage of distribution of
the estate which must come after
the inheritance is liquidated.
aSTcCE

Section 1, Rule 90 of the Rules of Court does not

depart from the foregoing admonition:

Sec. 1. When order for distribution of residue is

made. . . . . If there is a controversy
before the court as to who are the lawful
 heirs of the deceased person or as to the
distributive shares to which each person is
entitled under the law, the controversy
shall be heard and decided as in ordinary
cases.

No distribution shall be allowed until the payment

of the obligations above mentioned has
been made or provided for, unless the
distributees, or any of them, give a bond, in
a sum to be fixed by the court, conditioned
for the payment of said obligations within
such time as the court directs. 45

Lastly, we dispose of a peripheral issue raised in the

Supplemental Comment 46 of Emilio III questioning
the Special Second Division which issued the 18 April
2012 Resolution. Emilio III asseverates that "the
operation of the Special Second Division in Baguio is
unconstitutional and void" as the Second Division in
Manila had already promulgated its Decision on 16
June 2010 on the petition filed by him:
7. The question is: who created the Special Second
Division in Baguio, acting separately from
the Second Division of the Supreme Court
in Manila? There will then be two Second
 Divisions of the Supreme Court: one acting
with the Supreme Court in Manila, and
another Special Second Division acting
independently of the Second Division of
the Supreme Court in Manila. 47

For Emilio III's counsels' edification, the Special Second

Division in Baguio is not a different division created by
the Supreme Court.
The Second Division which promulgated its Decision
on this case on 16 June 2010, penned by Justice
Antonio Eduardo B. Nachura, now has a different
composition, with the advent of Justice Nachura's
retirement on 13 June 2011. Section 7, Rule 2 of the
Internal Rules of the Supreme Court provides:
Sec. 7. Resolutions of motions for reconsideration
or clarification of decisions or signed
resolutions and all other motions and
incidents subsequently filed; creation of
a Special Division. Motions for
reconsideration or clarification of a
decision or of a signed resolution and all
other motions and incidents subsequently
filed in the case shall be acted upon by the
ponente and the other Members of the
Division who participated in the rendition
of the decision or signed resolution.
If the ponente has retired, is no longer a Member of
the Court, is disqualified, or has inhibited himself or
herself from acting on the motion for reconsideration or
clarification, he or she shall be replaced through
raffle by a new ponente who shall be chosen
among the new Members of the Division who
participated in the rendition of the decision or
signed resolution and who concurred therein. If
only one Member of the Court who participated
and concurred in the rendition of the decision
or signed resolution remains, he or she shall be
designated as the new ponente.
If a Member (not the ponente) of the Division which
rendered the decision or signed resolution
has retired, is no longer a Member of the
Court, is disqualified, or has inhibited
himself or herself from acting on the
motion for reconsideration or clarification,
he or she shall be replaced through raffle
by a replacement Member who shall be
chosen from the other Divisions until a
new Justice is appointed as replacement
for the retired Justice. Upon the
appointment of a new Justice, he or she
shall replace the designated Justice as
replacement Member of the Special
Division.
AaEcHC

Any vacancy or vacancies in the Special Division

 shall be filled by raffle from among the
other Members of the Court to constitute a
Special Division of five (5) Members.

If the ponente and all the Members of the Division

that rendered the Decision or signed
Resolution are no longer Members of the
Court, the case shall be raffled to any
Member of the Court and the motion shall
be acted upon by him or her with the
participation of the other Members of the
Division to which he or she belongs.

If there are pleadings, motions or incidents

subsequent to the denial of the motion for
reconsideration or clarification, the case
shall be acted upon by the ponente on
record with the participation of the other
Members of the Division to which he or she
belongs at the time said pleading, motion
or incident is to be taken up by the Court.
(Emphasis supplied)

As regards the operation thereof in Baguio

City, such is simply a change in venue for the
 Supreme Court's summer session held last April. 48

WHEREFORE, the Motion for Reconsideration is

PARTIALLY GRANTED. Our Decision in G.R. No.
183053 dated 16 June 2010 is MODIFIED. Letters of
Administration over the estate of decedent Cristina
Aguinaldo-Suntay shall solely issue to respondent
Isabel Cojuangco-Suntay upon payment of a bond to
be set by the Regional Trial Court, Branch 78, Malolos,
Bulacan, in Special Proceeding Case No. 117-M-95. The
Regional Trial Court, Branch 78, Malolos, Bulacan is
likewise directed to settle the estate of decedent
Cristina Aguinaldo-Suntay with dispatch. No costs.
SO ORDERED.

(Suntay III v. Cojuangco-Suntay, G.R. No. 183053

|||

(Resolution), [October 10, 2012], 697 PHIL 106-132)

 THIRD DIVISION
[G.R. No. 146006. February 23, 2004.]
JOSE C. LEE AND ALMA AGGABAO, in their
capacities as President and Corporate
Secretary, respectively, of Philippines
International Life Insurance Company, and
FILIPINO LOAN ASSISTANCE GROUP,
petitioners, vs. REGIONAL TRIAL COURT OF
QUEZON CITY BRANCH 85 presided by JUDGE
PEDRO M. AREOLA, BRANCH CLERK OF
COURT JANICE Y. ANTERO, DEPUTY SHERIFFS
ADENAUER G. RIVERA and PEDRO L. BORJA,
all of the Regional Trial Court of Quezon City
Branch 85, MA. DIVINA ENDERES claiming to
be Special Administratrix, and other
persons/public officers acting for and in
their behalf, respondents.
DECISION
CORONA, J : p

This is a petition for review under Rule 45 of the Rules

of Court seeking to reverse and set aside the decision
1 of the Court of Appeals, First Division, dated July 26,
2000, in CA G.R. 59736, which dismissed the petition
for certiorari filed by petitioners Jose C. Lee and Alma
Aggabao (in their capacities as president and
secretary, respectively, of Philippine International Life
Insurance Company) and Filipino Loan Assistance
Group. SDHacT

The antecedent facts follow.

Dr. Juvencio P. Ortaez incorporated the Philippine
International Life Insurance Company, Inc. on July 6,
1956. At the time of the company's incorporation, Dr.
Ortaez owned ninety percent (90%) of the subscribed
capital stock.
On July 21, 1980, Dr. Ortaez died. He left behind a
wife (Juliana Salgado Ortaez), three legitimate
children (Rafael, Jose and Antonio Ortaez) and five
illegitimate children by Ligaya Novicio (herein private
respondent Ma. Divina Ortaez-Enderes and her
siblings Jose, Romeo, Enrico Manuel and Cesar, all
surnamed Ortaez). 2
On September 24, 1980, Rafael Ortaez filed before
the Court of First Instance of Rizal, Quezon City Branch
(now Regional Trial Court of Quezon City) a petition for
letters of administration of the intestate estate of Dr.
Ortaez, docketed as SP. Proc. Q-30884 (which
petition to date remains pending at Branch 85
thereof).
Private respondent Ma. Divina Ortaez-Enderes and
her siblings filed an opposition to the petition for
letters of administration and, in a subsequent urgent
motion, prayed that the intestate court appoint a
special administrator.
On March 10, 1982, Judge Ernani Cruz Pao, then
presiding judge of Branch 85, appointed Rafael and
Jose Ortaez joint special administrators of their
father's estate. Hearings continued for the
appointment of a regular administrator (up to now no
regular administrator has been appointed).
As ordered by the intestate court, special
administrators Rafael and Jose Ortaez submitted an
inventory of the estate of their father which included,
among other properties, 2,029 3 shares of stock in
Philippine International Life Insurance Company
(hereafter Philinterlife), representing 50.725% of the
company's outstanding capital stock.
On April 15, 1989, the decedent's wife, Juliana S.
Ortaez, claiming that she owned 1,014 4 Philinterlife
shares of stock as her conjugal share in the estate,
sold said shares with right to repurchase in favor of
herein petitioner Filipino Loan Assistance Group
(FLAG), represented by its president, herein petitioner
Jose C. Lee. Juliana Ortaez failed to repurchase the
shares of stock within the stipulated period, thus
ownership thereof was consolidated by petitioner
FLAG in its name.
On October 30, 1991, Special Administrator Jose
Ortaez, acting in his personal capacity and claiming
that he owned the remaining 1,011 5 Philinterlife
shares of stocks as his inheritance share in the estate,
sold said shares with right to repurchase also in favor
of herein petitioner FLAG, represented by its
president, herein petitioner Jose C. Lee. After one
year, petitioner FLAG consolidated in its name the
ownership of the Philinterlife shares of stock when
Jose Ortaez failed to repurchase the same.
It appears that several years before (but already
during the pendency of the intestate proceedings at
the Regional Trial Court of Quezon City, Branch 85),
Juliana Ortaez and her two children, Special
Administrators Rafael and Jose Ortaez, entered into a
memorandum of agreement dated March 4, 1982 for
the extrajudicial settlement of the estate of Dr.
Juvencio Ortaez, partitioning the estate (including the
Philinterlife shares of stock) among themselves. This
was the basis of the number of shares separately sold
by Juliana Ortaez on April 15, 1989 (1,014 shares) and
by Jose Ortaez on October 30, 1991 (1,011 shares) in
favor of herein petitioner FLAG.
On July 12, 1995, herein private respondent Ma. Divina
Ortaez-Enderes and her siblings (hereafter referred
to as private respondents Enderes et al.) filed a
motion for appointment of special administrator of
Philinterlife shares of stock. This move was opposed
by Special Administrator Jose Ortaez.
On November 8, 1995, the intestate court granted the
motion of private respondents Enderes et al. and
appointed private respondent Enderes special
administratrix of the Philinterlife shares of stock.
On December 20, 1995, Special Administratrix Enderes
filed an urgent motion to declare void ab initio the
memorandum of agreement dated March 4, 1982. On
January 9, 1996, she filed a motion to declare the
partial nullity of the extrajudicial settlement of the
decedent's estate. These motions were opposed by
Special Administrator Jose Ortaez.
On March 22, 1996, Special Administratrix Enderes
filed an urgent motion to declare void ab initio the
deeds of sale of Philinterlife shares of stock, which
move was again opposed by Special Administrator
Jose Ortaez.
On February 4, 1997, Jose Ortaez filed an omnibus
motion for (1) the approval of the deeds of sale of the
Philinterlife shares of stock and (2) the release of Ma.
Divina Ortaez-Enderes as special administratrix of
the Philinterlife shares of stock on the ground that
there were no longer any shares of stock for her to
administer.
On August 11, 1997, the intestate court denied the
omnibus motion of Special Administrator Jose Ortaez
for the approval of the deeds of sale for the reason
that:
Under the Godoy case, supra, it was held in
substance that a sale of a property of the
estate without an Order of the probate
court is void and passes no title to the
purchaser. Since the sales in question were
entered into by Juliana S. Ortaez and Jose
 S. Ortaez in their personal capacity
without prior approval of the Court, the
same is not binding upon the Estate.

WHEREFORE, the OMNIBUS MOTION for the

approval of the sale of Philinterlife shares
of stock and release of Ma. Divina Ortaez-
Enderes as Special Administratrix is hereby
denied. 6

On August 29, 1997, the intestate court issued another

order granting the motion of Special Administratrix
Enderes for the annulment of the March 4, 1982
memorandum of agreement or extrajudicial partition
of estate. The court reasoned that:
In consonance with the Order of this Court dated
August 11, 1997 DENYING the approval of
the sale of Philinterlife shares of stocks and
release of Ma. Divina Ortaez-Enderes as
Special Administratrix, the "Urgent Motion
to Declare Void Ab Initio Memorandum of
Agreement" dated December 19, 1995. . . is
hereby impliedly partially resolved insofar
as the transfer/waiver/renunciation of the
Philinterlife shares of stock are concerned,
in particular, No. 5, 9(c), 10(b) and 11(d)(ii)
of the Memorandum of Agreement.
WHEREFORE, this Court hereby declares the
Memorandum of Agreement dated March
4, 1982 executed by Juliana S. Ortaez,
Rafael S. Ortaez and Jose S. Ortaez as
partially void ab initio insofar as the
transfer/waiver/renunciation of the
Philinterlife shares of stocks are
concerned. 7

Aggrieved by the above-stated orders of the intestate

court, Jose Ortaez filed, on December 22, 1997, a
petition for certiorari in the Court of Appeals. The
appellate court denied his petition, however, ruling
that there was no legal justification whatsoever for the
extrajudicial partition of the estate by Jose Ortaez,
his brother Rafael Ortaez and mother Juliana
Ortaez during the pendency of the settlement of the
estate of Dr. Ortaez, without the requisite approval
of the intestate court, when it was clear that there
were other heirs to the estate who stood to be
prejudiced thereby. Consequently, the sale made by
Jose Ortaez and his mother Juliana Ortaez to FLAG
of the shares of stock they invalidly appropriated for
themselves, without approval of the intestate court,
was void. 8
Special Administrator Jose Ortaez filed a motion for
reconsideration of the Court of Appeals decision but it
was denied. He elevated the case to the Supreme
Court via petition for review under Rule 45 which the
Supreme Court dismissed on October 5, 1998, on a
technicality. His motion for reconsideration was
denied with finality on January 13, 1999. On February
23, 1999, the resolution of the Supreme Court
dismissing the petition of Special Administrator Jose
Ortaez became final and was subsequently recorded
in the book of entries of judgments.
Meanwhile, herein petitioners Jose Lee and Alma
Aggabao, with the rest of the FLAG-controlled board of
directors, increased the authorized capital stock of
Philinterlife, diluting in the process the 50.725%
controlling interest of the decedent, Dr. Juvencio
Ortaez, in the insurance company. 9 This became the
subject of a separate action at the Securities and
Exchange Commission filed by private respondent-
Special Administratrix Enderes against petitioner Jose
Lee and other members of the FLAG-controlled board
of Philinterlife on November 7, 1994. Thereafter,
various cases were filed by Jose Lee as president of
Philinterlife and Juliana Ortaez and her sons against
private respondent-Special Administratrix Enderes in
the SEC and civil courts. 10 Somehow, all these cases
were connected to the core dispute on the legality of
the sale of decedent Dr. Ortaez's Philinterlife shares
of stock to petitioner FLAG, represented by its
president, herein petitioner Jose Lee who later
became the president of Philinterlife after the
controversial sale.

On May 2, 2000, private respondent-Special

Administratrix Enderes and her siblings filed a motion
for execution of the Orders of the intestate court
dated August 11 and August 29, 1997 because the
orders of the intestate court nullifying the sale (upheld
by the Court of Appeals and the Supreme Court) had
long became final. Respondent-Special Administratrix
Enderes served a copy of the motion to petitioners
Jose Lee and Alma Aggabao as president and
secretary, respectively, of Philinterlife, 11 but
petitioners ignored the same.
On July 6, 2000, the intestate court granted the motion
for execution, the dispositive portion of which read:
WHEREFORE, premises considered, let a writ of
execution issue as follows:

1. Confirming the nullity of the sale of the 2,029

Philinterlife shares in the
name of the Estate of Dr.
Juvencio Ortaez to Filipino
Loan Assistance Group (FLAG);
2. Commanding the President and the Corporate
Secretary of Philinterlife to
reinstate in the stock and
transfer book of Philinterlife
the 2,029 Philinterlife shares
of stock in the name of the
Estate of Dr. Juvencio P.
Ortaez as the owner thereof
without prejudice to other
claims for violation of pre-
emptive rights pertaining to
the said 2,029 Philinterlife
shares;

3. Directing the President and the Corporate

Secretary of Philinterlife to
issue stock certificates of
Philinterlife for 2,029 shares in
the name of the Estate of Dr.
Juvencio P. Ortaez as the
owner thereof without
prejudice to other claims for
violations of pre-emptive
rights pertaining to the said
2,029 Philinterlife shares and,

4. Confirming that only the Special Administratrix,

 Ma. Divina Ortaez-Enderes,
has the power to exercise all
the rights appurtenant to the
said shares, including the right
to vote and to receive
dividends.

5. Directing Philinterlife and/or any other person or

persons claiming to represent
it or otherwise, to
acknowledge and allow the
said Special Administratrix to
exercise all the aforesaid
rights on the said shares and
to refrain from resorting to
any action which may tend
directly or indirectly to
impede, obstruct or bar the
free exercise thereof under
pain of contempt.

6. The President, Corporate Secretary, any

responsible officer/s of
Philinterlife, or any other
person or persons claiming to
represent it or otherwise, are
hereby directed to comply
 with this order within three (3)
days from receipt hereof
under pain of contempt.

7. The Deputy Sheriffs Adenauer Rivera and Pedro

Borja are hereby directed to
implement the writ of
execution with dispatch to
forestall any and/or further
damage to the Estate.

SO ORDERED. 12

In the several occasions that the sheriff went to the

office of petitioners to execute the writ of execution,
he was barred by the security guard upon petitioners'
instructions. Thus, private respondent-Special
Administratrix Enderes filed a motion to cite herein
petitioners Jose Lee and Alma Aggabao (president and
secretary, respectively, of Philinterlife) in contempt. 13
Petitioners Lee and Aggabao subsequently filed
before the Court of Appeals a petition for certiorari,
docketed as CA G.R. SP No. 59736. Petitioners alleged
that the intestate court gravely abused its discretion in
(1) declaring that the ownership of FLAG over the
Philinterlife shares of stock was null and void; (2)
ordering the execution of its order declaring such
nullity and (3) depriving the petitioners of their right to
due process.
On July 26, 2000, the Court of Appeals dismissed the
petition outright:
We are constrained to DISMISS OUTRIGHT the
present petition for certiorari and
prohibition with prayer for a temporary
restraining order and/or writ of preliminary
injunction in the light of the following
considerations:

1. The assailed Order dated August 11, 1997 of the

respondent judge had long
become final and executory;

2. The certification on non-forum shopping is

signed by only one (1) of the
three (3) petitioners in
violation of the Rules; and

3. Except for the assailed orders and writ of

execution, deed of sale with
right to repurchase, deed of
 sale of shares of stocks and
omnibus motion, the petition
is not accompanied by such
pleadings, documents and
other material portions of the
record as would support the
allegations therein in violation
of the second paragraph, Rule
65 of the 1997 Rules of Civil
Procedure, as amended. aDSTIC

Petition is DISMISSED.

SO ORDERED. 14

The motion for reconsideration filed by petitioners

Lee and Aggabao of the above decision was denied by
the Court of Appeals on October 30, 2000:
This resolves the "urgent motion for
reconsideration" filed by the petitioners of
our resolution of July 26, 2000 dismissing
outrightly the above-entitled petition for
the reason, among others, that the assailed
Order dated August 11, 1997 of the
respondent Judge had long become final
 and executory.

Dura lex, sed lex.

WHEREFORE, the urgent motion for

reconsideration is hereby DENIED, for lack
of merit.

SO ORDERED. 15

On December 4, 2000, petitioners elevated the case to

the Supreme Court through a petition for review
under Rule 45 but on December 13, 2000, we denied
the petition because there was no showing that the
Court of Appeals in CA G.R. SP No. 59736 committed
any reversible error to warrant the exercise by the
Supreme Court of its discretionary appellate
jurisdiction. 16
However, upon motion for reconsideration filed by
petitioners Lee and Aggabao, the Supreme Court
granted the motion and reinstated their petition on
September 5, 2001. The parties were then required to
submit their respective memoranda.
Meanwhile, private respondent-Special Administratrix
Enderes, on July 19, 2000, filed a motion to direct the
branch clerk of court in lieu of herein petitioners Lee
and Aggabao to reinstate the name of Dr. Ortaez in
the stock and transfer book of Philinterlife and issue
the corresponding stock certificate pursuant to
Section 10, Rule 39 of the Rules of Court which
provides that "the court may direct the act to be done
at the cost of the disobedient party by some other
person appointed by the court and the act when so
done shall have the effect as if done by the party."
Petitioners Lee and Aggabao opposed the motion on
the ground that the intestate court should refrain
from acting on the motion because the issues raised
therein were directly related to the issues raised by
them in their petition for certiorari at the Court of
Appeals docketed as CA-G.R. SP No. 59736. On
October 30, 2000, the intestate court granted the
motion, ruling that there was no prohibition for the
intestate court to execute its orders inasmuch as the
appellate court did not issue any TRO or writ of
preliminary injunction.
On December 3, 2000, petitioners Lee and Aggabao
filed a petition for certiorari in the Court of Appeals,
docketed as CA-G.R. SP No. 62461, questioning this
time the October 30, 2000 order of the intestate court
directing the branch clerk of court to issue the stock
certificates. They also questioned in the Court of
Appeals the order of the intestate court nullifying the
sale made in their favor by Juliana Ortaez and Jose
Ortaez. On November 20, 2002, the Court of Appeals
denied their petition and upheld the power of the
intestate court to execute its order. Petitioners Lee
and Aggabao then filed motion for reconsideration
which at present is still pending resolution by the
Court of Appeals.
Petitioners Jose Lee and Alma Aggabao (president and
secretary, respectively, of Philinterlife) and FLAG now
raise the following errors for our consideration:
THE COURT OF APPEALS COMMITTED GRAVE
REVERSIBLE ERROR:

A. IN FAILING TO RECONSIDER ITS PREVIOUS

RESOLUTION DENYING THE
PETITION DESPITE THE FACT
THAT THE APPELLATE
COURT'S MISTAKE IN
APPREHENDING THE FACTS
HAD BECOME PATENT AND
EVIDENT FROM THE MOTION
FOR RECONSIDERATION AND
THE COMMENT OF
RESPONDENT ENDERES
WHICH HAD ADMITTED THE
FACTUAL ALLEGATIONS OF
 PETITIONERS IN THE PETITION
AS WELL AS IN THE MOTION
FOR RECONSIDERATION.
MOREOVER, THE RESOLUTION
OF THE APPELLATE COURT
DENYING THE MOTION FOR
RECONSIDERATION WAS
CONTAINED IN ONLY ONE
PAGE WITHOUT EVEN
TOUCHING ON THE
SUBSTANTIVE MERITS OF THE
EXHAUSTIVE DISCUSSION OF
FACTS AND SUPPORTING LAW
IN THE MOTION FOR
RECONSIDERATION IN
VIOLATION OF THE RULE ON
ADMINISTRATIVE DUE
PROCESS;

B. IN FAILING TO SET ASIDE THE VOID ORDERS OF

THE INTESTATE COURT ON
THE ERRONEOUS GROUND
THAT THE ORDERS WERE
FINAL AND EXECUTORY WITH
REGARD TO PETITIONERS
EVEN AS THE LATTER WERE
NEVER NOTIFIED OF THE
PROCEEDINGS OR ORDER
 CANCELING ITS OWNERSHIP;

C. IN NOT FINDING THAT THE INTESTATE COURT

COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO
EXCESS OF JURISDICTION (1)
WHEN IT ISSUED THE
OMNIBUS ORDER NULLIFYING
THE OWNERSHIP OF
PETITIONER FLAG OVER
SHARES OF STOCK WHICH
WERE ALLEGED TO BE PART
OF THE ESTATE AND (2) WHEN
IT ISSUED A VOID WRIT OF
EXECUTION AGAINST
PETITIONER FLAG AS PRESENT
OWNER TO IMPLEMENT
MERELY PROVISIONAL
ORDERS, THEREBY VIOLATING
FLAG'S CONSTITUTIONAL
RIGHT AGAINST DEPRIVATION
OF PROPERTY WITHOUT DUE
PROCESS;

D. IN FAILING TO DECLARE NULL AND VOID THE

ORDERS OF THE INTESTATE
COURT WHICH NULLIFIED THE
 SALE OF SHARES OF STOCK
BETWEEN THE LEGITIMATE
HEIR JOSE S. ORTAEZ AND
PETITIONER FLAG BECAUSE
OF SETTLED LAW AND
JURISPRUDENCE, I.E., THAT AN
HEIR HAS THE RIGHT TO
DISPOSE OF THE DECEDENT'S
PROPERTY EVEN IF THE SAME
IS UNDER ADMINISTRATION
PURSUANT TO CIVIL CODE
PROVISION THAT POSSESSION
OF HEREDITARY PROPERTY IS
TRANSMITTED TO THE HEIR
THE MOMENT OF DEATH OF
THE DECEDENT (ACEDEBO VS.
ABESAMIS, 217 SCRA 194);

E. IN DISREGARDING THE FINAL DECISION OF THE

SUPREME COURT IN G.R. NO.
128525 DATED DECEMBER 17,
1999 INVOLVING
SUBSTANTIALLY THE SAME
PARTIES, TO WIT, PETITIONERS
JOSE C. LEE AND ALMA
AGGABAO WERE
RESPONDENTS IN THAT CASE
WHILE RESPONDENT MA.
 DIVINA ENDERES WAS THE
PETITIONER THEREIN. THAT
DECISION, WHICH CAN BE
CONSIDERED LAW OF THE
CASE, RULED THAT
PETITIONERS CANNOT BE
ENJOINED BY RESPONDENT
ENDERES FROM EXERCISING
THEIR POWER AS DIRECTORS
AND OFFICERS OF
PHILINTERLIFE AND THAT THE
INTESTATE COURT IN CHARGE
OF THE INTESTATE
PROCEEDINGS CANNOT
ADJUDICATE TITLE TO
PROPERTIES CLAIMED TO BE
PART OF THE ESTATE AND
WHICH ARE EQUALLY
CLAIMED BY PETITIONER
FLAG. 17

The petition has no merit.

Petitioners Jose Lee and Alma Aggabao, representing
Philinterlife and FLAG, assail before us not only the
validity of the writ of execution issued by the intestate
court dated July 7, 2000 but also the validity of the
August 11, 1997 order of the intestate court nullifying
the sale of the 2,029 Philinterlife shares of stock made
by Juliana Ortaez and Jose Ortaez, in their personal
capacities and without court approval, in favor of
petitioner FLAG.
We cannot allow petitioners to reopen the issue of
nullity of the sale of the Philinterlife shares of stock in
their favor because this was already settled a long
time ago by the Court of Appeals in its decision dated
June 23, 1998 in CA-G.R. SP No. 46342. This decision
was effectively upheld by us in our resolution dated
October 9, 1998 in G.R. No. 135177 dismissing the
petition for review on a technicality and thereafter
denying the motion for reconsideration on January 13,
1999 on the ground that there was no compelling
reason to reconsider said denial. 18 Our decision
became final on February 23, 1999 and was
accordingly entered in the book of entry of judgments.
For all intents and purposes therefore, the nullity of
the sale of the Philinterlife shares of stock made by
Juliana Ortaez and Jose Ortaez in favor of petitioner
FLAG is already a closed case. To reopen said issue
would set a bad precedent, opening the door wide
open for dissatisfied parties to relitigate unfavorable
decisions no end. This is completely inimical to the
orderly and efficient administration of justice.
The said decision of the Court of Appeals in CA-G.R. SP
No. 46342 affirming the nullity of the sale made by
Jose Ortaez and his mother Juliana Ortaez of the
Philinterlife shares of stock read:
Petitioner's asseverations relative to said
[memorandum] agreement were scuttled
during the hearing before this Court thus:

JUSTICE AQUINO:

Counsel for petitioner, when the Memorandum of

Agreement was executed, did the children of Juliana
Salgado know already that there was a claim for share in
the inheritance of the children of Novicio?
ATTY. CALIMAG:

Your Honor please, at that time, Your Honor, it is already

known to them. acTDCI

JUSTICE AQUINO:

What can be your legal justification for extrajudicial

settlement of a property subject of intestate proceedings
when there is an adverse claim of another set of heirs,
alleged heirs? What would be the legal justification for
extra judicially settling a property under administration
without the approval of the intestate court?
ATTY. CALIMAG:

Well, Your Honor please, in that extra-judicial settlement

there is an approval of the honorable court as to the
property's partition . . .. There were as mentioned by the
respondents' counsel, Your Honor.
ATTY. BUYCO:

No . . .
JUSTICE AQUINO:

The point is, there can be no adjudication of a property

under intestate proceedings without the approval of the
court. That is basic unless you can present justification on
that. In fact, there are two steps: first, you ask leave and
then execute the document and then ask for approval of
the document executed. Now, is there any legal
justification to exclude this particular transaction from
those steps?
ATTY. CALIMAG:

None, Your Honor.

ATTY. BUYCO:

With that admission that there is no legal justification,

Your Honor, we rest the case for the private respondent.
How can the lower court be accused of abusing its
discretion? (pages 33-35, TSN of January 29, 1998).
Thus, We find merit in the following postulation by
private respondent:

What we have here is a situation where some of

the heirs of the decedent without
securing court approval have
appropriated as their own personal
property the properties of [the]
Estate, to the exclusion and the
extreme prejudice of the other
claimant/heirs. In other words, these
heirs, without court approval, have
distributed the asset of the estate
among themselves and proceeded
to dispose the same to third parties
even in the absence of an order of
distribution by the Estate Court. As
admitted by petitioner's counsel,
there was absolutely no legal
justification for this action by the
heirs. There being no legal
 justification, petitioner has no basis
for demanding that public
respondent [the intestate court]
approve the sale of the Philinterlife
shares of the Estate by Juliana and
Jose Ortaez in favor of the Filipino
Loan Assistance Group.

It is an undisputed fact that the parties to the

Memorandum of Agreement dated
March 4, 1982 (see Annex 7 of the
Comment) . . . are not the only heirs
claiming an interest in the estate left
by Dr. Juvencio P. Ortaez. The
records of this case . . . clearly show
that as early as March 3, 1981 an
Opposition to the Application for
Issuance of Letters of Administration
was filed by the acknowledged
natural children of Dr. Juvencio P.
Ortaez with Ligaya Novicio . . . This
claim by the acknowledged natural
children of Dr. Juvencio P. Ortaez is
admittedly known to the parties to
the Memorandum of Agreement
before they executed the same. This
much was admitted by petitioner's
counsel during the oral
 argument. . . .

Given the foregoing facts, and the applicable

jurisprudence, public respondent
can never be faulted for not
approving . . . the subsequent sale
by the petitioner [Jose Ortaez] and
his mother [Juliana Ortaez] of the
Philinterlife shares belonging to the
Estate of Dr. Juvencio P. Ortaez."
(pages 3-4 of Private Respondent's
Memorandum; pages 243-244 of the
Rollo)

Amidst the foregoing, We found no grave abuse of

discretion amounting to excess or want of
jurisdiction committed by respondent
judge. 19

From the above decision, it is clear that Juliana

Ortaez, and her three sons, Jose, Rafael and Antonio,
all surnamed Ortaez, invalidly entered into a
memorandum of agreement extrajudicially
partitioning the intestate estate among themselves,
despite their, knowledge that there were other heirs
or claimants to the estate and before final settlement
of the estate by the intestate court. Since the
appropriation of the estate properties by Juliana
Ortaez and her children (Jose, Rafael and Antonio
Ortaez) was invalid, the subsequent sale thereof by
Juliana and Jose to a third party (FLAG), without court
approval, was likewise void.
An heir can sell his right, interest, or participation in
the property under administration under Art. 533 of
the Civil Code which provides that possession of
hereditary property is deemed transmitted to the heir
without interruption from the moment of death of the
decedent. 20 However, an heir can only alienate such
portion of the estate that may be allotted to him in the
division of the estate by the probate or intestate court
after final adjudication, that is, after all debtors shall
have been paid or the devisees or legatees shall have
been given their shares. 21 This means that an heir
may only sell his ideal or undivided share in the
estate, not any specific property therein. In the
present case, Juliana Ortaez and Jose Ortaez sold
specific properties of the estate (1,014 and 1,011
shares of stock in Philinterlife) in favor of petitioner
FLAG. This they could not lawfully do pending the final
adjudication of the estate by the intestate court
because of the undue prejudice it would cause the
other claimants to the estate, as what happened in
the present case.
Juliana Ortaez and Jose Ortaez sold specific
properties of the estate, without court approval. It is
well-settled that court approval is necessary for the
validity of any disposition of the decedent's estate. In
the early case of Godoy vs. Orellano, 22 we laid down
the rule that the sale of the property of the estate by
an administrator without the order of the probate
court is void and passes no title to the purchaser. And
in the case of Dillena vs. Court of Appeals, 23 we ruled
that:
[I]t must be emphasized that the questioned
properties (fishpond) were included in the
inventory of properties of the estate
submitted by then Administratrix Fausta
Carreon Herrera on November 14, 1974.
Private respondent was appointed as
administratrix of the estate on March 3,
1976 in lieu of Fausta Carreon Herrera. On
November 1, 1978, the questioned deed of
sale of the fishponds was executed
between petitioner and private respondent
without notice and approval of the probate
court. Even after the sale, administratrix
Aurora Carreon still included the three
fishponds as among the real properties of
the estate in her inventory submitted on
August 13, 1981. In fact, as stated by the
Court of Appeals, petitioner, at the time of
 the sale of the fishponds in question, knew
that the same were part of the estate
under administration.

xxx xxx xxx

The subject properties therefore are under the

jurisdiction of the probate court which
according to our settled jurisprudence has
the authority to approve any disposition
regarding properties under
administration . . . More emphatic is the
declaration We made in Estate of Olave vs.
Reyes (123 SCRA 767) where We stated that
when 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.

Only recently, in Manotok Realty, Inc. vs. Court of

Appeals (149 SCRA 174), We held that the
sale of an immovable property belonging
to the estate of a decedent, in a special
proceedings, needs court approval . . . This
pronouncement finds support in the
previous case of Dolores Vda. De Gil vs.
 Agustin Cancio (14 SCRA 797) wherein We
emphasized that it is within the jurisdiction
of a probate court to approve the sale of
properties of a deceased person by his
prospective heirs before final
adjudication. . . .

It being settled that property under administration

needs the approval of the probate court
before it can be disposed of, any
unauthorized disposition does not bind the
estate and is null and void. As early as 1921
in the case of Godoy vs. Orellano (42 Phil
347), We laid down the rule that a sale by
an administrator of property of the
deceased, which is not authorized by the
probate court is null and void and title
does not pass to the purchaser.

There is hardly any doubt that the probate court

can declare null and void the disposition of
the property under administration, made
by private respondent, the same having
been affected without authority from said
 court. It is the probate court that has the
power to authorize and/or approve the
sale (Section 4 and 7, Rule 89), hence, a
fortiori, it is said court that can declare it
null and void for as long as the
proceedings had not been closed or
terminated. To uphold petitioner's
contention that the probate court cannot
annul the unauthorized sale, would render
meaningless the power pertaining to the
said court. (Bonga vs. Soler, 2 SCRA 755).
(emphasis ours)

Our jurisprudence is therefore clear that (1) any

disposition of estate property by an administrator or
prospective heir pending final adjudication requires
court approval and (2) any unauthorized disposition of
estate property can be annulled by the probate court,
there being no need for a separate action to annul the
unauthorized disposition.
The question now is: can the intestate or probate
court execute its order nullifying the invalid sale?
We see no reason why it cannot. The intestate court
has the power to execute its order with regard to the
nullity of an unauthorized sale of estate property,
otherwise its power to annul the unauthorized or
fraudulent disposition of estate property would be
meaningless. In other words, enforcement is a
necessary adjunct of the intestate or probate court's
power to annul unauthorized or fraudulent
transactions to prevent the dissipation of estate
property before final adjudication.
Moreover, in this case, the order of the intestate court
nullifying the sale was affirmed by the appellate courts
(the Court of Appeals in CA-G.R. SP No. 46342 dated
June 23, 1998 and subsequently by the Supreme Court
in G.R. No. 135177 dated October 9, 1998). The finality
of the decision of the Supreme Court was entered in
the book of entry of judgments on February 23, 1999.
Considering the finality of the order of the intestate
court nullifying the sale, as affirmed by the appellate
courts, it was correct for private respondent-Special
Administratrix Enderes to thereafter move for a writ of
execution and for the intestate court to grant it.
Petitioners Jose Lee, Alma Aggabao and FLAG,
however, contend that the probate court could not
issue a writ of execution with regard to its order
nullifying the sale because said order was merely
provisional:
The only authority given by law is for respondent
judge to determine provisionally whether
said shares are included or excluded in the
inventory . . . In ordering the execution of
the orders, respondent judge acted in
excess of his jurisdiction and grossly
 violated settled law and jurisprudence, i.e.,
that the determination by a probate or
intestate court of whether a property is
included or excluded in the inventory of
the estate being provisional in nature,
cannot be the subject of execution. 24
(emphasis ours)

Petitioners' argument is misplaced. There is no

question, based on the facts of this case, that the
Philinterlife shares of stock were part of the estate of
Dr. Juvencio Ortaez from the very start as in fact
these shares were included in the inventory of the
properties of the estate submitted by Rafael Ortaez
after he and his brother, Jose Ortaez, were appointed
special administrators by the intestate court. 25
The controversy here actually started when, during
the pendency of the settlement of the estate of Dr.
Ortaez, his wife Juliana Ortaez sold the 1,014
Philinterlife shares of stock in favor petitioner FLAG
without the approval of the intestate court. Her son
Jose Ortaez later sold the remaining 1,011
Philinterlife shares also in favor of FLAG without the
approval of the intestate court.
We are not dealing here with the issue of inclusion or
exclusion of properties in the inventory of the estate
because there is no question that, from the very start,
the Philinterlife shares of stock were owned by the
decedent, Dr. Juvencio Ortaez. Rather, we are
concerned here with the effect of the sale made by
the decedent's heirs, Juliana Ortaez and Jose
Ortaez, without the required approval of the
intestate court. This being so, the contention of
petitioners that the determination of the intestate
court was merely provisional and should have been
threshed out in a separate proceeding is incorrect.
The petitioners Jose Lee and Alma Aggabao next
contend that the writ of execution should not be
executed against them because they were not
notified, nor they were aware, of the proceedings
nullifying the sale of the shares of stock.
We are not persuaded. The title of the purchaser like
herein petitioner FLAG can be struck down by the
intestate court after a clear showing of the nullity of
the alienation. This is the logical consequence of our
ruling in Godoy and in several subsequent cases. 26
The sale of any property of the estate by an
administrator or prospective heir without order of the
probate or intestate court is void and passes no title
to the purchaser. Thus, in Juan Lao et al. vs. Hon.
Melencio Geneto, G.R. No. 56451, June 19, 1985, we
ordered the probate court to cancel the transfer
certificate of title issued to the vendees at the instance
of the administrator after finding that the sale of real
property under probate proceedings was made
without the prior approval of the court. The
dispositive portion of our decision read:
IN VIEW OF THE FOREGOING CONSIDERATIONS,
the assailed Order dated February 18, 1981
of the respondent Judge approving the
questioned Amicable Settlement is
declared NULL and VOID and hereby SET
ASIDE. Consequently, the sale in favor of
Sotero Dioniosio III and by the latter to
William Go is likewise declared NULL and
VOID. The Transfer Certificate of Title
issued to the latter is hereby ordered
cancelled.

It goes without saying that the increase in

Philinterlife's authorized capital stock, approved on
the vote of petitioners' non-existent shareholdings
and obviously calculated to make it difficult for Dr.
Ortaez's estate to reassume its controlling interest in
Philinterlife, was likewise void ab initio.
Petitioners next argue that they were denied due
process.
We do not think so.
The facts show that petitioners, for reasons known
only to them, did not appeal the decision of the
intestate court nullifying the sale of shares of stock in
their favor. Only the vendor, Jose Ortaez, appealed
the case. A careful review of the records shows that
petitioners had actual knowledge of the estate
settlement proceedings and that they knew private
respondent Enderes was questioning therein the sale
to them of the Philinterlife shares of stock.
acAIES

It must be noted that private respondent-Special

Administratrix Enderes filed before the intestate court
(RTC of Quezon City, Branch 85) a "Motion to Declare
Void Ab Initio Deeds of Sale of Philinterlife Shares of
Stock" on March 22, 1996. But as early as 1994,
petitioners already knew of the pending settlement
proceedings and that the shares they bought were
under the administration by the intestate court
because private respondent Ma. Divina Ortaez-
Enderes and her mother Ligaya Novicio had filed a
case against them at the Securities and Exchange
Commission on November 7, 1994, docketed as SEC
No. 11-94-4909, for annulment of transfer of shares of
stock, annulment of sale of corporate properties,
annulment of subscriptions on increased capital
stocks, accounting, inspection of corporate books and
records and damages with prayer for a writ of
preliminary injunction and/or temporary restraining
order. 27 In said case, Enderes and her mother
questioned the sale of the aforesaid shares of stock to
petitioners. The SEC hearing officer in fact, in his
resolution dated March 24, 1995, deferred to the
jurisdiction of the intestate court to rule on the validity
of the sale of shares of stock sold to petitioners by
Jose Ortaez and Juliana Ortaez:
Petitioners also averred that . . . the Philinterlife
shares of Dr. Juvencio Ortaez who died, in
1980, are part of his estate which is
presently the subject matter of an intestate
proceeding of the RTC of Quezon City,
Branch 85. Although, private respondents
[Jose Lee et al.] presented the documents
of partition whereby the foregoing share of
stocks were allegedly partitioned and
conveyed to Jose S. Ortaez who allegedly
assigned the same to the other private
respondents, approval of the Court was
not presented. Thus, the assignments to
the private respondents [Jose Lee, et al.] of
the subject shares of stocks are void.

xxx xxx xxx

With respect to the alleged extrajudicial partition of

the shares of stock owned by the late Dr.
Juvencio Ortaez, we rule that the matter
properly belongs to the jurisdiction of the
regular court where the intestate
proceedings are currently pending. 28
With this resolution of the SEC hearing officer dated as
early as March 24, 1995 recognizing the jurisdiction of
the intestate court to determine the validity of the
extrajudicial partition of the estate of Dr. Ortaez and
the subsequent sale by the heirs of the decedent of
the Philinterlife shares of stock to petitioners, how can
petitioners claim that they were not aware of the
intestate proceedings?
Furthermore, when the resolution of the SEC hearing
officer reached the Supreme Court in 1996 (docketed
as G.R. 128525), herein petitioners who were
respondents therein filed their answer which
contained statements showing that they knew of the
pending intestate proceedings:
[T]he subject matter of the complaint is not within
the jurisdiction of the SEC but with the
Regional Trial Court; Ligaya Novicio and
children represented themselves to be the
common law wife and illegitimate children
of the late Ortaez; that on March 4, 1982,
the surviving spouse Juliana Ortaez, on
her behalf and for her minor son Antonio,
executed a Memorandum of Agreement
with her other sons Rafael and Jose, both
surnamed Ortaez, dividing the estate of
the deceased composed of his one-half
(1/2) share in the conjugal properties; that
in the said Memorandum of Agreement,
 Jose S. Ortaez acquired as his share of the
estate the 1,329 shares of stock in
Philinterlife; that on March 4, 1982, Juliana
and Rafael assigned their respective shares
of stock in Philinterlife to Jose; that
contrary to the contentions of petitioners,
private respondents Jose Lee, Carlos Lee,
Benjamin Lee and Alma Aggabao became
stockholders of Philinterlife on March 23,
1983 when Jose S. Ortaez, the principal
stockholder at that time, executed a deed
of sale of his shares of stock to private
respondents; and that the right of
petitioners to question the Memorandum
of Agreement and the acquisition of shares
of stock of private respondent is barred by
prescription. 29

Also, private respondent-Special Administratrix

Enderes offered additional proof of actual knowledge
of the settlement proceedings by petitioners which
petitioners never denied: (1) that petitioners were
represented by Atty. Ricardo Calimag previously hired
by the mother of private respondent Enderes to
initiate cases against petitioners Jose Lee and Alma
Aggabao for the nullification of the sale of the shares
of stock but said counsel made a conflicting turn-
around and appeared instead as counsel of
petitioners, and (2) that the deeds of sale executed
between petitioners and the heirs of the decedent
(vendors Juliana Ortaez and Jose Ortaez) were
acknowledged before Atty. Ramon Carpio who, during
the pendency of the settlement proceedings, filed a
motion for the approval of the sale of Philinterlife
shares of stock to the Knights of Columbus Fraternal
Association, Inc. (which motion was, however, later
abandoned). 30 All this sufficiently proves that
petitioners, through their counsels, knew of the
pending settlement proceedings.
Finally, petitioners filed several criminal cases such as
libel (Criminal Case No. 97-7179-81), grave coercion
(Criminal Case No. 84624) and robbery (Criminal Case
No. Q-96-67919) against private respondent's mother
Ligaya Novicio who was a director of Philinterlife, 31 all
of which criminal cases were related to the
questionable sale to petitioners of the Philinterlife
shares of stock.
Considering these circumstances, we cannot accept
petitioners' claim of denial of due process. The
essence of due process is the reasonable opportunity
to be heard. Where the opportunity to be heard has
been accorded, there is no denial of due process. 32 In
this case, petitioners knew of the pending intestate
proceedings for the settlement of Dr. Juvencio
Ortaez's estate but for reasons they alone knew, they
never intervened. When the court declared the nullity
of the sale, they did not bother to appeal. And when
they were notified of the motion for execution of the
Orders of the intestate court, they ignored the same.
Clearly, petitioners alone should bear the blame.
Petitioners next contend that we are bound by our
ruling in G.R. No. 128525 entitled Ma. Divina Ortaez-
Enderes vs. Court of Appeals, dated December 17,
1999, where we allegedly ruled that the intestate court
"may not pass upon the title to a certain property for
the purpose of determining whether the same should
or should not be included in the inventory but such
determination is not conclusive and is subject to final
decision in a separate action regarding ownership
which may be constituted by the parties."
We are not unaware of our decision in G.R. No.
128525. The issue therein was whether the Court of
Appeals erred in affirming the resolution of the SEC
that Enderes et al. were no, entitled to the issuance, of
the writ of preliminary injunction. We ruled that the
Court of Appeals was correct in affirming the
resolution of the SEC denying the issuance of the writ
of preliminary injunction because injunction is not
designed to protect contingent rights. Said case did
not rule on the issue of the validity of the sale of
shares of stock belonging to the decedent's estate
without court approval nor of the validity of the writ of
execution issued by the intestate court. G.R. No.
128525 clearly involved a different issue and it does
not therefore apply to the present case.
Petitioners and all parties claiming rights under them
are hereby warned not to further delay the execution
of the Orders of the intestate court dated August 11
and August 29, 1997.
WHEREFORE, the petition is hereby DENIED. The
decision of the Court of Appeals in CA-G.R. S.P. No.
59736 dated July 26, 2000, dismissing petitioners'
petition for certiorari and affirming the July 6, 2000
order of the trial court which ordered the execution of
its (trial court's) August 11 and 29, 1997 orders, is
hereby AFFIRMED.
SO ORDERED.
(Lee v. RTC of Quezon City Branch 85, G.R. No.
|||

146006, [February 23, 2004], 467 PHIL 997-1024)

 SECOND DIVISION
[G.R. No. 118671. January 29, 1996.]
THE ESTATE OF HILARIO M. RUIZ, EDMOND
RUIZ, Executor, petitioner, vs. THE COURT OF
APPEALS (Former Special Sixth Division),
MARIA PILAR RUIZ-MONTES, MARIA
CATHRYN RUIZ, CANDICE ALBERTINE RUIZ,
MARIA ANGELINE RUIZ and THE PRESIDING
JUDGE OF THE REGIONAL TRIAL COURT OF
PASIG, BRANCH 156, respondents.
Hemedino M. Brondial, for petitioner.
De Jesus & Associates, for private respondents.
SYLLABUS
1. REMEDIAL LAW; SPECIAL PROCEEDINGS;
SETTLEMENT OF ESTATE; ALLOWANCE FOR SUPPORT;
SHOULD NOT BE LIMITED TO "MINOR OR
INCAPACITATED" CHILDREN. It is settled that
allowances for support under Section 3 of Rule 83
should not be limited to the "minor or incapacitated"
children of the deceased. Article 188 of the Civil Code
of the Philippines, the substantive law in force at the
time of the testator's death, provides that during the
liquidation of the conjugal partnership, deceased's
legitimate spouse and children, regardless of their
age, civil status or gainful employment, are entitled to
provisional support from the funds of the estate. The
law is rooted on the fact that the right and duty to
support, especially the right to education, subsist even
beyond the age of majority.
2. ID.; ID.; ID.; ID.; DOES NOT EXTEND TO DECEASED'S
GRANDCHILDREN. The law clearly limits the
allowance to "widow and children" and does not
extend it to the deceased's grandchildren, regardless
of their minority or incapacity.
3. ID.; ID.; ID.; ID.; WHEN DISTRIBUTION OF ESTATE
PROPERTIES CAN BE MADE. In settlement of estate
proceedings, the distribution of the estate properties
can only be made: (1) after all the debts, funeral
charges, expenses of administration, allowance to the
widow, and estate tax have been paid; or (2) before
payment of said obligations only if the distributees or
any of them gives a bond in a sum fixed by the court
conditioned upon the payment of said obligations
within such time as the court directs, or when
provision is made to meet those obligations.
4. ID., ID., ID.; PAYMENT OF ESTATE TAX; AN
OBLIGATION THAT MUST BE PAID BEFORE THE
DISTRIBUTION OF ESTATE. The estate tax is one of
those obligations that must be paid before
distribution of the estate. If not yet paid, the rule
requires that the distributees post a bond or make
such provisions as to meet the said tax obligation in
proportion to their respective shares in the
inheritance.
5. ID.; ID.; ID.; PURPOSE OF PROBATE. The probate
of a will is conclusive as to its due execution and
extrinsic validity and settles only the question of
whether the testator, being of sound mind, freely
executed it in accordance with the formalities
prescribed by law. Questions as to the intrinsic validity
and efficacy of the provisions of the will, the legality of
any devise or legacy may be raised even after the will
has been authenticated.
6. ID.; ID.; ID.; RIGHT OF AN EXECUTOR OR
ADMINISTRATOR OVER PROPERTIES OF THE
DECEASED. The right of an executor or
administrator to the possession and management of
the real and personal properties of the deceased is
not absolute and can only be exercised "so long as it is
necessary for the payment of the debts and expenses
of administration."
DECISION
PUNO, J :p

This petition for review on certiorari seeks to annul

and set aside the decision dated November 10, 1994
and the resolution dated January 5, 1995 of the Court
of Appeals in CA-G.R. SP No. 33045. LexLib

The facts show that on June 27, 1987, Hilario M. Ruiz 1

executed a holographic will naming as his heirs his
only son, Edmond Ruiz, his adopted daughter, private
respondent Maria Pilar Ruiz Montes, and his three
granddaughters, private respondents Maria Cathryn,
Candice Albertine and Maria Angeline, all children of
Edmond Ruiz. The testator bequeathed to his heirs
substantial cash, personal and real properties and
named Edmond Ruiz executor of his estate. 2
On April 12, 1988, Hilario Ruiz died. Immediately
thereafter, the cash component of his estate was
distributed among Edmond Ruiz and private
respondents in accordance with the decedent's will.
For unbeknown reasons, Edmond, the named
executor, did not take any action for the probate of his
father's holographic will.
On June 29, 1992, four years after the testator's death,
it was private respondent Maria Pilar Ruiz Montes who
filed before the Regional Trial Court, Branch 156,
Pasig, a petition for the probate and approval of
Hilario Ruiz's will and for the issuance of letters
testamentary to Edmond Ruiz. 3 Surprisingly, Edmond
opposed the petition on the ground that the will was
executed under undue influence.
On November 2, 1992, one of the properties of the
estate the house and lot at No. 2 Oliva Street, Valle
Verde IV, Pasig which the testator bequeathed to
Maria Cathryn, Candice Albertine and Maria Angeline 4
was leased out by Edmond Ruiz to third persons.
On January 19, 1993, the probate court ordered
Edmond to deposit with the Branch Clerk of Court the
rental deposit and payments totalling P540,000.00
representing the one-year lease of the Valle Verde
property. In compliance, on January 25, 1993, Edmond
turned over the amount of P348,583.56, representing
the balance of the rent after deducting P191,416.14
for repair and maintenance expenses on the estate. 5
In March 1993, Edmond moved for the release of
P50,000.00 to pay the real estate taxes on the real
properties of the estate. The probate court approved
the release of P7,722.00. 6
On May 14, 1993, Edmond withdrew his opposition to
the probate of the will. Consequently, the probate
court, on May 18, 1993, admitted the will to probate
and ordered the issuance of letters testamentary to
Edmond conditioned upon the filing of a bond in the
amount of P50,000.00. The letters testamentary were
issued on June 23, 1993.
On July 28, 1993, petitioner Testate Estate of Hilario
Ruiz, with Edmond Ruiz as executor, filed an "Ex-Parte
Motion for Release of Funds." It prayed for the release
of the rent payments deposited with the Branch Clerk
of Court. Respondent Montes opposed the motion
and concurrently filed a "Motion for Release of Funds
to Certain Heirs" and "Motion for Issuance of
Certificate of Allowance of Probate Will." Montes
prayed for the release of the said rent payments to
Maria Cathryn, Candice Albertine and Maria Angeline
and for the distribution of the testator's properties,
specifically the Valle Verde property and the Blue
Ridge apartments, in accordance with the provisions
of the holographic will.
On August 26, 1993, the probate court denied
petitioner's motion for release of funds but granted
respondent Montes' motion in view of petitioner's lack
of opposition. It thus ordered the release of the rent
payments to the decedent's three granddaughters. It
further ordered the delivery of the titles to and
possession of the properties bequeathed to the three
granddaughters and respondent Montes upon the
filing of a bond of P50,000.00.
Petitioner moved for reconsideration alleging that he
actually filed his opposition to respondent Montes'
motion for release of rent payments which opposition
the court failed to consider. Petitioner likewise
reiterated his previous motion for release of funds.
On November 23, 1993, petitioner, through counsel,
manifested that he was withdrawing his motion for
release of funds in view of the fact that the lease
contract over the Valle Verde property had been
renewed for another year. 7
Despite petitioner's manifestation, the probate court,
on December 22, 1993, ordered the release of the
funds to Edmond but only "such amount as may be
necessary to cover the expenses of administration
and allowances for support" of the testator's three
granddaughters subject to collation and deductible
from their share in the inheritance. The court,
however, held in abeyance the release of the titles to
respondent Montes and the three granddaughters
until the lapse of six months from the date of first
publication of the notice to creditors. 8 The court
stated thus:
"xxx xxx xxx

After consideration of the arguments set forth

thereon by the parties, the court resolves
to allow Administrator Edmond M. Ruiz to
take possession of the rental payments
deposited with the Clerk of Court, Pasig
Regional Trial Court, but only such amount
as may be necessary to cover the expenses
of administration and allowances for
support of Maria Cathryn Veronique,
Candice Albertine and Maria Angeli, which
are subject to collation and deductible
from the share in the inheritance of said
heirs and insofar as they exceed the fruits
or rents pertaining to them.

As to the release of the titles bequeathed to

petitioner Maria Pilar Ruiz-Montes and the
above-named heirs, the same is hereby
reconsidered and held in abeyance until
the lapse of six (6) months from the date of
 first publication of Notice to Creditors.

WHEREFORE, Administrator Edmond M. Ruiz is

hereby ordered to submit an accounting of
the expenses necessary for administration
including provisions for the support of
Maria Cathryn Veronique Ruiz, Candice
Albertine Ruiz and Maria Angeli Ruiz before
the amount required can be withdrawn
and cause the publication of the notice to
creditors with reasonable dispatch. 9

Petitioner assailed this order before the Court of

Appeals. Finding no grave abuse of discretion on the
part of respondent judge, the appellate court
dismissed the petition and sustained the probate
court's order in a decision dated November 10, 1994
10 and a resolution dated January 5, 1995. 11
Hence, this petition.
Petitioner claims that:
"THE PUBLIC RESPONDENT COURT OF APPEALS
COMMITTED GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR EXCESS OF
JURISDICTION IN AFFIRMING AND
CONFIRMING THE ORDER OF RESPONDENT
REGIONAL TRIAL COURT OF PASIG,
 BRANCH 156, DATED DECEMBER 22, 1993,
WHICH WHEN GIVEN DUE COURSE AND IS
EFFECTED WOULD: (1) DISALLOW THE
EXECUTOR/ADMINISTRATOR OF THE
ESTATE OF THE LATE HILARIO M. RUIZ TO
TAKE POSSESSION OF ALL THE REAL AND
PERSONAL PROPERTIES OF THE ESTATE; (2)
GRANT SUPPORT, DURING THE PENDENCY
OF THE SETTLEMENT OF AN ESTATE, TO
CERTAIN PERSONS NOT ENTITLED
THERETO; AND (3) PREMATURELY
PARTITION AND DISTRIBUTE THE ESTATE
PURSUANT TO THE PROVISIONS OF THE
HOLOGRAPHIC WILL EVEN BEFORE ITS
INTRINSIC VALIDITY HAS BEEN
DETERMINED, AND DESPITE THE
EXISTENCE OF UNPAID DEBTS AND
OBLIGATIONS OF THE ESTATE." 12

The issue for resolution is whether the probate court,

after admitting the will to probate but before payment
of the estate's debts and obligations, has the
authority: (1) to grant an allowance from the funds of
the estate for the support of the testator's
grandchildren; (2) to order the release of the titles to
certain heirs and (3) to grant possession of all
properties of the estate to the executor of the will.
On the matter of allowance, Section 3 of Rule 83 of the
Revised Rules of Court provides:
"Sec. 3. Allowance to widow and family. The
widow and minor or incapacitated children
of a deceased person, during the
settlement of the estate, shall receive
therefrom under the direction of the court,
such allowance as are provided by law." LLphil

Petitioner alleges that this provision only gives the

widow and the minor or incapacitated children of the
deceased the right to receive allowances for support
during the settlement of estate proceedings. He
contends that the testator's three granddaughters do
not qualify for an allowance because they are not
incapacitated and are no longer minors but of legal
age, married and gainfully employed. In addition, the
provision expressly states "children" of the deceased
which excludes the latter's grandchildren.
It is settled that allowances for support under Section
3 of Rule 83 should not be limited to the "minor or
incapacitated" children of the deceased. Article 188 13
of the Civil Code of the Philippines, the substantive law in
force at the time of the testator's death, provides that
during the liquidation of the conjugal partnership, the
deceased's legitimate spouse and children, regardless of
their age, civil status or gainful employment, are entitled
to provisional support from the funds of the estate. 14
The law is rooted on the fact that the right and duty to
support, especially the right to education, subsist even
beyond the age of majority. 15
Be that as it may, grandchildren are not entitled to
provisional support from the funds of the decedent's
estate. The law clearly limits the allowance to "widow
and children" and does not extend it to the deceased's
grandchildren, regardless of their minority or
incapacity. 16 It was error, therefore, for the appellate
court to sustain the probate court's order granting an
allowance to the grandchildren of the testator
pending settlement of his estate.
Respondent courts also erred when they ordered the
release of the titles of the bequeathed properties to
private respondents six months after the date of first
publication of notice to creditors. An order releasing
titles to properties of the estate amounts to an
advance distribution of the estate which is allowed
only under the following conditions:
"Sec. 2. Advance distribution in special
proceedings. Notwithstanding a pending
controversy or appeal in proceedings to
settle the estate of a decedent, the court
may, in its discretion and upon such terms
 as it may deem proper and just, permit
that such part of the estate as may not be
affected by the controversy or appeal be
distributed among the heirs or legatees,
upon compliance with the conditions set
forth in Rule 90 of these Rules." 17

And Rule 90 provides that:

"Section 1. When order for distribution of residue
made. When the debts, funeral charges,
and expenses of administration, the
allowance to the widow, and inheritance
tax, if any, chargeable to the estate in
accordance with law, have been paid, the
court, on the application of the executor or
administrator, or of a person interested in
the estate, and after hearing upon notice,
shall assign the residue of the estate to the
persons entitled to the same, naming them
and the proportions, or parts, to which
each is entitled, and such persons may
demand and recover their respective
shares from the executor or administrator,
or any other person having the same in his
possession. If there is a controversy before
the court as to who are the lawful heirs of
the deceased person or as to the
distributive shares to which each person is
 entitled under the law, the controversy
shall be heard and decided as in ordinary
cases.

No distribution shall be allowed until the payment of the

obligations above-mentioned has been made or provided
for, unless the distributees, or any of them, give a bond,
in a sum to be fixed by the court, conditioned for the
payment of said obligations within such time as the court
directs." 18
In settlement of estate proceedings, the distribution of
the estate properties can only be made: (1) after all
the debts, funeral charges, expenses of
administration, allowance to the widow, and estate tax
have been paid; or (2) before payment of said
obligations only if the distributees or any of them
gives a bond in a sum fixed by the court conditioned
upon the payment of said obligations within such time
as the court directs, or when provision is made to
meet those obligations. 19
In the case at bar, the probate court ordered the
release of the titles to the Valle Verde property and
the Blue Ridge apartments to the private respondents
after the lapse of six months from the date of first
publication of the notice to creditors. The questioned
order speaks of "notice" to creditors, not payment of
debts and obligations. Hilario Ruiz allegedly left no
debts when he died but the taxes on his estate had
not hitherto been paid, much less ascertained. The
estate tax is one of those obligations that must be
paid before distribution of the estate. If not yet paid,
the rule requires that the distributees post a bond or
make such provisions as to meet the said tax
obligation in proportion to their respective shares in
the inheritance. 20 Notably, at the time the order was
issued the properties of the estate had not yet been
inventoried and appraised.
It was also too early in the day for the probate court to
order the release of the titles six months after
admitting the will to probate. The probate of a will is
conclusive as to its due execution and extrinsic validity
21 and settles only the question of whether the
testator, being of sound mind, freely executed it in
accordance with the formalities prescribed by law. 22
Questions as to the intrinsic validity and efficacy of the
provisions of the will, the legality of any devise or
legacy may be raised even after the will has been
authenticated. 23
The intrinsic validity of Hilario's holographic will was
controverted by petitioner before the probate court in
his Reply to Montes' Opposition to his motion for
release of funds 24 and his motion for reconsideration
of the August 26, 1993 order of the said court. 25
Therein, petitioner assailed the distributive shares of
the devisees and legatees inasmuch as his father's will
included the estate of his mother and allegedly
impaired his legitime as an intestate heir of his
mother. The Rules provide that if there is a
controversy as to who are the lawful heirs of the
decedent and their distributive shares in his estate,
the probate court shall proceed to hear and decide
the same as in ordinary cases. 26
Still and all, petitioner cannot correctly claim that the
assailed order deprived him of his right to take
possession of all the real and personal properties of
the estate. The right of an executor or administrator
to the possession and management of the real and
personal properties of the deceased is not absolute
and can only be exercised "so long as it is necessary
for the payment of the debts and expenses of
administration." 27 Section 3 of Rule 84 of the Revised
Rules of Court explicitly provides:
"Sec. 3. Executor or administrator to retain whole
estate to pay debts, and to administer
estate not willed. An executor or
administrator shall have the right to the
possession and management of the real as
well as the personal estate of the deceased
so long as it is necessary for the payment
of the debts and expenses for
administration." 28
When petitioner moved for further release of the
funds deposited with the clerk of court, he had
been previously granted by the probate court
certain amounts for repair and maintenance
expenses on the properties of the estate, and
payment of the real estate taxes thereon. But
petitioner moved again for the release of additional
funds for the same reasons he previously cited. It
was correct for the probate court to require him to
submit an accounting of the necessary expenses
for administration before releasing any further
money in his favor.

It was relevantly noted by the probate court that

petitioner had deposited with it only a portion of the
one-year rental income from the Valle Verde property.
Petitioner did not deposit its succeeding rents after
renewal of the lease. 29 Neither did he render an
accounting of such funds. cda

Petitioner must be reminded that his right of

ownership over the properties of his father is merely
inchoate as long as the estate has not been fully
settled and partitioned. 30 As executor, he is a mere
trustee of his father's estate. The funds of the estate
in his hands are trust funds and he is held to the
duties and responsibilities of a trustee of the highest
order. 31 He cannot unilaterally assign to himself and
possess all his parents' properties and the fruits
thereof without first submitting an inventory and
appraisal of all real and personal properties of the
deceased, rendering a true account of his
administration, the expenses of administration, the
amount of the obligations and estate tax, all of which
are subject to a determination by the court as to their
veracity, propriety and justness. 32
IN VIEW WHEREOF, the decision and resolution of the
Court of Appeals in CA-G.R. SP No. 33045 affirming the
order dated December 22, 1993 of the Regional Trial
Court, Branch 156, Pasig in SP Proc. No. 10259 are
affirmed with the modification that those portions of
the order granting an allowance to the testator's
grandchildren and ordering the release of the titles to
the private respondents upon notice to creditors are
annulled and set aside.

Respondent judge is ordered to proceed with dispatch

in the proceedings below.
SO ORDERED.
(Estate of Ruiz v. Court of Appeals, G.R. No. 118671,
|||

[January 29, 1996], 322 PHIL 590-604)

 SECOND DIVISION
[G.R. No. 149926. February 23, 2005.]
UNION BANK OF THE PHILIPPINES, petitioner,
vs. EDMUND SANTIBAEZ and FLORENCE
SANTIBAEZ ARIOLA, respondents.
DECISION
CALLEJO, SR., J :p

Before us is a petition for review on certiorari under

Rule 45 of the Revised Rules of Court which seeks the
reversal of the Decision 1 of the Court of Appeals
dated May 30, 2001 in CA-G.R. CV No. 48831 affirming
the dismissal 2 of the petitioner's complaint in Civil
Case No. 18909 by the Regional Trial Court (RTC) of
Makati City, Branch 63.
The antecedent facts are as follows:
On May 31, 1980, the First Countryside Credit
Corporation (FCCC) and Efraim M. Santibaez entered
into a loan agreement 3 in the amount of P128,000.00.
The amount was intended for the payment of the
purchase price of one (1) unit Ford 6600 Agricultural
All-Purpose Diesel Tractor. In view thereof, Efraim and
his son, Edmund, executed a promissory note in favor
of the FCCC, the principal sum payable in five equal
annual amortizations of P43,745.96 due on May 31,
1981 and every May 31st thereafter up to May 31,
1985.
On December 13, 1980, the FCCC and Efraim entered
into another loan agreement, 4 this time in the
amount of P123,156.00. It was intended to pay the
balance of the purchase price of another unit of Ford
6600 Agricultural All-Purpose Diesel Tractor, with
accessories, and one (1) unit Howard Rotamotor
Model AR 60K. Again, Efraim and his son, Edmund,
executed a promissory note for the said amount in
favor of the FCCC. Aside from such promissory note,
they also signed a Continuing Guaranty Agreement 5
for the loan dated December 13, 1980. jur2005cd

Sometime in February 1981, Efraim died, leaving a

holographic will. 6 Subsequently in March 1981,
testate proceedings commenced before the RTC of
Iloilo City, Branch 7, docketed as Special Proceedings
No. 2706. On April 9, 1981, Edmund, as one of the
heirs, was appointed as the special administrator of
the estate of the decedent. 7 During the pendency of
the testate proceedings, the surviving heirs, Edmund
and his sister Florence Santibaez Ariola, executed a
Joint Agreement 8 dated July 22, 1981, wherein they
agreed to divide between themselves and take
possession of the three (3) tractors; that is, two (2)
tractors for Edmund and one (1) tractor for Florence.
Each of them was to assume the indebtedness of their
late father to FCCC, corresponding to the tractor
respectively taken by them.SEIcAD

On August 20, 1981, a Deed of Assignment with

Assumption of Liabilities 9 was executed by and
between FCCC and Union Savings and Mortgage Bank,
wherein the FCCC as the assignor, among others,
assigned all its assets and liabilities to Union Savings
and Mortgage Bank.
Demand letters 10 for the settlement of his account
were sent by petitioner Union Bank of the Philippines
(UBP) to Edmund, but the latter failed to heed the
same and refused to pay. Thus, on February 5, 1988,
the petitioner filed a Complaint 11 for sum of money
against the heirs of Efraim Santibaez, Edmund and
Florence, before the RTC of Makati City, Branch 150,
docketed as Civil Case No. 18909. Summonses were
issued against both, but the one intended for Edmund
was not served since he was in the United States and
there was no information on his address or the date
of his return to the Philippines. 12 Accordingly, the
complaint was narrowed down to respondent
Florence S. Ariola.
On December 7, 1988, respondent Florence S. Ariola
filed her Answer 13 and alleged that the loan
documents did not bind her since she was not a party
thereto. Considering that the joint agreement signed
by her and her brother Edmund was not approved by
the probate court, it was null and void; hence, she was
not liable to the petitioner under the joint agreement.
On January 29, 1990, the case was unloaded and re-
raffled to the RTC of Makati City, Branch 63. 14
Consequently, trial on the merits ensued and a
decision was subsequently rendered by the court
dismissing the complaint for lack of merit. The
decretal portion of the RTC decision reads:
WHEREFORE, judgment is hereby rendered
DISMISSING the complaint for lack of merit.
15

The trial court found that the claim of the petitioner

should have been filed with the probate court before
which the testate estate of the late Efraim Santibaez
was pending, as the sum of money being claimed was
an obligation incurred by the said decedent. The trial
court also found that the Joint Agreement apparently
executed by his heirs, Edmund and Florence, on July
22, 1981, was, in effect, a partition of the estate of the
decedent. However, the said agreement was void,
considering that it had not been approved by the
probate court, and that there can be no valid partition
until after the will has been probated. The trial court
further declared that petitioner failed to prove that it
was the now defunct Union Savings and Mortgage
Bank to which the FCCC had assigned its assets and
liabilities. The court also agreed to the contention of
respondent Florence S. Ariola that the list of assets
and liabilities of the FCCC assigned to Union Savings
and Mortgage Bank did not clearly refer to the
decedent's account. Ruling that the joint agreement
executed by the heirs was null and void, the trial court
held that the petitioner's cause of action against
respondent Florence S. Ariola must necessarily fail.
The petitioner appealed from the RTC decision and
elevated its case to the Court of Appeals (CA),
assigning the following as errors of the trial court:
1. THE COURT A QUO ERRED IN FINDING THAT THE
JOINT AGREEMENT (EXHIBIT A)
SHOULD BE APPROVED BY THE
PROBATE COURT.

2. THE COURT A QUO ERRED IN FINDING THAT

THERE CAN BE NO VALID PARTITION
AMONG THE HEIRS UNTIL AFTER THE
WILL HAS BEEN PROBATED.

3. THE COURT A QUO ERRED IN NOT FINDING THAT

THE DEFENDANT HAD WAIVED HER
RIGHT TO HAVE THE CLAIM RE-
LITIGATED IN THE ESTATE
PROCEEDING. 16

The petitioner asserted before the CA that the

obligation of the deceased had passed to his
legitimate children and heirs, in this case, Edmund
and Florence; the unconditional signing of the joint
agreement marked as Exhibit "A" estopped
respondent Florence S. Ariola, and that she cannot
deny her liability under the said document; as the
agreement had been signed by both heirs in their
personal capacity, it was no longer necessary to
present the same before the probate court for
approval; the property partitioned in the agreement
was not one of those enumerated in the holographic
will made by the deceased; and the active
participation of the heirs, particularly respondent
Florence S. Ariola, in the present ordinary civil action
was tantamount to a waiver to re-litigate the claim in
the estate proceedings.
On the other hand, respondent Florence S. Ariola
maintained that the money claim of the petitioner
should have been presented before the probate court.
17
The appellate court found that the appeal was not
meritorious and held that the petitioner should have
filed its claim with the probate court as provided
under Sections 1 and 5, Rule 86 of the Rules of Court.
It further held that the partition made in the
agreement was null and void, since no valid partition
may be had until after the will has been probated.
According to the CA, page 2, paragraph (e) of the
holographic will covered the subject properties
(tractors) in generic terms when the deceased
referred to them as "all other properties." Moreover,
the active participation of respondent Florence S.
Ariola in the case did not amount to a waiver. Thus,
the CA affirmed the RTC decision, viz.:
WHEREFORE, premises considered, the appealed
Decision of the Regional Trial Court of
Makati City, Branch 63, is hereby AFFIRMED
in toto.ISAcHD

SO ORDERED. 18

In the present recourse, the petitioner ascribes the

following errors to the CA:
I.

THE HONORABLE COURT OF APPEALS ERRED IN

FINDING THAT THE JOINT AGREEMENT
SHOULD BE APPROVED BY THE PROBATE
COURT.

II.
THE COURT OF APPEALS ERRED IN FINDING THAT
THERE CAN BE NO VALID PARTITION
AMONG THE HEIRS OF THE LATE EFRAIM
SANTIBAEZ UNTIL AFTER THE WILL HAS
BEEN PROBATED.

III.

THE COURT OF APPEALS ERRED IN NOT FINDING

THAT THE RESPONDENT HAD WAIVED HER
RIGHT TO HAVE THE CLAIM RE-LITIGATED
IN THE ESTATE PROCEEDING.

IV.

RESPONDENTS CAN, IN FACT, BE HELD JOINTLY

AND SEVERALLY LIABLE WITH THE
PRINCIPAL DEBTOR THE LATE EFRAIM
SANTIBAEZ ON THE STRENGTH OF THE
CONTINUING GUARANTY AGREEMENT
EXECUTED IN FAVOR OF PETITIONER-
APPELLANT UNION BANK.
 V.

THE PROMISSORY NOTES DATED MAY 31, 1980 IN

THE SUM OF P128,000.00 AND DECEMBER
13, 1980 IN THE AMOUNT OF P123,000.00
CATEGORICALLY ESTABLISHED THE FACT
THAT THE RESPONDENTS BOUND
THEMSELVES JOINTLY AND SEVERALLY
LIABLE WITH THE LATE DEBTOR EFRAIM
SANTIBAEZ IN FAVOR OF PETITIONER
UNION BANK. 19

The petitioner claims that the obligations of the

deceased were transmitted to the heirs as provided in
Article 774 of the Civil Code; there was thus no need
for the probate court to approve the joint agreement
where the heirs partitioned the tractors owned by the
deceased and assumed the obligations related
thereto. Since respondent Florence S. Ariola signed
the joint agreement without any condition, she is now
estopped from asserting any position contrary
thereto. The petitioner also points out that the
holographic will of the deceased did not include nor
mention any of the tractors subject of the complaint,
and, as such was beyond the ambit of the said will.
The active participation and resistance of respondent
Florence S. Ariola in the ordinary civil action against
the petitioner's claim amounts to a waiver of the right
to have the claim presented in the probate
proceedings, and to allow any one of the heirs who
executed the joint agreement to escape liability to pay
the value of the tractors under consideration would
be equivalent to allowing the said heirs to enrich
themselves to the damage and prejudice of the
petitioner.
The petitioner, likewise, avers that the decisions of
both the trial and appellate courts failed to consider
the fact that respondent Florence S. Ariola and her
brother Edmund executed loan documents, all
establishing the vinculum juris or the legal bond
between the late Efraim Santibaez and his heirs to be
in the nature of a solidary obligation. Furthermore,
the Promissory Notes dated May 31, 1980 and
December 13, 1980 executed by the late Efraim
Santibaez, together with his heirs, Edmund and
respondent Florence, made the obligation solidary as
far as the said heirs are concerned. The petitioner also
proffers that, considering the express provisions of
the continuing guaranty agreement and the
promissory notes executed by the named
respondents, the latter must be held liable jointly and
severally liable thereon. Thus, there was no need for
the petitioner to file its money claim before the
probate court. Finally, the petitioner stresses that both
surviving heirs are being sued in their respective
personal capacities, not as heirs of the deceased. cSITDa

In her comment to the petition, respondent Florence

S. Ariola maintains that the petitioner is trying to
recover a sum of money from the deceased Efraim
Santibaez; thus the claim should have been filed with
the probate court. She points out that at the time of
the execution of the joint agreement there was
already an existing probate proceedings of which the
petitioner knew about. However, to avoid a claim in
the probate court which might delay payment of the
obligation, the petitioner opted to require them to
execute the said agreement.
According to the respondent, the trial court and the
CA did not err in declaring that the agreement was
null and void. She asserts that even if the agreement
was voluntarily executed by her and her brother
Edmund, it should still have been subjected to the
approval of the court as it may prejudice the estate,
the heirs or third parties. Furthermore, she had not
waived any rights, as she even stated in her answer in
the court a quo that the claim should be filed with the
probate court. Thus, the petitioner could not invoke or
claim that she is in estoppel.
Respondent Florence S. Ariola further asserts that she
had not signed any continuing guaranty agreement,
nor was there any document presented as evidence to
show that she had caused herself to be bound by the
obligation of her late father.
The petition is bereft of merit.
The Court is posed to resolve the following issues: a)
whether or not the partition in the Agreement
executed by the heirs is valid; b) whether or not the
heirs' assumption of the indebtedness of the
deceased is valid; and c) whether the petitioner can
hold the heirs liable on the obligation of the deceased.
At the outset, well-settled is the rule that a probate
court has the jurisdiction to determine all the
properties of the deceased, to determine whether
they should or should not be included in the inventory
or list of properties to be administered. 20 The said
court is primarily concerned with the administration,
liquidation and distribution of the estate. 21
In our jurisdiction, the rule is that there can be no
valid partition among the heirs until after the will has
been probated.
In testate succession, there can be no valid partition
among the heirs until after the will has been probated.
The law enjoins the probate of a will and the public
requires it, because unless a will is probated and
notice thereof given to the whole world, the right of a
person to dispose of his property by will may be
rendered nugatory. The authentication of a will
decides no other question than such as touch upon
the capacity of the testator and the compliance with
those requirements or solemnities which the law
prescribes for the validity of a will. 22
This, of course, presupposes that the properties to be
partitioned are the same properties embraced in the
will. 23 In the present case, the deceased, Efraim
Santibaez, left a holographic will 24 which contained,
inter alia, the provision which reads as follows:
(e) All other properties, real or personal, which I
own and may be discovered later
after my demise, shall be distributed
in the proportion indicated in the
immediately preceding paragraph in
favor of Edmund and Florence, my
children.

We agree with the appellate court that the above-

quoted is an all-encompassing provision embracing all
the properties left by the decedent which might have
escaped his mind at that time he was making his will,
and other properties he may acquire thereafter.
Included therein are the three (3) subject tractors. This
being so, any partition involving the said tractors
among the heirs is not valid. The joint agreement 25
executed by Edmund and Florence, partitioning the
tractors among themselves, is invalid, specially so
since at the time of its execution, there was already a
pending proceeding for the probate of their late
father's holographic will covering the said tractors. aSCHcA

It must be stressed that the probate proceeding had

already acquired jurisdiction over all the properties of
the deceased, including the three (3) tractors. To
dispose of them in any way without the probate
court's approval is tantamount to divesting it with
jurisdiction which the Court cannot allow. 26 Every act
intended to put an end to indivision among co-heirs
and legatees or devisees is deemed to be a partition,
although it should purport to be a sale, an exchange, a
compromise, or any other transaction. 27 Thus, in
executing any joint agreement which appears to be in
the nature of an extra-judicial partition, as in the case
at bar, court approval is imperative, and the heirs
cannot just divest the court of its jurisdiction over that
part of the estate. Moreover, it is within the
jurisdiction of the probate court to determine the
identity of the heirs of the decedent. 28 In the instant
case, there is no showing that the signatories in the
joint agreement were the only heirs of the decedent.
When it was executed, the probate of the will was still
pending before the court and the latter had yet to
determine who the heirs of the decedent were. Thus,
for Edmund and respondent Florence S. Ariola to
adjudicate unto themselves the three (3) tractors was
a premature act, and prejudicial to the other possible
heirs and creditors who may have a valid claim against
the estate of the deceased.
The question that now comes to fore is whether the
heirs' assumption of the indebtedness of the
decedent is binding. We rule in the negative. Perusing
the joint agreement, it provides that the heirs as
parties thereto "have agreed to divide between
themselves and take possession and use the above-
described chattel and each of them to assume the
indebtedness corresponding to the chattel taken as
herein after stated which is in favor of First
Countryside Credit Corp." 29 The assumption of
liability was conditioned upon the happening of an
event, that is, that each heir shall take possession and
use of their respective share under the agreement. It
was made dependent on the validity of the partition,
and that they were to assume the indebtedness
corresponding to the chattel that they were each to
receive. The partition being invalid as earlier
discussed, the heirs in effect did not receive any such
tractor. It follows then that the assumption of liability
cannot be given any force and effect.
The Court notes that the loan was contracted by the
decedent. The petitioner, purportedly a creditor of the
late Efraim Santibaez, should have thus filed its
money claim with the probate court in accordance
with Section 5, Rule 86 of the Revised Rules of Court,
which provides:
Section 5. Claims which must be filed under the
notice. If not filed barred; exceptions. All
claims for money against the decedent,
arising from contract, express or implied,
whether the same be due, not due, or
contingent, all claims for funeral expenses
for the last sickness of the decedent, and
judgment for money against the decedent,
must be filed within the time limited in the
notice; otherwise they are barred forever,
except that they may be set forth as
counterclaims in any action that the
executor or administrator may bring
against the claimants. Where an executor
or administrator commences an action, or
prosecutes an action already commenced
by the deceased in his lifetime, the debtor
may set forth by answer the claims he has
against the decedent, instead of presenting
them independently to the court as herein
provided, and mutual claims may be set off
against each other in such action; and if
final judgment is rendered in favor of the
defendant, the amount so determined
shall be considered the true balance
against the estate, as though the claim had
been presented directly before the court in
 the administration proceedings. Claims not
yet due, or contingent, may be approved at
their present value.

The filing of a money claim against the decedent's

estate in the probate court is mandatory. 30 As we
held in the vintage case of Py Eng Chong v. Herrera: 31
. . . This requirement is for the purpose of
protecting the estate of the deceased by
informing the executor or administrator of
the claims against it, thus enabling him to
examine each claim and to determine
whether it is a proper one which should be
allowed. The plain and obvious design of
the rule is the speedy settlement of the
affairs of the deceased and the early
delivery of the property to the distributees,
legatees, or heirs. 'The law strictly requires
the prompt presentation and disposition of
the claims against the decedent's estate in
order to settle the affairs of the estate as
soon as possible, pay off its debts and
distribute the residue. 32

Perusing the records of the case, nothing therein

could hold private respondent Florence S. Ariola
accountable for any liability incurred by her late
father. The documentary evidence presented,
particularly the promissory notes and the continuing
guaranty agreement, were executed and signed only
by the late Efraim Santibaez and his son Edmund. As
the petitioner failed to file its money claim with the
probate court, at most, it may only go after Edmund
as co-maker of the decedent under the said
promissory notes and continuing guaranty, of course,
subject to any defenses Edmund may have as against
the petitioner. As the court had not acquired
jurisdiction over the person of Edmund, we find it
unnecessary to delve into the matter further. DSTCIa

We agree with the finding of the trial court that the

petitioner had not sufficiently shown that it is the
successor-in-interest of the Union Savings and
Mortgage Bank to which the FCCC assigned its assets
and liabilities. 33 The petitioner in its complaint alleged
that "by virtue of the Deed of Assignment dated
August 20, 1981 executed by and between First
Countryside Credit Corporation and Union Bank of the
Philippines . . ." 34 However, the documentary
evidence 35 clearly reflects that the parties in the deed
of assignment with assumption of liabilities were the
FCCC, and the Union Savings and Mortgage Bank, with
the conformity of Bancom Philippine Holdings, Inc.
Nowhere can the petitioner's participation therein as a
party be found. Furthermore, no documentary or
testimonial evidence was presented during trial to
show that Union Savings and Mortgage Bank is now,
in fact, petitioner Union Bank of the Philippines. As the
trial court declared in its decision:

. . . [T]he court also finds merit to the contention of

defendant that plaintiff failed to prove or
did not present evidence to prove that
Union Savings and Mortgage Bank is now
the Union Bank of the Philippines. Judicial
notice does not apply here. "The power to
take judicial notice is to [be] exercised by
the courts with caution; care must be taken
that the requisite notoriety exists; and
every reasonable doubt upon the subject
should be promptly resolved in the
negative." (Republic vs. Court of Appeals,
107 SCRA 504). 36

This being the case, the petitioner's personality to file

the complaint is wanting. Consequently, it failed to
establish its cause of action. Thus, the trial court did
not err in dismissing the complaint, and the CA in
affirming the same.
IN LIGHT OF ALL THE FOREGOING, the petition is
hereby DENIED. The assailed Court of Appeals
Decision is AFFIRMED. No costs.
SO ORDERED.
(Union Bank of the Philippines v. Santibaez , G.R.
|||

No. 149926, [February 23, 2005], 492 PHIL 329-342)

 SECOND DIVISION
[G.R. No. 171206. September 23, 2013.]
HEIRS OF THE LATE SPOUSES FLAVIANO
MAGLASANG and SALUD ADAZA-
MAGLASANG, namely, OSCAR A.
MAGLASANG, EDGAR A. MAGLASANG,
CONCEPCION CHONA A. MAGLASANG,
GLENDA A. MAGLASANG-ARNAIZ, LERMA A.
MAGLASANG, FELMA A. MAGLASANG, FE
DORIS A. MAGLASANG, LEOLINO A.
MAGLASANG, MARGIE LEILA A. MAGLASANG,
MA. MILALIE A. MAGLASANG, SALUD A.
MAGLASANG, and MA. FLASALIE A.
MAGLASANG, REPRESENTING THE ESTATES
OF THEIR AFORE-NAMED DECEASED
PARENTS, petitioners, vs. MANILA BANKING
CORPORATION, now substituted by FIRST
SOVEREIGN ASSET MANAGEMENT [SPV-
AMC], INC. [FSAMI], respondent.
DECISION
PERLAS-BERNABE, J : p

Assailed in this petition for review on certiorari 1 are

the Decision 2 dated July 20, 2005 and Resolution 3
dated January 4, 2006 of the Court of Appeals (CA) in
CA-G.R. CV No. 50410 which dismissed petitioners'
appeal and affirmed the Decision 4 dated April 6, 1987
of the Regional Trial Court of Ormoc City, Branch 12
(RTC) directing petitioners to jointly and severally pay
respondent Manila Banking Corporation the amount
of P434,742.36, with applicable interests, representing
the deficiency of the former's total loan obligation to
the latter after the extra-judicial foreclosure of the real
estate mortgage subject of this case, including
attorney's fees and costs of suit.
The Facts
On June 16, 1975, spouses Flaviano and Salud
Maglasang (Sps. Maglasang) obtained a credit line
from respondent 5 in the amount of P350,000.00
which was secured by a real estate mortgage 6
executed over seven of their properties 7 located in
Ormoc City and the Municipality of Kananga, Province
of Leyte. 8 They availed of their credit line by securing
loans in the amounts of P209,790.50 and P139,805.83
on October 24, 1975 and March 15, 1976, respectively,
9 both of which becoming due and demandable within
a period of one year. Further, the parties agreed that
the said loans would earn interest at 12% per annum
(p.a.) and an additional 4% penalty would be charged
upon default. 10 CAHTIS

After Flaviano Maglasang (Flaviano) died intestate on

February 14, 1977, his widow Salud Maglasang (Salud)
and their surviving children, herein petitioners Oscar
(Oscar), Concepcion Chona, Lerma, Felma, Fe Doris,
Leolino, Margie Leila, Ma. Milalie, Salud and Ma.
Flasalie, all surnamed Maglasang, and Glenda
Maglasang-Arnaiz, appointed 11 their brother
petitioner Edgar Maglasang (Edgar) as their attorney-
in-fact. 12 Thus, on March 30, 1977, Edgar filed a
verified petition for letters of administration of the
intestate estate of Flaviano before the then Court of
First Instance of Leyte, Ormoc City, Branch 5 (probate
court), docketed as Sp. Proc. No. 1604-0. 13 On August
9, 1977, the probate court issued an Order 14 granting
the petition, thereby appointing Edgar as the
administrator 15 of Flaviano's estate.cITAaD

In view of the issuance of letters of administration, the

probate court, on August 30, 1977, issued a Notice to
Creditors 16 for the filing of money claims against
Flaviano's estate. Accordingly, as one of the creditors
of Flaviano, respondent notified 17 the probate court
of its claim in the amount of P382,753.19 as of
October 11, 1978, exclusive of interests and charges.
During the pendency of the intestate proceedings,
Edgar and Oscar were able to obtain several loans
from respondent, secured by promissory notes 18
which they signed.
In an Order 19 dated December 14, 1978 (December
14, 1978 Order), the probate court terminated the
proceedings with the surviving heirs executing an
extra-judicial partition of the properties of Flaviano's
estate. The loan obligations owed by the estate to
respondent, however, remained unsatisfied due to
respondent's certification that Flaviano's account was
undergoing a restructuring. Nonetheless, the probate
court expressly recognized the rights of respondent
under the mortgage and promissory notes executed
by the Sps. Maglasang, specifically, its "right to
foreclose the same within the statutory period." 20
In this light, respondent proceeded to extra-judicially
foreclose the mortgage covering the Sps. Maglasang's
properties and emerged as the highest bidder at the
public auction for the amount of P350,000.00. 21
There, however, remained a deficiency on Sps.
Maglasang's obligation to respondent. Thus, on June
24, 1981, respondent filed a suit to recover the
deficiency amount of P250,601.05 as of May 31, 1981
against the estate of Flaviano, his widow Salud and
petitioners, docketed as Civil Case No. 1998-0. 22
AHSEaD

The RTC Ruling and Subsequent Proceedings

After trial on the merits, the RTC (formerly, the
probate court) 23 rendered a Decision 24 on April 6,
1987 directing the petitioners to pay respondent,
jointly and severally, the amount of P434,742.36 with
interest at the rate of 12% p.a., plus a 4% penalty
charge, reckoned from September 5, 1984 until fully
paid. 25 The RTC found that it was shown, by a
preponderance of evidence, that petitioners, after the
extra-judicial foreclosure of all the properties
mortgaged, still have an outstanding obligation in the
amount and as of the date as above-stated. The RTC
also found in order the payment of interests and
penalty charges as above-mentioned as well as
attorney's fees equivalent to 10% of the outstanding
obligation. 26
Dissatisfied, petitioners elevated the case to the CA on
appeal, contending, 27 inter alia, that the remedies
available to respondent under Section 7, Rule 86 of
the Rules of Court (Rules) are alternative and
exclusive, such that the election of one operates as a
waiver or abandonment of the others. Thus, when
respondent filed its claim against the estate of
Flaviano in the proceedings before the probate court,
it effectively abandoned its right to foreclose on the
mortgage. Moreover, even on the assumption that it
has not so waived its right to foreclose, it is
nonetheless barred from filing any claim for any
deficiency amount.
During the pendency of the appeal, Flaviano's widow,
Salud, passed away on July 25, 1997. 28 DISHEA

The CA Ruling
In a Decision 29 dated July 20, 2005, the CA denied the
petitioners' appeal and affirmed the RTC's Decision. At
the outset, it pointed out that the probate court erred
when it, through the December 14, 1978 Order, closed
and terminated the proceedings in Sp. Proc. No. 1604-
0 without first satisfying the claims of the creditors of
the estate in particular, respondent in violation
of Section 1, Rule 90 of the Rules. 30 As a
consequence, respondent was not able to collect from
the petitioners and thereby was left with the option of
foreclosing the real estate mortgage. 31 Further, the
CA held that Section 7, Rule 86 of the Rules does not
apply to the present case since the same does not
involve a mortgage made by the administrator over
any property belonging to the estate of the decedent.
32 According to the CA, what should apply is Act No.
3135 33 which entitles respondent to claim the
deficiency amount after the extra-judicial foreclosure
of the real estate mortgage of Sps. Maglasang's
properties. 34
Petitioners' motion for reconsideration was
subsequently denied in a Resolution 35 dated January
4, 2006. Hence, the present recourse.
The Issue Before the Court
The essential issue in this case is whether or not the
CA erred in affirming the RTC's award of the deficiency
amount in favor of respondent.
Petitioners assert 36 that it is not Act No. 3135 but
Section 7, Rule 86 of the Rules which applies in this
case. The latter provision provides alternative and
exclusive remedies for the satisfaction of respondent's
claim against the estate of Flaviano. 37 Corollarily,
having filed its claim against the estate during the
intestate proceedings, petitioners argue that
respondent had effectively waived the remedy of
foreclosure and, even assuming that it still had the
right to do so, it was precluded from filing a suit for
the recovery of the deficiency obligation. 38
AEIHaS

Likewise, petitioners maintain that the extra-judicial

foreclosure of the subject properties was null and
void, not having been conducted in the capital of the
Province of Leyte in violation of the stipulations in the
real estate mortgage contract. 39 They likewise deny
any personal liability for the loans taken by their
deceased parents. 40
The Court's Ruling
The petition is partly meritorious.
Claims against deceased persons should be filed
during the settlement proceedings of their estate. 41
Such proceedings are primarily governed by special
rules found under Rules 73 to 90 of the Rules,
although rules governing ordinary actions may, as far
as practicable, apply suppletorily. 42 Among these
special rules, Section 7, Rule 86 of the Rules (Section 7,
Rule 86) provides the rule in dealing with secured
claims against the estate:
SEC. 7. Mortgage debt due from estate. A
creditor holding a claim against the
deceased secured by a mortgage or
other collateral security, may
abandon the security and prosecute his
claim in the manner provided in this rule,
and share in the general distribution of the
assets of the estate; or he may foreclose
his mortgage or realize upon his security,
by action in court, making the executor or
administrator a party defendant, and if
there is a judgment for a deficiency, after
 the sale of the mortgaged premises, or the
property pledged, in the foreclosure or
other proceeding to realize upon the
security, he may claim his deficiency
judgment in the manner provided in the
preceding section; or he may rely upon his
mortgage or other security alone, and
foreclose the same at any time within the
period of the statute of limitations, and in
that event he shall not be admitted as a
creditor, and shall receive no share in the
distribution of the other assets of the
estate; but nothing herein contained shall
prohibit the executor or administrator
from redeeming the property mortgaged
or pledged, by paying the debt for which it
is held as security, under the direction of
the court, if the court shall adjudged it to
be for the best interest of the estate that
such redemption shall be made. (Emphasis
and underscoring supplied) DTEAHI

As the foregoing generally speaks of "[a] creditor

holding a claim against the deceased secured by a
mortgage or other collateral security" as above-
highlighted, it may be reasonably concluded that the
aforementioned section covers all secured claims,
whether by mortgage or any other form of collateral,
which a creditor may enforce against the estate of the
deceased debtor. On the contrary, nowhere from its
language can it be fairly deducible that the said
section would as the CA interpreted narrowly
apply only to mortgages made by the administrator
over any property belonging to the estate of the
decedent. To note, mortgages of estate property
executed by the administrator, are also governed by
Rule 89 of the Rules, captioned as "Sales, Mortgages,
and Other Encumbrances of Property of Decedent."
In this accord, it bears to stress that the CA's reliance
on Philippine National Bank v. CA 43 (PNB) was
misplaced as the said case did not, in any manner,
limit the scope of Section 7, Rule 86. It only stated that
the aforesaid section equally applies to cases where
the administrator mortgages the property of the
estate to secure the loan he obtained. 44 Clearly, the
pronouncement was a ruling of inclusion and not one
which created a distinction. It cannot, therefore, be
doubted that it is Section 7, Rule 86 which remains
applicable in dealing with a creditor's claim against the
mortgaged property of the deceased debtor, as in this
case, as well as mortgages made by the administrator,
as that in the PNB case.
Jurisprudence breaks down the rule under Section 7,
Rule 86 and explains that the secured creditor has
three remedies/options that he may alternatively
adopt for the satisfaction of his indebtedness. In
particular, he may choose to: (a) waive the mortgage
and claim the entire debt from the estate of the
mortgagor as an ordinary claim; (b) foreclose the
mortgage judicially and prove the deficiency as an
ordinary claim; and (c) rely on the mortgage
exclusively, or other security and foreclose the same
before it is barred by prescription, without the right to
file a claim for any deficiency. 45 It must, however, be
emphasized that these remedies are distinct,
independent and mutually exclusive from each other;
thus, the election of one effectively bars the exercise
of the others. With respect to real properties, the
Court in Bank of America v. American Realty
Corporation 46 pronounced: cDTACE

In our jurisdiction, the remedies available to the

mortgage creditor are deemed
alternative and not cumulative.
Notably, an election of one remedy
operates as a waiver of the other.
For this purpose, a remedy is deemed
chosen upon the filing of the suit for
collection or upon the filing of the
complaint in an action for foreclosure of
mortgage, pursuant to the provision of
Rule 68 of the 1997 Rules of Civil
Procedure. As to extrajudicial foreclosure,
such remedy is deemed elected by the
mortgage creditor upon filing of the
 petition not with any court of justice but
with the Office of the Sheriff of the
province where the sale is to be made, in
accordance with the provisions of Act No.
3135, as amended by Act No. 4118. 47
(Emphasis supplied) CTHDcE

Anent the third remedy, it must be mentioned that the

same includes the option of extra-judicially foreclosing
the mortgage under Act No. 3135, as availed of by
respondent in this case. However, the plain result of
adopting the last mode of foreclosure is that the
creditor waives his right to recover any deficiency
from the estate. 48 These precepts were discussed in
the PNB case, citing Perez v. Philippine National Bank
49 which overturned the earlier Pasno v. Ravina ruling:
50
Case law now holds that this rule grants to the
mortgagee three distinct, independent and
mutually exclusive remedies that can be
alternatively pursued by the mortgage
creditor for the satisfaction of his credit in
case the mortgagor dies, among them:

(1) to waive the mortgage and claim the

entire debt from the estate
of the mortgagor as an
 ordinary claim;

(2) to foreclose the mortgage judicially and

prove any deficiency as an
ordinary claim; and

(3) to rely on the mortgage exclusively,

foreclosing the same at any
time before it is barred by
prescription without right to
file a claim for any
deficiency.

In Perez v. Philippine National Bank, reversing

Pasno vs. Ravina, we held: ACSaHc
The ruling in Pasno v. Ravina not having been
reiterated in any other case, we have
carefully reexamined the same, and
after mature deliberation have
reached the conclusion that the
dissenting opinion is more in
conformity with reason and law. Of
the three alternative courses that
section 7, Rule 87 (now Rule 86),
offers the mortgage creditor, to wit,
(1) to waive the mortgage and claim
the entire debt from the estate of
the mortgagor as an ordinary claim;
(2) foreclose the mortgage judicially
and prove any deficiency as an
ordinary claim; and (3) to rely on the
mortgage exclusively, foreclosing the
same at any time before it is barred
by prescription, without right to file a
claim for any deficiency, the majority
opinion in Pasno v. Ravina, in
requiring a judicial foreclosure,
virtually wipes out the third
alternative conceded by the Rules to
the mortgage creditor, and which
would precisely include extra-
judicial foreclosures by contrast
with the second alternative.
The plain result of adopting the last mode of
foreclosure is that the creditor waives his right
to recover any deficiency from the estate.
Following the Perez ruling that the third mode
includes extrajudicial foreclosure sales, the
result of extrajudicial foreclosure is that the
creditor waives any further deficiency
claim. . . . . 51 (Emphases and underscoring supplied;
italics in the original)
THIECD

To obviate any confusion, the Court observes that the

operation of Act No. 3135 does not entirely discount
the application of Section 7, Rule 86, or vice-versa.
Rather, the two complement each other within their
respective spheres of operation. On the one hand,
Section 7, Rule 86 lays down the options for the
secured creditor to claim against the estate and,
according to jurisprudence, the availment of the third
option bars him from claiming any deficiency amount.
On the other hand, after the third option is chosen,
the procedure governing the manner in which the
extra-judicial foreclosure should proceed would still
be governed by the provisions of Act No. 3135. Simply
put, Section 7, Rule 86 governs the parameters and
the extent to which a claim may be advanced against
the estate, whereas Act No. 3135 sets out the specific
procedure to be followed when the creditor
subsequently chooses the third option specifically,
that of extra-judicially foreclosing real property
belonging to the estate. The application of the
procedure under Act No. 3135 must be concordant
with Section 7, Rule 86 as the latter is a special rule
applicable to claims against the estate, and at the
same time, since Section 7, Rule 86 does not detail the
procedure for extra-judicial foreclosures, the
formalities governing the manner of availing of the
third option such as the place where the
application for extra-judicial foreclosure is filed, the
requirements of publication and posting and the place
of sale must be governed by Act No. 3135.
In this case, respondent sought to extra-judicially
foreclose the mortgage of the properties previously
belonging to Sps. Maglasang (and now, their estates)
and, therefore, availed of the third option. Lest it be
misunderstood, it did not exercise the first option of
directly filing a claim against the estate, as petitioners
assert, since it merely notified 52 the probate court of
the outstanding amount of its claim against the estate
of Flaviano and that it was currently restructuring the
account. 53 Thus, having unequivocally opted to
exercise the third option of extra-judicial foreclosure
under Section 7, Rule 86, respondent is now precluded
from filing a suit to recover any deficiency amount as
earlier discussed. cIADaC

As a final point, petitioners maintain that the extra-

judicial foreclosure of the subject properties was null
and void since the same was conducted in violation of
the stipulation in the real estate mortgage contract
stating that the auction sale should be held in the
capital of the province where the properties are
located, i.e., the Province of Leyte.
The Court disagrees.
As may be gleaned from the records, the stipulation
under the real estate mortgage 54 executed by Sps.
Maglasang which fixed the place of the foreclosure
sale at Tacloban City lacks words of exclusivity which
would bar any other acceptable fora wherein the said
sale may be conducted, to wit:
It is hereby agreed that in case of foreclosure of
this mortgage under Act 3135, the auction
sale shall be held at the capital of the
province if the property is within the
territorial jurisdiction of the province
concerned, or shall be held in the city if the
property is within the territorial jurisdiction
of the city concerned; . . . . 55

Case law states that absent such qualifying or

restrictive words to indicate the exclusivity of the
agreed forum, the stipulated place should only be as
an additional, not a limiting venue. 56 As a
consequence, the stipulated venue and that provided
under Act No. 3135 can be applied alternatively.
In particular, Section 2 of Act No. 3135 allows the
foreclosure sale to be done within the province where
the property to be sold is situated, viz.:
SEC. 2. Said sale cannot be made legally outside of
the province which the property sold is
situated; and in case the place within said
province in which the sale is to be made is
subject to stipulation, such sale shall be
made in said place or in the municipal
building of the municipality in which the
property or part thereof is situated. (Italics
supplied) DAEcIS

In this regard, since the auction sale was conducted in

Ormoc City, which is within the territorial jurisdiction
of the Province of Leyte, then the Court finds sufficient
compliance with the above-cited requirement.
All told, finding that the extra-judicial foreclosure
subject of this case was properly conducted in
accordance with the formalities of Act No. 3135, the
Court upholds the same as a valid exercise of
respondent's third option under Section 7, Rule 86. To
reiterate, respondent cannot, however, file any suit to
recover any deficiency amount since it effectively
waived its right thereto when it chose to avail of extra-
judicial foreclosure as jurisprudence instructs. ADCTac

WHEREFORE, the petition is PARTLY GRANTED.

The complaint for the recovery of the deficiency
amount after extra-judicial foreclosure filed by
respondent Manila Banking Corporation is hereby
DISMISSED. The extra-judicial foreclosure of the
mortgaged properties, however, stands.
SO ORDERED.
(Heirs of the Late Sps. Magsalang v. Manila Banking
|||

Corp., G.R. No. 171206, [September 23, 2013], 718

PHIL 256-273)
 THIRD DIVISION
[G.R. No. 150175. February 5, 2007.]
ERLINDA PILAPIL and HEIRS OF DONATA
ORTIZ BRIONES, namely: ESTELA, ERIBERTO
AND VIRGILIO SANTOS, ANA SANTOS
CULTURA, ELVIRA SANTOS INOCENTES,
ERNESTO MENDOZA, RIZALINA SANTOS,
ADOLFO MENDOZA and PACITA MENDOZA,
petitioners, vs. HEIRS OF MAXIMINO R.
BRIONES, namely: SILVERIO S. BRIONES,
PETRA BRIONES, BONIFACIO CABAHUG, JR.,
ANITA TRASMONTE, CIRILITA FORTUNA,
CRESENCIA BRIONES, FUGURACION
MEDALLE and MERCEDES LAGBAS,
respondents.
RESOLUTION
CHICO-NAZARIO, J : p

On 10 March 2006, this Court promulgated its

Decision 1 in the above-entitled case, ruling in favor of
the petitioners. The dispositive portion 2 reads as
follows:
IN VIEW OF THE FOREGOING, the assailed Decision
of the Court of Appeals in CA-G.R. CV No.
55194, dated 31 August 2001, affirming the
Decision of the Cebu City RTC in Civil Case
No. CEB-5794, dated 28 September 1986, is
hereby REVERSED and SET ASIDE; and the
Complaint for partition, annulment, and
recovery of possession filed by the heirs of
 Maximino in Civil Case No. CEB-5794 is
hereby DISMISSED.

On 10 May 2006, a Motion for Reconsideration 3 of

the foregoing Decision was filed by Atty. Celso C.
Reales of the Reales Law Office on behalf of the
respondents, heirs of Maximino R. Briones. On 19 May
2006, petitioners Erlinda Pilapil and the other co-heirs
of Donata Ortiz Vda. de Briones, through counsel, filed
an Opposition to Respondents' Motion for
Reconsideration, 4 to which the respondents filed a
Rejoinder 5 on 23 May 2006. Thereafter, Atty. Amador
F. Brioso, Jr. of the Canto Brioso Arnedo Law Office
entered his appearance as collaborating counsel for
the respondents. 6 Atty. Brioso then filed on 11 June
2006 and 16 June 2006, respectively, a Reply 7 and
Supplemental Reply 8 to the petitioners' Opposition to
respondents' Motion for Reconsideration. Finally,
petitioners filed a Rejoinder 9 to the respondents'
Reply and Supplemental Reply on 5 July 2006.
The facts of the case, as recounted in the Decision, 10
are as follows
Petitioners are the heirs of the late Donata Ortiz-
Briones (Donata), consisting of her
surviving sister, Rizalina Ortiz-Aguila
(Rizalina); Rizalina's daughter, Erlinda
Pilapil (Erlinda); and the other nephews
 and nieces of Donata, in representation of
her two other sisters who had also passed
away. Respondents, on the other hand, are
the heirs of the late Maximino Briones
(Maximino), composed of his nephews and
nieces, and grandnephews and
grandnieces, in representation of the
deceased siblings of Maximino.

xxx xxx xxx

Maximino was married to Donata but their union

did not produce any children. When
Maximino died on 1 May 1952, Donata
instituted intestate proceedings to settle
her husband's estate with the Cebu City
Court of First Instance (CFI), 14th Judicial
District, designated as Special Proceedings
No. 928-R. On 8 July 1952, the CFI issued
Letters of Administration appointing
Donata as the administratrix of Maximino's
estate. She submitted an Inventory of
Maximino's properties, which included,
among other things, the following parcels
of land . . . .

xxx xxx xxx

The CFI would subsequently issue an Order, dated
2 October 1952, awarding ownership of the
aforementioned real properties to Donata.
On 27 June 1960, Donata had the said CFI
Order recorded in the Primary Entry Book
of the Register of Deeds, and by virtue
thereof, received new TCTs, covering the
said properties, now in her name.aCIHAD

Donata died on 1 November 1977. Erlinda, one of

Donata's nieces, instituted with the RTC a
petition for the administration of the
intestate estate of Donata. Erlinda and her
husband, Gregorio, were appointed by the
RTC as administrators of Donata's intestate
estate. Controversy arose among Donata's
heirs when Erlinda claimed exclusive
ownership of three parcels of land, covered
by TCTs No. 21542, 21545, and 58684,
based on two Deeds of Donation, both
dated 15 September 1977, allegedly
executed in her favor by her aunt Donata.
The other heirs of Donata opposed
Erlinda's claim. This Court, however, was
no longer informed of the subsequent
development in the intestate proceedings
of the estate of Donata; and as far as this
Petition is concerned, all the heirs of
 Donata, including Erlinda, appear to be on
the same side.

On 21 January 1985, Silverio Briones (Silverio), a

nephew of Maximino, filed a Petition with
the RTC for Letters of Administration for
the intestate estate of Maximino, which
was initially granted by the RTC. The RTC
also issued an Order, dated 5 December
1985, allowing Silverio to collect rentals
from Maximino's properties. But then,
Gregorio filed with the RTC a Motion to Set
Aside the Order, dated 5 December 1985,
claiming that the said properties were
already under his and his wife's
administration as part of the intestate
estate of Donata. Silverio's Letters of
Administration for the intestate estate of
Maximino was subsequently set aside by
the RTC.

On 3 March 1987, the heirs of Maximino filed a

Complaint with the RTC against the heirs of
Donata for the partition, annulment, and
recovery of possession of real property,
docketed as Civil Case No. CEB-5794. They
later filed an Amended Complaint, on 11
 December 1992. They alleged that Donata,
as administratrix of the estate of
Maximino, through fraud and
misrepresentation, in breach of trust, and
without the knowledge of the other heirs,
succeeded in registering in her name the
real properties belonging to the intestate
estate of Maximino.

xxx xxx xxx

After trial in due course, the RTC rendered its

Decision, dated 8 April 1986, in favor of the
heirs of Maximino . . . .

xxx xxx xxx

. . . [T]he RTC declared that the heirs of Maximino

were entitled to 1/2 of the real properties
covered by TCTs No. 21542, 21543, 21544,
21545, 21546, and 58684. It also ordered
Erlinda to reconvey to the heirs of
Maximino the said properties and to
render an accounting of the fruits thereof.

The heirs of Donata appealed the RTC Decision,

dated 8 April 1986, to the Court of Appeals.
 The Court of Appeals, in its Decision,
promulgated on 31 August 2001, affirmed
the RTC Decision, . . . .

xxx xxx xxx

Unsatisfied with the afore-quoted Decision of the

Court of Appeals, the heirs of Donata filed
the present Petition, . . . .

In its Decision, dated 10 March 2006, this Court found

the Petition meritorious and, reversing the Decisions
of the Court of Appeals and the Regional Trial Court
(RTC), dismissed the Complaint for partition,
annulment, and recovery of possession of real
property filed by the heirs of Maximino in Civil Case
No. CEB-5794. This Court summed up its findings, 11
thus
In summary, the heirs of Maximino failed to prove
by clear and convincing evidence that
Donata managed, through fraud, to have
the real properties, belonging to the
intestate estate of Maximino, registered in
her name. In the absence of fraud, no
implied trust was established between
Donata and the heirs of Maximino under
Article 1456 of the New Civil Code. Donata
 was able to register the real properties in
her name, not through fraud or mistake,
but pursuant to an Order, dated 2 October
1952, issued by the CFI in Special
Proceedings No. 928-R. The CFI Order,
presumed to be fairly and regularly issued,
declared Donata as the sole, absolute, and
exclusive heir of Maximino; hence, making
Donata the singular owner of the entire
estate of Maximino, including the real
properties, and not merely a co-owner with
the other heirs of her deceased husband.
There being no basis for the Complaint of
the heirs of Maximino in Civil Case No.
CEB-5794, the same should have been
dismissed. IcaHTA

Respondents move for the reconsideration of the

Decision of this Court raising still the arguments that
Donata committed fraud in securing the Court of First
Instance Order, dated 2 October 1952, which declared
her as the sole heir of her deceased husband
Maximino and authorized her to have Maximino's
properties registered exclusively in her name; that
respondents' right to succession to the disputed
properties was transmitted or vested from the
moment of Maximino's death and which they could no
longer be deprived of; that Donata merely possessed
and held the properties in trust for her co-
heirs/owners; and that, by virtue of this Court's ruling
in Quion v. Claridad 12 and Sevilla, et al. v. De Los
Angeles, 13 respondents' action to recover title to and
possession of their shares in Maximino's estate, held
in trust for their benefit by Donata, and eventually, by
petitioners as the latter's successors-in-interest, is
imprescriptible. Respondents also advance a fresh
contention that the CFI Order, dated 2 October 1952,
being based on the fraudulent misrepresentation of
Donata that she was Maximino's sole heir, was a void
order, which produced no legal effect. Lastly,
respondents asseverate that, by relying on certain
procedural presumptions in its Decision, dated 10
March 2006, this Court has sacrificed their substantive
right to succession, thus, making justice "subservient
to the dictates of mere procedural fiats." 14
While this Court is persuaded to reexamine and clarify
some points in its previous Decision in this case, it
does not find any new evidence or argument that
would adequately justify a change in its previous
position.
On the finding of fraud
As this Court declared in its Decision, the existence of
any trust relations between petitioners and
respondents shall be examined in the light of Article
1456 of the New Civil Code, which provides that, "[i]f
property is acquired through mistake or fraud, the
person obtaining it is, by force of law, considered a
trustee of an implied trust for the benefit of the
person from whom the property comes." Hence, the
foremost question to be answered is still whether an
implied trust under Article 1456 of the New Civil Code
had been sufficiently established in the present case.
In the Decision, this Court ruled in the negative, since
there was insufficient evidence to establish that
Donata committed fraud. It should be remembered
that Donata was able to secure certificates of title to
the disputed properties by virtue of the CFI Order in
Special Proceedings No. 928-R (the proceedings she
instituted to settle Maximino's intestate estate), which
declared her as Maximino's sole heir. In the absence
of proof to the contrary, the Court accorded to Special
Proceedings No. 928-R the presumptions of regularity
and validity. Reproduced below are the relevant
portions 15 of the Decision
At the onset, it should be emphasized that Donata
was able to secure the TCTs covering the
real properties belonging to the estate of
Maximino by virtue of a CFI Order, dated 2
October 1952. It is undisputed that the said
CFI Order was issued by the CFI in Special
Proceedings No. 928-R, instituted by
Donata herself, to settle the intestate
estate of Maximino. The petitioners, heirs
of Donata, were unable to present a copy
of the CFI Order, but this is not surprising
considering that it was issued 35 years
prior to the filing by the heirs of Maximino
of their Complaint in Civil Case No. CEB-
5794 on 3 March 1987. The existence of
such CFI Order, nonetheless, cannot be
denied. It was recorded in the Primary
Entry Book of the Register of Deeds on 27
June 1960, at 1:10 p.m., as Entry No. 1714.
It was annotated on the TCTs covering the
real properties as having declared Donata
the sole, absolute, and exclusive heir of
Maximino. The non-presentation of the
actual CFI Order was not fatal to the cause
of the heirs of Donata considering that its
authenticity and contents were never
questioned. The allegation of fraud by the
heirs of Maximino did not pertain to the
CFI Order, but to the manner or procedure
by which it was issued in favor of Donata.
Moreover, the non-presentation of the CFI
Order, contrary to the declaration by the
RTC, does not amount to a willful
suppression of evidence that would give
rise to the presumption that it would be
adverse to the heirs of Donata if produced.
....
 xxx xxx xxx

The CFI Order, dated 2 October 1952, issued in

Special Proceedings No. 928-R, effectively
settled the intestate estate of Maximino by
declaring Donata as the sole, absolute, and
exclusive heir of her deceased husband.
The issuance by the CFI of the said Order,
as well as its conduct of the entire Special
Proceedings No. 928-R, enjoy the
presumption of validity pursuant to the
Section 3(m) and (n) of Rule 131 of the
Revised Rules of Court, reproduced below
cTIESD

SEC. 3. Disputable presumptions. The following

presumptions are satisfactory if uncontradicted, but may
be contradicted and overcome by other evidence:
xxx xxx xxx

(m) That official duty has been regularly performed;

(n) That a court, or judge acting as such, whether in

the Philippines or elsewhere, was
acting in the lawful exercise of
jurisdiction.
By reason of the foregoing provisions, this Court
must presume, in the absence of any clear
and convincing proof to the contrary, that
the CFI in Special Proceedings No. 928-R
had jurisdiction of the subject matter and
the parties, and to have rendered a
judgment valid in every respect; and it
could not give credence to the following
statements made by the Court of Appeals
in its Decision.

xxx xxx xxx

There was totally no evidentiary basis for the

foregoing pronouncements. First of all, the
Petition filed by Donata for Letters of
Administration in Special Proceedings No.
928-R before the CFI was not even referred
to nor presented during the course of the
trial of Civil Case No. CEB-5794 before the
RTC. How then could the Court of Appeals
make a finding that Donata willfully
excluded from the said Petition the names,
ages, and residences of the other heirs of
Maximino? Second, there was also no
evidence showing that the CFI actually
failed to send notices of Special
Proceedings No. 928-R to the heirs of
 Maximino or that it did not require
presentation of proof of service of such
notices. It should be remembered that
there stands a presumption that the CFI
Judge had regularly performed his duties in
Special Proceedings No. 928-R, which
included sending out of notices and
requiring the presentation of proof of
service of such notices; and, the heirs of
Maximino did not propound sufficient
evidence to debunk such presumption.
They only made a general denial of
knowledge of Special Proceedings No. 928-
R, at least until 1985. There was no
testimony or document presented in which
the heirs of Maximino categorically denied
receipt of notice from the CFI of the
pendency of Special Proceedings No. 928-
R. The only evidence on record in reference
to the absence of notice of such
proceedings was the testimony of Aurelia
Briones (Aurelia), one of the heirs of
Maximino, . . . .

xxx xxx xxx

Aurelia's testimony deserves scant credit

considering that she was not testifying on
 matters within her personal knowledge.
The phrase "I don't think" is a clear
indication that she is merely voicing out
her opinion on how she believed her
uncles and aunts would have acted had
they received notice of Special Proceedings
No. 928-R.

It is worth noting that, in its foregoing ratiocination,

the Court was proceeding from an evaluation of the
evidence on record, which did not include an actual
copy of the CFI Order in Special Proceedings No. 928-
R. Respondents only submitted a certified true copy
thereof on 15 June 2006, annexed to their
Supplemental Reply to petitioners' opposition to their
motion for reconsideration of this Court's Decision.
Respondents did not offer any explanation as to why
they belatedly produced a copy of the said Order, but
merely claimed to have been "fortunate enough to
obtain a copy" thereof from the Register of Deeds of
Cebu. 16
Respondents should be taken to task for springing
new evidence so late into the proceedings of this case.
Parties should present all their available evidence at
the courts below so as to give the opposing party the
opportunity to scrutinize and challenge such evidence
during the course of the trial. However, given that the
existence of the CFI Order in Special Proceedings No.
928-R was never in issue and was, in fact, admitted by
the petitioners; that the copy submitted is a certified
true copy of the said Order; and that the said Order
may provide new information vital to a just resolution
of the present case, this Court is compelled to
consider the same as part of the evidence on record.
CacTSI

The CFI Order 17 in question reads in full as

ORDER

This is with reference to the Motion of the

Administratrix, dated January 5, 1960, that
she be declared the sole heir of her
deceased husband, Maximino Suico
Briones, the latter having died without any
legitimate ascendant nor descendant, nor
any legitimate brother or sister, nephews
or nieces.

At the hearing of this incident today, nobody

appeared to resist the motion, and based
on the uncontradicted testimony of Donata
G. Ortiz that she was the nearest surviving
relative of the deceased Maximino Suico
Briones at the time of the latter's death,
and pursuant to the pertinent provisions of
 the new Civil Code of the Philippines, the
Court hereby declares the aforesaid
Donata G. Ortiz the sole, absolute and
exclusive heir of the estate of the deceased
Maximino Suico Briones, and she is hereby
entitled to inherit all the residue of this
estate after paying all the obligations
thereof, which properties are those
contained in the Inventory, dated October
2, 1952.

Cebu City, January 15, 1960.

From the contents of the afore-quoted Order, this

Court is able to deduce that the CFI Order was in fact
issued on 15 January 1960 and not 2 October 1952, as
earlier stated in the Decision. It was the inventory of
properties, submitted by Donata as administratrix of
Maximino's intestate estate, which was dated 2
October 1952. 18 Other than such observation, this
Court finds nothing in the CFI Order which could
change its original position in the Decision under
consideration.
While it is true that since the CFI was not informed
that Maximino still had surviving siblings and so the
court was not able to order that these siblings be
given personal notices of the intestate proceedings, it
should be borne in mind that the settlement of estate,
whether testate or intestate, is a proceeding in rem, 19
and that the publication in the newspapers of the
filing of the application and of the date set for the
hearing of the same, in the manner prescribed by law,
is a notice to the whole world of the existence of the
proceedings and of the hearing on the date and time
indicated in the publication. The publication
requirement of the notice in newspapers is precisely
for the purpose of informing all interested parties in
the estate of the deceased of the existence of the
settlement proceedings, most especially those who
were not named as heirs or creditors in the petition,
regardless of whether such omission was voluntarily
or involuntarily made.
This Court cannot stress enough that the CFI Order
was the result of the intestate proceedings instituted
by Donata before the trial court. As this Court pointed
out in its earlier Decision, the manner by which the CFI
judge conducted the proceedings enjoys the
presumption of regularity, and encompassed in such
presumption is the order of publication of the notice
of the intestate proceedings. A review of the records
fails to show any allegation or concrete proof that the
CFI also failed to order the publication in newspapers
of the notice of the intestate proceedings and to
require proof from Donata of compliance therewith.
Neither can this Court find any reason or explanation
as to why Maximino's siblings could have missed the
published notice of the intestate proceedings of their
brother.

In relying on the presumptions of the regular

performance of official duty and lawful exercise of
jurisdiction by the CFI in rendering the questioned
Order, dated 15 January 1960, this Court is not, as
counsel for respondents allege, sacrificing the
substantive right of respondents to their share in the
inheritance in favor of mere procedural fiats. There is
a rationale for the establishment of rules of
procedure, as amply explained by this Court in De
Dios v. Court of Appeals 20
Procedural rules are designed to insure the orderly
and expeditious administration of justice
by providing for a practical system by
which the parties to a litigation may be
accorded a full and fair opportunity to
present their respective positions and
refute each other's submissions under the
prescribed requirements, conditions and
limitations. Adjective law is not the
counterfoil of substantive law. In fact, there
is a symbiotic relationship between them.
By complying faithfully with the Rules of
 Court, the bench and the bar are better
able to discuss, analyze and understand
substantive rights and duties and
consequently to more effectively protect
and enforce them. The other alternative is
judicial anarchy.
EHCDSI

Thus, compliance with the procedural rules is the

general rule, and abandonment thereof should
only be done in the most exceptional
circumstances. The presumptions relied upon by
this Court in the instant case are disputable
presumptions, which are satisfactory, unless
contradicted or overcome by evidence. This Court
finds that the evidence presented by respondents
failed to overcome the given presumptions.

Although Donata may have alleged before the CFI that

she was her husband's sole heir, it was not
established that she did so knowingly, maliciously and
in bad faith, so as for this Court to conclude that she
indeed committed fraud. This Court again brings to
the fore the delay by which respondents filed the
present case, when the principal actors involved,
particularly, Donata and Maximino's siblings, have
already passed away and their lips forever sealed as
to what truly transpired between them. On the other
hand, Special Proceedings No. 928-R took place when
all these principal actors were still alive and each
would have been capable to act to protect his or her
own right to Maximino's estate. Letters of
Administration of Maximino's estate were issued in
favor of Donata as early as 8 July 1952, and the CFI
Order in question was issued only on 15 January 1960.
The intestate proceedings for the settlement of
Maximino's estate were thus pending for almost eight
years, and it is the burden of the respondents to
establish that their parents or grandparents,
Maximino's surviving siblings, had absolutely no
knowledge of the said proceedings all these years. As
established in Ramos v. Ramos, 21 the degree of proof
to establish fraud in a case where the principal actors
to the transaction have already passed away is proof
beyond reasonable doubt, to wit
". . . But length of time necessarily
obscures all human evidence; and
as it thus removes from the parties
all the immediate means to verify
the nature of the original
transactions, it operates by way of
presumption, in favor of innocence,
and against imputation of fraud. It
would be unreasonable, after a great
length of time, to require exact proof of all
the minute circumstances of any
transaction, or to expect a satisfactory
 explanation of every difficulty, real or
apparent, with which it may be
encumbered. The most that can fairly be
expected, in such cases, if the parties are
living, from the frailty of memory, and
human infirmity, is, that the material facts
can be given with certainty to a common
intent; and, if the parties are dead, and the
cases rest in confidence, and in parol
agreements, the most that we can hope is
to arrive at probable conjectures, and to
substitute general presumptions of law, for
exact knowledge. Fraud, or breach of
trust, ought not lightly to be
imputed to the living; for, the legal
presumption is the other way; as to
the dead, who are not here to
answer for themselves, it would be
the height of injustice and cruelty,
to disturb their ashes, and violate
the sanctity of the grave, unless
the evidence of fraud be clear,
beyond a reasonable doubt (Prevost
vs. Gratz, 6 Wheat. [U.S.], 481, 498).

Moreover, even if Donata's allegation that she was

Maximino's sole heir does constitute fraud, it is
insufficient to justify abandonment of the CFI Order,
dated 15 January 1960, 22 considering the nature of
intestate proceedings as being in rem and the
disputable presumptions of the regular performance
of official duty and lawful exercise of jurisdiction by
the CFI in rendering the questioned Order, dated 15
January 1960, in Special Proceedings No. 928-R.
On prescription of the right to recover based
on implied trust
Assuming, for the sake of argument, that Donata's
misrepresentation constitutes fraud that would
impose upon her the implied trust provided in Article
1456 of the Civil Code, this Court still cannot sustain
respondents' contention that their right to recover
their shares in Maximino's estate is imprescriptible. It
is already settled in jurisprudence that an implied
trust, as opposed to an express trust, is subject to
prescription and laches. DCESaI

The case of Ramos v. Ramos 23 already provides an

elucidating discourse on the matter, to wit
"Trusts are either express or implied. Express
trusts are created by the intention of the
trustor or of the parties. Implied trusts
come into being by operation of law" (Art.
1441, Civil Code). "No express trusts
concerning an immovable or any interest
therein may be proven by oral evidence. An
implied trust may be proven by oral
evidence" (Ibid; Arts. 1443 and 1457).
"No particular words are required for the creation
of an express trust, it being sufficient that a
trust is clearly intended" (Ibid; Art. 1444;
Tuason de Perez vs. Caluag, 96 Phil. 981;
Julio vs. Dalandan, L-19012, October 30,
1967, 21 SCRA 543, 546). "Express trusts
are those which are created by the direct
and positive acts of the parties, by some
writing or deed, or will, or by words either
expressly or impliedly evincing an intention
to create a trust" (89 C.J. S. 122).

"Implied trusts are those which, without being

expressed, are deducible from the nature
of the transaction as matters of intent, or
which are superinduced on the transaction
by operation of law as matters of equity,
independently of the particular intention of
the parties" (89 C.J.S. 724). They are
ordinarily subdivided into resulting and
constructive trusts (89 C.J.S. 722).

"A resulting trust is broadly defined as a trust

which is raised or created by the act or
construction of law, but in its more
restricted sense it is a trust raised by
implication of law and presumed always to
 have been contemplated by the parties,
the intention as to which is to be found in
the nature of their transaction, but not
expressed in the deed or instrument of
conveyance" (89 C.J.S. 725). Examples of
resulting trusts are found in Article 1448 to
1455 of the Civil Code. See Padilla vs. Court
of Appeals, L-31569, September 28, 1973,
53 SCRA 168, 179).

On the other hand, a constructive trust is a

trust "raised by construction of law, or
arising by operation of law." In a more
restricted sense and as
contradistinguished from a resulting trust,
a constructive trust is "a trust not created
by any words, either expressly or impliedly
evincing a direct intention to create a trust,
but by the construction of equity in order
to satisfy the demands of justice. It does
not arise by agreement or intention but by
operation of law." (89 C.J.S. 726-727). "If a
person obtains legal title to property by
fraud or concealment, courts of equity will
impress upon the title a so-called
constructive trust in favor of the defrauded
party." A constructive trust is not a trust in
the technical sense (Gayondato vs.
 Treasurer of the P.I., 49 Phil. 244; See Art.
1456, Civil Code).

There is a rule that a trustee cannot acquire by

prescription the ownership of property
entrusted to him (Palma vs. Cristobal, 77
Phil. 712), or that an action to compel a
trustee to convey property registered in his
name in trust for the benefit of the cestui
qui trust does not prescribe (Manalang vs.
Canlas, 94 Phil. 776; Cristobal vs. Gomez,
50 Phil. 810), or that the defense of
prescription cannot be set up in an action
to recover property held by a person in
trust for the benefit of another (Sevilla vs.
De los Angeles, 97 Phil. 875), or that
property held in trust can be recovered by
the beneficiary regardless of the lapse of
time (Marabilles vs. Quito, 100 Phil. 64;
Bancairen vs. Diones, 98 Phil. 122, 126;
Juan vs. Zuiga, 62 O.G. 1351; 4 SCRA 1221;
Jacinto vs. Jacinto, L-17957, May 31, 1962.
See Tamayo vs. Callejo, 147 Phil. 31, 37).

That rule applies squarely to express trusts. The

basis of the rule is that the possession of a
trustee is not adverse. Not being adverse,
 he does not acquire by prescription the
property held in trust. Thus, Section 38 of
Act 190 provides that the law of
prescription does not apply "in the case of
a continuing and subsisting trust" (Diaz vs.
Gorricho and Aguado, 103 Phil. 261, 266;
Laguna vs. Levantino, 71 Phil. 566; Sumira
vs. Vistan, 74 Phil. 138; Golfeo vs. Court of
Appeals, 63 O.G. 4895, 12 SCRA 199;
Caladiao vs. Santos, 63 O.G. 1956, 10 SCRA
691).aEHTSc

The rule of imprescriptibility of the action to

recover property held in trust may possibly
apply to resulting trusts as long as the
trustee has not repudiated the trust (Heirs
of Candelaria vs. Romero, 109 Phil. 500,
502-3; Martinez vs. Grao, 42 Phil. 35;
Buencamino vs. Matias, 63 O.G. 11033, 16
SCRA 849).

The rule of imprescriptibility was misapplied to

constructive trusts (Geronimo and Isidoro vs. Nava
and Aquino, 105 Phil. 145, 153. Compare with Cuison vs.
Fernandez and Bengzon, 105 Phil. 135, 139; De Pasion vs.
De Pasion, 112 Phil. 403, 407).
Acquisitive prescription may bar the action of the
beneficiary against the trustee in an
express trust for the recovery of the
property held in trust where (a) the trustee
has performed unequivocal acts of
repudiation amounting to an ouster of the
cestui qui trust; (b) such positive acts of
repudiation have been made known to the
cestui qui trust and (c) the evidence
thereon is clear and conclusive ( Laguna vs.
Levantino, supra; Salinas vs. Tuason, 55
Phil. 729. Compare with the rule regarding
co-owners found in the last paragraph of
Article 494, Civil Code; Casaas vs. Rosello,
50 Phil. 97; Gerona vs. De Guzman, L-
19060, May 29, 1964, 11 SCRA 153, 157).

With respect to constructive trusts, the rule is

different. The prescriptibility of an action for
reconveyance based on constructive trust is
now settled (Alzona vs. Capunitan, L-10228, February
28, 1962, 4 SCRA 450; Gerona vs. De Guzman, supra;
Claridad vs. Henares, 97 Phil. 973; Gonzales vs. Jimenez, L-
19073, January 30, 1965, 13 SCRA 80; Boaga vs. Soler,
112 Phil. 651; J. M. Tuason & Co., vs. Magdangal, L-15539,
January 30, 1962, 4 SCRA 84). Prescription may
supervene in an implied trust (Bueno vs. Reyes, L-
22587, April 28, 1969, 27 SCRA 1179; Fabian vs. Fabian, L-
20449, January 29, 1968; Jacinto vs. Jacinto, L-17957, May
31, 1962, 5 SCRA 371).
And whether the trust is resulting or
constructive, its enforcement may be barred by
laches (90 C.J.S. 887-889; 54 Am Jur. 449-450; Diaz vs.
Gorricho and Aguado, supra; Compare with Mejia vs.
Gampona, 100 Phil. 277). [Emphases supplied.]
A present reading of the Quion 24 and Sevilla 25 cases,
invoked by respondents, must be made in conjunction
with and guided accordingly by the principles
established in the afore-quoted case. Thus, while
respondents' right to inheritance was transferred or
vested upon them at the time of Maximino's death,
their enforcement of said right by appropriate legal
action may be barred by the prescription of the action.
Prescription of the action for reconveyance of the
disputed properties based on implied trust is
governed by Article 1144 of the New Civil Code, which
reads
ART. 1144. The following actions must be brought
within ten years from the time the right of
action accrues:

(1) Upon a written contract;

(2) Upon an obligation created by law;

(3) Upon a judgment.

Since an implied trust is an obligation created by law

(specifically, in this case, by Article 1456 of the New
Civil Code), then respondents had 10 years within
which to bring an action for reconveyance of their
shares in Maximino's properties. The next question
now is when should the ten-year prescriptive
period be reckoned from. The general rule is that
an action for reconveyance of real property based
on implied trust prescribes ten years from
registration and/or issuance of the title to the
property, 26 not only because registration under
the Torrens system is a constructive notice of title,
27 but also because by registering the disputed
properties exclusively in her name, Donata had
already unequivocally repudiated any other claim
to the same. DaTICE

By virtue of the CFI Order, dated 15 January 1960, in

Special Proceedings No. 928-R, Donata was able to
register and secure certificates of title over the
disputed properties in her name on 27 June 1960. The
respondents filed with the RTC their Complaint for
partition, annulment, and recovery of possession of
the disputed real properties, docketed as Civil Case
No. CEB-5794, only on 3 March 1987, almost 27 years
after the registration of the said properties in the
name of Donata. Therefore, respondents' action for
recovery of possession of the disputed properties had
clearly prescribed.
Moreover, even though respondents' Complaint
before the RTC in Civil Case No. CEB-5794 also prays
for partition of the disputed properties, it does not
make their action to enforce their right to the said
properties imprescriptible. While as a general rule, the
action for partition among co-owners does not
prescribe so long as the co-ownership is expressly or
impliedly recognized, as provided for in Article 494, of
the New Civil Code, it bears to emphasize that Donata
had never recognized respondents as co-owners or
co-heirs, either expressly or impliedly. 28 Her
assertion before the CFI in Special Proceedings No.
928-R that she was Maximino's sole heir necessarily
excludes recognition of some other co-owner or co-
heir to the inherited properties; Consequently, the
rule on non-prescription of action for partition of
property owned in common does not apply to the
case at bar.
On laches as bar to recovery
Other than prescription of action, respondents' right
to recover possession of the disputed properties,
based on implied trust, is also barred by laches. The
defense of laches, which is a question of inequity in
permitting a claim to be enforced, applies
independently of prescription, which is a question of
time. Prescription is statutory; laches is equitable. 29
Laches is defined as the failure to assert a right for an
unreasonable and unexplained length of time,
warranting a presumption that the party entitled to
assert it has either abandoned or declined to assert it.
This equitable defense is based upon grounds of
public policy, which requires the discouragement of
stale claims for the peace of society. 30
This Court has already thoroughly discussed in its
Decision the basis for barring respondents' action for
recovery of the disputed properties because of laches.
This Court pointed out therein 31 that
In further support of their contention of fraud by
Donata, the heirs of Maximino even
emphasized that Donata lived along the
same street as some of the siblings of
Maximino and, yet, she failed to inform
them of the CFI Order, dated [15 January
1960], in Special Proceedings No. 928-R,
and the issuance in her name of new TCTs
covering the real properties which
belonged to the estate of Maximino. This
Court, however, appreciates such
information differently. It actually works
against the heirs of Maximino. Since they
only lived nearby, Maximino's siblings had
ample opportunity to inquire or discuss
 with Donata the status of the estate of
their deceased brother. Some of the real
properties, which belonged to the estate of
Maximino, were also located within the
same area as their residences in Cebu City,
and Maximino's siblings could have
regularly observed the actions and
behavior of Donata with regard to the said
real properties. It is uncontested that from
the time of Maximino's death on 1 May
1952, Donata had possession of the real
properties. She managed the real
properties and even collected rental fees
on some of them until her own death on 1
November 1977. After Donata's death,
Erlinda took possession of the real
properties, and continued to manage the
same and collect the rental fees thereon.
Donata and, subsequently, Erlinda, were so
obviously exercising rights of ownership
over the real properties, in exclusion of all
others, which must have already put the
heirs of Maximino on guard if they truly
believed that they still had rights thereto.
EACTSH

The heirs of Maximino knew he died on 1 May

1952. They even attended his wake. They
did not offer any explanation as to why
 they had waited 33 years from Maximino's
death before one of them, Silverio, filed a
Petition for Letters of Administration for
the intestate estate of Maximino on 21
January 1985. After learning that the
intestate estate of Maximino was already
settled in Special Proceedings No. 928-R,
they waited another two years, before
instituting, on 3 March 1987, Civil Case No.
CEB-5794, the Complaint for partition,
annulment and recovery of the real
property belonging to the estate of
Maximino. . . .

Considering the circumstances in the afore-quoted

paragraphs, as well as respondents' conduct before
this Court, particularly the belated submission of
evidence and argument of new issues, respondents
are consistently displaying a penchant for delayed
action, without any proffered reason or justification
for such delay.
It is well established that the law serves those who are
vigilant and diligent and not those who sleep when
the law requires them to act. The law does not
encourage laches, indifference, negligence or
ignorance. On the contrary, for a party to deserve the
considerations of the courts, he must show that he is
not guilty of any of the aforesaid failings. 32
On void judgment or order
Respondents presented only in their Reply and
Supplemental Reply to the petitioners' Opposition to
their Motion for Reconsideration the argument that
the CFI Order, dated 15 January 1960, in Special
Proceedings No. 928-R is void and, thus, it cannot
have any legal effect. Consequently, the registration of
the disputed properties in the name of Donata
pursuant to such Order was likewise void.
This Court is unconvinced.
In the jurisprudence referred to by the respondents,
33 an order or judgment is considered void when
rendered by the court without or in excess of its
jurisdiction or in violation of a mandatory duty,
circumstances which are not present in the case at
bar.
Distinction must be made between a void judgment
and a voidable one, thus
". . . A voidable judgment is one which, though not
a mere nullity, is liable to be made void
when a person who has a right to proceed
in the matter takes the proper steps to
have its invalidity declared. It always
contains some defect which may become
fatal. It carries within it the means of its
own overthrow. But unless and until it is
duly annulled, it is attended with all the
 ordinary consequences of a legal
judgment. The party against whom it is
given may escape its effect as a bar or an
obligation, but only by a proper application
to have it vacated or reversed. Until that is
done, it will be efficacious as a claim, an
estoppel, or a source of title. If no
proceedings are ever taken against it, it will
continue throughout its life to all intents a
valid sentence. If emanating from a court
of general jurisdiction, it will be sustained
by the ordinary presumptions of regularity,
and it is not open to impeachment in any
collateral action. . . ."

But it is otherwise when the judgment is void. "A

void judgment is in legal effect no
judgment. By it no rights are divested.
From it no rights can be obtained. Being
worthless in itself, all proceedings founded
upon it are equally worthless. It neither
binds nor bars any one. All acts performed
under it and all claims flowing out of it are
void. The parties attempting to enforce it
may be responsible as trespassers. The
 purchaser at a sale by virtue of its authority
finds himself without title and without
redress." (Freeman on Judgments, sec. 117,
citing Campbell vs. McCahan, 41 Ill., 45;
Roberts vs. Stowers, 7 Bush, 295, Huls vs.
Buntin, 47 Ill., 396; Sherrell vs. Goodrum, 3
Humph., 418; Andrews vs. State, 2 Sneed,
549; Hollingsworth vs. Bagley, 35 Tex., 345;
Morton vs. Root, 2 Dill., 312; Commercial
Bank of Manchester vs. Martin, 9 Smedes &
M., 613; Hargis vs. Morse, 7 Kan., 259. See
also Cornell vs. Barnes, 7 Hill, 35; Dawson
and Another vs. Wells, 3 Ind., 399; Meyer
vs. Mintonye, 106 Ill., 414; Olson vs.
Nunnally, 47 Kan., 391; White vs. Foote L. &
M. Co., 29 W. Va., 385.) aDcTHE

It is not always easy to draw the line of

demarcation between a void judgment and
a voidable one, but all authorities agree
that jurisdiction over the subject-matter is
essential to the validity of a judgment and
that want of such jurisdiction renders it
void and a mere nullity. In the eye of the
law it is non-existent. ( Fisher vs. Harnden,
1 Paine, 55; Towns vs. Springer, 9 Ga., 130;
Mobley vs. Mobley, 9 Ga., 247; Beverly and
McBride vs. Burke, 9 Ga., 440; Central Bank
 of Georgia vs. Gibson, 11 Ga., 453; Johnson
vs. Johnson, 30 Ill., 215; St. Louis and
Sandoval Coal and Mining Co. vs. Sandoval
Coal and Mining Co., 111 Ill., 32; Swiggart
vs. Harber, 4 Scam., 364; Miller vs. Snyder,
6 Ind., 1; Seely vs. Reid, 3 Greene [Iowa],
374.) 34

The fraud and misrepresentation fostered by Donata

on the CFI in Special Proceedings No. 928-R did not
deprive the trial court of jurisdiction over the subject-
matter of the case, namely, the intestate estate of
Maximino. Donata's fraud and misrepresentation may
have rendered the CFI Order, dated 15 January 1960,
voidable, but not void on its face. Hence, the said
Order, which already became final and executory, can
only be set aside by direct action to annul and enjoin
its enforcement. 35 It cannot be the subject of a
collateral attack as is being done in this case. Note
that respondents' Complaint before the RTC in Civil
Case No. CEB-5794 was one for partition, annulment,
and recovery of possession of the disputed properties.
The annulment sought in the Complaint was not that
of the CFI Order, dated 15 January 1960, but of the
certificates of title over the properties issued in
Donata's name. So until and unless respondents bring
a direct action to nullify the CFI Order, dated 15
January 1960, in Special Proceedings No. 928-R, and
attain a favorable judgment therein, the assailed
Order remains valid and binding.
Nonetheless, this Court also points out that an action
to annul an order or judgment based on fraud must
be brought within four years from the discovery of the
fraud. 36 If it is conceded that the respondents came
to know of Donata's fraudulent acts only in 1985,
during the course of the RTC proceedings which they
instituted for the settlement of Maximino's estate,
then their right to file an action to annul the CFI Order,
dated 15 January 1960, in Special Proceedings No.
928-R (earlier instituted by Donata for the settlement
of Maximino's estate), has likewise prescribed by
present time.
In view of the foregoing, the Motion for
Reconsideration is DENIED.
SO ORDERED.
(Pilapil v. Heirs of Briones, G.R. No. 150175,
|||

[February 5, 2007], 543 PHIL 184-211)

 EN BANC
[A.M. No. P-01-1448. June 25, 2013.]
(Formerly OCA IPI No. 99-664-P)
RODOLFO C. SABIDONG, complainant, vs.
NICOLASITO S. SOLAS (Clerk of Court IV),
respondent.
DECISION
VILLARAMA, JR., J p:

The present administrative case stemmed from a

sworn letter-complaint 1 dated May 29, 1999 filed
before this Court by Rodolfo C. Sabidong
(complainant) charging respondent Nicolasito S. Solas,
Clerk of Court IV, Municipal Trial Court in Cities
(MTCC), Iloilo City with grave and serious misconduct,
dishonesty, oppression and abuse of authority.
The Facts

Trinidad Sabidong, complainant's mother, is one of

the longtime occupants of a parcel of land, designated
as Lot 11 (Lot 1280-D-4-11 of consolidation-
subdivision plan [LRC] Pcs-483) originally registered in
the name of C. N. Hodges and situated at Barangay
San Vicente, Jaro, Iloilo City. 2 The Sabidongs are in
possession of one-half portion of Lot 11 of the said
Estate (Hodges Estate), as the other half-portion was
occupied by Priscila Saplagio. Lot 11 was the subject of
an ejectment suit filed by the Hodges Estate, docketed
as Civil Case No. 14706 of the MTCC Iloilo City, Branch
4 ("Rosita R. Natividad in her capacity as
Administratrix of C.N. Hodges Estate, plaintiff vs.
Priscila Saplagio, defendant"). On May 31, 1983, a
decision was rendered in said case ordering the
defendant to immediately vacate the portion of Lot 11
leased to her and to pay the plaintiff rentals due,
attorney's fees, expenses and costs. 3 At the time,
respondent was the Clerk of Court III of MTCC, Branch
3, Iloilo City.
HCTEDa

Sometime in October 1984, respondent submitted an

Offer to Purchase on installment Lots 11 and 12. In a
letter dated January 7, 1986, the Administratrix of the
Hodges Estate rejected respondent's offer in view of
an application to purchase already filed by the actual
occupant of Lot 12, "in line with the policy of the
Probate Court to give priority to the actual occupants
in awarding approval of Offers". While the check for
initial down payment tendered by respondent was
returned to him, he was nevertheless informed that
he may file an offer to purchase Lot 11 and that if he
could put up a sufficient down payment, the Estate
could immediately endorse it for approval of the
Probate Court so that the property can be awarded to
him "should the occupant fail to avail of the priority
given to them." 4
The following day, January 8, 1986, respondent again
submitted an Offer to Purchase Lot 11 with an area of
234 square meters for the amount of P35,100. Under
the Order dated November 18, 1986 issued by the
probate court (Regional Trial Court of Iloilo, Branch 27)
in Special Proceedings No. 1672 ("Testate Estate of the
Late Charles Newton Hodges, Rosita R. Natividad,
Administratrix"), respondent's Offer to Purchase Lot
11 was approved upon the court's observation that
the occupants of the subject lots "have not manifested
their desire to purchase the lots they are occupying up
to this date and considering time restraint and
considering further, that the sales in favor of the . . .
offerors are most beneficial to the estate . . .". On
January 21, 1987, the probate court issued another
Order granting respondent's motion for issuance of a
writ of possession in his favor. The writ of possession
over Lot 11 was eventually issued on June 27, 1989. 5
On November 21, 1994, a Deed of Sale with Mortgage
covering Lot 11 was executed between respondent
and the Hodges Estate represented by its
Administratrix, Mrs. Ruth R. Diocares. Lot 11 was
thereby conveyed to respondent on installment for
the total purchase price of P50,000. Consequently,
Transfer Certificate of Title (TCT) No. T-11836 in the
name of C. N. Hodges was cancelled and a new
certificate of title, TCT No. T-107519 in the name of
respondent was issued on December 5, 1994. Lot 11
was later subdivided into two lots, Lots 11-A and 11-B
for which the corresponding titles (TCT Nos. T-116467
and T-116468), also in the name of respondent, were
issued on February 28, 1997. 6 TEAaDC

On motion of Ernesto Pe Benito, Administrator of the

Hodges Estate, a writ of demolition was issued on
March 3, 1998 by the probate court in favor of
respondent and against all adverse occupants of Lot
11. 7
On June 14, 1999, this Court received the sworn letter-
complaint asserting that as court employee
respondent cannot buy property in litigation
(consequently he is not a buyer in good faith), commit
deception, dishonesty, oppression and grave abuse of
authority. Complainant specifically alleged the
following:
3. Complainant and his siblings, are possessors and
occupants of a parcel of land situated at
Brgy. San Vicente, Jaro, Iloilo City, then
identified as Lot No. 1280-D-4-11, later
consolidated and subdivided and became
known as Lot 11, then registered and titled
in the name of Charles Newton Hodges.
The Sabidong family started occupying this
lot in 1948 and paid their monthly rentals
until sometime in 1979 when the Estate of
Hodges stopped accepting rentals. . . .
4. Upon knowing sometime in 1987 that the
property over which their house is
standing, was being offered for sale by the
Estate, the mother of complainant,
TRINIDAD CLAVERIO SABIDONG (now
deceased), took interest in buying said
property, Lot 11;

5. TRINIDAD CLAVERIO SABIDONG, was then an

ordinary housekeeper and a
laundrywoman, who never received any
formal education, and did not even know
how to read and write. When Trinidad
Claverio Sabidong, together with her
children and the complainant in this case,
tried to negotiate with the Estate for the
sale of the subject property, they were
informed that all papers for transaction
must pass through the respondent in this
case, Nicolasito Solas. This is unusual, so
they made inquiries and they learned that,
Nicolasito Solas was then the Clerk of
Court 111, Branch 3, Municipal Trial Court
in Cities, Iloilo City and presently, the City
Sheriff of Iloilo City;

6. The respondent Nicolasito Solas, then Clerk of

 Court III, MTCC, Iloilo City, has knowledge,
by reason of his position that in 1983
Hodges Estate was ejecting occupants of its
land. . . . Taking advantage of this inside
information that the land subject of an
ejectment case in the Municipal Trial Court
in Cities, Iloilo City, whom respondent is a
Clerk of Court III, the respondent
surreptitiously offered to buy the said lot in
litigation. . . .
DCATHS

7. Complainant nor any member of his family did

not know that as early as 1984, the
respondent had offered to purchase the
subject lot from the estate . . . . After
receiving the notice of denial of his offer to
purchase, dated January 7, 1986,
respondent made a second offer to
purchase the subject property the
following day, January 8, 1986, knowing
fully well that the subject property was
being occupied. . . .

8. Because of this denial, respondent met with the

family of the complainant and negotiated
for the sale of the property and transfer of
the title in favor of the latter. Respondent
 made the complainant and his family
believed that he is the representative of
the estate and that he needed a
downpayment right away. All the while, the
Sabidong family (who were carpenters,
laundrywomen, a janitor, persons who
belong to the underprivileged) relied on
the representations of the respondent that
he was authorized to facilitate the sale,
with more reason that respondent
represented himself as the City Sheriff;

9. That between 1992-1993, a sister of the

complainant who was fortunate to have
worked abroad, sent the amount of Ten
Thousand (P10,000.00) Pesos to
complainant's mother, to be given to
respondent Nicolasito Solas. . . . After
receiving the money, respondent assured
the Sabidong family that they will not be
ejected from the lot, he being the City
Sheriff will take care of everything, and
taking advantage of the illiteracy of
Trinidad Claverio Sabidong, he did not
issue any receipt;
CTAIDE

10. True enough, they were not ejected instead it

 took the respondent some time to see
them again and demanded additional
payment. In the meanwhile, the
complainant waited for the papers of the
supposed sale and transfer of title, which
respondent had promised after receiving
the downpayment of P10,000.00;

11. That sometime again in 1995, respondent again

received from the mother of complainant
the amount of Two Thousand (P2,000.00)
Pesos, allegedly for the expenses of the
documentation of sale and transfer of title,
and again respondent promised that the
Sabidong family will not be ejected;

12. To the prejudice and surprise of the

complainant and his family, respondent
was able to secure an order for the
approval of his offer to purchase . . . in
Special Proceedings No. 1672 . . .;

13. Worse, respondent moved for the issuance of a

Writ of Possession in his favor, which the
probate court acted favorably . . . . A writ of
possession was issued on June 27,
 1989 . . .;

14. . . . respondent took advantage of the trust and

confidence which the Sabidong family has
shown, considering that respondent was
an officer of the court and a City Sheriff at
that. The complainant and his family
thought that respondent, being a City
Sheriff, could help them in the transfer of
the title in their favor. Never had they ever
imagined that while respondent had been
receiving from them hard-earned monies
purportedly for the sale of the subject
property, respondent was also exercising
acts of ownership adverse to the interest of
the complainant and his family;

15. Being an officer of the court and supposed to

be an embodiment of fairness and justice,
respondent acted with malice, with grave
abuse of confidence and deceit when he
represented that he can facilitate the sale
and titling of the subject property in favor
of the complainant and his family; TCADEc

16. That when several thousands of pesos were

 given to the respondent as payment for the
same and incidental expenses relative
thereto, he was able to cause the transfer
of the title in his favor. . . .;

17. After the death of Trinidad Claverio

Sabidong . . . the respondent received from
the complainant the amount of Five
Thousand (P5,000.00) Pesos . . . When a
receipt was demanded, respondent
refused to issue one, and instead promised
and assured the complainant that they will
not be ejected;

xxx xxx xxx

19. The complainant again, through his sister-in-

law, Socorro Sabidong, delivered and gave
to the respondent the amount of Three
Thousand (P3,000.00) Pesos as expenses
for the subdivision of the subject lot. The
respondent facilitated the subdivision and
after the same was approved, the
complainant did not know that two (2) titles
were issued in the name of the
respondent. . . .;
20. Meanwhile, respondent prepared a Contract to
Sell, for the complainant and his neighbor
Norberto Saplagio to affix their signatures,
pursuant to their previous agreement for
the buyers to avail of a housing loan with
the Home Development Mutual Fund (PAG-
IBIG). Complainant attended the seminar
of the HDMF for seven (7) times, in his
desire to consummate the sale. However,
when the complainant affixed his signature
in the contract, he was surprised that the
owner of the subject property was the
respondent. When complainant raised a
question about this, respondent assured
complainant that everything was alright
and that sooner complainant will be the
owner of the property. Complainant and
his family, all these years, had believed and
continued to believe that the owner was
the estate of Hodges and that respondent
was only the representative of the estate;

21. The Contract to Sell, appeared to have been

notarized on June 3, 1996, however, no
copy thereof was given to the complainant
by the respondent. Respondent then, took
the papers and documents required by the
HDMF to be completed, from the
 complainant allegedly for the purpose of
personally filing the same with the HDMF.
Complainant freely and voluntarily
delivered all pertinent documents to the
respondent, thinking that respondent was
helping in the fast and easy release of the
loan. While the said documents were in the
possession of the respondent, he never
made any transaction with the HDMF,
worse, when complainant tried to secure a
copy of the Contract to Sell, the copy given
was not signed by the Notary Public, . . .;

22. The complainant [was] shocked to learn that

respondent had canceled the sale and that
respondent refused to return the
documents required by the HDMF.
Respondent claimed that as Sheriff, he can
cause the demolition of the house of the
complainant and of his family. Respondent
threatened the complainant and he is
capable of pursuing a demolition order and
serve the same with the assistance of the
military. . . .;
TICDSc

23. After learning of the demolition [order],

complainant attempted to settle the matter
 with the respondent, however, the same
proved futile as respondent boasted that
the property would now cost at Four
Thousand Five Hundred (P4,500.00) Pesos;

24. The threats of demolition is imminent. Clearly,

complainant and his family were duped by
the respondent and are helpless victims of
an officer of the court who took advantage
of their good faith and trust. Complainant
later was informed that the subject
property was awarded to the respondent
as his Sheriff's Fees, considering that
respondent executed the decisions in
ejectment cases filed by the Hodges estate
against the adverse occupants of its vast
properties;

25. A civil case for the Annulment of Title of the

respondent over the subject property is
pending before the Regional Trial Court of
Iloilo, Branch 37 and a criminal complaint
for Estafa is also pending preliminary
investigation before the Office of the City
Prosecutor of Iloilo City, known as I.S. No.
1559-99, both filed [by] the complainant
against the respondent. 8
Acting on the complaint, Court Administrator Alfredo
L. Benipayo issued a 1st Indorsement 9 dated July 8,
1999, requiring respondent to file his comment on the
Complaint dated May 29, 1999. On October 21, 1999,
respondent submitted his Comment. 10
In a Resolution 11 dated July 19, 1999, Public
Prosecutor Constantino C. Tubilleja dismissed the
Estafa charge against respondent for insufficiency of
evidence.
On November 29, 2000, Court Administrator Benipayo
issued an Evaluation and Recommendation 12 finding
respondent guilty of violating Article 1491 13 of the
Civil Code. Said rule prohibits the purchase by certain
court officers of property and rights in litigation within
their jurisdiction. Court Administrator Benipayo
recommended that:
1. this administrative complaint be treated as an
administrative matter;DCcSHE

2. respondent Nicolasito S. Solas, Clerk of Court IV,

OCC, MTCC, Iloilo City be SUSPENDED for
six (6) months, with warning that a
repetition of the same offense in the future
will be dealt with more severely;

3. inasmuch as there are factual issues regarding

 the delivery of substantial amounts which
complainant alleged and which defendant
denied, this issue should be investigated
and the Executive Judge of the Regional
Trial Court of Iloilo City should be
designated to hear the evidence and to
make a report and recommendation within
sixty (60) days from receipt. 14

In a Resolution 15 dated January 22, 2001, this Court

adopted the recommendation of the Court
Administrator to treat the present administrative
action as a regular administrative matter and to
designate the Executive Judge of the RTC of Iloilo City
to hear the evidence of the parties. The Court,
however, noted without action the Court
Administrator's recommendation to suspend
respondent for six months.
On March 13, 2001, Acting Court Administrator
Zenaida N. Elepao forwarded the records of this case
to Executive Judge Tito G. Gustilo of the Iloilo City RTC.
16 In a Resolution 17 dated July 18, 2001, the Court
referred this case to the Executive Judge of the RTC of
Iloilo City for investigation, report and
recommendation within 60 days from notice. By Order
18 dated August 30, 2001, Executive Judge Gustilo set
the case for reception of evidence.
On March 19, 2004, the RTC of Iloilo, Branch 37,
dismissed the case for annulment of title, damages
and injunction against respondent for lack of merit. 19
aDcHIC

In a Resolution 20 dated June 15, 2005, the Court

resolved to reassign the instant administrative case to
Executive Judge Rene S. Hortillo for investigation,
report and recommendation within 60 days from
notice. In a Letter 21 dated September 15, 2005,
Executive Judge Hortillo informed the Court that per
the records, the parties have presented their
testimonial and documentary evidence before retired
Executive Judge Tito G. Gustilo.
On September 12, 2005, Executive Judge Hortillo
required the parties to file their respective
memoranda within 60 days from notice, upon
submission of which the case shall be deemed
submitted for resolution. 22
In his Memorandum, 23 respondent maintained that
his purchase of the subject land is not covered by the
prohibition in paragraph 5, Article 1491 of the Civil
Code. He pointed out that he bought Lot 11-A a
decade after the MTCC of Iloilo, Branch 3, had ordered
the ejectment of Priscila Saplagio and Trinidad
Sabidong from the subject lot. He insisted that public
trust was observed when complainant was accorded
his right of first refusal in the purchase of Lot 11-A,
albeit the latter failed to avail said right. Asserting that
he is a buyer in good faith and for value, respondent
cited the dismissal of the cases for Estafa and
annulment of title and damages which complainant
filed against him.
On September 10, 2007, respondent compulsorily
retired from service. Prior to this, he wrote then
Senior Deputy Court Administrator Zenaida N.
Elepao, requesting for the release of his retirement
benefits pending resolution of the administrative
cases against him. 24 In a Memorandum 25 dated
September 24, 2007, Senior Deputy Court
Administrator Elepao made the following
recommendations:
a) The request of Nicolasito S. Solas, former Clerk
of Court, MTCC, Iloilo City for partial
release of his retirement benefits be
GRANTED; and

b) Atty. Lilian Barribal Co, Chief, Financial

Management Office, Office of the
Court Administrator be DIRECTED
to (1) WITHHOLD the amount of
Two Hundred Thousand Pesos
(P200,000.00) from the retirement
benefits of Nicolasito S. Solas to
answer for any administrative
liability that the Court may find
 against him in A.M. No. P-01-1448
(Formerly Administrative Matter OCA
IPI No. 99-664-P); OCA IPI No. 99-
659-P; OCA IPI No. 99-670-P; and
OCA IPI No. 99-753-P; and (2)
RELEASE the balance of his
retirement benefits. 26HCEISc

Eventually, the case was assigned to Judge Roger B.

Patricio, the new Executive Judge of the Iloilo City RTC
for investigation, report and recommendation.
On June 2, 2008, Judge Patricio submitted his final
Report and Recommendation 27 finding respondent
liable for grave misconduct and dishonesty under A.M.
No. 03-06-13-SC or the Code of Conduct for Court
Personnel. Based on the evidence presented, Judge
Patricio concluded that respondent misappropriated
the money which he received for the filing of
complainant's loan application. Such money could not
have been used for the partition of Lot No. 1280-D-4-
11 since the same was already subdivided into Lots
11-A and 11-B when respondent presented the
Contract to Sell to complainant. And despite
respondent's promise to keep complainant and his
family in peaceful possession of the subject property,
respondent caused the issuance of a writ of
demolition against them. Thus, Judge Patricio
recommended the forfeiture of respondent's salary
for six months to be deducted from his retirement
benefits.
In a Resolution 28 dated September 29, 2008, the
Court noted Judge Patricio's Investigation Report and
referred the same to the Office of the Court
Administrator (OCA) for evaluation, report and
recommendation.
Findings and Recommendation of the OCA

In a Memorandum 29 dated January 16, 2009, then

Court Administrator Jose P. Perez found respondent
liable for serious and grave misconduct and
dishonesty and recommended the forfeiture of
respondent's salary for six months, which shall be
deducted from his retirement benefits. IaHSCc

The Court Administrator held that by his unilateral

acts of extinguishing the contract to sell and forfeiting
the amounts he received from complainant and
Saplagio without due notice, respondent failed to act
with justice and equity. He found respondent's denial
to be anchored merely on the fact that he had not
issued receipts which was belied by his admission that
he had asked money for the expenses of partitioning
Lot 11 from complainant and Saplagio. Since their
PAG-IBIG loan applications did not materialize,
complainant should have returned the amounts given
to him by complainant and Saplagio.
On February 11, 2009, the Court issued a Resolution
30 requiring the parties to manifest whether they are
willing to submit the case for decision on the basis of
the pleadings and records already filed with the Court.
However, the copy of the Resolution dated February
11, 2009 which was sent to complainant was returned
unserved with the postal carrier's notation "RTS-
Deceased." Meanwhile, in a Compliance 31 dated
August 24, 2009, respondent expressed his willingness
to submit the case for decision and prayed for an
early resolution of the case.
Our Ruling

Article 1491, paragraph 5 of the Civil Code prohibits

court officers such as clerks of court from acquiring
property involved in litigation within the jurisdiction or
territory of their courts. Said provision reads:
Article 1491. The following persons cannot acquire
by purchase, even at a public or judicial
auction, either in person or through the
mediation of another:

xxx xxx xxx

(5) Justices, judges, prosecuting attorneys, clerks of

superior and inferior courts, and other
officers and employees connected with the
administration of justice, the property
 and rights in litigation or levied upon
an execution before the court within
whose jurisdiction or territory they
exercise their respective functions;
this prohibition includes the act of
acquiring by assignment and shall apply to
lawyers, with respect to the property and
rights which may be the object of any
litigation in which they may take part by
virtue of their profession.AIHTEa

xxx xxx xxx (Emphasis supplied.)

The rationale advanced for the prohibition is that

public policy disallows the transactions in view of the
fiduciary relationship involved, i.e., the relation of trust
and confidence and the peculiar control exercised by
these persons. 32 "In so providing, the Code tends to
prevent fraud, or more precisely, tends not to give
occasion for fraud, which is what can and must be
done." 33
For the prohibition to apply, the sale or assignment of
the property must take place during the pendency of
the litigation involving the property. 34 Where the
property is acquired after the termination of the case,
no violation of paragraph 5, Article 1491 of the Civil
Code attaches. 35
In the case at bar, when respondent purchased Lot
11-A on November 21, 1994, the Decision in Civil Case
No. 14706 which was promulgated on May 31, 1983
had long become final. Be that as it may, it can not be
said that the property is no longer "in litigation" at that
time considering that it was part of the Hodges Estate
then under settlement proceedings (Sp. Proc. No.
1672).
A thing is said to be in litigation not only if there is
some contest or litigation over it in court, but also
from the moment that it becomes subject to the
judicial action of the judge. 36 A property forming part
of the estate under judicial settlement continues to be
subject of litigation until the probate court issues an
order declaring the estate proceedings closed and
terminated. The rule is that as long as the order for
the distribution of the estate has not been complied
with, the probate proceedings cannot be deemed
closed and terminated. 37 The probate court loses
jurisdiction of an estate under administration only
after the payment of all the debts and the remaining
estate delivered to the heirs entitled to receive the
same. 38 Since there is no evidence to show that Sp.
Proc. No. 1672 in the RTC of Iloilo, Branch 27, had
already been closed and terminated at the time of the
execution of the Deed of Sale with Mortgage dated
November 21, 1994, Lot 11 is still deemed to be "in
litigation" subject to the operation of Article 1491 (5)
of the Civil Code.
DTAaCE

This notwithstanding, we hold that the sale of Lot 11

in favor of respondent did not violate the rule on
disqualification to purchase property because Sp.
Proc. No. 1672 was then pending before another court
(RTC) and not MTCC where he was Clerk of Court.
On the charges against the respondent, we find him
liable for dishonesty and grave misconduct.
Misconduct is a transgression of some established
and definite rule of action, more particularly, unlawful
behavior as well as gross negligence by a public
officer. To warrant dismissal from service, the
misconduct must be grave, serious, important,
weighty, momentous and not trifling. The misconduct
must imply wrongful intention and not a mere error of
judgment. The misconduct must also have a direct
relation to and be connected with the performance of
the public officer's official duties amounting either to
maladministration or willful, intentional neglect, or
failure to discharge the duties of the office. 39
Dishonesty is the "disposition to lie, cheat, deceive,
defraud or betray; untrustworthiness; lack of integrity;
lack of honesty, probity, or integrity in principle; and
lack of fairness and straightforwardness." 40
In this case, respondent deceived complainant's family
who were led to believe that he is the legal
representative of the Hodges Estate, or at least
possessed of such power to intercede for overstaying
occupants of the estate's properties like complainant.
Boasting of his position as a court officer, a City Sheriff
at that, complainant's family completely relied on his
repeated assurance that they will not be ejected from
the premises. Upon learning that the lot they were
occupying was for sale and that they had to negotiate
for it through respondent, complainant's family
readily gave the amounts he demanded and, along
with Saplagio, complied with the requirements for a
loan application with PAG-IBIG. All the while and
unknown to complainant's family, respondent was
actually working to acquire Lot 11 for himself. DcAEIS

Thus, while respondent was negotiating with the

Hodges Estate for the sale of the property to him, he
collected as down payment P5,000 from
complainant's family in July 1986. Four months later,
on November 18, 1986, the probate court approved
respondent's offer to purchase Lot 11. The latter
received further down payment from complainant in
the amount of P10,000 between 1992 and 1993, or
before the Deed of Sale with Mortgage 41 dated
November 21, 1994 could be executed in respondent's
favor.
Thereafter, respondent demanded P3,000 from
complainant supposedly for the subdivision of Lot 11
between the latter and the Saplagios. Yet, it was not
until respondent obtained title over said lot that the
same was subdivided into Lots 11-A and 11-B. The
records 42 of the case show that the Subdivision Plan
dated April 25, 1996, duly approved by the Land
Management Services (DENR) subdividing Lot 11 into
sublots 11-A and 11-B, was inscribed on February 28,
1997 two years after TCT No. T-107519 covering Lot
11 was issued in respondent's name on December 5,
1994.
Finally, in 1995, respondent received the amount of
P2,000 to defray the expenses for documentation and
transfer of title in complainant's name. In the latter
instance, while it may be argued that respondent
already had the capacity to sell the subject property,
the sum of all the circumstances belie an honest
intention on his part to convey Lot 11-A to
complainant. We note the inscription in TCT No. T-
11836 43 in the name of C.N. Hodges that respondent
executed a Request dated February 19, 1997 "for the
issuance of separate titles in the name of the
registered owner." 44 Soon after, TCT No. T-116467 45
covering Lot 11-A and TCT No. T-116468 46 covering
Lot 11-B were issued in the name of respondent on
February 28, 1997 only eight months after he
executed the Contract to Sell 47 in favor of
complainant on June 3, 1996. aESHDA

Respondent's bare denials were correctly disregarded

by the Court Administrator in the light of his own
admission that he indeed asked money from both
complainant and Saplagio. The evidence on record
clearly established that by misrepresenting himself as
the estate's representative and as a court officer
having the power to protect complainant's family from
eviction, respondent was able to collect sums totaling
P20,000 from complainant's family. Even after the
latter realized they were duped since respondent was
already the owner of Lot 11, they still offered to buy
the property from him. Respondent, however,
changed his mind and no longer wanted to sell the
property after nothing happened to the loan
applications of complainant and Saplagio. This
subsequent unilateral cancellation by respondent of
the contract to sell with complainant may have been
an afterthought, and plainly unjustified, based merely
on his own assumption that complainant could not
make full payment. But it did not negate the deception
and fraudulent acts perpetrated against complainant's
family who were forced into submission by the
constant threat of eviction. Such acts constitute grave
misconduct for which respondent should be held
answerable. TaHDAS

In Re: Complaint Filed by Paz De Vera Lazaro Against

Edna Magallanes, Court Stenographer III, RTC Br. 28
and Bonifacio G. Magallanes, Process Server, RTC Br.
30, Bayombong, Nueva Vizcaya, 48 the Court stressed
that to preserve decency within the judiciary, court
personnel must comply with just contractual
obligations, act fairly and adhere to high ethical
standards. In that case, we said that court employees
are expected to be paragons of uprightness, fairness
and honesty not only in their official conduct but also
in their personal dealings, including business and
commercial transactions to avoid becoming the
court's albatross of infamy. 49
More importantly, Section 4 (c) of Republic Act No.
6713 50 or the Code of Conduct and Ethical Standards
for Public Officials and Employees mandates that
public officials and employees shall remain true to the
people at all times. They must act with justness and
sincerity and shall not discriminate against anyone,
especially the poor and the underprivileged. They
shall at all times respect the rights of others, and shall
refrain from doing acts contrary to law, good morals,
good customs, public policy, public order, public safety
and public interest.
Under Section 52, 51 Rule IV of the Uniform Rules on
Administrative Cases in the Civil Service, dishonesty
and grave misconduct are classified as grave offenses
with the corresponding penalty of dismissal for the
first offense. Section 58 (a) states that the penalty of
dismissal shall carry with it the cancellation of
eligibility, forfeiture of retirement benefits, and the
perpetual disqualification for reemployment in the
government service.
Section 53 further provides that mitigating
circumstances attendant to the commission of the
offense should be considered in the determination of
the penalty to be imposed on the erring government
employee. However, no such mitigating circumstance
had been shown. On the contrary, respondent had
been previously held administratively liable for
irregularities in the performance of his duties as Clerk
of Court. In A.M. No. P-01-1484, 52 this Court imposed
on respondent a fine of P5,000 for acting imprudently
in notarizing documents and administering oath on
matters alien to his official duties. And in A.M. Nos. P-
08-2567 (formerly OCA IPI No. 99-670-P) and P-08-
2568 (formerly OCA IPI No. 99-753-P), 53 respondent
was found liable for simple misconduct and ordered
to pay a fine equivalent to his three (3) months salary
to be deducted from his retirement benefits. ECaSIT

Since respondent had compulsorily retired from

service on September 10, 2007, for this additional
administrative case he should be fined in an amount
equivalent to his salary for six months which shall
likewise be deducted from his retirement benefits.
WHEREFORE, the Court finds respondent Nicolasito
S. Solas, retired Clerk of Court IV, Municipal Trial Court
in Cities, Iloilo City, LIABLE FOR GRAVE
MISCONDUCT AND DISHONESTY. Respondent is
FINED in an amount equivalent to his salary for six
(6) months to be deducted from his retirement
benefits.
SO ORDERED.
(Sabidong v. Solas, A.M. No. P-01-1448, [June 25,
|||

2013])
 FIRST DIVISION
[G.R. No. 156407. January 15, 2014.]
THELMA M. ARANAS, petitioner, vs. TERESITA
V. MERCADO, FELIMON V. MERCADO,
CARMENCITA M. SUTHERLAND, RICHARD V.
MERCADO, MA. TERESITA M. ANDERSON, and
FRANKLIN L. MERCADO, respondents.
DECISION
BERSAMIN, J : p

The probate court is authorized to determine the

issue of ownership of properties for purposes of their
inclusion or exclusion from the inventory to be
submitted by the administrator, but its determination
shall only be provisional unless the interested parties
are all heirs of the decedent, or the question is one of
collation or advancement, or the parties consent to
the assumption of jurisdiction by the probate court
and the rights of third parties are not impaired. Its
jurisdiction extends to matters incidental or collateral
to the settlement and distribution of the estate, such
as the determination of the status of each heir and
whether property included in the inventory is the
conjugal or exclusive property of the deceased
spouse. HSDCTA

Antecedents
Emigdio S. Mercado (Emigdio) died intestate on
January 12, 1991, survived by his second wife, Teresita
V. Mercado (Teresita), and their five children, namely:
Allan V. Mercado, Felimon V. Mercado, Carmencita M.
Sutherland, Richard V. Mercado, and Maria Teresita M.
Anderson; and his two children by his first marriage,
namely: respondent Franklin L. Mercado and
petitioner Thelma M. Aranas (Thelma).
Emigdio inherited and acquired real properties during
his lifetime. He owned corporate shares in Mervir
Realty Corporation (Mervir Realty) and Cebu Emerson
Transportation Corporation (Cebu Emerson). He
assigned his real properties in exchange for corporate
stocks of Mervir Realty, and sold his real property in
Badian, Cebu (Lot 3353 covered by Transfer Certificate
of Title No. 3252) to Mervir Realty.
On June 3, 1991, Thelma filed in the Regional Trial
Court (RTC) in Cebu City a petition for the
appointment of Teresita as the administrator of
Emigdio's estate (Special Proceedings No. 3094-CEB). 1
The RTC granted the petition considering that there
was no opposition. The letters of administration in
favor of Teresita were issued on September 7, 1992.
As the administrator, Teresita submitted an inventory
of the estate of Emigdio on December 14, 1992 for the
consideration and approval by the RTC. She indicated
in the inventory that at the time of his death, Emigdio
had "left no real properties but only personal
properties" worth P6,675,435.25 in all, consisting of
cash of P32,141.20; furniture and fixtures worth
P20,000.00; pieces of jewelry valued at P15,000.00;
44,806 shares of stock of Mervir Realty worth
P6,585,585.80; and 30 shares of stock of Cebu
Emerson worth P22,708.25. 2 cEAIHa

Claiming that Emigdio had owned other properties

that were excluded from the inventory, Thelma moved
that the RTC direct Teresita to amend the inventory,
and to be examined regarding it. The RTC granted
Thelma's motion through the order of January 8, 1993.
On January 21, 1993, Teresita filed a compliance with
the order of January 8, 1993, 3 supporting her
inventory with copies of three certificates of stocks
covering the 44,806 Mervir Realty shares of stock; 4
the deed of assignment executed by Emigdio on
January 10, 1991 involving real properties with the
market value of P4,440,651.10 in exchange for 44,407
Mervir Realty shares of stock with total par value of
P4,440,700.00; 5 and the certificate of stock issued on
January 30, 1979 for 300 shares of stock of Cebu
Emerson worth P30,000.00. 6
On January 26, 1993, Thelma again moved to require
Teresita to be examined under oath on the inventory,
and that she (Thelma) be allowed 30 days within which
to file a formal opposition to or comment on the
inventory and the supporting documents Teresita had
submitted.
On February 4, 1993, the RTC issued an order
expressing the need for the parties to present
evidence and for Teresita to be examined to enable
the court to resolve the motion for approval of the
inventory. 7
On April 19, 1993, Thelma opposed the approval of
the inventory, and asked leave of court to examine
Teresita on the inventory.
With the parties agreeing to submit themselves to the
jurisdiction of the court on the issue of what
properties should be included in or excluded from the
inventory, the RTC set dates for the hearing on that
issue. 8
Ruling of the RTC
After a series of hearings that ran for almost eight
years, the RTC issued on March 14, 2001 an order
finding and holding that the inventory submitted by
Teresita had excluded properties that should be
included, and accordingly ruled:
WHEREFORE, in view of all the foregoing premises
and considerations, the Court hereby
denies the administratrix's motion for
approval of inventory. The Court hereby
orders the said administratrix to re-do the
inventory of properties which are
supposed to constitute as the estate of the
late Emigdio S. Mercado by including
therein the properties mentioned in the
last five immediately preceding paragraphs
 hereof and then submit the revised
inventory within sixty (60) days from notice
of this order.

The Court also directs the said administratrix to

render an account of her administration of
the estate of the late Emigdio S. Mercado
which had come to her possession. She
must render such accounting within sixty
(60) days from notice hereof.

SO ORDERED. 9

On March 29, 2001, Teresita, joined by other heirs of

Emigdio, timely sought the reconsideration of the
order of March 14, 2001 on the ground that one of the
real properties affected, Lot No. 3353 located in
Badian, Cebu, had already been sold to Mervir Realty,
and that the parcels of land covered by the deed of
assignment had already come into the possession of
and registered in the name of Mervir Realty. 10
Thelma opposed the motion.
On May 18, 2001, the RTC denied the motion for
reconsideration, 11 stating that there was no cogent
reason for the reconsideration, and that the movants'
agreement as heirs to submit to the RTC the issue of
what properties should be included or excluded from
the inventory already estopped them from
questioning its jurisdiction to pass upon the issue.
Decision of the CA
Alleging that the RTC thereby acted with grave abuse
of discretion in refusing to approve the inventory, and
in ordering her as administrator to include real
properties that had been transferred to Mervir Realty,
Teresita, joined by her four children and her stepson
Franklin, assailed the adverse orders of the RTC
promulgated on March 14, 2001 and May 18, 2001 by
petition for certiorari, stating:
I

THE HONORABLE RESPONDENT JUDGE HAS

COMMITTED GRAVE ABUSE OF
JURISDICTION(sic) AMOUNTING TO LACK
OR EXCESS OF JURISDICTION IN HOLDING
THAT THE REAL PROPERTY WHICH WAS
SOLD BY THE LATE EMIGDIO S. MERCADO
DURING HIS LIFETIME TO A PRIVATE
CORPORATION (MERVIR REALTY
CORPORATION) BE INCLUDED IN THE
INVENTORY OF THE ESTATE OF THE LATE
EMIGDIO S. MERCADO.
 II

THE HONORABLE RESPONDENT JUDGE HAS

COMMITTED GRAVE ABUSE OF
JURISDICTION(sic) AMOUNTING TO LACK
OR EXCESS OF JURISDICTION IN HOLDING
THAT REAL PROPERTIES WHICH ARE IN
THE POSSESSION OF AND ALREADY
REGISTERED IN THE NAME (OF) PRIVATE
CORPORATION (MERVIR REALTY
CORPORATION) BE INCLUDED IN THE
INVENTORY OF THE ESTATE OF THE LATE
EMIGDIO S. MERCADO. ECTAHc

III

THE HONORABLE RESPONDENT JUDGE HAS

COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OR
EXCESS OF JURISDICTION IN HOLDING
THAT PETITIONERS ARE NOW ESTOPPED
FROM QUESTIONING ITS JURISDICTION IN
PASSING UPON THE ISSUE OF WHAT
PROPERTIES SHOULD BE INCLUDED IN
 THE INVENTORY OF THE ESTATE OF THE
LATE EMIGDIO MERCADO. 12

On May 15, 2002, the CA partly granted the petition

for certiorari, disposing as follows: 13
WHEREFORE, FOREGOING PREMISES CONSIDERED,
this petition is GRANTED partially. The
assailed Orders dated March 14, 2001 and
May 18, 2001 are hereby reversed and set
aside insofar as the inclusion of parcels of
land known as Lot No. 3353 located at
Badian, Cebu with an area of 53,301 square
meters subject matter of the Deed of
Absolute Sale dated November 9, 1989 and
the various parcels of land subject matter
of the Deeds of Assignment dated
February 17, 1989 and January 10, 1991 in
the revised inventory to be submitted by
the administratrix is concerned and
affirmed in all other respects.

SO ORDERED.

The CA opined that Teresita, et al. had properly filed

the petition for certiorari because the order of the RTC
directing a new inventory of properties was
interlocutory; that pursuant to Article 1477 of the Civil
Code, to the effect that the ownership of the thing
sold "shall be transferred to the vendee" upon its
"actual and constructive delivery," and to Article 1498
of the Civil Code, to the effect that the sale made
through a public instrument was equivalent to the
delivery of the object of the sale, the sale by Emigdio
and Teresita had transferred the ownership of Lot No.
3353 to Mervir Realty because the deed of absolute
sale executed on November 9, 1989 had been
notarized; that Emigdio had thereby ceased to have
any more interest in Lot 3353; that Emigdio had
assigned the parcels of land to Mervir Realty as early
as February 17, 1989 "for the purpose of saving, as in
avoiding taxes with the difference that in the Deed of
Assignment dated January 10, 1991, additional seven
(7) parcels of land were included"; that as to the
January 10, 1991 deed of assignment, Mervir Realty
had been "even at the losing end considering that
such parcels of land, subject matter(s) of the Deed of
Assignment dated February 12, 1989, were again given
monetary consideration through shares of stock"; that
even if the assignment had been based on the deed of
assignment dated January 10, 1991, the parcels of
land could not be included in the inventory
"considering that there is nothing wrong or
objectionable about the estate planning scheme"; that
the RTC, as an intestate court, also had no power to
take cognizance of and determine the issue of title to
property registered in the name of third persons or
corporation; that a property covered by the Torrens
system should be afforded the presumptive
conclusiveness of title; that the RTC, by disregarding
the presumption, had transgressed the clear
provisions of law and infringed settled jurisprudence
on the matter; and that the RTC also gravely abused
its discretion in holding that Teresita, et al. were
estopped from questioning its jurisdiction because of
their agreement to submit to the RTC the issue of
which properties should be included in the inventory.
HCATEa

The CA further opined as follows:

In the instant case, public respondent court erred
when it ruled that petitioners are estopped
from questioning its jurisdiction
considering that they have already agreed
to submit themselves to its jurisdiction of
determining what properties are to be
included in or excluded from the inventory
to be submitted by the administratrix,
because actually, a reading of petitioners'
Motion for Reconsideration dated March
26, 2001 filed before public respondent
court clearly shows that petitioners are not
questioning its jurisdiction but the manner
 in which it was exercised for which they are
not estopped, since that is their right,
considering that there is grave abuse of
discretion amounting to lack or in excess of
limited jurisdiction when it issued the
assailed Order dated March 14, 2001
denying the administratrix's motion for
approval of the inventory of properties
which were already titled and in possession
of a third person that is, Mervir Realty
Corporation, a private corporation, which
under the law possessed a personality
distinct and separate from its stockholders,
and in the absence of any cogency to shred
the veil of corporate fiction, the
presumption of conclusiveness of said
titles in favor of Mervir Realty Corporation
should stand undisturbed.

Besides, public respondent court acting as a

probate court had no authority to
determine the applicability of the doctrine
of piercing the veil of corporate fiction and
even if public respondent court was not
merely acting in a limited capacity as a
probate court, private respondent
nonetheless failed to adjudge competent
evidence that would have justified the
 court to impale the veil of corporate fiction
because to disregard the separate
jurisdictional personality of a corporation,
the wrongdoing must be clearly and
convincingly established since it cannot be
presumed. 14

On November 15, 2002, the CA denied the motion for

reconsideration of Teresita, et al. 15
Issue
Did the CA properly determine that the RTC
committed grave abuse of discretion amounting to
lack or excess of jurisdiction in directing the inclusion
of certain properties in the inventory notwithstanding
that such properties had been either transferred by
sale or exchanged for corporate shares in Mervir
Realty by the decedent during his lifetime?
Ruling of the Court
The appeal is meritorious.
I
Was certiorari the proper recourse
to assail the questioned orders of the RTC?
The first issue to be resolved is procedural. Thelma
contends that the resort to the special civil action for
certiorari to assail the orders of the RTC by Teresita
and her co-respondents was not proper.
Thelma's contention cannot be sustained.
The propriety of the special civil action for certiorari as
a remedy depended on whether the assailed orders of
the RTC were final or interlocutory in nature. In Pahila-
Garrido v. Tortogo, 16 the Court distinguished
between final and interlocutory orders as follows:
The distinction between a final order and an
interlocutory order is well known. The first
disposes of the subject matter in its
entirety or terminates a particular
proceeding or action, leaving nothing more
to be done except to enforce by execution
what the court has determined, but the
latter does not completely dispose of the
case but leaves something else to be
decided upon. An interlocutory order deals
with preliminary matters and the trial on
the merits is yet to be held and the
judgment rendered. The test to ascertain
whether or not an order or a judgment is
interlocutory or final is: does the order or
judgment leave something to be done in
the trial court with respect to the merits of
the case? If it does, the order or judgment
is interlocutory; otherwise, it is final.

The order dated November 12, 2002, which

granted the application for the writ of
preliminary injunction, was an
 interlocutory, not a final, order, and should
not be the subject of an appeal. The reason
for disallowing an appeal from an
interlocutory order is to avoid multiplicity
of appeals in a single action, which
necessarily suspends the hearing and
decision on the merits of the action during
the pendency of the appeals. Permitting
multiple appeals will necessarily delay the
trial on the merits of the case for a
considerable length of time, and will
compel the adverse party to incur
unnecessary expenses, for one of the
parties may interpose as many appeals as
there are incidental questions raised by
him and as there are interlocutory orders
rendered or issued by the lower court. An
interlocutory order may be the subject of
an appeal, but only after a judgment has
been rendered, with the ground for
appealing the order being included in the
appeal of the judgment itself.

The remedy against an interlocutory order not

subject of an appeal is an appropriate
special civil action under Rule 65, provided
that the interlocutory order is rendered
without or in excess of jurisdiction or with
 grave abuse of discretion. Then is certiorari
under Rule 65 allowed to be resorted to. TCASIH

The assailed order of March 14, 2001 denying

Teresita's motion for the approval of the inventory
and the order dated May 18, 2001 denying her motion
for reconsideration were interlocutory. This is because
the inclusion of the properties in the inventory was
not yet a final determination of their ownership.
Hence, the approval of the inventory and the
concomitant determination of the ownership as basis
for inclusion or exclusion from the inventory were
provisional and subject to revision at anytime during
the course of the administration proceedings.
In Valero Vda. de Rodriguez v. Court of Appeals, 17 the
Court, in affirming the decision of the CA to the effect
that the order of the intestate court excluding certain
real properties from the inventory was interlocutory
and could be changed or modified at anytime during
the course of the administration proceedings, held
that the order of exclusion was not a final but an
interlocutory order "in the sense that it did not settle
once and for all the title to the San Lorenzo Village
lots." The Court observed there that:
The prevailing rule is that for the purpose of
determining whether a certain property
should or should not be included in the
 inventory, the probate court may
pass upon the title thereto but
such determination is not
conclusive and is subject to the
final decision in a separate action
regarding ownership which may be
instituted by the parties (3 Moran's
Comments on the Rules of Court,1970
Edition, pages 448-9 and 473; Lachenal vs.
Salas, L-42257, June 14, 1976, 71 SCRA 262,
266). 18 (Bold emphasis supplied)

To the same effect was De Leon v. Court of Appeals, 19

where the Court declared that a "probate court,
whether in a testate or intestate proceeding, can only
pass upon questions of title provisionally," and
reminded, citing Jimenez v. Court of Appeals, that the
"patent reason is the probate court's limited
jurisdiction and the principle that questions of title or
ownership, which result in inclusion or exclusion from
the inventory of the property, can only be settled in a
separate action." Indeed, in the cited case of Jimenez
v. Court of Appeals, 20 the Court pointed out:
All that the said court could do as regards the said
properties is determine whether they
should or should not be included in the
inventory or list of properties to be
administered by the administrator. If
 there is a dispute as to the
ownership, then the opposing
parties and the administrator have
to resort to an ordinary action for a
final determination of the
conflicting claims of title because
the probate court cannot do so.
(Bold emphasis supplied)

On the other hand, an appeal would not be the

correct recourse for Teresita, et al. to take against the
assailed orders. The final judgment rule embodied in
the first paragraph of Section 1, Rule 41, Rules of
Court, 21 which also governs appeals in special
proceedings, stipulates that only the judgments, final
orders (and resolutions) of a court of law "that
completely disposes of the case, or of a particular
matter therein when declared by these Rules to be
appealable" may be the subject of an appeal in due
course. The same rule states that an interlocutory
order or resolution (interlocutory because it deals with
preliminary matters, or that the trial on the merits is
yet to be held and the judgment rendered) is
expressly made non-appealable.
Multiple appeals are permitted in special proceedings
as a practical recognition of the possibility that
material issues may be finally determined at various
stages of the special proceedings. Section 1, Rule 109
of the Rules of Court enumerates the specific
instances in which multiple appeals may be resorted
to in special proceedings, viz.:
Section 1. Orders or judgments from which
appeals may be taken. An interested
person may appeal in special proceedings
from an order or judgment rendered by a
Court of First Instance or a Juvenile and
Domestic Relations Court, where such
order or judgment:

(a) Allows or disallows a will;

(b) Determines who are the lawful heirs of a

deceased person, or the distributive share
of the estate to which such person is
entitled;

(c) Allows or disallows, in whole or in part, any

claim against the estate of a deceased
person, or any claim presented on behalf
of the estate in offset to a claim against it;

(d) Settles the account of an executor,

 administrator, trustee or guardian;

(e) Constitutes, in proceedings relating to the

settlement of the estate of a deceased
person, or the administration of a trustee
or guardian, a final determination in the
lower court of the rights of the party
appealing, except that no appeal shall be
allowed from the appointment of a special
administrator; and

(f) Is the final order or judgment rendered in the

case, and affects the substantial rights of
the person appealing, unless it be an order
granting or denying a motion for a new
trial or for reconsideration.

Clearly, the assailed orders of the RTC, being

interlocutory, did not come under any of the instances
in which multiple appeals are permitted.
II
Did the RTC commit grave abuse of
discretion
in directing the inclusion of the properties
in the estate of the decedent?
In its assailed decision, the CA concluded that the RTC
committed grave abuse of discretion for including
properties in the inventory notwithstanding their
having been transferred to Mervir Realty by Emigdio
during his lifetime, and for disregarding the
registration of the properties in the name of Mervir
Realty, a third party, by applying the doctrine of
piercing the veil of corporate fiction.
Was the CA correct in its conclusion?
The answer is in the negative. It is unavoidable to find
that the CA, in reaching its conclusion, ignored the law
and the facts that had fully warranted the assailed
orders of the RTC.
Under Section 6 (a), Rule 78 of the Rules of Court, the
letters of administration may be granted at the
discretion of the court to the surviving spouse, who is
competent and willing to serve when the person dies
intestate. Upon issuing the letters of administration to
the surviving spouse, the RTC becomes duty-bound to
direct the preparation and submission of the
inventory of the properties of the estate, and the
surviving spouse, as the administrator, has the duty
and responsibility to submit the inventory within three
months from the issuance of letters of administration
pursuant to Rule 83 of the Rules of Court,viz.:
Section 1. Inventory and appraisal to be returned
within three months. Within three (3)
months after his appointment every
executor or administrator shall return to
 the court a true inventory and
appraisal of all the real and
personal estate of the deceased
which has come into his possession
or knowledge. In the appraisement of
such estate, the court may order one or
more of the inheritance tax appraisers to
give his or their assistance.
THacES

The usage of the word all in Section 1, supra, demands

the inclusion of all the real and personal properties of
the decedent in the inventory. 22 However, the word
all is qualified by the phrase which has come into his
possession or knowledge, which signifies that the
properties must be known to the administrator to
belong to the decedent or are in her possession as the
administrator. Section 1 allows no exception, for the
phrase true inventory implies that no properties
appearing to belong to the decedent can be excluded
from the inventory, regardless of their being in the
possession of another person or entity.
The objective of the Rules of Court in requiring the
inventory and appraisal of the estate of the decedent
is "to aid the court in revising the accounts and
determining the liabilities of the executor or the
administrator, and in malting a final and equitable
distribution (partition) of the estate and otherwise to
facilitate the administration of the estate." 23 Hence,
the RTC that presides over the administration of an
estate is vested with wide discretion on the question
of what properties should be included in the
inventory. According to Peralta v. Peralta, 24 the CA
cannot impose its judgment in order to supplant that
of the RTC on the issue of which properties are to be
included or excluded from the inventory in the
absence of "positive abuse of discretion," for in the
administration of the estates of deceased persons,
"the judges enjoy ample discretionary powers and the
appellate courts should not interfere with or attempt
to replace the action taken by them, unless it be
shown that there has been a positive abuse of
discretion." 25 As long as the RTC commits no patently
grave abuse of discretion, its orders must be
respected as part of the regular performance of its
judicial duty.
There is no dispute that the jurisdiction of the trial
court as an intestate court is special and limited. The
trial court cannot adjudicate title to properties claimed
to be a part of the estate but are claimed to belong to
third parties by title adverse to that of the decedent
and the estate, not by virtue of any right of inheritance
from the decedent. All that the trial court can do
regarding said properties is to determine whether or
not they should be included in the inventory of
properties to be administered by the administrator.
Such determination is provisional and may be still
revised. As the Court said in Agtarap v. Agtarap: 26
The general rule is that the jurisdiction of the trial
court, either as a probate court or an
intestate court, relates only to matters
having to do with the probate of the will
and/or settlement of the estate of
deceased persons, but does not extend to
the determination of questions of
ownership that arise during the
proceedings. The patent rationale for this
rule is that such court merely exercises
special and limited jurisdiction. As held in
several cases, a probate court or one in
charge of estate proceedings, whether
testate or intestate, cannot adjudicate or
determine title to properties claimed to be
a part of the estate and which are claimed
to belong to outside parties, not by virtue
of any right of inheritance from the
deceased but by title adverse to that of the
deceased and his estate. All that the said
court could do as regards said properties is
to determine whether or not they should
be included in the inventory of properties
to be administered by the administrator. If
there is no dispute, there poses no
problem, but if there is, then the parties,
 the administrator, and the opposing
parties have to resort to an ordinary action
before a court exercising general
jurisdiction for a final determination of the
conflicting claims of title.
TcHDIA

However, this general rule is subject to exceptions

as justified by expediency and
convenience.

First, the probate court may provisionally pass

upon in an intestate or a testate proceeding
the question of inclusion in, or exclusion from,
the inventory of a piece of property without
prejudice to final determination of ownership
in a separate action. Second, if the interested
parties are all heirs to the estate, or the question
is one of collation or advancement, or the parties
consent to the assumption of jurisdiction by
the probate court and the rights of third
parties are not impaired, then the probate
court is competent to resolve issues on
ownership. Verily, its jurisdiction extends to matters
incidental or collateral to the settlement and distribution
of the estate, such as the determination of the status of
each heir and whether the property in the
inventory is conjugal or exclusive property of
the deceased spouse. 27 (Italics in the original; bold
emphasis supplied)
It is clear to us that the RTC took pains to explain the
factual bases for its directive for the inclusion of the
properties in question in its assailed order of March
14, 2001, viz.:
In the first place, the administratrix of the estate
admitted that Emigdio Mercado was one of
the heirs of Severina Mercado who, upon
her death, left several properties as listed
in the inventory of properties submitted in
Court in Special Proceedings No. 306-R
which are supposed to be divided among
her heirs. The administratrix admitted,
while being examined in Court by the
counsel for the petitioner, that she did not
include in the inventory submitted by her
in this case the shares of Emigdio Mercado
in the said estate of Severina Mercado.
Certainly, said properties constituting
Emigdio Mercado's share in the estate of
Severina Mercado should be included in
the inventory of properties required to be
submitted to the Court in this particular
case.

In the second place, the administratrix of the estate

of Emigdio Mercado also admitted in Court
that she did not include in the inventory
 shares of stock of Mervir Realty
Corporation which are in her name and
which were paid by her from money
derived from the taxicab business which
she and her husband had since 1955 as a
conjugal undertaking. As these shares of
stock partake of being conjugal in
character, one-half thereof or of the value
thereof should be included in the inventory
of the estate of her husband.

In the third place, the administratrix of the estate

of Emigdio Mercado admitted, too, in Court
that she had a bank account in her name at
Union Bank which she opened when her
husband was still alive. Again, the money in
said bank account partakes of being
conjugal in character, and so, one-half
thereof should be included in the inventory
of the properties constituting as estate of
her husband.

In the fourth place, it has been established during

the hearing in this case that Lot No. 3353
of Pls-657-D located in Badian, Cebu
containing an area of 53,301 square
meters as described in and covered by
 Transfer Certificate of Title No. 3252 of the
Registry of Deeds for the Province of Cebu
is still registered in the name of Emigdio S.
Mercado until now. When it was the
subject of Civil Case No. CEB-12690 which
was decided on October 19, 1995, it was
the estate of the late Emigdio Mercado
which claimed to be the owner thereof.
Mervir Realty Corporation never
intervened in the said case in order to be
the owner thereof. This fact was admitted
by Richard Mercado himself when he
testified in Court. . . . So the said property
located in Badian, Cebu should be included
in the inventory in this case.AECacS

Fifthly and lastly, it appears that the assignment of

several parcels of land by the late Emigdio
S. Mercado to Mervir Realty Corporation on
January 10, 1991 by virtue of the Deed of
Assignment signed by him on the said day
(Exhibit N for the petitioner and Exhibit 5
for the administratrix) was a transfer in
contemplation of death. It was made two
days before he died on January 12, 1991. A
transfer made in contemplation of death is
one prompted by the thought that the
transferor has not long to live and made in
 place of a testamentary disposition (1959
Prentice Hall, p. 3909). Section 78 of the
National Internal Revenue Code of 1977
provides that the gross estate of the
decedent shall be determined by including
the value at the time of his death of all
property to the extent of any interest
therein of which the decedent has at any
time made a transfer in contemplation of
death. So, the inventory to be approved in
this case should still include the said
properties of Emigdio Mercado which were
transferred by him in contemplation of
death. Besides, the said properties actually
appeared to be still registered in the name
of Emigdio S. Mercado at least ten (10)
months after his death, as shown by the
certification issued by the Cebu City
Assessor's Office on October 31, 1991
(Exhibit O). 28

Thereby, the RTC strictly followed the directives of the

Rules of Court and the jurisprudence relevant to the
procedure for preparing the inventory by the
administrator. The aforequoted explanations
indicated that the directive to include the properties in
question in the inventory rested on good and valid
reasons, and thus was far from whimsical, or arbitrary,
or capricious.
Firstly, the shares in the properties inherited by
Emigdio from Severina Mercado should be included in
the inventory because Teresita, et al. did not dispute
the fact about the shares being inherited by Emigdio.
Secondly, with Emigdio and Teresita having been
married prior to the effectivity of the Family Code in
August 3, 1988, their property regime was the
conjugal partnership of gains. 29 For purposes of the
settlement of Emigdio's estate, it was unavoidable for
Teresita to include his shares in the conjugal
partnership of gains. The party asserting that specific
property acquired during that property regime did not
pertain to the conjugal partnership of gains carried
the burden of proof, and that party must prove the
exclusive ownership by one of them by clear,
categorical, and convincing evidence. 30 In the
absence of or pending the presentation of such proof,
the conjugal partnership of Emigdio and Teresita must
be provisionally liquidated to establish who the real
owners of the affected properties were, 31 and which
of the properties should form part of the estate of
Emigdio. The portions that pertained to the estate of
Emigdio must be included in the inventory.
Moreover, although the title over Lot 3353 was
already registered in the name of Mervir Realty, the
RTC made findings that put that title in dispute. Civil
Case No. CEB-12692, a dispute that had involved the
ownership of Lot 3353, was resolved in favor of the
estate of Emigdio, and Transfer Certificate of Title No.
3252 covering Lot 3353 was still in Emigdio's name.
Indeed, the RTC noted in the order of March 14, 2001,
or ten years after his death, that Lot 3353 had
remained registered in the name of Emigdio.
Interestingly, Mervir Realty did not intervene at all in
Civil Case No. CEB-12692. Such lack of interest in Civil
Case No. CEB-12692 was susceptible of various
interpretations, including one to the effect that the
heirs of Emigdio could have already threshed out their
differences with the assistance of the trial court. This
interpretation was probable considering that Mervir
Realty, whose business was managed by respondent
Richard, was headed by Teresita herself as its
President. In other words, Mervir Realty appeared to
be a family corporation.
Also, the fact that the deed of absolute sale executed
by Emigdio in favor of Mervir Realty was a notarized
instrument did not sufficiently justify the exclusion
from the inventory of the properties involved. A
notarized deed of sale only enjoyed the presumption
of regularity in favor of its execution, but its
notarization did not per se guarantee the legal efficacy
of the transaction under the deed, and what the
contents purported to be. The presumption of
regularity could be rebutted by clear and convincing
evidence to the contrary. 32 As the Court has observed
in Suntay v. Court of Appeals: 33
. . . . Though the notarization of the deed of sale in
question vests in its favor the presumption
of regularity, it is not the intention nor the
function of the notary public to validate
and make binding an instrument never, in
the first place, intended to have any
binding legal effect upon the parties
thereto. The intention of the parties
still and always is the primary
consideration in determining the
true nature of a contract. (Bold
emphasis supplied)

It should likewise be pointed out that the exchange of

shares of stock of Mervir Realty with the real
properties owned by Emigdio would still have to be
inquired into. That Emigdio executed the deed of
assignment two days prior to his death was a
circumstance that should put any interested party on
his guard regarding the exchange, considering that
there was a finding about Emigdio having been sick of
cancer of the pancreas at the time. 34 In this regard,
whether the CA correctly characterized the exchange
as a form of an estate planning scheme remained to
be validated by the facts to be established in court.
The fact that the properties were already covered by
Torrens titles in the name of Mervir Realty could not
be a valid basis for immediately excluding them from
the inventory in view of the circumstances admittedly
surrounding the execution of the deed of assignment.
This is because:
The Torrens system is not a mode of acquiring
titles to lands; it is merely a system of
registration of titles to lands. However,
justice and equity demand that the
titleholder should not be made to bear the
unfavorable effect of the mistake or
negligence of the State's agents, in the
absence of proof of his complicity in a
fraud or of manifest damage to third
persons. The real purpose of the Torrens
system is to quiet title to land and put a
stop forever to any question as to the
legality of the title, except claims that were
noted in the certificate at the time of
registration or that may arise subsequent
thereto. Otherwise, the integrity of the
Torrens system shall forever be sullied by
the ineptitude and inefficiency of land
registration officials, who are ordinarily
presumed to have regularly performed
their duties. 35 cEAIHa
Assuming that only seven titled lots were the subject
of the deed of assignment of January 10, 1991, such
lots should still be included in the inventory to enable
the parties, by themselves, and with the assistance of
the RTC itself, to test and resolve the issue on the
validity of the assignment. The limited jurisdiction of
the RTC as an intestate court might have constricted
the determination of the rights to the properties
arising from that deed, 36 but it does not prevent the
RTC as intestate court from ordering the inclusion in
the inventory of the properties subject of that deed.
This is because the RTC as intestate court, albeit
vested only with special and limited jurisdiction, was
still "deemed to have all the necessary powers to
exercise such jurisdiction to make it effective." 37
Lastly, the inventory of the estate of Emigdio must be
prepared and submitted for the important purpose of
resolving the difficult issues of collation and
advancement to the heirs. Article 1061 of the Civil
Code required every compulsory heir and the
surviving spouse, herein Teresita herself, to "bring into
the mass of the estate any property or right which he
(or she) may have received from the decedent, during
the lifetime of the latter, by way of donation, or any
other gratuitous title, in order that it may be
computed in the determination of the legitime of each
heir, and in the account of the partition." Section 2,
Rule 90 of the Rules of Court also provided that any
advancement by the decedent on the legitime of an
heir "may be heard and determined by the court
having jurisdiction of the estate proceedings, and the
final order of the court thereon shall be binding on
the person raising the questions and on the heir."
Rule 90 thereby expanded the special and limited
jurisdiction of the RTC as an intestate court about the
matters relating to the inventory of the estate of the
decedent by authorizing it to direct the inclusion of
properties donated or bestowed by gratuitous title to
any compulsory heir by the decedent. 38
The determination of which properties should be
excluded from or included in the inventory of estate
properties was well within the authority and discretion
of the RTC as an intestate court. In making its
determination, the RTC acted with circumspection,
and proceeded under the guiding policy that it was
best to include all properties in the possession of the
administrator or were known to the administrator to
belong to Emigdio rather than to exclude properties
that could turn out in the end to be actually part of the
estate. As long as the RTC commits no patent grave
abuse of discretion, its orders must be respected as
part of the regular performance of its judicial duty.
Grave abuse of discretion means either that the
judicial or quasi-judicial power was exercised in an
arbitrary or despotic manner by reason of passion or
personal hostility, or that the respondent judge,
tribunal or board evaded a positive duty, or virtually
refused to perform the duty enjoined or to act in
contemplation of law, such as when such judge,
tribunal or board exercising judicial or quasi-judicial
powers acted in a capricious or whimsical manner as
to be equivalent to lack of jurisdiction. 39
In light of the foregoing, the CA's conclusion of grave
abuse of discretion on the part of the RTC was
unwarranted and erroneous.
WHEREFORE, the Court GRANTS the petition for
review on certiorari; REVERSES and SETS ASIDE
the decision promulgated on May 15, 2002;
REINSTATES the orders issued on March 14, 2001
and May 18, 2001 by the Regional Trial Court in Cebu;
DIRECTS the Regional Trial Court in Cebu to proceed
with dispatch in Special Proceedings No. 3094-CEB
entitled Intestate Estate of the late Emigdio Mercado,
Thelma Aranas, petitioner, and to resolve the case;
and ORDERS the respondents to pay the costs of
suit.
SO ORDERED.
(Aranas v. Mercado, G.R. No. 156407, [January 15,
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2014], 724 PHIL 174-197)