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G.R. No.

191031, October 05, 2015 A parcel of land with its camarin situated in the Municipality of Carigara, Province of
Leyte.
DOLORES L. HACBANG AND BERNARDO J. HACBANG, Petitioners, v. ATTY. BASILIO
H. ALO, Respondent. A parcel of land in the Barrio of Pinamopuan, of the Municipality of Capoocan,
Province of Leyte.
DECISION
A parcel of land with house and planted to coconuts in the Barrio of Sorsogon,
Municipality of Sta. Margarita, Province of Samar.
This petition for review on certiorari seeks to reverse the 13 October 2009 Decision
and the 21 January 2010 resolution of the Court of Appeals (CA) in CA-G.R CV No.
FIFTH: The other remaining half of my properties wherever they may be located,
83137.1 The CA affirmed the Quezon City Regional Trial Court's (RTC) dismissal of
by these presents I give, cede and hand over to my sister Dolores Hacbang, which
the petitioners' complaint in Civil Case No. Q 99-366602for lack of cause of action.
properties are more particularly described as follows:chanRoblesvirtualLawlibrary
ANTECEDENTS
Fifty (50) percent of my stockholdings in the "SAMAR NAVIGATION CO. INC."
On 3 April 1937, Bishop Sofronio Hacbang (Bishop Sofronio) died leaving several
A piece of land with one house where the Botica San Antonio is located, in the
properties behind. Among these was Lot No. 8-A of subdivision Plan Psd-6227
Municipality of Calbayog, Province of Samar.
located at Espaa Street, San Juan, Rizal,3covered by Transfer Certificate of Title
(TCT) No. (19896) 227644 (the subject lot).
A piece of land with house in Acedillo St., Municipality of Calbayog, Province of
Samar.
Bishop Sofronio was survived by his parents, Basilio and Maria Hacbang, and his
siblings: Perfecto Hacbang, Joaquin Hacbang, Lucia Teresita Hacbang, and Dolores
A piece of land with 1 camarin in the barrio of Sorsogon, Municipality of Sta.
Hacbang Alo. Petitioner Dolores L. Hacbang is the grandchild of Perfecto while
Margarita, Province of Samar.
petitioner Bernardo Hacbang (Bernardo) is a son of Joaquin. The respondent Basilio
Alo is the son of Dolores.
Six (6) Parcels of land located in "NEW MANILA," Municipality of San Juan, Province
of Rizal, in 7th St., described as follows: Block 7, Lots 16, 18, 20 and 22, and in 3rd
Bishop Sofronio left a will denominated as Ultima Voluntad y Testamento. He left
Street, Block 3, Lots 4 and 6.
one-half of his properties to his parents and devised the other half - including the
subject lot - to his sister Dolores. The pertinent portions of his will
A piece of land situated in Espana St., Municipality of San Juan del Monte of the
read:cralawlawlibrary
Province of Rizal, marked as Lot 8-A, Block 17, of 1,403 square meters in
FOURTH: By these presents I give, name, declare and institute as heirs my parents area.4chanrobleslaw
BASILIO HACBANG and MARIA GABORNY DE HACBANG of one-half of all my
On 16 April 1937, a petition for the probate of Bishop Sofronio's will and the
properties, whether real, personal or mixed, in whatever place they may be found,
whether they were acquired before or after the execution of this testament, settlement of his estate was filed before the then Court of First Instance (CFI) of
including all the properties that at the time of my death I may have the power to Manila. The petition was docketed as SP. PROC. No. 51199.
dispose of by will, and which properties consist of the
following:chanRoblesvirtualLawlibrary On 21 May 1937, the CFI admitted Bishop Sofronio's will to probate.5

Fifty (50) percent of the shares of stock that I own in the "SAMAR NAVIGATION CO. The records are bare with respect to what happened next. They show, however,
that the CFI ordered the proceedings to be archived on 2 November 1957.
INC."
On 24 September 1971, the Register of Deeds of Quezon City appears to have
1
issued TCT No. 169342over the subject lot in the name of respondent Basilio H. Alo. the distributees.7 The appeal was docketed as CA-G.R CV No. 83137.
TCT No. 169342 cancelled TCT No. 117322/T-500. However, this Court cannot
determine the circumstances surrounding the issuance of TCT No. 169342 or the They further argued that the distribution of the estate should be governed by
relationship between TCT No. 117322/T-500 and TCT No. (19896) 227644 due to intestate succession because: (1) the subject property was not adjudicated; and (2)
the inadequacy of the documents on record. the settlement proceedings were archived and dismissed. Thus, all the properties
passed on to and became part of the estate of Bishop Sofronio's parents. The
On 17 March 1975, Dolores Hacbang Alo moved to revive the settlement petitioners concluded that they had legal interest in the subject lot as
proceedings because the CFI had not yet completed adjudicating the properties. representatives of their ascendants, the other children of Bishop Sofronio's parents.

On 23 May 1975, the CFI denied the motion for revival because the order to archive In his appeal brief, the respondent insisted that the petitioners do not have a clear
"had long become final and executory."6 legal right to maintain the suit because: (1) as collateral relatives, they cannot
invoke the right of representation to the estate of Bishop Sofronio; and (2) they are
On 1 February 1999, petitioners Dolores L. Hacbang and Bernardo filed a petition to not real parties in interest and have no right of action over the subject lot.
cancel TCT No. 169342 on the ground that it was fraudulently secured. In support of
their allegations, they submitted the 5 March 1997 Investigation Report of Land On 13 October 2009, the CA affirmed the RTC's order of dismissal. The CA held that
Registration Authority (LRA) Investigator Rodrigo I. Del Rosario. The report the admission of Bishop Sofronio's will to probate precluded intestate succession
concluded that TCT No. 117322 was of "doubtful authenticity" and was neither unless the will was intrinsically invalid or failed to completely dispose of his estate.
derived from TCT No. 117322 nor issued by the Registry of Deeds of Quezon City on Contrary to the petitioners' contention, the settlement proceedings were not
24 September 1971 at 2:30 PM. dismissed but archived; the will did not lose its validity merely because the
proceedings were archived. Undoubtedly, Bishop Sofronio did not die intestate.
In his Answer dated 18 August 1999, Basilio denied all allegations of irregularity and
wrongdoing. He also moved to dismiss the petition because the petitioners were The CA denied the petitioners' claim to a right of inheritance by representation. It
neither heirs nor devisees of Bishop Sofronio and had no legal interest in the held that the presence of Bishop Sofronio's parents during his death excluded his
subject lot. brothers and sisters from being compulsory heirs; the petitioners cannot represent
those who are hot entitled to succeed. Considering that they are neither
On 7 January 2003, the RTC dismissed the petition because the petitioners had no compulsory nor testamentary heirs, petitioners have no legal interest in the subject
right to prosecute the case on the subject lot. The RTC noted that Bishop Sofronio's property.
will had already been admitted into probate in 1937; thus, the intrinsic validity of
the will is no longer in question. Though the settlement proceedings were archived, The petitioners moved for reconsideration which the CA denied on 21 January
Bishop Sofronio already designated his heirs: Bishop Sofronio's parents were 2010. The denial paved the way for the petitioners to file the present petition for
compulsory heirs entitled to half of his estate while the respondent's mother, review on certiorari.
Dolores Hacbang Alo, was devised the remaining half (the free portion). Thus, the
petitioners, who are neither compulsory nor testamentary heirs, are not real parties THE PETITION
in interest.
The petitioners argue: (1) that the CA erred when it failed to rule on the validity of
The petitioners moved for reconsideration which the RTC denied on 19 August TCT No. 169342; (2) that the probate proceedings of the estate was dismissed, not
2003. archived; and (3) that the CA erred when it used Bishop Sofronio's will as basis to
declare that they are not real parties in interest.
The petitioners appealed to the CA, arguing that: (1) Bishop Sofronio's will did not
validly transfer the subject property to Dolores Hacbang Alo; (2) the probate of the In his Comment, the respondent maintained that the petitioners had no right over
will is not conclusive as to the validity of its intrinsic provisions; and (3) only a final the property and moved to dismiss the present petition.
decree of distribution of the estate vests title on the properties from the estate on
2
OUR RULING gone to Bishop Sofronio's parents, the petitioners' ascendants. Thus, they claim to
have a legal interest in the subject lot as representatives of the other children of
At the outset, this Court observes that the parties and even the lower courts Bishop Sofronio's parents.
erroneously applied the provisions of the present Civil Code to the will and the
estate of Bishop Sofronio. The law in force at the time of the decedent's death We do not find the petitioners' argument meritorious.
determines the applicable law over the settlement of his estate.8 Bishop Sofronio
died in 1937 before the enactment of the Civil Code in 1949. Therefore, the correct Our jurisdiction has always respected a decedent's freedom to dispose of his estate,
applicable laws to the settlement of his estate are the 1889 Spanish Civil Code and whether under the Spanish Civil Code or under the present Civil Code. Article 763 of
the 1901 Code of Civil Procedure. the Spanish Code provides:cralawlawlibrary

In any case, under both the Spanish Code and our Civil Code, successional rights are Art. 763. El que no tuviere herederos forzosos puede disponer por testamento de
vested at the precise moment of the death of the decedent. Section 657 of the todos sus bienes o de parte de ellos en favor de cualquiera persona que tenga
Spanish code provides:cralawlawlibrary capacidad para adquirirlos. El que tuviere herederos forzosos solo podra disponer
de sus bienes en la forma y con las limitaciones que se establecen en la section
Art. 657. Los derechos a la sucesion de una persona se transmiten desde el quinta de este capitulo.chanrobleslaw
momento de su muerte.9chanrobleslaw
This provision states that a person without compulsory heirs may dispose of his
The inheritance vests immediately upon the decedent's death without a moment's estate, either in part or in its entirety, in favor of anyone capacitated to succeed
interruption. This provision was later on translated and adopted as Article 777 of him; if the testator has compulsory heirs, he can dispose of his property provided
our Civil Code.10 he does not impair their legitimes. This provision was later translated and adopted
as Article 842 of our Civil Code.12
As a consequence of this principle, ownership over the inheritance passes to the
heirs at the precisemoment of death - not at the time the heirs are declared, nor at Our jurisdiction accords great respect to the testator's freedom of disposition.
the time of the partition, nor at the distribution of the properties. There is no Hence, testate succession has always been preferred over intestacy.13 As much as
interruption between the end of the decedent's ownership and the start of the possible, a testator's will is treated and interpreted in a way that would render all of
heir/legatee/devisee's ownership. its provisions operative.14 Hence, there is no basis to apply the provisions on
intestacy when testate succession evidently applies.
For intestate heirs, this means that they are immediately entitled to their hereditary
shares in the estate even though they may not be entitled to any particular Even though the CFI archived the settlement proceedings, there is no indication
properties yet. For legatees and devisees granted specific properties, this means that it declared any of the dispositions in the will invalid. The records are
that they acquire ownership over the legacies and devises at that immediate understandably bare considering the probate proceedings were initiated as early as
moment without prejudice to the legitimes of compulsory heirs. 1937. Nonetheless, we find no reason to doubt the intrinsic validity of the will.

Undoubtedly, Bishop Sofronio did not die intestate. He left a will that was probated Bishop Sofronio was free to dispose of his estate without prejudice to the legitimes
in 1937. He left half of his properties to his parents and the remaining half to his of his compulsory heirs. Bishop Sofronio's only compulsory heirs were his
sister Dolores Hacbang Alo. The admission of his will to probate is conclusive with parents.15 Their legitime was one-half of Bishop Sofronio's estate.16 Considering that
respect to its due execution and extrinsic validity. 11 Bishop Sofronio gave his parents half of his estate, then he was free to dispose of
the free portion of his estate in favor of his sister, Dolores Hacbang Alo. Thus, his
Unfortunately, the settlement proceedings were never concluded; the case was will was intrinsically valid.
archived without any pronouncement as to the intrinsic validity of the will or an
adjudication of the properties. Because of this, the petitioners posit that intestate The CFPs failure to adjudicate the specific properties is irrelevant because Bishop
succession should govern. They maintain that the entire inheritance should have Sofronio did not just name his heirs; he also identified the specific properties
3
forming part of their inheritance. The dispositions in the will rendered court
adjudication and distribution unnecessary. Every action must also be prosecuted or defended in the name of the real party in
interest: the party who stands to be benefited or injured by the judgment. 19 These
The petitioners' contention that only a final decree of distribution of the estate fundamental requirements are not merely technical matters; they go into the very
vests title to the land of the estate in the distributees is also incorrect. Again, substance of every suit.
ownership over the inheritance vests upon the heirs, legatees, and devisees
immediately upon the death of the decedent. The petitioners came to the courts praying for the annulment of the respondent's
title yet they failed to show that they are entitled to even ask for such relief. They
At the precise moment of death, the heirs become owners of the estate pro- have no right over the subject lot and the respondent has no legal obligation to
indiviso. They become absolute owners of their undivided aliquot share but with them with respect to the subject lot. Even if we assume that the respondent
respect to the individual properties of the estate, they become co-owners. This co- fraudulently or irregularly secured his certificate of title, the bottom-line is that the
ownership remains until partition and distribution. Until then, the individual heirs petitioners have no legal standing to sue for the cancellation of this title. This right
cannot claim any rights over a specific property from the estate. This is because the only belongs to the rightful owner of the subject lot.
heirs do not know which properties will be adjudicated to them yet. Hence, there is
a need for a partition before title over particular properties vest in the distributee- Judicial power is the duty of the courts to settle actual controversies involving
heirs. rights which are legally demandable and enforceable.20 Courts settle real legal
disputes involving the rights and obligations between parties. If either of the parties
However, heirs, legatees, and devisees bequeathed specific properties do not is not the real party in interest, the Court cannot grant the reliefs prayed for
require Court adjudication to identify which particular properties become theirs; because that party has no legal right or duty with respect to his opponent. Further
the testator had already identified these. From the very moment of the testator's litigation becomes an academic exercise in legal theory that eventually settles
death, title over these particular properties vests on the heir, legatee, or devisee. nothing - a waste of time that could have been spent resolving actual justiciable
controversies.
On 3 April 1937, title over the subject lot passed on to the respondent's mother,
Dolores Hacbang Alo, at the exact moment of her brother's death. From that WHEREFORE, premises considered, the petition is DENIED for lack of merit. Costs
moment on, she was free to dispose of the subject lot as a consequence of her against the petitioners.
ownership.
SO ORDERED.chanroblesvirtuallawlibrary
On the other hand, Bishop Sofronio's parents, Basilio and Maria Gaborny Hacbang,
never acquired the title over the subject lot. Thus, it never became part of their
estate. Clearly, the petitioners - who claim to represent the children of Basilio and
Maria Gaborny in the spouses' estate -have no legal right or interest over the
subject lot.

Every ordinary civil action must be based on a cause of action - an act or omission
that violates the rights of the plaintiff.17 A cause of action
requires:chanRoblesvirtualLawlibrary

(1) a legal right in favor of the plaintiff;ChanRoblesVirtualawlibrary

(2) a correlative duty of the defendant to respect the plaintiffs right; and

(3) an act or omission of the defendant in violation of the plaintiffs right. 18


4
Believing that the decedent died intestate, the respondent heirs filed a petition
with the Las Pias RTC for the partition of the decedents estate and the
appointment of a special administrator on July 4, 2003. The case was raffled
to Branch 254 and docketed as Sp. Proc. Case No. SP-03-0060.

On July 11, 2003, the RTC appointed Alfonso Juan O. Olondriz, Jr. as special
administrator.

However, on July 28, 2003, Iris Morales filed a separate petition with the RTC
alleging that the decedent left a will dated July 23, 1991. Morales prayed for the
probate of the will and for her appointment as special administratrix. Her petition
was also raffled to Branch 254 and docketed as Sp. Proc. Case No. SP-03-0069.

The pertinent portions of the decedents will reads:

1. Upon my death, IRIS MORALES OLONDRIZ shall be the executor hereof and
G.R. No. 198994 administrator of my estate until its distribution in accordance herewith. x x x

IRIS MORALES, Petitioner, 2. My entire estate shall be divided into six (6) parts to be distributed equally
vs. among and between (1) IRIS MORALES OLONDRIZ, my children (2) ALFONSO JUAN
ANA MARIA OLONDRIZ, ALFONSO JUAN OLONDRIZ, JR., ALEJANDRO MORENO OLONDRIZ, JR., (3) ALEJANDRO OLONDRIZ, (4) ISABEL OLONDRIZ, (5) ANGELO
OLONDRIZ, ISABEL ROSA OLONDRIZ and FRANCISCO JAVIER MARIA OLONDRIZ, and their mother (6) MARIA ORTEGAS OLONDRIZ, SR.3
OLONDRIZ, Respondents.
Notably, the will omitted Francisco Javier Maria Bautista Olondriz, an illegitimate
DECISION son of the decedent.

This is a petition for review on certiorari filed by Iris Morales from the May 27, 2011 On September 1, 2003, Morales filed a manifestation in Sp. Proc. Case No. SP-03-
decision and October 12, 2011 resolution of the Court of Appeals (CA) in CA-G.R. SP 0060 and moved to suspend the intestate proceedings in order to give way to the
No. 102358.1 The CA denied Morales' petition for certiorarifrom the Regional Trial probate proceedings in Sp. Proc. Case No. SP-03-0069. The respondent heirs
Court's (RTC) July 12, 2007 and October 30, 2007 orders in SP. Proc. No. 03-0060 opposed Morales motion for suspension and her petition for allowance of the will.
and SP. Proc. No. 03-0069.2
On November 27, 2003, the RTC consolidated Sp. Proc. Case No. SP-03-
Antecedents 0060 with Sp. Proc. Case No. SP-03-0069.

Alfonso Juan P. Olondriz, Sr. (the decedent) died on June 9, 2003. He was survived On January 6, 2004, the respondent heirs moved to dismiss the probate
by his widow, Ana Maria Ortigas de Olondriz, and his children: Alfonso Juan O. proceedings because Francisco was preterited from the will.
Olondriz, Jr., Alejandro Marino O. Olondriz, Isabel Rosa O. Olondriz, Angelo Jose O.
Olondriz, and Francisco Javier Maria Bautista Olondriz. His widow and children are On January 10, 2006, Morales agreed to the holding of an evidentiary hearing to
collectively referred to as the respondent heirs. resolve the issue of preterition. Thus, the RTC ordered the parties to submit their

5
factual allegations to support or negate the existence of preterition. Only the On February 7, 2008, Morales filed a petition for certiorari against the orders of the
respondent heirs complied with this order. RTC. Morales alleged that the RTC acted with grave abuse of discretion in
proceeding intestate despite the existence of the will. The petition was docketed
After several postponements at the instance of Morales, the reception of evidence as CA-G.R. SP No. 102358.
for the evidentiary hearing was scheduled on May 29, 2006. However, Morales
failed to appear, effectively waiving her right to present evidence on the issue of On May 27, 2011, the CA dismissed Morales petition for certiorari. The CA
preterition. reasoned that while probate proceedings take precedence over intestate
proceedings, the preterition of a compulsory heir in the direct line annuls the
On June 23, 2006, the RTC, through Judge Gloria Butay Aglugub, suspended the institution of heirs in the will and opens the entire inheritance into intestate
intestate proceedings in Sp. Proc. Case No. SP-03-0060 and set the case for succession.4 Thus, the continuation of the probate proceedings would be
probate. The RTC reasoned that probate proceedings take precedence over superfluous and impractical because the inheritance will be adjudicated intestate.
intestate proceedings. The CA concluded that the RTC did not act with grave abuse of discretion.

The respondent heirs moved for reconsideration of the suspension order but the Morales moved for reconsideration which the CA denied on October 12, 2011.
RTC denied the motion on September 1, 2006. The RTC also summarily revoked the Hence, she filed the present petition for review on certiorari on December 5, 2011.
Letters of Administration previously issued to Alfonso Jr.
The Petition
The respondent heirs moved for reconsideration of the summary revocation of the
Letters of Administration. They also moved for the inhibition of Judge Aglugub of Morales maintains that the RTC committed grave abuse of discretion when it
Branch 254. ordered the case to proceed intestate because: (1) the probate of a decedents will
is mandatory; (2) the RTC Branch 254 already ordered the case to proceed into
On November 16, 2006, the RTC granted the motion for inhibition. The case was probate; (3) the order setting the case for probate already attained finality; (3) the
transferred to Branch 253 presided by Judge Salvador V. Timbang, Jr. probate court cannot touch on the intrinsic validity of the will; and (4) there was no
preterition because Francisco received a house and lot inter vivos as an advance on
On July 12, 2007, the RTC resolved (1) the respondent heirs motion for his legitime.
reconsideration of the revocation of the Letters of Administration and (2) Morales
motion to be appointed Special Administratrix of the estate. The RTC noted that The respondent heirs counter: (1) that it is within the RTCs jurisdiction to reverse
while testacy is preferred over intestacy, courts will not hesitate to set aside or modify an interlocutory order setting the case for probate; (2) that the petitioner
probate proceedings if it appears that the probate of the will might become an idle failed to mention that she did not appear in any of the evidentiary hearings to
ceremony because the will is intrinsically void. disprove their allegation of preterition; (3) that the RTC and the CA both found that
Francisco was preterited from the will; and (4) that Franciscos preterition annulled
The RTC observed: (1) that Morales expressly admitted that Francisco Javier Maria the institution of heirs and opened the case into intestacy. They conclude that the
Bautista Olondriz is an heir of the decedent; (2) that Francisco was clearly omitted RTC did not exceed its jurisdiction or act with grave abuse of discretion when it
from the will; and (3) that based on the evidentiary hearings, Francisco was clearly reinstated Alfonso Jr. as the administrator of the estate and ordered the case to
preterited. Thus, the RTC reinstated Alfonso Jr. as administrator of the estate and proceed intestate.
ordered the case to proceed in intestacy.
Our Ruling
Morales moved for reconsideration which the RTC denied on October 30, 2007, for
lack of merit. We join the ruling of the CA.

6
Preterition consists in the omission of a compulsory heir from the will, either concurred with the RTCs conclusion. We see no cogent reason to deviate from the
because he is not named or, although he is named as a father, son, etc., he is factual findings of the lower courts.
neither instituted as an heir nor assigned any part of the estate without expressly
being disinherited tacitly depriving the heir of his legitime.5 Preterition requires The remaining question is whether it was proper for the RTC to (1) pass upon the
that the omission is total, meaning the heir did not also receive any legacies, intrinsic validity of the will during probate proceedings and (2) order the case to
devises, or advances on his legitime.6 proceed intestate because of preterition.

In other words, preterition is the complete and total omission of a compulsory The general rule is that in probate proceedings, the scope of the courts inquiry is
heir from the testators inheritance without the heirs express disinheritance. limited to questions on the extrinsic validity of the will; the probate court will only
determine the wills formal validity and due execution.8However, this rule is not
Article 854 of the Civil Code states the legal effects of preterition: inflexible and absolute.9 It is not beyond the probate courts jurisdiction to pass
upon the intrinsic validity of the will when so warranted by exceptional
Art. 854. The preterition or omission of one, some, or all of the compulsory heirs in circumstances.10 When practical considerations demand that the intrinsic validity of
the direct line, whether living at the time of the execution of the will or born after the will be passed upon even before it is probated, the probate court should meet
the death of the testator, shall annul the institution of heir; but the devises and the issue.11
legacies shall be valid insofar as they are not inofficious.
The decedents will does not contain specific legacies or devices and Franciscos
If the omitted compulsory heirs should die before the testator, the institution shall preterition annulled the institution of heirs.1avvphi1 The annulment effectively
be effectual, without prejudice to the right of representation. (emphasis supplied) caused the total abrogation of the will, resulting in total intestacy of the
inheritance.12 The decedents will, no matter how valid it may appear extrinsically,
Under the Civil Code, the preterition of a compulsory heir in the direct line shall is null and void. The conduct of separate proceedings to determine the intrinsic
annul the institution of heirs, but the devises and legacies shall remain valid insofar validity of its testamentary provisions would be superfluous. Thus, we cannot
as the legitimes are not impaired. Consequently, if a will does not institute any attribute error much less grave abuse of discretion on the RTC for ordering the
devisees or legatees, the preterition of a compulsory heir in the direct line will case to proceed intestate.
result in total intestacy.7
Finally, there is no merit in the petitioners argument that the previous order
In the present case, the decedents will evidently omitted Francisco Olondriz as an setting the case for probate barred the RTC from ordering the case to proceed
heir, legatee, or devisee. As the decedents illegitimate son, Francisco is a intestate. The disputed order is merely interlocutory and can never become final
compulsory heir in the direct line. Unless Morales could show otherwise, Franciscos and executory in the same manner that a final judgment does. 13 An interlocutory
omission from the will leads to the conclusion of his preterition. order does not result in res judicata.14 It remains under the control of the court and
can be modified or rescinded at any time before final judgment.15
During the proceedings in the RTC, Morales had the opportunity to present
evidence that Francisco received donations inter vivos and advances on his legitime Certiorari is a limited form of review confined to errors of jurisdiction. An error of
from the decedent. However, Morales did not appear during the hearing dates, jurisdiction is one where the officer or tribunal acted without or in excess of its
effectively waiving her right to present evidence on the issue. We cannot fault the jurisdiction, or with grave abuse of discretion amounting to lack or excess of
RTC for reaching the reasonable conclusion that there was preterition. jurisdiction.16 As discussed, it is well within the jurisdiction of the probate court to
pass upon the intrinsic validity of the will if probate proceedings might become an
idle ceremony due to the nullity of the will.
We will not entertain the petitioners factual allegation that Francisco was not
preterited because this Court is not a trier of facts.1wphi1 Furthermore, the CA
On the other hand, grave abuse of discretion is the capricious and whimsical
exercise of judgment equivalent to an evasion of positive duty, or a virtual refusal to
7
act at all in contemplation of the law.17 It is present when power is exercised in a DULY-APPOINTED ATTORNEY-IN-FACT ANGELITO MEEZ, Petitioners, v. HEIRS OF
despotic manner by reason, for instance, of passion and hostility. Morales failed to JOSE MA. GEPUELA, Respondents.
show that the R TC acted in such a capricious and despotic manner that would have
warranted the CA's grant of her petition for certiorari. On the contrary, the RTC DECISION
acted appropriately in accordance with the law and jurisprudence.
JARDELEZA, J.:
WHEREFORE, the petition is DISMISSED. Costs against the petitioner.
These are consolidated petitions for review on certiorari assailing the
SO ORDERED. Decision1 dated January 31, 2005 and the Amended Decision2 dated July 21, 2006 of
the Court of Appeals (CA) which denied the appeals of both parties and affirmed
with modification the Decision3 dated May 25, 1999 of Branch 67 of the Regional
Trial Court of Pasig City. The assailed Amended Decision upheld the redemption
made by the late Jose Ma. Gepuela of the 36/72 pro indiviso share of the late Basilia
Austria Vda. de Cruz over the property covered by Transfer Certificate of Title (TCT)
No. 95524, except for the two and a half percent (2.5%) share of Hernita Meez-
Andres and her co-heirs.

The Facts

The controversy arose from the redemption made by the late Jose Ma. Gepuela
(Gepuela), petitioner in G.R. No. 173636, and transferee of an aliquot portion of the
property covered by TCT No. 95524, of the 36/72 pro indiviso share of Basilia
Austria Vda. de Cruz (Basilia). Hernita Meez-Andres and Nelia Mehez-Cayetano
(Hernita, et al.), petitioners in G.R. No. 173770, assailed the redemption on the
ground that Gepuela had no legal personality to make the redemption.

Basilia was the widow of Pedro Cruz, with whom she had five children, namely,
Perfecto, Alberto, Luz, Benita and Isagani. Basilia executed a Huling Habilin,4 where
she named her daughter Benita's children Hernita, Nelia, Rosemarie, Angel and
Gracita as voluntary heirs to ten percent (10%) of the free portion of her estate.
Basilia's Huling Habilin was admitted into ante-mortem probate on March 1,
1957.5 Her daughter Luz Cruz Salonga (Luz) was appointed Administratrix of Basilia's
G.R. No. 173636, January 13, 2016 estate on August 18, 1976.6

HEIRS OF JOSE MA. GEPUELA, Petitioners, v. HERNITA MEEZ-ANDRES, ET When Basilia died, she left behind considerable properties, including a 36/72 pro
AL., Respondents. indiviso share in a 5,492 square meter property in San Juan, then province of Rizal.
This property was covered by TCT No. 95524 and co-owned with some of Basilia's
G.R. No. 173770 children and grandchildren, as follows:
Basilia Austria Vda. de Cruz, widow36/72; Perfecto Cruz, married to Flavia Jorge
HERNITA MEEZ-ANDRES AND NELIA MEEZ CAYETANO, REPRESENTED BY THEIR 12/72; Luz Cruz, married to Feliciano Salonga12/72; Isagani Cruz, married to
Milagros Villarcal4/72; Flavia Jorge, married to Perfecto Cruz-2/72; Pedrito Cruz,

8
single-2/72; Perfecto Cruz, Jr., single2/72; Vito Cruz, 20 years of age, single year, reflecting Gepuela's ownership of the 36/72 pro indiviso share previously
2/72.7ChanRoblesVirtualawlibrary owned by Basilia.20
Perfecto and Flavia sold their interests (14/72 pro indiviso share) in the property to
Severino Etorma (Etorma), who later on sold the same to Gepuela and one Antonio The proceedings covering Basilia's estate were, per motion of her heirs, ordered
Cinco (Cinco). These transactions were annotated on TCT No. 95524 as Entry Nos. closed on February 15, 1996.21 The record also shows that Gepuela filed a case,
12640 and 73035, dated November 13, 1964 and November 18, 1971, docketed as SCA No. 302 with Branch 159 of the Regional Trial Court of Pasig, for
respectively.8 In 1978, Cinco sold his share to Gepuela.9 This was likewise annotated the partition of the property covered by TCT No. 5033-R.22 The lower court
in the title as Entry No. 3904 dated May 20, 1988.10 Luz also disposed, by way of a rendered a decision ordering the partition of the property. TCT No. 5033-R was
Sale of Rights with Mortgage, her 12/72 pro indiviso share in the property to cancelled and several titles were issued covering the respective shares of Gepuela,
Gepuela in another transaction registered as Entry No. 8536 dated May 8, 1989 on Isagani, Perfecto and Pedrito, and Vito Cruz in the property.23
TCT No. 95524.11
In the meantime, or on October 10, 1995, Basilia's grandchildren Hernita and Nelia
On July 29, 1986, Basilia's 36/72 pro indiviso share was sold in a public auction to filed a Complaint for Redemption and Consignation with Damages24 and a
satisfy the judgment in Civil Case No. 32824, entitled "Benita Me[]ez v. Luz Cruz subsequent Amended Complaint lor Declaration of Nullity of Redemption,
Salonga as Administratrix of the Estate of Basilia Austria Vda. [d]e Cruz." Benita, as Cancellation of Notation in Title, and Consignation with Damages25 against Gepuela.
judgment creditor in the case, emerged as the highest bidder. 12 This was docketed as Civil Case No. 65327 and raffled to Branch 67 of the Regional
Trial Court of Pasig City.
On May 14, 1987, Gepuela redeemed Basilia's 36/72 pro indiviso share from Benita
by paying the auction price of Four Hundred Seventy-Four Thousand Nine Hundred In their complaint, Hernita and Nelia alleged, among others, that: 1) Gepuela's
Seventy-Seven Pesos (P474,977.00), inclusive of interest and other legal fees.13 This redemption was null and void as he not being an heir, legatee/devisee, co-owner or
was inscribed on the title as Entry No. 022 dated May 14, 1987. Accordingly, creditor) did not have the legal personality to redeem the share;26 and 2) Hernita
Basilia's estate, through Administratrix Luz, executed a Deed of Sale14 and Waiver of and Nelia sent notices to Gepuela informing him of their intent to recover their
Redemption15 over the share, subject to the following conditions: 1) Gepuela should interest in Basilia's 36/72 pro indiviso share and to tender payment of the
obtain court approval of the sale; and 2) Gepuela should inform all heirs of the sale redemption price paid by him, plus interest, which Gepuela refused.27
formally in writing.
In his Answer with Compulsory Counterclaim28 dated December 28, 1995, Gepuela
After the expiration of the periods to redeem, Gepuela filed an action to denied Hernita and Nelia's allegations and alleged that his redemption had already
consolidate his ownership over the 36/72 pro indiviso share he acquired by way of been adjudicated by the trial court in LRC Case No. R-3855. This ruling has, in turn,
redemption from Basilia's estate. This was docketed as LRC Case No. R-3855 and been affirmed by the Seventh Division of the CA in CA G.R. CV No. 25605. No further
assigned to Branch 166 of the Regional Trial Court of Pasig. The other registered co- appeal having been made, Gepuela asserts that the CA's Decision became final and
owners Isagani, Perfecto, Jr., Pedrito, and Vito (Isagani, et al.) opposed this action, executory on February 26, 1992.29
raising Gepuela's lack of standing to redeem given that he is not a co-owner of
Basilia's one-half portion. In a Decision16 dated December 6, 1989, the trial court Ruling of the Regional Trial Court
granted Gepuela's petition, declared him the owner of Basilia's 36/72 pro
indiviso share in the parcel of land covered by TCT No. 95524 and ordered the In its Decision30 dated May 25, 1999, the trial court upheld Gepuela's redemption of
issuance of a new certificate of title to reflect this change in ownership. 17 Basilia's 36/72 pro indiviso share. It, however, ruled that because Gepuela failed to
formally notify Hernita, Nelia and Rosemarie of the redemption, the same was null
Aggrieved, oppositors Isagani, Perfecto, Jr., Pedrito, Vito and Alberto appealed the and void insofar as it affected the latter's six percent (6%) share in the property. The
trial court's Decision to the CA, docketed as CA-G.R. CV No. 25605. In a dispositive portion of the trial court's Decision reads:
Decision18 dated January 31, 1992, the CA, however, affirmed the trial court's WHEREFORE, in view of the foregoing, the Court hereby renders judgment in favor
findings. The CA's Decision in CA GR. CV No. 25605 was not appealed and became of plaintiffs HERNITA ME[]EZ ANDRES, NELIA ME[]EZ CAYETANO, ROSEMARIE
final and executory on February 26, 1992.19 TCT No. 5033-R was issued that same ME[]EZ PRONSTROLLER, all represented herein by their duly-appointed Attorney-
9
in-fact, ANGELINO ME[]EZ and against defendant JOSE MA. GEPUELA, declaring rather a co-owner of, the entire communal property "x x x because the two estates
that: are not separate and distinct properties but actually constitute one and the same
property owned in community and covered by the same TCI No. 95524." 34 Since
1. [T]he redemption made by defendant GEPUELA of the 36/72 portion of the redemption inures to the benefit of the other co-owners, the CA affirmed the trial
Estate of Basilia Austria Vda. [d]e Cruz as covered previously by TCT No. court's decision insofar as it nullified the redemption in proportion to Hernita, et
95524 and at present by TCT No. 5033-R is NULL AND VOID only insofar as al.'s respective shares.35
to the shares of plaintiffs which corresponds to Six Percent (6%) thereof;
The CA thereafter recomputed the corresponding shares as follows: Hernita, Nelia,
2. [P]laintiffs are allowed to consign with the Court the redemption price of and Rosemarie, with their siblings Angel and Granito, are instituted heirs entitled to
that portion which is their share of the 36/72 pro indiviso share of the ten percent (10%) of the free portion of Basilia's estate, equivalent to two and a half
Estate of Basilia Austria Vda. [d]e Cruz with interest at Twelve Percent 12% percent (2.5%) share in the property. They are likewise entitled to the five percent
per annum from the institution of this action until fully paid; (5%) share corresponding to the legitime of their deceased mother Benita, to which
they are entitled to, by right of representation, as the latter's heirs. The dispositive
3. [U]pon payment of the redemption price, and finality of this Decision the portion of the CA's Decision dated January 31, 2005 thus reads:
Register of Deeds of San Juan, Metro Manila is ordered to cancel Transfer WHEREFORE, both appeals of plaintiffs-appellants and defendant-appellant are
Certificate of Title No. 5033-R and to issue another Transfer Certificate of dismissed and the trial court's Decision dated May 25, 1999 is affirmed, with certain
Title reflecting therein the names of plaintiffs as owners of the pro modification. The award of attorney's fees is deleted and paragraphs 1, 2 and 3 of
indiviso share corresponding to six percent (6%) of the 36/72 pro the dispositive portion thereof arc modi lied to read as follows:
indiviso share of defendant Jose Ma. Gepuela; "1. [T]he redemption made by defendant GEPUELA of the 36/72 portion of the
Estate of Basilia Austria Vda. [d]e Cruz as covered previously by TCT No. 95524 and
4. [D]efendant is ordered to pay the amount of Two Hundred Thousand at present by TCT No. 5033-R is MULE AND VOID only insofar as to the shares of
Pesos (P200,000.00) for and as attorney's fees; plaintiffs (and their siblings Angel and Gracito Me[]ez) which correspond[] to 7.5%
thereof;
5. [T]o pay the cost of suit.
2. [P]laintiffs are allowed to consign with the Court the redemption price of that
31
SO ORDERED. ChanRoblesVirtualawlibrary portion which is their share of the 36/72 pro indiviso share of the Estate of Basilia
Both parties filed their respective appeals before the CA. 32 Austria Vda. de Cruz with interest at Twelve Percent 12% per annum from finality of
this Decision until fully paid;
Ruling of the Court of Appeals
3. [U]pon payment of the redemption price[] and finality of this Decision[,] the
The CA rejected both appeals and affirmed the trial court's Decision, with certain Register of Deeds of San Juan, Metro Manila is ordered to cancel Transfer
modifications. At the outset, the CA noted that the validity of Gepuela's Certificate of Title No. 5033-R and to issue another Transfer Certificate of Title
redemption has already been settled in LRC Case No. R-3855 and affirmed by the reflecting therein the names of plaintiffs as owners of the pro indivisoshare
CA in CA G.R. CV No. 25605. Since the Decision in said case had already become corresponding to 7.5% of the 36/72 pro indiviso share of defendant Jose Ma.
final and executory per entry of judgment dated February 26, 1992, the CA declared Gepuela.
that Hernita, et al. are barred from assailing it again under the principle of res The trial court's Decision is affirmed in all other respects.
judicata.33
SO ORDERED.36ChanRoblesVirtualawlibrary
Despite this, the CA still proceeded to resolve the case on the merits. Rejecting Both parties filed their respective motions for reconsideration.
Hernita, et al.'s claim that Gepuela had no personality to redeem Basilia's 36/72 pro
indiviso share, the appellate court held that Gepuela was not a stranger to, but In denying these motions, the CA held that: (1) under the principle of res judicata,
Hernita, et al. are barred from assailing the redemption made by Gepuela, the
10
validity of which had long been settled in LRC Case No. R-3855 and CA GR. CV No. corresponding to 2.5% of the 36/72 pro indiviso share in the name of defendant
25605;37 (2) the nullification of the redemption over Hernita, et al.'s proportionate Jose Ma. Gepuela.
share does not serve to disturb the final ruling in LRC Case No. R-3855 and CA G.R. SO ORDERED.44
CV No. 25605 because Hernita, et al.'s rights as co-owners were not resolved in said
cases;38 (3) the one year period provided under the Rules of Court to redeem Hence, these petitions.
applies to redemption of properties sold on execution whereas Hernita, et al.'s right
to recover their share is premised on the fact that they are co-owners of the subject G.R. No. 173636
property;39 (4) the lapse of about nine years from the auction sale cannot be
equated with laches because of the equitable considerations that Hernita, et al. The Heirs of Gepuela maintain that the CA erred in nullifying his redemption of the
were neither shown to have been notified of the auction sale in 1986, nor 36/72 pro indivisoshare of Basilia. They argue that:chanRoblesvirtualLawlibrary
impleaded as parties in the petition for consolidation subsequently filed by
defendant Gepuela;40 (5) the imposition of 12% interest per annum from finality of
(1) By issuing the assailed Decisions, the CA indirectly disturbed and altered the
Decision until fully paid is consistent with the guidelines laid down in Eastern
judgment rendered in LRC Case. No. R-3855 which had long attained finality;45
Shipping Lines case.41
(2) Even assuming arguendo that the redemption inured to the benefit of the
The CA, however, modified its ruling with respect to the computation of Hernita, et other co-owners, the latter should have timely opposed the action for
al.'s shares in Basilia's estate. According to the CA, since both parties attested to the consolidation of ownership or filed an annulment of the resulting judgment to
fact that Benita Cruz was still alive, Hernita et al.'s right to inherit by representation protect their interest;46
has not accrued as yet.42 Thus, they shall inherit from Basilia's estate only to the
extent of their right as devisees or voluntary heirs as per the Huling (3) There is nothing more for Hernita, et al. to inherit as the 36/72 share was sold
Habilin executed by the deceased Basilia.43 at auction and the estate failed to redeem the same within the period
provided by law;47
The dispositive portion of the CA's Decision, as amended, now
reads:chanRoblesvirtualLawlibrary (4) The Mariano case cited by the CA is inapplicable as there is no community of
interest (for the redemption to inure to the benefit of all co-owners) Gepuela
WHEREFORE, the motions for reconsideration filed by both parties are denied. The not being a co-owner of the 36/72 share which was the subject of the
Decision dated January 31, 2005 is modified to read as follows: execution sale;48
1. [T]he redemption made by defendant GEPUELA of the 36/72 portion of the
(5) Hernita et al. cannot feign ignorance of the sale in Gepuela's favor as the same
Estate of Basilia Austria Vda. [d]e Cruz as covered previously by TCT No. 95524 and
was duly annotated in the title;49 and
at present by TCTNo/5033-R is NULL AND VOID only insofar as to the shares of
plaintiffs (and their siblings Angel and Gracito Me[]ez) which corresponds (6) Interest should be reckoned not from the finality of decision but from the time
to 2.5% thereof; the redemption was made.50

2. [P]laintiffs are allowed to consign with the Court the redemption price of that
portion which is their share of the 36/72 pro indiviso share of the Estate of Basilia G.R. No. 173770
Austria Vda. de Cruz with interest at Twelve Percent 12% per annum from finality of
judgment until fully paid; Hernita et al., on the other hand, insist that Gepuela's redemption is null and void
for the following reasons:chanRoblesvirtualLawlibrary
3. [U]pon payment of the redemption price[] and finality of this Decision[,] the
Register of Deeds of San Juan, Metro Manila is ordered to cancel Transfer 1) Benita Meez, who purchased the property, was a co-owner thereof and
Certificate of Title No. 5033-R and to issue another Transfer Certificate of Title under Article 1620, when a co-owner purchases the property, no stranger may
reflecting therein the names of plaintiffs as owners of the pro indiviso share
11
redeem the same;
In the case of Degayo v. Magbanua-Dinglasan, we held that:
2) Gepuela is a complete stranger who could not redeem; Res judicata literally means "a mailer adjudged; a thing judicially acted upon or
decided; a thing or matter settled by judgment." It also refers to the rule that a final
3) The portions of the property purchased by Gepuela were in custodia legis by a judgment or decree on the merits by a court of competent jurisdiction is conclusive
probate court and could not have been purchased without court approval; of the rights of the parties or their privies in all later suits on points and matters
determined in the former suit. It rests on the principle thai parties should not to be
4) Gepuela will lose nothing if he is not able to redeem, his act was nothing but permitted to litigate the same issue more than once; that, when a right or fact has
an illegitimate act of expansion; been judicially tried and determined by a court of competent jurisdiction, or an
opportunity for such trial has been given, the judgment of the court, so long as it
5) Gepuela is conclusively estopped from claiming that he became a co-owner of
remains unreversed, should be conclusive upon the parlies and those in privity with
the property because he admitted otherwise. He claimed that he was a co-
them in law or estate.
owner in the estate of Pedro Cruz and not in the estate of Basilia;

6) Gepuela deceived the other heirs and co-owners by not informing the latter This judicially created doctrine exists as an obvious rule of reason, justice, fairness,
about the court proceedings initiated by him; and expediency, practical necessity, and public tranquility. Moreover, public policy,
judicial orderliness, economy of judicial time, and the interest of litigants, as well as
7) As instituted heirs of Basilia, llernita et al. had every right to redeem the the peace and order of society, all require that stability should be accorded
property for themselves and their co-heirs.51 judgments, that controversies once decided on their merits shall remain in repose,
that inconsistent judicial decision shall not be made on the same set of fads, and
Hernita, et al. also challenge the jurisdiction of the CA claiming that since Gepuela that there be an end to litigation which, without the doctrine of res judicata, would
did not present any evidence in the trial court, he and his successors-in-interest can be endless. (Citations omitted.)54ChanRoblesVirtualawlibrary
It is embodied in Section 47, Rule 39 of the Rules of Court which provides:
only raise pure questions of law, over which the appellate court has no
jurisdiction.52 SEC. 47. Effect of judgments or final orders. The effect of a judgment or final
order rendered by a court of the Philippines, having jurisdiction to pronounce the
The Issues judgment or final order, may be as follows:chanRoblesvirtualLawlibrary

The main issues presented for our consideration in this case are (1) whether (a) In case of a judgment or final order against a specific thing, or in respect to the
Gepuela's redemption of Basilia's 36/72 pro indiviso share in the subject property probate of a will, or the administration of the estate of a deceased person, or in
was valid; and (2) whether Hcrnita et al. could still redeem the 36/72 pro respect to the personal, political, or legal condition or status of a particular person
indiviso share. Before these issues can be resolved, however, we must determine or his relationship to another, the judgment or final order is conclusive upon the
whether the issues raised herein are already barred under the principle of res title to the thing, the will or administration, or the condition, status or relationship
judicata. of the person; however, the probate of a will or granting of letters of administration
shall only be prima facie evidence of the death of the testator or intestate;
The Court's Ruling
(b) In other cases, the judgment or final order is, with respect to the matter directly
We rule in favor of the heirs of Gepuela, petitioners in G.R. No. 173636. adjudged or as to any other matter that could have been raised in relation thereto,
conclusive between the parties and their successors in interest, by title subsequent
Under the rule of res judicata, a final judgment or decree on the merits by a court of to the commencement of the action or special proceeding, litigating for the same
competent jurisdiction is conclusive as to the rights of the parties or their privies in thing and under the same title and in the same capacity; and
all later suits, and on all points and matters determined in the former suit. 53
(c) In any other litigation between the same parties or their successors in interest,
that only is deemed to have been adjudged in a former judgment or final order
12
which appears upon its face to have been so adjudged, or which was actually and of the evidence or stipulations submitted by the parties at the trial of the case; (3) it
necessarily included therein or necessary thereto. must have been rendered by a court having jurisdiction over the subject matter and
There are two distinct concepts of res judicata: (1) bar by former judgment and (2) the parties; and (4) there must be, between the first and second actions, identity of
conclusiveness of judgment: parties, of subject matter and of cause of action. 56
The first aspect is the effect of a judgment as a bar to the prosecution of a second
action upon the same claim, demand or cause of action. In traditional terminology, We find that all of the foregoing elements are present in this case.
this aspect is known as merger or bar; in modern terminology, it is called claim
preclusion. There is no question that the Decision rendered in LRC Case No. R-3855 and
affirmed by the CA in CA G.R. CV No. 25605 had already become final for failure of
The second aspect precludes the relitigation of a particular fact of issue in another the parties to appeal the same. The Decision was rendered by the Regional Trial
action between the same parties on a different claim or cause of action. This is Court which had jurisdiction over the action (for consolidation of ownership filed by
traditionally known as collateral estoppel; in modern terminology, it is called issue Gepuela) and the parties thereto. It was a judgment on the merits, with the trial
preclusion. court rejecting the claims of the oppositors and declaring Gepuela as the owner of
the disputed one-half portion of the property covered by TCT No. 95524. 57
Conclusiveness of judgment finds application when a fact or question has been
squarely put in issue, judicially passed upon, and adudged in a former suit by a Furthermore, as between LRC Case No. R-3855 and Civil Case No. 65327 (the action
court of competent jurisdiction. The fact or question settled by final judgment or for nullity of the redemption filed by Hernita, et al.), there is identity of parties, of
order binds the parties to that action (and persons in privily with them or their subject matter, and of causes of action.
successors-in-interest), and continues to bind them while the judgment or order
remains standing and unreversed by proper authority on a timely motion or Id.ntity of subject matter, parties and causes of action
petition; the conclusively settled fact or question furthermore cannot again be
litigated in any future or other action between the same parties or their privies and It is not disputed that both LRC Case No. R-3855 and Civil Case No. 65327 involved
successors-in-interest, in the same or in any other court of concurrent jurisdiction, the same subject matter, that is, the 36/72 pro indiviso share of Basilia in the land
either for the same or for a different cause of action. Thus, only the identities covered by TCT No. 95524.
of parties and issues are required for the operation of the principle of
conclusiveness of judgment. LRC Case No. R-3855, on the one hand, was filed by Gepuela to consolidate his
ownership over Basilia's one-half portion of the parcel of land covered by TCT No.
While conclusiveness of judgment does not have the same barring effect as that of 95524. Isagani, Perfecto, Jr., Pedrito, and Vito, all registered co-owners of the whole
a bar by former judgment that proscribes subsequent actions, the former property, appeared as oppositors. In Civil Case No. 65327, on the other hand,
nonetheless estops the parties from raising in a later case the issues or points that Hernita, et al. sought to nullify the earlier redemption made by Gepuela over
were raised and controverted, and were determinative of the ruling in the earlier Basilia's portion and redeem the same for their own account as Basilia's instituted
case. In other words, the dictum laid down in the earlier final judgment or order heirs.
becomes conclusive and continues to be binding between the same parties, their
privies and successors-in-interest, as long as the facts on which that judgment was Thus, while there appears to be a lack of identity between the concerned parties
predicated continue to be the facts of the case or incident before the court in a and the causes of action involved in the two actions, it must be recalled that
later case; the binding effect and enforceability of that earlier dictum can no longer absolute identity is not required for res judicata to apply; substantial identity of
be re-litigated in a later case since the issue has already been resolved and finally parties and causes of actions is sufficient.58 The court articulated this principle
laid to rest in the earlier case.55 (Citations omitted; emphasis in the original) in Cruz v. Court of Appeals,59 to wit:
The former concept of res judicata, that is, bar by prior judgment, applies in this x x x Only substantial identity is necessary to warrant the application of res judicata.
case. The following requisites must concur in order that a prior judgment may bar a The addition or elimination of some parties does not alter the situation. There is
subsequent action, viz: (1) the former judgment or order must be final; (2) it must substantial identity of parties when there is a community of interest between a
be a judgment or order on the merits, that is, it was rendered after a consideration party in the first case and a party in the second case albeit the latter was not
13
impleaded in the first case. of the consolidation of Gepuela's ownership over Basilia's 36/72 pro indiviso share.
In fact, the issues presented against Gepuela's redemption over the disputed
In the case at bar, it is apparent that from the lace of the complaint for Quieting of portion had already been thoroughly ventilated in LRC Case No. R-3855. Thus,
Title, private respondent Rolando Bunag was not a party therein as his name does although ostensibly styled in different forms, the complaints in Civil Case No. 65327
not appear in the title. This, notwithstanding, his claim and that of the plaintiffs and LRC Case No. R-3855 are really litigating for the same tiling and seeking the
therein, which included private respondent Mariano Bunag, are the sameto be same relief, that is, to remove from Gepuela ownership over the disputed 36/72
declared the true owners of the parcel of land covered by Original Certificate of portion.
Title (OCT) No. 22262 and Transfer Certificate of Title (TCT) No. 67161 of the
Registry of Deeds of Nueva Ecija. Private respondent Rolando Bunag and the In fact, Civil Case No. 65327 was filed specifically seeking to declare the nullity of
plaintiffs are all heirs of the alleged owners of the parcel of land covered by OCT Gepuela's redemption of the one-half share previously owned by Basilia.65 This
No. 22262. Private respondent Rolando Bunag, though not a party therein, shared issue, however, has already been conclusively settled in LRC Case No. R-3855,
an identity of interest from which flowed an identity of relief sought, namely, to where the trial court upheld Gepuela's redemption of the share and declared him
declare them the true owners of the parcel of land covered by OCT No. 22262 and absolute owner of the same.
TCT No. 67161. Such identity of interest is sufficient to make them privy-in-law,
thereby satisfying the requisite of substantial identity of parties.60 (Emphasis Hernita, et al. are not indispensable parlies to LRC Case No. R-3855; their non-
supplied; citations omitted.) participation does not affect the validity of the decision rendered
In this case, Hernita, et al., though not a party to LRC Case No. R-3855, share an
identity of interest with Isagani, et al., in that they (1) are heirs of Basilia, the owner Hernita, et al., in their comment to Gepuela's petition, argue that the doctrine oi res
of the disputed 36/72 portion of the land covered by TCT No. 95524, and (2) both judicata "does not at all attach, because the judgment in LRC Case No. [R-3855] is
sought to challenge the redemption made by Gepuela of the said portion of not valid for lack of due process and in the absence of indispensable parties." 66 As
property. Following the ruling in Cruz, both Hernita, et al. and Isagani, et al. can be indispensable parties who were not made part of the proceedings, Hernita, et al.
considered to share "an identity of interest from which flowed an identity of relief claim that they cannot be bound by the decision in LRC Case No. R-3855 or the
sought,"61 that is, to be eventually declared owners of the portion being contested. appeal in CA-GR. No. 25605.67

Similarly, we find that there is identity in the causes of action involved in LRC Case We reject this contention.
No. R-3855 and Civil Case No. 65327. To reiterate, for the doctrine of res judicata to
apply, identity of causes of action does not mean absolute identity. Otherwise, a An indispensable party is defined as a party in interest without whom no final
party could easily escape the operation of the doctrine by simply changing the form determination can be had of an action.68 Hernita, et al. are voluntary heirs to ten
of the action or the relief sought.62 percent of the free portion of Basilia's estate.69In fact, the complaint filed by
Hernita, et al. in Civil Case No. 65327 reads:
In Benedicto v. Lacson,63 we held: III. Causes of Action
The test to determine identity of causes of action is to ascertain whether the same
evidence necessary to sustain the second cause of action is sufficient to authorize a 3.1 As instituted heirs in the "Huling Habilin" of Bnsilia Austria Vila. [d]e Cruz, it is
recovery in the first, even if the forms or the nature of the two (2) actions are indubitable that the plaintiffs are co-owners of the 36/72 pro-indiviso share of the
different from each other. If the same facts or evidence would sustain both, the estate of said decedent in the property formerly covered by [TCT] No. 95524 and
two (2) actions are considered the same within the rule that the judgment in the now covered by [TCT] No. 5033-R and they are legally entitled to redeem the
former is a bar to the subsequent action; otherwise, it is not. This method has been samepursuant to Article 1620 of the Civil Code[.]70 (Emphasis and underscoring
considered the most accurate test as to whether a former judgment is a bar in supplied)
subsequent proceedings between the same parties. It has even been designated as Given their limited participation in the estate, this Court is at a loss as to how
infallible.64(Emphasis supplied) Hernita, et al. can be considered indispensable parties for purposes of LRC Case No.
The allegations in Civil Case No. 65327 show that Hernita, et al. are seeking exactly R-3855, an action to consolidate Gepuela's title over the property covered by TCT
the same relief sought by the oppositors in LRC Case No. R-3855, that is, the denial No. 95524. The claim all the more fails to persuade especially when one considers
14
that the estate itself, through its Administratrix, and all the other registered co- have no right to claim any specific property of the estate, such as the contested
owners of aliquot portions of the property (namely, Isagani, Perfecto Jr., Pedrito, 36/72 pro indiviso share in the property, until after the estate had been settled and
Vito and Alberto Cruz) appear to have been properly notified of and, in fact, actively distributed in accordance with law.
participated in, the proceedings in LRC Case No. R-3855.
WHEREFORE, premises considered, the Petition in G.R. No. 173636 is GRANTED.
We further note from Hernita, et al.'s comment that the decision in LRC Case No. R- The assailed Decisions of the CA affirming with modification the Regional Trial
3855 was subject of a petition for annulment of judgment (docketed as CA G.R. SP Court's Decision are SET ASIDE. The Petition in G.R. No. 173770 is DENIED for lack of
No. 50424) filed by their mother Bcnita.71 In that case, Benita alleged nullity of the merit.
proceedings on grounds of extrinsic fraud, want of jurisdiction and denial of due
process. We take judicial notice,72 however, of the Decision rendered by the CA SO ORDERED
denying the petition for lack of merit.73 The CA's finding was later on affirmed by
this Court which denied with finality Benita's petition for the annulment of the
decision in LRC Case No. R-3855.74

In sum, inasmuch as both LRC Case No. R-3855 and Civil Case No. 65327 are
anchored on the same cause of action, based on identical facts, and even claim the
same reliefs, we hold that the latter case is barred by the decision in the former
case. The CA therefore erred when, after declaring that the Decision in LRC Case No.
R-3855 had become final, executory and unappealable, it still modified the terms of
the case and awarded Hernita, et al. with portions of the property allegedly
corresponding to their shares as instituted heirs of Basilia's estate.
G.R. No. 193374, June 08, 2016
Hernita, et al. cannot claim a stake over a specific property of the decedent.
HEIRS OF THE LATE GERRY* ECARMA, NAMELY: AVELINA SUIZA-ECARMA, DENNIS
Even assuming that res judicata would not bar Civil Case No. 65327, Hernita, et al.'s ECARMA, JERRY LYN ECARMA PENA, ANTONIO ECARMA AND NATALIA ECARMA
claim of a right to redeem Basilia's disputed share would still not prosper. SANGALANG, Petitioners, v. COURT OF APPEALS AND RENATO A.
ECARMA, Respondents.
First. As instituted heirs only to a part of the free portion of Basilia's estate, Hernita,
et al. are entitled to receive their share of the same, if any, only after payment of all
DECISION
debts, funeral charges, expenses of administration, allowance to the widow and
inheritance tax.75 Otherwise stated, their share would be dependent on whether
anything is left of the estate after payment of all its obligations. We here have another case of heirs quarrelling over inherited properties, some of
them refusing their partition.
In this case, the disputed 36/72 pro indiviso share was sold at public auction to
satisfy the judgment claim of a creditor (Benita) of the estate. When it was Before us is a Petition for Certiorari1 under Rule 65 of the Rules of Court assailing
redeemed by Gepuela, no further redemption was made. Upon expiration of the the twin Resolutions2of the Court of Appeals (CA) in CA-G.R. CV No. 92375 for
periods to redeem, Gepuela became entitled, as a matter of right, to the having been issued with grave abuse of discretion amounting to lack of or in excess
consolidation of the ownership of the share in his name. The share no longer of jurisdiction. The appellate court dismissed outright the appeal of petitioners,
formed part of the estate which can theoretically be distributed to Hernita, et al. as heirs of Gerry Ecarma for a number of procedural defects, including failure to
Basilia's voluntary heirs. comply with Section 13, Rule 44 of the Rules of Court on the contents of their
appellants' brief. Petitioners sought to appeal the two (2) Orders3 of the Regional
Second, and more importantly, as voluntary heirs to the free portion, Hernita, et al. Trial Court (RTC), Branch 220, Quezon City in SP PROC. No. Q-90-6332 which
15
approved the Project of Partition proposed by respondent Renato Ecarma, previous pleadings, xxx
administrator in the intestate proceedings to settle the estate of decedent Arminda
vda. de Ecarma covering four (4) properties. 2. This, Court has ordered the sale of the assets of the estate in an earlier order, but
efforts to sell the Kitanlad property, the most contentious issue, by the Regular
Because of the outright dismissal of their appeal before the CA, we have a dearth of Administrator, [Renato Ecarma |, has been thwarted by Jerry for reasons already
facts we had to glean from the bare pleadings of petitioners. known by this Court, xxx

The decedent Arminda was married to Natalio Ecarma who predeceased her on 9 3. The law frowns on the indivision of property held in common indefinitely.
May 1970. During their marriage, they acquired several properties and begat seven Furthermore, the legal heirs, except Jerry and perhaps the Oppositor, have
(7) children: (1) Angelita; (2) Rodolfo; (3) respondent Renato; (4) Maria Arminda; (5) expressed their desire to have the Kitanlad property partitioned. The fairest legal
Gerry Anthony Ecarma, husband and father respectively of herein petitioners way to partition the property without any legal heir getting a share bigger than the
Avelina Suiza Ecarma, Dennis Ecarma, Gerry Lyn Ecarma Pena, Antonio Ecarma and others is to sell the property and divide the net proceeds, but Jerry's objection to its
Natalia Ecarma Sangalang (collectively petitioners and/or heirs of Gerry Ecarma); (6) sale at a price which will attract interested buyers has rendered nugatory this
Fe Shirley; and (7) Rolando. option. The next best option, with no legal heir getting an undue advantage over
the others, is to divide the property longitudinally from the frontage down to the
After Natalio's death, his heirs executed an Extrajudicial Settlement of other end in seven equal parts. Although this option will render the improvements
Estate4 covering four (4) properties designated as Kitanlad, Cuyapo and Lala unusable, it must be realised that these improvements are now fully depreciated.
(consisting of two separate lots), half of which was specifically noted as pertaining The. duplex house is 57 years old, while the apartments are now 40 years old. All
to herein decedent Arminda's share in their property regime of conjugal seven parts will be equal to each other in all their aspects: the measurements,
partnership of gains. In the same Extrajudicial Settlement of Estate signed by all the length and width, will be the same, each part will have a frontage to the street.
heirs, the four (4) properties were partitioned among them: Arminda was assigned Each legal heir will have complete control over his/her portion. Me/she may keep it
an undivided two-ninth's (2/9's) proportion and all their children in equal if he/she wishes, or sell it if he/she desires. Allocation of these seven parts will be
proportion of one-ninth (1/9) each. Significantly, despite the partition agreement, by lot.5
no physical division of the properties was effected, Natalio's heirs remaining in co-
ownership (pro indiviso) even at the time of their mother's, decedent Arminda's,
On 7 April 2005, Renato filed another motion, Omnibus Motion: Project of Partition
death on 17 April 1983.
of the Lala and Cuyapo Properties.
On 18 May 1990, after his petition for the probate of Arminda's will was dismissed Finding the motions impressed with merit, the RTC, Branch 220, on 28 July
by the RTC, Branch 86, Quezon City, respondent Renato filed the subject intestate
2005,6 issued a lengthy Order approving the proposed partition of the properties:
proceedings before the RTC, Branch 220.
1. That the property be divided longitudinally from the frontage down to the
On 30 January 1991, Renato was appointed Special Administrator by the RTC,
other end in seven (7) equal parts. The shares of Jerry Ecarma and Rodolfo
Branch 220.
Ecarma shall be contiguous to each other on one side of the property
nearest the main entrance, while the shares of the other five (5) legal heirs
After what appears to be continuing conflict between Gerry Ecarma and the other
shall comprise the balance thereof. Following this general guideline, Jerry
heirs of Natalio and Arminda over actual division of their inherited properties, by 9
Ecarma and Rodolfo Ecarma shall determine among themselves their
March 2005, Renato unequivocally moved to terminate their co-ownership: he filed
respective share. Similarly, the five (5) remaining legal heirs shall
a Project of Partition of the Kitanlad Property, alleging that:
determine among themselves by draw of lot their respective shares. They
shall submit to the Petitioner/Regular Administrator their choice of their
1. This probate case has been left unresolved for 16 years now because of the
specific shares not later [than] fifteen (15) days upon receipt of this Order.
incessant opposition by Oppositor and legal heir, Jerry Ecarma, the only legal heir
Should they fail to comply, the Regular Administrator is hereby directed to
who stays in Kitanlad, for reasons they had ventilated already in this Court in their
16
assign the respective share of each legal heir. project of partition of the Kitanlad properties is not feasible, impractical and
detrimental to the interests of the heirs of the Spouses Natalio and Arminda
xxxx Ecarma; (2) the planned partition is not in accordance with the wishes of the
decedents, the spouses Natalio and Arminda; and (3) the RTC, Branch 220, as the
court settling the intestate estate of Arminda, has no jurisdiction over part of.the
II. Cuyapo Property subject properties which do not form part of Arminda's estate, such undivided
share already pertaining to the other heirs as part of their inheritance from their
deceased father, Natalio.
1. The Cuyapo farm lot shall be partitioned into seven (7) equal parts
substantially in accordance with Annex "A" of the "Partial Project of The other oppositor to the partition, Rodolfo Ecarma, likewise filed a Motion for
Partition of Estate" dated 22 June 1992. Lots 1 and 2 will be allocated to Reconsideration of the 28 July 2005 Order of Partition on the main ground, akin to
Jerry Ecarma and Rodolfo Ecarma, so that the remaining balance will the 3rd ground raised by Gerry in his motion, that the RTC, Branch 220 acted
remain contiguous to one another. The remaining balance, as prayed for, without or in excess of jurisdiction by ordering the partition of the subject
can now be donated by the five (5) other legal heirs to the Armed Forces of properties, portions of which do not belong to the intestate estate of Arminda.
the Philippines (AFP). This manner of partition will effectuate the desire of
the five (5) remaining legal heirs to donate their share to the AFP. After Renato filed his Comment/Opposition to the two motions for reconsideration,
the RTC, Branch 220, finding no cogent reason to reverse or modify its prior order
2. The Regular Administrator is hereby directed to cause the partition and of partition, issued an Order denying Gerry's and Renato's motions.
titling of the property.
Thereafter, Gerry filed both a Notice of Appeal and a Record on Appeal before the
3. Expenses for the partition and titling of the property shall be for the RTC, Branch 220 to bring up on appeal to the CA the trial court's partition order.
personal account of each legal heir, which shall be deducted from their
share of the estate. It appears that sometime before 4 May 2009, counsel of Gerry Ecarma filed a Notice
of Death of Gerry Ecarma before the appellate court and was subsequently required
by the latter to submit a certified true copy of Gerry Ecarma's death certificate
within a prescribed period.8
III. Lala Property
Meanwhile, herein petitioners, presumably in substitution of the deceased Gerry
Ecarma, filed their Appellants' Brief pursuant to the order of the appellate court.
1. The Lala Property consisting of two (2) farm lots contiguous to each other,
From this incident of herein petitioners' Appellants' Brief before the CA, and its
one consisting of more than six (6) hectares and the other more than 13
contents, the controversy has reached us.
hectares shall each be partitioned into seven (7) equal parts substantially
in accordance with Annex "B" of the aforecited "Partial Project of Partition
Renato forthwith filed a Motion to Dismiss Appellants' Brief, to which the CA
of Estate" dated 22 June 1992, as submitted by the Regular Administrator.
required a comment from petitioner.9
Lots 6 and 7 of the six-hectare lot will while Lots 1 and 2 of the 13-hectare
lot will be likewise allocated to Jerry Ecarma and each other. The
The Resolutions of the CA finding insufficient herein petitioners' Appellants' Brief
remaining balance can now be donated by the five (5) other legal heirs to
are now before us. The CA ruled that:
the AFP. This manner of partition will effectuate the desire of the five (5)
remaining legal heirs to donate their shares to the AFP. 7
The Court xxx finds [petitioners'] submission [that their brief substantially complied
with the requirements under Section 13, Rule 44 of the Rules of Court] to be utterly
devoid of merit. Indeed, [petitioners'] brief does not contain a subject index, table
Gerry Ecarma filed a motion for reconsideration on the following grounds: (1) the of cases and authorities, statement of case, statement of facts and page references
17
to the record in violation of Section 13, Rule 44 of the 1997 Rules of Civil Procedure
xxx. Petitioners simple allegation of grave abuse of discretion in the CA's dismissal of
their appeal cannot substitute for the correct remedy of a lost appeal.14
xxxx
Notably, as they have stubbornly done so in the appellate court, petitioners urge us
Non-compliance with these requirements warrants the dismissal of appeal under to reverse these adverse rulings of the appellate court without abiding by the rules
Section 1(1), Rule 50. therefor.

xxxx First. An appeal by certiorari under Rule 45 of the Rules of Court is different from a
petition for certiorari under Rule 65 thereof. A special civil action for certiorari may
[Petitioners] could have easily cured these multiple defects in the same manner be availed of only if the lower tribunal has acted without or in excess of jurisdiction,
their counsel did with his MCLE compliance and SPA. But, they opted not to. or with grave abuse of discretion amounting to lack or excess of jurisdiction, and if
Instead, they stubbornly insist, albeit erroneously, that their appellants' brief there is no appeal or any other plain, speedy, and adequate remedy in the ordinary
substantially complied with the requirements. They failed, however, to point out course of law. 5 Simply imputing in a petition that the ruling sought to be reviewed
with specificity what part or parts of their brief contain their so-called substantial is tainted with grave abuse of discretion does not magically transform a petition
compliance. Surely, the Court cannot countenance [petitioners'] careless attitude, if into a special civil action for certiorari.
not irreverent disregard, of the procedural rules intended precisely to ensure
orderly administration of justice. The appellate court's outright dismissal of therein appellants' appeal was a final
order which left it with nothing more to do to resolve the case. 16 That disposition is
xxxx a final and executory order, appealable to, and may be questioned before, this
Court by persons aggrieved thereby, such as herein petitioners, viaRule 45.
Accordingly, the appeal is DISMISSED.10
Moreover, the dismissal of therein appellants', herein petitioners', appeal before
Petitioners moved for reconsideration of the dismissal of their appeal, attaching a the CA is expressly allowed by Section 1(f),17 Rule 50 of the Rules of Court. The
Supplemental Appellants' Brief11 to their motion. However, the appellate court appellate court, therefore, cannot be charged with grave abuse of discretion as
again deemed the Supplemental Appellants' Brief to be unsatisfactory and non- there is no showing that, in the exercise of its judgment, it acted in a capricious,
compliant with the rules and denied petitioners' motion for reconsideration: whimsical, arbitrary or despotic manner tantamount to lack of jurisdiction. Absent
grave abuse of discretion, petitioners should have filed a petition for review
Notably, the new appeal brief, just like the original one, does not contain reference on certiorari under Rule 45 instead of a petition for certiorari under Rule 65. The
to the relevant portions of the record pertaining to its statement of facts. Further, soundness of the ruling dismissing petitioners' appeal before the appellate court is
the subject index does not contain a summary of arguments and reference to the a matter of judgment with respect to which the remedy of the party aggrieved is a
specific pages of the brief, and the supporting laws and authorities. 12 Rule 45 petition. An error of judgment committed by a court in the exercise of its
legitimate jurisdiction is not the same as grave abuse of discretion. Errors of
From that denial, petitioners filed this petition for certiorari under Rule 65 of the judgment are correctible by appeal, while those of jurisdiction are reviewable by
Rules of Court almost sixty (60) days from the time they received the appellate certiorari.18
court's denial of their motion for reconsideration.
Even if we were to take a liberal stance and consider this present petition as that
At the outset, we see through petitioners' obvious ploy to avoid the necessary filed under Rule 45 of the Rules of Court raising grave error in the appellate courts'
consequence of their failure to file, within the required fifteen-day period, the ruling, such cannot cure the unavoidable consequence of dismissal for failure to file
correct remedy of appeal by certiorari under Rule 4513 of the Rules of Court, from an appeal within the reglementary fifteen-day period provided under Section 219 of
the assailed ruling of the CA. On this score alone, the present petition should have Rule 45.
been dismissed outright.
18
Second. The CA correctly dismissed herein petitioners' Appellants' Brief for failure statutes cited:
to comply with the content requirement specified under Section 13 20 of Rule 44. chanRoblesvirtualLawlibrary
Section 13. Contents of the appellant's brief. - The appellant's brief shall contain, in
Petitioners are adamant, however, that they complied with the required content the order herein indicated, the following:
specified in the rules even attaching a sample copy of an Appellant's Brief found in chanRoblesvirtualLawlibrary
Guevarra's Legal Forms which was purportedly their guideline in revising and (a) A subject index of the matter in brief with a digest of the arguments and page
submitting their Supplemental Appellants' Brief to the appellate court. 21 references, and a table of cases alphabetically arranged, textbooks and statutes
cited with references to the pages where they are cited;
We assiduously went through the Supplemental Appellants' Brief of herein
petitioners and as the CA have, we likewise find it wanting, a lame attempt at xxxx
compliance through superficial changes, devoid of substance.22
(c) Under the heading "Statement of the Case," a clear and concise statement of the
In fact, the Supplemental Appellants' Brief could only cite Section 1, Rule 74 of the nature of the action, a summary of the proceedings, the appealed rulings and
Rules of Court as its sole legal authority in questioning the RTC, Branch 220's Order orders of the court, the nature of the controversy, with page references to the
of Partition.23 Petitioners, even in their present petition before us, are unable to record;
grasp the necessity of supporting and anchoring their arguments with legal basis.
They cannot simply cite one section of one rule without expounding thereon. (d) Under the heading "Statement of Facts," a clear and concise statement in a
narrative form of the facts admitted by both parties and of those in controversy,
In the recent case of Lui Enterprises, Inc., v. Zuellig Pharma Corporation, et al. ,24 we together with the substance of the proof relating thereto in sufficient detail to
reiterated the faithful adherence to the rules on the specific contents of an make it clearly intelligible, with page references to the record;
Appellant's Brief as provided in Section 14, Rule 44 of the Rules of Court:
xxxx
Lui Enterprises did not comply with the
rules on the contents of the appellant's brief (f) Under the heading "Argument," the appellant's arguments on each assignment
of error with page references' to the record. The authorities relied upon shall be
Under Rule 50, Section 1, paragraph (f) of the 1997 Rules of Civil Procedure, the cited by the page of the report at which the case begins and the page of the report
Court of Appeals may, on its own motion or that of the appellee, dismiss an appeal on which the citation is found;
should the appellant's brief lack specific requirements under Rule 44, Section 13, xxxx
paragraphs (a), (c), (d), and (f):
chanRoblesvirtualLawlibrary Lui Enterprises' appellant's brief lacked a subject index, page references to the
Section 1. Grounds for dismissal of appeal. - An appeal may be dismissed by the record, and table of cases, textbooks and statutes cited. Under Rule 50, Section 1 of
Court of Appeals, on its own motion or on that of the appellee, on the following the 1997 Rules of Civil Procedure, the Court of Appeals correctly dismissed Lui
grounds: Enterprises' appeal.
chanRoblesvirtualLawlibrary
xxxx Except for cases provided in the Constitution, appeal is a "purely statutory
right."The right to appeal "must be exercised in. the manner prescribed by law" and
(f) Absence of specific assignment of errors in the appellant's brief, or of page requires strict compliance with the Rules of Court on appeals. Otherwise, the
references to the record as required in Section 13, paragraphs (a), (c), (d), and (f) of appeal shall be dismissed, and its dismissal shall not be a deprivation of due process
Rule 44[.] of law.
These requirements are the subject index of the matter in brief, page references to
the record, and a table of cases alphabetically arranged and with textbooks and In Mendoza v. United Coconut Planters Bank, Inc., this court sustained the Court of
Appeals' dismissal of Mendoza's appeal. Mendoza's appellant's brief lacked a
19
subject index, assignment of errors, and page references to the record. In De Liano appellate court to substantially attend to this case as well as other cases.
v. Court of Appeal, this court also sustained the dismissal of De Liano's appeal. De
Liano's appellant's brief lacked a subject index, a table of cases and authorities, and Page references to the record guarantee that the facts stated in the appellant's
page references to the record. brief are supported by the record. A statement of fact without a page reference to
the record creates the presumption that it is unsupported by the record and, thus,
There are exceptions to this rule. In Philippine Coconut Authority v. Corona "may be stricken or disregarded altogether."
International, Inc., the Philippine Coconut Authority's appellant's brief lacked a clear
and "concise statement of the nature of the action, a summary of the proceedings, As for the table of cases, textbooks, and statutes cited, this is required so that the
the nature of the judgment, and page references to the record. However, this court Court of Appeals can easily verify the authorities cited "for accuracy and aptness."
found that the Philippine Coconut Authority substantially complied with the Rules.
Its appellant's brief apprise[d] [the Court of Appeals] of the essential facts and Lui Enterprises' appellant's brief lacked a subject index, page references to the
nature of the case as well as the issues raised and the laws necessary [to dispose of record, and a table of cases, textbooks, and statutes cited. These requirements
the case]." This court "[deviated] from a rigid enforcement of the rules" and "were designed to assist the appellate court in the accomplishment of its tasks, and,
ordered the Court of Appeals to resolve the Philippine Coconut Authority's appeal. overall, to enhance the orderly administration of justice." This court will not
disregard rules on appeal "in the guise of liberal construction." For this court to
In Go v. Chaves, Go's 17-page appellant's brief lacked a subject index. However, Go liberally construe the Rules, the party must substantially comply with the Rules and
subsequently filed a subject index. This court excused Go's procedural lapse since correct its procedural lapses. Lui Enterprises failed to remedy these errors.
the appellant's brief "[consisted] only of 17 pages which [the Court of Appeals] may
easily peruse to apprise it of [the case] and of the relief sought." This court ordered All told, the Court of Appeals did not err in dismissing Lui Enterprises' appeal. It
the Court of Appeals to resolve Go's appeal "in the interest of justice." failed to comply with Rule 44, Section 13, paragraphs (a), (c), (d), and (f) of the 1997
In Philippine Coconut Authority and Go, the appellants substantially complied with Rules of Civil Procedure on the required contents of the appellant's brief.
the rules on the contents of the appellant's brief. Thus, this court excused the
appellants' procedural lapses. Third. While we sustain the appellate court's dismissal of herein petitioners' appeal,
we find it imperative to rule on the merits of the RTC, Branch 220's Order of
In this case, Lui Enterprises did not substantially comply with the rules on the Partition to forestall any further delay in the settlement of decedent Arminda's
contents of the appellant's brief. It admitted that its appellant's brief lacked the estate which has been pending since 1990 where Order of Partition of the subject
required subject index, page references to the record, and table of cases, textbooks, properties was issued on 28 July 2005. We note also that petitioners themselves
and statutes cited. However, it did not even correct its admitted "technical pray for a ruling thereon.
omissions" by filing an amended appellant's brief with the required contents. Thus,
this case does not allow a relaxation of the rules. The Court of Appeals did not err in There is no quarrel from any of the parties that the subject properties were
dismissing Lui Enterprises' appeal. originally part of the conjugal partnership of gains property regime of the deceased
spouses Natalio and Arminda.25 The nature of these properties as part of the
Rules on appeal "are designed for the proper and prompt disposition.of cases spouses' conjugal properties was confirmed in the Extrajudicial Settlement of the
before the Court of Appeals." With respect to the appellant's brief, its required Estate of Natalio signed by all his heirs, his spouse Arminda and their children,
contents are designed "to minimize the [Court of Appeals'] labor in [examining] the including predecessor of herein petitioners, Gerry Ecarma.26
record upon which the appeal is heard and determined."
Essentially, pursuant to this Extrajudicial Settlement, Arminda was apportioned
The subject index serves as the briefs table of contents. Instead of "[thumbing] two-ninth's (2/9's) share, while her children were equally ascribed one-ninth (1/9)
through the [appellant's brief]" every time the Court of Appeals Justice encounters portion, of the subject properties. Upon Arminda's death, her heirs' rights to the
an argument or citation, the Justice deciding the case only has to refer to the succession (covering Arminda's share in the subject properties) vested and their co-
subject index for the argument or citation he or she needs. This saves the Court of ownership over the subject properties has consolidated by operation of
Appeals time in reviewing the appealed case. Efficiency allows the justices of the law.27Effectively, without a valid will of Arminda, and as Arminda's compulsory
20
heirs,28 herein parties (specifically Gerry Ecarma prior to his death and substitution testator should have expressly forbidden its partition, in which case the period of
by herein petitioners) all ipso facto co-owned the subject properties in equal indivision shall not exceed twenty years as provided in Article 494. This power of
proportion being compulsory heirs of the deceased spouses Natalio and Arminda. 29 the testator to prohibit division applies to the legitime.

There appears to be no clear objection, therefore, to the RTC, Branch 220's Order of Even though forbidden by the testator, the co-ownership terminates when any of
Partition approving the proposal of the administrator, herein respondent Renato, the causes for which partnership is dissolved takes place, or when the court finds
for the equal division of the properties: for compelling reasons that division should be ordered, upon petition of one of the
co-heirs.
1. The Kitanlad property: longitudinally from the frontage down to the other end
with the shares of the [oppositors to the partition] Jerry Ecarnia and Rodolfo The impasse between the parties is due to herein petitioners' persistent objection
Ecarma contiguous to each other on one side of the property nearest to the main to proposals for the partition of the subject properties. The deceased Gerry Ecarma,
entrance; and Rodolfo Ecarma and herein petitioners consistently opposed the proposed partition
of the administrator, respondent Renato, since such is ostensibly "not feasible,
xxxx impractical and renders detrimental use of the Kitanlad property." However, it is
apparent that Gerry Ecarma and his heirs (herein petitioners) completely object to
2. The Cuyapo and Lala properties: partitioned into seven (7) equal parts with any kind of partition of the subject properties, contravening even the proposed sale
Jerry's and Rodolfo's respective shares contiguous to each other, and the remainder thereof.
to be donated by the other legal heirs, as manifested by them, to the Armed Forces
of the Philippines (AFP). We note that petitioners have been careful not to proffer that the subject
properties are indivisible or that physical division of thereof would render such
Their objection to the actual partition notwithstanding, herein petitioners and even unserviceable since Article 49530 of the Civil Code provides the remedy of
Rodolfo Ecarma cannot compel the other co-heirs to remain in perpetual co- termination of co-ownership in accordance with Article 49831 of the same
ownership over the subject properties. Article 494, in relation to Article 1083, of the Code, i.e. sale of the property and distribution of the proceeds. Ineluctably,
Civil Code provides: therefore, herein petitioners' absolute opposition to the partition of the subject
properties which are co-owned has no basis in law. As mere co-owners, herein
Art. 494. No co-owner shall be obliged to remain in the co-ownership. Each co- petitioners, representing the share of the deceased Gerry Ecarma, cannot preclude
owner may demand at any time the partition of the thing owned in common, the other owners likewise compulsory heirs of the deceased spouses Natalio and
insofar as his share is concerned. Arminda, from exercising all incidences of their full ownership.32

Nevertheless, an agreement to keep the thing undivided for a certain period of Wherefore, the petition is DISMISSED. The Court of Appeal's dismissal of the Appeal
time, not exceeding ten years, shall be valid. This term may be extended by a new in CA-G.R. CV No. 92375 is FINAL. Costs against petitioners.
agreement.
SO ORDERED.
A donor or testator may prohibit partition for a period which shall not exceed
twenty years.

Neither shall there be any partition when it is prohibited by law.

No prescription shall run in favor of a co-owner or co-heir against his co-owners or


co-heirs so long as he expressly or impliedly recognizes the co-ownership.

Art. 1083. Every co-heir has a right to demand the division of the estate unless the
21
G.R. No. 198434 However, Domingo died without being able to cause such transfer. Subsequently,
despite demands and several follow-ups made by petitioners, respondents failed
HEIRS OF LEANDRO NATIVIDAD AND JULIANA V. NATIVIDAD, Petitioners, and refused to honor their undertaking.
vs.
JUANA MAURICIO-NATIVIDAD, and SPOUSES JEAN NATIVIDAD CRUZ AND JERRY Respondents filed their Answer denying the allegations in the complaint and raising
CRUZ, Respondents. the following defenses: (1) respondents are not parties to the contract between
Sergio and DBP; (2) there is neither verbal nor written agreement between
DECISION petitioners and respondents that the latter shall reimburse whatever payment was
made by the former or their predecessor-in-interest; (3) Jean was only a minor
PERALTA, J.: during the execution of the alleged agreement and is not a party thereto; (4) that
whatever liability or obligation of respondents is already barred by prescription,
laches and estoppel; (5) that the complaint states no cause of action as respondents
Challenged in the present petition for review on certiorari are the Decision1 and
are not duty-bound to reimburse whatever alleged payments were made by
Resolution2 of the Court of Appeals (CA), dated February 7, 2011 and August 25,
petitioners; and (6) there is no contract between the parties to the effect that
2011, respectively, in CA-G.R. CV No. 92840. The assailed CA Decision modified the
respondents are under obligation to transfer ownership in petitioners' favor as
Decision of the Regional Trial Court (RTC) of San Mateo, Rizal, Branch 75, in Civil
reimbursement for the alleged payments made by petitioners to DBP.
Case No. 1637-02-SM, while the CA Resolution denied petitioners' motion for
reconsideration.
Respondents waived their right to present evidence arid they merely filed their
memorandum. Also, during pendency" of the trial, Leandro died and was
The present petition arose from an action for specific performance and/or recovery
substituted by his heirs, herein petitioners.
of sum of money filed against herein respondents by the spouses Leandro
Natividad (Leandro) and Juliana Natividad (Juliana), who are the predecessors of
herein petitioners. On November. 4, 2008, the RTC rendered its Decision in favor of petitioners, the
dispositive portion of which reads as follows:
In their Complaint, Leandro and Juliana alleged that sometime in 1974, Sergio
Natividad (Sergio), husband of respondent Juana Mauricio-Natividad (Juana) and WHEREFORE, premises considered, judgment is hereby rendered as follows:
father of respondent Jean Natividad-Cruz (Jean), obtained a loan from the
Development Bank of t.he Philippines (DBP). As security for the loan, Sergio 1. Defendants Juana Mauricio [Vda.] de Natividad and Jean
mortgaged two parcels of land, one of which is co-owned and registered in his Natividad-Cruz are ordered to effect the transfer of title in OCT
name and that of his siblings namely, Leandro, Domingo and Adoracion. This No. 5980 with respect to the undivided share of the late Sergio
property is covered by Original Certificate of Title (OCT) No. 5980. Sergio's siblings Natividad; and in OCT No. 10271 both of the Registry of Deeds of
executed a Special Power of Attorney authorizing him to mortgage the said the Province of Rizal in favor of plaintiff Juliana [V da.] de
property. The other mortgaged parcel of land, covered by OCT No. 10271, was Natividad and the Heirs of the late Leandro Natividad.
registered in the name of Sergio and Juana. Subsequently, Sergio died without
being able to pay his obligations with DBP. Since the loan was nearing its maturity 2. Defendants to pay jointly and severally, attorney's fees in the
and the mortgaged properties were in danger of being foreclosed, Leandro paid sum of Thirty Thousand Pesos (P30,000.00); and cost of suit.
Sergio's loan obligations. Considering that respondents were unable to reimburse
Leandro for the advances he made in Sergio's favor, respondents agreed that SO ORDERED.3
Sergio's share in the lot which he co-owned with his siblings and the other parcel of
land in the name of Sergio and Juana, shall be assigned in favor of Leandro ahd Aggrieved by the RTC Decision, respondents filed an Appeal with the CA.
Juliana. Leandro's and Sergio's brother, Domingo, was tasked to facilitate the
transfer of ownership of the subject properties in favor of Leandro and Juliana.
22
On February 7, 2011, the CA promulgated its questioned Decision, disposing as Settlement Among Heirs, which was executed by respondents to prove that there
follows: was indeed such an agreement and that such a Settlement is evidence of the partial
execution of the said agreement. The provisions of the said Settlement are as
WHEREFORE, the appeal is PARTLY GRANTED. The Decision dated November 4, follows:
2008 is hereby MODIFIED in that defendants-appellants Juana Mauricio-Natividad
and Jean Natividad-Cruz are ordered instead to reimburse plaintiffs-appellees EXTRAJUDICIAL SETTLEMENT AMONG HEIRS
Juliana Natividad and the heirs of the late Leandro Natividad the amount of
P162,514.88 representing the amount of the loan obligation paid to the KNOW ALL MEN BY THESE PRESENTS:
Development Bank of the Philippines, plus legal interest of 12% per annum
computed from June 23, 2001 until finality of the judgment, the total amount of This EXTRAJUDICIAL SETTLEMENT, made and entered into by and among:
which shall be to the extent only of defendants-appellants' successional rights in
the mortgaged properties and Juana's conjugal share in [the] property covered by
JUAN M. NATIVIDAD, widow; JEAN N. CRUZ, married to JERRY CRUZ; JOSELITO M.
OCT No. 10271. The award of attorney's fees and cost of suit are AFFIRMED.
NATIVIDAD, single, all of legal age, Filipino citizens, and residents of Malanday, San
Mateo, Rizal
SO ORDERED.4
WITNESSETH
Petitioners filed a Motion for Partial Reconsideration, while respondents filed their
own Motion for Reconsideration, both of which, however, were denied by the CA in
That the above-named parties, is the legitimate wife and children and sole heirs of
its assailed Resolution dated August 25, 2011.
the deceased SERGIO NATIVIDAD, who died in San Mateo, Rizal on May 31, 1981;

Hence, the instant petition based on the following grounds:


That the said deceased, at the time of his death, left certain real estate properties
located at San Mateo, Rizal, and Montalban, Rizal, more particularly described as
I. WITH DUE RESPECT, THE HONORABLE COURT OF APPEALS' follows:
RULING THAT THE VERBAL AGREEMENT TO CONVEY THE
PROPERTY SHARES OF SERGIO NATIVIDAD IN THE PAYMENT OF
a. A whole portion of a parcel of land (Plan Psu-295655, L.R. Case
HIS OBLIGATION IS COVERED BY THE STATUTE OF FRAUDS
No. Q-29, L.R.C. Record No. N-295___ , situated in the Barrio of
DESPITE THE FACT THAT IT HAS BEEN PARTIALLY EXECUTED, IS
Malanday, Municipality of San Mateo, Province of Rizal,
CONTRARY TO'EXISTING JURISPRUDENCE.
containing an area of TWO HUNDRED EIGHT (208) SQUARE
METERS, more or less, and covered by OCT NO. 10271.
II. WITH DUE RESPECT, THE HONORABLE COURT OF APPEALS
ERRED IN RULING THAT THE INTEREST ON THE UNPAID LOAN
b. A one-fourth (1/4) share in the parcel of land situated in
.OBLIGATION SHOULD BE IMPOSED ONLY ON JUNE 23, 2001,
Guinayang, San Mateo, Rizal, containing an area of 2,742 square
DATE OF THE DEMAND FOR PAYMENT INSTEAD OF SEPTEMBER
meters, covered by OCT No. 10493.
23, 1994, WHEN THE PARTIES VERBALLY AGREED TO CONVEY
THEIR PROPERTY RIGHTS WITH THE EXECUTION OF THE
c. A one-fourth (1/4) share in the parcel of land situated in San
EXTRAJUDICIAL SETTLEMENT OF ESTATE OF SERGIO NATIVIDAD.5
Jose, Montalban, Rizal, containing an area of 4,775 square meters,
and covered by OCT No. ON-403.
Petitioners, insist that there was a verbal agreement between respondents and
Leandro, their predecessor-in-interest, wherein the subject properties shall be
assigned to the latter as reimbursement for the payments he made in Sergio's
favor. To support this contention, petitioners relied heavily on the Extrajudicial
23
d. A one-fourth (1/4) share in the parcel of land situated in is an age-old rule in civil cases that he who alleges a fact has the burden of proving
Cambal, San Mateo, Rizal, containing an area of 13,456 square it and a mere allegation is not evidence. 8
meters, and covered by OCT No. 5980.
In relation to petitioners' contention that the subject verbal agreement actually
That no other personal properties are involved in this extrajudicial settlement. existed, they reiterate their contention that the conveyance of the subject
properties in their favor is not covered by the Statute of Frauds because they claim
That to the best knowledge and information of the parties hereto, the said that respondents' execution of the Extrajudicial Settlement Among Heirs constitutes
deceased left certain obligations amounting to P175,000.00 representing loan partial execution of their alleged agreement.
obligations with the Development Bank of the Philippines.
The Court does not agree.
That a notice of this extrajudicial settlement had been published once a week for
three consecutive weeks in ___________ a newspaper of general circulation Suffice it to say that there is no partial execution of any contract, whatsoever,
in_______, as certified by the said newspaper hereto attached as Annex "A"; because petitioners failed to prove, in the first place, that there was a verbal
agreement that was entered into.
That the parties hereto being all of legal age and with full civil capacity to contract,
hereby by these presents agree to divide and adjudicate, as they hereby divide and Even granting that such an agreement existed, the CA did not commit any en-or in
adjudicate, among themselves the above-described real estate property in equal ruling that the assignment of the shares of Sergio in the subject properties in
shares and interest. petitioners' favor as payment of Sergio's obligation cannot be enforced if there is no
written contract to such effect. Under the Statute of Frauds 9, an agreement to
IN WITNESS WHEREOF, the parties have signed this document on this 2nd day convey real properties shall be unenforceable by action in the absence of a written
of September, 1994 in San Mateo, Rizal, Philippines. note or memorandum thereof and subscribed by the party charged or by his agent.
As earlier discussed, the pieces of evidence presented by petitioners, consisting of
x x x6 respondents' acknowledgment of Sergio's loan obligations with DBP as embodied in
the Extrajudicial Settlement Among Heirs, as well as the cash voucher which
allegedly represents payment for taxes and transfer of title in petitioners' name do
After a careful reading of the abovequoted Extra judicial Settlement Among Heirs,
not serve as written notes or memoranda of the alleged verbal agreement.
the Court agrees with the CA that there is nothing in the said document which
would indicate that respondents agreed to the effect that the subject properties
shall be transferred in the name of Leandro as reimbursement for his payment of The foregoing, notwithstanding, the Court finds it proper to reiterate the CA ruling
Syrgio's loan obligations with the DBP. On the contrary, the second to the last that, in any case, since respondents had already acknowledged that Sergio had, in
paragraph of the said Settlement clearly shows that herein respondents, as heirs of fact, incurred loan obligations with the DBP, they are liable to reimburse the
Sergio, have divided the subject properties exclusively among themselves. amount paid by Leandro for the payment of the said obligation even if such
payment was made without their knowledge or consent.
There is no competent evidence to prove the verbal agreement being claimed by
respondents. Aside from the subject Extrajudicial Settlement Among Heirs, the self- Article 1236 of the Civil Code clearly provides that:
serving claims of Leandro on the witness stand, as well as the cash voucher, 7 which
supposedly represented payment of P8,000.00 given to Atty. Domingo Natividad for The creditor is not bound to accept payment or performance by a third person who
the expenses in transferring the title of the subject properties in Leandro's favor, has no interest in the fulfillment of the obligation, unless there is a stipulation to
would hardly count as competent evidence in the eyes of the law. Respondents' the contrary.
claim of the existence of a verbal agreement between them, on one hand, and
petitioners' predecessors-in-interest, on the other, remains to be mere allegation. It

24
Whoever pays for another may demand from the debtor what he has paid, except However, the rate of interest should be modified in view of the issuance of Circular
that if he paid without the knowledge or against the will of the debtor, he can No. 799, Series of 2013 by the Bangko Sentral ng Pilipinas Monetary Board (BSP-
recover only insofar as the payment has been beneficial to the debtor. (Emphasis MB). The said Circular reduced the "rate of interest for the loan or forbearance of
supplied) any money, goods or credits and the rate allowed in judgments, in the absence of
an express contract as to such rate of interest," from twelve percent (12%) to six
Neither can respondents evade liability by arguing that they were not parties to the percent (6%) per annum. The Circular was made effective on July 1, 2013. Hence,
contract between Sergio and the DBP. As earlier stated, the fact remains that, in the under the modified guidelines in the imposition of interest, as laid down in the case
Extrajudicial Settlement Among Heirs, respondents clearly acknowledged Sergio's of Nacar v. Gallery Frames, 12 this Court held that:
loan obligations with the DBP. Being Sergio's heirs, they succeed not only to the
rights of Sergio but also to his obligations. xxxx

The following provisions of the Civil Code are clear on this matter, to wit: II. With regard particularly to an award of interest in the concept of actual and
compensatory damages, the rate of interest, as well as the accrual thereof, is
Art. 774. Succession is a mode of acquisition by virtue of which the property, rights imposed, as follows:
and obligations to the extent of the value of the inheritance, of a person are
transmitted through his death to another or others either by will or by operation of 1. When the obligation is breached, and it consists in the payment of a
law. sum of money, i.e., a loan or forbearance of money, the interest due
should be that which may have been stipulated in writing. Furthermore,
Art. 776. The inheritance includes all the property, rights and obligations of a the interest due shall itself earn legal interest from the time it is judicially
person which are not extinguished by his death. demanded. In the absence of stipulation, the rate of interest shall be
6% per annum to be computed from default, i.e., from judicial or
Art. 781. The inheritance of a person includes not only the property and the extrajudicial demand under and subject to the provisions of Article 1169
transmissible rights and obligations existing at the time of his death, but also those of the Civil Code.
which have accrued thereto since the opening of the succession.
2. When an obligation, not constituting a loan or forbearance of money, is
In the present case, respondents, being heirs of Sergio, are now liable to settle his breached, an interest on the amount of damages awarded may be
transmissible obligations, which include the amount due to petitioners, prior to the imposed at the discretion of the court at the rate of 6% per annum. No
distribution of the remainder of Sergio's estate to them, in accordance with Section interest, however, shall be adjudged on unliquidated claims or damages,
1, 10 Rule 90 of the Rules of Court. except when or until the demand can be established with reasonable
certainty. Accordingly, where the demand is established with reasonable
certainty, the interest shall begin to run from the time the claim is made
As to when the interest on the sum due from respondents should be reckoned, the
judicially or extrajudicially (Art. 1169, Civil Code), but when such certainty
Court finds no error in the ruling of the CA that such interest should be computed
cannot be so reasonably established at the time the demand is made, the
from June 23, 2001, the date when petitioners made a written demand for the
interest shall begin to run only from the date the judgment of the court is
payment of respondents' obligation. 11 There is no merit in petitioners' contention
made (at which time the quantification of damages may be deemed to
that the reckoning date should have been September 23, 1994, the date when
have been reasonably ascertained). The actual base for the computation of
respondents executed the Extrajudicial Settlement Among Heirs, because there is
legal interest shall, in any case, be on the amount finally adjudged.
nothing therein to prove that petitioners, at that time, made a demand for
reimbursement.
3. When the judgment of the court awarding a sum of money becomes
final and executory, the rate of legal interest, whether the case falls
under paragraph 1 or paragraph 2, above, shall be 6% per annum from
25
such finality until its satisfaction, this interim period being deemed to be
by then an equivalent to a forbearance of credit. (Emphasis supplied)

x x x13

The Court explained that:

[F]rom the foregoing, in the absence of an express stipulation as to the rate of


interest that would govern the parties, the rate of legal interest for loans or
forbearance of any money, goods or credits and the rate allowed in judgments shall
no longer be twelve percent (12%) per annum - as reflected in the case of Eastern
Shipping Lines and Subsection X305.1 of the Manual of Regulations for Banks and
Sections 4305Q.1, 4305S.3 and 4303P.1 of the Manual of Regulations for Non-Bank
Financial Institutions, before its amendment by BSP-MB Circular No. 799 - but will
now be six percent (6%) per annum effective July 1, 2013. It should be noted,
nonetheless, that the new rate could only be applied prospectively and not
retroactively. Consequently, the twelve percent (12%) per annum legal interest shall
apply only until June 30, 2013. Come July 1, 2013, the new rate of six percent
(6%) per annum shall be the prevailing rate of interest when applicable. 14

Thus, in accordance with the above ruling, the rate of interest on the principal
amount due to petitioners shall be 12% from June 23, 2001, the date when
petitioners made a demand for payment, to June 30, 2013. From July 1, 2013, the
effective date of BSP-MB Circular No. 799, until full satisfaction of the monetary
award, the rate of interest shall be 6%.

WHEREFORE, the instant petition is DENIED. The Decision and Resolution of the
Court of Appeals, dated February 7, 2011 and August 25, 2011, respectively, in CA-
G.R. CV No. 92840 are AFFIRMED with MODIFICATION by ORDERING respondents
to pay petitioners, in addition to the principal amount of P162,514.88, interest
thereon at the rate of twelve percent (12%) per annum, computed from June 23,
2001 to June 30, 2013, and six percent (6%) per annum from July 1, 2013 until full
satisfaction of the judgment award.

SO ORDERED.

26
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.

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 Emigdios estate
(Special Proceedings No. 3094-CEB).1 The RTC granted the petition considering that
G.R. No. 156407 January 15, 2014 there was no opposition. The letters of administration in favor of Teresita were
issued on September 7, 1992.
THELMA M. ARANAS, Petitioner,
vs. As the administrator, Teresita submitted an inventory of the estate of Emigdio on
TERESITA V. MERCADO, FELIMON V. MERCADO, CARMENCITA M. SUTHERLAND, December 14, 1992 for the consideration and approval by the RTC. She indicated in
RICHARD V. MERCADO, MA. TERESITA M. ANDERSON, and FRANKLIN L. the inventory that at the time of his death, Emigdio had "left no real properties but
MERCADO, Respondents. only personal properties" worth 6,675,435.25 in all, consisting of cash of
32,141.20; furniture and fixtures worth 20,000.00; pieces of jewelry valued at
15,000.00; 44,806 shares of stock of Mervir Realty worth 6,585,585.80; and 30
DECISION
shares of stock of Cebu Emerson worth 22,708.25. 2

BERSAMIN, J.:
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
The probate court is authorized to determine the issue of ownership of properties to be examined regarding it. The RTC granted Thelmas motion through the order of
for purposes of their inclusion or exclusion from the inventory to be submitted by January 8, 1993.
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
On January 21, 1993, Teresita filed a compliance with the order of January 8,
advancement, or the parties consent to the assumption of jurisdiction by the
1993,3 supporting her inventory with copies of three certificates of stocks covering
27
the 44,806 Mervir Realty shares of stock;4 the deed of assignment executed by SO ORDERED.9
Emigdio on January 10, 1991 involving real properties with the market value of
4,440,651.10 in exchange for 44,407 Mervir Realty shares of stock with total par On March 29, 2001, Teresita, joined by other heirs of Emigdio, timely sought the
value of 4,440,700.00;5 and the certificate of stock issued on January 30, 1979 for reconsideration of the order of March 14, 2001 on the ground that one of the real
300 shares of stock of Cebu Emerson worth 30,000.00.6 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
On January 26, 1993, Thelma again moved to require Teresita to be examined under already come into the possession of and registered in the name of Mervir
oath on the inventory, and that she (Thelma) be allowed 30 days within which to Realty.10 Thelma opposed the motion.
file a formal opposition to or comment on the inventory and the supporting
documents Teresita had submitted. 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
On February 4, 1993, the RTC issued an order expressing the need for the parties to agreement as heirs to submit to the RTC the issue of what properties should be
present evidence and for Teresita to be examined to enable the court to resolve the included or excluded from the inventory already estopped them from questioning
motion for approval of the inventory.7 its jurisdiction to pass upon the issue.

On April 19, 1993, Thelma opposed the approval of the inventory, and asked leave Decision of the CA
of court to examine Teresita on the inventory.
Alleging that the RTC thereby acted with grave abuse of discretion in refusing to
With the parties agreeing to submit themselves to the jurisdiction of the court on approve the inventory, and in ordering her as administrator to include real
the issue of what properties should be included in or excluded from the inventory, properties that had been transferred to Mervir Realty, Teresita, joined by her four
the RTC set dates for the hearing on that issue.8 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:
Ruling of the RTC
I
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 THE HONORABLE RESPONDENT JUDGE HAS COMMITTED GRAVE ABUSE OF
excluded properties that should be included, and accordingly ruled: JURISDICTION (sic) AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN HOLDING
THAT THE REAL PROPERTY WHICH WAS SOLD BY THE LATE EMIGDIO S. MERCADO
WHEREFORE, in view of all the foregoing premises and considerations, the Court DURING HIS LIFETIME TO A PRIVATE CORPORATION (MERVIR REALTY
hereby denies the administratrixs motion for approval of inventory. The Court CORPORATION) BE INCLUDED IN THE INVENTORY OF THE ESTATE OF THE LATE
hereby orders the said administratrix to re-do the inventory of properties which are EMIGDIO S. MERCADO.
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 II
hereof and then submit the revised inventory within sixty (60) days from notice of
this order. THE HONORABLE RESPONDENT JUDGE HAS COMMITTED GRAVE ABUSE OF
JURISDICTION (sic) AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN HOLDING
The Court also directs the said administratrix to render an account of her THAT REAL PROPERTIES WHICH ARE IN THE POSSESSION OF AND ALREADY
administration of the estate of the late Emigdio S. Mercado which had come to her REGISTERED IN THE NAME (OF) PRIVATE CORPORATION (MERVIR REALTY
possession. She must render such accounting within sixty (60) days from notice CORPORATION) BE INCLUDED IN THE INVENTORY OF THE ESTATE OF THE LATE
hereof. EMIGDIO S. MERCADO.

28
III 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
THE HONORABLE RESPONDENT JUDGE HAS COMMITTED GRAVE ABUSE OF persons or corporation; that a property covered by the Torrens system should be
DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN HOLDING THAT afforded the presumptive conclusiveness of title; that the RTC, by disregarding the
PETITIONERS ARE NOW ESTOPPED FROM QUESTIONING ITS JURISDICTION IN presumption, had transgressed the clear provisions of law and infringed settled
PASSING UPON THE ISSUE OF WHAT PROPERTIES SHOULD BE INCLUDED IN THE jurisprudence on the matter; and that the RTC also gravely abused its discretion in
INVENTORY OF THE ESTATE OF THE LATE EMIGDIO MERCADO.12 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
On May 15, 2002, the CA partly granted the petition for certiorari, disposing as included in the inventory.
follows:13
The CA further opined as follows:
WHEREFORE, FOREGOING PREMISES CONSIDERED, this petition is GRANTED
partially. The assailed Orders dated March 14, 2001 and May 18, 2001 are hereby In the instant case, public respondent court erred when it ruled that petitioners are
reversed and set aside insofar as the inclusion of parcels of land known as Lot No. estopped from questioning its jurisdiction considering that they have already
3353 located at Badian, Cebu with an area of 53,301 square meters subject matter agreed to submit themselves to its jurisdiction of determining what properties are
of the Deed of Absolute Sale dated November 9, 1989 and the various parcels of to be included in or excluded from the inventory to be submitted by the
land subject matter of the Deeds of Assignment dated February 17, 1989 and administratrix, because actually, a reading of petitioners Motion for
January 10, 1991 in the revised inventory to be submitted by the administratrix is Reconsideration dated March 26, 2001 filed before public respondent court clearly
concerned and affirmed in all other respects. 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,
SO ORDERED. 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 administratrixs motion for approval of the inventory of properties which were
The CA opined that Teresita, et al. had properly filed the petition for certiorari
already titled and in possession of a third person that is, Mervir Realty Corporation,
because the order of the RTC directing a new inventory of properties was
a private corporation, which under the law possessed a personality distinct and
interlocutory; that pursuant to Article 1477 of the Civil Code, to the effect that the
separate from its stockholders, and in the absence of any cogency to shred the veil
ownership of the thing sold "shall be transferred to the vendee" upon its "actual
of corporate fiction, the presumption of conclusiveness of said titles in favor of
and constructive delivery," and to Article 1498 of the Civil Code, to the effect that
Mervir Realty Corporation should stand undisturbed.
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 Besides, public respondent court acting as a probate court had no authority to
November 9, 1989 had been notarized; that Emigdio had thereby ceased to have determine the applicability of the doctrine of piercing the veil of corporate fiction
any more interest in Lot 3353; that Emigdio had assigned the parcels of land to and even if public respondent court was not merely acting in a limited capacity as a
Mervir Realty as early as February 17, 1989 "for the purpose of saving, as in probate court, private respondent nonetheless failed to adjudge competent
avoiding taxes with the difference that in the Deed of Assignment dated January 10, evidence that would have justified the court to impale the veil of corporate fiction
1991, additional seven (7) parcels of land were included"; that as to the January 10, because to disregard the separate jurisdictional personality of a corporation, the
1991 deed of assignment, Mervir Realty had been "even at the losing end wrongdoing must be clearly and convincingly established since it cannot be
considering that such parcels of land, subject matter(s) of the Deed of Assignment presumed.14
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 On November 15, 2002, the CA denied the motion for reconsideration of Teresita,
dated January 10, 1991, the parcels of land could not be included in the inventory et al.15
"considering that there is nothing wrong or objectionable about the estate planning
29
Issue 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
Did the CA properly determine that the RTC committed grave abuse of discretion the subject of an appeal. The reason for disallowing an appeal from an interlocutory
amounting to lack or excess of jurisdiction in directing the inclusion of certain order is to avoid multiplicity of appeals in a single action, which necessarily
properties in the inventory notwithstanding that such properties had been either suspends the hearing and decision on the merits of the action during the pendency
transferred by sale or exchanged for corporate shares in Mervir Realty by the of the appeals. Permitting multiple appeals will necessarily delay the trial on the
decedent during his lifetime? 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
Ruling of the Court 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 appeal is meritorious.
the ground for appealing the order being included in the appeal of the judgment
itself.
I
The remedy against an interlocutory order not subject of an appeal is an
Was certiorari the proper recourse
appropriate special civil action under Rule 65, provided that the interlocutory order
to assail the questioned orders of the RTC?
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.
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
The assailed order of March 14, 2001 denying Teresitas motion for the approval of
co-respondents was not proper.
the inventory and the order dated May 18, 2001 denying her motion for
reconsideration were interlocutory. This is because the inclusion of the properties
Thelmas contention cannot be sustained. 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
The propriety of the special civil action for certiorari as a remedy depended on basis for inclusion or exclusion from the inventory were provisional and subject to
whether the assailed orders of the RTC were final or interlocutory in nature. In revision at anytime during the course of the administration proceedings.
Pahila-Garrido v. Tortogo,16 the Court distinguished between final and interlocutory
orders as follows: 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
The distinction between a final order and an interlocutory order is well known. The certain real properties from the inventory was interlocutory and could be changed
first disposes of the subject matter in its entirety or terminates a particular or modified at anytime during the course of the administration proceedings, held
proceeding or action, leaving nothing more to be done except to enforce by that the order of exclusion was not a final but an interlocutory order "in the sense
execution what the court has determined, but the latter does not completely that it did not settle once and for all the title to the San Lorenzo Village lots." The
dispose of the case but leaves something else to be decided upon. An interlocutory Court observed there that:
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 The prevailing rule is that for the purpose of determining whether a certain
judgment is interlocutory or final is: does the order or judgment leave something to property should or should not be included in the inventory, the probate court may
be done in the trial court with respect to the merits of the case? If it does, the order pass upon the title thereto but such determination is not conclusive and is subject
or judgment is interlocutory; otherwise, it is final. to the final decision in a separate action regarding ownership which may be
instituted by the parties (3 Morans Comments on the Rules of Court, 1970 Edition,

30
pages 448-9 and 473; Lachenal vs. Salas, L-42257, June 14, 1976, 71 SCRA 262, (b) Determines who are the lawful heirs of a deceased person, or the
266).18 (Bold emphasis supplied) distributive share of the estate to which such person is entitled;

To the same effect was De Leon v. Court of Appeals,19 where the Court declared (c) Allows or disallows, in whole or in part, any claim against the estate of a
that a "probate court, whether in a testate or intestate proceeding, can only pass deceased person, or any claim presented on behalf of the estate in offset
upon questions of title provisionally," and reminded, citing Jimenez v. Court of to a claim against it;
Appeals, that the "patent reason is the probate courts limited jurisdiction and the
principle that questions of title or ownership, which result in inclusion or exclusion (d) Settles the account of an executor, administrator, trustee or guardian;
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: (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
All that the said court could do as regards the said properties is determine whether determination in the lower court of the rights of the party appealing,
they should or should not be included in the inventory or list of properties to be except that no appeal shall be allowed from the appointment of a special
administered by the administrator. If there is a dispute as to the ownership, then administrator; and
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 (f) Is the final order or judgment rendered in the case, and affects the
cannot do so. (Bold emphasis supplied) substantial rights of the person appealing, unless it be an order granting or
denying a motion for a new trial or for reconsideration.
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 Clearly, the assailed orders of the RTC, being interlocutory, did not come under any
paragraph of Section 1, Rule 41, Rules of Court,21 which also governs appeals in of the instances in which multiple appeals are permitted.
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
II
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
Did the RTC commit grave abuse of discretion
order or resolution (interlocutory because it deals with preliminary matters, or that
in directing the inclusion of the properties
the trial on the merits is yet to be held and the judgment rendered) is expressly
in the estate of the decedent?
made non-appealable.

In its assailed decision, the CA concluded that the RTC committed grave abuse of
Multiple appeals are permitted in special proceedings as a practical recognition of
discretion for including properties in the inventory notwithstanding their having
the possibility that material issues may be finally determined at various stages of
been transferred to Mervir Realty by Emigdio during his lifetime, and for
the special proceedings. Section 1, Rule 109 of the Rules of Court enumerates the
disregarding the registration of the properties in the name of Mervir Realty, a third
specific instances in which multiple appeals may be resorted to in special
party, by applying the doctrine of piercing the veil of corporate fiction.
proceedings, viz:

Was the CA correct in its conclusion?


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 The answer is in the negative. It is unavoidable to find that the CA, in reaching its
or judgment: conclusion, ignored the law and the facts that had fully warranted the assailed
orders of the RTC.
(a) Allows or disallows a will;
31
Under Section 6(a), Rule 78 of the Rules of Court, the letters of administration may There is no dispute that the jurisdiction of the trial court as an intestate court is
be granted at the discretion of the court to the surviving spouse, who is competent special and limited. The trial court cannot adjudicate title to properties claimed to
and willing to serve when the person dies intestate. Upon issuing the letters of be a part of the estate but are claimed to belong to third parties by title adverse to
administration to the surviving spouse, the RTC becomes duty-bound to direct the that of the decedent and the estate, not by virtue of any right of inheritance from
preparation and submission of the inventory of the properties of the estate, and the the decedent. All that the trial court can do regarding said properties is to
surviving spouse, as the administrator, has the duty and responsibility to submit the determine whether or not they should be included in the inventory of properties to
inventory within three months from the issuance of letters of administration be administered by the administrator. Such determination is provisional and may be
pursuant to Rule 83 of the Rules of Court, viz: still revised. As the Court said in Agtarap v. Agtarap:26

Section 1. Inventory and appraisal to be returned within three months. Within The general rule is that the jurisdiction of the trial court, either as a probate court
three (3) months after his appointment every executor or administrator shall return or an intestate court, relates only to matters having to do with the probate of the
to the court a true inventory and appraisal of all the real and personal estate of the will and/or settlement of the estate of deceased persons, but does not extend to
deceased which has come into his possession or knowledge. In the appraisement of the determination of questions of ownership that arise during the proceedings. The
such estate, the court may order one or more of the inheritance tax appraisers to patent rationale for this rule is that such court merely exercises special and limited
give his or their assistance. 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
The usage of the word all in Section 1, supra, demands the inclusion of all the real properties claimed to be a part of the estate and which are claimed to belong to
and personal properties of the decedent in the inventory. 22 However, the word all is outside parties, not by virtue of any right of inheritance from the deceased but by
qualified by the phrase which has come into his possession or knowledge, which title adverse to that of the deceased and his estate. All that the said court could do
signifies that the properties must be known to the administrator to belong to the as regards said properties is to determine whether or not they should be included in
decedent or are in her possession as the administrator. Section 1 allows no the inventory of properties to be administered by the administrator. If there is no
exception, for the phrase true inventory implies that no properties appearing to dispute, there poses no problem, but if there is, then the parties, the administrator,
belong to the decedent can be excluded from the inventory, regardless of their and the opposing parties have to resort to an ordinary action before a court
being in the possession of another person or entity. exercising general jurisdiction for a final determination of the conflicting claims of
title.
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 However, this general rule is subject to exceptions as justified by expediency and
the liabilities of the executor or the administrator, and in making a final and convenience.
equitable distribution (partition) of the estate and otherwise to facilitate the
administration of the estate."23Hence, the RTC that presides over the First, the probate court may provisionally pass upon in an intestate or a testate
administration of an estate is vested with wide discretion on the question of what proceeding the question of inclusion in, or exclusion from, the inventory of a piece
properties should be included in the inventory. According to Peralta v. Peralta,24 the of property without prejudice to final determination of ownership in a separate
CA cannot impose its judgment in order to supplant that of the RTC on the issue of action. Second, if the interested parties are all heirs to the estate, or the question is
which properties are to be included or excluded from the inventory in the absence one of collation or advancement, or the parties consent to the assumption of
of "positive abuse of discretion," for in the administration of the estates of jurisdiction by the probate court and the rights of third parties are not impaired,
deceased persons, "the judges enjoy ample discretionary powers and the appellate then the probate court is competent to resolve issues on ownership. Verily, its
courts should not interfere with or attempt to replace the action taken by them, jurisdiction extends to matters incidental or collateral to the settlement and
unless it be shown that there has been a positive abuse of discretion." 25 As long as distribution of the estate, such as the determination of the status of each heir and
the RTC commits no patently grave abuse of discretion, its orders must be whether the property in the inventory is conjugal or exclusive property of the
respected as part of the regular performance of its judicial duty. deceased spouse.27 (Italics in the original; bold emphasis supplied)

32
It is clear to us that the RTC took pains to explain the factual bases for its directive Fifthly and lastly, it appears that the assignment of several parcels of land by the
for the inclusion of the properties in question in its assailed order of March 14, late Emigdio S. Mercado to Mervir Realty Corporation on January 10, 1991 by virtue
2001, viz: 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
In the first place, the administratrix of the estate admitted that Emigdio Mercado death. It was made two days before he died on January 12, 1991. A transfer made
was one of the heirs of Severina Mercado who, upon her death, left several in contemplation of death is one prompted by the thought that the transferor has
properties as listed in the inventory of properties submitted in Court in Special not long to live and made in place of a testamentary disposition (1959 Prentice Hall,
Proceedings No. 306-R which are supposed to be divided among her heirs. The p. 3909). Section 78 of the National Internal Revenue Code of 1977 provides that
administratrix admitted, while being examined in Court by the counsel for the the gross estate of the decedent shall be determined by including the value at the
petitioner, that she did not include in the inventory submitted by her in this case time of his death of all property to the extent of any interest therein of which the
the shares of Emigdio Mercado in the said estate of Severina Mercado. Certainly, decedent has at any time made a transfer in contemplation of death. So, the
said properties constituting Emigdio Mercados share in the estate of Severina inventory to be approved in this case should still include the said properties of
Mercado should be included in the inventory of properties required to be Emigdio Mercado which were transferred by him in contemplation of death.
submitted to the Court in this particular case. 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
In the second place, the administratrix of the estate of Emigdio Mercado also certification issued by the Cebu City Assessors Office on October 31, 1991 (Exhibit
admitted in Court that she did not include in the inventory shares of stock of Mervir O).28
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 Thereby, the RTC strictly followed the directives of the Rules of Court and the
conjugal undertaking. As these shares of stock partake of being conjugal in jurisprudence relevant to the procedure for preparing the inventory by the
character, one-half thereof or of the value thereof should be included in the administrator. The aforequoted explanations indicated that the directive to include
inventory of the estate of her husband. the properties in question in the inventory rested on good and valid reasons, and
thus was far from whimsical, or arbitrary, or capricious.
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 Firstly, the shares in the properties inherited by Emigdio from Severina Mercado
opened when her husband was still alive. Again, the money in said bank account should be included in the inventory because Teresita, et al. did not dispute the fact
partakes of being conjugal in character, and so, one-half thereof should be included about the shares being inherited by Emigdio.
in the inventory of the properties constituting as estate of her husband.
Secondly, with Emigdio and Teresita having been married prior to the effectivity of
In the fourth place, it has been established during the hearing in this case that Lot the Family Code in August 3, 1988, their property regime was the conjugal
No. 3353 of Pls-657-D located in Badian, Cebu containing an area of 53,301 square partnership of gains.29 For purposes of the settlement of Emigdios estate, it was
meters as described in and covered by Transfer Certificate of Title No. 3252 of the unavoidable for Teresita to include his shares in the conjugal partnership of gains.
Registry of Deeds for the Province of Cebu is still registered in the name of Emigdio The party asserting that specific property acquired during that property regime did
S. Mercado until now. When it was the subject of Civil Case No. CEB-12690 which not pertain to the conjugal partnership of gains carried the burden of proof, and
was decided on October 19, 1995, it was the estate of the late Emigdio Mercado that party must prove the exclusive ownership by one of them by clear, categorical,
which claimed to be the owner thereof. Mervir Realty Corporation never intervened and convincing evidence.30 In the absence of or pending the presentation of such
in the said case in order to be the owner thereof. This fact was admitted by Richard proof, the conjugal partnership of Emigdio and Teresita must be provisionally
Mercado himself when he testified in Court. x x x So the said property located in liquidated to establish who the real owners of the affected properties were, 31 and
Badian, Cebu should be included in the inventory in this case. 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.

33
Moreover, although the title over Lot 3353 was already registered in the name of The fact that the properties were already covered by Torrens titles in the name of
Mervir Realty, the RTC made findings that put that title in dispute. Civil Case No. Mervir Realty could not be a valid basis for immediately excluding them from the
CEB-12692, a dispute that had involved the ownership of Lot 3353, was resolved in inventory in view of the circumstances admittedly surrounding the execution of the
favor of the estate of Emigdio, and deed of assignment. This is because:

Transfer Certificate of Title No. 3252 covering Lot 3353 was still in Emigdios The Torrens system is not a mode of acquiring titles to lands; it is merely a system
name.1wphi1 Indeed, the RTC noted in the order of March 14, 2001, or ten years of registration of titles to lands.1wphi1However, justice and equity demand that
after his death, that Lot 3353 had remained registered in the name of Emigdio. the titleholder should not be made to bear the unfavorable effect of the mistake or
negligence of the States agents, in the absence of proof of his complicity in a fraud
Interestingly, Mervir Realty did not intervene at all in Civil Case No. CEB-12692. or of manifest damage to third persons. The real purpose of the Torrens system is
Such lack of interest in Civil Case No. CEB-12692 was susceptible of various to quiet title to land and put a stop forever to any question as to the legality of the
interpretations, including one to the effect that the heirs of Emigdio could have title, except claims that were noted in the certificate at the time of registration or
already threshed out their differences with the assistance of the trial court. This that may arise subsequent thereto. Otherwise, the integrity of the Torrens system
interpretation was probable considering that Mervir Realty, whose business was shall forever be sullied by the ineptitude and inefficiency of land registration
managed by respondent Richard, was headed by Teresita herself as its President. In officials, who are ordinarily presumed to have regularly performed their duties. 35
other words, Mervir Realty appeared to be a family corporation.
Assuming that only seven titled lots were the subject of the deed of assignment of
Also, the fact that the deed of absolute sale executed by Emigdio in favor of Mervir January 10, 1991, such lots should still be included in the inventory to enable the
Realty was a notarized instrument did not sufficiently justify the exclusion from the parties, by themselves, and with the assistance of the RTC itself, to test and resolve
inventory of the properties involved. A notarized deed of sale only enjoyed the the issue on the validity of the assignment. The limited jurisdiction of the RTC as an
presumption of regularity in favor of its execution, but its notarization did not per intestate court might have constricted the determination of the rights to the
se guarantee the legal efficacy of the transaction under the deed, and what the properties arising from that deed,36 but it does not prevent the RTC as intestate
contents purported to be. The presumption of regularity could be rebutted by clear court from ordering the inclusion in the inventory of the properties subject of that
and convincing evidence to the contrary.32 As the Court has observed in Suntay v. deed. This is because the RTC as intestate court, albeit vested only with special and
Court of Appeals:33 limited jurisdiction, was still "deemed to have all the necessary powers to exercise
such jurisdiction to make it effective."37
x x x. 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 Lastly, the inventory of the estate of Emigdio must be prepared and submitted for
public to validate and make binding an instrument never, in the first place, intended the important purpose of resolving the difficult issues of collation and advancement
to have any binding legal effect upon the parties thereto. The intention of the to the heirs. Article 1061 of the Civil Code required every compulsory heir and the
parties still and always is the primary consideration in determining the true nature surviving spouse, herein Teresita herself, to "bring into the mass of the estate any
of a contract. (Bold emphasis supplied) 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
It should likewise be pointed out that the exchange of shares of stock of Mervir that it may be computed in the determination of the legitime of each heir, and in
Realty with the real properties owned by Emigdio would still have to be inquired the account of the partition." Section 2, Rule 90 of the Rules of Court also provided
into. That Emigdio executed the deed of assignment two days prior to his death was that any advancement by the decedent on the legitime of an heir "may be heard
a circumstance that should put any interested party on his guard regarding the and determined by the court having jurisdiction of the estate proceedings, and the
exchange, considering that there was a finding about Emigdio having been sick of final order of the court thereon shall be binding on the person raising the questions
cancer of the pancreas at the time.34 In this regard, whether the CA correctly and on the heir." Rule 90 thereby expanded the special and limited jurisdiction of
characterized the exchange as a form of an estate planning scheme remained to be the RTC as an intestate court about the matters relating to the inventory of the
validated by the facts to be established in court.
34
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.

35

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