Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. Nos. 208828-29               August 13, 2014

RICARDO C. SILVERIO, SR., Petitioner,

vs.
RICARDO S. SILVERIO, JR., CITRINE HOLDINGS, INC., MONICA P. OCAMPO and
ZEE2 RESOURCES, INC., Respondents.

DECISION

VILLARAMA, JR., J.:

Before the Court is a petition for review under Rule 45 of the 1997 Rules of Civil
Procedure, as amended, to reverse and set aside the Decision 1 dated March 8, 2013 of
the Court of Appeals (CA) insofar as CA-G.R. SP Nos. 121173 and 122024 are
concerned, and Resolution2 dated July 4, 2013 denying petitioner's Motion for Partial
Reconsideration. The CA nullified the preliminary injunction issued by the Regional Trial
Court (RTC) of Makati City ("intestate court"), Branch 57 in Sp. Proc. No. M-2629 and
reversed said court's Order dated August 18, 2011 declaring the sales and derivative
titles over two properties subject of intestate proceedings as null and void.

The factual and procedural antecedents of the case, as summarized by the CA, are as
follows: The late Beatriz S. Silverio died without leaving a will on October 7, 1987. She
was survived by her legal heirs, namely: Ricardo C. Silverio, Sr. (husband), Edmundo S.
Silverio (son), Edgardo S. Silverio (son), Ricardo S. Silverio, Jr. (son), Nelia S.Silverio-
Dee (daughter), and Ligaya S. Silverio (daughter). Subsequently, an intestate
proceeding (SP PROC. NO. M-2629) for the settlement of her estate was filed by
SILVERIO, SR.

In the course of the proceedings, the parties filed different petitions and appeal
challenging several orders of the intestate court that went all the way up to the Supreme
Court. To better understand the myriad of factual and procedural antecedents leading to
the instant consolidated case, this court will resolve the petitions in seriatim.

The Petitions

CA-G.R. SP No. 121172

The first petition of the three consolidated petitions is CA-G.R. SP No. 121172 wherein
petitioner, RICARDO S. SILVERIO JR. ("SILVERIO JR.") assails the Order ofthe
intestate court dated 16 June 2011 reinstating RICARDO SILVERIO SR. ("SILVERIO
SR.") as administrator to the estate of the late Beatriz Silverio.

The administrator first appointed by the Court was EDGARDO SILVERIO

("EDGARDO"), but by virtue of a Joint Manifestation dated 3 November 1999 filed by
the heirs of BEATRIZ D. SILVERIO, the motion to withdraw as administrator filed by
EDGARDO was approved by the intestate court and in his stead, SILVERIO SR. was
appointed as the new administrator. Thereafter, an active exchange of pleadings to
remove and appoint a new administrator ensued between SILVERIO SR. and
SILVERIO JR. The flip-flopping appointment of administrator is summarized below:

In an Order dated 3 January 2005, SILVERIO SR. was removed as administrator and in
his stead, SILVERIO, JR. was designated as the new administrator. A motion for
reconsideration was separately filed by SILVERIO SR. and Nelia Silverio-Dee
("SILVERIO-DEE") and on 31 May 2005, the intestate court issued an Omnibus Order
affirming among others, the Order of 3 January 2005. Inthe same Order, the intestate
court also granted the motion of SILVERIO JR. to take his oath as administrator
effective upon receipt of the order and expunged the inventory report filed by SILVERIO
SR.

On 12 December 2005 the intestate court acting on the motion filed by SILVERIO SR.
recalled the Order granting letters of administration to SILVERIO JR. and reinstated
SILVERIO SR. as administrator. Then again, the intestate court acting on the motion for
partial consideration to the Order dated 12 December 2005 filed by SILVERIO JR.
issued an Omnibus Order dated 31 October 2006 upholding the grant of Letters of
Administration to SILVERIO JR. and removed SILVERIO SR., ad administrator for gross
violation of his duties and functions under Section 1, Rule 81 of the Rules of Court.

SILVERIO SR. moved for reconsideration of the above Order whereas SILVERIO-DEE
on the other hand, filed a Petition for Certiorari before the Court of Appeals docketed as
CA-G.R. SP No. 97196. On 28 August 2008, the Court of Appeals (Seventh Division)
rendered a decision reinstating SILVERIO, SR. as administrator, the decretal portion of
the Order reads:

"WHEREFORE, the petition is GRANTED. The portions of the Omnibus Order

upholding the grant of letters of administration to and the taking of an oath of
administration by Ricardo Silverio, Jr., as well as the removal of Ricardo Silverio, Sr. as
administrator to the Estate of Beatriz Silverio, are declared NULL and VOID. The writ of
preliminary injunction earlier issued is MADE PERMANENT in regard to the said
portions. Respondent RTC is ORDERED to reinstate Ricardo Silverio, Sr. as
administrator to the Estate of Beatriz Silverio. Costs against the Private Respondents.

SO ORDERED."

SILVERIO JR. filed a Petition for review on Certioraribefore the Supreme Court
docketed as G.R. No. 185619 challenging the 28 Augsut 2008 decision of the Court of
Appeals. On 11 February 2009, the Supreme Court issued a resolution denying the
petition for failure to sufficiently show any reversible error inthe assailed judgment to
warrant the exercise by the Court of discretionary appellate jurisdiction. Acting on
SILVERIO JR.’s motion for reconsideration, the Supreme Court on 11 February 2011,
denied the motion with finality. An entry of judgment was made on 29 March 2011.

On 25 April 2011 SILVERIO SR. filed before the intestate court, an urgent motion to be
reinstated as administrator of the estate. Acting on the motion, the intestate court issued
the now challenged Order dated 16 June 2011, the pertinent portion of the Order reads:

xxxx

"WHEREFORE, upon posting of a bond in the sum of TEN MILLION PESOS, the same
to be approved by this Court, Mr. Ricardo C. Silverio, Sr. is hereby ordered reinstated
as the Administrator to the estate of the late Beatriz Silverio and to immediately take his
oath as such, and exercise his duties and functions as are incumbent under the law
upon the said position. xxx."

xxxx

CA-G.R. SP No. 121173

xxxx

On 15 March 2011, heirs SILVERIO JR., EDMUNDO and LIGAYA represented by her
legal guardian moved for the disqualification and/or inhibition of JUDGE GUANLAO, JR.
based on the following grounds: (1) Absence of the written consent of all parties in
interest allowing JUDGE GUANLAO, JR. to continue hearing the case considering that
he appeared once as counsel in the intestate proceedings; (2) JUDGE GUANLAO, JR.
has shown bias and partiality in favor of SILVERIO SR. by allowing the latter to pursue
several motions and even issued a TRO in violation of the rules against forum shopping;
(3) Heir LIGAYA’s Petition for Support and Release of Funds for Medical Support has
not been resolved; and (4) It is in the best interest of all the heirs that the proceedings
be presided and decided by the cold neutrality of an impartial judge.

On 23 March 2011, JUDGE GUANLAO, JR. issued an order denying the Motion for
Disqualification and/or Inhibition. The movants filed a motion for reconsideration but the
same was denied in an order dated 14 June 2011. Hence, the instant petition.

xxxx

CA-G.R. SP NO. 122024

xxxx
The intestate court in its Omnibus Order dated 31 October 2006, ordered among others,
the sale of certain properties belonging to the estate. The portion of the order which is
pertinent to the present petition reads:

"WHEREFORE, above premises considered, this Court for the foregoing reasons
resolves to grant the following:

(1) xxx

(2) xxx

(3) Allowing the sale of the properties located at (1) No. 82 Cambridge Circle,
Forbes Park, Makati City, covered by T.C.T. No. 137155 issued by Register of
Deeds of Makati City; (2) No. 3 Intsia Road, Forbes Park, Makati City covered by
T.C.T. No. 4137154 issued by the Register of Deeds of Makati City; and (3) No.
19 Taurus St., Bel-Air Subd. Makati City covered by TCT No. 137156 issued by
the Register of Deeds of Makati City to partially settle the intestate estate of the
late Beatriz S. Silverio, and authorizing the Administrator to undertake the proper
procedure or transferring the titles involved to the name of the estate; and

(4) To apply the proceeds of the sale mentioned in Number 3 above to the
payment of taxes, interests, penalties and other charges, if any, and todistribute
the residue among the heirs Ricardo C. Silverio, Sr., Ricardo S. Silverio, Jr.,
Ligaya S. Silverio represented by Legal Guardian Nestor S. Dela Merced II,
Edmundo S. Silverio and Nelia S. SilverioDee in accordance with the law on
intestacy.

SO ORDERED."

By virtue of the aforesaid Order, SILVERIO, JR. on 16 October 2007 executed a Deed
of Absolute Salein favor of CITRINE HOLDINGS, Inc. ("CITRINE") over the property
located at No. 3 Intsia Road, Forbes Park, Makati City. CITRINE became the registered
owner thereof on 06 September 2010 as evidenced by TCT No. 006-201000063.

A Deed of Absolute Sale was likewise executed in favor of Monica P. Ocampo

(notarized on September 16, 2010) for the lot located at No. 82 Cambridge Circle,
Forbes Park, Makati City. On 23 December 2010, TCT No. 006-2011000050 was
issued toMonica P. Ocampo. The latter subsequently sold said property to ZEE2
Resources, Inc. (ZEE2) and TCT No. 006-2011000190 was issued on 11 February
2011 under its name.

In the interim, or on 12 December 2006 SILVERIO-DEE filed a petition for

certioraribefore the Court of Appeals docketed as CA-G.R. SP No. 97196 with prayer for
injunctive relief. As prayed for, the Court of Appeals issued a Temporary Restraining
Order (TRO) on 5 February 2007. On 4 July 2007, the Court issueda Writ of Preliminary
Injunction conditioned upon the posting of the bond in the amount of two million pesos
(Php2,000,000.00). SILVERIO-DEE posted the required bond on February 5, 2007 but
in an order dated 3 January 2008, the Court ruled that the bond posted by SILVERIO-
DEE failed to comply with A.M. No. 04-7-02-SC. The Court, however, did not reverse
the ruling granting the injunction but instead ordered SILVERIO-DEE to comply with
A.M. No. 04-7-02-SC. The Court also increased the bond from two million to ten million.
On 29 February 2008, the Court issued a Resolution approving the ten million bond and
issued the Writ of Preliminary Injunction. Eventually, on 28 August 2008 the Court of
Appeals (Seventh Division) issued a decision reinstating SILVERIO SR. as
administrator and declaring the Writ of Preliminary Injunction permanent in regard to the
appointment of administrator.

On 04 February 2011 SILVERIO SR. filed an Urgent Application for the Issuance of
Temporary Restraining Order/Preliminary Prohibitory Injunction (With Motion For the
Issuance of Subpoena Ad Testificandum and Subpoena Duces Tecum) praying among
others, that a TRO be issued restraining and/or preventing SILVERIO, JR., MONICA
OCAMPO, CITRINE HOLDINGS, INC. and their successors-in-interest from committing
any act that would affect the titles to the three properties.

On 14 February 2011, SILVERIO SR. filed an Urgent Omnibus Motion (a) To Declare as
Null and Void the Deed of Absolute Sale dated 16 September 2010; (b) To cancel the
Transfer Certificate of Title No. 006-2011000050; and (c) To reinstate the Transfer
Certificate of Title No. 2236121 in the name of Ricardo C. SilverioSr. and the Intestate
Estate of the late Beatriz S. Silverio.

On 28 February 2011 the Intestate Court issued an Order granting a Temporary

Restraining Order enjoining SILVERIO JR., their agent or anybody acting in their behalf
from committing any act that would affect the titles to the properties and enjoining the
Register of Deeds of Makati City from accepting, admitting, approving, registering,
annotating or in any way giving due course to whatever deeds, instruments or any other
documents involving voluntary or involuntary dealings which may have the effect of
transferring, conveying, encumbering, ceding, waiving, alienating, or disposing in favor
of any individual or any entity of the subject properties. Subpoena ad testificandumand
duces tecumwas also issued by the intestate court requiring SILVERIO, JR., MONICA
OCAMPO and ALEXANDRA GARCIA of CITRINE to testify and bring with them any
books and documents under their control to shed light on the circumstances
surrounding the transaction involving the properties in question.

On 9 March 2011, SILVERIO Sr. filed a Supplement to the Urgent Omnibus Motion
dated 14 February 2011. On 18 August 2011, the intestate court rendered the now
assailed Order the decretal portion of the Order is quoted hereunder:

"WHEREFORE, this Court hereby orders that:

1. The Deed of Absolute Sale dated 16 September 2010 as VOID:

 2. The Transfer Certificate of Title No. 006-2011000050 in the name of defendant
MONICA OCAMPO or any of her successors-in-interestincluding all derivative
titles, as NULL AND VOID;

3. The Transfer Certificate of Title TCT No. 006-2011000190 in the name of

ZEE2 RESOURCES, INC. or any of its successors-in-interest including all
derivative titles, as NULL AND VOID;

4. (T)he Register of Deeds of Makati City to CANCEL Transfer Certificate of Title

No. 006-2011000050, Transfer Certificate of Title No. 006-2011000190 and all of
its derivative titles; and 5. Reinstating the Transfer Certificate of Title No.
2236121 in the name of RICARDO C. SILVERIO, SR. AND THE INTESTATE
ESTATE OF THE LATE BEATRIZ SILVERIO, and AS TO THE INTSIA
PROPERTY:

1. The Register of Deeds ofMakati City to CANCEL Transfer Certificate

ofTitle No. 006-2010000063, in the name of CITRINE HOLDINGS, INC.
and all of its derivative titles; and

2. The reinstatement of Transfer Certificate of Title No. 223612 in the

name of RICARDO C. SILVERIO, SR. and the INTESTATE ESTATE OF
THE LATE BEATRIZ SILVERIO.

SO ORDERED."

x x x x3

The consolidated petitions for certiorari filed by respondent Ricardo S. Silverio, Jr.
("Silverio, Jr.") before the CA questioned the following issuances of the intestate court:
CA-G.R. SP No. 121172 – Order dated June 16, 2011 reinstating Silverio, Sr. as
Administrator; CA-G.R. SP No. 121173 – (1) Order dated March 23,2011 granting
Silverio, Sr.’s application for preliminary injunction enjoining Silverio, Jr. or anyone
acting on their behalf from committing any act that would affect the titles to the subject
properties and enjoining the Register of Deeds of Makati City from accepting, admitting,
approving, registering, annotating or in any way giving due course to whatever deeds,
instruments or any other documents involving the Cambridge and Intsia properties, (2)
Order dated March 23, 2011 which denied Silverio, Jr.’s motion or disqualification
and/or inhibition of Judge Guanlao, Jr., and (3) Order dated June 14, 2011 denying the
motion for reconsideration of the March 23, 2011 Order (granting application for
preliminary injunction); and in CA-G.R. SP No. 122024 – Order dated August 18, 2011
declaring the Deed of Absolute Sale, TCT and all derivative titles over the Cambridge
and Intsiaproperties as null and void.

On March 8, 2013, the CA rendered its Decision, the falloof which reads:
WHEREFORE, based on the foregoing premises, the Court hereby disposes and orders
the following:

1. The petition in CA G.R. SP No. 121172is DENIEDfor lack of merit.

Accordingly, the 16 June 2011 Order of the Regional Trial Court of Makati City,
Branch 57 reinstating MR. RICARDO C. SILVERIO, SR. as Administrator is
AFFIRMED.

2. The petition in CA GR. S.P. No. 121173is partly DENIEDfor lack of merit
insofar as it questions the 23 March 2011 Order denying RICARDO SILVERIO,
JR’s Motion for Disqualification and/or Inhibition of Judge Honorio E. Guanlao, Jr.
The petition is partly GRANTEDin that the Preliminary Injunction issued by the
Regional Trial Court of Makati City, Branch 57 is herebydeclared NULL and
VOID for being issued with grave abuse of discretion.

3. The petition in CA G.R.-S.P. No. 122024is GRANTED. Accordingly, the 18

August 2011 Order declaring the Deed of Absolute Sale, Transfer Certificate of
Title and all derivative titles over the Cambridge and Intsia Property null and void
is hereby REVERSEDand SET ASIDE.

SO ORDERED.4

Ricardo C. Silverio, Sr. (petitioner) filed a Motion for Partial Reconsideration 5 "insofar as
its ruling in CA-G.R. SP No. 122024" praying that the August 18, 2011 Order of the
intestate court be affirmed. By Resolution dated July 4, 2013, the CA denied his motion
for partial reconsideration.

Hence, this petition contending thatthe CA committed a reversible error in

upholding the validity of the Intsiak and Cambridgeproperties upon the ground
that the intestate court cannotannul the sales as it has a limited jurisdiction only
and which does not includeresolving issues of ownership. It is asserted that the
CA should nothave stopped there and looked into the nature of the properties
sold, which formed part of the conjugal partnership of Ricardo Silverio, Sr. and
Beatriz S. Silverio.

Petitioner seeks the reinstatement of the order of the intestate court annulling the sales
of the Cambridge and Intsia properties. In the alternative, should the said sales be
upheld, petitioner prays that this Court (1) declare the sales to be valid only to the extent
of 50% net remainder share of the late Beatriz less the corresponding shares therefrom
of petitioner and the other legal compulsory heirs, and (2) order respondent Silverio, Jr.
to account for the proceeds of sales for distribution of the residue among the
legal/compulsory heirs.

In their Comment, respondents Silverio, Jr., Monica Ocampo and Citrine Holdings, Inc.
argued that the intestate court should not have ruled on the validity of the sale of the
subject properties to third parties after it itself had authorized their disposal in partial
settlementof the estate, especially so when separate actions assailing the new titles
issued to said third parties were already instituted by petitioner.

As to the issue of alleged lack ofprior consent of petitioner to the aforesaid sales as the
surviving spouses with a 50% conjugal share in the subject properties, respondents
point out that such is belied by the October 31, 2006 Order of the intestate court, which
clearly showed that counsels of all the heirs were present at the hearing of June 16,
2006 and no objection was made by them to the sale of the properties and the partial
settlement of the Estate of Beatriz S. Silverio, together with the transfer of titles of these
properties in the name of the Estate as prayed for in petitioner’s Manifestation and
Motion dated April 19, 2006. Petitioner had not challenged or appealed the said order
authorizing the sale of the subject properties. Thus, it is too late in the day for petitioner
to raise this factual issue before this Court, not to mention that it cannot be ventilated in
the present appeal by certiorari as thisCourt is not a trier of facts.

Respondent ZEE2 Resources Corporation filed its Comment contending that the
intestate court improperly nullified the titles despite the fact that the present registered
owners, who are indispensable parties, were not impleaded. Indeed, a Torrens title
cannot be collaterally attacked and may be cancelled only in a direct proceeding
brought for the purpose. Respondent points out that petitioner himself recognized thata
direct action is required to annul a Torrens title ashe initially instituted two civil
complaints before the RTC of Makati City seeking to annul, among others, the TCT’s
issued to respondent Ocampo for the Cambridge property. After failing to secure
restraining orders in these two civil cases, petitioner filed in the intestate court his
Urgent OmnibusMotion dated February 14, 2011 to annul the said titles, including that
of ZEE2. In any case, respondent maintains that it is a buyer of good faith and for value,
of which the intestate court never made a determination nor did the aforesaid Urgent
Omnibus Motion and Supplement to the Omnibus Motion dated March 4, 2011 contain
allegations indicating that respondent ZEE2 was not a buyer in good faith and for value.

According to respondent ZEE2, petitioner’s act of filing a separate complaint with

application for a temporary restraining order (TRO) and preliminary injunction on
January 31, 2011 in another court (Civil Case Nos. 11-084 of the RTC of Makati City,
Branch 143) constitutes willful and deliberate forum shopping asthe former also
prayedsimilar primary reliefs and setting up the alleged nullity of the subject deeds of
absolute sale as those raised in the Urgent Omnibus Motion and Supplement to the
Urgent Omnibus Motion filed in the intestate court.

At the outset, we emphasize that the probate court having jurisdiction over properties
under administration has the authority not only to approve any disposition or
conveyance, but also to annul an unauthorized sale by the prospective heirs or
administrator. Thus we held in Lee v. Regional Trial Court of Quezon City, Branch 85 6:

Juliana Ortañez and Jose Ortañez sold specific properties of the estate, without court
approval. It is well-settled that court approval is necessary for the validity of any
disposition of the decedent’s estate. In the early case of Godoy vs. Orellano, we laid
down the rule that the sale of the property of the estate by an administrator without the
order of the probate court is void and passes no title to the purchaser. And in the case
of Dillena vs. Court of Appeals, we ruled that: x x x x

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

There is hardly any doubt that the probate court can declare null and void the
disposition of the property under administration, made by private respondent, the same
having been effected without authority from said court. It is the probate court that has
the power to authorize and/or approve the sale (Section 4 and 7, Rule 89), hence, a
fortiori, it is said court that can declare it null and void for as long as the proceedings
had not been closed or terminated. To uphold petitioner’s contention that the probate
court cannot annul the unauthorized sale, would render meaningless the power
pertaining to the said court. (Bonga vs. Soler, 2 SCRA 755). (italics ours) Our
jurisprudence is therefore clear that (1) any disposition of estate property by an
administrator or prospective heir pending final adjudication requires court approval and
(2) any unauthorized disposition of estate property can be annulled by the probate
court, there being no need for a separate action to annul the unauthorized disposition.
(Emphasis supplied.)

In this case, the sale of the subject properties was executed by respondent Silverio, Jr.
with prior approval of the intestate court under its Omnibus Order dated October 31,
2006. Subsequently, however, the sale was annulled by the said court on motion by
petitioner.

In reversing the intestate court’s order annulling the sale of the subject properties, the
CA noted that said ruling is anchored on the fact that the deeds of sale were executed
at the time when the TRO and writ of preliminary injunction issued in CA-G.R. SP No.
97196 was still in effect. It then concluded that the eventual decision in the latter case
making the writ of preliminary injunction permanent only with respect to the appointment
of petitioner as administrator and not to the grant of authority to sell mooted the issue of
whether the sale was executed at the time when the TRO and writ of preliminary
injunction were in effect.

The CA’s ruling on this issue is hereunder quoted:

The more crucial question that needs to be addressed is: Whether the authority to sell
the properties in question granted under the October 31, 2006 Omnibus Order, was
nullified by the decision of the Court of Appeals in CA-G.R. SP No. 97196. A look at the
dispositive portion of the decision in CA-G.R. SP No. 97196 would lead us to
reasonably conclude that the grant of authority to sell is still good and valid. The fallo of
the decision reads:

"WHEREFORE, the petition is GRANTED. The portions of the Omnibus Order

upholding the grant of letters of administration to and the taking of an oath of
administration by Ricardo Silverio, Jr., as well as the removal of Ricardo Silverio,
Sr. as administrator to the Estate of Beatriz Silverio, are declared NULL and VOID.
The writ of preliminary injunction earlier issued is made permanent in regard to the said
portions. Respondent RTC is ORDERED to reinstate Ricardo Silverio, Sr. as
administrator of the Estate of Beatriz Silverio. Costs against the Private Respondents.

SO ORDERED."

The October 31, 2006 Omnibus Order of the testate [sic] court in so far as it authorizes
the saleof the three properties in question was not declared by the Court of Appeals,
Seventh Division as null and void.It is axiomatic that it is the dispositive portion of the
decision that finally invests rights upon the parties, sets conditions for the exercise of
those rights, and imposes the corresponding duties or obligations.

From all the foregoing, We declare that it was grave abuse of discretion on the
part of the intestate court when it ordered the sale of the Cambridge Property and
Intsia Property as NULL and VOID citing as justification the decision of the Court
of Appeals, Seventh Division in CAG.R. SP No. 97196. To reiterate, the injunction
order which was made permanent by the Court of Appeals (Seventh Division) was
declared to be limited only to the portion ofthe Omnibus Order that upheld the grant of
letters of administrationby SILVERIO, JR. and the removal of SILVERIO, SR. as
administrator and nothing else.

Anent the preliminary injunction issued by the intestate court in its Order dated 23
March 2011 and challenged by SILVERIO JR. in CA-G.R. SP No. 121173, we find that it
was issued with grave abuse of discretion as it was directed against acts which were
already [fait]accompli. The preliminary injunction sought to: 1) restrain SILVERIO JR.,
their agents, or anybody acting in their behalf or any person from committing any act
that would affect the titles to the subject properties belonging to the Intestate Estate of
the late Beatriz Silverio and (2) enjoining the Register of Deeds of Makati City from
accepting, admitting, approving, registering, annotating or in any giving due course to
whatever deeds, instruments or any other documents involving voluntary or involuntary
dealings which may have the effect of transferring, conveying, encumbering, ceding,
waiving, alienating or disposing in favor of any individual or any entity the above-
enumerated properties belonging to the Intestate Estate of the late Beatriz Silverio.
However, the records show that when the preliminary injunction was issued on 23
March 2011 new titles over the disputed properties were already issued to CITRINE
HOLDINGS, INC. and ZEE2 RESOURCES INC.7 (Emphasis supplied.)

We affirm the CA.

It bears to stress that the October 31, 2006 Omnibus Order was issued by the intestate
court acting upon pending motions filed by petitioner and respondent Silverio, Jr., father
and son, respectively, who are the central figures in the now decade-old controversy
over the Intestate Estate of the late Beatriz S. Silverio. The intestate court flip-flopped in
appointing as administrator of the estate petitioner and respondent Silverio, Jr., their
personal conflicts becoming more evident to the intestate court as the proceedings
suffered delays. At the hearing of the urgent motion filed by Edmundo Silverio to sell the
subject properties and partially settle the estate, the much awaited opportunity came
when the heirs represented by their respective counsels interposed no objection to the
same.

While it is true that petitioner was eventually reinstated as Administrator pursuant to the
August 28, 2008 decision in CA-G.R. SP No. 97196 (petition for certiorari filed by Nelia
Silverio-Dee), weagree with the CA that the permanent injunction issued under the said
decision, as explicitly stated in its fallo, pertained only to the portions of the October 31,
2006 Omnibus Order upholding the grant of letters of administration to and taking of an
oath of administration by respondent Silverio, Jr., as otherwise the CA would have
expressly set aside as well the directive in the same Omnibus Order allowing the sale of
the subject properties. Moreover, the CA Decision attained finality only on February 11,
2011 when this Court denied with finality respondent Silverio, Jr.’s motion for
reconsideration of the February 11, 2009 Resolution denyinghis petition for review (G.R.
No. 185619).1âwphi1

The CA therefore did not err in reversing the August 18, 2011 Order of the intestate
court annulling the sale of the subject properties grounded solely on the injunction
issued in CA-G.R. SP No. 97196. Respondents Ocampo, Citrine and ZEE2 should not
be prejudiced by the flip-flopping appointment of Administrator by the intestate court,
having relied in good faith that the sale was authorized and with prior approval of the
intestate court under its Omnibus Order dated October 31, 2006 which remained valid
and subsisting insofar as it allowed the aforesaid sale.

WHEREFORE, the petition is DENIED. The Decision dated March 8, 2013 and
Resolution dated July 4, 2013 of the Court of Appeals in CAG.R. SP Nos. 121173 and
122024 are AFFIRMED.

With costs against the petitioner.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 133743             February 6, 2007

EDGAR SAN LUIS, Petitioner,

vs.
FELICIDAD SAN LUIS, Respondent.

x ---------------------------------------------------- x

G.R. No. 134029             February 6, 2007

RODOLFO SAN LUIS, Petitioner,

vs.
FELICIDAD SAGALONGOS alias FELICIDAD SAN LUIS, Respondent.

DECISION

YNARES-SANTIAGO, J.:

Before us are consolidated petitions for review assailing the February 4, 1998
Decision 1 of the Court of Appeals in CA-G.R. CV No. 52647, which reversed and set
aside the September 12, 1995 2 and January 31, 1996 3 Resolutions of the Regional
Trial Court of Makati City, Branch 134 in SP. Proc. No. M-3708; and its May 15, 1998
Resolution 4 denying petitioners’ motion for reconsideration.

The instant case involves the settlement of the estate of Felicisimo T. San Luis
(Felicisimo), who was the former governor of the Province of Laguna. During his
lifetime, Felicisimo contracted three marriages. His first marriage was with Virginia Sulit
on March 17, 1942 out of which were born six children, namely: Rodolfo, Mila, Edgar,
Linda, Emilita and Manuel. On August 11, 1963, Virginia predeceased Felicisimo.

Five years later, on May 1, 1968, Felicisimo married Merry Lee Corwin, with whom he
had a son, Tobias. However, on October 15, 1971, Merry Lee, an American citizen, filed
a Complaint for Divorce 5 before the Family Court of the First Circuit, State of Hawaii,
United States of America (U.S.A.), which issued a Decree Granting Absolute Divorce
and Awarding Child Custody on December 14, 1973. 6

On June 20, 1974, Felicisimo married respondent Felicidad San Luis, then surnamed
Sagalongos, before Rev. Fr. William Meyer, Minister of the United Presbyterian at
Wilshire Boulevard, Los Angeles, California, U.S.A. 7 He had no children with
respondent but lived with her for 18 years from the time of their marriage up to his death
on December 18, 1992.

Thereafter, respondent sought the dissolution of their conjugal partnership assets and
the settlement of Felicisimo’s estate. On December 17, 1993, she filed a petition for
letters of administration 8 before the Regional Trial Court of Makati City, docketed as
SP. Proc. No. M-3708 which was raffled to Branch 146 thereof.

Respondent alleged that she is the widow of Felicisimo; that, at the time of his death,
the decedent was residing at 100 San Juanico Street, New Alabang Village, Alabang,
Metro Manila; that the decedent’s surviving heirs are respondent as legal spouse, his
six children by his first marriage, and son by his second marriage; that the decedent left
real properties, both conjugal and exclusive, valued at ₱30,304,178.00 more or less;
that the decedent does not have any unpaid debts. Respondent prayed that the
conjugal partnership assets be liquidated and that letters of administration be issued to
her.

On February 4, 1994, petitioner Rodolfo San Luis, one of the children of Felicisimo by
his first marriage, filed a motion to dismiss 9 on the grounds of improper venue and
failure to state a cause of action. Rodolfo claimed that the petition for letters of
administration should have been filed in the Province of Laguna because this was
Felicisimo’s place of residence prior to his death. He further claimed that respondent
has no legal personality to file the petition because she was only a mistress of
Felicisimo since the latter, at the time of his death, was still legally married to Merry Lee.

On February 15, 1994, Linda invoked the same grounds and joined her brother Rodolfo
in seeking the dismissal 10 of the petition. On February 28, 1994, the trial court issued
an Order 11 denying the two motions to dismiss.

Unaware of the denial of the motions to dismiss, respondent filed on March 5, 1994 her
opposition 12 thereto. She submitted documentary evidence showing that while
Felicisimo exercised the powers of his public office in Laguna, he regularly went home
to their house in New Alabang Village, Alabang, Metro Manila which they bought
sometime in 1982. Further, she presented the decree of absolute divorce issued by the
Family Court of the First Circuit, State of Hawaii to prove that the marriage of Felicisimo
to Merry Lee had already been dissolved. Thus, she claimed that Felicisimo had the
legal capacity to marry her by virtue of paragraph 2, 13 Article 26 of the Family Code and
the doctrine laid down in Van Dorn v. Romillo, Jr. 14

Thereafter, Linda, Rodolfo and herein petitioner Edgar San Luis, separately filed
motions for reconsideration from the Order denying their motions to dismiss. 15 They
asserted that paragraph 2, Article 26 of the Family Code cannot be given retroactive
effect to validate respondent’s bigamous marriage with Felicisimo because this would
impair vested rights in derogation of Article 256 16 of the Family Code.
On April 21, 1994, Mila, another daughter of Felicisimo from his first marriage, filed a
motion to disqualify Acting Presiding Judge Anthony E. Santos from hearing the case.

On October 24, 1994, the trial court issued an Order 17 denying the motions for
reconsideration. It ruled that respondent, as widow of the decedent, possessed the legal
standing to file the petition and that venue was properly laid. Meanwhile, the motion for
disqualification was deemed moot and academic 18 because then Acting Presiding
Judge Santos was substituted by Judge Salvador S. Tensuan pending the resolution of
said motion.

Mila filed a motion for inhibition 19 against Judge Tensuan on November 16, 1994. On
even date, Edgar also filed a motion for reconsideration 20 from the Order denying their
motion for reconsideration arguing that it does not state the facts and law on which it
was based.

On November 25, 1994, Judge Tensuan issued an Order 21 granting the motion for
inhibition. The case was re-raffled to Branch 134 presided by Judge Paul T. Arcangel.

On April 24, 1995, 22 the trial court required the parties to submit their respective
position papers on the twin issues of venue and legal capacity of respondent to file the
petition. On May 5, 1995, Edgar manifested 23 that he is adopting the arguments and
evidence set forth in his previous motion for reconsideration as his position paper.
Respondent and Rodolfo filed their position papers on June 14, 24 and June 20, 25 1995,
respectively.

On September 12, 1995, the trial court dismissed the petition for letters of
administration. It held that, at the time of his death, Felicisimo was the duly elected
governor and a resident of the Province of Laguna. Hence, the petition should have
been filed in Sta. Cruz, Laguna and not in Makati City. It also ruled that respondent was
without legal capacity to file the petition for letters of administration because her
marriage with Felicisimo was bigamous, thus, void ab initio. It found that the decree of
absolute divorce dissolving Felicisimo’s marriage to Merry Lee was not valid in the
Philippines and did not bind Felicisimo who was a Filipino citizen. It also ruled that
paragraph 2, Article 26 of the Family Code cannot be retroactively applied because it
would impair the vested rights of Felicisimo’s legitimate children.

Respondent moved for reconsideration 26 and for the disqualification 27 of Judge

Arcangel but said motions were denied. 28

Respondent appealed to the Court of Appeals which reversed and set aside the orders
of the trial court in its assailed Decision dated February 4, 1998, the dispositive portion
of which states:

WHEREFORE, the Orders dated September 12, 1995 and January 31, 1996 are hereby
REVERSED and SET ASIDE; the Orders dated February 28 and October 24, 1994 are
REINSTATED; and the records of the case is REMANDED to the trial court for further
proceedings. 29

The appellante court ruled that under Section 1, Rule 73 of the Rules of Court, the term
"place of residence" of the decedent, for purposes of fixing the venue of the settlement
of his estate, refers to the personal, actual or physical habitation, or actual residence or
place of abode of a person as distinguished from legal residence or domicile. It noted
that although Felicisimo discharged his functions as governor in Laguna, he actually
resided in Alabang, Muntinlupa. Thus, the petition for letters of administration was
properly filed in Makati City.

The Court of Appeals also held that Felicisimo had legal capacity to marry respondent
by virtue of paragraph 2, Article 26 of the Family Code and the rulings in Van Dorn v.
Romillo, Jr. 30 and Pilapil v. Ibay-Somera. 31 It found that the marriage between
Felicisimo and Merry Lee was validly dissolved by virtue of the decree of absolute
divorce issued by the Family Court of the First Circuit, State of Hawaii. As a result,
under paragraph 2, Article 26, Felicisimo was capacitated to contract a subsequent
marriage with respondent. Thus –

With the well-known rule – express mandate of paragraph 2, Article 26, of the Family
Code of the Philippines, the doctrines in Van Dorn, Pilapil, and the reason and
philosophy behind the enactment of E.O. No. 227, — there is no justiciable reason to
sustain the individual view — sweeping statement — of Judge Arc[h]angel, that "Article
26, par. 2 of the Family Code, contravenes the basic policy of our state against divorce
in any form whatsoever." Indeed, courts cannot deny what the law grants. All that the
courts should do is to give force and effect to the express mandate of the law. The
foreign divorce having been obtained by the Foreigner on December 14, 1992, 32 the
Filipino divorcee, "shall x x x have capacity to remarry under Philippine laws". For this
reason, the marriage between the deceased and petitioner should not be denominated
as "a bigamous marriage.

Therefore, under Article 130 of the Family Code, the petitioner as the surviving spouse
can institute the judicial proceeding for the settlement of the estate of the deceased. x x
x 33

Edgar, Linda, and Rodolfo filed separate motions for reconsideration 34 which were
denied by the Court of Appeals.

On July 2, 1998, Edgar appealed to this Court via the instant petition for review on
certiorari. 35 Rodolfo later filed a manifestation and motion to adopt the said petition
which was granted. 36

In the instant consolidated petitions, Edgar and Rodolfo insist that the venue of the
subject petition for letters of administration was improperly laid because at the time of
his death, Felicisimo was a resident of Sta. Cruz, Laguna. They contend that pursuant
to our rulings in Nuval v. Guray 37 and Romualdez v. RTC, Br. 7, Tacloban
City, 38 "residence" is synonymous with "domicile" which denotes a fixed permanent
residence to which when absent, one intends to return. They claim that a person can
only have one domicile at any given time. Since Felicisimo never changed his domicile,
the petition for letters of administration should have been filed in Sta. Cruz, Laguna.

Petitioners also contend that respondent’s marriage to Felicisimo was void and
bigamous because it was performed during the subsistence of the latter’s marriage to
Merry Lee. They argue that paragraph 2, Article 26 cannot be retroactively applied
because it would impair vested rights and ratify the void bigamous marriage. As such,
respondent cannot be considered the surviving wife of Felicisimo; hence, she has no
legal capacity to file the petition for letters of administration.

The issues for resolution: (1) whether venue was properly laid, and (2) whether
respondent has legal capacity to file the subject petition for letters of administration.

The petition lacks merit.

Under Section 1, 39 Rule 73 of the Rules of Court, the petition for letters of
administration of the estate of Felicisimo should be filed in the Regional Trial Court of
the province "in which he resides at the time of his death." In the case of Garcia Fule v.
Court of Appeals, 40 we laid down the doctrinal rule for determining the residence – as
contradistinguished from domicile – of the decedent for purposes of fixing the venue of
the settlement of his estate:

[T]he term "resides" connotes ex vi termini "actual residence" as distinguished from

"legal residence or domicile." This term "resides," like the terms "residing" and
"residence," is elastic and should be interpreted in the light of the object or purpose of
the statute or rule in which it is employed. In the application of venue statutes and rules
– Section 1, Rule 73 of the Revised Rules of Court is of such nature – residence rather
than domicile is the significant factor. Even where the statute uses the word "domicile"
still it is construed as meaning residence and not domicile in the technical sense. Some
cases make a distinction between the terms "residence" and "domicile" but as generally
used in statutes fixing venue, the terms are synonymous, and convey the same
meaning as the term "inhabitant." In other words, "resides" should be viewed or
understood in its popular sense, meaning, the personal, actual or physical habitation of
a person, actual residence or place of abode. It signifies physical presence in a place
and actual stay thereat. In this popular sense, the term means merely residence, that is,
personal residence, not legal residence or domicile. Residence simply requires bodily
presence as an inhabitant in a given place, while domicile requires bodily presence in
that place and also an intention to make it one’s domicile. No particular length of time of
residence is required though; however, the residence must be more than
temporary. 41 (Emphasis supplied)

It is incorrect for petitioners to argue that "residence," for purposes of fixing the venue of
the settlement of the estate of Felicisimo, is synonymous with "domicile." The rulings in
Nuval and Romualdez are inapplicable to the instant case because they involve election
cases. Needless to say, there is a distinction between "residence" for purposes of
election laws and "residence" for purposes of fixing the venue of actions. In election
cases, "residence" and "domicile" are treated as synonymous terms, that is, the fixed
permanent residence to which when absent, one has the intention of
returning. 42 However, for purposes of fixing venue under the Rules of Court, the
"residence" of a person is his personal, actual or physical habitation, or actual residence
or place of abode, which may not necessarily be his legal residence or domicile
provided he resides therein with continuity and consistency. 43 Hence, it is possible that
a person may have his residence in one place and domicile in another.

In the instant case, while petitioners established that Felicisimo was domiciled in Sta.
Cruz, Laguna, respondent proved that he also maintained a residence in Alabang,
Muntinlupa from 1982 up to the time of his death. Respondent submitted in evidence
the Deed of Absolute Sale 44 dated January 5, 1983 showing that the deceased
purchased the aforesaid property. She also presented billing statements 45 from the
Philippine Heart Center and Chinese General Hospital for the period August to
December 1992 indicating the address of Felicisimo at "100 San Juanico, Ayala
Alabang, Muntinlupa." Respondent also presented proof of membership of the
deceased in the Ayala Alabang Village Association 46 and Ayala Country Club,
Inc., 47 letter-envelopes 48 from 1988 to 1990 sent by the deceased’s children to him at
his Alabang address, and the deceased’s calling cards 49 stating that his home/city
address is at "100 San Juanico, Ayala Alabang Village, Muntinlupa" while his
office/provincial address is in "Provincial Capitol, Sta. Cruz, Laguna."

From the foregoing, we find that Felicisimo was a resident of Alabang, Muntinlupa for
purposes of fixing the venue of the settlement of his estate. Consequently, the subject
petition for letters of administration was validly filed in the Regional Trial Court 50 which
has territorial jurisdiction over Alabang, Muntinlupa. The subject petition was filed on
December 17, 1993. At that time, Muntinlupa was still a municipality and the branches
of the Regional Trial Court of the National Capital Judicial Region which had territorial
jurisdiction over Muntinlupa were then seated in Makati City as per Supreme Court
Administrative Order No. 3. 51 Thus, the subject petition was validly filed before the
Regional Trial Court of Makati City.

Anent the issue of respondent Felicidad’s legal personality to file the petition for letters
of administration, we must first resolve the issue of whether a Filipino who is divorced
by his alien spouse abroad may validly remarry under the Civil Code, considering that
Felicidad’s marriage to Felicisimo was solemnized on June 20, 1974, or before the
Family Code took effect on August 3, 1988. In resolving this issue, we need not
retroactively apply the provisions of the Family Code, particularly Art. 26, par. (2)
considering that there is sufficient jurisprudential basis allowing us to rule in the
affirmative.

The case of Van Dorn v. Romillo, Jr. 52 involved a marriage between a foreigner and his
Filipino wife, which marriage was subsequently dissolved through a divorce obtained
abroad by the latter. Claiming that the divorce was not valid under Philippine law, the
alien spouse alleged that his interest in the properties from their conjugal partnership
should be protected. The Court, however, recognized the validity of the divorce and held
that the alien spouse had no interest in the properties acquired by the Filipino wife after
the divorce. Thus:

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

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

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

As to the effect of the divorce on the Filipino wife, the Court ruled that she should no
longer be considered married to the alien spouse. Further, she should not be required to
perform her marital duties and obligations. It held:

To maintain, as private respondent does, that, under our laws, petitioner has to
be considered still married to private respondent and still subject to a wife's
obligations under Article 109, et. seq. of the Civil Code cannot be just. Petitioner
should not be obliged to live together with, observe respect and fidelity, and render
support to private respondent. The latter should not continue to be one of her heirs with
possible rights to conjugal property. She should not be discriminated against in her
own country if the ends of justice are to be served. 54 (Emphasis added)

This principle was thereafter applied in Pilapil v. Ibay-Somera 55 where the Court

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

Likewise, in Quita v. Court of Appeals, 57 the Court stated that where a Filipino is

divorced by his naturalized foreign spouse, the ruling in Van Dorn applies. 58 Although
decided on December 22, 1998, the divorce in the said case was obtained in 1954
when the Civil Code provisions were still in effect.

The significance of the Van Dorn case to the development of limited recognition of

divorce in the Philippines cannot be denied. The ruling has long been interpreted as
severing marital ties between parties in a mixed marriage and capacitating the Filipino
spouse to remarry as a necessary consequence of upholding the validity of a divorce
obtained abroad by the alien spouse. In his treatise, Dr. Arturo M. Tolentino cited Van
Dorn stating that "if the foreigner obtains a valid foreign divorce, the Filipino spouse
shall have capacity to remarry under Philippine law." 59 In Garcia v. Recio, 60 the Court
likewise cited the aforementioned case in relation to Article 26. 61

In the recent case of Republic v. Orbecido III, 62 the historical background and legislative
intent behind paragraph 2, Article 26 of the Family Code were discussed, to wit:

Brief Historical Background

On July 6, 1987, then President Corazon Aquino signed into law Executive Order No.
209, otherwise known as the "Family Code," which took effect on August 3, 1988.
Article 26 thereof states:

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

On July 17, 1987, shortly after the signing of the original Family Code, Executive Order
No. 227 was likewise signed into law, amending Articles 26, 36, and 39 of the Family
Code. A second paragraph was added to Article 26. As so amended, it now provides:

ART. 26. All marriages solemnized outside the Philippines in accordance with the laws
in force in the country where they were solemnized, and valid there as such, shall also
be valid in this country, except those prohibited under Articles 35(1), (4), (5) and (6), 36,
37 and 38.

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

x x x x
Legislative Intent

Records of the proceedings of the Family Code deliberations showed that the intent of
Paragraph 2 of Article 26, according to Judge Alicia Sempio-Diy, a member of the Civil
Code Revision Committee, is to avoid the absurd situation where the Filipino spouse
remains married to the alien spouse who, after obtaining a divorce, is no longer married
to the Filipino spouse.

Interestingly, Paragraph 2 of Article 26 traces its origin to the 1985 case of Van
Dorn v. Romillo, Jr. The Van Dorn case involved a marriage between a Filipino
citizen and a foreigner. The Court held therein that a divorce decree validly
obtained by the alien spouse is valid in the Philippines, and consequently, the
Filipino spouse is capacitated to remarry under Philippine law. 63 (Emphasis
added)

As such, the Van Dorn case is sufficient basis in resolving a situation where a divorce is
validly obtained abroad by the alien spouse. With the enactment of the Family Code and
paragraph 2, Article 26 thereof, our lawmakers codified the law already established
through judicial precedent.1awphi1.net

Indeed, when the object of a marriage is defeated by rendering its continuance

intolerable to one of the parties and productive of no possible good to the community,
relief in some way should be obtainable. 64 Marriage, being a mutual and shared
commitment between two parties, cannot possibly be productive of any good to the
society where one is considered released from the marital bond while the other remains
bound to it. Such is the state of affairs where the alien spouse obtains a valid divorce
abroad against the Filipino spouse, as in this case.

Petitioners cite Articles 15 65 and 17 66 of the Civil Code in stating that the divorce is void
under Philippine law insofar as Filipinos are concerned. However, in light of this Court’s
rulings in the cases discussed above, the Filipino spouse should not be discriminated
against in his own country if the ends of justice are to be served. 67 In Alonzo v.
Intermediate Appellate Court, 68 the Court stated:

But as has also been aptly observed, we test a law by its results; and likewise, we may
add, by its purposes. It is a cardinal rule that, in seeking the meaning of the law, the first
concern of the judge should be to discover in its provisions the intent of the lawmaker.
Unquestionably, the law should never be interpreted in such a way as to cause injustice
as this is never within the legislative intent. An indispensable part of that intent, in fact,
for we presume the good motives of the legislature, is to render justice.

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

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

xxxx

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

Applying the above doctrine in the instant case, the divorce decree allegedly obtained
by Merry Lee which absolutely allowed Felicisimo to remarry, would have vested
Felicidad with the legal personality to file the present petition as Felicisimo’s surviving
spouse. However, the records show that there is insufficient evidence to prove the
validity of the divorce obtained by Merry Lee as well as the marriage of respondent and
Felicisimo under the laws of the U.S.A. In Garcia v. Recio, 70 the Court laid down the
specific guidelines for pleading and proving foreign law and divorce judgments. It held
that presentation solely of the divorce decree is insufficient and that proof of its
authenticity and due execution must be presented. Under Sections 24 and 25 of Rule
132, a writing or document may be proven as a public or official record of a foreign
country by either (1) an official publication or (2) a copy thereof attested by the officer
having legal custody of the document. If the record is not kept in the Philippines, such
copy must be (a) accompanied by a certificate issued by the proper diplomatic or
consular officer in the Philippine foreign service stationed in the foreign country in which
the record is kept and (b) authenticated by the seal of his office. 71

With regard to respondent’s marriage to Felicisimo allegedly solemnized in California,

U.S.A., she submitted photocopies of the Marriage Certificate and the annotated
text 72 of the Family Law Act of California which purportedly show that their marriage
was done in accordance with the said law. As stated in Garcia, however, the Court
cannot take judicial notice of foreign laws as they must be alleged and proved. 73

Therefore, this case should be remanded to the trial court for further reception of
evidence on the divorce decree obtained by Merry Lee and the marriage of respondent
and Felicisimo.

Even assuming that Felicisimo was not capacitated to marry respondent in 1974,
nevertheless, we find that the latter has the legal personality to file the subject petition
for letters of administration, as she may be considered the co-owner of Felicisimo as
regards the properties that were acquired through their joint efforts during their
cohabitation.
Section 6, 74 Rule 78 of the Rules of Court states that letters of administration may be
granted to the surviving spouse of the decedent. However, Section 2, Rule 79 thereof
also provides in part:

SEC. 2. Contents of petition for letters of administration. – A petition for letters of

administration must be filed by an interested person and must show, as far as known to
the petitioner: x x x.

An "interested person" has been defined as one who would be benefited by the estate,
such as an heir, or one who has a claim against the estate, such as a creditor. The
interest must be material and direct, and not merely indirect or contingent. 75

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

Meanwhile, if respondent fails to prove the validity of both the divorce and the marriage,
the applicable provision would be Article 148 of the Family Code which has filled the
hiatus in Article 144 of the Civil Code by expressly regulating the property relations of
couples living together as husband and wife but are incapacitated to marry. 78 In Saguid
v. Court of Appeals, 79 we held that even if the cohabitation or the acquisition of property
occurred before the Family Code took effect, Article 148 governs. 80 The Court
described the property regime under this provision as follows:

The regime of limited co-ownership of property governing the union of parties who are
not legally capacitated to marry each other, but who nonetheless live together as
husband and wife, applies to properties acquired during said cohabitation in proportion
to their respective contributions. Co-ownership will only be up to the extent of the
proven actual contribution of money, property or industry. Absent proof of the extent
thereof, their contributions and corresponding shares shall be presumed to be equal.

xxxx

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

As in other civil cases, the burden of proof rests upon the party who, as determined by
the pleadings or the nature of the case, asserts an affirmative issue. Contentions must
be proved by competent evidence and reliance must be had on the strength of the
party’s own evidence and not upon the weakness of the opponent’s defense. x x x 81

In view of the foregoing, we find that respondent’s legal capacity to file the subject
petition for letters of administration may arise from her status as the surviving wife of
Felicisimo or as his co-owner under Article 144 of the Civil Code or Article 148 of the
Family Code.

WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals reinstating
and affirming the February 28, 1994 Order of the Regional Trial Court which denied
petitioners’ motion to dismiss and its October 24, 1994 Order which dismissed
petitioners’ motion for reconsideration is AFFIRMED. Let this case be REMANDED to
the trial court for further proceedings.

SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 177099               June 8, 2011

EDUARDO G. AGTARAP, Petitioner,
vs.
SEBASTIAN AGTARAP, JOSEPH AGTARAP, TERESA AGTARAP, WALTER DE
SANTOS, and ABELARDO DAGORO, Respondents.

x - - - - - - - - - - - - - - - - - - - - - - -x

G.R. No. 177192

SEBASTIAN G. AGTARAP, Petitioner,
vs.
EDUARDO G. AGTARAP, JOSEPH AGTARAP, TERESA AGTARAP, WALTER DE
SANTOS, and ABELARDO DAGORO, Respondents.
 DECISION

NACHURA, J.:

Before us are the consolidated petitions for review on certiorari of petitioners Sebastian
G. Agtarap (Sebastian)1 and Eduardo G. Agtarap (Eduardo), 2 assailing the Decision
dated November 21, 20063 and the Resolution dated March 27, 20074 of the Court of
Appeals (CA) in CA-G.R. CV No. 73916.

The antecedent facts and proceedings—

On September 15, 1994, Eduardo filed with the Regional Trial Court (RTC), Branch 114,
Pasay City, a verified petition for the judicial settlement of the estate of his deceased
father Joaquin Agtarap (Joaquin). It was docketed as Special Proceedings No. 94-4055.

The petition alleged that Joaquin died intestate on November 21, 1964 in Pasay City
without any known debts or obligations. During his lifetime, Joaquin contracted two
marriages, first with Lucia Garcia (Lucia), 5 and second with Caridad Garcia (Caridad).
Lucia died on April 24, 1924. Joaquin and Lucia had three children—Jesus (died without
issue), Milagros, and Jose (survived by three children, namely, Gloria, 6 Joseph, and
Teresa7). Joaquin married Caridad on February 9, 1926. They also had three children—
Eduardo, Sebastian, and Mercedes (survived by her daughter Cecile). At the time of his
death, Joaquin left two parcels of land with improvements in Pasay City, covered by
Transfer Certificates of Title (TCT) Nos. 873-(38254) and 874-(38255). Joseph, a
grandson of Joaquin, had been leasing and improving the said realties and had been
appropriating for himself ₱26,000.00 per month since April 1994.

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

On September 26, 1994, the RTC issued an order setting the petition for initial hearing
and directing Eduardo to cause its publication.

On December 28, 1994, Sebastian filed his comment, generally admitting the
allegations in the petition, and conceding to the appointment of Eduardo as special
administrator.

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

On February 16, 1995, the RTC issued a resolution appointing Eduardo as regular
administrator of Joaquin’s estate. Consequently, it issued him letters of administration.

On September 16, 1995, Abelardo Dagoro filed an answer in intervention, alleging that
Mercedes is survived not only by her daughter Cecile, but also by him as her husband.
He also averred that there is a need to appoint a special administrator to the estate, but
claimed that Eduardo is not the person best qualified for the task.

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

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

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

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

I LAND:
Two lots and two buildings with one garage quarter located at #3030 Agtarap St., Pasay
City, covered by Transfer Certificate of Title Nos. 38254 and 38255 and registered with
the Registry of Deeds of Pasay City, Metro Manila, described as follows:

TCT NO. LOT NO. AREA/SQ.M. ZONAL VALUE AMOUNT

38254 745-B-1 1,335 sq. m. ₱5,000.00 ₱6,675,000.00
38255 745-B-2 1,331 sq. m. ₱5,000.00 ₱6,655,000.00

TOTAL------------------------------------------------------------- ₱13,330,000.00

II BUILDINGS AND IMPROVEMENTS:

BUILDING I (Lot # 745-B-1) ------------------------------ ₱350,000.00

BUILDING II (Lot # 745-B-2) ----------------------------- 320,000.00
Building Improvements -------------------------------------- 97,500.00
Restaurant ------------------------------------------------------ 80,000.00

TOTAL --------------------------------------------------------- ₱847,500.00

TOTAL NET WORTH ----------------------------------------- ₱14,177,500.00

WHEREFORE, the net assets of the estate of the late JOAQUIN AGTARAP with a total
value of ₱14,177,500.00, together with whatever interest from bank deposits and all
other incomes or increments thereof accruing after the Accounting Report of December
31, 1996, after deducting therefrom the compensation of the administrator and other
expenses allowed by the Court, are hereby ordered distributed as follows:

TOTAL ESTATE – ₱14,177,500.00

CARIDAD AGTARAP – ½ of the estate as her conjugal share – ₱7,088,750.00, the

other half of ₱7,088,750.00 – to be divided among the compulsory heirs as follows:

1) JOSE (deceased) - ₱1,181,548.30

2) MILAGROS (deceased) - ₱1,181,548.30
3) MERCEDES (deceased) - ₱1,181,548.30
4) SEBASTIAN - ₱1,181,548.30
5) EDUARDO - ₱1,181,548.30
6) CARIDAD - ₱1,181,548.30
The share of Milagros Agtarap as compulsory heir in the amount of ₱1,181,548.30 and
who died in 1996 will go to Teresa Agtarap and Joseph Agtarap, Walter de Santos and
half brothers Eduardo and Sebastian Agtarap in equal proportions.

TERESA AGTARAP - ₱236,291.66

JOSEPH AGTARAP - ₱236,291.66
WALTER DE SANTOS - ₱236,291.66
SEBASTIAN AGTARAP - ₱236,291.66
EDUARDO AGTARAP - ₱236,291.66

Jose Agtarap died in 1967. His compulsory heirs are as follows:

COMPULSORY HEIRS:

1) GLORIA – (deceased) – represented by Walter de

Santos –
- ₱295,364.57
2) JOSEPH AGTARAP - ₱295,364.57
3) TERESA AGTARAP - ₱295,364.57
4) PRISCILLA AGTARAP - ₱295,364.57

Hence, Priscilla Agtarap will inherit ₱295,364.57.

Adding their share from Milagros Agtarap, the following heirs of the first marriage stand
to receive the total amount of:

HEIRS OF THE FIRST MARRIAGE:

1avvphi1
1) JOSEPH AGTARAP - ₱236,291.66 – share from Milagros Agtarap

₱295,364.57 – as compulsory heir of

₱531,656.23 Jose Agtarap

2) TERESA AGTARAP - ₱236,291.66 – share from Milagros Agtarap

₱295,364.57 – as compulsory heir of

₱531,656.23 Jose Agtarap

 3) WALTER DE SANTOS - ₱236,291.66 – share from Milagros Agtarap

₱295,364.57 – as compulsory heir of

₱531,656.23 Jose Agtarap

HEIRS OF THE SECOND MARRIAGE:

a) CARIDAD AGTARAP - died on August 25, 1999

₱7,088,750.00 - as conjugal share
₱1,181,458.30 - as compulsory heir

Total of ₱8,270,208.30
b) SEBASTIAN AGTARAP - ₱1,181,458.38 – as compulsory heir
₱ 236,291.66 – share from Milagros
c) EDUARDO AGTARAP - ₱1,181,458.38 – as compulsory heir
₱ 236,291.66 – share from Milagros
d) MERCEDES - as represented by Abelardo Dagoro as the
surviving spouse of a compulsory heir
₱1,181,458.38

REMAINING HEIRS OF CARIDAD AGTARAP:

1) SEBASTIAN AGTARAP

2) EDUARDO AGTARAP
MERCEDES AGTARAP (Predeceased Caridad Agtarap)

In sum, Sebastian Agtarap and Eduardo Agtarap stand to inherit:

SEBASTIAN – ₱4,135,104.10 – share from Caridad Garcia

₱1,181,458.30 - as compulsory heir
₱ 236,291.66 - share from Milagros

₱5,522,854.06
EDUARDO – ₱4,135,104.10 – share from Caridad Garcia
₱1,181,458.30 – as compulsory heir
₱ 236,291.66 – share from Milagros
 ₱5,522,854.06

SO ORDERED.9

Eduardo, Sebastian, and oppositors Joseph and Teresa filed their respective motions
for reconsideration.

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

On November 21, 2006, the CA rendered its Decision, the dispositive portion of which
reads—

WHEREFORE, premises considered, the instant appeals are DISMISSED for lack of
merit. The assailed Resolution dated August 27, 2001 is AFFIRMED and pursuant
thereto, the subject properties (Lot No. 745-B-1 [TCT No. 38254] and Lot No. 745-B-2
[TCT No. 38255]) and the estate of the late Joaquin Agtarap are hereby partitioned as
follows:

The two (2) properties, together with their improvements, embraced by TCT No. 38254
and TCT No. 38255, respectively, are first to be distributed among the following:

Lucia Mendietta - ½ of the property. But since she is deceased, her share shall be
inherited by Joaquin, Jesus, Milagros and Jose in equal shares.

Joaquin Agtarap - ½ of the property and ¼ of the other half of the property which
pertains to Lucia Mendietta’s share.

Jesus Agtarap - ¼ of Lucia Mendietta’s share. But since he is already deceased (and
died without issue), his inheritance shall, in turn, be acquired by Joaquin Agtarap.

Milagros Agtarap - ¼ of Lucia Mendietta’s share. But since she died in 1996 without
issue, 5/8 of her inheritance shall be inherited by Gloria (represented by her husband
Walter de Santos and her daughter Samantha), Joseph Agtarap and Teresa Agtarap,
(in representation of Milagros’ brother Jose Agtarap) and 1/8 each shall be inherited by
Mercedes (represented by her husband Abelardo Dagoro and her daughter Cecile),
Sebastian Eduardo, all surnamed Agtarap.

Jose Agtarap - ¼ of Lucia Mendietta’s share. But since he died in 1967, his inheritance
shall be acquired by his wife Priscilla, and children Gloria (represented by her husband
Walter de Santos and her daughter Samantha), Joseph Agtarap and Teresa in equal
shares.
Then, Joaquin Agtarap’s estate, comprising three-fourths (3/4) of the subject properties
and its improvements, shall be distributed as follows:

Caridad Garcia - 1/6 of the estate. But since she died in 1999, her share shall be
inherited by her children namely Mercedes Agtarap (represented by her husband
Abelardo Dagoro and her daughter Cecilia), Sebastian Agtarap and Eduardo Agtarap in
their own right, dividing the inheritance in equal shares.

Milagros Agtarap - 1/6 of the estate. But since she died in 1996 without issue, 5/8 of her
inheritance shall be inherited by Gloria (represented by her husband Walter de Santos
and her daughter Samantha), Joseph Agtarap and Teresa Agtarap, (in representation of
Milagros’ brother Jose Agtarap) and 1/8 each shall be inherited by Mercedes
(represented by her husband Abelardo Dagoro and her daughter Cecile), Sebastian and
Eduardo, all surnamed Agtarap.

Jose Agtarap - 1/6 of the estate. But since he died in 1967, his inheritance shall be
acquired by his wife Priscilla, and children Gloria (represented by her husband Walter
de Santos and her daughter Samantha), Joseph Agtarap and Teresa Agtarap in equal
shares.

Mercedes Agtarap - 1/6 of the estate. But since she died in 1984, her inheritance shall
be acquired by her husband Abelardo Dagoro and her daughter Cecile in equal shares.

Sebastian Agtarap - 1/6 of the estate.

Eduardo Agtarap - 1/6 of the estate.

SO ORDERED.11

Aggrieved, Sebastian and Eduardo filed their respective motions for reconsideration.

In its Resolution dated March 27, 2007, the CA denied both motions. Hence, these
petitions ascribing to the appellate court the following errors:

G.R. No. 177192

1. – The Court of Appeals erred in not considering the aforementioned important

facts12 which alter its Decision;

2. – The Court of Appeals erred in not considering the necessity of hearing the
issue of legitimacy of respondents as heirs;

3. – The Court of Appeals erred in allowing violation of the law and in not
applying the doctrines of collateral attack, estoppel, and res judicata. 13

G.R. No. 177099

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

II.

THE COURT OF APPEALS (FORMER TWELFTH DIVISION) ERRED IN DISMISSING

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

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

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

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

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

The Court’s Ruling

As to Sebastian’s and Eduardo’s common issue on the ownership of the subject

real properties, we hold that the RTC, as an intestate court, had jurisdiction to
resolve the same.

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

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

We hold that the general rule does not apply to the instant case considering that the
parties are all heirs of Joaquin and that no rights of third parties will be impaired by the
resolution of the ownership issue. More importantly, the determination of whether the
subject properties are conjugal is but collateral to the probate court’s jurisdiction to
settle the estate of Joaquin.1auuphi1

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

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

Ap-4966 – NOTA: Se ha enmendado el presente certificado de titulo, tal como aparece,

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

Pasig, Rizal, a 29 abril de 1937.23

Thus, per the order dated April 28, 1937 of Hon. Sixto de la Costa, presiding judge of
the Court of First Instance of Rizal, the phrase con Lucia Garcia Mendiet[t]a was
crossed out and replaced by en segundas nuptias con Caridad Garcia, referring to the
second marriage of Joaquin to Caridad. It cannot be gainsaid, therefore, that prior to the
replacement of Caridad’s name in TCT No. 32184, Lucia, upon her demise, already left,
as her estate, one-half (1/2) conjugal share in TCT No. 32184. Lucia’s share in the
property covered by the said TCT was carried over to the properties covered by the
certificates of title derivative of TCT No. 32184, now TCT Nos. 38254 and 38255. And
as found by both the RTC and the CA, Lucia was survived by her compulsory heirs –
Joaquin, Jesus, Milagros, and Jose.

Section 2, Rule 73 of the Rules of Court provides that when the marriage is
dissolved by the death of the husband or the wife, the community property shall
be inventoried, administered, and liquidated, and the debts thereof paid; in the
testate or intestate proceedings of the deceased spouse, and if both spouses
have died, the conjugal partnership shall be liquidated in the testate or intestate
proceedings of either. Thus, the RTC had jurisdiction to determine whether the
properties are conjugal as it had to liquidate the conjugal partnership to
determine the estate of the decedent. In fact, should Joseph and Teresa institute
a settlement proceeding for the intestate estate of Lucia, the same should be
consolidated with the settlement proceedings of Joaquin, being Lucia’s
spouse.24 Accordingly, the CA correctly distributed the estate of Lucia, with
respect to the properties covered by TCT Nos. 38254 and 38255 subject of this
case, to her compulsory heirs.

Therefore, in light of the foregoing evidence, as correctly found by the RTC and the CA,
the claim of Sebastian and Eduardo that TCT Nos. 38254 and 38255 conclusively show
that the owners of the properties covered therein were Joaquin and Caridad by virtue of
the registration in the name of Joaquin Agtarap casado con (married to) Caridad Garcia,
deserves scant consideration. This cannot be said to be a collateral attack on the said
TCTs. Indeed, simple possession of a certificate of title is not necessarily conclusive of
a holder’s true ownership of property. 25 A certificate of title under the Torrens system
aims to protect dominion; it cannot be used as an instrument for the deprivation of
ownership.26 Thus, the fact that the properties were registered in the name of Joaquin
Agtarap, married to Caridad Garcia, is not sufficient proof that the properties were
acquired during the spouses’ coverture.27 The phrase "married to Caridad Garcia" in the
TCTs is merely descriptive of the civil status of Joaquin as the registered owner, and
does not necessarily prove that the realties are their conjugal properties. 28
Neither can Sebastian’s claim that Joaquin’s estate could have already been settled in
1965 after the payment of the inheritance tax be upheld. Payment of the inheritance tax,
per se, does not settle the estate of a deceased person. As provided in Section 1, Rule
90 of the Rules of Court—

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

No distribution shall be allowed until the payment of the obligations above mentioned
has been made or provided for, unless the distributees, or any of them, give a bond, in a
sum to be fixed by the court, conditioned for the payment of said obligations within such
time as the court directs.

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

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

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

Indeed, this Court is not a trier of facts, and there appears no compelling reason to hold
that both courts erred in ruling that Joseph, Teresa, Walter de Santos, and Abelardo
Dagoro rightfully participated in the estate of Joaquin. It was incumbent upon Sebastian
to present competent evidence to refute his and Eduardo’s admissions that Joseph and
Teresa were heirs of Jose, and thus rightful heirs of Joaquin, and to timely object to the
participation of Walter de Santos and Abelardo Dagoro. Unfortunately, Sebastian failed
to do so. Nevertheless, Walter de Santos and Abelardo Dagoro had the right to
participate in the estate in representation of the Joaquin’s compulsory heirs, Gloria and
Mercedes, respectively.33

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

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

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

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

SO ORDERED.

ANTONIO EDUARDO B. NACHURA

Associate Justice

WE CONCUR:

Republic of the Philippines

SUPREME COURT
Manila

SECOND SPECIAL DIVISION

G.R. No. 183053               October 10, 2012

EMILIO A.M. SUNTAY III, Petitioner,

vs.
ISABEL COJUANGCO-SUNTAY, Respondent.

RESOLUTION

PEREZ, J.:

The now overly prolonged, all-too familiar and too-much-stretched imbroglio over the
estate of Cristina Aguinaldo-Suntay has continued. We issued a Decision in the dispute
as in Inter Caetera.1 We now find a need to replace the decision.

Before us is a Motion for Reconsideration filed by respondent Isabel Cojuangco-Suntay

(respondent Isabel) of our Decision 2 in G.R. No. 183053 dated 16 June 2010, directing
the issuance of joint letters of administration to both petitioner Emilio A.M. Suntay III
(Emilio III) and respondent. The dispositive portion thereof reads:
WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals in CA-
G.R. CV No. 74949 is REVERSED and SET ASIDE. Letters of Administration over the
estate of decedent Cristina Aguinaldo-Suntay shall issue to both petitioner Emilio A.M.
Suntay III and respondent Isabel Cojuangco-Suntay upon payment by each of a bond to
be set by the Regional Trial Court, Branch 78, Malolos, Bulacan, in Special Proceeding
Case No. 117-M-95. The Regional Trial Court, Branch 78, Malolos, Bulacan is likewise
directed to make a determination and to declare the heirs of decedent Cristina
Aguinaldo-Suntay according to the actual factual milieu as proven by the parties, and all
other persons with legal interest in the subject estate. It is further directed to settle the
estate of decedent Cristina Aguinaldo-Suntay with dispatch. No costs. 3

We are moved to trace to its roots the controversy between the parties.

The decedent Cristina Aguinaldo-Suntay (Cristina) died intestate on 4 June 1990.

Cristina was survived by her spouse, Dr. Federico Suntay (Federico) and five
grandchildren: three legitimate grandchildren, including herein respondent, Isabel; and
two illegitimate grandchildren, including petitioner Emilio III, all by Federico’s and
Cristina’s only child, Emilio A. Suntay (Emilio I), who predeceased his parents.

The illegitimate grandchildren, Emilio III and Nenita, were both reared from infancy by
the spouses Federico and Cristina. Their legitimate grandchildren, Isabel and her
siblings, Margarita and Emilio II, lived with their mother Isabel Cojuangco, following the
separation of Isabel’s parents, Emilio I and Isabel Cojuangco. Isabel’s parents, along
with her paternal grandparents, were involved in domestic relations cases, including a
case for parricide filed by Isabel Cojuangco against Emilio I. Emilio I was eventually
acquitted.

In retaliation, Emilio I filed a complaint for legal separation against his wife, charging her
among others with infidelity. The trial court declared as null and void and of no effect the
marriage of Emilio I and Isabel Cojuangco on the finding that:

From February 1965 thru December 1965 plaintiff was confined in the Veterans
memorial Hospital. Although at the time of the trial of parricide case (September 8,
1967) the patient was already out of the hospital, he continued to be under observation
and treatment.

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

There is no controversy that the marriage between the parties was effected on July 9,
1958, years after plaintiffs mental illness had set in. This fact would justify a declaration
of nullity of the marriage under Article 85 of the Civil Code which provides:
Art. 95. (sic) A marriage may be annulled for any of the following causes after (sic)
existing at the time of the marriage:

xxxx

(3) That either party was of unsound mind, unless such party, after coming to reason,
freely cohabited with the other as husband or wife.

There is a dearth of proof at the time of the marriage defendant knew about the mental
condition of plaintiff; and there is proof that plaintiff continues to be without sound
reason. The charges in this very complaint add emphasis to the findings of the neuro-
psychiatrist handling the patient, that plaintiff really lives more in fancy than in reality, a
strong indication of schizophernia (sic).4

Intent on maintaining a relationship with their grandchildren, Federico and Isabel filed a
complaint for visitation rights to spend time with Margarita, Emilio II, and Isabel in the
same special lower court. The Juvenile Domestic Relations Court in Quezon City
(JDRC-QC) granted their prayer for one hour a month of visitation rights which was
subsequently reduced to thirty minutes, and ultimately stopped, because of respondent
Isabel’s testimony in court that her grandparents’ visits caused her and her siblings
stress and anxiety.5

On 27 September 1993, more than three years after Cristina’s death, Federico adopted
his illegitimate grandchildren, Emilio III and Nenita.

On 26 October 1995, respondent Isabel, filed before the Regional Trial Court (RTC),
Malolos, Bulacan, a petition for the issuance of letters of administration over Cristina’s
estate docketed as Special Proceeding Case No. 117-M-95. Federico, opposed the
petition, pointing out that: (1) as the surviving spouse of the decedent, he should be
appointed administrator of the decedent’s estate; (2) as part owner of the mass of
conjugal properties left by the decedent, he must be accorded preference in the
administration thereof; (3) Isabel and her siblings had been alienated from their
grandparents for more than thirty (30) years; (4) the enumeration of heirs in the petition
was incomplete as it did not mention the other children of his son, Emilio III and Nenita;
(5) even before the death of his wife, Federico had administered their conjugal
properties, and thus, is better situated to protect the integrity of the decedent’s estate;
(6) the probable value of the estate as stated in the petition was grossly overstated; and
(7) Isabel’s allegation that some of the properties are in the hands of usurpers is untrue.

Federico filed a Motion to Dismiss Isabel’s petition for letters of administration on the
ground that Isabel had no right of representation to the estate of Cristina, she being an
illegitimate grandchild of the latter as a result of Isabel’s parents’ marriage being
declared null and void. However, in Suntay v. Cojuangco-Suntay, we categorically
declared that Isabel and her siblings, having been born of a voidable marriage as
opposed to a void marriage based on paragraph 3, Article 85 of the Civil Code, were
legitimate children of Emilio I, who can all represent him in the estate of their legitimate
grandmother, the decedent, Cristina.

Undaunted by the set back, Federico nominated Emilio III to administer the decedent’s
estate on his behalf in the event letters of administration issues to Federico.
Consequently, Emilio III filed an Opposition-In-Intervention, echoing the allegations in
his grandfather’s opposition, alleging that Federico, or in his stead, Emilio III, was better
equipped than respondent to administer and manage the estate of the decedent,
Cristina.

On 13 November 2000, Federico died.

Almost a year thereafter or on 9 November 2001, the trial court rendered a decision
appointing Emilio III as administrator of decedent Cristina’s intestate estate:

WHEREFORE, the petition of Isabel Cojuangco-Suntay is DENIED and the Opposition-

in-Intervention is GRANTED.

Accordingly, the Intervenor, Emilio A.M. Suntay, III (sic) is hereby appointed
administrator of the estate of the decedent Cristina Aguinaldo Suntay, who shall enter
upon the execution of his trust upon the filing of a bond in the amount of ₱ 200,000.00,
conditioned as follows:

(1) To make and return within three (3) months, a true and complete inventory;

(2) To administer the estate and to pay and discharge all debts, legatees, and charge
on the same, or dividends thereon;

(3) To render a true and just account within one (1) year, and at any other time when
required by the court, and

(4) To perform all orders of the Court.

Once the said bond is approved by the court, let Letters of Administration be issued in
his favor.6

On appeal, the Court of Appeals reversed and set aside the decision of the RTC,
revoked the Letters of Administration issued to Emilio III, and appointed respondent as
administratrix of the subject estate:

WHEREFORE, in view of all the foregoing, the assailed decision dated November 9,
2001 of Branch 78, Regional Trial Court of Malolos, Bulacan in SPC No. 117-M-95 is
REVERSED and SET ASIDE and the letters of administration issued by the said court
to Emilio A.M. Suntay III, if any, are consequently revoked. Petitioner Isabel Cojuangco-
Suntay is hereby appointed administratrix of the intestate estate of Cristina Aguinaldo
Suntay. Let letters of administration be issued in her favor upon her filing of a bond in
the amount of Two Hundred Thousand (₱ 200,000.00) Pesos. 7

As previously adverted to, on appeal by certiorari, we reversed and set aside the ruling
of the appellate court. We decided to include Emilio III as co-administrator of Cristina’s
estate, giving weight to his interest in Federico’s estate. In ruling for co-administration
between Emilio III and

Isabel, we considered that:

1. Emilio III was reared from infancy by the decedent, Cristina, and her husband,
Federico, who both acknowledged him as their grandchild;

2. Federico claimed half of the properties included in the estate of the decedent,
Cristina, as forming part of their conjugal partnership of gains during the
subsistence of their marriage;

3. Cristina’s properties, forming part of her estate, are still commingled with those
of her husband, Federico, because her share in the conjugal partnership remains
undetermined and unliquidated; and

4. Emilio III is a legally adopted child of Federico, entitled to share in the

distribution of the latter’s estate as a direct heir, one degree from Federico, and
not simply in representation of his deceased illegitimate father, Emilio I.

In this motion, Isabel pleads for total affirmance of the Court of Appeals’ Decision in
favor of her sole administratorship based on her status as a legitimate grandchild of
Cristina, whose estate she seeks to administer.

Isabel contends that the explicit provisions of Section 6, Rule 78 of the Rules of Court
on the order of preference for the issuance of letters of administration cannot be ignored
and that Article 992 of the Civil Code must be followed. Isabel further asserts that Emilio
III had demonstrated adverse interests and disloyalty to the estate, thus, he does not
deserve to become a co-administrator thereof.

Specifically, Isabel bewails that: (1) Emilio III is an illegitimate grandchild and therefore,
not an heir of the decedent; (2) corollary thereto, Emilio III, not being a "next of kin" of
the decedent, has no interest in the estate to justify his appointment as administrator
thereof; (3) Emilio III’s actuations since his appointment as administrator by the RTC on
9 November 2001 emphatically demonstrate the validity and wisdom of the order of
preference in Section 6, Rule 78 of the Rules of Court; and (4) there is no basis for joint
administration as there are no "opposing parties or factions to be represented."

To begin with, the case at bar reached us on the issue of who, as between Emilio III and
Isabel, is better qualified to act as administrator of the decedent’s estate. We did not
choose. Considering merely his demonstrable interest in the subject estate, we ruled
that Emilio III should likewise administer the estate of his illegitimate grandmother,
Cristina, as a co-administrator. In the context of this case, we have to make a choice
and therefore, reconsider our decision of 16 June 2010.

The general rule in the appointment of administrator of the estate of a decedent is laid
down in Section 6, Rule 78 of the Rules of Court:

SEC. 6. When and to whom letters of administration granted. – If no executor is named

in the will, or the executor or executors are incompetent, refuse the trust, or fail to give
bond, or a person dies intestate, administration shall be granted:

(a) To the surviving husband or wife, as the case may be, or next of kin, or both, in the
discretion of the court, or to such person as such surviving husband or wife, or next of
kin, requests to have appointed, if competent and willing to serve;

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

(c) If there is not such creditor competent and willing to serve, it may be granted to such
other person as the court may select.

Textually, the rule lists a sequence to be observed, an order of preference, in the

appointment of an administrator. This order of preference, which categorically seeks out
the surviving spouse, the next of kin and the creditors in the appointment of an
administrator, has been reinforced in jurisprudence. 8

The paramount consideration in the appointment of an administrator over the estate of a

decedent is the prospective administrator’s interest in the estate. 9 This is the same
consideration which Section 6, Rule 78 takes into account in establishing the order of
preference in the appointment of administrator for the estate. The rationale behind the
rule is that those who will reap the benefit of a wise, speedy and economical
administration of the estate, or, in the alternative, suffer the consequences of waste,
improvidence or mismanagement, have the highest interest and most influential motive
to administer the estate correctly.10 In all, given that the rule speaks of an order of
preference, the person to be appointed administrator of a decedent’s estate must
demonstrate not only an interest in the estate, but an interest therein greater than any
other candidate.

To illustrate, the preference bestowed by law to the surviving spouse in the

administration of a decedent’s estate presupposes the surviving spouse’s interest in the
conjugal partnership or community property forming part of the decedent’s
estate.11 Likewise, a surviving spouse is a compulsory heir of a decedent 12 which
evinces as much, if not more, interest in administering the entire estate of a decedent,
aside from her share in the conjugal partnership or absolute community property.

It is to this requirement of observation of the order of preference in the appointment of

administrator of a decedent’s estate, that the appointment of co-administrators has been
allowed, but as an exception. We again refer to Section 6(a) of Rule 78 of the Rules of
Court which specifically states that letters of administration may be issued to both the
surviving spouse and the next of kin. In addition and impliedly, we can refer to Section 2
of Rule 82 of the Rules of Court which say that "x x x when an executor or administrator
dies, resigns, or is removed, the remaining executor or administrator may administer the
trust alone, x x x."

In a number of cases, we have sanctioned the appointment of more than one

administrator for the benefit of the estate and those interested therein. 13 We recognized
that the appointment of administrator of the estate of a decedent or the determination of
a person’s suitability for the office of judicial administrator rests, to a great extent, in the
sound judgment of the court exercising the power of appointment. 14

Under certain circumstances and for various reasons well-settled in Philippine and
American jurisprudence, we have upheld the appointment of co-administrators: (1) to
have the benefits of their judgment and perhaps at all times to have different interests
represented;15 (2) where justice and equity demand that opposing parties or factions be
represented in the management of the estate of the deceased; (3) where the estate is
large or, from any cause, an intricate and perplexing one to settle; 16 (4) to have all
interested persons satisfied and the representatives to work in harmony for the best
interests of the estate;17 and when a person entitled to the administration of an estate
desires to have another competent person associated with him in the office. 18

In the frequently cited Matias v. Gonzales, we dwelt on the appointment of special co-
administrators during the pendency of the appeal for the probate of the decedent’s will.
Pending the probate thereof, we recognized Matias’ special interest in the decedent’s
estate as universal heir and executrix designated in the instrument who should not be
excluded in the administration thereof. Thus, we held that justice and equity demands
that the two (2) factions among the non-compulsory heirs of the decedent, consisting of
an instituted heir (Matias) and intestate heirs (respondents thereat), should be
represented in the management of the decedent’s estate. 19

Another oft-cited case is Vda. de Dayrit v. Ramolete, where we held that "inasmuch as
petitioner-wife owns one-half of the conjugal properties and that she, too, is a
compulsory heir of her husband, to deprive her of any hand in the administration of the
estate prior to the probate of the will would be unfair to her proprietary interests." 20

Hewing closely to the aforementioned cases is our ruling in Ventura v. Ventura 21 where
we allowed the appointment of the surviving spouse and legitimate children of the
decedent as co-administrators. However, we drew a distinction between the heirs
categorized as next of kin, the nearest of kin in the category being preferred, thus:
In the case at bar, the surviving spouse of the deceased Gregorio Ventura is Juana
Cardona while the next of kin are: Mercedes and Gregoria Ventura and Maria and
Miguel Ventura. The "next of kin" has been defined as those persons who are entitled
under the statute of distribution to the decedent’s property (citations omitted). It is
generally said that "the nearest of kin, whose interest in the estate is more
preponderant, is preferred in the choice of administrator. ‘Among members of a class
the strongest ground for preference is the amount or preponderance of interest. As
between next of kin, the nearest of kin is to be preferred.’" (citations omitted)

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

In Silverio, Sr. v. Court of Appeals, 23 we maintained that the order of preference in the
appointment of an administrator depends on the attendant facts and circumstances. In
that case, we affirmed the legitimate child’s appointment as special administrator, and
eventually as regular administrator, of the decedent’s estate as against the surviving
spouse who the lower court found unsuitable. Reiterating Sioca v. Garcia 24 as good law,
we pointed out that unsuitableness for appointment as administrator may consist in
adverse interest of some kind or hostility to those immediately interested in the estate.

In Valarao v. Pascual,25 we see another story with a running theme of heirs squabbling
over the estate of a decedent. We found no reason to set aside the probate court’s
refusal to appoint as special co-administrator Diaz, even if he had a demonstrable
interest in the estate of the decedent and represented one of the factions of heirs,
because the evidence weighed by the probate court pointed to Diaz’s being remiss in
his previous duty as co-administrator of the estatein the early part of his administration.
Surveying the previously discussed cases of Matias, Corona, and Vda. de Dayrit, we
clarified, thus:

Respondents cannot take comfort in the cases of Matias v. Gonzales, Corona v. Court
of Appeals, and Vda. de Dayrit v. Ramolete, cited in the assailed Decision. Contrary to
their claim, these cases do not establish an absolute right demandable from the probate
court to appoint special co-administrators who would represent the respective interests
of squabbling heirs. Rather, the cases constitute precedents for the authority of the
probate court to designate not just one but also two or more special co-administrators
for a single estate. Now whether the probate court exercises such prerogative when the
heirs are fighting among themselves is a matter left entirely to its sound discretion.
Furthermore, the cases of Matias, Corona and Vda. de Dayrit hinge upon factual
circumstances other than the incompatible interests of the heirs which are glaringly
absent from the instant case. In Matias this Court ordered the appointment of a special
co-administrator because of the applicant's status as the universal heir and executrix
designated in the will, which we considered to be a "special interest" deserving
protection during the pendency of the appeal. Quite significantly, since the lower court in
Matias had already deemed it best to appoint more than one special administrator, we
found grave abuse of discretion in the act of the lower court in ignoring the applicant's
distinctive status in the selection of another special administrator.

In Corona we gave "highest consideration" to the "executrix's choice of Special

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

Finally in Vda. de Dayrit we justified the designation of the wife of the decedent as
special co-administrator because it was "our considered opinion that inasmuch as
petitioner-wife owns one-half of the conjugal properties and that she, too, is a
compulsory heir of her husband, to deprive her of any hand in the administration of the
estate prior to the probate of the will would be unfair to her proprietary interests." The
special status of a surviving spouse in the special administration of an estate was also
emphasized in Fule v. Court of Appeals where we held that the widow would have more
interest than any other next of kin in the proper administration of the entire estate since
she possesses not only the right of succession over a portion of the exclusive property
of the decedent but also a share in the conjugal partnership for which the good or bad
administration of the estate may affect not just the fruits but more critically the naked
ownership thereof. And in Gabriel v. Court of Appeals we recognized the distinctive
status of a surviving spouse applying as regular administrator of the deceased spouse's
estate when we counseled the probate court that "there must be a very strong case to
justify the exclusion of the widow from the administration."

Clearly, the selection of a special co-administrator in Matias, Corona and Vda. de Dayrit
was based upon the independent proprietary interests and moral circumstances of the
appointee that were not necessarily related to the demand for representation being
repeatedly urged by respondents.26 (Emphasis supplied)

In Gabriel v. Court of Appeals, we unequivocally declared the mandatory character of

the rule on the order of preference for the issuance of letters of administration:

Evidently, the foregoing provision of the Rules prescribes the order of preference in the
issuance of letters of administration, it categorically seeks out the surviving spouse, the
next of kin and the creditors, and requires that sequence to be observed in appointing
an administrator. It would be a grave abuse of discretion for the probate court to
imperiously set aside and insouciantly ignore that directive without any valid and
sufficient reason therefor.27

Subsequently, in Angeles v. Angeles-Maglaya,28 we expounded on the legal

contemplation of a "next of kin," thus:

Finally, it should be noted that on the matter of appointment of administrator of the

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

Finally, in Uy v. Court of Appeals, 30 we took into consideration the size of, and benefits
to, the estate should respondent therein be appointed as co-administrator. We
emphasized that where the estate is large or, from any cause, an intricate and
perplexing one to settle, the appointment of co-administrators may be sanctioned by
law.

In our Decision under consideration, we zeroed in on Emilio III’s demonstrable interest

in the estate and glossed over the order of preference set forth in the Rules. We gave
weight to Emilio III’s demonstrable interest in Cristina’s estate and without a closer
scrutiny of the attendant facts and circumstances, directed co-administration thereof.
We are led to a review of such position by the foregoing survey of cases.

The collected teaching is that mere demonstration of interest in the estate to be settled
does not ipso facto entitle an interested person to co-administration thereof. Neither
does squabbling among the heirs nor adverse interests necessitate the discounting of
the order of preference set forth in Section 6, Rule 78. Indeed, in the appointment of
administrator of the estate of a deceased person, the principal consideration reckoned
with is the interest in said estate of the one to be appointed as administrator. 31 Given
Isabel’s unassailable interest in the estate as one of the decedent’s legitimate
grandchildren and undoubted nearest "next of kin," the appointment of Emilio III as co-
administrator of the same estate, cannot be a demandable right. It is a matter left
entirely to the sound discretion of the Court32 and depends on the facts and the
attendant circumstances of the case.33

Thus, we proceed to scrutinize the attendant facts and circumstances of this case even
as we reiterate Isabel’s and her sibling’s apparent greater interest in the estate of
Cristina.
These considerations do not warrant the setting aside of the order of preference
mapped out in Section 6, Rule 78 of the Rules of Court. They compel that a choice be
made of one over the other.

1. The bitter estrangement and long-standing animosity between Isabel, on the

one hand, and Emilio III, on the other, traced back from the time their paternal
grandparents were alive, which can be characterized as adverse interest of some
kind by, or hostility of, Emilio III to Isabel who is immediately interested in the
estate;

2. Corollary thereto, the seeming impossibility of Isabel and Emilio III working
harmoniously as co-administrators may result in prejudice to the decedent’s
estate, ultimately delaying settlement thereof; and

3. Emilio III, for all his claims of knowledge in the management of Cristina’s
estate, has not looked after the estate’s welfare and has acted to the damage
and prejudice thereof.

Contrary to the assumption made in the Decision that Emilio III’s demonstrable interest
in the estate makes him a suitable co-administrator thereof, the evidence reveals that
Emilio III has turned out to be an unsuitable administrator of the estate. Respondent
Isabel points out that after Emilio III’s appointment as administrator of the subject estate
in 2001, he has not looked after the welfare of the subject estate and has actually acted
to the damage and prejudice thereof as evidenced by the following:

1. Emilio III, despite several orders from the probate court for a complete
inventory, omitted in the partial inventories 34 he filed therewith properties of the
estate35 including several parcels of land, cash, bank deposits, jewelry, shares of
stock, motor vehicles, and other personal properties, contrary to Section
1,36 paragraph a, Rule 81 of the Rules of Court.

2. Emilio III did not take action on both occasions against Federico’s settlement
of the decedent’s estate which adjudicated to himself a number of properties
properly belonging to said estate (whether wholly or partially), and which
contained a declaration that the decedent did not leave any descendants or
heirs, except for Federico, entitled to succeed to her estate. 37

In compliance to our Resolution dated 18 April 2012 requiring Emilio III to respond to
the following imputations of Isabel that:

1. Emilio III did not file an inventory of the assets until November 14, 2002;

2. The inventory Emilio III submitted did not include several properties of the decedent;

3. That properties belonging to the decedent have found their way to different
individuals or persons; several properties to Federico Suntay himself; and
4. While some properties have found their way to Emilio III, by reason of falsified
documents;38

Emilio III refutes Isabel’s imputations that he was lackadaisical in assuming and
performing the functions of administrator of Cristina’s estate:

1. From the time of the RTC’s Order appointing Emilio III as administrator, Isabel,
in her pleadings before the RTC, had vigorously opposed Emilio III’s assumption
of that office, arguing that "the decision of the RTC dated 9 November 2001 is
not among the judgments authorized by the Rules of Court which may be
immediately implemented or executed;"

2. The delay in Emilio III’s filing of an inventory was due to Isabel’s vociferous
objections to Emilio III’s attempts to act as administrator while the RTC decision
was under appeal to the Court of Appeals;

3. The complained partial inventory is only initiatory, inherent in the nature

thereof, and one of the first steps in the lengthy process of settlement of a
decedent’s estate, such that it cannot constitute a complete and total listing of the
decedent’s properties; and

4. The criminal cases adverted to are trumped-up charges where Isabel, as

private complainant, has been unwilling to appear and testify, leading the Judge
of the Regional Trial Court, Branch 44 of Mamburao, Occidental Mindoro, to warn
the prosecutor of a possible motu propio dismissal of the cases.

While we can subscribe to Emilio III’s counsel’s explanation for the blamed delay in the
filing of an inventory and his exposition on the nature thereof, partial as opposed to
complete, in the course of the settlement of a decedent’s estate, we do not find any
clarification on Isabel’s accusation that Emilio III had deliberately omitted properties in
the inventory, which properties of Cristina he knew existed and which he claims to be
knowledgeable about.

The general denial made by Emilio III does not erase his unsuitability as administrator
rooted in his failure to "make and return x x x a true and complete inventory" which
became proven fact when he actually filed partial inventories before the probate court
and by his inaction on two occasions of Federico’s exclusion of Cristina’s other
compulsory heirs, herein Isabel and her siblings, from the list of heirs.

As administrator, Emilio III enters into the office, posts a bond and executes an oath to
faithfully discharge the duties of settling the decedent’s estate with the end in view of
distribution to the heirs, if any. This he failed to do. The foregoing circumstances of
Emilio III’s omission and inaction become even more significant and speak volume of
his unsuitability as administrator as it demonstrates his interest adverse to those
immediately interested in the estate of the decedent, Cristina.
In this case, palpable from the evidence on record, the pleadings, and the protracted
litigation, is the inescapable fact that Emilio III and respondent Isabel have a deep
aversion for each other.1awp++i1 To our mind, it becomes highly impractical, nay,
improbable, for the two to work as co-administrators of their grandmother’s estate. The
allegations of Emilio III, the testimony of Federico and the other witnesses for Federico
and Emilio III that Isabel and her siblings were estranged from their grandparents further
drive home the point that Emilio III bears hostility towards Isabel. More importantly, it
appears detrimental to the decedent’s estate to appoint a co-administrator (Emilio III)
who has shown an adverse interest of some kind or hostility to those, such as herein
respondent Isabel, immediately interested in the said estate.

Bearing in mind that the issuance of letters of administration is simply a preliminary

order to facilitate the settlement of a decedent’s estate, we here point out that Emilio III
is not without remedies to protect his interests in the estate of the decedent. In Hilado v.
Court of Appeals,39 we mapped out as among the allowable participation of "any
interested persons" or "any persons interested in the estate" in either testate or intestate
proceedings:

xxxx

4. Section 640 of Rule 87, which allows an individual interested in the estate of the
deceased "to complain to the court of the concealment, embezzlement, or conveyance
of any asset of the decedent, or of evidence of the decedent’s title or interest therein;"

5. Section 1041 of Rule 85, which requires notice of the time and place of the
examination and allowance of the Administrator’s account "to persons interested;"

6. Section 7(b)42 of Rule 89, which requires the court to give notice "to the persons
interested" before it may hear and grant a petition seeking the disposition or
encumbrance of the properties of the estate; and

7. Section 1,43 Rule 90, which allows "any person interested in the estate" to petition for
an order for the distribution of the residue of the estate of the decedent, after all
obligations are either satisfied or provided for. 44

In addition to the foregoing, Emilio III may likewise avail of the remedy found in Section
2, Rule 82 of the Rules of Court, to wit:

Sec. 2. Court may remove or accept resignation of executor or

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

Once again, as we have done in the Decision, we exercise judicial restraint: we uphold
that the question of who are the heirs of the decedent Cristina is not yet upon us. Article
992 of the Civil Code or the curtain bar rule is inapplicable in resolving the issue of who
is better qualified to administer the estate of the decedent.

Thus, our disquisition in the assailed Decision:

Nonetheless, it must be pointed out that judicial restraint impels us to refrain from
making a final declaration of heirship and distributing the presumptive shares of the
parties in the estates of Cristina and Federico, considering that the question on who will
administer the properties of the long deceased couple has yet to be settled.

Our holding in Capistrano v. Nadurata on the same issue remains good law:

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

Section 1, Rule 90 of the Rules of Court does not depart from the foregoing admonition:

Sec. 1. When order for distribution of residue is made. - x x x. If there is a controversy

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

No distribution shall be allowed until the payment of the obligations above mentioned
has been made or provided for, unless the distributees, or any of them, give a bond, in a
sum to be fixed by the court, conditioned for the payment of said obligations within such
time as the court directs.45

Lastly, we dispose of a peripheral issue raised in the Supplemental Comment 46 of Emilio
III questioning the Special Second Division which issued the 18 April 2012 Resolution.
Emilio III asseverates that "the operation of the Special Second Division in Baguio is
unconstitutional and void" as the Second Division in Manila had already promulgated its
Decision on 16 June 2010 on the petition filed by him:

7. The question is: who created the Special Second Division in Baguio, acting
separately from the Second Division of the Supreme Court in Manila? There will then be
two Second Divisions of the Supreme Court: one acting with the Supreme Court in
Manila, and another Special Second Division acting independently of the Second
Division of the Supreme Court in Manila.47
For Emilio III’s counsels’ edification, the Special Second Division in Baguio is not a
different division created by the Supreme Court.

The Second Division which promulgated its Decision on this case on 16 June 2010,
penned by Justice Antonio Eduardo B. Nachura, now has a different composition, with
the advent of Justice Nachura’s retirement on 13 June 2011. Section 7, Rule 2 of the
Internal Rules of the Supreme Court provides:

Sec. 7. Resolutions of motions for reconsideration or clarification of decisions or signed

resolutions and all other motions and incidents subsequently filed; creation of a Special
Division. – Motions for reconsideration or clarification of a decision or of a signed
resolution and all other motions and incidents subsequently filed in the case shall be
acted upon by the ponente and the other Members of the Division who participated in
the rendition of the decision or signed resolution.

If the ponente has retired, is no longer a Member of the Court, is disqualified, or has
inhibited himself or herself from acting on the motion for reconsideration or clarification,
he or she shall be replaced through raffle by a new ponente who shall be chosen
among the new Members of the Division who participated in the rendition of the decision
or signed resolution and who concurred therein. If only one Member of the Court who
participated and concurred in the rendition of the decision or signed resolution remains,
he or she shall be designated as the new ponente.

If a Member (not the ponente) of the Division which rendered the decision or signed
resolution has retired, is no longer a Member of the Court, is disqualified, or has
inhibited himself or herself from acting on the motion for reconsideration or clarification,
he or she shall be replaced through raffle by a replacement Member who shall be
chosen from the other Divisions until a new Justice is appointed as replacement for the
retired Justice. Upon the appointment of a new Justice, he or she shall replace the
designated Justice as replacement Member of the Special Division.

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

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

If there are pleadings, motions or incidents subsequent to the denial of the motion for
reconsideration or clarification, the case shall be acted upon by the ponente on record
with the participation of the other Members of the Division to which he or she belongs at
the time said pleading, motion or incident is to be taken up by the Court. (Emphasis
supplied)
As regards the operation thereof in Baguio City, such is simply a change in venue for
the Supreme Court's summer session held last April. 48

WHEREFORE, the Motion for Reconsideration is PARTIALLY GRANTED. Our

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

SO ORDERED.

JOSE PORTUGAL PEREZ

Associate Justice

WE CONCUR:

THIRD DIVISION

G.R. No. 146006             February 23, 2004

JOSE C. LEE AND ALMA AGGABAO, in their capacities as President and

Corporate Secretary, respectively, of Philippines International Life Insurance
Company, and FILIPINO LOAN ASSISTANCE GROUP, petitioners
vs.
REGIONAL TRIAL COURT OF QUEZON CITY BRANCH 85 presided by JUDGE
PEDRO M. AREOLA, BRANCH CLERK OF COURT JANICE Y. ANTERO, DEPUTY
SHERIFFS ADENAUER G. RIVERA and PEDRO L. BORJA, all of the Regional Trial
Court of Quezon City Branch 85, MA. DIVINA ENDERES claiming to be Special
Administratrix, and other persons/ public officers acting for and in their
behalf, respondents.

DECISION

CORONA, J.:
This is a petition for review under Rule 45 of the Rules of Court seeking to reverse and
set aside the decision1 of the Court of Appeals, First Division, dated July 26, 2000, in
CA G.R. 59736, which dismissed the petition for certiorari filed by petitioners Jose C.
Lee and Alma Aggabao (in their capacities as president and secretary, respectively, of
Philippine International Life Insurance Company) and Filipino Loan Assistance Group.

The antecedent facts follow.

Dr. Juvencio P. Ortañez incorporated the Philippine International Life Insurance

Company, Inc. on July 6, 1956. At the time of the company’s incorporation, Dr. Ortañez
owned ninety percent (90%) of the subscribed capital stock.

On July 21, 1980, Dr. Ortañez died. He left behind a wife (Juliana Salgado Ortañez),
three legitimate children (Rafael, Jose and Antonio Ortañez) and five illegitimate
children by Ligaya Novicio (herein private respondent Ma. Divina Ortañez-Enderes and
her siblings Jose, Romeo, Enrico Manuel and Cesar, all surnamed Ortañez). 2

On September 24, 1980, Rafael Ortañez filed before the Court of First Instance of Rizal,
Quezon City Branch (now Regional Trial Court of Quezon City) a petition for letters of
administration of the intestate estate of Dr. Ortañez, docketed as SP Proc. Q-30884
(which petition to date remains pending at Branch 85 thereof).

Private respondent Ma. Divina Ortañez-Enderes and her siblings filed an opposition to
the petition for letters of administration and, in a subsequent urgent motion, prayed that
the intestate court appoint a special administrator.

On March 10, 1982, Judge Ernani Cruz Paño, then presiding judge of Branch 85,
appointed Rafael and Jose Ortañez joint special administrators of their father’s estate.
Hearings continued for the appointment of a regular administrator (up to now no regular
administrator has been appointed).

As ordered by the intestate court, special administrators Rafael and Jose Ortañez
submitted an inventory of the estate of their father which included, among other
properties, 2,0293 shares of stock in Philippine International Life Insurance Company
(hereafter Philinterlife), representing 50.725% of the company’s outstanding capital
stock.

On April 15, 1989, the decedent’s wife, Juliana S. Ortañez, claiming that she owned
1,0144 Philinterlife shares of stock as her conjugal share in the estate, sold said shares
with right to repurchase in favor of herein petitioner Filipino Loan Assistance Group
(FLAG), represented by its president, herein petitioner Jose C. Lee. Juliana Ortañez
failed to repurchase the shares of stock within the stipulated period, thus ownership
thereof was consolidated by petitioner FLAG in its name.

On October 30, 1991, Special Administrator Jose Ortañez, acting in his personal
capacity and claiming that he owned the remaining 1,011 5 Philinterlife shares of stocks
as his inheritance share in the estate, sold said shares with right to repurchase also in
favor of herein petitioner FLAG, represented by its president, herein petitioner Jose C.
Lee. After one year, petitioner FLAG consolidated in its name the ownership of the
Philinterlife shares of stock when Jose Ortañez failed to repurchase the same.

It appears that several years before (but already during the pendency of the intestate
proceedings at the Regional Trial Court of Quezon City, Branch 85), Juliana Ortañez
and her two children, Special Administrators Rafael and Jose Ortañez, entered into a
memorandum of agreement dated March 4, 1982 for the extrajudicial settlement of the
estate of Dr. Juvencio Ortañez, partitioning the estate (including the Philinterlife shares
of stock) among themselves. This was the basis of the number of shares separately
sold by Juliana Ortañez on April 15, 1989 (1,014 shares) and by Jose Ortañez on
October 30, 1991 (1,011 shares) in favor of herein petitioner FLAG.

On July 12, 1995, herein private respondent Ma. Divina Ortañez–Enderes and her
siblings (hereafter referred to as private respondents Enderes et al.) filed a motion for
appointment of special administrator of Philinterlife shares of stock. This move was
opposed by Special Administrator Jose Ortañez.

On November 8, 1995, the intestate court granted the motion of private respondents
Enderes et al. and appointed private respondent Enderes special administratrix of the
Philinterlife shares of stock.

On December 20, 1995, Special Administratrix Enderes filed an urgent motion to

declare void ab initio the memorandum of agreement dated March 4, 1982. On January
9, 1996, she filed a motion to declare the partial nullity of the extrajudicial settlement of
the decedent’s estate. These motions were opposed by Special Administrator Jose
Ortañez.

On March 22, 1996, Special Administratrix Enderes filed an urgent motion to declare
void ab initio the deeds of sale of Philinterlife shares of stock, which move was again
opposed by Special Administrator Jose Ortañez.

On February 4, 1997, Jose Ortañez filed an omnibus motion for (1) the approval of the
deeds of sale of the Philinterlife shares of stock and (2) the release of Ma. Divina
Ortañez-Enderes as special administratrix of the Philinterlife shares of stock on the
ground that there were no longer any shares of stock for her to administer.

On August 11, 1997, the intestate court denied the omnibus motion of Special
Administrator Jose Ortañez for the approval of the deeds of sale for the reason that:

Under the Godoy case, supra, it was held in substance that a sale of a property of the

estate without an Order of the probate court is void and passes no title to the purchaser.
Since the sales in question were entered into by Juliana S. Ortañez and Jose S.
Ortañez in their personal capacity without prior approval of the Court, the same is not
binding upon the Estate.
WHEREFORE, the OMNIBUS MOTION for the approval of the sale of Philinterlife
shares of stock and release of Ma. Divina Ortañez-Enderes as Special Administratrix is
hereby denied.6

On August 29, 1997, the intestate court issued another order granting the motion of
Special Administratrix Enderes for the annulment of the March 4, 1982 memorandum of
agreement or extrajudicial partition of estate. The court reasoned that:

In consonance with the Order of this Court dated August 11, 1997 DENYING the
approval of the sale of Philinterlife shares of stocks and release of Ma. Divina Ortañez-
Enderes as Special Administratrix, the "Urgent Motion to Declare Void Ab
Initio Memorandum of Agreement" dated December 19, 1995. . . is hereby impliedly
partially resolved insofar as the transfer/waiver/renunciation of the Philinterlife shares of
stock are concerned, in particular, No. 5, 9(c), 10(b) and 11(d)(ii) of the Memorandum of
Agreement.

WHEREFORE, this Court hereby declares the Memorandum of Agreement dated March
4, 1982 executed by Juliana S. Ortañez, Rafael S. Ortañez and Jose S. Ortañez as
partially void ab initio insofar as the transfer/waiver/renunciation of the Philinterlife
shares of stocks are concerned.7

Aggrieved by the above-stated orders of the intestate court, Jose Ortañez filed, on
December 22, 1997, a petition for certiorari in the Court of Appeals. The appellate court
denied his petition, however, ruling that there was no legal justification whatsoever for
the extrajudicial partition of the estate by Jose Ortañez, his brother Rafael Ortañez and
mother Juliana Ortañez during the pendency of the settlement of the estate of Dr.
Ortañez, without the requisite approval of the intestate court, when it was clear that
there were other heirs to the estate who stood to be prejudiced thereby. Consequently,
the sale made by Jose Ortañez and his mother Juliana Ortañez to FLAG of the shares
of stock they invalidly appropriated for themselves, without approval of the intestate
court, was void.8

Special Administrator Jose Ortañez filed a motion for reconsideration of the Court of
Appeals decision but it was denied. He elevated the case to the Supreme Court via
petition for review under Rule 45 which the Supreme Court dismissed on October 5,
1998, on a technicality. His motion for reconsideration was denied with finality on
January 13, 1999. On February 23, 1999, the resolution of the Supreme Court
dismissing the petition of Special Administrator Jose Ortañez became final and was
subsequently recorded in the book of entries of judgments.

Meanwhile, herein petitioners Jose Lee and Alma Aggabao, with the rest of the FLAG-
controlled board of directors, increased the authorized capital stock of Philinterlife,
diluting in the process the 50.725% controlling interest of the decedent, Dr. Juvencio
Ortañez, in the insurance company.9 This became the subject of a separate action at
the Securities and Exchange Commission filed by private respondent-Special
Administratrix Enderes against petitioner Jose Lee and other members of the FLAG-
controlled board of Philinterlife on November 7, 1994. Thereafter, various cases were
filed by Jose Lee as president of Philinterlife and Juliana Ortañez and her sons against
private respondent-Special Administratrix Enderes in the SEC and civil
courts.10 Somehow, all these cases were connected to the core dispute on the legality of
the sale of decedent Dr. Ortañez’s Philinterlife shares of stock to petitioner FLAG,
represented by its president, herein petitioner Jose Lee who later became the president
of Philinterlife after the controversial sale.

On May 2, 2000, private respondent-Special Administratrix Enderes and her siblings

filed a motion for execution of the Orders of the intestate court dated August 11 and
August 29, 1997 because the orders of the intestate court nullifying the sale (upheld by
the Court of Appeals and the Supreme Court) had long became final. Respondent-
Special Administratrix Enderes served a copy of the motion to petitioners Jose Lee and
Alma Aggabao as president and secretary, respectively, of Philinterlife, 11 but petitioners
ignored the same.

On July 6, 2000, the intestate court granted the motion for execution, the dispositive
portion of which read:

WHEREFORE, premises considered, let a writ of execution issue as follows:

1. Confirming the nullity of the sale of the 2,029 Philinterlife shares in the name of
the Estate of Dr. Juvencio Ortañez to Filipino Loan Assistance Group (FLAG);

2. Commanding the President and the Corporate Secretary of Philinterlife to

reinstate in the stock and transfer book of Philinterlife the 2,029 Philinterlife
shares of stock in the name of the Estate of Dr. Juvencio P. Ortañez as the
owner thereof without prejudice to other claims for violation of pre-emptive rights
pertaining to the said 2,029 Philinterlife shares;

3. Directing the President and the Corporate Secretary of Philinterlife to issue

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

4. Confirming that only the Special Administratrix, Ma. Divina Ortañez-Enderes,

has the power to exercise all the rights appurtenant to the said shares, including
the right to vote and to receive dividends.

5. Directing Philinterlife and/or any other person or persons claiming to represent

it or otherwise, to acknowledge and allow the said Special Administratrix to
exercise all the aforesaid rights on the said shares and to refrain from resorting to
any action which may tend directly or indirectly to impede, obstruct or bar the free
exercise thereof under pain of contempt.
 6. The President, Corporate Secretary, any responsible officer/s of Philinterlife, or
any other person or persons claiming to represent it or otherwise, are hereby
directed to comply with this order within three (3) days from receipt hereof under
pain of contempt.

7. The Deputy Sheriffs Adenauer Rivera and Pedro Borja are hereby directed to
implement the writ of execution with dispatch to forestall any and/or further
damage to the Estate.

SO ORDERED.12

In the several occasions that the sheriff went to the office of petitioners to execute the
writ of execution, he was barred by the security guard upon petitioners’ instructions.
Thus, private respondent-Special Administratrix Enderes filed a motion to cite herein
petitioners Jose Lee and Alma Aggabao (president and secretary, respectively, of
Philinterlife) in contempt.13

Petitioners Lee and Aggabao subsequently filed before the Court of Appeals a petition
for certiorari, docketed as CA G.R. SP No. 59736. Petitioners alleged that the intestate
court gravely abused its discretion in (1) declaring that the ownership of FLAG over the
Philinterlife shares of stock was null and void; (2) ordering the execution of its order
declaring such nullity and (3) depriving the petitioners of their right to due process.

On July 26, 2000, the Court of Appeals dismissed the petition outright:

We are constrained to DISMISS OUTRIGHT the present petition for certiorari and
prohibition with prayer for a temporary restraining order and/or writ of preliminary
injunction in the light of the following considerations:

1. The assailed Order dated August 11, 1997 of the respondent judge had long
become final and executory;

2. The certification on non-forum shopping is signed by only one (1) of the three
(3) petitioners in violation of the Rules; and

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

Petition is DISMISSED.

SO ORDERED.14
The motion for reconsideration filed by petitioners Lee and Aggabao of the above
decision was denied by the Court of Appeals on October 30, 2000:

This resolves the "urgent motion for reconsideration" filed by the petitioners of our
resolution of July 26, 2000 dismissing outrightly the above-entitled petition for the
reason, among others, that the assailed Order dated August 11, 1997 of the respondent
Judge had long become final and executory.

Dura lex, sed lex.

WHEREFORE, the urgent motion for reconsideration is hereby DENIED, for lack of
merit.

SO ORDERED.15

On December 4, 2000, petitioners elevated the case to the Supreme Court through a
petition for review under Rule 45 but on December 13, 2000, we denied the petition
because there was no showing that the Court of Appeals in CA G.R. SP No. 59736
committed any reversible error to warrant the exercise by the Supreme Court of its
discretionary appellate jurisdiction.16

However, upon motion for reconsideration filed by petitioners Lee and Aggabao, the
Supreme Court granted the motion and reinstated their petition on September 5, 2001.
The parties were then required to submit their respective memoranda.

Meanwhile, private respondent-Special Administratrix Enderes, on July 19, 2000, filed a

motion to direct the branch clerk of court in lieu of herein petitioners Lee and Aggabao
to reinstate the name of Dr. Ortañez in the stock and transfer book of Philinterlife and
issue the corresponding stock certificate pursuant to Section 10, Rule 39 of the Rules of
Court which provides that "the court may direct the act to be done at the cost of the
disobedient party by some other person appointed by the court and the act when so
done shall have the effect as if done by the party." Petitioners Lee and Aggabao
opposed the motion on the ground that the intestate court should refrain from acting on
the motion because the issues raised therein were directly related to the issues raised
by them in their petition for certiorari at the Court of Appeals docketed as CA-G.R. SP
No. 59736. On October 30, 2000, the intestate court granted the motion, ruling that
there was no prohibition for the intestate court to execute its orders inasmuch as the
appellate court did not issue any TRO or writ of preliminary injunction.

On December 3, 2000, petitioners Lee and Aggabao filed a petition for certiorari in the
Court of Appeals, docketed as CA-G.R. SP No. 62461, questioning this time the
October 30, 2000 order of the intestate court directing the branch clerk of court to issue
the stock certificates. They also questioned in the Court of Appeals the order of the
intestate court nullifying the sale made in their favor by Juliana Ortañez and Jose
Ortañez. On November 20, 2002, the Court of Appeals denied their petition and upheld
the power of the intestate court to execute its order. Petitioners Lee and Aggabao then
filed motion for reconsideration which at present is still pending resolution by the Court
of Appeals.

Petitioners Jose Lee and Alma Aggabao (president and secretary, respectively, of
Philinterlife) and FLAG now raise the following errors for our consideration:

The Court of Appeals committed grave reversible ERROR:

A. In failing to reconsider its previous resolution denying the petition despite the
fact that the appellate court’s mistake in apprehending the facts had become
patent and evident from the motion for reconsideration and the comment of
respondent Enderes which had admitted the factual allegations of petitioners in
the petition as well as in the motion for reconsideration. Moreover, the resolution
of the appellate court denying the motion for reconsideration was contained in
only one page without even touching on the substantive merits of the exhaustive
discussion of facts and supporting law in the motion for reconsideration in
violation of the Rule on administrative due process;

B. in failing to set aside the void orders of the intestate court on the erroneous
ground that the orders were final and executory with regard to petitioners even as
the latter were never notified of the proceedings or order canceling its ownership;

C. in not finding that the intestate court committed grave abuse of discretion
amounting to excess of jurisdiction (1) when it issued the Omnibus Order
nullifying the ownership of petitioner FLAG over shares of stock which were
alleged to be part of the estate and (2) when it issued a void writ of execution
against petitioner FLAG as present owner to implement merely provisional
orders, thereby violating FLAG’s constitutional right against deprivation of
property without due process;

D. In failing to declare null and void the orders of the intestate court which
nullified the sale of shares of stock between the legitimate heir Jose S. Ortañez
and petitioner FLAG because of settled law and jurisprudence, i.e., that an heir
has the right to dispose of the decedent’s property even if the same is under
administration pursuant to Civil Code provision that possession of hereditary
property is transmitted to the heir the moment of death of the decedent (Acedebo
vs. Abesamis, 217 SCRA 194);

E. In disregarding the final decision of the Supreme Court in G.R. No. 128525
dated December 17, 1999 involving substantially the same parties, to wit,
petitioners Jose C. Lee and Alma Aggabao were respondents in that case while
respondent Ma. Divina Enderes was the petitioner therein. That decision, which
can be considered law of the case, ruled that petitioners cannot be enjoined by
respondent Enderes from exercising their power as directors and officers of
Philinterlife and that the intestate court in charge of the intestate proceedings
 cannot adjudicate title to properties claimed to be part of the estate and which
are equally CLAIMED BY petitioner FLAG. 17

The petition has no merit.

Petitioners Jose Lee and Alma Aggabao, representing Philinterlife and FLAG, assail
before us not only the validity of the writ of execution issued by the intestate court dated
July 7, 2000 but also the validity of the August 11, 1997 order of the intestate court
nullifying the sale of the 2,029 Philinterlife shares of stock made by Juliana Ortañez and
Jose Ortañez, in their personal capacities and without court approval, in favor of
petitioner FLAG.

We cannot allow petitioners to reopen the issue of nullity of the sale of the Philinterlife
shares of stock in their favor because this was already settled a long time ago by the
Court of Appeals in its decision dated June 23, 1998 in CA-G.R. SP No. 46342. This
decision was effectively upheld by us in our resolution dated October 9, 1998 in G.R.
No. 135177 dismissing the petition for review on a technicality and thereafter denying
the motion for reconsideration on January 13, 1999 on the ground that there was no
compelling reason to reconsider said denial. 18 Our decision became final on February
23, 1999 and was accordingly entered in the book of entry of judgments. For all intents
and purposes therefore, the nullity of the sale of the Philinterlife shares of stock made
by Juliana Ortañez and Jose Ortañez in favor of petitioner FLAG is already a closed
case. To reopen said issue would set a bad precedent, opening the door wide open for
dissatisfied parties to relitigate unfavorable decisions no end. This is completely inimical
to the orderly and efficient administration of justice.

The said decision of the Court of Appeals in CA-G.R. SP No. 46342 affirming the nullity
of the sale made by Jose Ortañez and his mother Juliana Ortañez of the Philinterlife
shares of stock read:

Petitioner’s asseverations relative to said [memorandum] agreement were scuttled

during the hearing before this Court thus:

JUSTICE AQUINO:

Counsel for petitioner, when the Memorandum of Agreement was executed, did
the children of Juliana Salgado know already that there was a claim for share in
the inheritance of the children of Novicio?

ATTY. CALIMAG:

Your Honor please, at that time, Your Honor, it is already known to them.

JUSTICE AQUINO:
 What can be your legal justification for extrajudicial settlement of a property
subject of intestate proceedings when there is an adverse claim of another set of
heirs, alleged heirs? What would be the legal justification for extra-judicially
settling a property under administration without the approval of the intestate
court?

ATTY. CALIMAG:

Well, Your Honor please, in that extra-judicial settlement there is an approval of

the honorable court as to the property’s partition x x x. There were as mentioned
by the respondents’ counsel, Your Honor.

ATTY. BUYCO:

No…

JUSTICE AQUINO:

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

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

ATTY. CALIMAG:

None, Your Honor.

ATTY. BUYCO:

With that admission that there is no legal justification, Your Honor, we rest the
case for the private respondent. How can the lower court be accused of abusing
its discretion? (pages 33-35, TSN of January 29, 1998).

Thus, We find merit in the following postulation by private respondent:

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

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

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

Amidst the foregoing, We found no grave abuse of discretion amounting to excess or

want of jurisdiction committed by respondent judge. 19

From the above decision, it is clear that Juliana Ortañez, and her three sons, Jose,
Rafael and Antonio, all surnamed Ortañez, invalidly entered into a memorandum of
agreement extrajudicially partitioning the intestate estate among themselves, despite
their knowledge that there were other heirs or claimants to the estate and before final
settlement of the estate by the intestate court. Since the appropriation of the estate
properties by Juliana Ortañez and her children (Jose, Rafael and Antonio Ortañez) was
invalid, the subsequent sale thereof by Juliana and Jose to a third party (FLAG), without
court approval, was likewise void.

An heir can sell his right, interest, or participation in the property under administration
under Art. 533 of the Civil Code which provides that possession of hereditary property is
deemed transmitted to the heir without interruption from the moment of death of the
decedent.20 However, an heir can only alienate such portion of the estate that may be
allotted to him in the division of the estate by the probate or intestate court after final
adjudication, that is, after all debtors shall have been paid or the devisees or legatees
shall have been given their shares. 21 This means that an heir may only sell his ideal or
undivided share in the estate, not any specific property therein. In the present case,
Juliana Ortañez and Jose Ortañez sold specific properties of the estate (1,014 and
1,011 shares of stock in Philinterlife) in favor of petitioner FLAG. This they could not
lawfully do pending the final adjudication of the estate by the intestate court because of
the undue prejudice it would cause the other claimants to the estate, as what happened
in the present case.
Juliana Ortañez and Jose Ortañez sold specific properties of the estate, without court
approval. It is well-settled that court approval is necessary for the validity of any
disposition of the decedent’s estate. In the early case of Godoy vs. Orellano,22 we laid
down the rule that the sale of the property of the estate by an administrator without the
order of the probate court is void and passes no title to the purchaser. And in the case
of Dillena vs. Court of Appeals,23 we ruled that:

[I]t must be emphasized that the questioned properties (fishpond) were included in the
inventory of properties of the estate submitted by then Administratrix Fausta Carreon
Herrera on November 14, 1974. Private respondent was appointed as administratrix of
the estate on March 3, 1976 in lieu of Fausta Carreon Herrera. On November 1, 1978,
the questioned deed of sale of the fishponds was executed between petitioner and
private respondent without notice and approval of the probate court. Even after the sale,
administratrix Aurora Carreon still included the three fishponds as among the real
properties of the estate in her inventory submitted on August 13, 1981. In fact, as stated
by the Court of Appeals, petitioner, at the time of the sale of the fishponds in question,
knew that the same were part of the estate under administration.

x x x           x x x          x x x

The subject properties therefore are under the jurisdiction of the probate court which
according to our settled jurisprudence has the authority to approve any disposition
regarding properties under administration. . . More emphatic is the declaration We made
in Estate of Olave vs. Reyes (123 SCRA 767) where We stated that when the estate of
the deceased person is already the subject of a testate or intestate proceeding, the
administrator cannot enter into any transaction involving it without prior approval of the
probate court.

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

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

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

Our jurisprudence is therefore clear that (1) any disposition of estate property by an
administrator or prospective heir pending final adjudication requires court approval and
(2) any unauthorized disposition of estate property can be annulled by the probate
court, there being no need for a separate action to annul the unauthorized disposition.

The question now is: can the intestate or probate court execute its order nullifying the
invalid sale?

We see no reason why it cannot. The intestate court has the power to execute its order
with regard to the nullity of an unauthorized sale of estate property, otherwise its power
to annul the unauthorized or fraudulent disposition of estate property would be
meaningless. In other words, enforcement is a necessary adjunct of the intestate or
probate court’s power to annul unauthorized or fraudulent transactions to prevent the
dissipation of estate property before final adjudication.

Moreover, in this case, the order of the intestate court nullifying the sale was affirmed by
the appellate courts (the Court of Appeals in CA-G.R. SP No. 46342 dated June 23,
1998 and subsequently by the Supreme Court in G.R. No. 135177 dated October 9,
1998). The finality of the decision of the Supreme Court was entered in the book of
entry of judgments on February 23, 1999. Considering the finality of the order of the
intestate court nullifying the sale, as affirmed by the appellate courts, it was correct for
private respondent-Special Administratrix Enderes to thereafter move for a writ of
execution and for the intestate court to grant it.

Petitioners Jose Lee, Alma Aggabao and FLAG, however, contend that the probate
court could not issue a writ of execution with regard to its order nullifying the sale
because said order was merely provisional:

The only authority given by law is for respondent judge to determine provisionally
whether said shares are included or excluded in the inventory… In ordering the
execution of the orders, respondent judge acted in excess of his jurisdiction and grossly
violated settled law and jurisprudence, i.e., that the determination by a probate or
intestate court of whether a property is included or excluded in the inventory of the
estate being provisional in nature, cannot be the subject of execution.24 (emphasis ours)

Petitioners’ argument is misplaced. There is no question, based on the facts of this

case, that the Philinterlife shares of stock were part of the estate of Dr. Juvencio
Ortañez from the very start as in fact these shares were included in the inventory of the
properties of the estate submitted by Rafael Ortañez after he and his brother, Jose
Ortañez, were appointed special administrators by the intestate court. 25
The controversy here actually started when, during the pendency of the settlement of
the estate of Dr. Ortañez, his wife Juliana Ortañez sold the 1,014 Philinterlife shares of
stock in favor petitioner FLAG without the approval of the intestate court. Her son Jose
Ortañez later sold the remaining 1,011 Philinterlife shares also in favor of FLAG without
the approval of the intestate court.

We are not dealing here with the issue of inclusion or exclusion of properties in the
inventory of the estate because there is no question that, from the very start, the
Philinterlife shares of stock were owned by the decedent, Dr. Juvencio Ortañez. Rather,
we are concerned here with the effect of the sale made by the decedent’s heirs,
Juliana Ortañez and Jose Ortañez, without the required approval of the intestate
court. This being so, the contention of petitioners that the determination of the intestate
court was merely provisional and should have been threshed out in a separate
proceeding is incorrect.

The petitioners Jose Lee and Alma Aggabao next contend that the writ of execution
should not be executed against them because they were not notified, nor they were
aware, of the proceedings nullifying the sale of the shares of stock.

We are not persuaded. The title of the purchaser like herein petitioner FLAG can be
struck down by the intestate court after a clear showing of the nullity of the alienation.
This is the logical consequence of our ruling in Godoy and in several subsequent
cases.26 The sale of any property of the estate by an administrator or prospective
heir without order of the probate or intestate court is void and passes no title to
the purchaser. Thus, in Juan Lao et al. vs. Hon. Melencio Geneto, G.R. No. 56451,
June 19, 1985, we ordered the probate court to cancel the transfer certificate of title
issued to the vendees at the instance of the administrator after finding that the sale of
real property under probate proceedings was made without the prior approval of the
court. The dispositive portion of our decision read:

IN VIEW OF THE FOREGOING CONSIDERATIONS, the assailed Order dated

February 18, 1981 of the respondent Judge approving the questioned Amicable
Settlement is declared NULL and VOID and hereby SET ASIDE. Consequently, the sale
in favor of Sotero Dioniosio III and by the latter to William Go is likewise declared NULL
and VOID. The Transfer Certificate of Title issued to the latter is hereby ordered
cancelled.

It goes without saying that the increase in Philinterlife’s authorized capital stock,
approved on the vote of petitioners’ non-existent shareholdings and obviously
calculated to make it difficult for Dr. Ortañez’s estate to reassume its controlling interest
in Philinterlife, was likewise void ab initio.

Petitioners next argue that they were denied due process.

We do not think so.

The facts show that petitioners, for reasons known only to them, did not appeal the
decision of the intestate court nullifying the sale of shares of stock in their favor. Only
the vendor, Jose Ortañez, appealed the case. A careful review of the records shows
that petitioners had actual knowledge of the estate settlement proceedings and that they
knew private respondent Enderes was questioning therein the sale to them of the
Philinterlife shares of stock.

It must be noted that private respondent-Special Administratrix Enderes filed before the
intestate court (RTC of Quezon City, Branch 85) a "Motion to Declare Void Ab
Initio Deeds of Sale of Philinterlife Shares of Stock" on March 22, 1996. But as early as
1994, petitioners already knew of the pending settlement proceedings and that the
shares they bought were under the administration by the intestate court because private
respondent Ma. Divina Ortañez-Enderes and her mother Ligaya Novicio had filed a
case against them at the Securities and Exchange Commission on November 7, 1994,
docketed as SEC No. 11-94-4909, for annulment of transfer of shares of stock,
annulment of sale of corporate properties, annulment of subscriptions on increased
capital stocks, accounting, inspection of corporate books and records and damages with
prayer for a writ of preliminary injunction and/or temporary restraining order. 27 In said
case, Enderes and her mother questioned the sale of the aforesaid shares of stock to
petitioners. The SEC hearing officer in fact, in his resolution dated March 24, 1995,
deferred to the jurisdiction of the intestate court to rule on the validity of the sale of
shares of stock sold to petitioners by Jose Ortañez and Juliana Ortañez:

Petitioners also averred that. . . the Philinterlife shares of Dr. Juvencio Ortañez who
died, in 1980, are part of his estate which is presently the subject matter of an intestate
proceeding of the RTC of Quezon City, Branch 85. Although, private respondents [Jose
Lee et al.] presented the documents of partition whereby the foregoing share of stocks
were allegedly partitioned and conveyed to Jose S. Ortañez who allegedly assigned the
same to the other private respondents, approval of the Court was not presented. Thus,
the assignments to the private respondents [Jose Lee et al.] of the subject shares of
stocks are void.

x x x           x x x          x x x

With respect to the alleged extrajudicial partition of the shares of stock owned by the
late Dr. Juvencio Ortañez, we rule that the matter properly belongs to the jurisdiction of
the regular court where the intestate proceedings are currently pending. 28

With this resolution of the SEC hearing officer dated as early as March 24, 1995
recognizing the jurisdiction of the intestate court to determine the validity of the
extrajudicial partition of the estate of Dr. Ortañez and the subsequent sale by the heirs
of the decedent of the Philinterlife shares of stock to petitioners, how can petitioners
claim that they were not aware of the intestate proceedings?

Furthermore, when the resolution of the SEC hearing officer reached the Supreme
Court in 1996 (docketed as G.R. 128525), herein petitioners who were respondents
therein filed their answer which contained statements showing that they knew of the
pending intestate proceedings:

[T]he subject matter of the complaint is not within the jurisdiction of the SEC but with the
Regional Trial Court; Ligaya Novicio and children represented themselves to be the
common law wife and illegitimate children of the late Ortañez; that on March 4, 1982,
the surviving spouse Juliana Ortañez, on her behalf and for her minor son Antonio,
executed a Memorandum of Agreement with her other sons Rafael and Jose, both
surnamed Ortañez, dividing the estate of the deceased composed of his one-half (1/2)
share in the conjugal properties; that in the said Memorandum of Agreement, Jose S.
Ortañez acquired as his share of the estate the 1,329 shares of stock in Philinterlife;
that on March 4, 1982, Juliana and Rafael assigned their respective shares of stock in
Philinterlife to Jose; that contrary to the contentions of petitioners, private respondents
Jose Lee, Carlos Lee, Benjamin Lee and Alma Aggabao became stockholders of
Philinterlife on March 23, 1983 when Jose S. Ortañez, the principal stockholder at that
time, executed a deed of sale of his shares of stock to private respondents; and that the
right of petitioners to question the Memorandum of Agreement and the acquisition of
shares of stock of private respondent is barred by prescription. 29

Also, private respondent-Special Administratrix Enderes offered additional proof of

actual knowledge of the settlement proceedings by petitioners which petitioners never
denied: (1) that petitioners were represented by Atty. Ricardo Calimag previously hired
by the mother of private respondent Enderes to initiate cases against petitioners Jose
Lee and Alma Aggabao for the nullification of the sale of the shares of stock but said
counsel made a conflicting turn-around and appeared instead as counsel of petitioners,
and (2) that the deeds of sale executed between petitioners and the heirs of the
decedent (vendors Juliana Ortañez and Jose Ortañez) were acknowledged before Atty.
Ramon Carpio who, during the pendency of the settlement proceedings, filed a motion
for the approval of the sale of Philinterlife shares of stock to the Knights of Columbus
Fraternal Association, Inc. (which motion was, however, later abandoned). 30 All this
sufficiently proves that petitioners, through their counsels, knew of the pending
settlement proceedings.

Finally, petitioners filed several criminal cases such as libel (Criminal Case No. 97-
7179-81), grave coercion (Criminal Case No. 84624) and robbery (Criminal Case No. Q-
96-67919) against private respondent’s mother Ligaya Novicio who was a director of
Philinterlife,31 all of which criminal cases were related to the questionable sale to
petitioners of the Philinterlife shares of stock.

Considering these circumstances, we cannot accept petitioners’ claim of denial of due

process. The essence of due process is the reasonable opportunity to be heard. Where
the opportunity to be heard has been accorded, there is no denial of due process. 32 In
this case, petitioners knew of the pending instestate proceedings for the settlement of
Dr. Juvencio Ortañez’s estate but for reasons they alone knew, they never intervened.
When the court declared the nullity of the sale, they did not bother to appeal. And when
they were notified of the motion for execution of the Orders of the intestate court, they
ignored the same. Clearly, petitioners alone should bear the blame.

Petitioners next contend that we are bound by our ruling in G.R. No. 128525
entitled Ma. Divina Ortañez-Enderes vs. Court of Appeals, dated December 17, 1999,
where we allegedly ruled that the intestate court "may not pass upon the title to a certain
property for the purpose of determining whether the same should or should not be
included in the inventory but such determination is not conclusive and is subject to final
decision in a separate action regarding ownership which may be constituted by the
parties."

We are not unaware of our decision in G.R. No. 128525. The issue therein was whether
the Court of Appeals erred in affirming the resolution of the SEC that Enderes et al.
were not entitled to the issuance of the writ of preliminary injunction. We ruled that the
Court of Appeals was correct in affirming the resolution of the SEC denying the
issuance of the writ of preliminary injunction because injunction is not designed to
protect contingent rights. Said case did not rule on the issue of the validity of the sale of
shares of stock belonging to the decedent’s estate without court approval nor of the
validity of the writ of execution issued by the intestate court. G.R. No. 128525 clearly
involved a different issue and it does not therefore apply to the present case.

Petitioners and all parties claiming rights under them are hereby warned not to further
delay the execution of the Orders of the intestate court dated August 11 and August 29,
1997.

WHEREFORE, the petition is hereby DENIED. The decision of the Court of Appeals in
CA-G.R. S.P. No. 59736 dated July 26, 2000, dismissing petitioners’ petition
for certiorari and affirming the July 6, 2000 order of the trial court which ordered the
execution of its (trial court’s) August 11 and 29, 1997 orders, is hereby AFFIRMED.

SO ORDERED.

Vitug, (Chairman), and Carpio-Morales, JJ., concur.

Sandoval-Gutierrez, J., no part.

Republic of the Philippines

SUPREME COURT
Manila
 SECOND DIVISION

G.R. No. 118671             January 29, 1996

THE ESTATE OF HILARIO M. RUIZ, EDMOND RUIZ, Executor, petitioner,

vs.
THE COURT OF APPEALS (Former Special Sixth Division), MARIA PILAR RUIZ-
MONTES, MARIA CATHRYN RUIZ, CANDICE ALBERTINE RUIZ, MARIA ANGELINE
RUIZ and THE PRESIDING JUDGE OF THE REGIONAL TRIAL COURT OF
PASIG, respondents.

DECISION

PUNO, J.:

This petition for review on certiorari seeks to annul and set aside the decision dated
November 10, 1994 and the resolution dated January 5, 1995 of the Court of Appeals in
CA-G.R. SP No. 33045.

The facts show that on June 27, 1987, Hilario M. Ruiz 1 executed a holographic will
naming as his heirs his only son, Edmond Ruiz, his adopted daughter, private
respondent Maria Pilar Ruiz Montes, and his three granddaughters, private respondents
Maria Cathryn, Candice Albertine and Maria Angeline, all children of Edmond Ruiz. The
testator bequeathed to his heirs substantial cash, personal and real properties and
named Edmond Ruiz executor of his estate.2

On April 12, 1988, Hilario Ruiz died. Immediately thereafter, the cash component of his
estate was distributed among Edmond Ruiz and private respondents in accordance with
the decedent's will. For unbeknown reasons, Edmond, the named executor, did not take
any action for the probate of his father's holographic will.

On June 29, 1992, four years after the testator's death, it was private respondent Maria
Pilar Ruiz Montes who filed before the Regional Trial Court, Branch 156, Pasig, a
petition for the probate and approval of Hilario Ruiz's will and for the issuance of letters
testamentary to Edmond Ruiz,3 Surprisingly, Edmond opposed the petition on the
ground that the will was executed under undue influence.

On November 2, 1992, one of the properties of the estate — the house and lot at No. 2
Oliva Street, Valle Verde IV, Pasig which the testator bequeathed to Maria Cathryn,
Candice Albertine and Maria Angeline 4 — was leased out by Edmond Ruiz to third
persons.

On January 19, 1993, the probate court ordered Edmond to deposit with the Branch
Clerk of Court the rental deposit and payments totalling P540,000.00 representing the
one-year lease of the Valle Verde property. In compliance, on January 25, 1993,
Edmond turned over the amount of P348,583.56, representing the balance of the rent
after deducting P191,416.14 for repair and maintenance expenses on the estate. 5

In March 1993, Edmond moved for the release of P50,000.00 to pay the real estate
taxes on the real properties of the estate. The probate court approved the release of
P7,722.00.6

On May 14, 1993, Edmond withdrew his opposition to the probate of the will.
Consequently, the probate court, on May 18, 1993, admitted the will to probate and
ordered the issuance of letters testamentary to Edmond conditioned upon the filing of a
bond in the amount of P50,000.00. The letters testamentary were issued on June 23,
1993.

On July 28, 1993, petitioner Testate Estate of Hilario Ruiz, with Edmond Ruiz as
executor, filed an "Ex-Parte Motion for Release of Funds." It prayed for the release of
the rent payments deposited with the Branch Clerk of Court. Respondent Montes
opposed the motion and concurrently filed a "Motion for Release of Funds to Certain
Heirs" and "Motion for Issuance of Certificate of Allowance of Probate Will." Montes
prayed for the release of the said rent payments to Maria Cathryn, Candice Albertine
and Maria Angeline and for the distribution of the testator's properties, specifically the
Valle Verde property and the Blue Ridge apartments, in accordance with the provisions
of the holographic will.

On August 26, 1993, the probate court denied petitioner's motion for release of funds
but granted respondent Montes' motion in view of petitioner's lack of opposition. It thus
ordered the release of the rent payments to the decedent's three granddaughters. It
further ordered the delivery of the titles to and possession of the properties bequeathed
to the three granddaughters and respondent Montes upon the filing of a bond of
P50,000.00.

Petitioner moved for reconsideration alleging that he actually filed his opposition to
respondent Montes's motion for release of rent payments which opposition the court
failed to consider. Petitioner likewise reiterated his previous motion for release of funds.

On November 23, 1993, petitioner, through counsel, manifested that he was

withdrawing his motion for release of funds in view of the fact that the lease contract
over the Valle Verde property had been renewed for another year. 7

Despite petitioner's manifestation, the probate court, on December 22, 1993, ordered
the release of the funds to Edmond but only "such amount as may be necessary to
cover the expenses of administration and allowances for support" of the testator's three
granddaughters subject to collation and deductible from their share in the inheritance.
The court, however, held in abeyance the release of the titles to respondent Montes and
the three granddaughters until the lapse of six months from the date of first publication
of the notice to creditors.8 The court stated thus:
 xxx       xxx       xxx

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

As to the release of the titles bequeathed to petitioner Maria Pilar Ruiz-Montes

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

WHEREFORE, Administrator Edmond M. Ruiz is hereby ordered to submit an

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

Petitioner assailed this order before the Court of Appeals. Finding no grave abuse of
discretion on the part of respondent judge, the appellate court dismissed the petition
and sustained the probate court's order in a decision dated November 10, 1994 10 and a
resolution dated January 5, 1995.11

Hence, this petition.

Petitioner claims that:

THE PUBLIC RESPONDENT COURT OF APPEALS COMMITTED GRAVE

ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF
JURISDICTION IN AFFIRMING AND CONFIRMING THE ORDER OF
RESPONDENT REGIONAL TRIAL COURT OF PASIG, BRANCH 156, DATED
DECEMBER 22, 1993, WHICH WHEN GIVEN DUE COURSE AND IS
EFFECTED WOULD: (1) DISALLOW THE EXECUTOR/ADMINISTRATOR OF
THE ESTATE OF THE LATE HILARIO M. RUIZ TO TAKE POSSESSION OF
ALL THE REAL AND PERSONAL PROPERTIES OF THE ESTATE; (2) GRANT
SUPPORT, DURING THE PENDENCY OF THE SETTLEMENT OF AN
ESTATE, TO CERTAIN PERSONS NOT ENTITLED THERETO; AND (3)
PREMATURELY PARTITION AND DISTRIBUTE THE ESTATE PURSUANT TO
THE PROVISIONS OF THE HOLOGRAPHIC WILL EVEN BEFORE ITS
INTRINSIC VALIDITY HAS BEEN DETERMINED, AND DESPITE THE
EXISTENCE OF UNPAID DEBTS AND OBLIGATIONS OF THE ESTATE. 12
The issue for resolution is whether the probate court, after admitting the will to
probate but before payment of the estate's debts and obligations, has the
authority: (1) to grant an allowance from the funds of the estate for the support of
the testator's grandchildren; (2) to order the release of the titles to certain heirs;
and (3) to grant possession of all properties of the estate to the executor of the
will.

On the matter of allowance, Section 3 of Rule 83 of the Revised Rules of Court

provides:

Sec. 3. Allowance to widow and family. — The widow and minor or incapacitated
children of a deceased person, during the settlement of the estate, shall receive
therefrom under the direction of the court, such allowance as are provided by
law.

Petitioner alleges that this provision only gives the widow and the minor or incapacitated
children of the deceased the right to receive allowances for support during the
settlement of estate proceedings. He contends that the testator's three
granddaughters do not qualify for an allowance because they are not
incapacitated and are no longer minors but of legal age, married and gainfully
employed. In addition, the provision expressly states "children" of the deceased
which excludes the latter's grandchildren.

It is settled that allowances for support under Section 3 of Rule 83 should not be limited
to the "minor or incapacitated" children of the deceased. Article 188 13 of the Civil Code
of the Philippines, the substantive law in force at the time of the testator's death,
provides that during the liquidation of the conjugal partnership, the deceased's
legitimate spouse and children, regardless of their age, civil status or gainful
employment, are entitled to provisional support from the funds of the estate. 14 The
law is rooted on the fact that the right and duty to support, especially the right to
education, subsist even beyond the age of majority. 15

Be that as it may, grandchildren are not entitled to provisional support from the funds of
the decedent's estate. The law clearly limits the allowance to "widow and children" and
does not extend it to the deceased's grandchildren, regardless of their minority or
incapacity.16 It was error, therefore, for the appellate court to sustain the probate court's
order granting an allowance to the grandchildren of the testator pending settlement of
his estate.

Respondent courts also erred when they ordered the release of the titles of the
bequeathed properties to private respondents six months after the date of first
publication of notice to creditors. An order releasing titles to properties of the estate
amounts to an advance distribution of the estate which is allowed only under the
following conditions:
 Sec. 2. Advance distribution in special proceedings. — Nothwithstanding a
pending controversy or appeal in proceedings to settle the estate of a decedent,
the court may, in its discretion and upon such terms as it may deem proper and
just, permit that such part of the estate as may not be affected by the controversy
or appeal be distributed among the heirs or legatees, upon compliance with the
conditions set forth in Rule 90 of these Rules.17

And Rule 90 provides that:

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

No distribution shall be allowed until the payment of the obligations above-

mentioned has been made or provided for, unless the distributees, or any of
them, give a bond, in a sum to be fixed by the court, conditioned for the payment
of said obligations within such time as the court directs. 18

In settlement of estate proceedings, the distribution of the estate properties can only be
made: (1) after all the debts, funeral charges, expenses of administration, allowance to
the widow, and estate tax have been paid; or (2) before payment of said obligations only
if the distributees or any of them gives a bond in a sum fixed by the court conditioned
upon the payment of said obligations within such time as the court directs, or when
provision is made to meet those obligations.19

In the case at bar, the probate court ordered the release of the titles to the Valle
Verde property and the Blue Ridge apartments to the private respondents after
the lapse of six months from the date of first publication of the notice to
creditors. The questioned order speaks of "notice" to creditors, not payment of
debts and obligations. Hilario Ruiz allegedly left no debts when he died but the
taxes on his estate had not hitherto been paid, much less ascertained. The estate
tax is one of those obligations that must be paid before distribution of the estate.
If not yet paid, the rule requires that the distributees post a bond or make such
provisions as to meet the said tax obligation in proportion to their respective
shares in the inheritance. 20 Notably, at the time the order was issued the
properties of the estate had not yet been inventoried and appraised.
It was also too early in the day for the probate court to order the release of the titles six
months after admitting the will to probate. The probate of a will is conclusive as to its
due execution and extrinsic validity21 and settles only the question of whether the
testator, being of sound mind, freely executed it in accordance with the formalities
prescribed by law.22 Questions as to the intrinsic validity and efficacy of the provisions of
the will, the legality of any devise or legacy may be raised even after the will has been
authenticated.23

The intrinsic validity of Hilario's holographic will was controverted by petitioner before
the probate court in his Reply to Montes' Opposition to his motion for release of
funds24 and his motion for reconsideration of the August 26, 1993 order of the said
court.25 Therein, petitioner assailed the distributive shares of the devisees and legatees
inasmuch as his father's will included the estate of his mother and allegedly impaired his
legitime as an intestate heir of his mother. The Rules provide that if there is a
controversy as to who are the lawful heirs of the decedent and their distributive shares
in his estate, the probate court shall proceed to hear and decide the same as in ordinary
cases.26

Still and all, petitioner cannot correctly claim that the assailed order deprived him of his
right to take possession of all the real and personal properties of the estate. The right of
an executor or administrator to the possession and management of the real and
personal properties of the deceased is not absolute and can only be exercised "so long
as it is necessary for the payment of the debts and expenses of
administration,"27 Section 3 of Rule 84 of the Revised Rules of Court explicitly provides:

Sec. 3. Executor or administrator to retain whole estate to pay debts, and to

administer estate not willed. — An executor or administrator shall have the right
to the possession and management of the real as well as the personal estate of
the deceased so long as it is necessary for the payment of the debts and
expenses for administration.28

When petitioner moved for further release of the funds deposited with the clerk of court,
he had been previously granted by the probate court certain amounts for repair and
maintenance expenses on the properties of the estate, and payment of the real estate
taxes thereon. But petitioner moved again for the release of additional funds for the
same reasons he previously cited. It was correct for the probate court to require him to
submit an accounting of the necessary expenses for administration before releasing any
further money in his favor.

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

Petitioner must be reminded that his right of ownership over the properties of his father
is merely inchoate as long as the estate has not been fully settled and partitioned. 30 As
executor, he is a mere trustee of his father's estate. The funds of the estate in his hands
are trust funds and he is held to the duties and responsibilities of a trustee of the highest
order.31 He cannot unilaterally assign to himself and possess all his parents' properties
and the fruits thereof without first submitting an inventory and appraisal of all real and
personal properties of the deceased, rendering a true account of his administration, the
expenses of administration, the amount of the obligations and estate tax, all of which
are subject to a determination by the court as to their veracity, propriety and justness. 32

IN VIEW WHEREOF, the decision and resolution of the Court of Appeals in CA-G.R. SP
No. 33045 affirming the order dated December 22, 1993 of the Regional Trial Court,
Branch 156, Pasig in SP Proc. No. 10259 are affirmed with the modification that those
portions of the order granting an allowance to the testator's grandchildren and ordering
the release of the titles to the private respondents upon notice to creditors are annulled
and set aside.

Respondent judge is ordered to proceed with dispatch in the proceedings below.

SO ORDERED.

G.R. No. 149926             February 23, 2005

UNION BANK OF THE PHILIPPINES, petitioner,

vs.
EDMUND SANTIBAÑEZ and FLORENCE SANTIBAÑEZ ARIOLA, respondents.

DECISION

CALLEJO, SR., J.:

Before us is a petition for review on certiorari under Rule 45 of the Revised Rules of
Court which seeks the reversal of the Decision 1 of the Court of Appeals dated May 30,
2001 in CA-G.R. CV No. 48831 affirming the dismissal 2 of the petitioner’s complaint in
Civil Case No. 18909 by the Regional Trial Court (RTC) of Makati City, Branch 63.

The antecedent facts are as follows:

On May 31, 1980, the First Countryside Credit Corporation (FCCC) and Efraim M.
Santibañez entered into a loan agreement 3 in the amount of ₱128,000.00. The amount
was intended for the payment of the purchase price of one (1) unit Ford 6600
Agricultural All-Purpose Diesel Tractor. In view thereof, Efraim and his son, Edmund,
executed a promissory note in favor of the FCCC, the principal sum payable in five
equal annual amortizations of ₱43,745.96 due on May 31, 1981 and every May 31st
thereafter up to May 31, 1985.
On December 13, 1980, the FCCC and Efraim entered into another loan
agreement,4 this time in the amount of ₱123,156.00. It was intended to pay the balance
of the purchase price of another unit of Ford 6600 Agricultural All-Purpose Diesel
Tractor, with accessories, and one (1) unit Howard Rotamotor Model AR 60K. Again,
Efraim and his son, Edmund, executed a promissory note for the said amount in favor of
the FCCC. Aside from such promissory note, they also signed a Continuing Guaranty
Agreement5 for the loan dated December 13, 1980.

Sometime in February 1981, Efraim died, leaving a holographic will. 6 Subsequently in

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

On August 20, 1981, a Deed of Assignment with Assumption of Liabilities 9 was executed
by and between FCCC and Union Savings and Mortgage Bank, wherein the FCCC as
the assignor, among others, assigned all its assets and liabilities to Union Savings and
Mortgage Bank.

Demand letters10 for the settlement of his account were sent by petitioner Union Bank of
the Philippines (UBP) to Edmund, but the latter failed to heed the same and refused to
pay. Thus, on February 5, 1988, the petitioner filed a Complaint 11 for sum of money
against the heirs of Efraim Santibañez, Edmund and Florence, before the RTC of
Makati City, Branch 150, docketed as Civil Case No. 18909. Summonses were issued
against both, but the one intended for Edmund was not served since he was in the
United States and there was no information on his address or the date of his return to
the Philippines.12 Accordingly, the complaint was narrowed down to respondent
Florence S. Ariola.

On December 7, 1988, respondent Florence S. Ariola filed her Answer 13 and alleged
that the loan documents did not bind her since she was not a party thereto. Considering
that the joint agreement signed by her and her brother Edmund was not approved by
the probate court, it was null and void; hence, she was not liable to the petitioner under
the joint agreement.

On January 29, 1990, the case was unloaded and re-raffled to the RTC of Makati City,
Branch 63.14 Consequently, trial on the merits ensued and a decision was subsequently
rendered by the court dismissing the complaint for lack of merit. The decretal portion of
the RTC decision reads:
WHEREFORE, judgment is hereby rendered DISMISSING the complaint for lack of
merit.15

The trial court found that the claim of the petitioner should have been filed with the
probate court before which the testate estate of the late Efraim Santibañez was
pending, as the sum of money being claimed was an obligation incurred by the said
decedent. The trial court also found that the Joint Agreement apparently executed by
his heirs, Edmund and Florence, on July 22, 1981, was, in effect, a partition of the
estate of the decedent. However, the said agreement was void, considering that it had
not been approved by the probate court, and that there can be no valid partition until
after the will has been probated. The trial court further declared that petitioner failed to
prove that it was the now defunct Union Savings and Mortgage Bank to which the
FCCC had assigned its assets and liabilities. The court also agreed to the contention of
respondent Florence S. Ariola that the list of assets and liabilities of the FCCC assigned
to Union Savings and Mortgage Bank did not clearly refer to the decedent’s account.
Ruling that the joint agreement executed by the heirs was null and void, the trial court
held that the petitioner’s cause of action against respondent Florence S. Ariola must
necessarily fail.

The petitioner appealed from the RTC decision and elevated its case to the Court of
Appeals (CA), assigning the following as errors of the trial court:

1. THE COURT A QUO ERRED IN FINDING THAT THE JOINT AGREEMENT

(EXHIBIT A) SHOULD BE APPROVED BY THE PROBATE COURT.

2. THE COURT A QUO ERRED IN FINDING THAT THERE CAN BE NO VALID

PARTITION AMONG THE HEIRS UNTIL AFTER THE WILL HAS BEEN
PROBATED.

3. THE COURT A QUO ERRED IN NOT FINDING THAT THE DEFENDANT

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

The petitioner asserted before the CA that the obligation of the deceased had passed to
his legitimate children and heirs, in this case, Edmund and Florence; the unconditional
signing of the joint agreement marked as Exhibit "A" estopped respondent Florence S.
Ariola, and that she cannot deny her liability under the said document; as the agreement
had been signed by both heirs in their personal capacity, it was no longer necessary to
present the same before the probate court for approval; the property partitioned in the
agreement was not one of those enumerated in the holographic will made by the
deceased; and the active participation of the heirs, particularly respondent Florence S.
Ariola, in the present ordinary civil action was tantamount to a waiver to re-litigate the
claim in the estate proceedings.

On the other hand, respondent Florence S. Ariola maintained that the money claim of
the petitioner should have been presented before the probate court. 17
The appellate court found that the appeal was not meritorious and held that the
petitioner should have filed its claim with the probate court as provided under Sections 1
and 5, Rule 86 of the Rules of Court. It further held that the partition made in the
agreement was null and void, since no valid partition may be had until after the will has
been probated. According to the CA, page 2, paragraph (e) of the holographic will
covered the subject properties (tractors) in generic terms when the deceased referred to
them as "all other properties." Moreover, the active participation of respondent Florence
S. Ariola in the case did not amount to a waiver. Thus, the CA affirmed the RTC
decision, viz.:

WHEREFORE, premises considered, the appealed Decision of the Regional Trial Court
of Makati City, Branch 63, is hereby AFFIRMED in toto.

SO ORDERED.18

In the present recourse, the petitioner ascribes the following errors to the CA:

I.

THE HONORABLE COURT OF APPEALS ERRED IN FINDING THAT THE JOINT

AGREEMENT SHOULD BE APPROVED BY THE PROBATE COURT.

II.

THE COURT OF APPEALS ERRED IN FINDING THAT THERE CAN BE NO VALID

PARTITION AMONG THE HEIRS OF THE LATE EFRAIM SANTIBAÑEZ UNTIL
AFTER THE WILL HAS BEEN PROBATED.

III.

THE COURT OF APPEALS ERRED IN NOT FINDING THAT THE RESPONDENT HAD
WAIVED HER RIGHT TO HAVE THE CLAIM RE-LITIGATED IN THE ESTATE
PROCEEDING.

IV.

RESPONDENTS CAN, IN FACT, BE HELD JOINTLY AND SEVERALLY LIABLE WITH

THE PRINCIPAL DEBTOR THE LATE EFRAIM SANTIBAÑEZ ON THE STRENGTH
OF THE CONTINUING GUARANTY AGREEMENT EXECUTED IN FAVOR OF
PETITIONER-APPELLANT UNION BANK.

V.

THE PROMISSORY NOTES DATED MAY 31, 1980 IN THE SUM OF ₱128,000.00
AND DECEMBER 13, 1980 IN THE AMOUNT OF ₱123,000.00 CATEGORICALLY
ESTABLISHED THE FACT THAT THE RESPONDENTS BOUND THEMSELVES
JOINTLY AND SEVERALLY LIABLE WITH THE LATE DEBTOR EFRAIM
SANTIBAÑEZ IN FAVOR OF PETITIONER UNION BANK.19

The petitioner claims that the obligations of the deceased were transmitted to the heirs
as provided in Article 774 of the Civil Code; there was thus no need for the probate
court to approve the joint agreement where the heirs partitioned the tractors owned by
the deceased and assumed the obligations related thereto. Since respondent Florence
S. Ariola signed the joint agreement without any condition, she is now estopped from
asserting any position contrary thereto. The petitioner also points out that the
holographic will of the deceased did not include nor mention any of the tractors subject
of the complaint, and, as such was beyond the ambit of the said will. The active
participation and resistance of respondent Florence S. Ariola in the ordinary civil action
against the petitioner’s claim amounts to a waiver of the right to have the claim
presented in the probate proceedings, and to allow any one of the heirs who executed
the joint agreement to escape liability to pay the value of the tractors under
consideration would be equivalent to allowing the said heirs to enrich themselves to the
damage and prejudice of the petitioner.

The petitioner, likewise, avers that the decisions of both the trial and appellate courts
failed to consider the fact that respondent Florence S. Ariola and her brother Edmund
executed loan documents, all establishing the vinculum juris or the legal bond between
the late Efraim Santibañez and his heirs to be in the nature of a solidary obligation.
Furthermore, the Promissory Notes dated May 31, 1980 and December 13, 1980
executed by the late Efraim Santibañez, together with his heirs, Edmund and
respondent Florence, made the obligation solidary as far as the said heirs are
concerned. The petitioner also proffers that, considering the express provisions of the
continuing guaranty agreement and the promissory notes executed by the named
respondents, the latter must be held liable jointly and severally liable thereon. Thus,
there was no need for the petitioner to file its money claim before the probate court.
Finally, the petitioner stresses that both surviving heirs are being sued in their
respective personal capacities, not as heirs of the deceased.

In her comment to the petition, respondent Florence S. Ariola maintains that the
petitioner is trying to recover a sum of money from the deceased Efraim Santibañez;
thus the claim should have been filed with the probate court. She points out that at the
time of the execution of the joint agreement there was already an existing probate
proceedings of which the petitioner knew about. However, to avoid a claim in the
probate court which might delay payment of the obligation, the petitioner opted to
require them to execute the said agreement.1a\^/phi1.net

According to the respondent, the trial court and the CA did not err in declaring that the
agreement was null and void. She asserts that even if the agreement was voluntarily
executed by her and her brother Edmund, it should still have been subjected to the
approval of the court as it may prejudice the estate, the heirs or third parties.
Furthermore, she had not waived any rights, as she even stated in her answer in the
court a quo that the claim should be filed with the probate court. Thus, the petitioner
could not invoke or claim that she is in estoppel.

Respondent Florence S. Ariola further asserts that she had not signed any continuing
guaranty agreement, nor was there any document presented as evidence to show that
she had caused herself to be bound by the obligation of her late father.

The petition is bereft of merit.

The Court is posed to resolve the following issues: a) whether or not the partition in the
Agreement executed by the heirs is valid; b) whether or not the heirs’ assumption of the
indebtedness of the deceased is valid; and c) whether the petitioner can hold the heirs
liable on the obligation of the deceased.1awphi1.nét

At the outset, well-settled is the rule that a probate court has the jurisdiction to
determine all the properties of the deceased, to determine whether they should or
should not be included in the inventory or list of properties to be administered. 20 The
said court is primarily concerned with the administration, liquidation and distribution of
the estate.21

In our jurisdiction, the rule is that there can be no valid partition among the heirs until
after the will has been probated:

In testate succession, there can be no valid partition among the heirs until after
the will has been probated. The law enjoins the probate of a will and the public
requires it, because unless a will is probated and notice thereof given to the
whole world, the right of a person to dispose of his property by will may be
rendered nugatory. The authentication of a will decides no other question than
such as touch upon the capacity of the testator and the compliance with those
requirements or solemnities which the law prescribes for the validity of a will. 22

This, of course, presupposes that the properties to be partitioned are the same
properties embraced in the will.23 In the present case, the deceased, Efraim Santibañez,
left a holographic will24 which contained, inter alia, the provision which reads as follows:

(e) All other properties, real or personal, which I own and may be discovered later after
my demise, shall be distributed in the proportion indicated in the immediately preceding
paragraph in favor of Edmund and Florence, my children.

We agree with the appellate court that the above-quoted is an all-encompassing

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

It must be stressed that the probate proceeding had already acquired jurisdiction over
all the properties of the deceased, including the three (3) tractors. To dispose of them in
any way without the probate court’s approval is tantamount to divesting it with
jurisdiction which the Court cannot allow.26 Every act intended to put an end to indivision
among co-heirs and legatees or devisees is deemed to be a partition, although it should
purport to be a sale, an exchange, a compromise, or any other transaction. 27 Thus, in
executing any joint agreement which appears to be in the nature of an extra-judicial
partition, as in the case at bar, court approval is imperative, and the heirs cannot just
divest the court of its jurisdiction over that part of the estate. Moreover, it is within the
jurisdiction of the probate court to determine the identity of the heirs of the
decedent.28 In the instant case, there is no showing that the signatories in the joint
agreement were the only heirs of the decedent. When it was executed, the
probate of the will was still pending before the court and the latter had yet to
determine who the heirs of the decedent were. Thus, for Edmund and respondent
Florence S. Ariola to adjudicate unto themselves the three (3) tractors was a
premature act, and prejudicial to the other possible heirs and creditors who may
have a valid claim against the estate of the deceased.

The question that now comes to fore is whether the heirs’ assumption of the
indebtedness of the decedent is binding. We rule in the negative. Perusing the joint
agreement, it provides that the heirs as parties thereto "have agreed to divide between
themselves and take possession and use the above-described chattel and each of them
to assume the indebtedness corresponding to the chattel taken as herein after stated
which is in favor of First Countryside Credit Corp."29 The assumption of liability was
conditioned upon the happening of an event, that is, that each heir shall take
possession and use of their respective share under the agreement. It was made
dependent on the validity of the partition, and that they were to assume the
indebtedness corresponding to the chattel that they were each to receive. The partition
being invalid as earlier discussed, the heirs in effect did not receive any such tractor. It
follows then that the assumption of liability cannot be given any force and effect.

The Court notes that the loan was contracted by the decedent.l^vvphi1.net The
petitioner, purportedly a creditor of the late Efraim Santibañez, should have thus filed its
money claim with the probate court in accordance with Section 5, Rule 86 of the
Revised Rules of Court, which provides:

Section 5. Claims which must be filed under the notice. If not filed barred; exceptions. —
All claims for money against the decedent, arising from contract, express or implied,
whether the same be due, not due, or contingent, all claims for funeral expenses for the
last sickness of the decedent, and judgment for money against the decedent, must be
filed within the time limited in the notice; otherwise they are barred forever, except that
they may be set forth as counterclaims in any action that the executor or administrator
may bring against the claimants. Where an executor or administrator commences an
action, or prosecutes an action already commenced by the deceased in his lifetime, the
debtor may set forth by answer the claims he has against the decedent, instead of
presenting them independently to the court as herein provided, and mutual claims may
be set off against each other in such action; and if final judgment is rendered in favor of
the defendant, the amount so determined shall be considered the true balance against
the estate, as though the claim had been presented directly before the court in the
administration proceedings. Claims not yet due, or contingent, may be approved at their
present value.

The filing of a money claim against the decedent’s estate in the probate court is
mandatory.30 As we held in the vintage case of Py Eng Chong v. Herrera:31

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

Perusing the records of the case, nothing therein could hold private respondent
Florence S. Ariola accountable for any liability incurred by her late father. The
documentary evidence presented, particularly the promissory notes and the continuing
guaranty agreement, were executed and signed only by the late Efraim Santibañez and
his son Edmund. As the petitioner failed to file its money claim with the probate court, at
most, it may only go after Edmund as co-maker of the decedent under the said
promissory notes and continuing guaranty, of course, subject to any defenses Edmund
may have as against the petitioner. As the court had not acquired jurisdiction over the
person of Edmund, we find it unnecessary to delve into the matter further.

We agree with the finding of the trial court that the petitioner had not sufficiently shown
that it is the successor-in-interest of the Union Savings and Mortgage Bank to which the
FCCC assigned its assets and liabilities. 33 The petitioner in its complaint alleged that "by
virtue of the Deed of Assignment dated August 20, 1981 executed by and between First
Countryside Credit Corporation and Union Bank of the Philippines…"34 However, the
documentary evidence35 clearly reflects that the parties in the deed of assignment with
assumption of liabilities were the FCCC, and the Union Savings and Mortgage Bank,
with the conformity of Bancom Philippine Holdings, Inc. Nowhere can the petitioner’s
participation therein as a party be found. Furthermore, no documentary or testimonial
evidence was presented during trial to show that Union Savings and Mortgage Bank is
now, in fact, petitioner Union Bank of the Philippines. As the trial court declared in its
decision:

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

This being the case, the petitioner’s personality to file the complaint is wanting.
Consequently, it failed to establish its cause of action. Thus, the trial court did not err in
dismissing the complaint, and the CA in affirming the same.

IN LIGHT OF ALL THE FOREGOING, the petition is hereby DENIED. The assailed

Court of Appeals Decision is AFFIRMED. No costs.

SO ORDERED.

Puno, (Chairman), Austria-Martinez, Tinga, and Chico-Nazario, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 189121               July 31, 2013

AMELIA GARCIA-QUIAZON, JENNETH QUIAZON and MARIA JENNIFER

QUIAZON, Petitioners,
vs.
MA. LOURDES BELEN, for and in behalf of MARIA LOURDES ELISE
QUIAZON, Respondent.

DECISION

PEREZ, J.:

This is a Petition for Review on Certiorari filed pursuant to Rule 45 of the Revised Rules
of Court, primarily assailing the 28 November 2008 Decision rendered by the Ninth
Division of the Court of Appeals in CA-G.R. CV No. 88589, 1 the decretal portion of
which states:

WHEREFORE, premises considered, the appeal is hereby DENIED. The assailed

Decision dated March 11, 2005, and the Order dated March 24, 2006 of the Regional
Trial Court, Branch 275, Las Piñas City are AFFIRMED in toto. 2

The Facts

This case started as a Petition for Letters of Administration of the Estate of Eliseo
Quiazon (Eliseo), filed by herein respondents who are Eliseo’s common-law wife and
daughter. The petition was opposed by herein petitioners Amelia Garcia-Quaizon
(Amelia) to whom Eliseo was married. Amelia was joined by her children, Jenneth
Quiazon (Jenneth) and Maria Jennifer Quiazon (Jennifer).

Eliseo died intestate on 12 December 1992.

On 12 September 1994, Maria Lourdes Elise Quiazon (Elise), represented by her

mother, Ma. Lourdes Belen (Lourdes), filed a Petition for Letters of Administration
before the Regional Trial Court (RTC) of Las Piñas City. 3 In her Petition docketed as SP
Proc. No. M-3957, Elise claims that she is the natural child of Eliseo having been
conceived and born at the time when her parents were both capacitated to marry each
other. Insisting on the legal capacity of Eliseo and Lourdes to marry, Elise impugned the
validity of Eliseo’s marriage to Amelia by claiming that it was bigamous for having been
contracted during the subsistence of the latter’s marriage with one Filipito Sandico
(Filipito). To prove her filiation to the decedent, Elise, among others, attached to the
Petition for Letters of Administration her Certificate of Live Birth 4 signed by Eliseo as her
father. In the same petition, it was alleged that Eliseo left real properties worth
₱2,040,000.00 and personal properties worth ₱2,100,000.00. In order to preserve the
estate of Eliseo and to prevent the dissipation of its value, Elise sought her appointment
as administratrix of her late father’s estate.

Claiming that the venue of the petition was improperly laid, Amelia, together with her
children, Jenneth and Jennifer, opposed the issuance of the letters of administration by
filing an Opposition/Motion to Dismiss. 5 The petitioners asserted that as shown by his
Death Certificate, 6 Eliseo was a resident of Capas, Tarlac and not of Las Piñas City, at
the time of his death. Pursuant to Section 1, Rule 73 of the Revised Rules of Court, 7 the
petition for settlement of decedent’s estate should have been filed in Capas, Tarlac and
not in Las Piñas City. In addition to their claim of improper venue, the petitioners
averred that there are no factual and legal bases for Elise to be appointed administratix
of Eliseo’s estate.

In a Decision8 dated 11 March 2005, the RTC directed the issuance of Letters of

Administration to Elise upon posting the necessary bond. The lower court ruled that the
venue of the petition was properly laid in Las Piñas City, thereby discrediting the
position taken by the petitioners that Eliseo’s last residence was in Capas, Tarlac, as
hearsay. The dispositive of the RTC decision reads:

Having attained legal age at this time and there being no showing of any disqualification
or incompetence to serve as administrator, let letters of administration over the estate of
the decedent Eliseo Quiazon, therefore, be issued to petitioner, Ma. Lourdes Elise
Quiazon, after the approval by this Court of a bond in the amount of ₱100,000.00 to be
posted by her.9

On appeal, the decision of the trial court was affirmed in toto in the 28 November 2008
Decision10 rendered by the Court of Appeals in CA-G.R.CV No. 88589. In validating the
findings of the RTC, the Court of Appeals held that Elise was able to prove that Eliseo
and Lourdes lived together as husband and wife by establishing a common residence at
No. 26 Everlasting Road, Phase 5, Pilar Village, Las Piñas City, from 1975 up to the
time of Eliseo’s death in 1992. For purposes of fixing the venue of the settlement of
Eliseo’s estate, the Court of Appeals upheld the conclusion reached by the RTC that the
decedent was a resident of Las Piñas City. The petitioners’ Motion for Reconsideration
was denied by the Court of Appeals in its Resolution 11 dated 7 August 2009.

The Issues

The petitioners now urge Us to reverse the assailed Court of Appeals Decision and
Resolution on the following grounds:

I. THE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THAT ELISEO

QUIAZON WAS A RESIDENT OF LAS PIÑAS AND THEREFORE, THE
PETITION FOR LETTERS OF ADMINISTRATION WAS PROPERLY FILED
WITH THE RTC OF LAS PIÑAS;

II. THE COURT OF APPEALS GRAVELY ERRED IN DECLARING THAT

AMELIA GARCIA-QUIAZON WAS NOT LEGALLY MARRIED TO ELISEO
QUIAZON DUE TO PREEXISTING MARRIAGE; AND

III. THE COURT OF APPEALS OVERLOOKED THE FACT THAT ELISE

QUIAZON HAS NOT SHOWN ANY INTEREST IN THE PETITION FOR
LETTERS OF ADMINISTRATION.12

The Court’s Ruling

We find the petition bereft of merit.

Under Section 1, Rule 73 of the Rules of Court, the petition for letters of administration
of the estate of a decedent should be filed in the RTC of the province where the
decedent resides at the time of his death:
Sec. 1. Where estate of deceased persons settled. – If the decedent is an inhabitant of
the Philippines at the time of his death, whether a citizen or an alien, his will shall be
proved, or letters of administration granted, and his estate settled, in the Court of First
Instance now Regional Trial Court in the province in which he resides at the time of his
death, and if he is an inhabitant of a foreign country, the Court of First Instance now
Regional Trial Court of any province in which he had estate. The court first taking
cognizance of the settlement of the estate of a decedent, shall exercise jurisdiction to
the exclusion of all other courts. The jurisdiction assumed by a court, so far as it
depends on the place of residence of the decedent, or of the location of his estate, shall
not be contested in a suit or proceeding, except in an appeal from that court, in the
original case, or when the want of jurisdiction appears on the record. (Emphasis
supplied).

The term "resides" connotes ex vi termini "actual residence" as distinguished from "legal
residence or domicile." This term "resides," like the terms "residing" and "residence," is
elastic and should be interpreted in the light of the object or purpose of the statute or
rule in which it is employed. In the application of venue statutes and rules – Section 1,
Rule 73 of the Revised Rules of Court is of such nature – residence rather than domicile
is the significant factor.13 Even where the statute uses word "domicile" still it is construed
as meaning residence and not domicile in the technical sense. 14 Some cases make a
distinction between the terms "residence" and "domicile" but as generally used in
statutes fixing venue, the terms are synonymous, and convey the same meaning as the
term "inhabitant."15 In other words, "resides" should be viewed or understood in its
popular sense, meaning, the personal, actual or physical habitation of a person, actual
residence or place of abode.16 It signifies physical presence in a place and actual stay
thereat.17 Venue for ordinary civil actions and that for special proceedings have one and
the same meaning.18 As thus defined, "residence," in the context of venue provisions,
means nothing more than a person’s actual residence or place of abode, provided he
resides therein with continuity and consistency.19

Viewed in light of the foregoing principles, the Court of Appeals cannot be faulted for
affirming the ruling of the RTC that the venue for the settlement of the estate of Eliseo
was properly laid in Las Piñas City. It is evident from the records that during his lifetime,
Eliseo resided at No. 26 Everlasting Road, Phase 5, Pilar Village, Las Piñas City. For
this reason, the venue for the settlement of his estate may be laid in the said city.

In opposing the issuance of letters of administration, the petitioners harp on the entry in
Eliseo’s Death Certificate that he is a resident of Capas, Tarlac where they insist his
estate should be settled. While the recitals in death certificates can be considered
proofs of a decedent’s residence at the time of his death, the contents thereof, however,
is not binding on the courts. Both the RTC and the Court of Appeals found that Eliseo
had been living with Lourdes, deporting themselves as husband and wife, from 1972 up
to the time of his death in 1995. This finding is consistent with the fact that in 1985,
Eliseo filed an action for judicial partition of properties against Amelia before the RTC of
Quezon City, Branch 106, on the ground that their marriage is void for being
bigamous.20 That Eliseo went to the extent of taking his marital feud with Amelia before
the courts of law renders untenable petitioners’ position that Eliseo spent the final days
of his life in Tarlac with Amelia and her children. It disproves rather than supports
petitioners’ submission that the lower courts’ findings arose from an erroneous
appreciation of the evidence on record. Factual findings of the trial court, when affirmed
by the appellate court, must be held to be conclusive and binding upon this Court. 21

Likewise unmeritorious is petitioners’ contention that the Court of Appeals erred in

declaring Amelia’s marriage to Eliseo as void ab initio. In a void marriage, it was though
no marriage has taken place, thus, it cannot be the source of rights. Any interested
party may attack the marriage directly or collaterally. A void marriage can be questioned
even beyond the lifetime of the parties to the marriage. 22 It must be pointed out that at
the time of the celebration of the marriage of Eliseo and Amelia, the law in effect was
the Civil Code, and not the Family Code, making the ruling in Niñal v.
Bayadog23 applicable four-square to the case at hand. In Niñal, the Court, in no
uncertain terms, allowed therein petitioners to file a petition for the declaration of nullity
of their father’s marriage to therein respondent after the death of their father, by
contradistinguishing void from voidable marriages, to wit:

Consequently, void marriages can be questioned even after the death of either party but
voidable marriages can be assailed only during the lifetime of the parties and not after
death of either, in which case the parties and their offspring will be left as if the marriage
had been perfectly valid. That is why the action or defense for nullity is imprescriptible,
unlike voidable marriages where the action prescribes. Only the parties to a voidable
marriage can assail it but any proper interested party may attack a void marriage. 24

It was emphasized in Niñal that in a void marriage, no marriage has taken place and it
cannot be the source of rights, such that any interested party may attack the marriage
directly or collaterally without prescription, which may be filed even beyond the lifetime
of the parties to the marriage.25

Relevant to the foregoing, there is no doubt that Elise, whose successional rights would
be prejudiced by her father’s marriage to Amelia, may impugn the existence of such
marriage even after the death of her father. The said marriage may be questioned
directly by filing an action attacking the validity thereof, or collaterally by raising it as an
issue in a proceeding for the settlement of the estate of the deceased spouse, such as
in the case at bar. Ineluctably, Elise, as a compulsory heir, 26 has a cause of action for
the declaration of the absolute nullity of the void marriage of Eliseo and Amelia, and the
death of either party to the said marriage does not extinguish such cause of action.

Having established the right of Elise to impugn Eliseo’s marriage to Amelia, we now
proceed to determine whether or not the decedent’s marriage to Amelia is void for being
bigamous.

Contrary to the position taken by the petitioners, the existence of a previous marriage
between Amelia and Filipito was sufficiently established by no less than the Certificate
of Marriage issued by the Diocese of Tarlac and signed by the officiating priest of the
Parish of San Nicolas de Tolentino in Capas, Tarlac. The said marriage certificate is a
competent evidence of marriage and the certification from the National Archive that no
information relative to the said marriage exists does not diminish the probative value of
the entries therein. We take judicial notice of the fact that the first marriage was
celebrated more than 50 years ago, thus, the possibility that a record of marriage can
no longer be found in the National Archive, given the interval of time, is not completely
remote. Consequently, in the absence of any showing that such marriage had been
dissolved at the time Amelia and Eliseo’s marriage was solemnized, the inescapable
conclusion is that the latter marriage is bigamous and, therefore, void ab initio. 27

Neither are we inclined to lend credence to the petitioners’ contention that Elise has not
shown any interest in the Petition for Letters of Administration.

Section 6, Rule 78 of the Revised Rules of Court lays down the preferred persons who
are entitled to the issuance of letters of administration, thus:

Sec. 6. When and to whom letters of administration granted. — If no executor is named

in the will, or the executor or executors are incompetent, refuse the trust, or fail to give
bond, or a person dies intestate, administration shall be granted:

(a) To the surviving husband or wife, as the case may be, or next of kin, or both,
in the discretion of the court, or to such person as such surviving husband or
wife, or next of kin, requests to have appointed, if competent and willing to serve;

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

(c) If there is no such creditor competent and willing to serve, it may be granted
to such other person as the court may select.

Upon the other hand, Section 2 of Rule 79 provides that a petition for Letters of
Administration must be filed by an interested person, thus:

Sec. 2. Contents of petition for letters of administration. — A petition for letters of

administration must be filed by an interested person and must show, so far as known to
the petitioner:

(a) The jurisdictional facts;

(b) The names, ages, and residences of the heirs, and the names and
residences of the creditors, of the decedent;
 (c) The probable value and character of the property of the estate;

(d) The name of the person for whom letters of administration are prayed.

But no defect in the petition shall render void the issuance of letters of administration.

An "interested party," in estate proceedings, is one who would be benefited in the

estate, such as an heir, or one who has a claim against the estate, such as a creditor.
Also, in estate proceedings, the phrase "next of kin" refers to those whose relationship
with the decedent Is such that they are entitled to share in the estate as distributees. 28

In the instant case, Elise, as a compulsory heir who stands to be benefited by the
distribution of Eliseo’s estate, is deemed to be an interested party. With the
overwhelming evidence on record produced by Elise to prove her filiation to
Eliseo, the petitioners’ pounding on her lack of interest in the administration of
the decedent’s estate, is just a desperate attempt to sway this Court to reverse
the findings of the Court of Appeals. Certainly, the right of Elise to be appointed
administratix of the estate of Eliseo is on good grounds. It is founded on her right
as a compulsory heir, who, under the law, is entitled to her legitimate after the
debts of the estate are satisfied. 29 Having a vested right in the distribution of
Eliseo’s estate as one of his natural children, Elise can rightfully be considered
as an interested party within the purview of the law.

WHEREFORE, premises considered, the petition is DENIED for lack of merit.

Accordingly, the Court of Appeals assailed 28 November 2008 Decision and 7 August
2009 Resolution, arc AFFIRMED in toto.

SO ORDERED.

JOSE PORTUGAL PEREZ

Associate Justice

WE CONCUR:

ERLINDA PILAPIL and HEIRS OF DONATA ORTIZ BRIONES, namely: ESTELA,

ERIBERTO AND VIRGILIO SANTOS, ANA SANTOS CULTURA, ELVIRA SANTOS
INOCENTES, ERNESTO MENDOZA, RIZALINA SANTOS, ADOLFO MENDOZA and
PACITA MENDOZA, Petitioners, v. HEIRS OF MAXIMINO R. BRIONES, namely:
SILVERIO S. BRIONES, PETRA BRIONES, BONIFACIO CABAHUG, JR., ANITA
TRASMONTE, CIRILITA FORTUNA, CRESENCIA BRIONES, FUGURACION
MEDALLE and MERCEDES LAGBAS, Respondents.

RESOLUTION
 CHICO-NAZARIO, J.:

On 10 March 2006, this Court promulgated its Decision 1 in the above-entitled case,
ruling in favor of the petitioners. The dispositive portion 2 reads as follows:

IN VIEW OF THE FOREGOING, the assailed Decision of the Court of Appeals in CA-
GR CV No. 55194, dated 31 August 2001, affirming the Decision of the Cebu City RTC
in Civil Case No. CEB-5794, dated 28 September 1986, is hereby REVERSED and SET
ASIDE; and the Complaint for partition, annulment, and recovery of possession filed by
the heirs of Maximino in Civil Case No. CEB-5794 is hereby DISMISSED.

On 10 May 2006, a Motion for Reconsideration 3 of the foregoing Decision was filed by
Atty. Celso C. Reales of the Reales Law Office on behalf of the respondents, heirs of
Maximino R. Briones. On 19 May 2006, petitioners Erlinda Pilapil and the other co-heirs
of Donata Ortiz Vda. de Briones, through counsel, filed an Opposition to Respondents'
Motion for Reconsideration,4 to which the respondents filed a Rejoinder 5 on 23 May
2006. Thereafter, Atty. Amador F. Brioso, Jr. of the Canto Brioso Arnedo Law Office
entered his appearance as collaborating counsel for the respondents. 6 Atty. Brioso then
filed on 11 June 2006 and 16 June 2006, respectively, a Reply 7 and Supplemental
Reply8 to the petitioners' Opposition to respondents' Motion for Reconsideration. Finally,
petitioners filed a Rejoinder9 to the respondents' Reply and Supplemental Reply on 5
July 2006.

The facts of the case, as recounted in the Decision, 10 are as follows'

Petitioners are the heirs of the late Donata Ortiz-Briones (Donata), consisting of her
surviving sister, Rizalina Ortiz-Aguila (Rizalina); Rizalina's daughter, Erlinda Pilapil
(Erlinda); and the other nephews and nieces of Donata, in representation of her two
other sisters who had also passed away. Respondents, on the other hand, are the heirs
of the late Maximino Briones (Maximino), composed of his nephews and nieces, and
grandnephews and grandnieces, in representation of the deceased siblings of
Maximino.

x   x   x

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

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

Donata died on 1 November 1977. Erlinda, one of Donata's nieces, instituted with the
RTC a petition for the administration of the intestate estate of Donata. Erlinda and her
husband, Gregorio, were appointed by the RTC as administrators of Donata's intestate
estate. Controversy arose among Donata's heirs when Erlinda claimed exclusive
ownership of three parcels of land, covered by TCTs No. 21542, 21545, and 58684,
based on two Deeds of Donation, both dated 15 September 1977, allegedly executed in
her favor by her aunt Donata. The other heirs of Donata opposed Erlinda's claim. This
Court, however, was no longer informed of the subsequent development in the intestate
proceedings of the estate of Donata; and as far as this Petition is concerned, all the
heirs of Donata, including Erlinda, appear to be on the same side.

On 21 January 1985, Silverio Briones (Silverio), a nephew of Maximino, filed a Petition

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

On 3 March 1987, the heirs of Maximino filed a Complaint with the RTC against the
heirs of Donata for the partition, annulment, and recovery of possession of real property,
docketed as Civil Case No. CEB-5794. They later filed an Amended Complaint, on 11
December 1992. They alleged that Donata, as administratrix of the estate of Maximino,
through fraud and misrepresentation, in breach of trust, and without the knowledge of
the other heirs, succeeded in registering in her name the real properties belonging to
the intestate estate of Maximino.

x   x   x

After trial in due course, the RTC rendered its Decision, dated 8 April 1986, in favor of
the heirs of Maximino x x x.

x   x   x

x x x[T]he RTC declared that the heirs of Maximino were entitled to - of the real
properties covered by TCTs No. 21542, 21543, 21544, 21545, 21546, and 58684. It
also ordered Erlinda to reconvey to the heirs of Maximino the said properties and to
render an accounting of the fruits thereof.
The heirs of Donata appealed the RTC Decision, dated 8 April 1986, to the Court of
Appeals. The Court of Appeals, in its Decision, promulgated on 31 August 2001,
affirmed the RTC Decision, x x x.

x   x   x

Unsatisfied with the afore-quoted Decision of the Court of Appeals, the heirs of Donata
filed the present Petition, x x x.

In its Decision, dated 10 March 2006, this Court found the Petition meritorious and,
reversing the Decisions of the Court of Appeals and the Regional Trial Court (RTC),
dismissed the Complaint for partition, annulment, and recovery of possession of real
property filed by the heirs of Maximino in Civil Case No. CEB-5794. This Court summed
up its findings,11 thus'

In summary, the heirs of Maximino failed to prove by clear and convincing

evidence that Donata managed, through fraud, to have the real properties,
belonging to the intestate estate of Maximino, registered in her name. In the
absence of fraud, no implied trust was established between Donata and the heirs
of Maximino under Article 1456 of the New Civil Code. Donata was able to register
the real properties in her name, not through fraud or mistake, but pursuant to an
Order, dated 2 October 1952, issued by the CFI in Special Proceedings No. 928-R.
The CFI Order, presumed to be fairly and regularly issued, declared Donata as the
sole, absolute, and exclusive heir of Maximino; hence, making Donata the
singular owner of the entire estate of Maximino, including the real properties, and
not merely a co-owner with the other heirs of her deceased husband. There being
no basis for the Complaint of the heirs of Maximino in Civil Case No. CEB-5794,
the same should have been dismissed.

Respondents move for the reconsideration of the Decision of this Court raising still the
arguments that Donata committed fraud in securing the Court of First Instance Order,
dated 2 October 1952, which declared her as the sole heir of her deceased husband
Maximino and authorized her to have Maximino's properties registered exclusively in
her name; that respondents' right to succession to the disputed properties was
transmitted or vested from the moment of Maximino's death and which they could no
longer be deprived of; that Donata merely possessed and held the properties in trust for
her co-heirs/owners; and that, by virtue of this Court's ruling in Quion v. Claridad 12 and
Sevilla, et al. v. De Los Angeles, 13 respondents' action to recover title to and possession
of their shares in Maximino's estate, held in trust for their benefit by Donata, and
eventually, by petitioners as the latter's successors-in-interest, is imprescriptible.
Respondents also advance a fresh contention that the CFI Order, dated 2 October
1952, being based on the fraudulent misrepresentation of Donata that she was
Maximino's sole heir, was a void order, which produced no legal effect. Lastly,
respondents asseverate that, by relying on certain procedural presumptions in its
Decision, dated 10 March 2006, this Court has sacrificed their substantive right to
succession, thus, making justice "subservient to the dictates of mere procedural fiats." 14
While this Court is persuaded to reexamine and clarify some points in its previous
Decision in this case, it does not find any new evidence or argument that would
adequately justify a change in its previous position.

On the finding of fraud

As this Court declared in its Decision, the existence of any trust relations between
petitioners and respondents shall be examined in the light of Article 1456 of the New
Civil Code, which provides that, "[i]f property is acquired through mistake or fraud, the
person obtaining it is, by force of law, considered a trustee of an implied trust for the
benefit of the person from whom the property comes." Hence, the foremost question to
be answered is still whether an implied trust under Article 1456 of the New Civil Code
had been sufficiently established in the present case.

In the Decision, this Court ruled in the negative, since there was insufficient evidence to
establish that Donata committed fraud. It should be remembered that Donata was able
to secure certificates of title to the disputed properties by virtue of the CFI Order in
Special Proceedings No. 928-R (the proceedings she instituted to settle Maximino's
intestate estate), which declared her as Maximino's sole heir. In the absence of proof to
the contrary, the Court accorded to Special Proceedings No. 928-R the presumptions of
regularity and validity. Reproduced below are the relevant portions 15 of the Decision'

At the onset, it should be emphasized that Donata was able to secure the TCTs
covering the real properties belonging to the estate of Maximino by virtue of a CFI
Order, dated 2 October 1952. It is undisputed that the said CFI Order was issued by the
CFI in Special Proceedings No. 928-R, instituted by Donata herself, to settle the
intestate estate of Maximino. The petitioners, heirs of Donata, were unable to present a
copy of the CFI Order, but this is not surprising considering that it was issued 35 years
prior to the filing by the heirs of Maximino of their Complaint in Civil Case No. CEB-5794
on 3 March 1987. The existence of such CFI Order, nonetheless, cannot be denied. It
was recorded in the Primary Entry Book of the Register of Deeds on 27 June 1960, at
1:10 p.m., as Entry No. 1714. It was annotated on the TCTs covering the real properties
as having declared Donata the sole, absolute, and exclusive heir of Maximino. The non-
presentation of the actual CFI Order was not fatal to the cause of the heirs of Donata
considering that its authenticity and contents were never questioned. The allegation of
fraud by the heirs of Maximino did not pertain to the CFI Order, but to the manner or
procedure by which it was issued in favor of Donata. Moreover, the non-presentation of
the CFI Order, contrary to the declaration by the RTC, does not amount to a willful
suppression of evidence that would give rise to the presumption that it would be
adverse to the heirs of Donata if produced. x x x.

x   x   x

The CFI Order, dated 2 October 1952, issued in Special Proceedings No. 928-R,
effectively settled the intestate estate of Maximino by declaring Donata as the sole,
absolute, and exclusive heir of her deceased husband. The issuance by the CFI of the
said Order, as well as its conduct of the entire Special Proceedings No. 928-R, enjoy
the presumption of validity pursuant to the Section 3(m) and (n) of Rule 131 of the
Revised Rules of Court, reproduced below'

SEC. 3. Disputable presumptions. - The following presumptions are satisfactory if

uncontradicted, but may be contradicted and overcome by other evidence:

x   x   x

(m) That official duty has been regularly performed;

(n) That a court, or judge acting as such, whether in the Philippines or elsewhere, was
acting in the lawful exercise of jurisdiction.

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

x   x   x

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

x   x   x

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

It is worth noting that, in its foregoing ratiocination, the Court was proceeding from an
evaluation of the evidence on record, which did not include an actual copy of the CFI
Order in Special Proceedings No. 928-R. Respondents only submitted a certified true
copy thereof on 15 June 2006, annexed to their Supplemental Reply to petitioners'
opposition to their motion for reconsideration of this Court's Decision. Respondents did
not offer any explanation as to why they belatedly produced a copy of the said Order,
but merely claimed to have been "fortunate enough to obtain a copy" thereof from the
Register of Deeds of Cebu.16

Respondents should be taken to task for springing new evidence so late into the
proceedings of this case. Parties should present all their available evidence at the
courts below so as to give the opposing party the opportunity to scrutinize and
challenge such evidence during the course of the trial. However, given that the
existence of the CFI Order in Special Proceedings No. 928-R was never in issue and
was, in fact, admitted by the petitioners; that the copy submitted is a certified true copy
of the said Order; and that the said Order may provide new information vital to a just
resolution of the present case, this Court is compelled to consider the same as part of
the evidence on record.

The CFI Order17 in question reads in full as'

ORDER

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

At the hearing of this incident today, nobody appeared to resist the motion, and based
on the uncontradicted testimony of Donata G. Ortiz that she was the nearest surviving
relative of the deceased Maximino Suico Briones at the time of the latter's death, and
pursuant to the pertinent provisions of the new Civil Code of the Philippines, the Court
hereby declares the aforesaid Donata G. Ortiz the sole, absolute and exclusive heir of
the estate of the deceased Maximino Suico Briones, and she is hereby entitled to inherit
all the residue of this estate after paying all the obligations thereof, which properties are
those contained in the Inventory, dated October 2, 1952.ςηαñrοblεš νιr†υαl lαω lιbrαrÿ

Cebu City, January 15, 1960.

From the contents of the afore-quoted Order, this Court is able to deduce that the CFI
Order was in fact issued on 15 January 1960 and not 2 October 1952, as earlier stated
in the Decision. It was the inventory of properties, submitted by Donata as administratrix
of Maximino's intestate estate, which was dated 2 October 1952. 18 Other than such
observation, this Court finds nothing in the CFI Order which could change its original
position in the Decision under consideration.

While it is true that since the CFI was not informed that Maximino still had surviving
siblings and so the court was not able to order that these siblings be given personal
notices of the intestate proceedings, it should be borne in mind that the settlement of
estate, whether testate or intestate, is a proceeding in rem,19 and that the publication in
the newspapers of the filing of the application and of the date set for the hearing of the
same, in the manner prescribed by law, is a notice to the whole world of the existence of
the proceedings and of the hearing on the date and time indicated in the publication.
The publication requirement of the notice in newspapers is precisely for the purpose of
informing all interested parties in the estate of the deceased of the existence of the
settlement proceedings, most especially those who were not named as heirs or
creditors in the petition, regardless of whether such omission was voluntarily or
involuntarily made.

This Court cannot stress enough that the CFI Order was the result of the intestate
proceedings instituted by Donata before the trial court. As this Court pointed out in its
earlier Decision, the manner by which the CFI judge conducted the proceedings enjoys
the presumption of regularity, and encompassed in such presumption is the order of
publication of the notice of the intestate proceedings. A review of the records fails to
show any allegation or concrete proof that the CFI also failed to order the publication in
newspapers of the notice of the intestate proceedings and to require proof from Donata
of compliance therewith. Neither can this Court find any reason or explanation as to why
Maximino's siblings could have missed the published notice of the intestate proceedings
of their brother.

In relying on the presumptions of the regular performance of official duty and lawful
exercise of jurisdiction by the CFI in rendering the questioned Order, dated 15 January
1960, this Court is not, as counsel for respondents allege, sacrificing the substantive
right of respondents to their share in the inheritance in favor of mere procedural fiats.
There is a rationale for the establishment of rules of procedure, as amply explained by
this Court in De Dios v. Court of Appeals20'

Procedural rules are designed to insure the orderly and expeditious administration of
justice by providing for a practical system by which the parties to a litigation may be
accorded a full and fair opportunity to present their respective positions and refute each
other's submissions under the prescribed requirements, conditions and limitations.
Adjective law is not the counterfoil of substantive law. In fact, there is a symbiotic
relationship between them. By complying faithfully with the Rules of Court, the bench
and the bar are better able to discuss, analyze and understand substantive rights and
duties and consequently to more effectively protect and enforce them. The other
alternative is judicial anarchy.

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

Although Donata may have alleged before the CFI that she was her husband's sole heir,
it was not established that she did so knowingly, maliciously and in bad faith, so as for
this Court to conclude that she indeed committed fraud. This Court again brings to the
fore the delay by which respondents filed the present case, when the principal actors
involved, particularly, Donata and Maximino's siblings, have already passed away and
their lips forever sealed as to what truly transpired between them. On the other hand,
Special Proceedings No. 928-R took place when all these principal actors were still alive
and each would have been capable to act to protect his or her own right to Maximino's
estate. Letters of Administration of Maximino's estate were issued in favor of Donata as
early as 8 July 1952, and the CFI Order in question was issued only on 15 January
1960. The intestate proceedings for the settlement of Maximino's estate were thus
pending for almost eight years, and it is the burden of the respondents to establish that
their parents or grandparents, Maximino's surviving siblings, had absolutely no
knowledge of the said proceedings all these years. As established in Ramos v.
Ramos,21 the degree of proof to establish fraud in a case where the principal actors to
the transaction have already passed away is proof beyond reasonable doubt, to wit'

"x x x But length of time necessarily obscures all human evidence; and as it thus
removes from the parties all the immediate means to verify the nature of the
original transactions, it operates by way of presumption, in favor of innocence,
and against imputation of fraud. It would be unreasonable, after a great length of
time, to require exact proof of all the minute circumstances of any transaction, or to
expect a satisfactory explanation of every difficulty, real or apparent, with which it may
be encumbered. The most that can fairly be expected, in such cases, if the parties are
living, from the frailty of memory, and human infirmity, is, that the material facts can be
given with certainty to a common intent; and, if the parties are dead, and the cases rest
in confidence, and in parol agreements, the most that we can hope is to arrive at
probable conjectures, and to substitute general presumptions of law, for exact
knowledge. Fraud, or breach of trust, ought not lightly to be imputed to the living;
for, the legal presumption is the other way; as to the dead, who are not here to
answer for themselves, it would be the height of injustice and cruelty, to disturb
their ashes, and violate the sanctity of the grave, unless the evidence of fraud be
clear, beyond a reasonable doubt (Prevost v. Gratz, 6 Wheat. [U.S.], 481, 498).

Moreover, even if Donata's allegation that she was Maximino's sole heir does constitute
fraud, it is insufficient to justify abandonment of the CFI Order, dated 15 January
1960,22 considering the nature of intestate proceedings as being in rem and the
disputable presumptions of the regular performance of official duty and lawful exercise
of jurisdiction by the CFI in rendering the questioned Order, dated 15 January 1960, in
Special Proceedings No. 928-R.

On prescription of the right to recover based on implied trust

Assuming, for the sake of argument, that Donata's misrepresentation constitutes fraud
that would impose upon her the implied trust provided in Article 1456 of the Civil Code,
this Court still cannot sustain respondents' contention that their right to recover their
shares in Maximino's estate is imprescriptible. It is already settled in jurisprudence that
an implied trust, as opposed to an express trust, is subject to prescription and laches.

The case of Ramos v. Ramos23 already provides an elucidating discourse on the matter,

to wit'

"Trusts are either express or implied. Express trusts are created by the intention of the
trustor or of the parties. Implied trusts come into being by operation of law" (Art. 1441,
Civil Code). "No express trusts concerning an immovable or any interest therein may be
proven by oral evidence. An implied trust may be proven by oral evidence" (Ibid; Arts.
1443 and 1457).

"No particular words are required for the creation of an express trust, it being sufficient
that a trust is clearly intended" (Ibid; Art. 1444; Tuason de Perez v. Caluag, 96 Phil. 981;
Julio v. Dalandan, L-19012, October 30, 1967, 21 SCRA 543, 546). "Express trusts are
those which are created by the direct and positive acts of the parties, by some writing or
deed, or will, or by words either expressly or impliedly evincing an intention to create a
trust" (89 C.J. S. 122).

"Implied trusts are those which, without being expressed, are deducible from the nature
of the transaction as matters of intent, or which are superinduced on the transaction by
operation of law as matters of equity, independently of the particular intention of the
parties" (89 C.J.S. 724). They are ordinarily subdivided into resulting and constructive
trusts (89 C.J.S. 722).

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

On the other hand, a constructive trust is a trust "raised by construction of law, or arising
by operation of law." In a more restricted sense and as contradistinguished from a
resulting trust, a constructive trust is "a trust not created by any words, either expressly
or impliedly evincing a direct intention to create a trust, but by the construction of equity
in order to satisfy the demands of justice. It does not arise by agreement or intention but
by operation of law." (89 C.J.S. 726-727). "If a person obtains legal title to property by
fraud or concealment, courts of equity will impress upon the title a so-called constructive
trust in favor of the defrauded party." A constructive trust is not a trust in the technical
sense (Gayondato v. Treasurer of the P.I., 49 Phil. 244; See Art. 1456, Civil Code).
There is a rule that a trustee cannot acquire by prescription the ownership of property
entrusted to him (Palma v. Cristobal, 77 Phil. 712), or that an action to compel a trustee
to convey property registered in his name in trust for the benefit of the cestui qui trust
does not prescribe (Manalang v. Canlas, 94 Phil. 776; Cristobal v. Gomez, 50 Phil.
810), or that the defense of prescription cannot be set up in an action to recover
property held by a person in trust for the benefit of another (Sevilla v. De los Angeles,
97 Phil. 875), or that property held in trust can be recovered by the beneficiary
regardless of the lapse of time (Marabilles v. Quito, 100 Phil. 64; Bancairen v. Diones,
98 Phil. 122, 126; Juan v. Zuñiga, 62 O.G. 1351; 4 SCRA 1221; Jacinto v. Jacinto, L-
17957, May 31, 1962. See Tamayo v. Callejo, 147 Phil. 31, 37).

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

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

The rule of imprescriptibility was misapplied to constructive trusts (Geronimo and Isidoro

v. Nava and Aquino, 105 Phil. 145, 153. Compare with Cuison v. Fernandez and
Bengzon, 105 Phil. 135, 139; De Pasion v. De Pasion, 112 Phil. 403, 407).

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

With respect to constructive trusts, the rule is different. The prescriptibility of an action
for reconveyance based on constructive trust is now settled  (Alzona v. Capunitan, L-
10228, February 28, 1962, 4 SCRA 450; Gerona v. De Guzman, supra; Claridad v.
Henares, 97 Phil. 973; Gonzales v. Jimenez, L-19073, January 30, 1965, 13 SCRA 80;
Boñaga v. Soler, 112 Phil. 651; J. M. Tuason & Co., v. Magdangal, L-15539, January
30, 1962, 4 SCRA 84). Prescription may supervene in an implied trust (Bueno v. Reyes,
L-22587, April 28, 1969, 27 SCRA 1179; Fabian v. Fabian, L-20449, January 29, 1968;
Jacinto v. Jacinto, L-17957, May 31, 1962, 5 SCRA 371).
And whether the trust is resulting or constructive, its enforcement may be barred by
laches (90 C.J.S. 887-889; 54 Am Jur. 449-450; Diaz v. Gorricho and Aguado, supra;
Compare with Mejia v. Gampona, 100 Phil. 277). [Emphases supplied.]

A present reading of the Quion 24 and Sevilla25 cases, invoked by respondents, must be

made in conjunction with and guided accordingly by the principles established in the
afore-quoted case. Thus, while respondents' right to inheritance was transferred or
vested upon them at the time of Maximino's death, their enforcement of said right by
appropriate legal action may be barred by the prescription of the action.

Prescription of the action for reconveyance of the disputed properties based on implied
trust is governed by Article 1144 of the New Civil Code, which reads'

ART. 1144. The following actions must be brought within ten years from the time the
right of action accrues:

(1) Upon a written contract;

(2) Upon an obligation created by law;

(3) Upon a judgment.

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

By virtue of the CFI Order, dated 15 January 1960, in Special Proceedings No. 928-R,
Donata was able to register and secure certificates of title over the disputed properties
in her name on 27 June 1960. The respondents filed with the RTC their Complaint
for partition, annulment, and recovery of possession of the disputed real
properties, docketed as Civil Case No. CEB-5794, only on 3 March 1987, almost 27
years after the registration of the said properties in the name of Donata.
Therefore, respondents' action for recovery of possession of the disputed
properties had clearly prescribed.

Moreover, even though respondents' Complaint before the RTC in Civil Case No. CEB-
5794 also prays for partition of the disputed properties, it does not make their action to
enforce their right to the said properties imprescriptible. While as a general rule, the
action for partition among co-owners does not prescribe so long as the co-ownership is
expressly or impliedly recognized, as provided for in Article 494, of the New Civil Code,
it bears to emphasize that Donata had never recognized respondents as co-owners or
co-heirs, either expressly or impliedly. 28 Her assertion before the CFI in Special
Proceedings No. 928-R that she was Maximino's sole heir necessarily excludes
recognition of some other co-owner or co-heir to the inherited properties; Consequently,
the rule on non-prescription of action for partition of property owned in common does
not apply to the case at bar.

On laches as bar to recovery

Other than prescription of action, respondents' right to recover possession of the

disputed properties, based on implied trust, is also barred by laches. The defense of
laches, which is a question of inequity in permitting a claim to be enforced, applies
independently of prescription, which is a question of time. Prescription is statutory;
laches is equitable.29

Laches is defined as the failure to assert a right for an unreasonable and unexplained
length of time, warranting a presumption that the party entitled to assert it has either
abandoned or declined to assert it. This equitable defense is based upon grounds of
public policy, which requires the discouragement of stale claims for the peace of
society.30

This Court has already thoroughly discussed in its Decision the basis for barring
respondents' action for recovery of the disputed properties because of laches. This
Court pointed out therein31 that -

In further support of their contention of fraud by Donata, the heirs of Maximino even
emphasized that Donata lived along the same street as some of the siblings of
Maximino and, yet, she failed to inform them of the CFI Order, dated [15 January 1960],
in Special Proceedings No. 928-R, and the issuance in her name of new TCTs covering
the real properties which belonged to the estate of Maximino. This Court, however,
appreciates such information differently. It actually works against the heirs of Maximino.
Since they only lived nearby, Maximino's siblings had ample opportunity to inquire or
discuss with Donata the status of the estate of their deceased brother. Some of the real
properties, which belonged to the estate of Maximino, were also located within the same
area as their residences in Cebu City, and Maximino's siblings could have regularly
observed the actions and behavior of Donata with regard to the said real properties. It is
uncontested that from the time of Maximino's death on 1 May 1952, Donata had
possession of the real properties. She managed the real properties and even collected
rental fees on some of them until her own death on 1 November 1977. After Donata's
death, Erlinda took possession of the real properties, and continued to manage the
same and collect the rental fees thereon. Donata and, subsequently, Erlinda, were so
obviously exercising rights of ownership over the real properties, in exclusion of all
others, which must have already put the heirs of Maximino on guard if they truly
believed that they still had rights thereto.
The heirs of Maximino knew he died on 1 May 1952. They even attended his wake.
They did not offer any explanation as to why they had waited 33 years from Maximino's
death before one of them, Silverio, filed a Petition for Letters of Administration for the
intestate estate of Maximino on 21 January 1985. After learning that the intestate estate
of Maximino was already settled in Special Proceedings No. 928-R, they waited another
two years, before instituting, on 3 March 1987, Civil Case No. CEB-5794, the Complaint
for partition, annulment and recovery of the real property belonging to the estate of
Maximino. x x x

Considering the circumstances in the afore-quoted paragraphs, as well as respondents'

conduct before this Court, particularly the belated submission of evidence and argument
of new issues, respondents are consistently displaying a penchant for delayed action,
without any proffered reason or justification for such delay.

It is well established that the law serves those who are vigilant and diligent and not
those who sleep when the law requires them to act. The law does not encourage
laches, indifference, negligence or ignorance. On the contrary, for a party to deserve the
considerations of the courts, he must show that he is not guilty of any of the aforesaid
failings.32

On void judgment or order

Respondents presented only in their Reply and Supplemental Reply to the petitioners'
Opposition to their Motion for Reconsideration the argument that the CFI Order, dated
15 January 1960, in Special Proceedings No. 928-R is void and, thus, it cannot have
any legal effect. Consequently, the registration of the disputed properties in the name of
Donata pursuant to such Order was likewise void.

This Court is unconvinced.

In the jurisprudence referred to by the respondents, 33 an order or judgment is

considered void when rendered by the court without or in excess of its jurisdiction or in
violation of a mandatory duty, circumstances which are not present in the case at bar.

Distinction must be made between a void judgment and a voidable one, thus '

"* * * A voidable judgment is one which, though not a mere nullity, is liable to be made
void when a person who has a right to proceed in the matter takes the proper steps to
have its invalidity declared. It always contains some defect which may become fatal. It
carries within it the means of its own overthrow. But unless and until it is duly annulled,
it is attended with all the ordinary consequences of a legal judgment. The party against
whom it is given may escape its effect as a bar or an obligation, but only by a proper
application to have it vacated or reversed. Until that is done, it will be efficacious as a
claim, an estoppel, or a source of title. If no proceedings are ever taken against it, it will
continue throughout its life to all intents a valid sentence. If emanating from a court of
general jurisdiction, it will be sustained by the ordinary presumptions of regularity, and it
is not open to impeachment in any collateral action. * * *"

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

It is not always easy to draw the line of demarcation between a void judgment and a
voidable one, but all authorities agree that jurisdiction over the subject-matter is
essential to the validity of a judgment and that want of such jurisdiction renders it void
and a mere nullity. In the eye of the law it is non-existent. (Fisher v. Harnden, 1 Paine,
55; Towns v. Springer, 9 Ga., 130; Mobley v. Mobley, 9 Ga., 247; Beverly and McBride
v. Burke, 9 Ga., 440; Central Bank of Georgia v. Gibson, 11 Ga., 453; Johnson v.
Johnson, 30 Ill., 215; St. Louis and Sandoval Coal and Mining Co. v. Sandoval Coal and
Mining Co., 111 Ill., 32; Swiggart v. Harber, 4 Scam., 364; Miller v. Snyder, 6 Ind., 1;
Seely v. Reid, 3 Greene [Iowa], 374.)34

The fraud and misrepresentation fostered by Donata on the CFI in Special Proceedings
No. 928-R did not deprive the trial court of jurisdiction over the subject-matter of the
case, namely, the intestate estate of Maximino. Donata's fraud and misrepresentation
may have rendered the CFI Order, dated 15 January 1960, voidable, but not void on its
face. Hence, the said Order, which already became final and executory, can only be set
aside by direct action to annul and enjoin its enforcement. 35 It cannot be the subject of a
collateral attack as is being done in this case. Note that respondents' Complaint before
the RTC in Civil Case No. CEB-5794 was one for partition, annulment, and recovery of
possession of the disputed properties. The annulment sought in the Complaint was not
that of the CFI Order, dated 15 January 1960, but of the certificates of title over the
properties issued in Donata's name. So until and unless respondents bring a direct
action to nullify the CFI Order, dated 15 January 1960, in Special Proceedings No. 928-
R, and attain a favorable judgment therein, the assailed Order remains valid and
binding.

Nonetheless, this Court also points out that an action to annul an order or judgment
based on fraud must be brought within four years from the discovery of the fraud. 36 If it
is conceded that the respondents came to know of Donata's fraudulent acts only in
1985, during the course of the RTC proceedings which they instituted for the settlement
of Maximino's estate, then their right to file an action to annul the CFI Order, dated 15
January 1960, in Special Proceedings No. 928-R (earlier instituted by Donata for the
settlement of Maximino's estate), has likewise prescribed by present time.

In view of the foregoing, the Motion for Reconsideration is DENIED.

SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

A.M. No. P-01-1448               June 25, 2013

(Formerly OCA IPI No. 99-664-P)

RODOLFO C. SABIDONG, Complainant,
vs.
NICOLASITO S. SOLAS (Clerk of Court IV), Respondent.

DECISION

VILLARAMA, JR., J.:

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

The Facts

Trinidad Sabidong, complainant’s mother, is one of the longtime occupants of a parcel

of land, designated as Lot 11 (Lot 1280-D-4-11 of consolidation-subdivision plan [LRC]
Pcs-483) originally registered in the name of C. N. Hodges and situated at Barangay
San Vicente, Jaro, Iloilo City. 2 The Sabidongs are in possession of one-half portion of
Lot 11 of the said Estate (Hodges Estate), as the other half-portion was occupied by
Priscila Saplagio. Lot 11 was the subject of an ejectment suit filed by the Hodges
Estate, docketed as Civil Case No. 14706 of the MTCC Iloilo City, Branch 4 ("Rosita R.
Natividad in her capacity as Administratrix of C.N. Hodges Estate, plaintiff vs. Priscila
Saplagio, defendant"). On May 31, 1983, a decision was rendered in said case ordering
the defendant to immediately vacate the portion of Lot 11 leased to her and to pay the
plaintiff rentals due, attorney’s fees, expenses and costs. 3 At the time, respondent was
the Clerk of Court III of MTCC, Branch 3, Iloilo City.
Sometime in October 1984, respondent submitted an Offer to Purchase on installment
Lots 11 and 12. In a letter dated January 7, 1986, the Administratrix of the Hodges
Estate rejected respondent’s offer in view of an application to purchase already filed by
the actual occupant of Lot 12, "in line with the policy of the Probate Court to give priority
to the actual occupants in awarding approval of Offers". While the check for initial down
payment tendered by respondent was returned to him, he was nevertheless informed
that he may file an offer to purchase Lot 11 and that if he could put up a sufficient down
payment, the Estate could immediately endorse it for approval of the Probate Court so
that the property can be awarded to him "should the occupant fail to avail of the priority
given to them."4

The following day, January 8, 1986, respondent again submitted an Offer to Purchase
Lot 11 with an area of 234 square meters for the amount of ₱35,100. Under the Order
dated November 18, 1986 issued by the probate court (Regional Trial Court of Iloilo,
Branch 27) in Special Proceedings No. 1672 ("Testate Estate of the Late Charles
Newton Hodges, Rosita R. Natividad, Administratrix"), respondent’s Offer to Purchase
Lot 11 was approved upon the court’s observation that the occupants of the subject lots
"have not manifested their desire to purchase the lots they are occupying up to this date
and considering time restraint and considering further, that the sales in favor of the x x x
offerors are most beneficial to the estate x x x". On January 21, 1987, the probate court
issued another Order granting respondent’s motion for issuance of a writ of possession
in his favor. The writ of possession over Lot 11 was eventually issued on June 27,
1989.5

On November 21, 1994, a Deed of Sale With Mortgage covering Lot 11 was executed
between respondent and the Hodges Estate represented by its Administratrix, Mrs. Ruth
R. Diocares. Lot 11 was thereby conveyed to respondent on installment for the total
purchase price of ₱50,000.

Consequently, Transfer Certificate of Title (TCT) No. T-11836 in the name of C. N.

Hodges was cancelled and a new certificate of title, TCT No. T-107519 in the name of
respondent was issued on December 5, 1994. Lot 11 was later subdivided into two lots,
Lots 11-A and 11-B for which the corresponding titles (TCT Nos. T-116467 and T-
116468), also in the name of respondent, were issued on February 28, 1997. 6

On motion of Ernesto Pe Benito, Administrator of the Hodges Estate, a writ of

demolition was issued on March 3, 1998 by the probate court in favor of respondent and
against all adverse occupants of Lot 11.7

On June 14, 1999, this Court received the sworn letter-complaint asserting that as court
employee respondent cannot buy property in litigation (consequently he is not a buyer in
good faith), commit deception, dishonesty, oppression and grave abuse of authority.
Complainant specifically alleged the following:

3. Complainant and his siblings, are possessors and occupants of a parcel of

land situated at Brgy. San Vicente, Jaro, Iloilo City, then identified as Lot No.
1280-D-4-11, later consolidated and subdivided and became known as Lot 11,
then registered and titled in the name of Charles Newton Hodges. The Sabidong
family started occupying this lot in 1948 and paid their monthly rentals until
sometime in 1979 when the Estate of Hodges stopped accepting rentals. x x x

4. Upon knowing sometime in 1987 that the property over which their house is
standing, was being offered for sale by the Estate, the mother of complainant,
TRINIDAD CLAVERIO SABIDONG (now deceased), took interest in buying said
property, Lot 11;

5. TRINIDAD CLAVERIO SABIDONG, was then an ordinary housekeeper and a

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

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

7. Complainant nor any member of his family did not know that as early as 1984,
the respondent had offered to purchase the subject lot from the estate x x x. After
receiving the notice of denial of his offer to purchase, dated January 7, 1986,
respondent made a second offer to purchase the subject property the following
day, January 8, 1986, knowing fully well that the subject property was being
occupied. x x x

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

9. That between 1992-1993, a sister of the complainant who was fortunate to

have worked abroad, sent the amount of Ten Thousand (₱10,000.00) Pesos to
complainant’s mother, to be given to respondent Nicolasito Solas. x x x After
receiving the money, respondent assured the Sabidong family that they will not
be ejected from the lot, he being the City Sheriff will take care of everything, and
taking advantage of the illiteracy of Trinidad Claverio Sabidong, he did not issue
any receipt;

10. True enough, they were not ejected instead it took the respondent some time
to see them again and demanded additional payment. In the meanwhile, the
complainant waited for the papers of the supposed sale and transfer of title,
which respondent had promised after receiving the downpayment of ₱10,000.00;

11. That sometime again in 1995, respondent again received from the mother of
complainant the amount of Two Thousand (₱2,000.00) Pesos, allegedly for the
expenses of the documentation of sale and transfer of title, and again respondent
promised that the Sabidong family will not be ejected;

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

13. Worse, respondent moved for the issuance of a Writ of Possession in his
favor, which the probate court acted favorably x x x. A writ of possession was
issued on June 27, 1989 x x x;

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

15. Being an officer of the court and supposed to be an embodiment of fairness

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

16. That when several thousands of pesos were given to the respondent as
payment for the same and incidental expenses relative thereto, he was able to
cause the transfer of the title in his favor. x x x;

17. After the death of Trinidad Claverio Sabidong x x x the respondent received
from the complainant the amount of Five Thousand (₱5,000.00) Pesos x x x
When a receipt was demanded, respondent refused to issue one, and instead
promised and assured the complainant that they will not be ejected;
xxxx

19. The complainant again, through his sister-in-law, Socorro Sabidong,

delivered and gave to the respondent the amount of Three Thousand
(₱3,000.00) Pesos as expenses for the subdivision of the subject lot. The
respondent facilitated the subdivision and after the same was approved, the
complainant did not know that two (2) titles were issued in the name of the
respondent. x x x;

20. Meanwhile, respondent prepared a Contract to Sell, for the complainant and
his neighbor Norberto Saplagio to affix their signatures, pursuant to their previous
agreement for the buyers to avail of a housing loan with the Home Development
Mutual Fund (PAG-IBIG). Complainant attended the seminar of the HDMF for
seven (7) times, in his desire to consummate the sale. However, when the
complainant affixed his signature in the contract, he was surprised that the owner
of the subject property was the respondent. When complainant raised a question
about this, respondent assured complainant that everything was alright and that
sooner complainant will be the owner of the property. Complainant and his
family, all these years, had believed and continued to believe that the owner was
the estate of Hodges and that respondent was only the representative of the
estate;

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

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

23. After learning of the demolition order, complainant attempted to settle the
matter with the respondent, however, the same proved futile as respondent
boasted that the property would now cost at Four Thousand Five Hundred
(₱4,500.00) Pesos;
 24. The threats of demolition is imminent. Clearly, complainant and his family
were duped by the respondent and are helpless victims of an officer of the court
who took advantage of their good faith and trust. Complainant later was informed
that the subject property was awarded to the respondent as his Sheriff’s Fees,
considering that respondent executed the decisions in ejectment cases filed by
the Hodges estate against the adverse occupants of its vast properties;

25. A civil case for the Annulment of Title of the respondent over the subject
property is pending before the Regional Trial Court of Iloilo, Branch 37 and a
criminal complaint for Estafa is also pending preliminary investigation before the
Office of the City Prosecutor of Iloilo City, known as I.S. No. 1559-99, both filed
[by] the complainant against the respondent. 8

Acting on the complaint, Court Administrator Alfredo L. Benipayo issued a 1st

Indorsement9 dated July 8, 1999, requiring respondent to file his comment on the
Complaint dated May 29, 1999. On October 21, 1999, respondent submitted his
Comment.10

In a Resolution11 dated July 19, 1999, Public Prosecutor Constantino C. Tubilleja

dismissed the Estafa charge against respondent for insufficiency of evidence.

On November 29, 2000, Court Administrator Benipayo issued an Evaluation and

Recommendation12 finding respondent guilty of violating Article 1491 13 of the Civil Code.
Said rule prohibits the purchase by certain court officers of property and rights in
litigation within their jurisdiction. Court Administrator Benipayo recommended that:

1. this administrative complaint be treated as an administrative matter;

2. respondent Nicolasito S. Solas, Clerk of Court IV, OCC, MTCC, Iloilo City be
SUSPENDED for six (6) months, with warning that a repetition of the same
offense in the future will be dealt with more severely;

3. inasmuch as there are factual issues regarding the delivery of substantial

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

In a Resolution15 dated January 22, 2001, this Court adopted the recommendation of

the Court Administrator to treat the present administrative action as a regular
administrative matter and to designate the Executive Judge of the RTC of Iloilo City to
hear the evidence of the parties.

The Court, however, noted without action the Court Administrator’s recommendation to
suspend respondent for six months.
On March 13, 2001, Acting Court Administrator Zenaida N. Elepaño forwarded the
records of this case to Executive Judge Tito G. Gustilo of the Iloilo City RTC. 16 In a
Resolution17 dated July 18, 2001, the Court referred this case to the Executive Judge of
the RTC of Iloilo City for investigation, report and recommendation within 60 days from
notice. By Order18 dated August 30, 2001, Executive Judge Gustilo set the case for
reception of evidence.

On March 19, 2004, the RTC of Iloilo, Branch 37, dismissed the case for annulment of
title, damages and injunction against respondent for lack of merit. 19

In a Resolution20 dated June 15, 2005, the Court resolved to reassign the instant
administrative case to Executive Judge Rene S. Hortillo for investigation, report and
recommendation within 60 days from notice. In a Letter 21 dated September 15, 2005,
Executive Judge Hortillo informed the Court that per the records, the parties have
presented their testimonial and documentary evidence before retired Executive Judge
Tito G. Gustilo.

On September 12, 2005, Executive Judge Hortillo required the parties to file their
respective memoranda within 60 days from notice, upon submission of which the case
shall be deemed submitted for resolution.22

In his Memorandum,23 respondent maintained that his purchase of the subject land is

not covered by the prohibition in paragraph 5, Article 1491 of the Civil Code. He pointed
out that he bought Lot 11-A a decade after the MTCC of Iloilo, Branch 3, had ordered
the ejectment of Priscila Saplagio and Trinidad Sabidong from the subject lot. He
insisted that public trust was observed when complainant was accorded his right of first
refusal in the purchase of Lot 11-A, albeit the latter failed to avail said right. Asserting
that he is a buyer in good faith and for value, respondent cited the dismissal of the
cases for Estafa and annulment of title and damages which complainant filed against
him.

On September 10, 2007, respondent compulsorily retired from service. Prior to this, he
wrote then Senior Deputy Court Administrator Zenaida N. Elepaño, requesting for the
release of his retirement benefits pending resolution of the administrative cases against
him.24 In a Memorandum25 dated September 24, 2007, Senior Deputy Court
Administrator Elepaño made the following recommendations:

a) The request of Nicolasito S. Solas, former Clerk of Court, MTCC, Iloilo City for
partial release of his retirement benefits be GRANTED; and

b) Atty. Lilian Barribal Co, Chief, Financial Management Office, Office of the
Court Administrator be DIRECTED to (1) WITHHOLD the amount of Two
Hundred Thousand Pesos (₱200,000.00) from the retirement benefits of
Nicolasito S. Solas to answer for any administrative liability that the Court may
find against him in A.M. No. P-01-1448 (Formerly Administrative Matter OCA IPI
 No. 99-664-P); OCA IPI No. 99-659-P; OCA IPI No. 99-670-P; and OCA IPI No.
99-753-P; and (2) RELEASE the balance of his retirement benefits. 26

Eventually, the case was assigned to Judge Roger B. Patricio, the new Executive Judge
of the Iloilo City RTC for investigation, report and recommendation.

On June 2, 2008, Judge Patricio submitted his final Report and

Recommendation27 finding respondent liable for grave misconduct and dishonesty
under A.M. No. 03-06-13-SC or the Code of Conduct for Court Personnel. Based on the
evidence presented, Judge Patricio concluded that respondent misappropriated the
money which he received for the filing of complainant’s loan application. Such money
could not have been used for the partition of Lot No. 1280-D-4-11 since the same was
already subdivided into Lots 11-A and 11-B when respondent presented the Contract to
Sell to complainant. And despite respondent’s promise to keep complainant and his
family in peaceful possession of the subject property, respondent caused the issuance
of a writ of demolition against them. Thus, Judge Patricio recommended the forfeiture of
respondent’s salary for six months to be deducted from his retirement benefits.

In a Resolution28 dated September 29, 2008, the Court noted Judge Patricio’s

Investigation Report and referred the same to the Office of the Court Administrator
(OCA) for evaluation, report and recommendation.

Findings and Recommendation of the OCA

In a Memorandum29 dated January 16, 2009, then Court Administrator Jose P. Perez

found respondent liable for serious and grave misconduct and dishonesty and
recommended the forfeiture of respondent’s salary for six months, which shall be
deducted from his retirement benefits.

The Court Administrator held that by his unilateral acts of extinguishing the contract to
sell and forfeiting the amounts he received from complainant and Saplagio without due
notice, respondent failed to act with justice and equity. He found respondent’s denial to
be anchored merely on the fact that he had not issued receipts which was belied by his
admission that he had asked money for the expenses of partitioning Lot 11 from
complainant and Saplagio. Since their PAG-IBIG loan applications did not materialize,
complainant should have returned the amounts given to him by complainant and
Saplagio.

On February 11, 2009, the Court issued a Resolution 30 requiring the parties to manifest
whether they are willing to submit the case for decision on the basis of the pleadings
and records already filed with the Court. However, the copy of the Resolution dated
February 11, 2009 which was sent to complainant was returned unserved with the
postal carrier’s notation "RTS-Deceased." Meanwhile, in a Compliance 31 dated August
24, 2009, respondent expressed his willingness to submit the case for decision and
prayed for an early resolution of the case.
Our Ruling

Article 1491, paragraph 5 of the Civil Code prohibits court officers such as clerks of
court from acquiring property involved in litigation within the jurisdiction or territory of
their courts. Said provision reads:

Article 1491. The following persons cannot acquire by purchase, even at a public or
judicial auction, either in person or through the mediation of another:

xxxx

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

x x x x (Emphasis supplied.)

The rationale advanced for the prohibition is that public policy disallows the transactions
in view of the fiduciary relationship involved, i.e., the relation of trust and confidence and
the peculiar control exercised by these persons. 32 "In so providing, the Code tends to
prevent fraud, or more precisely, tends not to give occasion for fraud, which is what can
and must be done."33

For the prohibition to apply, the sale or assignment of the property must take place
during the pendency of the litigation involving the property. 34 Where the property is
acquired after the termination of the case, no violation of paragraph 5, Article 1491 of
the Civil Code attaches.35

In the case at bar, when respondent purchased Lot 11-A on November 21, 1994, the
Decision in Civil Case No. 14706 which was promulgated on May 31, 1983 had long
become final. Be that as it may, it can not be said that the property is no longer "in
litigation" at that time considering that it was part of the Hodges Estate then under
settlement proceedings (Sp. Proc. No. 1672).

A thing is said to be in litigation not only if there is some contest or litigation over it in
court, but also from the moment that it becomes subject to the judicial action of the
judge.36 A property forming part of the estate under judicial settlement continues to be
subject of litigation until the probate court issues an order declaring the estate
proceedings closed and terminated. The rule is that as long as the order for the
distribution of the estate has not been complied with, the probate proceedings cannot
be deemed closed and terminated. 37 The probate court loses jurisdiction of an estate
under administration only after the payment of all the debts and the remaining estate
delivered to the heirs entitled to receive the same. 38 Since there is no evidence to
show that Sp. Proc. No. 1672 in the RTC of Iloilo, Branch 27, had already been
closed and terminated at the time of the execution of the Deed of Sale With
Mortgage dated November 21, 1994, Lot 11 is still deemed to be "in litigation"
subject to the operation of Article 1491 (5) of the Civil Code.

This notwithstanding, we hold that the sale of Lot 11 in favor of respondent did
not violate the rule on disqualification to purchase property because Sp. Proc.
No. 1672 was then pending before another court (RTC) and not MTCC where he
was Clerk of Court.

On the charges against the respondent, we find him liable for dishonesty and grave
misconduct.

Misconduct is a transgression of some established and definite rule of action, more

particularly, unlawful behavior as well as gross negligence by a public officer. To
warrant dismissal from service, the misconduct must be grave, serious, important,
weighty, momentous and not trifling. The misconduct must imply wrongful intention and
not a mere error of judgment. The misconduct must also have a direct relation to and be
connected with the performance of the public officer’s official duties amounting either to
maladministration or willful, intentional neglect, or failure to discharge the duties of the
office.39

Dishonesty is the "disposition to lie, cheat, deceive, defraud or betray;

untrustworthiness; lack of integrity; lack of honesty, probity, or integrity in principle; and
lack of fairness and straightforwardness."40

In this case, respondent deceived complainant’s family who were led to believe that he
is the legal representative of the Hodges Estate, or at least possessed of such power to
intercede for overstaying occupants of the estate’s properties like complainant. Boasting
of his position as a court officer, a City Sheriff at that, complainant’s family completely
relied on his repeated assurance that they will not be ejected from the premises. Upon
learning that the lot they were occupying was for sale and that they had to negotiate for
it through respondent, complainant’s family readily gave the amounts he demanded
and, along with Saplagio, complied with the requirements for a loan application with
PAG-IBIG. All the while and unknown to complainant’s family, respondent was actually
working to acquire Lot 11 for himself.

Thus, while respondent was negotiating with the Hodges Estate for the sale of the
property to him, he collected as down payment ₱5,000 from complainant’s family in July
1986. Four months later, on November 18, 1986, the probate court approved
respondent’s offer to purchase Lot 11. The latter received further down payment from
complainant in the amount of ₱10,000 between 1992 and 1993, or before the Deed of
Sale with Mortgage41 dated November 21, 1994 could be executed in respondent’s
favor.
Thereafter, respondent demanded ₱3,000 from complainant supposedly for the
subdivision of Lot 11 between the latter and the Saplagios. Yet, it was not until
respondent obtained title over said lot that the same was subdivided into Lots 11-A and
11-B. The records42 of the case show that the Subdivision Plan dated April 25, 1996,
duly approved by the Land Management Services (DENR) subdividing Lot 11 into
sublots 11-A and 11-B, was inscribed on February 28, 1997 – two years after TCT No.
T-107519 covering Lot 11 was issued in respondent’s name on December 5, 1994.

Finally, in 1995, respondent received the amount of ₱2,000 to defray the expenses for
documentation and transfer of title in complainant’s name. In the latter instance, while it
may be argued that respondent already had the capacity to sell the subject property, the
sum of all the circumstances belie an honest intention on his part to convey Lot 11-A to
complainant. We note the inscription in TCT No. T-11836 43 in the name of C.N. Hodges
that respondent executed a Request dated February 19, 1997 "for the issuance of
separate titles in the name of the registered owner." 44 Soon after, TCT No. T-
11646745 covering Lot 11-A and TCT No. T-116468 46 covering Lot 11-B were issued in
the name of respondent on February 28, 1997 – only eight months after he executed
the Contract to Sell47 in favor of complainant on June 3, 1996.

Respondent’s bare denials were correctly disregarded by the Court Administrator in the
light of his own admission that he indeed asked money from both complainant and
Saplagio. The evidence on record clearly established that by misrepresenting himself as
the estate’s representative and as a court officer having the power to protect
complainant’s family from eviction, respondent was able to collect sums totaling
₱20,000 from complainant’s family. Even after the latter realized they were duped since
respondent was already the owner of Lot 11, they still offered to buy the property from
him. Respondent, however, changed his mind and no longer wanted to sell the property
after nothing happened to the loan applications of complainant and Saplagio. This
subsequent unilateral cancellation by respondent of the contract to sell with complainant
may have been an afterthought, and plainly unjustified, based merely on his own
assumption that complainant could not make full payment. But it did not negate the
deception and fraudulent acts perpetrated against complainant’s family who were forced
into submission by the constant threat of eviction. Such acts constitute grave
misconduct for which respondent should be held answerable.

In Re: Complaint Filed by Paz De Vera Lazaro Against Edna Magallanes, Court
Stenographer III, RTC Br. 28 and Bonifacio G. Magallanes, Process Server, RTC Br.
30, Bayombong, Nueva Vizcaya,48 the Court stressed that to preserve decency within
the judiciary, court personnel must comply with just contractual obligations, act fairly
and adhere to high ethical standards. In that case, we said that court employees are
expected to be paragons of uprightness, fairness and honesty not only in their official
conduct but also in their personal dealings, including business and commercial
transactions to avoid becoming the court’s albatross of infamy. 49

More importantly, Section 4(c) of Republic Act No. 6713 50 or the Code of Conduct and
Ethical Standards for Public Officials and Employees mandates that public officials and
employees shall remain true to the people at all times. They must act with justness and
sincerity and shall not discriminate against anyone, especially the poor and the
underprivileged.1âwphi1 They shall at all times respect the rights of others, and shall
refrain from doing acts contrary to law, good morals, good customs, public policy, public
order, public safety and public interest.

Under Section 52,51 Rule IV of the Uniform Rules on Administrative Cases in the Civil
Service, dishonesty and grave misconduct are classified as grave offenses with the
corresponding penalty of dismissal for the first offense. Section 58(a) states that the
penalty of dismissal shall carry with it the cancellation of eligibility, forfeiture of
retirement benefits, and the perpetual disqualification for reemployment in the
government service.

Section 53 further provides that mitigating circumstances attendant to the commission

of the offense should be considered in the determination of the penalty to be imposed
on the erring government employee. However, no such mitigating circumstance had
been shown. On the contrary, respondent had been previously held administratively
liable for irregularities in the performance of his duties as Clerk of Court. In A.M. No. P-
01-1484,52 this Court imposed on respondent a fine of ₱5,000 for acting imprudently in
notarizing documents and administering oath on matters alien to his official duties. And
in A.M. Nos. P-08-2567 (formerly OCA IPI No. 99-670-P) and P-08-2568 (formerly OCA
IPI No. 99-753-P),53 respondent was found liable for simple misconduct and ordered to
pay a fine equivalent to his three (3) months salary to be deducted from his retirement
benefits.

Since respondent had compulsorily retired from service on September 10, 2007, for this
additional administrative case he should be fined in an amount equivalent to his salary
for six months which shall likewise be deducted from his retirement benefits.

WHEREFORE, the Court finds respondent Nicolasito S. Solas, retired Clerk of Court IV,
Municipal Trial Court in Cities, Iloilo City, LIABLE FOR GRAVE MISCONDUCT AND
DISHONESTY. Respondent is FINED in an amount equivalent to his salary for six (6)
months to be deducted from his retirement benefits.

SO ORDERED.

MARTIN S. VILLARAMA, JR.

Associate Justice

WE CONCUR:

G.R. No. 156407, January 15, 2014

 THELMA M. ARANAS, Petitioner, v. TERESITA V. MERCADO, FELIMON V.
MERCADO, CARMENCITA M. SUTHERLAND, RICHARD V. MERCADO, MA.
TERESITA M. ANDERSON, AND FRANKLIN L. MERCADO, Respondents.

DECISION

BERSAMIN, J.:

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

Antecedents

Emigdio S. Mercado (Emigdio) died intestate on January 12, 1991, survived by his
second wife, Teresita V. Mercado (Teresita), and their five children, namely: Allan V.
Mercado, Felimon V. Mercado, Carmencita M. Sutherland, Richard V. Mercado, and
Maria Teresita M. Anderson; and his two children by his first marriage, namely:
respondent Franklin L. Mercado and petitioner Thelma M. Aranas (Thelma).

Emigdio inherited and acquired real properties during his lifetime. He owned corporate
shares in Mervir Realty Corporation (Mervir Realty) and Cebu Emerson Transportation
Corporation (Cebu Emerson). He assigned his real properties in exchange for corporate
stocks of Mervir Realty, and sold his real property in Badian, Cebu (Lot 3353 covered by
Transfer Certificate of Title No. 3252) to Mervir Realty.

On June 3, 1991, Thelma filed in the Regional Trial Court (RTC) in Cebu City a petition
for the appointment of Teresita as the administrator of Emigdio’s estate (Special
Proceedings No. 3094–CEB).1 The RTC granted the petition considering that there was
no opposition. The letters of administration in favor of Teresita were issued on
September 7, 1992.

As the administrator, Teresita submitted an inventory of the estate of Emigdio on

December 14, 1992 for the consideration and approval by the RTC. She indicated in the
inventory that at the time of his death, Emigdio had “left no real properties but only
personal properties” worth P6,675,435.25 in all, consisting of cash of P32,141.20;
furniture and fixtures worth P20,000.00; pieces of jewelry valued at P15,000.00; 44,806
shares of stock of Mervir Realty worth P6,585,585.80; and 30 shares of stock of Cebu
Emerson worth P22,708.25.2
Claiming that Emigdio had owned other properties that were excluded from the
inventory, Thelma moved that the RTC direct Teresita to amend the inventory, and to be
examined regarding it. The RTC granted Thelma’s motion through the order of January
8, 1993.

On January 21, 1993, Teresita filed a compliance with the order of January 8,
1993,3 supporting her inventory with copies of three certificates of stocks covering the
44,806 Mervir Realty shares of stock; 4 the deed of assignment executed by Emigdio on
January 10, 1991 involving real properties with the market value of P4,440,651.10 in
exchange for 44,407 Mervir Realty shares of stock with total par value of
P4,440,700.00;5 and the certificate of stock issued on January 30, 1979 for 300 shares
of stock of Cebu Emerson worth P30,000.00. 6

On January 26, 1993, Thelma again moved to require Teresita to be examined under
oath on the inventory, and that she (Thelma) be allowed 30 days within which to file a
formal opposition to or comment on the inventory and the supporting documents
Teresita had submitted.

On February 4, 1993, the RTC issued an order expressing the need for the parties to
present evidence and for Teresita to be examined to enable the court to resolve the
motion for approval of the inventory. 7cralawred

On April 19, 1993, Thelma opposed the approval of the inventory, and asked leave of
court to examine Teresita on the inventory.

With the parties agreeing to submit themselves to the jurisdiction of the court on the
issue of what properties should be included in or excluded from the inventory, the RTC
set dates for the hearing on that issue. 8cralawlawlibrary

Ruling of the RTC

After a series of hearings that ran for almost eight years, the RTC issued on March 14,
2001 an order finding and holding that the inventory submitted by Teresita had excluded
properties that should be included, and accordingly ruled:

WHEREFORE, in view of all the foregoing premises and considerations, the Court
hereby denies the administratrix’s motion for approval of inventory. The Court hereby
orders the said administratrix to re–do the inventory of properties which are supposed to
constitute as the estate of the late Emigdio S. Mercado by including therein the
properties mentioned in the last five immediately preceding paragraphs hereof and then
submit the revised inventory within sixty (60) days from notice of this order.

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

SO ORDERED.9ChanRoblesVirtualawlibrary
On March 29, 2001, Teresita, joined by other heirs of Emigdio, timely sought the
reconsideration of the order of March 14, 2001 on the ground that one of the real
properties affected, Lot No. 3353 located in Badian, Cebu, had already been sold to
Mervir Realty, and that the parcels of land covered by the deed of assignment had
already come into the possession of and registered in the name of Mervir
Realty.10 Thelma opposed the motion.

On May 18, 2001, the RTC denied the motion for reconsideration, 11 stating that there
was no cogent reason for the reconsideration, and that the movants’ agreement as heirs
to submit to the RTC the issue of what properties should be included or excluded from
the inventory already estopped them from questioning its jurisdiction to pass upon the
issue.

Decision of the CA

Alleging that the RTC thereby acted with grave abuse of discretion in refusing to
approve the inventory, and in ordering her as administrator to include real properties
that had been transferred to Mervir Realty, Teresita, joined by her four children and her
stepson Franklin, assailed the adverse orders of the RTC promulgated on March 14,
2001 and May 18, 2001 by petition for certiorari, stating:

THE HONORABLE RESPONDENT JUDGE HAS COMMITTED GRAVE ABUSE OF

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

II

THE HONORABLE RESPONDENT JUDGE HAS COMMITTED GRAVE ABUSE OF

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

III

THE HONORABLE RESPONDENT JUDGE HAS COMMITTED GRAVE ABUSE OF

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

On May 15, 2002, the CA partly granted the petition for certiorari, disposing as follows: 13

WHEREFORE, FOREGOING PREMISES CONSIDERED, this petition is GRANTED

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

SO ORDERED.

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

The CA further opined as follows:

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

Besides, public respondent court acting as a probate court had no authority to

determine the applicability of the doctrine of piercing the veil of corporate fiction and
even if public respondent court was not merely acting in a limited capacity as a probate
court, private respondent nonetheless failed to adjudge competent evidence that would
have justified the court to impale the veil of corporate fiction because to disregard the
separate jurisdictional personality of a corporation, the wrongdoing must be clearly and
convincingly established since it cannot be presumed. 14

On November 15, 2002, the CA denied the motion for reconsideration of Teresita, et
al.15

Issue

Did the CA properly determine that the RTC committed grave abuse of discretion
amounting to lack or excess of jurisdiction in directing the inclusion of certain properties
in the inventory notwithstanding that such properties had been either transferred by sale
or exchanged for corporate shares in Mervir Realty by the decedent during his lifetime?

Ruling of the Court

The appeal is meritorious.

Was certiorari the proper recourse

to assail the questioned orders of the RTC?

The first issue to be resolved is procedural. Thelma contends that the resort to the
special civil action for certiorari to assail the orders of the RTC by Teresita and her co–
respondents was not proper.

Thelma’s contention cannot be sustained.

The propriety of the special civil action for certiorari as a remedy depended on whether
the assailed orders of the RTC were final or interlocutory in nature. In Pahila–Garrido v.
Tortogo,16 the Court distinguished between final and interlocutory orders as follows:

The distinction between a final order and an interlocutory order is well known. The first
disposes of the subject matter in its entirety or terminates a particular proceeding or
action, leaving nothing more to be done except to enforce by execution what the court
has determined, but the latter does not completely dispose of the case but leaves
something else to be decided upon.  An interlocutory order deals with preliminary
matters and the trial on the merits is yet to be held and the judgment rendered. The test
to ascertain whether or not an order or a judgment is interlocutory or final is: does the
order or judgment leave something to be done in the trial court with respect to the
merits of the case? If it does, the order or judgment is interlocutory; otherwise, it is final.

The order dated November 12, 2002, which granted the application for the writ of
preliminary injunction, was an interlocutory, not a final, order, and should not be the
subject of an appeal. The reason for disallowing an appeal from an interlocutory order is
to avoid multiplicity of appeals in a single action, which necessarily suspends the
hearing and decision on the merits of the action during the pendency of the appeals.
Permitting multiple appeals will necessarily delay the trial on the merits of the case for a
considerable length of time, and will compel the adverse party to incur unnecessary
expenses, for one of the parties may interpose as many appeals as there are incidental
questions raised by him and as there are interlocutory orders rendered or issued by the
lower court. An interlocutory order may be the subject of an appeal, but only after a
judgment has been rendered, with the ground for appealing the order being included in
the appeal of the judgment itself.

The remedy against an interlocutory order not subject of an appeal is an appropriate

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

The assailed order of March 14, 2001 denying Teresita’s motion for the approval of the
inventory and the order dated May 18, 2001 denying her motion for reconsideration
were interlocutory. This is because the inclusion of the properties in the inventory was
not yet a final determination of their ownership.  Hence, the approval of the inventory
and the concomitant determination of the ownership as basis for inclusion or exclusion
from the inventory were provisional and subject to revision at anytime during the course
of the administration proceedings.

In Valero Vda. De Rodriguez v. Court of Appeals,17 the Court, in affirming the decision

of the CA to the effect that the order of the intestate court excluding certain real
properties from the inventory was interlocutory and could be changed or modified at
anytime during the course of the administration proceedings, held that the order of
exclusion was not a final but an interlocutory order “in the sense that it did not settle
once and for all the title to the San Lorenzo Village lots.” The Court observed there that:

The prevailing rule is that for the purpose of determining whether a certain property
should or should not be included in the inventory, the probate court may pass upon
the title thereto but such determination is not conclusive and is subject to the
final decision in a separate action regarding ownership which may be instituted
by the parties (3 Moran’s Comments on the Rules of Court, 1970 Edition, pages 448–9
and 473; Lachenal vs. Salas, L–42257, June 14, 1976, 71 SCRA 262, 266). 18 (Bold
emphasis supplied)

To the same effect was De Leon v. Court of Appeals,19 where the Court declared that a
“probate court, whether in a testate or intestate proceeding, can only pass upon
questions of title provisionally,” and reminded, citing Jimenez v. Court of Appeals, that
the “patent reason is the probate court’s limited jurisdiction and the principle that
questions of title or ownership, which result in inclusion or exclusion from the inventory
of the property, can only be settled in a separate action.” Indeed, in the cited case
of Jimenez v. Court of Appeals,20 the Court pointed out:

All that the said court could do as regards the said properties is determine whether they
should or should not be included in the inventory or list of properties to be administered
by the administrator. If there is a dispute as to the ownership, then the opposing
parties and the administrator have to resort to an ordinary action for a final
determination of the conflicting claims of title because the probate court cannot
do so. (Bold emphasis supplied)

On the other hand, an appeal would not be the correct recourse for Teresita, et al. to
take against the assailed orders. The final judgment rule embodied in the first paragraph
of Section 1, Rule 41, Rules of Court,21 which also governs appeals in special
proceedings, stipulates that only the judgments, final orders (and resolutions) of a court
of law “that completely disposes of the case, or of a particular matter therein when
declared by these Rules to be appealable” may be the subject of an appeal in due
course. The same rule states that an interlocutory order or resolution (interlocutory
because it deals with preliminary matters, or that the trial on the merits is yet to be held
and the judgment rendered) is expressly made non–appealable.

Multiple appeals are permitted in special proceedings as a practical recognition of the

possibility that material issues may be finally determined at various stages of the special
proceedings. Section 1, Rule 109 of the Rules of Court enumerates the specific
instances in which multiple appeals may be resorted to in special proceedings, viz:

Section 1. Orders or judgments from which appeals may be taken. – An interested

person may appeal in special proceedings from an order or judgment rendered by a
Court of First Instance or a Juvenile and Domestic Relations Court, where such order or
judgment:

(a) Allows or disallows a will;

(b) Determines who are the lawful heirs of a deceased person, or the distributive share
of the estate to which such person is entitled;

(c) Allows or disallows, in whole or in part, any claim against the estate of a deceased
person, or any claim presented on behalf of the estate in offset to a claim against it;

(d) Settles the account of an executor, administrator, trustee or guardian;

(e) Constitutes, in proceedings relating to the settlement of the estate of a deceased

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

(f) Is the final order or judgment rendered in the case, and affects the substantial rights
of the person appealing, unless it be an order granting or denying a motion for a new
trial or for reconsideration.

Clearly, the assailed orders of the RTC, being interlocutory, did not come under any of
the instances in which multiple appeals are permitted.

II
Did the RTC commit grave abuse of discretion
in directing the inclusion of the properties
in the estate of the decedent?

In its assailed decision, the CA concluded that the RTC committed grave abuse of
discretion for including properties in the inventory notwithstanding their having been
transferred to Mervir Realty by Emigdio during his lifetime, and for disregarding the
registration of the properties in the name of Mervir Realty, a third party, by applying the
doctrine of piercing the veil of corporate fiction.

Was the CA correct in its conclusion?

The answer is in the negative. It is unavoidable to find that the CA, in reaching its
conclusion, ignored the law and the facts that had fully warranted the assailed orders of
the RTC.

Under Section 6(a), Rule 78 of the Rules of Court, the letters of administration may be
granted at the discretion of the court to the surviving spouse, who is competent and
willing to serve when the person dies intestate. Upon issuing the letters of
administration to the surviving spouse, the RTC becomes duty–bound to direct the
preparation and submission of the inventory of the properties of the estate, and the
surviving spouse, as the administrator, has the duty and responsibility to submit the
inventory within three months from the issuance of letters of administration pursuant to
Rule 83 of the Rules of Court, viz:

Section 1. Inventory and appraisal to be returned within three months. – Within three (3)
months after his appointment every executor or administrator shall return to the court
a true inventory and appraisal of all the real and personal estate of the deceased
which has come into his possession or knowledge. In the appraisement of such
estate, the court may order one or more of the inheritance tax appraisers to give his or
their assistance.

The usage of the word all in Section 1, supra, demands the inclusion of all the real and
personal properties of the decedent in the inventory. 22 However, the word all is qualified
by the phrase which has come into his possession or knowledge, which signifies that
the properties must be known to the administrator to belong to the decedent or are in
her possession as the administrator. Section 1 allows no exception, for the phrase true
inventory implies that no properties appearing to belong to the decedent can be
excluded from the inventory, regardless of their being in the possession of another
person or entity.

The objective of the Rules of Court in requiring the inventory and appraisal of the estate
of the decedent is “to aid the court in revising the accounts and determining the
liabilities of the executor or the administrator, and in making a final and equitable
distribution (partition) of the estate and otherwise to facilitate the administration of the
estate.”23 Hence, the RTC that presides over the administration of an estate is vested
with wide discretion on the question of what properties should be included in the
inventory. According to Peralta v. Peralta,24 the CA cannot impose its judgment in order
to supplant that of the RTC on the issue of which properties are to be included or
excluded from the inventory in the absence of “positive abuse of discretion,” for in the
administration of the estates of deceased persons, “the judges enjoy ample
discretionary powers and the appellate courts should not interfere with or attempt to
replace the action taken by them, unless it be shown that there has been a positive
abuse of discretion.”25 As long as the RTC commits no patently grave abuse of
discretion, its orders must be respected as part of the regular performance of its judicial
duty.

There is no dispute that the jurisdiction of the trial court as an intestate court is special
and limited. The trial court cannot adjudicate title to properties claimed to be a part of
the estate but are claimed to belong to third parties by title adverse to that of the
decedent and the estate, not by virtue of any right of inheritance from the decedent. All
that the trial court can do regarding said properties is to determine whether or not they
should be included in the inventory of properties to be administered by the
administrator. Such determination is provisional and may be still revised. As the Court
said in Agtarap v. Agtarap:26

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

However, this general rule is subject to exceptions as justified by expediency and

convenience.

First, the probate court may provisionally pass upon in an intestate or a testate

proceeding the question of inclusion in, or exclusion from, the inventory of a
piece of property without prejudice to final determination of ownership in a
separate action. Second, if the interested parties are all heirs to the estate, or the
question is one of collation or advancement, or the parties consent to the assumption
of jurisdiction by the probate court and the rights of third parties are not
impaired, then the probate court is competent to resolve issues on ownership.
Verily, its jurisdiction extends to matters incidental or collateral to the settlement and
distribution of the estate, such as the determination of the status of each heir
and whether the property in the inventory is conjugal or exclusive property of the
deceased spouse.27 (Italics in the original; bold emphasis supplied)

It is clear to us that the RTC took pains to explain the factual bases for its directive for
the inclusion of the properties in question in its assailed order of March 14, 2001, viz:

In the first place, the administratrix of the estate admitted that Emigdio Mercado was
one of the heirs of Severina Mercado who, upon her death, left several properties as
listed in the inventory of properties submitted in Court in Special Proceedings No. 306–
R which are supposed to be divided among her heirs. The administratrix admitted, while
being examined in Court by the counsel for the petitioner, that she did not include in the
inventory submitted by her in this case the shares of Emigdio Mercado in the said estate
of Severina Mercado. Certainly, said properties constituting Emigdio Mercado’s share in
the estate of Severina Mercado should be included in the inventory of properties
required to be submitted to the Court in this particular case.
In the second place, the administratrix of the estate of Emigdio Mercado also admitted
in Court that she did not include in the inventory shares of stock of Mervir Realty
Corporation which are in her name and which were paid by her from money derived
from the taxicab business which she and her husband had since 1955 as a conjugal
undertaking. As these shares of stock partake of being conjugal in character, one–half
thereof or of the value thereof should be included in the inventory of the estate of her
husband.

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

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

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

Thereby, the RTC strictly followed the directives of the Rules of Court and the
jurisprudence relevant to the procedure for preparing the inventory by the administrator.
The aforequoted explanations indicated that the directive to include the properties in
question in the inventory rested on good and valid reasons, and thus was far from
whimsical, or arbitrary, or capricious.

Firstly, the shares in the properties inherited by Emigdio from Severina Mercado should
be included in the inventory because Teresita, et al. did not dispute the fact about the
shares being inherited by Emigdio.

Secondly, with Emigdio and Teresita having been married prior to the effectivity of
the Family Code in August 3, 1988, their property regime was the conjugal partnership
of gains.29 For purposes of the settlement of Emigdio’s estate, it was unavoidable for
Teresita to include his shares in the conjugal partnership of gains. The party asserting
that specific property acquired during that property regime did not pertain to the
conjugal partnership of gains carried the burden of proof, and that party must prove the
exclusive ownership by one of them by clear, categorical, and convincing evidence. 30 In
the absence of or pending the presentation of such proof, the conjugal partnership of
Emigdio and Teresita must be provisionally liquidated to establish who the real owners
of the affected properties were, 31 and which of the properties should form part of the
estate of Emigdio. The portions that pertained to the estate of Emigdio must be included
in the inventory.

Moreover, although the title over Lot 3353 was already registered in the name of Mervir
Realty, the RTC made findings that put that title in dispute. Civil Case No. CEB–12692,
a dispute that had involved the ownership of Lot 3353, was resolved in favor of the
estate of Emigdio, and Transfer Certificate of Title No. 3252 covering Lot 3353 was still
in Emigdio’s name. Indeed, the RTC noted in the order of March 14, 2001, or ten years
after his death, that Lot 3353 had remained registered in the name of Emigdio.

Interestingly, Mervir Realty did not intervene at all in Civil Case No. CEB–12692. Such
lack of interest in Civil Case No. CEB–12692 was susceptible of various interpretations,
including one to the effect that the heirs of Emigdio could have already threshed out
their differences with the assistance of the trial court. This interpretation was probable
considering that Mervir Realty, whose business was managed by respondent Richard,
was headed by Teresita herself as its President. In other words, Mervir Realty appeared
to be a family corporation.

Also, the fact that the deed of absolute sale executed by Emigdio in favor of Mervir
Realty was a notarized instrument did not sufficiently justify the exclusion from the
inventory of the properties involved. A notarized deed of sale only enjoyed the
presumption of regularity in favor of its execution, but its notarization did not per
se guarantee the legal efficacy of the transaction under the deed, and what the contents
purported to be. The presumption of regularity could be rebutted by clear and
convincing evidence to the contrary.32 As the Court has observed in Suntay v. Court of
Appeals:33

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 public to
validate and make binding an instrument never, in the first place, intended to have any
binding legal effect upon the parties thereto. The intention of the parties still and
always is the primary consideration in determining the true nature of a
contract. (Bold emphasis supplied)

It should likewise be pointed out that the exchange of shares of stock of Mervir Realty
with the real properties owned by Emigdio would still have to be inquired into. That
Emigdio executed the deed of assignment two days prior to his death was a
circumstance that should put any interested party on his guard regarding the exchange,
considering that there was a finding about Emigdio having been sick of cancer of the
pancreas at the time.34 In this regard, whether the CA correctly characterized the
exchange as a form of an estate planning scheme remained to be validated by the facts
to be established in court.

The fact that the properties were already covered by Torrens titles in the name of Mervir
Realty could not be a valid basis for immediately excluding them from the inventory in
view of the circumstances admittedly surrounding the execution of the deed of
assignment. This is because:

The Torrens system is not a mode of acquiring titles to lands; it is merely a system of
registration of titles to lands. However, justice and equity demand that the titleholder
should not be made to bear the unfavorable effect of the mistake or negligence of the
State’s agents, in the absence of proof of his complicity in a fraud or of manifest
damage to third persons. The real purpose of the Torrens system is to quiet title to land
and put a stop forever to any question as to the legality of the title, except claims that
were noted in the certificate at the time of registration or that may arise subsequent
thereto. Otherwise, the integrity of the Torrens system shall forever be sullied by the
ineptitude and inefficiency of land registration officials, who are ordinarily presumed to
have regularly performed their duties.35

Assuming that only seven titled lots were the subject of the deed of assignment of
January 10, 1991, such lots should still be included in the inventory to enable the
parties, by themselves, and with the assistance of the RTC itself, to test and resolve the
issue on the validity of the assignment. The limited jurisdiction of the RTC as an
intestate court might have constricted the determination of the rights to the properties
arising from that deed,36 but it does not prevent the RTC as intestate court from ordering
the inclusion in the inventory of the properties subject of that deed. This is because the
RTC as intestate court, albeit vested only with special and limited jurisdiction, was still
“deemed to have all the necessary powers to exercise such jurisdiction to make it
effective.”37

Lastly, the inventory of the estate of Emigdio must be prepared and submitted for the
important purpose of resolving the difficult issues of collation and advancement to the
heirs. Article 1061 of the Civil Code required every compulsory heir and the surviving
spouse, herein Teresita herself, to “bring into the mass of the estate any property or
right which he (or she) may have received from the decedent, during the lifetime of the
latter, by way of donation, or any other gratuitous title, in order that it may be computed
in the determination of the legitime of each heir, and in the account of the partition.”
Section 2, Rule 90 of the Rules of Court also provided that any advancement by the
decedent on the legitime of an heir “may be heard and determined by the court having
jurisdiction of the estate proceedings, and the final order of the court thereon shall be
binding on the person raising the questions and on the heir.” Rule 90 thereby expanded
the special and limited jurisdiction of the RTC as an intestate court about the matters
relating to the inventory of the estate of the decedent by authorizing it to direct the
inclusion of properties donated or bestowed by gratuitous title to any compulsory heir by
the decedent.38

The determination of which properties should be excluded from or included in the

inventory of estate properties was well within the authority and discretion of the RTC as
an intestate court. In making its determination, the RTC acted with circumspection, and
proceeded under the guiding policy that it was best to include all properties in the
possession of the administrator or were known to the administrator to belong to Emigdio
rather than to exclude properties that could turn out in the end to be actually part of the
estate. As long as the RTC commits no patent grave abuse of discretion, its orders must
be respected as part of the regular performance of its judicial duty. Grave abuse of
discretion means either that the judicial or quasi–judicial power was exercised in an
arbitrary or despotic manner by reason of passion or personal hostility, or that the
respondent judge, tribunal or board evaded a positive duty, or virtually refused to
perform the duty enjoined or to act in contemplation of law, such as when such judge,
tribunal or board exercising judicial or quasi–judicial powers acted in a capricious or
whimsical manner as to be equivalent to lack of jurisdiction. 39

In light of the foregoing, the CA’s conclusion of grave abuse of discretion on the part of
the RTC was unwarranted and erroneous.

WHEREFORE, the Court GRANTS the petition for review

on certiorari; REVERSES and SETS ASIDE the decision promulgated on May 15,
2002; REINSTATES the orders issued on March 14, 2001 and May 18, 2001 by the
Regional Trial Court in Cebu; DIRECTS the Regional Trial Court in Cebu to proceed
with dispatch in Special Proceedings No. 3094–CEB entitled Intestate Estate of the late
Emigdio Mercado, Thelma Aranas, petitioner, and to resolve the case;
and ORDERS the respondents to pay the costs of suit.ChanRoblesVirtualawlibrary

SO ORDERED.

Sereno, C.J., Leonardo–De Castro, Villarama, Jr., and Reyes, JJ. concur.

Endnotes:
G.R. No. 187524, August 05, 2015 - SPOUSES MARIA BUTIONG AND FRANCISCO
VILLAFRIA, SUBSTITUTED BY DR. RUEL B. VILLAFRIA, Petitioners, v. MA. GRACIA
RIÑOZA PLAZO AND MA. FE RIÑOZA ALARAS, Respondents.

THIRD DIVISION

G.R. No. 187524, August 05, 2015

SPOUSES MARIA BUTIONG AND FRANCISCO VILLAFRIA, SUBSTITUTED BY DR.

RUEL B. VILLAFRIA, Petitioners, v. MA. GRACIA RIÑOZA PLAZO AND MA. FE
RIÑOZA ALARAS, Respondents.

DECISION

PERALTA, J.:

Before the-Court is a petition for review on certiorari under Rule 45 of the Rules of Court
seeking to reverse and set aside the Decision 1 and Resolution,2 dated March 13, 2009
and April 23, 2009, respectively, of the Court Appeals (CA) in CA-G.R. SP No. 107347,
which affirmed the Judgment3 dated October 1, 2001 of the Regional Trial Court (RTC)
of Nasugbu, Batangas, Branch 14, in Civil Case No. 217.

The antecedent facts are as follows:LawlibraryofCRAlaw

On November 16, 1989, Pedro L. Riñoza died intestate, leaving several heirs, including
his children with his first wife, respondents Ma. Gracia R. Plazo and Ma. Fe Alaras, as
well as several properties including a resort covered by Transfer Certificates of Title
(TCT) No. 51354 and No. 51355, each with an area of 351 square meters, and a family
home, the land on which it stands is covered by TCT Nos. 40807 and 40808, both
located in Nasugbu, Batangas.4redarclaw

In their Amended Complaint for Judicial Partition with Annulment of Title and Recovery
of Possession5 dated September 15, 1993, respondents alleged that sometime in March
1991, they discovered that their co-heirs, Pedro's second wife, Benita Tenorio and other
children, had sold the subject properties to petitioners, spouses Francisco Villafria and
Maria Butiong, who are now deceased and substituted by their son, Dr. Ruel B. Villafria,
without their knowledge and consent. When confronted about the sale, Benita
acknowledged the same, showing respondents a document she believed evidenced
receipt of her share in the sale, which, however, did not refer to any sort of sale but to a
previous loan obtained by Pedro and Benita from a bank. 6 The document actually
evidenced receipt from Banco Silangan of the amount of P87,352.62 releasing her and
her late husband's indebtedness therefrom. 7 Upon inquiry, the Register of Deeds of
Nasugbu informed respondents that he has no record of any transaction involving the
subject properties, giving them certified true copies of the titles to the same. When
respondents went to the subject properties, they discovered that 4 out of the 8 cottages
in the resort had been demolished. They were not, however, able to enter as the
premises were padlocked.

Subsequently, respondents learned that on July 18, 1991, a notice of an extra-judicial

settlement of estate of their late father was published in a tabloid called Balita. Because
of this, they caused the annotation of their adverse claims over the subject properties
before the Register of Deeds of Nasugbu and filed their complaint praying, among
others, for the annulment of all documents conveying the subject properties to the
petitioners and certificates of title issued pursuant thereto. 8redarclaw

In their Answer,9 petitioners denied the allegations of the complaint on the ground of

lack of personal knowledge and good faith in acquiring the subject properties. In the
course of his testimony during trial, petitioner Francisco further contended that what
they purchased was only the resort. 10 He also presented an Extra-Judicial Settlement
with Renunciation, Repudiations and Waiver of Rights and Sale which provides, among
others, that respondents' co-heirs sold the family home to the spouses Rolando and Ma.
Cecilia Bondoc for P1 million as well as a Deed of Sale whereby Benita sold the resort
to petitioners for P650,000.00.11redarclaw

On October 1, 2001, the trial court nullified the transfer of the subject properties to
petitioners and spouses Bondoc due to irregularities in the documents of conveyance
offered by petitioners.as well as the circumstances surrounding the execution of the
same. Specifically, the Extra-Judicial Settlement was notarized by a notary public who
was not duly commissioned as such on the date it was executed. 12 The Deed of Sale
was undated, the date of the acknowledgment therein was left blank, and the
typewritten name "Pedro Riñoza, Husband" on the left side of the document was not
signed.13 The trial court also observed that both documents were never presented to the
Office of the Register of Deeds for registration and that the titles to the subject
properties were still in the names of Pedro and his second wife Benita. In addition, the
supposed notaries and buyers of the subject properties were not even presented as
witnesses who supposedly witnessed the signing and execution of the documents of
conveyance.14 On the basis thereof, the trial court ruled in favor of respondents, in its
Judgment, the pertinent portions of its fallo provide:LawlibraryofCRAlaw

WHEREFORE, foregoing premises considered, judgment is hereby rendered as

follows:LawlibraryofCRAlaw

x x x x
4. a) Declaring as a nullity the Extra-Judicial Settlement with Renunciation, Repudiation
and Waiver of Rights and Sale" (Exh. "1", Villafria) notarized on December 23, 1991 by
Notary Public Antonio G. Malonzo of Manila, Doc. No. 190, Page No. 20, Book No. IXII,
Series of 1991.

b) Declaring as a nullity the Deed of Absolute Sale (Exh. "2", Villafria), purportedly
executed by Benita T. Riñoza in favor of spouses Francisco Villafria and Maria Butiong,
purportedly notarized by one Alfredo de Guzman, marked Doc. No. 1136, Page No.
141, Book No. XXX, Series of 1991.

c) Ordering the forfeiture of any and all improvements introduced by defendants

Francisco Villafria dnd Maria Butiong in the properties covered by TCT No. 40807,
40808, 51354 and 51355 of the Register of Deeds for Nasugbu, Batangas.

5. Ordering defendant Francisco Villafria and all persons, whose occupancy within the
premises of the four (4) parcels of land described in par. 4-c above is derived from the
rights and interest of defendant Villafria, to vacate its premises and to deliver
possession thereof, and all improvements existing thereon to plaintiffs, for and in behalf
of the estate of decedent Pedro L. Riñoza.

6. Declaring the plaintiffs and the defendants-heirs in the Amended Complaint to be the
legitimate heirs of decedent Pedro L. RifSoza, each in the capacity and degree
established, as well as their direct successors-in-interest, and ordering the defendant
Registrar of Deeds to issue the corresponding titles in their names in the proportion
established by law, pro indiviso, in TCT Nos. 40807, 40808, 51354, 51355 and 40353
(after restoration) within ten (10) days from finality of this Decision, upon payment of
lawful fees, except TCT No. 40353, which shall be exempt from all expenses for its
restoration.

With no costs.

SO ORDERED.15

On appeal, the CA affirmed the trial court's Judgment in its Decision 16 dated October 31,
2006 in the following wise:LawlibraryofCRAlaw

The person before whom the resort deed was acknowledged, Alfredo de Guzman,
was not commissioned as a notary public from 1989 to July 3, 1991, the date the
certification was issued. Such being the case, the resort deed is not a public
document and the presumption of- regularity accorded to public documents will
not apply to the same. As laid down in Tigno, el al. v. Aquino, et
al.:LawlibraryofCRAlaw

The validity of a notarial certification necessarily derives from the authority of the
notarial officer. If the notary public does net have the capacity to notarize a
document, but does so anyway, then the document should be treated as
unnotarized. The rule may strike as rather harsh, and perhaps may prove to be
prejudicial to parties in good faith relying on the proferred authority of the notary public
or the person pretending to be one. Still, to admit otherwise would render merely
officious the elaborate process devised by this Court in order that a lawyer may receive
a notarial commission. Without such a rule, the notarization of a document by a
duly-appointed notary public will have the same legal effect as one accomplished
by a non-lawyer engaged in pretense.

The notarization of a document carries considerable legal effect. Notarization of a

private document converts such document into a public one, and renders it
admissible in court without further proof of its authenticity. Thus, notarization is
not an empty routine; to the contrary, it engages public interest in a substantial degree
and the protection of that interest requires preventing those who are not qualified or
authorized to act as notaries public from imposing upon the public and the courts and
administrative offices generally.Parenthetically, the settlement/family home deed
cannot be considered a public document. This is because the following cast
doubt on the document's authenticity, to wit:LawlibraryofCRAlaw

1.) The date of its execution was not indicated;

2.) The amount of consideration was superimposed;
3.) It was not presented to the Registry of Deeds of Nasugbu, Batangas for
annotation; and
4.) Not even the supposed notary public," Alfredo de Guzman, or the purported
buyer, the Spouses Rolando and Ma. Cecilia Bondoc, were presented as
witnesses.

Concededly, the absence of notarization in the resort deed and/or the lacking details in
the settlement/family home deed did not necessarily invalidate the transactions
evidenced by the said documents. However, since the said deeds are private
documents, perforce, their due execution and authenticity becomes subject to the
requirement of proof under the Rules on Evidence, Section 20, Rule 132 of which
provides:LawlibraryofCRAlaw
Sec. 20. Proof of private document. - Before any private document offered as authentic
is received in evidence, its due execution aijd .authenticity must be proved
either:LawlibraryofCRAlaw

(a) By anyone who saw the document executed or written; or

(b) By evidence of the genuineness of the signature or handwriting of the maker.The
Complaining Heirs insist that the settlement/family home and the resort deed are void
as their signatures thereon are forgeries as opposed to the Villafrias who profess the
deeds' enforceability. After the Complaining Heirs presented proofs in support of
their claim that their signatures were forged, the burden then fell upon the
Villafrias to disprove the same, or conversely, to prove the authenticity and due
execution of the said deeds. The Villafrias failed in this regard.

As aforestated, the Villafrias did not present as witnesses (a) the notary public
who purportedly notarized the questioned instrument, (b) the witnesses who
appeared] in the instruments as eyewitnesses to the signing, or (c) an expert to
prove the authenticity and genuineness of all the signatures appearing o,n the
said instruments. Verily, the rule that, proper foundation must be laid for the
admission of documentary evidence; that is, the identity and authenticity of the
document must be reasonably established as a prerequisite to its admission, was
prudently observed by the lower court when it refused to admit the
settlement/family home and the resort deeds as their veracity are doubtful.17
Aggrieved, petitioners, substituted by their son Ruel Villafria, filed a Motion for
Reconsideration dated November 24, 2006 raising the trial court's lack of jurisdiction. It
was alleged that when the Complaint for Judicial Partition with Annulment of Title and
Recovery of Possession was filed, there was yet no settlement of Pedro's estate,
determination as to the nature thereof, nor was there an identification of the number of
legitimate heirs. As such, the trial court ruled on the settlement of the intestate estate of
Pedro in its ordinary jurisdiction when the action filed was for Judicial Partition.
Considering that the instant action is really one for settlement of intestate estate, the
trial court, sitting merely in its probate jurisdiction, exceeded its jurisdiction when it ruled
upon the issues of forgery and ownership. Thus, petitioner argued that said ruling is
void and has no effect for having been rendered without jurisdiction. The Motion for
Reconsideration was, however, denied by the appellate court on February 26, 2007.

On appeal, this Court denied on June 20, 2007, petitioner's Petition for Review
on Certiorari for submitting a verification of the petition, a certificate of non-forum
shopping and an affidavit of service that failed to comply with the 2004 Rules on
Notarial Practice regarding competent evidence of affiant's identities. 18 In its
Resolution19 dated September 26, 2007, this Court also denied petitioner's Motion for
Reconsideration in the absence of any compelling reason to warrant a modification of
the previous denial. Thus, the June 20, 2007 Resolution became final and executory on
October 31, 2007 as certified by the Entry of Judgment issued by the Court. 20redarclaw

On January 16, 2008, the Court further denied petitioner's motion for leave to admit a
second motion for reconsideration of its September 26, 2007 Resolution, considering
that the same is a prohibited pleading under Section 2, Rule 52, in relation to Section 4,
Rule 56 of the 1997 Rules of Civil Procedure, as amended. Furthermore, petitioner's
letter dated December 18, 2007 pleading the Court to take a second, look at his petition
for review on certiorari and that a decision thereon be rendered based purely on its
merits was noted without action. 21redarclaw

Unsatisfied, petitioner wrote a letter dated March 24, 2008 addressed to then Chief
Justice Reynato S. Puno praying that a decision on the case be rendered based on
the .merits and not on formal requirements "as he stands to lose everything his parents
had left him just because the verification against non-forum shopping is formally
defective." However, in view of the Entry of Judgment having been made on October
31, 2007, the Court likewise noted said letter without action. 22redarclaw

On November 27, 2008, the RTC issued an Order, issuing a Partial Writ of Execution of
its October 1, 2001 Decision with respect to the portions disposing of petitioner's claims
as affirmed by the CA.

The foregoing notwithstanding, petitioner filed, on February 11, 2009, a Petition for
Annulment of Judgment and Order before the CA assailing the October 1, 2001
Decision as well as the November 27, 2008 Order of the RTC on the grounds of
extrinsic fraud and lack of jurisdiction. In its Decision dated March 13, 2009, however,
the CA dismissed the petition and affirmed the rulings of the trial court in the following
wise:LawlibraryofCRAlaw

Although the assailed Decision of the Court a quo has already become final and
executory and in fact entry of judgment was issued on 31 October 2007, supra,
nevertheless, to put the issues to rest, We deem it apropos to tackle the same.

The Petitioner argues that the assailed Decision and Order of the Court a quo, supra,
should be annulled and set aside on the grounds of extrinsic fraud and lack of
jurisdiction.

We are not persuaded,

x x x x

Section 2 of the Rules as stated above provides that the annulment of a judgment may
"be based only on grounds of extrinsic fraud and lack of jurisdiction." In RP v. The Heirs
of Sancho Magdato, the High Tribunal stressed that:LawlibraryofCRAlaw
There is extrinsic fraud when "the unsuccessful party had been prevented from
exhibiting fully his case, by fraud or deception practiced on him by his opponent,
as by keeping him away from court, ... or where the defendant never had
knowledge of the suit, being kept in ignorance by the acts of the
plaintiff; ..."Otherwise put, extrinsic or collateral fraud pertains to such fraud which
prevents the aggrieved party from having a trial or presenting his case to the court, or is
used to procure the judgment without fair submission of the controversy. This refers to
acts intended to keep the unsuccessful party away from the courts as when there is a
false promise of compromise or when one is kept in ignorance of the suit.

The pivotal issues before Us are: (1) whether there was a time during the
proceedings below that the Petitioners ever prevented from exhibiting fully their
case, by fraud or deception, practiced on them by Respondents, and (2) whether
the Petitioners were kept away from the court or kept in ignorance by the acts of
the Respondent?

We find nothing of that sort. Instead, what We deduced as We carefully delved

into the evidentiary facts surrounding the instant case as well as the proceedings
below as shown in the 36-page Decision of the Court a quo, is that the Petitioners
were given ample time to rebut the allegations of the Respondents and had in fact
addressed every detail of Respondent's cause of action against them. Thus,
Petitioners' allegation of the Court a quo's lack of jurisdiction is misplaced.

Our pronouncement on the matter finds support in the explicit ruling of the Supreme
Court in Sps. Santos, et al. v. Sps. Lumbao, thus:LawlibraryofCRAlaw
It is elementary that the active participation of a party in a case pending against
him before a court is tantamount to recognition of that court's jurisdiction and
willingness to abide by the resolution of the case which will bar said party from
later on impugning the court's jurisdiction.In fine, under the circumstances obtaining
in this case the Petitioners are stopped from assailing the Court a quo's lack of
jurisdiction.

Too, We do not find merit in the Petitioners' second issue, supra.

As mentioned earlier, entry of judgment had already been made on the assailed
Decision and Order as early as 31 October 2007.

x x x x

It maybe that the doctrine of finality of judgments permits certain equitable

remedies such as a petition for annulment. But the rules are clear. The annulment
by the Court of Appeals of judgments or final orders and resolutions in civil
actions of the Regional Trial Courts is resorted to only where the ordinary
remedies of new trial, appeal, petition for relief or other appropriate remedies are
no longer available through no fault of the petitioner, supra.

If Petitioners lost their chance to avail themselves of the appropriate remedies or

appeal before the Supreme Court, that is their own look out. The High Tribunal has
emphatically pointed out in Mercado, et al. v. Security Bank
Corporation, thus:LawlibraryofCRAlaw
A principle almost repeated to satiety is that "an action for annulment of judgment
cannot and is not a substitute for the lost remedy of-appeal." A party must have first
availed of appeal, a motion for new trial or a petition for relief before an action for
annulment can prosper. Its obvious rationale is to prevent the party from
benefiting from his inaction or negligence. Also, the action for annulment of
judgment must be based either on (a) extrinsic fraud or (b) lack of jurisdiction or
denial of due process. Having failed to avail of the remedies and there being a
clear showing that neither of the grounds was present, the petition must be
dismissed. Only a disgruntled litigant would find such legal disposition
unacceptable.23When the appellate court denied Petitioner's Motion for
Reconsideration in its Resolution dated April 23, 2009, petitioner filed the instant
Petition for Review on Certiorari on June 10, 2009, invoking the following
ground:LawlibraryofCRAlaw

I.

THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN NOT RULING

THAT THE REGIONAL TRIAL COURT, BRANCH 14, NASUGBU, BATANGAS, ACTED
WITHOUT JURISDICTION IN ENTERTAINING THE SPECIAL PROCEEDING FOR
THE SETTLEMENT OF ESTATE OF PEDRO RIÑOZA AND THE CIVIL ACTION FOR
ANNULMENT OF TITLE OF THE HEIRS AND THIRD PERSONS IN ONE
PROCEEDING.24
Petitioner asserts that while the complaint filed by respondents was captioned as
"Judicial Partition with Annulment of Title and Recovery of Possession," the allegations
therein show that the cause of action is actually one for settlement of estate of decedent
Pedro. Considering that settlement of estate is a special proceeding cognizable by a
probate court of limited jurisdiction while judicial partition with annulment of title and
recovery of possession are ordinary civil actions cognizable by a court of general
jurisdiction, the trial court exceeded its jurisdiction in entertaining the latter while it was
sitting merely in its probate jurisdiction. This is in view of the prohibition found in the
Rules on the joinder of special civil actions and ordinary civil actions. 25 Thus, petitioner
argued that the ruling of the trial court is void and has no effect for having been
rendered in without jurisdiction.

Petitioner also reiterates the arguments raised before the appellate court that since the
finding of forgery relates only to the signature of respondents and not to their co-heirs
who assented to the conveyance, the transaction should be considered valid as to
them. Petitioner also denies the findings of the courts below that his parents are
builders in bad faith for they only took possession of the subject properties after the
execution of the transfer documents and after they paid the consideration on the sale.

The petition is bereft of merit.

Petitioner maintains that since respondents' complaint alleged the following causes of
action, the same is actually one for settlement of estate and not of judicial
partition:LawlibraryofCRAlaw

FIRST CAUSE OF ACTION

1. That Pedro L. Riñoza, Filipino and resident of Nasugbu, Batangas at the time of his
death, died intestate on November 16, 1989. Copy of his death certificate is hereto
attached as Annex "A";

2. That Plaintiffs together with the Defendants enumerated from paragraph 2-A to 2-

J are the only known heirs of the above-mentioned decedent. The plaintiffs and the
Defendants Rolando, Rafael, Antonio, Angelito, Lorna all surnamed Riñoza, and Myrna
R. Limon or Myrna R. Rogador, Epifanio Belo and Ma. Theresa R. Demafelix are the
decedent's legitimate children with his first wife, while Benita Tenorio Rifioza, is the
decedent's widow and Bernadette Riñoza, the decedent's daughter with said widow. As
such, said parties are co-owners by virtue of an intestate inheritance from the
decedent, of the properties enumerated in the succeeding paragraph;

3. That the decedent left the following real properties all located in Nasugbu,
Batangas:LawlibraryofCRAlaw
x x x x

16. That the estate of decedent Pedro L. Riñoza has no known legal indebtedness;

17. That said estate remains undivided up to this date and it will be to the best
interest of all heirs that same be partitioned judicially. 26

Petitioner is mistaken. It is true that some of respondents' causes of action pertaining to

the properties left behind by the decedent Pedro, his known heirs, and the nature and
extent of their interests thereon, may fall under an action for settlement of estate.
However, a complete reading of the complaint would readily show that, based on the
nature of the suit, the allegations therein, and the reliefs prayed for, the action is clearly
one for judicial partition with annulment of title and recovery of possession.

Section 1, Rule 74 of the Rules of Court provides:LawlibraryofCRAlaw

RULE 74
Summary Settlement of Estate

Section 1. Extrajudicial settlement by agreement between heirs. — If the decedent left

no will and no debts and the heirs are all of age, or the minors are represented by
their judicial or legal representatives duly authorized for the purpose, the parties may
without securing letters of administration, divide the estate among themselves as
they see fit by means of a public instrument filed in the office of the register of deeds,
and should they disagree, they may do so in an ordinary action of partition. If there
is only one heir, he may adjudicate to himself the entire estate by means of an affidavit
filled in the office of the register of deeds. The parties to an extrajudicial settlement,
whether by public instrument or by stipulation in a pending action for partition, or the
sole heir who adjudicates the entire estate to himself by means of an affidavit shall file,
simultaneously with and as a condition precedent to the filing of the public instrument, or
stipulation in the action for partition, or of the affidavit in the office of the register of
deeds, a bond with the said register of deeds, in an amount equivalent to the value of
the personal property involved as certified to under oath by the parties concerned and
conditioned upon the payment of any just claim that may be filed under section 4 of this
rule. It shall be presumed that the decedent left no debts if no creditor files a petition for
letters of administration within two (2) years after the death of the decedent.

The fact of the extrajudicial settlement or administration shall be published in a

newspaper of general circulation in the manner provided in the next succeeding section;
but no extrajudicial settlement shall be binding upon any person who has not
participated therein or had no notice thereof. 27

In this relation, Section 1, Rule 69 of the Rules of Court provides:LawlibraryofCRAlaw

Section 1. Complaint in action for partition of real estate. — A person having the right to
compel the partition of real estate may do so as provided in this Rule, setting forth in
his complaint the nature and extent of his title and an adequate description of the
real estate of which partition is demanded and joining as defendants all other
persons interested in the property.28

As can be gleaned from the foregoing provisions, the allegations of respondents in their
complaint are but customary, in fact, mandatory, to a complaint for partition of real
estate. Particularly, the complaint alleged: (1) that Pedro died intestate; (2) that
respondents, together with their co-heirs, are all of legal age, with the exception of one
who is represented by a judicial representative duly authorized for the purpose; (3) that
the heirs enumerated are the only known heirs of Pedro; (4) that there is an account
and description of all real properties left by Pedro; (5) that Pedro's estate has no known
indebtedness; and (6) that respondents, as rightful heirs to the decedent's estate, pray
for the partition of the same in accordance with the laws of intestacy. It is clear,
therefore, that based on the allegations of the complaint, the case is one for judicial
partition. That the complaint alleged causes of action identifying the heirs of the
decedent, properties of the estate, and their rights thereto, does not perforce make it an
action for settlement of estate.

It must be recalled that the general rule is that when a person dies intestate, or, if
testate, failed to name an executor in his will or the executor so named is incompetent,
or refuses the trust, or. fails to furnish the bond required by the Rules of Court, then the
decedent's estate shall be judicially administered and the competent court shall appoint
a qualified administrator in the order established in Section 6 of Rule 78 of the Rules of
Court.29 An exception to this rule, however, is found in the aforequoted Section 1 of Rule
74 wherein the heirs of a decedent, who left no will and no debts due from his estate,
may divide the estate either extrajudicially or in an ordinary action for partition without
submitting the same for judicial administration nor applying for the appointment of an
administrator by the court.30 The reason is that where the deceased dies without
pending obligations, there is no necessity for the appointment of an administrator to
administer the estate for them and to deprive the real owners of their possession to
which they are immediately entitled. 31redarclaw

In this case, it was expressly alleged in the complaint, and was not disputed, that Pedro
died without a will, leaving his estate without any pending obligations. Thus, contrary to
petitioner'.s contention, respondents were under no legal obligation to submit me
subject properties of the estate to a special proceeding for settlement of intestate
estate, and are, in fact, encouraged to have the same partitioned, judicially or
extrajudicially, by Pereira v. Court of Appeals:32redarclaw

Section 1, Rule 74 of the Revised Rules of Court, however, does not preclude the heirs
from instituting administration proceedings, even if the estate has no" debts or
obligations, if they do not desire to resort for good reasons to an ordinary action for
partition. While Section 1 allows the heirs to divide the estate among themselves as
they may see fit, or to resort to an ordinary action for partition, the said provision does
not compel them to do so if they have good reasons to take a different course of action.
It should be noted that recourse to an administration proceeding even if the estate has
no debts is sanctioned only if the heirs have good reasons for not resorting to an action
for partition. Where' partition is possible, either in or out of court, the estate should
not be burdened with an administration proceeding without good and compelling
reasons.

Thus, it has been repeatedly held that when a person dies without leaving
pending obligations to be paid, his heirs, whether of age or not, are not bound to
submit the property to a judicial administration, which is always long and costly,
or to apply for the appointment of an administrator by the Court. It has been
uniformly held that in such case the judicial administration and the appointment
of an administrator are superfluous and unnecessary proceedings. 33

Thus, respondents committed no error in filing an action for judicial partition instead of a
special proceeding for the settlement of estate as the same is expressly permitted by
law. That the complaint contained allegations inherent in an action for settlement of
estate does not mean that there was a prohibited joinder of causes of action for
questions as to the estate's properties as well as a determination of the heirs, their
status as such, and the nature and extent of their titles to the estate, may also be
properly ventilated in partition proceedings alone. 34 In fact, a complete inventory of the
estate may likewise be done during the partition proceedings, especially since the
estate has no debts.35 Indeed, where the more expeditious remedy of partition is
available to the heirs, then they may not be compelled to submit to administration
proceedings, dispensing of the risks of delay and of the properties being
dissipated.36redarclaw

Moreover, the fact that respondents' complaint al$o prayed for the annulment of title and
recovery of possession does not strip the trial court off of its jurisdiction to hear and
decide the case. Asking for the annulment of certain transfers of property could very
well be achieved in an action for partition, 37 as can be seen in cases where courts
determine the parties' rights arising from complaints asking not only for the partition of
estates but also for the annulment of titles and recovery of ownership and possession of
property.38 In fact, in Bagayas v. Bagayas,39 wherein a complaint for annulment of sale
and partition was dismissed by the trial court due to the impropriety of an action for
annulment as it constituted a collateral attack on the certificates of title of the
respondents therein, this Court found the dismissal to be improper in the following
manner:LawlibraryofCRAlaw

In Lacbayan v. Samoy, Jr. (Lacbayan) which is an action for partition premised on

the existence or non-existence of co-ownership between the parties, the Court
categorically pronounced that a resolution on the issue of ownership does not
subject the Torrens title issued over the disputed realties to a collateral attack. It
must be borne in mind that what cannot be collaterally attacked is the certificate
of title and not the title itself. As pronounced in Lacbayan:LawlibraryofCRAlaw
There is no dispute that a Torrens certificate of title cannot be collaterally attacked, but
that rule is not material to the case at bar. What cannot be collaterally attacked is the
certificate of title and not the title itself. The certificate referred to is that
document issued by the Register of Deeds known as the TCT. In contrast, the title
referred to by law means ownership which is, more often than not, represented by
that document. Petitioner apparently confuses title with the certificate of title. Title as a
concept of ownership should not be confused with the certificate of title as evidence of
such ownership although both are interchangeably used. (Emphases supplied)

Thus, the RTC erroneously dismissed petitioner's petition for annulment of sale
on the ground that it constituted a collateral attack since she was actually
assailing Rogelio and Orlando's title to the subject lands and not any Torrens
certificate of title over the same.

Indeed, an action for partition does not preclude the settlement of the issue of
ownership. In fact, the determination as to the existence of the same is necessary in the
resolution of an action for partition, as held in Municipality of Biñan v. Garcia:40redarclaw

The first phase of a partition and/or accounting suit is taken up with the
determination of whether or not a co-ownership in fact exists, and a partition is
proper (i.e., not otherwise legally proscribed) and may be made by voluntary
agreement of all the parties interested in the property. This phase may end with a
declaration that plaintiff is not entitled to have a partition either because a co-ownership
does not exist, or partition is legally prohibited. It may end, on ¦ the other hand, with an
adjudgment that a co-ownership does in truth exist, partition is proper in the premises
and an accounting of rents and profits received by the defendant from the real estate in
question is in order, x x x

The second phase commences when it appears that "the parties are unable to agree
upon the partition" directed by the court. In that event[,] partition shall be done for the
parties by the [c]ourt with the assistance of not more than three (3) commissioners. This
second stage may well also deal with the rendition of the accounting itself and its
approval by the [cjourt after the- parties have been accorded opportunity to be heard
thereon, and an award for the recovery by the party or parties thereto entitled of their
just share in the rents and profits of the real estate in question, x x x. 41redarclaw

An action for partition, therefore, is premised on the existence or non-existence of co-

ownership between the parties.42 Unless and until the issue of co-ownership is
definitively resolved, it would be premature to effect a partition of an estate. 43redarclaw

In view of the foregoing, petitioner's argument that the trial court acted without
jurisdiction in entertaining -the action of settlement of estate and annulment of title in a
single proceeding is clearly erroneous for the instant complaint is precisely one for
judicial partition with annulment of title and recovery of possession, filed within the
confines of applicable law and jurisprudence. Under Section 1 44 of Republic Act No.
7691 (RA 7691),45 amending Batas Pambansa Big. 129, the RTC shall exercise
exclusive original jurisdiction over all civil actions in which the subject of the litigation is
incapable of pecuniary estimation. Since the action herein was not merely for partition
and recovery of ownership but also for annulment of title and documents, the action is
incapable of pecuniary estimation and thus cognizable by the RTC. Hence, considering
that the trial court clearly had jurisdiction in rendering its decision, the instant petition for
annulment Sf judgment must necessarily fail.

Note that even if the instant action was one for annulment of title alone, without the
prayer for judicial partition, the requirement of instituting a separate special proceeding
for the determination of the status and rights of the respondents as putative heirs may
be dispensed with, in light of the fact that the parties had voluntarily submitted the issue
to the trial court and had already presented evidence regarding the issue of
heirship.46 In Portugal v. Portugal-Beltran,47 the Court explained:LawlibraryofCRAlaw

In the case at bar, respondent, believing rightly or wrongly that she was the sole
heir to Portugal's estate, executed on February 15, 1988 the questioned Affidavit
of Adjudication under the second sentence of Rule 74, Section 1 of the Revised
Rules of Court. Said rule is an exception to the general rule that when a person
dies leaving a property, it should be judicially administered and the competent
court should appoint a qualified administrator, in the order established in Sec. 6,
Rule 78 in case the deceased left no will, or in case he did, he failed to name an
executor therein.

x x x x

It appearing, however, that in the present case the only property of the intestate
estate of Portugal is the Caloocan parcel of land, to still subject it, under the
circumstances of the case, to a special proceeding which could be long, hence,
not expeditious, just to establish the status of petitioners as heirs is not only
impractical; it is burdensome to the estate with the costs and expenses of an
administration proceeding. And it is superfluous in light of the fact that the
parties to the civil case - subject of the present case, could and had already in
fact presented evidence before the trial court which assumed jurisdiction over the
case upon the issues it defined during pre-trial.

In fine, under the circumstances of the present case, there being no compelling

reason to still subject Portugal's estate to administration proceedings since a
determination of petitioners' status as heirs could be achieved in the civil case
filed by petitioners, the trial court should proceed to evaluate the evidence
presented by the parties during the trial and render a decision thereon upon the
issues it defined during pre-trial, x x x. 48

Thus, in view of the clarity of respondents' complaint and the causes of action alleged
therein, as well as the fact that the trial court, in arriving at its decision, gave petitioner
more than ample opportunity to advance his claims, petitioner cannot now be permitted
to allege lack of jurisdiction just because the judgment rendered was adverse to them.
To repeat, the action filed herein is one for judicial partition and not for settlement of
intestate estate. Consequently, that respondents also prayed for the annulment of title
and recovery of possession in the same proceeding does not strip the court off of its
jurisdiction for asking for the annulment of certain transfers of property could very well
be achieved in an action for partition.

As for petitioner's contention that the sale must be considered valid as to the heirs who
assented to the conveyance as well as their allegation of good faith, this Court does not
find any Compelling reason to deviate from the ruling of the appellate court. As
sufficiently found by both courts below, the authenticity and due execution of the
documents on which petitioner's claims are based were inadequately proven. They were
undated, forged, and acknowledged before a notary public who was not commissioned
as such on the date they were executed. They were never presented to the Register of
Deeds for registration. Neither were the supposed notaries and buyers of the subject
properties presented as witnesses.

While it may be argued that Benita, one of the co-heirs to the estate, actually
acknowledged the sale of the resort, the circumstances surrounding the same militate
against the fact of its occurrence. Not only was the Deed of Sale supposedly executed
by Benita undated and unsigned by Pedro, but the document she presented purportedly
evidencing her receipt of her share in the sale, did not refer to any sort of sale but to a
previous loan obtained by Pedro and Benita from a bank.

Moreover, credence must be given on the appellate court's observations as to

petitioners' actuations insofar as the transactions alleged herein are
concerned. First, they were seemingly uncertain as to the number and/or identity of the
properties bought by them.49 In their Answer, they gave the impression that" they bought
both the resort and the family home and yet, during trial, Francisco Villafria claimed they
only bought the resort. In fact, it was only then that they presented the subject Extra-
Judicial Settlement and Deed of Sale. 50Second, they never presented any other
document which would evidence their actual payment of consideration to the selling
heirs.51Third, in spite of the blatant legal infirmities of the subject documents of
conveyance, petitioners still took possession of the properties, demolished several
cottages, and introduced permanent improvements thereon.

In all, the Court agrees with the appellate court that petitioners failed to adequately
substantiate, with convincing, credible and independently verifiable proof, their claim
that they had, in fact, purchased the subject properties. The circumstances surrounding
the purported transfers cast doubt on whether they actually took place. In substantiating
their claim, petitioners relied solely on the Extra-Judicial Settlement and Deed of Sale,
who utterly failed to prove their authenticity and due execution. They cannot, therefore,
be permitted to claim absolute ownership of the subject lands based on the same.

Neither can they be considered as innocent purchasers for value and builders in good
faith. Good faith consists in the belief of the builder that the land the latter is building on
is one's own without knowledge of any defect or flaw in one's title. 52 However, in view of
the manifest defects in the instruments conveying their titles, petitioners should have
been placed on guard. Yet, they still demolished several cottages and constructed
improvement on the properties. Thus, their claim of good faith cannot be given
credence.

Indeed, a judgment which has acquired finality becomes immutable and unalterable,
hence, may no longer be modified in any respect except to correct clerical errors or
mistakes, all the issues between the parties being deemed resolved and. laid to rest. 53 It
is a fundamental principle in our judicial system and essential to an effective and
efficient administration of justice that, once a judgment has become final, the winning
party be, not through a mere subterfuge, deprived of the fruits of the
verdict.54 Exceptions to the immutability of final judgment are allowed only under the
most extraordinary of circumstances.55 Yet, when petitioner is given more than ample
opportunity to be heard, unbridled access to the appellate courts, as well as unbiased
judgments rendered after a consideration of evidence presented by the parties, as in the
case at hand, the Court shall refrain from reversing the rulings of the courts below in the
absence of any showing that the same were rendered with fraud or lack of jurisdiction.

WHEREFORE, premises considered, the instant petition is DENIED. The Decision and
Resolution, dated March 13, 2009 and April 23, 2009, respectively, of the Court Appeals
in CA-G.R. SP No. 107347, which affirmed the Judgment dated October 1, 2001 of the
Regional Trial Court of Nasugbu, Batangas, Branch 14, in Civil Case No. 217, insofar as
it concerns the resort covered by Transfer Certificates of Title No. 51354 and No.
51355, and family home covered by TCT No. 40807 and 40808, are AFFIRMED.

SO ORDERED.cralawlawlibrary

Velasco, Jr., (Chairperson), Perez,* Leonen,**and Jardeleza, JJ., concur.