Page 1 of 118

Republic of the Philippines

Felicisimo.

SUPREME COURT

Five years later, on May 1, 1968, Felicisimo

married Merry Lee Corwin, with whom he had a

Manila

son, Tobias. However, on October 15, 1971,

THIRD DIVISION

Merry

G.R. No. 133743

February 6, 2007

EDGAR SAN LUIS, Petitioner,

Lee,

an

American

Complaint for Divorce

citizen,

filed

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

vs.

Child Custody on December 14, 1973.

FELICIDAD SAN LUIS, Respondent.

x ---------------------------------------------------- x
G.R. No. 134029

February 6, 2007

On

June

20,

1974,

Felicisimo

married

respondent Felicidad San Luis, then surnamed

Sagalongos, before

Rev.

Fr.

William Meyer,

RODOLFO SAN LUIS, Petitioner,

Minister of the United Presbyterian at Wilshire

vs.

had no children with respondent but lived with

Boulevard, Los Angeles, California, U.S.A.

FELICIDAD SAGALONGOS alias FELICIDAD

He

her for 18 years from the time of their marriage

SAN LUIS, Respondent.

up to his death on December 18, 1992.

DECISION

Thereafter, respondent sought the dissolution of

YNARES-SANTIAGO, J.:

settlement of Felicisimos estate. On December

their

conjugal

partnership

assets

and

the

Before us are consolidated petitions for review

17, 1993, she filed a petition for letters of

assailing the February 4, 1998 Decision

administration

of the

before the Regional Trial Court

Court of Appeals in CA-G.R. CV No. 52647,

of Makati City, docketed as SP. Proc. No. M-3708

which reversed and set aside the September 12,

which was raffled to Branch 146 thereof.

1995

Respondent alleged that she is the widow of

and January 31, 1996

Resolutions of

the Regional Trial Court of Makati City, Branch

134 in SP. Proc. No. M-3708; and its May 15,
1998 Resolution

denying petitioners motion for

reconsideration.

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 decedents surviving heirs are

The instant case involves the settlement of the

respondent as legal spouse, his six children by

estate of Felicisimo T. San Luis (Felicisimo), who

his first marriage, and son by his second

was the former governor of the Province of

marriage; that the decedent left real properties,

Laguna.

both

During

his

lifetime,

Felicisimo

conjugal

and

exclusive,

valued

at

contracted three marriages. His first marriage

P30,304,178.00 more or less; that the decedent

was with Virginia Sulit on March 17, 1942 out of

does not have any unpaid debts. Respondent

which were born six children, namely: Rodolfo,

prayed that the conjugal partnership assets be

Mila, Edgar, Linda, Emilita and Manuel. On

liquidated and that letters of administration be

August

issued to her.

11,

1963,

Virginia

predeceased

Page 2 of 118
On February 4, 1994, petitioner Rodolfo San

cannot be given retroactive effect to validate

Luis, one of the children of Felicisimo by his first

respondents bigamous marriage with Felicisimo

marriage, filed a motion to dismiss

because this would impair vested rights in

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 Felicisimos 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

of the petition. On

10

February 28, 1994, the trial court issued an

Order

11

denying the two motions to dismiss.

filed

opposition

12

documentary

on

March

thereto.

evidence

5,

She

showing

1994

her

submitted
that

16

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

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

denying

17

the

standing to file the petition and that venue was

properly

laid.

Meanwhile,

18

motion

for

because then Acting Presiding Judge Santos

was substituted by Judge Salvador S. Tensuan

Mila filed a motion for inhibition

that

19

against

Judge Tensuan on November 16, 1994. On even

date,

Edgar

reconsideration

also
20

filed

motion

for

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

On April 24, 1995,

claimed

the

disqualification was deemed moot and academic

been

she

for

widow of the decedent, possessed the legal

by Judge Paul T. Arcangel.

Thus,

motions

reconsideration. It ruled that respondent, as

marriage of Felicisimo to Merry Lee had already

dissolved.

of the Family Code.

pending the resolution of said motion.

Unaware of the denial of the motions to dismiss,

respondent

derogation of Article 256

22

the trial court required the

Felicisimo had the legal capacity to marry her by

parties

virtue of paragraph 2,

Article 26 of the Family

papers on the twin issues of venue and legal

Code and the doctrine laid down in Van Dorn v.

capacity of respondent to file the petition. On

Romillo, Jr.

May 5, 1995, Edgar manifested

13

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

to

submit

their

respective

23

position

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,
20,

25

1995, respectively.

24

and June

Page 3 of 118
On

September

dismissed

12,

the

1995,

petition

the

trial

court

for

letters

distinguished from legal residence or domicile. It

of

noted that although Felicisimo discharged his

administration. It held that, at the time of his

functions as governor in Laguna, he actually

death, Felicisimo was the duly elected governor

resided in Alabang, Muntinlupa. Thus, the

and a resident of the Province of Laguna. Hence,

petition

the petition should have been filed in Sta. Cruz,

properly filed in Makati City.

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 Felicisimos 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 Felicisimos legitimate children.
Respondent moved for reconsideration
the disqualification

27

motions were denied.

26

for

letters

of

administration

was

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.
and Pilapil v. Ibay-Somera.

31

30

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

and for

of Judge Arcangel but said

28

With the well-known rule express mandate of

paragraph 2, Article 26, of the Family Code of
the Philippines, the doctrines in Van Dorn,

Respondent appealed to the Court of Appeals

Pilapil, and the reason and philosophy behind

which reversed and set aside the orders of the

the enactment of E.O. No. 227, there is no

trial

dated

justiciable reason to sustain the individual view

February 4, 1998, the dispositive portion of

sweeping statement of Judge Arc[h]angel,

which states:

that "Article 26, par. 2 of the Family Code,

court

in

its

assailed

Decision

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

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

Page 4 of 118
settlement of the estate of the deceased. x x x

33

The petition lacks merit.

Edgar, Linda, and Rodolfo filed separate motions

Under Section 1,

for reconsideration

Court, the petition for letters of administration

34

which were denied by the

Court of Appeals.
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
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
Tacloban City,

37

38

and Romualdez v. RTC, Br. 7,

"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

respondents

marriage to Felicisimo was void and bigamous

because

it

was

performed

during

the

subsistence of the latters marriage to Merry

Lee. They argue that paragraph 2, Article 26
cannot be retroactively applied because it would
impair

vested

Rule 73 of the Rules of

of the estate of Felicisimo should be filed in the

On July 2, 1998, Edgar appealed to this Court

petition

39

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.

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

The issues for resolution: (1) whether venue was

residence, that is, personal residence, not legal

properly laid, and (2) whether respondent has

residence or domicile. Residence simply requires

legal capacity to file the subject petition for

bodily presence as an inhabitant in a given

letters of administration.

place, while domicile requires bodily presence in

that place and also an intention to make it ones

Page 5 of 118
domicile.

No

particular

length

of

time

of

of membership of the deceased in the Ayala

residence is required though; however, the

Alabang

residence must be more than temporary.

Country Club, Inc.,

41

(Emphasis supplied)

Village

Association
47

and

46

letter-envelopes

Ayala
48

from

1988 to 1990 sent by the deceaseds children to

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.

him at his Alabang address, and the deceaseds

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."

Needless to say, there is a distinction between

From the foregoing, we find that Felicisimo was

"residence" for purposes of election laws and

a resident of Alabang, Muntinlupa for purposes

"residence" for purposes of fixing the venue of

of fixing the venue of the settlement of his

actions.

and

estate. Consequently, the subject petition for

"domicile" are treated as synonymous terms,

letters of administration was validly filed in the

that is, the fixed permanent residence to which

Regional Trial Court

when absent, one has the intention of returning.

jurisdiction

42

In

election

cases,

"residence"

However, for purposes of fixing venue under

over

50

which has territorial

Alabang,

Muntinlupa.

The

subject petition was filed on December 17, 1993.

the Rules of Court, the "residence" of a person is

At

his personal, actual or physical habitation, or

municipality and the branches of the Regional

actual residence or place of abode, which may

Trial Court of the National Capital Judicial

not necessarily be his legal residence or domicile

Region which had territorial jurisdiction over

provided he resides therein with continuity and

Muntinlupa were then seated in Makati City as

consistency.

per Supreme Court Administrative Order No. 3.

43

Hence, it is possible that a

that

time,

Muntinlupa

was

still

person may have his residence in one place and

51

domicile in another.

before the Regional Trial Court of Makati City.

In the instant case, while petitioners established

Anent the issue of respondent Felicidads legal

that Felicisimo was domiciled in Sta. Cruz,

personality to file the petition for letters of

Laguna,

also

administration, we must first resolve the issue of

maintained a residence in Alabang, Muntinlupa

whether a Filipino who is divorced by his alien

from 1982 up to the time of his death.

spouse abroad may validly remarry under the

Respondent submitted in evidence the Deed of

Civil Code, considering that Felicidads marriage

Absolute Sale

dated January 5, 1983 showing

to Felicisimo was solemnized on June 20, 1974,

that the deceased purchased the aforesaid

or before the Family Code took effect on August

property. She also presented billing statements

3, 1988. In resolving this issue, we need not

from the Philippine Heart Center and Chinese

retroactively apply the provisions of the Family

General Hospital for the period August to

Code, particularly Art. 26, par. (2) considering

December

that there is sufficient jurisprudential basis

45

respondent

44

1992

proved

indicating

that

the

he

address

of

Felicisimo at "100 San Juanico, Ayala Alabang,

Muntinlupa." Respondent also presented proof

Thus, the subject petition was validly filed

allowing us to rule in the affirmative.

The case of Van Dorn v. Romillo, Jr.

52

involved a

Page 6 of 118
marriage between a foreigner and his Filipino

said Court from asserting his right over the

wife,

alleged conjugal property.

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

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,

no interest in the properties acquired by the

that, under our laws, petitioner has to be

Filipino wife after the divorce. Thus:

considered

In this case, the divorce in Nevada released

respondent and still subject to a wife's

private respondent from the marriage from the

still

married

to

private

obligations under Article 109, et. seq. of the

standards of American law, under which divorce

Civil Code cannot be just. Petitioner should

dissolves the marriage. As stated by the Federal

not be obliged to live together with, observe

Supreme Court of the United States in Atherton

respect and fidelity, and render support to

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

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

free them both from the bond. The marriage tie,

(Emphasis added)

when thus severed as to one party, ceases to

This principle was thereafter applied in Pilapil v.

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."

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,

Thus, pursuant to his national law, private

respondent

Ibay-Somera

is

no

longer

the

husband

of

petitioner. He would have no standing to sue in

the case below as petitioners husband entitled
to exercise control over conjugal assets. As he is
bound by the Decision of his own countrys
Court, which validly exercised jurisdiction over
him, and whose decision he does not repudiate,
he is estopped by his own representation before

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.

Page 7 of 118
The significance of the Van Dorn case to the

Philippines in accordance with the laws in force

development of limited recognition of divorce in

in the country where they were solemnized, and

the Philippines cannot be denied. The ruling has

valid there as such, shall also be valid in this

long been interpreted as severing marital ties

country, except those prohibited under Articles

between parties in a mixed marriage and

35(1), (4), (5) and (6), 36, 37 and 38.

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."
likewise

cited

59

In Garcia v. Recio,

the

relation to Article 26.

60

aforementioned

the Court
case

in

61

In the recent case of Republic v. Orbecido III,

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)
xxxx
Legislative Intent
Records of the proceedings of the Family Code

62

deliberations

showed

that

the

intent

of

the historical background and legislative intent

Paragraph 2 of Article 26, according to Judge

behind paragraph 2, Article 26 of the Family

Alicia Sempio-Diy, a member of the Civil Code

Code were discussed, to wit:

Revision Committee, is to avoid the absurd

Brief Historical Background

situation where the Filipino spouse remains

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

married to the alien spouse who, after obtaining

a divorce, is no longer married to the Filipino
spouse.
Interestingly,

Paragraph

of

Article

26

states:

traces its origin to the 1985 case of Van

All marriages solemnized outside the Philippines

Dorn v. Romillo, Jr. The Van Dorn case

in accordance with the laws in force in the

involved

marriage

between

Filipino

country where they were solemnized, and valid

citizen and a foreigner. The Court held

there as such, shall also be valid in this country,

therein that a divorce decree validly obtained

except those prohibited under Articles 35, 37,

by

and 38.

Philippines, and consequently, the Filipino

On July 17, 1987, shortly after the signing of

spouse

the original Family Code, Executive Order No.

Philippine law.

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

the

alien
is

spouse

capacitated
63

is
to

valid
remarry

in

the

under

(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

Page 8 of 118
law

already

established

through

judicial

precedent.1awphi1.net

that, while generally valid, may seem arbitrary

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

being

shared

commitment

cannot

possibly

between

mutual
two

keep them so. To be sure, there are some laws

and

parties,

Marriage,
be

productive of any good to the society where one

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.

is considered released from the marital bond

As judges, we are not automatons. We do not

while the other remains bound to it. Such is the

and must not unfeelingly apply the law as it is

state of affairs where the alien spouse obtains a

worded,

valid divorce abroad against the Filipino spouse,

command without regard to its cause and

as in this case.

consequence. "Courts are apt to err by sticking

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 Courts
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.
Appellate Court,

67

68

In Alonzo v. Intermediate

the Court stated:

yielding

like

robots

to

the

literal

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

But as has also been aptly observed, we test a

brought to it for decision. Justice is always an

law by its results; and likewise, we may add, by

essential ingredient of its decisions. Thus when

its purposes. It is a cardinal rule that, in

the facts warrants, we interpret the law in a way

seeking the meaning of the law, the first concern

that will render justice, presuming that it was

of the judge should be to discover in its

the intention of the lawmaker, to begin with,

provisions

that the law be dispensed with justice.

the

Unquestionably,

intent
the

law

of

the

should

lawmaker.
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.

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
Felicisimos

surviving

spouse.

However,

the

Thus, we interpret and apply the law not

records show that there is insufficient evidence

independently of but in consonance with justice.

to prove the validity of the divorce obtained by

Law and justice are inseparable, and we must

Merry Lee as well as the marriage of respondent

Page 9 of 118
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

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.

petition

for

letters

of

administration must be filed by an interested

person and must show, as far as known to the

official publication or (2) a copy thereof attested

petitioner: x x x.

by the officer having legal custody of the

An "interested person" has been defined as one

document. If the record is not kept in the

who would be benefited by the estate, such as

Philippines, such copy must be (a) accompanied

an heir, or one who has a claim against the

by a certificate issued by the proper diplomatic

estate, such as a creditor. The interest must be

or consular officer in the Philippine foreign

material and direct, and not merely indirect or

service stationed in the foreign country in which

contingent.

the record is kept and (b) authenticated by the

seal of his office.
With

regard

71

to

75

In the instant case, respondent would qualify as

an interested person who has a direct interest in

to

the estate of Felicisimo by virtue of their

Felicisimo allegedly solemnized in California,

cohabitation, the existence of which was not

U.S.A.,

the

denied by petitioners. If she proves the validity

of

of the divorce and Felicisimos capacity to

which

remarry, but fails to prove that her marriage

purportedly show that their marriage was done

with him was validly performed under the laws

in accordance with the said law. As stated in

of the U.S.A., then she may be considered as a

Garcia, however, the Court cannot take judicial

co-owner under Article 144

notice of foreign laws as they must be alleged

This provision governs the property relations

and proved.

between parties who live together as husband

she

respondents

submitted

marriage

photocopies

of

Marriage Certificate and the annotated text

the

Family

Law

Act

of

California

72

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

capacitated

to

that

Felicisimo

marry

respondent

was
in

not
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

76

of the Civil Code.

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

Page 10 of 118
belonging to the co-owners shall be presumed

by competent evidence and reliance must be had

equal, unless the contrary is proven.

on the strength of the partys own evidence and

77

Meanwhile, if respondent fails to prove the

validity of both the divorce and the marriage,

not upon the weakness of the opponents

defense. x x x

the applicable provision would be Article 148 of

In

the Family Code which has filled the hiatus in

respondents legal capacity to file the subject

Article 144 of the Civil Code by expressly

petition for letters of administration may arise

regulating the property relations of couples

from her status as the surviving wife of

living together as husband and wife but are

Felicisimo or as his co-owner under Article 144

In Saguid v. Court of

of the Civil Code or Article 148 of the Family

incapacitated to marry.
Appeals,

79

78

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:

view

81

of

the

foregoing,

we

find

that

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

The regime of limited co-ownership of property

motion to dismiss and its October 24, 1994

governing the union of parties who are not

Order which dismissed petitioners motion for

legally capacitated to marry each other, but who

reconsideration is AFFIRMED. Let this case be

nonetheless live together as husband and wife,

REMANDED to the trial court for further

applies

proceedings.

to

properties

acquired

during

said

cohabitation in proportion to their respective

contributions. Co-ownership will only be up to

SO ORDERED.

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.

Republic
SUPREME
Manila

of

xxxx

SECOND DIVISION

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

G.R. No. 189121

Fernandez, which involved the issue of coownership 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

the

Philippines
COURT

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

Page 11 of 118
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. 88589,1the
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 Pias City are AFFIRMED in toto.2
The Facts
This case started as a Petition for Letters of
Administration of the Estate of Eliseo Quiazon
(Eliseo), filed by herein respondents who are
Eliseos 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 Pias City.3 In her
Petition docketed as SP Proc. No. M-3957, Elise
claims that she is the natural child of Eliseo
having been conceived and born at the time
when her parents were both capacitated to
marry each other. Insisting on the legal capacity
of Eliseo and Lourdes to marry, Elise impugned
the validity of Eliseos marriage to Amelia by
claiming that it was bigamous for having been
contracted during the subsistence of the latters
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

Birth4 signed by Eliseo as her father. In the same

petition, it was alleged that Eliseo left real
properties worth P2,040,000.00 and personal
properties worth P2,100,000.00. In order to
preserve the estate of Eliseo and to prevent the
dissipation of its value, Elise sought her
appointment as administratrix of her late
fathers estate.
Claiming that the venue of the petition was
improperly laid, Amelia, together with her
children, Jenneth and Jennifer, opposed the
issuance of the letters of administration by filing
an
Opposition/Motion
to
Dismiss.5 The
petitioners asserted that as shown by his Death
Certificate, 6 Eliseo was a resident of Capas,
Tarlac and not of Las Pias City, at the time of
his death. Pursuant to Section 1, Rule 73 of the
Revised Rules of Court,7 the petition for
settlement of decedents estate should have been
filed in Capas, Tarlac and not in Las Pias City.
In addition to their claim of improper venue, the
petitioners averred that there are no factual and
legal bases for Elise to be appointed
administratix of Eliseos 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 Pias City, thereby
discrediting the position taken by the petitioners
that Eliseos last residence was in Capas, Tarlac,
as hearsay. The dispositive of the RTC decision
reads:
Having attained legal age at this time and there
being no showing of any disqualification or
incompetence to serve as administrator, let
letters of administration over the estate of the
decedent Eliseo Quiazon, therefore, be issued to
petitioner, Ma. Lourdes Elise Quiazon, after the
approval by this Court of a bond in the amount
of P100,000.00 to be posted by her.9
On appeal, the decision of the trial court was
affirmed in toto in the 28 November 2008

Page 12 of 118
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 Pias City, from 1975
up to the time of Eliseos death in 1992. For
purposes of fixing the venue of the settlement of
Eliseos estate, the Court of Appeals upheld the
conclusion reached by the RTC that the
decedent was a resident of Las Pias City. The
petitioners Motion for Reconsideration was
denied by the Court of Appeals in its
Resolution11 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:

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).

I. THE COURT OF APPEALS GRAVELY

ERRED IN AFFIRMING THAT ELISEO
QUIAZON WAS A RESIDENT OF LAS
PIAS AND THEREFORE, THE PETITION
FOR LETTERS OF ADMINISTRATION WAS
PROPERLY FILED WITH THE RTC OF LAS
PIAS;
The term "resides" connotes ex vi termini "actual
residence" as distinguished from "legal residence
II. THE COURT OF APPEALS GRAVELY or domicile." This term "resides," like the terms
ERRED IN DECLARING THAT AMELIA "residing" and "residence," is elastic and should
GARCIA-QUIAZON WAS NOT LEGALLY be interpreted in the light of the object or
MARRIED TO ELISEO QUIAZON DUE TO purpose of the statute or rule in which it is
PREEXISTING MARRIAGE; AND
employed. In the application of venue statutes
and rules Section 1, Rule 73 of the Revised
III.
THE
COURT
OF
APPEALS Rules of Court is of such nature residence
OVERLOOKED THE FACT THAT ELISE rather than domicile is the significant
QUIAZON HAS NOT SHOWN ANY factor.13 Even where the statute uses word
INTEREST IN THE PETITION FOR "domicile" still it is construed as meaning
LETTERS OF ADMINISTRATION.12
residence and not domicile in the technical
sense.14 Some cases make a distinction between
The Courts Ruling
the terms "residence" and "domicile" but as
generally used in statutes fixing venue, the
We find the petition bereft of merit.
terms are synonymous, and convey the same
meaning as the term "inhabitant."15 In other
words, "resides" should be viewed or understood

Page 13 of 118
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 persons actual residence or place of
abode, provided he resides therein with
continuity and consistency.19
Viewed in light of the foregoing principles, the
Court of Appeals cannot be faulted for affirming
the ruling of the RTC that the venue for the
settlement of the estate of Eliseo was properly
laid in Las Pias City. It is evident from the
records that during his lifetime, Eliseo resided at
No. 26 Everlasting Road, Phase 5, Pilar Village,
Las Pias City. For this reason, the venue for the
settlement of his estate may be laid in the said
city.
In opposing the issuance of letters of
administration, the petitioners harp on the entry
in Eliseos 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
decedents 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
Amelias marriage to Eliseo as void ab initio. In a
void marriage, it was though no marriage has
taken place, thus, it cannot be the source of
rights. Any interested party may attack the
marriage directly or collaterally. A void marriage
can be questioned even beyond the lifetime of the
parties to the marriage.22 It must be pointed out
that at the time of the celebration of the
marriage of Eliseo and Amelia, the law in effect
was the Civil Code, and not the Family Code,
making
the
ruling
in
Nial
v.
Bayadog23 applicable four-square to the case at
hand. In Nial, the Court, in no uncertain terms,
allowed therein petitioners to file a petition for
the declaration of nullity of their fathers
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 Nial that in a void
marriage, no marriage has taken place and it
cannot be the source of rights, such that any
interested party may attack the marriage directly
or collaterally without prescription, which may
be filed even beyond the lifetime of the parties to
the marriage.25

Page 14 of 118
Relevant to the foregoing, there is no doubt that
Elise, whose successional rights would be
prejudiced by her fathers 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
Eliseos marriage to Amelia, we now proceed to
determine whether or not the decedents
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 Eliseos
marriage was solemnized, the inescapable
conclusion is that the latter marriage is
bigamous and, therefore, void ab initio.27

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

Neither are we inclined to lend credence to the administration. A petition for letters of
petitioners contention that Elise has not shown administration must be filed by an interested

Page 15 of 118
person and must show, so far as known to the WHEREFORE, premises considered, the petition
petitioner:
is DENIED for lack of merit. Accordingly, the
Court of Appeals assailed 28 November 2008
(a) The jurisdictional facts;
Decision and 7 August 2009 Resolution, arc
AFFIRMED in toto.
(b) The names, ages, and residences of the
heirs, and the names and residences of SO ORDERED.
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.

SECOND DIVISION

But no defect in the petition shall render void the

EDUARDO G. AGTARAP,
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
Eliseos 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 decedents 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 Eliseos estate as one of his
natural children, Elise can rightfully be
considered as an interested party within the
purview of the law.

Petitioner,

- versus -

SEBASTIAN AGTARAP, JOSEPH AGTARAP,

TERESA AGTARAP, WALTER DE SANTOS, and
ABELARDO DAGORO,
Respondents.

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

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

Page 16 of 118
x--------------------------------------------------x

by Transfer Certificates of Title (TCT) Nos. 873(38254) and 874-(38255). Joseph, a grandson of
Joaquin, had been leasing and improving the

DECISION

said realties and had been appropriating for

himself P26,000.00 per month since April 1994.

NACHURA, J.:
Before us are the consolidated petitions for

Eduardo further alleged that there was an

review on certiorari of petitioners Sebastian G.

imperative need to appoint him as special

Agtarap (Sebastian)[1] and Eduardo G. Agtarap

administrator to take possession and charge of

(Eduardo),[2]

dated

the estate assets and their civil fruits, pending

November 21, 2006[3] and the Resolution dated

the appointment of a regular administrator. In

March 27, 2007[4] of the Court of Appeals (CA)

addition, he prayed that an order be issued (a)

in CA-G.R. CV No. 73916.

confirming and declaring the named compulsory

assailing

the

Decision

heirs of Joaquin who would be entitled to

participate in the estate; (b) apportioning and

The antecedent facts and proceedings

allocating unto the named heirs their aliquot

shares in the estate in accordance with law; and

On September 15, 1994, Eduardo filed with the

Regional Trial Court (RTC), Branch 114, Pasay
City, a verified petition for the judicial settlement

(c) entitling the distributees the right to receive

and enter into possession those parts of the
estate individually awarded to them.

of the estate of his deceased father Joaquin

Agtarap (Joaquin). It was docketed as Special
Proceedings No. 94-4055.

On September 26, 1994, the RTC issued an

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

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

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.

three

childrenJesus (died without issue), Milagros,

Joseph,

and Jose (survived by three children, namely,

answer/opposition. They alleged that the two

Gloria,[6]

Joaquin

subject lots belong to the conjugal partnership

married Caridad on February 9, 1926. They also

of Joaquin with Lucia, and that, upon Lucias

had three childrenEduardo, Sebastian, and

death in April 1924, they became the pro

Mercedes (survived by her daughter Cecile). At

indiviso owners of the subject properties. They

the time of his death, Joaquin left two parcels of

said that their residence was built with the

land with improvements in Pasay City, covered

exclusive money of their late father Jose, and

Joseph,

and

Teresa[7]).

Gloria,

and

Teresa

filed

their

Page 17 of 118
the expenses of the extensions to the house

JOAQUIN AGTARAP is now consequently ripe for

were shouldered by Gloria and Teresa, while the

distribution

restaurant (Manongs Restaurant) was built with

surviving spouse Caridad Garcia who died on

the exclusive money of Joseph and his business

August 25, 1999.

among

the

heirs

minus

the

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.

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

On February 16, 1995, the RTC issued a

second marriage and the compulsory heirs

resolution

thereunder.

appointing

Eduardo

as

regular

administrator of Joaquins estate. Consequently,

it issued him letters of administration.

The Administrator, Eduardo Agtarap rendered a

true and just accounting of his administration

On September 16, 1995, Abelardo Dagoro filed

from his date of assumption up to the year

an

that

ending December 31, 1996 per Financial and

Mercedes is survived not only by her daughter

Accounting Report dated June 2, 1997 which

Cecile, but also by him as her husband. He also

was approved by the Court. The accounting

averred that there is a need to appoint a special

report included the income earned and received

administrator to the estate, but claimed that

for the period and the expenses incurred in the

Eduardo is not the person best qualified for the

administration, sustenance and allowance of the

task.

widow. In accordance with said Financial and

answer

in

intervention,

alleging

Accounting Report which was duly approved by

After the parties were given the opportunity to
be

heard

and

to

submit

their

respective

proposed projects of partition, the RTC, on

this Court in its Resolution dated July 28, 1998

the

deceased

JOAQUIN

AGTARAP

left

real

properties consisting of the following:

October 23, 2000, issued an Order of Partition,

[8] with the following disposition

I LAND:

In the light of the filing by the heirs of their

Two lots and two buildings with one garage

respective proposed projects of partition and the

quarter located at #3030 Agtarap St., Pasay

payment of inheritance taxes due the estate as

City, covered by Transfer Certificate of Title Nos.

early as 1965, and there being no claim in Court

38254 and 38255 and registered with the

against the estate of the deceased, the estate of

Page 18 of 118
Registry of Deeds of Pasay City, Metro Manila,

increments

thereof

accruing

after

the

described as follows:

Accounting Report of December 31, 1996, after

deducting therefrom the compensation of the

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

AMOUNT
38254

745-B-1

1,335

sq.

m.

P5,000.00

1,331

sq.

m.

P5,000.00

P6,675,000.00
38255

745-B-2

P6,655,000.00
TOTAL------------------------------------------------------------P13,330,000.00

(Lot

II

(Lot

745-B-1)

745-B-2)

----------------------------- 320,000.00
Building

TOTAL ESTATE P14,177,500.00

CARIDAD

AGTARAP

of

the

estate

as

her

conjugal share P7,088,750.00, the other half of

P7,088,750.00

to

be

divided

among

the

compulsory heirs as follows:

2) MILAGROS (deceased) - P1,181,548.30

------------------------------ P350,000.00
BUILDING

Court, are hereby ordered distributed as follows:

1) JOSE (deceased) - P1,181,548.30

II BUILDINGS AND IMPROVEMENTS:

BUILDING

administrator and other expenses allowed by the

3) MERCEDES (deceased) - P1,181,548.30

4) SEBASTIAN - P1,181,548.30
5) EDUARDO - P1,181,548.30
6) CARIDAD - P1,181,548.30

Improvements

-------------------------------------- 97,500.00

The share of Milagros Agtarap as compulsory

Restaurant

heir in the amount of P1,181,548.30 and who

------------------------------------------------------

died in 1996 will go to Teresa Agtarap and

80,000.00

Joseph Agtarap, Walter de Santos and half

brothers Eduardo and Sebastian Agtarap in

TOTAL
---------------------------------------------------------

equal proportions.

P847,500.00
TERESA AGTARAP - P236,291.66
TOTAL

NET

WORTH

----------------------------------------P14,177,500.00

WHEREFORE, the net assets of the estate of the

JOSEPH AGTARAP - P236,291.66

WALTER DE SANTOS - P236,291.66
SEBASTIAN AGTARAP - P236,291.66
EDUARDO AGTARAP - P236,291.66

late JOAQUIN AGTARAP with a total value of

P14,177,500.00, together with whatever interest

Jose Agtarap died in 1967. His compulsory heirs

from bank deposits and all other incomes or

are as follows:

Page 19 of 118

COMPULSORY HEIRS:
1)

GLORIA (deceased) represented by Walter

de Santos

c) EDUARDO AGTARAP - P1,181,458.38 as

compulsory heir
P 236,291.66 share from Milagros

- P295,364.57
2)

JOSEPH AGTARAP - P295,364.57

3)

TERESA AGTARAP - P295,364.57

4)

PRISCILLA AGTARAP - P295,364.57

Hence,

Priscilla

Agtarap

will

b) SEBASTIAN AGTARAP - P1,181,458.38 as

compulsory heir
P 236,291.66 share from Milagros

inherit

P295,364.57.

d) MERCEDES - as represented by Abelardo

Dagoro as the
surviving spouse of a compulsory heir
P1,181,458.38
REMAINING HEIRS OF CARIDAD AGTARAP:

receive the total amount of:

1)
SEBASTIAN AGTARAP
2)
EDUARDO AGTARAP
MERCEDES AGTARAP (Predeceased Caridad
Agtarap)

HEIRS OF THE FIRST MARRIAGE:

In sum, Sebastian Agtarap

Agtarap stand to inherit:

Adding their share from Milagros Agtarap, the

following heirs of the first marriage stand to

1)
JOSEPH AGTARAP - P236,291.66 share
from Milagros Agtarap
P295,364.57 as compulsory heir of
P531,656.23 Jose Agtarap
2)
TERESA AGTARAP - P236,291.66 share
from Milagros Agtarap
P295,364.57 as compulsory heir of
P531,656.23 Jose Agtarap
3) WALTER DE SANTOS - P236,291.66 share
from Milagros Agtarap
P295,364.57 as compulsory heir of
P531,656.23 Jose Agtarap
HEIRS OF THE SECOND MARRIAGE:
a) CARIDAD AGTARAP - died on August 25,
1999
P7,088,750.00 - as conjugal share
P1,181,458.30 - as compulsory heir
Total of P8,270,208.30

and

Eduardo

SEBASTIAN P4,135,104.10 share from Caridad

Garcia
P1,181,458.30 as compulsory heir
P 236,291.66 share from Milagros
P5,522,854.06
EDUARDO P4,135,104.10 share from Caridad
Garcia
P1,181,458.30 as compulsory heir
P 236,291.66 share from Milagros
P5,522,854.06
SO ORDERED.[9]
Eduardo, Sebastian, and oppositors Joseph and
Teresa filed their respective motions for
reconsideration.
On August 27, 2001, the RTC issued a
resolution[10]
denying
the
motions
for
reconsideration of Eduardo and Sebastian, and
granting that of Joseph and Teresa. It also

Page 20 of 118
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 - of the property. But since she
is deceased, her share shall be inherited by
Joaquin, Jesus, Milagros and Jose in equal
shares.
Joaquin Agtarap - of the property and of the
other half of the property which pertains to
Lucia Mendiettas share.
Jesus Agtarap - of Lucia Mendiettas share. But
since he is already deceased (and died without
issue), his inheritance shall, in turn, be
acquired by Joaquin Agtarap.
Milagros Agtarap - of Lucia Mendiettas 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 - of Lucia Mendiettas 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

Agtaraps

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

Page 21 of 118
by

his

wife

Priscilla,

and

children

Gloria

3. The Court of Appeals erred in allowing

(represented by her husband Walter de Santos

violation of the law and in not applying the

and her daughter Samantha), Joseph Agtarap

doctrines of collateral attack, estoppel, and res

and Teresa Agtarap in equal shares.

judicata.[13]

Mercedes Agtarap - 1/6 of the estate. But since

G.R. No. 177099

she died in 1984, her inheritance shall be

acquired by her husband Abelardo Dagoro and
her daughter Cecile in equal shares.

THE COURT OF APPEALS (FORMER TWELFTH

DIVISION) DID NOT ACQUIRE JURISDICTION
OVER THE ESTATE OF MILAGROS G. AGTARAP

Sebastian Agtarap - 1/6 of the estate.

AND

ERRED

INHERITANCE
Eduardo Agtarap - 1/6 of the estate.

IN

DISTRIBUTING

FROM

THE

ESTATE

HER
OF

JOAQUIN AGTARAP NOTWITHSTANDING THE

EXISTENCE

OF

HER

LAST

WILL

AND

TESTAMENT IN VIOLATION OF THE DOCTRINE

SO ORDERED.[11]

Aggrieved, Sebastian and Eduardo filed their

OF PRECEDENCE OF TESTATE PROCEEDINGS

OVER INTESTATE PROCEEDINGS.

respective motions for reconsideration.

II.

In its Resolution dated March 27, 2007, the CA

THE COURT OF APPEALS (FORMER TWELFTH

denied both motions. Hence, these petitions

ascribing to the appellate court the following
errors:

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

G.R. No. 177192

PARCELS OF LAND COVERED BY TCT NO.

38254

1. The Court of Appeals erred in not considering

the aforementioned important facts[12] which
alter its Decision;

AND

TCT

the necessity of hearing the issue of legitimacy

of respondents as heirs;

38255

OF

THE

REGISTRY OF DEEDS FOR THE CITY OF

PASAY

BELONG

PARTNERSHIP
MARRIED

TO

TO

THE

OF

JOAQUIN

LUCIA

GARCIA

NOTWITHSTANDING
2. The Court of Appeals erred in not considering

(NO.)

THEIR

CONJUGAL
AGTARAP
MENDIETTA

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

Page 22 of 118
DETERMINE

THE

THE

married to Caridad Garcia, and as such are

THESE

conclusive proof of their ownership thereof, and

CERTIFICATES OF TITLE WHICH SHOULD BE

thus, they are not subject to collateral attack,

RESOLVED IN AN APPROPRIATE SEPARATE

but should be threshed out in a separate

ACTION FOR A TORRENS TITLE UNDER THE

proceeding for that purpose. He likewise argues

LAW IS ENDOWED WITH INCONTESTABILITY

that estoppel applies against the children of the

UNTIL IT HAS BEEN SET ASIDE IN THE

first marriage, since none of them registered any

MANNER INDICATED IN THE LAW ITSELF.[14]

objection to the issuance of the TCTs in the

PROPERTY

OWNERSHIP

DESCRIBED

OF

IN

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

As regards his first and second assignments of

inheritance tax by Milagros, Joseph, and Teresa,

error, Sebastian contends that Joseph and

resulting to the issuance of TCT No. 8925 in

Teresa failed to establish by competent evidence

Milagros name and of TCT No. 8026 in the

that they are the legitimate heirs of their father

names of Milagros and Jose. He also alleges that

Jose, and thus of their grandfather Joaquin. He

res judicata is applicable as the court order

draws attention to the certificate of title (TCT No.

directing the deletion of the name of Lucia, and

8026) they submitted, stating that the wife of

replacing it with the name of Caridad, in the

their father Jose is Presentacion Garcia, while

TCTs had long become final and executory.

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

Joses

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.

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

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
Joaquins estate. He states that this violated the
rule on precedence of testate over intestate
proceedings.

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,

Anent his second assignment of error, Eduardo

contends that the CA gravely erred when it

Page 23 of 118
affirmed that the bulk of the realties subject of

properties is to determine whether or not they

this case belong to the first marriage of Joaquin

should

to Lucia, notwithstanding that the certificates of

properties

title were registered in the name of Joaquin

administrator. If there is no dispute, there poses

Agtarap casado con (married to) Caridad Garcia.

no problem, but if there is, then the parties, the

According to him, the RTC, acting as an

administrator, and the opposing parties have to

intestate court with limited jurisdiction, was not

resort to an ordinary action before a court

vested

exercising

with

determine

the

power

questions

of

and

authority

ownership,

to

which

be

included
to

be

general

in

the

inventory

administered

jurisdiction

of

by

for

the

final

determination of the conflicting claims of title.

properly belongs to another court with general

jurisdiction.

However,

this

general

rule

as

justified

by

exceptions

is

subject

expediency

to
and

convenience.
The Courts Ruling

First, the probate court may provisionally pass

upon in an intestate or a testate proceeding the

As to Sebastians and Eduardos 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.

question of inclusion in, or exclusion from, the

inventory

of

piece

of

property

without

prejudice to the final determination of ownership

in

separate

action.[18]

Second,

if

the

interested parties are all heirs to the estate, or

the question is one of collation or advancement,

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 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]

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

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

Page 24 of 118
are conjugal is but collateral to the probate

It is worthy to note that TCT No. 5577 (32184)

courts

contained an annotation, which reads

jurisdiction

to

settle

the

estate

of

Joaquin.
Ap-4966 NOTA: Se ha enmendado el presente
It should be remembered that when Eduardo

certificado

de

titulo,

tal

filed his verified petition for judicial settlement

tanchando

las

palabras

of Joaquins estate, he alleged that the subject

Mendiet[t]a y poniendo en su lugar, entre lineas

properties were owned by Joaquin and Caridad

y en tinta encarnada, las palabras en segundas

since the TCTs state that the lots were registered

nupcias con Caridad Garcia, en complimiento de

in the name of Joaquin Agtarap, married to

un orden de fecha 28 de abril de 1937, dictada

Caridad Garcia. He also admitted in his petition

por el Hon. Sixto de la Costa, juez del Juzgado

that Joaquin, prior to contracting marriage with

de Primera Instancia de Rizal, en el expediente

Caridad, contracted a first marriage with Lucia.

cadastal No. 23, G.L.R.O. Cad. Record No. 1368;

Oppositors to the petition, Joseph and Teresa,

copia de cual orden has sido presentada con el

however, were able to present proof before the

No. 4966 del Libro Diario, Tomo 6.0 y, archivada

RTC that TCT Nos. 38254 and 38255 were

en el Legajo T-No. 32184.

con

como
Lucia

aparece,
Garcia

derived from a mother title, TCT No. 5239, dated

March 17, 1920, in the name of FRANCISCO
VICTOR BARNES Y JOAQUIN AGTARAP, el

Pasig, Rizal, a 29 abril de 1937.[23]

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.

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 Caridads name in
TCT No. 32184, Lucia, upon her demise, already
left, as her estate, one-half (1/2) conjugal share
in TCT No. 32184. Lucias 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

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.

compulsory heirs Joaquin, Jesus, Milagros, and

Jose.

Page 25 of 118
Section 2, Rule 73 of the Rules of Court provides

name of Joaquin Agtarap, married to Caridad

that when the marriage is dissolved by the

Garcia, is not sufficient proof that the properties

death

the

were acquired during the spouses coverture.[27]

inventoried,

The phrase married to Caridad Garcia in the

administered, and liquidated, and the debts

TCTs is merely descriptive of the civil status of

thereof

intestate

Joaquin as the registered owner, and does not

proceedings of the deceased spouse, and if both

necessarily prove that the realties are their

spouses have died, the conjugal partnership

conjugal properties.[28]

of

the

community

husband

property

paid;

in

or

shall

the

the
be

testate

wife,

or

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

settlement

proceeding

for

the

intestate estate of Lucia, the same should be

consolidated with the settlement proceedings of

Neither can Sebastians claim that Joaquins

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

Joaquin, being Lucias spouse.[24] Accordingly,

SECTION 1. When order for distribution of

the CA correctly distributed the estate of Lucia,

residue made. -- When the debts, funeral

with respect to the properties covered by TCT

charges, and expenses of administration, the

Nos. 38254 and 38255 subject of this case, to

allowance to the widow, and inheritance tax, if

her compulsory heirs.

any, chargeable to the estate in accordance with

law,

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 holders true
ownership of property.[25] A certificate of title
under the Torrens system aims to protect

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.

dominion; it cannot be used as an instrument

for the deprivation of ownership.[26] Thus, the

No distribution shall be allowed until the

fact that the properties were registered in the

payment of the obligations above mentioned has

Page 26 of 118
been

made

or

provided

for,

unless

the

likewise noted that, on September 16, 1995,

distributees, or any of them, give a bond, in a

Abelardo Dagoro filed a motion for leave of court

sum to be fixed by the court, conditioned for the

to intervene, alleging that he is the surviving

payment of said obligations within such time as

spouse of Mercedes Agtarap and the father of

the court directs.

Cecilia Agtarap Dagoro, and his answer in

intervention. The RTC later granted the motion,

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,

Sebastians

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

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 Eduardos
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
Joaquins

compulsory

heirs,

Gloria

and

Mercedes, respectively.[33]

This

Court

also

differs

from

Eduardos

asseveration that the CA erred in settling,

together with Joaquins 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,

Page 27 of 118
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
Joaquins estate, they being his legal 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

However, we agree with Eduardos position that

the CA erred in distributing Joaquins estate
pertinent to the share allotted in favor of
Milagros. Eduardo was able to show that a
separate proceeding was instituted for the
probate of the will allegedly executed by Milagros

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.

before the RTC, Branch 108, Pasay City.[34]

While there has been no showing that the
alleged will of Milagros, bequeathing all of her
share from Joaquins estate in favor of Eduardo,
has

already

been

probated

and

approved,

prudence dictates that this Court refrain from

distributing Milagros share in Joaquins estate.

It is also worthy to mention that Sebastian died

These

cases

are

hereby

remanded

to

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.

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.

Republic of the Philippines

SUPREME COURT

Agtarap Panlilio (Ana Ma.).

Manila

Henceforth, in light of the foregoing, the assailed

SECOND SPECIAL DIVISION

November 21, 2006 Decision and the March 27,

2007 Resolution of the CA should be affirmed
with modifications such that the share of

G.R. No. 183053

October 10, 2012

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.

the

EMILIO A.M. SUNTAY III, Petitioner,

vs.

Page 28 of 118
ISABEL COJUANGCO-SUNTAY, Respondent.

parties, and all other persons with legal interest

in the subject estate. It is further directed to
settle the estate of decedent Cristina Aguinaldo-

RESOLUTION

Suntay with dispatch. No costs.3

PEREZ, J.:

We

are

moved

to

trace

to

its

roots

the

controversy between the parties.

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.

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

Before us is a Motion for Reconsideration filed

by

respondent

Isabel

Cojuangco-Suntay

(respondent Isabel) of our Decision2 in G.R. No.

183053 dated 16 June 2010, directing the

illegitimate grandchildren, including petitioner

Emilio III, all by Federicos and Cristinas only
child,

Emilio

A.

Suntay

(Emilio

I),

who

predeceased his parents.

issuance of joint letters of administration to both

petitioner Emilio A.M. Suntay III (Emilio III) and
respondent.

The

dispositive

portion

thereof

reads:

The illegitimate grandchildren, Emilio III and

Nenita, were both reared from infancy by the
spouses Federico and Cristina. Their legitimate
grandchildren,

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,

Isabel

and

her

siblings,

Margarita and Emilio II, lived with their mother

Isabel Cojuangco, following the separation of
Isabels parents, Emilio I and Isabel Cojuangco.
Isabels

parents,

grandparents,

along

were

with

involved

her

paternal

in

domestic

relations cases, including a case for parricide

filed by Isabel Cojuangco against Emilio I. Emilio
I was eventually acquitted.

Malolos,

Bulacan, in Special Proceeding Case No. 117-M95. 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

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:

Page 29 of 118
There is a dearth of proof at the time of the
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.

marriage defendant knew about the mental

condition of plaintiff; and there is proof that
plaintiff continues to be without sound reason.
The

charges

emphasis

in

to

this

the

very

findings

complaint
of

the

add

neuro-

psychiatrist handling the patient, that plaintiff

really lives more in fancy than in reality, a
strong indication of schizophernia (sic).4

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.

Intent on maintaining a relationship with their

grandchildren,

Federico

and

Isabel

filed

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
reduced

rights
to

which

thirty

because

was

minutes,
of

subsequently

and

ultimately

There is no controversy that the marriage

stopped,

respondent

Isabels

between the parties was effected on July 9,

testimony in court that her grandparents visits

1958, years after plaintiffs mental illness had

caused her and her siblings stress and anxiety.5

set in. This fact would justify a declaration of

nullity of the marriage under Article 85 of the
Civil Code which provides:

On 27 September 1993, more than three years

after Cristinas death, Federico adopted his
illegitimate grandchildren, Emilio III and Nenita.

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

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

On 26 October 1995, respondent Isabel, filed

before the Regional Trial Court (RTC), Malolos,
Bulacan, a petition for the issuance of letters of

xxxx

administration over Cristinas estate docketed as

Special

(3) That either party was of unsound mind,

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

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
decedents estate; (2) as part owner of the mass
of conjugal properties left by the decedent, he
must

be

accorded

preference

in

the

Page 30 of 118
administration

thereof;

siblings

been

had

(3)

Isabel

alienated

and

her

from

their

administer

and

manage

the

estate

of

the

decedent, Cristina.

grandparents for more than thirty (30) years; (4)

the enumeration of heirs in the petition was
incomplete as it did not mention the other

On 13 November 2000, Federico died.

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 decedents estate; (6) the probable value of
the estate as stated in the petition was grossly

Almost a year thereafter or on 9 November 2001,

the trial court rendered a decision appointing
Emilio III as administrator of decedent Cristinas
intestate estate:

overstated; and (7) Isabels allegation that some

of the properties are in the hands of usurpers is
untrue.

WHEREFORE, the petition of Isabel CojuangcoSuntay is DENIED and the Opposition-inIntervention is GRANTED.

Federico filed a Motion to Dismiss Isabels

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

Isabels

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

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 P 200,000.00, conditioned as follows:

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

a true and complete inventory;

the Civil Code, were legitimate children of Emilio

I, who can all represent him in the estate of
their legitimate grandmother, the decedent,
Cristina.

Emilio III to administer the decedents estate on

his behalf in the event letters of administration
issues to Federico. Consequently, Emilio III filed
Opposition-In-Intervention,

allegations

in

his

echoing

grandfathers

better

equipped

than

opposition,

respondent

(3) To render a true and just account within one

(1) year, and at any other time when required by
the court, and

the

alleging that Federico, or in his stead, Emilio III,

was

discharge all debts, legatees, and charge on the

same, or dividends thereon;

Undaunted by the set back, Federico nominated

an

(2) To administer the estate and to pay and

to

(4) To perform all orders of the Court.

Page 31 of 118
Once the said bond is approved by the court, let

2. Federico claimed half of the properties

Letters of Administration be issued in his favor.6

included in the estate of the decedent, Cristina,

as forming part of their conjugal partnership of

On appeal, the Court of Appeals reversed and

gains during the subsistence of their marriage;

set aside the decision of the RTC, revoked the

Letters of Administration issued to Emilio III,

3. Cristinas properties, forming part of her

and appointed respondent as administratrix of

estate, are still commingled with those of her

the subject estate:

husband, Federico, because her share in the

conjugal partnership remains undetermined and

WHEREFORE, in view of all the foregoing, the

unliquidated; and

assailed decision dated November 9, 2001 of

Branch 78, Regional Trial Court of Malolos,

4. Emilio III is a legally adopted child of

Bulacan in SPC No. 117-M-95 is REVERSED

Federico, entitled to share in the distribution of

and SET ASIDE and the letters of administration

the latters estate as a direct heir, one degree

issued by the said court to Emilio A.M. Suntay

from Federico, and not simply in representation

III, if any, are consequently revoked. Petitioner

of his deceased illegitimate father, Emilio I.

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 (P
200,000.00) Pesos.7

As

previously

adverted

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.

to,

on

appeal

by

certiorari, we reversed and set aside the ruling

of the appellate court. We decided to include
Emilio

In this motion, Isabel pleads for total affirmance

III as co-administrator of Cristinas

estate, giving weight to his interest in Federicos

estate. In ruling for co-administration between
Emilio III and

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

Isabel, we considered that:

a co-administrator thereof.

1. Emilio III was reared from infancy by the

Specifically, Isabel bewails that: (1) Emilio III is

decedent, Cristina, and her husband, Federico,

an illegitimate grandchild and therefore, not an

who both acknowledged him as their grandchild;

heir of the decedent; (2) corollary thereto, Emilio

III, not being a "next of kin" of the decedent, has

Page 32 of 118
no

interest

in

the

estate

to

justify

his

appointment as administrator thereof; (3) Emilio

IIIs

actuations

since

his

appointment

demonstrate

the

validity

appointed, if competent and willing to serve;

as

administrator by the RTC on 9 November 2001

emphatically

husband or wife, or next of kin, requests to have

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."

(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

To begin with, the case at bar reached us on the

other person, it may be granted to one or more

issue of who, as between Emilio III and Isabel, is

of the principal creditors, if competent and

better qualified to act as administrator of the

willing to serve;

decedents

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-

(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.

administrator. In the context of this case, we

have to make a choice and therefore, reconsider
our decision of 16 June 2010.

Textually, the rule lists a sequence to be

observed,

an

order

of

preference,

in

the

appointment of an administrator. This order of

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.

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
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:

The

paramount

consideration

in

the

appointment of an administrator over the estate

of a decedent is the prospective administrators
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

(a) To the surviving husband or wife, as the case

for the estate. The rationale behind the rule is

may be, or next of kin, or both, in the discretion

that those who will reap the benefit of a wise,

of the court, or to such person as such surviving

speedy and economical administration of the

estate,

or,

in

the

alternative,

suffer

the

Page 33 of 118
consequences

of

waste,

improvidence

or

In a number of cases, we have sanctioned the

mismanagement, have the highest interest and

appointment of more than one administrator for

most influential motive to administer the estate

the benefit of the estate and those interested

correctly.10 In all, given that the rule speaks of

therein.13 We recognized that the appointment

an order of preference, the person to be

of administrator of the estate of a decedent or

appointed administrator of a decedents estate

the determination of a persons suitability for

must demonstrate not only an interest in the

the office of judicial administrator rests, to a

estate, but an interest therein greater than any

great extent, in the sound judgment of the court

other candidate.

exercising the power of appointment.14

To illustrate, the preference bestowed by law to

Under certain circumstances and for various

the surviving spouse in the administration of a

reasons well-settled in Philippine and American

decedents estate presupposes the surviving

jurisprudence, we have upheld the appointment

spouses interest in the conjugal partnership or

of co-administrators: (1) to have the benefits of

community

property

forming

part

their judgment and perhaps at all times to have

decedents

estate.11

Likewise,

of

the

surviving

different

interests

represented;15

(2)

where

spouse is a compulsory heir of a decedent12

justice and equity demand that opposing parties

which evinces as much, if not more, interest in

or factions be represented in the management of

administering the entire estate of a decedent,

the estate of the deceased; (3) where the estate

aside from her share in the conjugal partnership

is large or, from any cause, an intricate and

or absolute community property.

perplexing one to settle;16 (4) to have all

interested

It is to this requirement of observation of the

order of preference in the appointment of
administrator of a decedents estate, that the
appointment

of

co-administrators

has

been

allowed, but as an exception. We again refer to

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

Section 6(a) of Rule 78 of the Rules of Court

which

specifically

states

that

letters

of

In the frequently cited Matias v. Gonzales, we

administration may be issued to both the

dwelt

surviving spouse and the next of kin. In addition

administrators during the pendency of the

and impliedly, we can refer to Section 2 of Rule

appeal for the probate of the decedents will.

82 of the Rules of Court which say that "x x x

Pending the probate thereof, we recognized

when an executor or administrator dies, resigns,

Matias special interest in the decedents estate

or is

or

as universal heir and executrix designated in

administrator may administer the trust alone, x

the instrument who should not be excluded in

x x."

the administration thereof. Thus, we held that

removed,

the

remaining

executor

on

the

appointment

of

special

co-

justice and equity demands that the two (2)

factions among the non-compulsory heirs of the

Page 34 of 118
decedent,
(Matias)
thereat),

consisting
and

of

intestate

should

be

an

instituted

heirs

heir

As decided by the lower court and sustained by

(respondents

the Supreme Court, Mercedes and Gregoria

represented

in

the

management of the decedents estate.19

Ventura are the legitimate children of Gregorio

Ventura

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. Ventura21 where we
allowed the appointment of the surviving spouse
and legitimate children of the decedent as coadministrators. However, we drew a distinction
between the heirs categorized as next of kin, the
nearest of kin in the category being preferred,
thus:

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 childs appointment

In the case at bar, the surviving spouse of the

as special administrator, and eventually as

deceased Gregorio Ventura is Juana Cardona

regular administrator, of the decedents estate as

while the next of kin are: Mercedes and Gregoria

against the surviving spouse who the lower

Ventura and Maria and Miguel Ventura. The

court found unsuitable. Reiterating Sioca v.

"next of kin" has been defined as those persons

Garcia24 as good law, we pointed out that

who

unsuitableness

are

entitled

under

the

statute

of

for

appointment

as

distribution to the decedents property (citations

administrator may consist in adverse interest of

omitted). It is generally said that "the nearest of

some kind or hostility to those immediately

kin, whose interest in the estate is more

interested in the estate.

preponderant, is preferred in the choice of

In Valarao v. Pascual,25 we see another story

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)

with a running theme of heirs squabbling over

the estate of a decedent. We found no reason to
set aside the probate courts 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 Diazs being remiss in

Page 35 of 118
his previous duty as co-administrator of the

In Corona we gave "highest consideration" to the

estatein the early part of his administration.

"executrix's choice of Special Administrator,

Surveying the previously discussed cases of

considering her own inability to serve and the

Matias, Corona, and Vda. de Dayrit, we clarified,

wide latitude of discretion given her by the

thus:

testatrix in her will," for this Court to compel

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

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."

just one but also two or more special co-

Finally in Vda. de Dayrit we justified the

administrators for a single estate. Now whether

designation of the wife of the decedent as special

the probate court exercises such prerogative

co-administrator because it was "our considered

when the heirs are fighting among themselves is

opinion that inasmuch as petitioner-wife owns

a matter left entirely to its sound discretion.

one-half of the conjugal properties and that she,

Furthermore, the cases of Matias, Corona and

Vda.

de

Dayrit

circumstances

other

hinge
than

upon
the

factual

incompatible

interests of the heirs which are glaringly absent

from the instant case. In Matias this Court
ordered

the

appointment

of

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.

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

Page 36 of 118
court that "there must be a very strong case to

whether

justify the exclusion of the widow from the

administration is a next of kin or an heir of the

administration."

decedent, the probate court perforce has to

Clearly,

the

selection

of

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

an

applicant

for

letters

of

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

repeatedly urged by respondents.26 (Emphasis

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

supplied)

consideration the size of, and benefits to, the

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
issuance

the
of

order
letters

of

preference

in

of

administration,

the
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

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 IIIs demonstrable interest in the
estate and glossed over the order of preference
set forth in the Rules. We gave weight to Emilio
IIIs demonstrable interest in Cristinas 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.

Subsequently, in Angeles v. Angeles-Maglaya,28

we expounded on the legal contemplation of a

The

"next of kin," thus:

demonstration of interest in the estate to be

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

collected

teaching

is

that

mere

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

Isabels

unassailable

Page 37 of 118
interest in the estate as one of the decedents

Emilio III has turned out to be an unsuitable

legitimate grandchildren and undoubted nearest

administrator of the estate. Respondent Isabel

"next of kin," the appointment of Emilio III as

points out that after Emilio IIIs appointment as

co-administrator of the same estate, cannot be a

administrator of the subject estate in 2001, he

demandable right. It is a matter left entirely to

has not looked after the welfare of the subject

the

estate and has actually acted to the damage and

sound

depends

on

discretion
the

facts

of

the
and

Court32
the

and

attendant

circumstances of the case.33

prejudice thereof as evidenced by the following:

1. Emilio III, despite several orders from the

Thus, we proceed to scrutinize the attendant

probate court for a complete inventory, omitted

facts and circumstances of this case even as we

in the partial inventories34 he filed therewith

reiterate Isabels and her siblings apparent

properties of the estate35 including several

greater interest in the estate of Cristina.

parcels of land, cash, bank deposits, jewelry,

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

shares of stock, motor vehicles, and other

personal properties, contrary to Section 1,36
paragraph a, Rule 81 of the Rules of Court.

compel that a choice be made of one over the

2. Emilio III did not take action on both

other.

occasions against Federicos settlement of the

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

decedents 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

Isabel who is immediately interested in the

estate;

In compliance to our Resolution dated 18 April

2. Corollary thereto, the seeming impossibility of

2012 requiring Emilio III to respond to the

Isabel and Emilio III working harmoniously as

following imputations of Isabel that:

co-administrators may result in prejudice to the

decedents estate, ultimately delaying settlement
thereof; and
3. Emilio III, for all his claims of knowledge in

1. Emilio III did not file an inventory of the

assets until November 14, 2002;

the management of Cristinas estate, has not

looked after the estates welfare and has acted to

2. The inventory Emilio III submitted did not

the damage and prejudice thereof.

include several properties of the decedent;

Contrary

to

the

assumption

made

in

the

Decision that Emilio IIIs demonstrable interest

in

the

estate

makes

him

suitable

co-

administrator thereof, the evidence reveals that

3. That properties belonging to the decedent

have found their way to different individuals or

Page 38 of 118
persons; several properties to Federico Suntay

Mindoro, to warn the prosecutor of a possible

himself; and

motu propio dismissal of the cases.

While we can subscribe to Emilio IIIs counsels

4. While some properties have found their way to

Emilio III, by reason of falsified documents;38

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 decedents estate,

Emilio III refutes Isabels imputations that he

we do not find any clarification on Isabels

was lackadaisical in assuming and performing

accusation that Emilio III had deliberately

the functions of administrator of Cristinas

omitted properties in the inventory, which

estate:

properties of Cristina he knew existed and

which he claims to be knowledgeable about.

1. From the time of the RTCs Order appointing

Emilio

III as administrator, Isabel, in her

The general denial made by Emilio III does not

vigorously

erase his unsuitability as administrator rooted

opposed Emilio IIIs assumption of that office,

in his failure to "make and return x x x a true

arguing that "the decision of the RTC dated 9

and complete inventory" which became proven

November 2001 is not among the judgments

fact when he actually filed partial inventories

authorized by the Rules of Court which may be

before the probate court and by his inaction on

immediately implemented or executed;"

two

pleadings

before

the

RTC,

had

occasions

of

Federicos

exclusion

of

Cristinas other compulsory heirs, herein Isabel

2. The delay in Emilio IIIs filing of an inventory

and her siblings, from the list of heirs.

was due to Isabels vociferous objections to

Emilio IIIs attempts to act as administrator

As administrator, Emilio III enters into the

while the RTC decision was under appeal to the

office, posts a bond and executes an oath to

Court of Appeals;

faithfully discharge the duties of settling the

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 decedents estate, such that it
cannot constitute a complete and total listing of
the decedents properties; and
4. The criminal cases adverted to are trumpedup

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

decedents estate with the end in view of

distribution to the heirs, if any. This he failed to
do. The foregoing circumstances of Emilio IIIs
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

Page 39 of 118
each other.1awp++i1 To our mind, it becomes

and allowance of the Administrators account "to

highly impractical, nay, improbable, for the two

persons interested;"

to

work

as

co-administrators

of

their

grandmothers 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

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

the

decedents 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.

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

Bearing in mind that the issuance of letters of

administration is simply a preliminary order to
facilitate the settlement of a decedents estate,
we here point out that Emilio III is not without

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:

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:

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

xxxx

absconds, or becomes insane, or otherwise

incapable or unsuitable to discharge the trust,

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
decedents title or interest therein;"

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

5. Section 1041 of Rule 85, which requires

notice of the time and place of the examination

person.

Page 40 of 118
deceased person or as to the distributive shares
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

to which each person is entitled under the law,

the controversy shall be heard and decided as in
ordinary cases.

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.

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

Thus, our disquisition in the assailed Decision:

sum to be fixed by the court, conditioned for the

payment of said obligations within such time as
the court directs.45

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.

Lastly, we dispose of a peripheral issue raised in

the Supplemental Comment46 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

Our holding in Capistrano v. Nadurata on the

already promulgated its Decision on 16 June

same issue remains good law:

2010 on the petition filed by him:

The declaration of heirs made by the lower court

7. The question is: who created the Special

is premature, although the evidence sufficiently

Second Division in Baguio, acting separately

shows who are entitled to succeed the deceased.

from the Second Division of the Supreme Court

The estate had hardly been judicially opened,

in Manila? There will then be two Second

and the proceeding has not as yet reached the

Divisions of the Supreme Court: one acting with

stage of distribution of the estate which must

the Supreme Court in Manila, and another

come after the inheritance is liquidated.

Special Second Division acting independently of

the Second Division of the Supreme Court in

Section 1, Rule 90 of the Rules of Court does

Manila.47

not depart from the foregoing admonition:

For Emilio IIIs counsels edification, the Special
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

Second Division in Baguio is not a different

division created by the Supreme Court.

Page 41 of 118
The Second Division which promulgated its

reconsideration or clarification, he or she shall

Decision on this case on 16 June 2010, penned

be replaced through raffle by a replacement

by Justice Antonio Eduardo B. Nachura, now

Member who shall be chosen from the other

has a different composition, with the advent of

Divisions until a new Justice is appointed as

Justice Nachuras retirement on 13 June 2011.

replacement for the retired Justice. Upon the

Section 7, Rule 2 of the Internal Rules of the

appointment of a new Justice, he or she shall

Supreme Court provides:

replace the designated Justice as replacement

Member of the Special Division.

Sec.

7.

Resolutions

of

motions

for

reconsideration or clarification of decisions or

Any vacancy or vacancies in the Special Division

signed resolutions and all other motions and

shall be filled by raffle from among the other

incidents

Members of the Court to constitute a Special

subsequently

filed;

creation

of

Special Division. Motions for reconsideration

Division of five (5) Members.

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 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

If the ponente has retired, is no longer a Member

Members of the Division to which he or she

of the Court, is disqualified, or has inhibited

belongs.

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

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

she shall be designated as the new ponente.

up by the Court. (Emphasis supplied)

If a Member (not the ponente) of the Division

As regards the operation thereof in Baguio City,

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

such is simply a change in venue for the

Supreme Court's summer session held last
April.48

Page 42 of 118
WHEREFORE, the Motion for Reconsideration is

Administratrix, and other persons/ public

PARTIALLY GRANTED. Our Decision in G.R. No.

officers

183053 dated 16 June 2010 is MODIFIED.

Letters of Administration over the estate of

acting

for

and

in

their

behalf,

respondents.

decedent Cristina Aguinaldo-Suntay shall solely

DECISION

issue to respondent Isabel Cojuangco-Suntay

CORONA, J.:

upon payment of a bond to be set by the

Regional

Trial

Court,

Branch

78,

Malolos,

Bulacan, in Special Proceeding Case No. 117-M95. The Regional Trial Court, Branch 78,
Malolos, Bulacan is likewise directed to settle
the estate of decedent Cristina AguinaldoSuntay with dispatch. No costs.

This is a petition for review under Rule 45 of the

Rules of Court seeking to reverse and set aside
the decision[1] of the Court of Appeals, First
Division, dated July 26, 2000, in CA G.R.
59736,

which

dismissed

the

petition

for

certiorari filed by petitioners Jose C. Lee and

Alma Aggabao (in their capacities as president

SO ORDERED.

and

secretary,

International

respectively,

Life

Insurance

of

Philippine

Company)

and

incorporated

the

Filipino Loan Assistance Group.

JOSE PORTUGAL PEREZ

Associate Justice

The antecedent facts follow.

THIRD DIVISION

Dr.

[G.R. No. 146006. February 23, 2004]

Juvencio

Philippine

P.

Ortaez

International

Life

Insurance

Company, Inc. on July 6, 1956. At the time of

the companys incorporation, Dr. Ortaez owned
JOSE C. LEE AND ALMA AGGABAO, in their

ninety percent (90%) of the subscribed capital

capacities

stock.

Secretary,

as

President

and

respectively,

of

Corporate
Philippines

Internationl 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

On July 21, 1980, Dr. Ortaez died. He left

behind a wife (Juliana Salgado Ortaez), three
legitimate children (Rafael, Jose and Antonio
Ortaez) and five illegitimate children by Ligaya
Novicio (herein private respondent Ma. Divina

OF COURT JANICE Y. ANTERO, DEPUTY

Ortaez-Enderes and her siblings Jose, Romeo,

SHERIFFS ADENAUER G. RIVERA and PEDRO

Enrico Manuel and Cesar, all surnamed Ortaez).

L. BORJA, all of the Regional Trial Court of

[2]

Quezon
ENDERES

City

Branch

claiming

85,

MA.

DIVINA

to

be

Special

Page 43 of 118
On September 24, 1980, Rafael Ortaez filed

represented by its president, herein petitioner

before the Court of First Instance of Rizal,

Jose C. Lee. Juliana Ortaez failed to repurchase

Quezon City Branch (now Regional Trial Court

the shares of stock within the stipulated period,

of

thus ownership thereof was consolidated by

Quezon

City)

petition

for

letters

of

administration of the intestate estate of Dr.

petitioner FLAG in its name.

Ortaez, docketed as SP Proc. Q-30884 (which

petition to date remains pending at Branch 85
thereof).

On October 30, 1991, Special Administrator

Jose Ortaez, acting in his personal capacity and
claiming that he owned the remaining 1,011[5]

Private respondent Ma. Divina Ortaez-Enderes

Philinterlife shares of stocks as his inheritance

and her siblings filed an opposition to the

share in the estate, sold said shares with right

petition for letters of administration and, in a

to repurchase also in favor of herein petitioner

subsequent urgent motion, prayed that the

FLAG, represented by its president, herein

intestate court appoint a special administrator.

petitioner Jose C. Lee. After one year, petitioner

FLAG consolidated in its name the ownership of

On March 10, 1982, Judge Ernani Cruz Pao,

then presiding judge of Branch 85, appointed
Rafael

and

Jose

Ortaez

joint

the Philinterlife shares of stock when Jose

Ortaez failed to repurchase the same.

special

administrators of their fathers estate. Hearings

It appears that several years before (but already

continued for the appointment of a regular

during

administrator

proceedings at the Regional Trial Court of

(up

to

now

no

regular

administrator has been appointed).

the

pendency

of

the

intestate

Quezon City, Branch 85), Juliana Ortaez and

her two children, Special Administrators Rafael

As ordered by the intestate court, special

administrators

Rafael

and

Jose

Ortaez

submitted an inventory of the estate of their

father which included, among other properties,
2,029[3]

shares

of

stock

in

Philippine

International Life Insurance Company (hereafter

Philinterlife),

representing

50.725%

of

the

companys outstanding capital stock.

and Jose Ortaez, entered into a memorandum of

agreement

dated

March

4,

1982

for

the

extrajudicial settlement of the estate of Dr.

Juvencio

Ortaez,

partitioning

the

estate

(including the Philinterlife shares of stock)

among themselves. This was the basis of the
number of shares separately sold by Juliana
Ortaez on April 15, 1989 (1,014 shares) and by
Jose Ortaez on October 30, 1991 (1,011 shares)
in favor of herein petitioner FLAG.

On April 15, 1989, the decedents wife, Juliana

S. Ortaez, claiming that she owned 1,014[4]
Philinterlife shares of stock as her conjugal
share in the estate, sold said shares with right
to repurchase in favor of herein petitioner
Filipino

Loan

Assistance

Group

(FLAG),

On July 12, 1995, herein private respondent

Ma. Divina OrtaezEnderes and her siblings
(hereafter referred to as private respondents
Enderes et al.) filed a motion for appointment of

Page 44 of 118
special administrator of Philinterlife shares of
stock. This move was opposed by Special
Administrator Jose Ortaez.

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

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

and passes no title to the purchaser. Since the

sales in question were entered into by Juliana S.
Ortaez and Jose S. Ortaez in their personal
capacity without prior approval of the Court, the
same is not binding upon the Estate.

WHEREFORE, the OMNIBUS MOTION for the

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

motion to declare the partial nullity of the

extrajudicial settlement of the decedents estate.
These

motions

were

opposed

by

Special

Administrator Jose Ortaez.

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

On March 22, 1996, Special Administratrix

Enderes filed an urgent motion to declare void

extrajudicial

partition

of

estate.

The

court

reasoned that:

ab initio the deeds of sale of Philinterlife shares

of stock, which move was again opposed by
Special Administrator Jose Ortaez.

In consonance with the Order of this Court

dated August 11, 1997 DENYING the approval of
the sale of Philinterlife shares of stocks and

On February 4, 1997, Jose Ortaez filed an

omnibus motion for (1) the approval of the deeds
of sale of the Philinterlife shares of stock and (2)
the release of Ma. Divina Ortaez-Enderes as
special administratrix of the Philinterlife shares
of stock on the ground that there were no longer
any shares of stock for her to administer.

release of Ma. Divina Ortaez-Enderes as Special

Administratrix, the Urgent Motion to Declare
Void Ab Initio Memorandum of Agreement dated
December 19, 1995. . . is hereby impliedly
partially

resolved

insofar

as

the

transfer/waiver/renunciation of the Philinterlife

shares of stock are concerned, in particular, No.
5, 9(c), 10(b) and 11(d)(ii) of the Memorandum of
Agreement.

On August 11, 1997, the intestate court denied

the omnibus motion of Special Administrator
Jose Ortaez for the approval of the deeds of sale
for the reason that:

WHEREFORE, this Court hereby declares the

Memorandum of Agreement dated March 4,

Page 45 of 118
1982 executed by Juliana S. Ortaez, Rafael S.

Meanwhile, herein petitioners Jose Lee and

Ortaez and Jose S. Ortaez as partially void ab

Alma Aggabao, with the rest of the FLAG-

initio

the

controlled board of directors, increased the

transfer/waiver/renunciation of the Philinterlife

authorized capital stock of Philinterlife, diluting

shares of stocks are concerned.[7]

in the process the 50.725% controlling interest

insofar

as

of the decedent, Dr. Juvencio Ortaez, in the

Aggrieved by the above-stated orders of the
intestate court, Jose Ortaez filed, on December
22, 1997, a petition for certiorari in the Court of
Appeals. The appellate court denied his petition,
however,

ruling

that

there

was

no

legal

justification whatsoever for the extrajudicial

partition of the estate by Jose Ortaez, his
brother Rafael Ortaez and mother Juliana
Ortaez during the pendency of the settlement of
the estate of Dr. Ortaez, without the requisite
approval of the intestate court, when it was
clear that there were other heirs to the estate
who

stood

to

be

prejudiced

thereby.

Consequently, the sale made by Jose Ortaez and

his mother Juliana Ortaez to FLAG of the shares
of

stock

they

invalidly

appropriated

for

themselves, without approval of the intestate

court, was void.[8]

Special Administrator Jose Ortaez filed a motion

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

insurance company.[9] This became the subject

of a separate action at the Securities and
Exchange

Commission

respondent-Special

filed

by

Administratrix

private
Enderes

against petitioner Jose Lee and other members

of the FLAG-controlled board of Philinterlife on
November 7, 1994. Thereafter, various cases
were

filed

by

Jose

Lee

as

president

of

Philinterlife and Juliana Ortaez and her sons

against

private

respondent-Special

Administratrix Enderes in the SEC and civil

courts.[10] Somehow, all these

cases were

connected to the core dispute on the legality of

the sale of decedent Dr. Ortaezs 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.

Page 46 of 118
On July 6, 2000, the intestate court granted the

5.

Directing

motion for execution, the dispositive portion of

person or persons claiming to represent it or

which read:

otherwise, to acknowledge and allow the said

Special

WHEREFORE, premises considered, let a writ of

execution issue as follows:

Philinterlife

Administratrix

and/or

to

any

exercise

other

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

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

contempt.

Philinterlife shares in the name of the Estate of

Dr. Juvencio Ortaez to Filipino Loan Assistance
Group (FLAG);

6. The President, Corporate Secretary, any

responsible officer/s of Philinterlife, or any other
person or persons claiming to represent it or

2. Commanding the President and the Corporate

Secretary of Philinterlife to reinstate in the stock
and transfer book of Philinterlife the 2,029

otherwise, are hereby directed to comply with

this order within three (3) days from receipt
hereof under pain of contempt.

Philinterlife shares of stock in the name of the

Estate of Dr. Juvencio P. Ortaez as the owner
thereof without prejudice to other claims for
violation of pre-emptive rights pertaining to the
said 2,029 Philinterlife shares;

of

Philinterlife

Pedro Borja are hereby directed to implement

the writ of execution with dispatch to forestall
any and/or further damage to the Estate.

3. Directing the President and the Corporate

Secretary

7. The Deputy Sheriffs Adenauer Rivera and

to

issue

stock

SO ORDERED.[12]

certificates of Philinterlife for 2,029 shares in the

name of the Estate of Dr. Juvencio P. Ortaez as

In the several occasions that the sheriff went to

the owner thereof without prejudice to other

the office of petitioners to execute the writ of

claims

rights

execution, he was barred by the security guard

pertaining to the said 2,029 Philinterlife shares

upon petitioners instructions. Thus, private

and,

respondent-Special Administratrix Enderes filed

for

violations

of

pre-emptive

a motion to cite herein petitioners Jose Lee and

4.

Confirming

that

only

the

Special

Administratrix, Ma. Divina Ortaez-Enderes, has

Alma

Aggabao

(president

and

secretary,

respectively, of Philinterlife) in contempt.[13]

the power to exercise all the rights appurtenant

to the said shares, including the right to vote

Petitioners Lee and Aggabao subsequently filed

and to receive dividends.

before the Court of Appeals a petition for

certiorari, docketed as CA G.R. SP No. 59736.
Petitioners alleged that the intestate court

Page 47 of 118
gravely abused its discretion in (1) declaring that

SO ORDERED.[14]

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.

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:

On July 26, 2000, the Court of Appeals

dismissed the petition outright:

This

resolves

the

urgent

motion

for

reconsideration filed by the petitioners of our

resolution

of

July

26,

2000

dismissing

We are constrained to DISMISS OUTRIGHT the

outrightly the above-entitled petition for the

present petition for certiorari and prohibition

reason, among others, that the assailed Order

with prayer for a temporary restraining order

dated August 11, 1997 of the respondent Judge

and/or writ of preliminary injunction in the

had long become final and executory.

light of the following considerations:

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

WHEREFORE,

the

urgent

motion

for

reconsideration is hereby DENIED, for lack of

merit.

2. The certification on non-forum shopping is

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

SO ORDERED.[15]

3. Except for the assailed orders and writ of

On December 4, 2000, petitioners elevated the

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

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]

Procedure, as amended.
However, upon motion for reconsideration filed
Petition is DISMISSED.

by petitioners Lee and Aggabao, the Supreme

Court granted the motion and reinstated their
petition on September 5, 2001. The parties were

Page 48 of 118
then

required

to

submit

their

respective

memoranda.

upheld the power of the intestate court to

execute its order. Petitioners Lee and Aggabao
then filed motion for reconsideration which at

Meanwhile,

private

respondent-Special

Administratrix Enderes, on July 19, 2000, filed

present is still pending resolution by the Court

of Appeals.

a motion to direct the branch clerk of court in

lieu of herein petitioners Lee and Aggabao to

Petitioners

Jose

reinstate the name of Dr. Ortaez in the stock

(president

and

and transfer book of Philinterlife and issue the

Philinterlife) and FLAG now raise the following

corresponding

errors for our consideration:

stock

certificate

pursuant

to

Lee

and

Alma

secretary,

Aggabao

respectively,

of

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 COURT OF APPEALS COMMITTED GRAVE

REVERSIBLE ERROR:

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.

A. IN FAILING TO RECONSIDER ITS PREVIOUS

RESOLUTION

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
order

of

the

intestate

PETITION

COURTS MISTAKE IN APPREHENDING THE

FACTS HAD BECOME PATENT AND EVIDENT
FROM THE MOTION FOR RECONSIDERATION
AND

THE

ENDERES

COMMENT
WHICH

OF

HAD

RESPONDENT

ADMITTED

THE

FACTUAL ALLEGATIONS OF PETITIONERS IN

THE PETITION AS WELL AS IN THE MOTION
FOR RECONSIDERATION. MOREOVER, THE
RESOLUTION OF THE APPELLATE COURT

On December 3, 2000, petitioners Lee and

the

THE

DESPITE THE FACT THAT THE APPELLATE

DENYING

Appeals

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;

court

nullifying the sale made in their favor by Juliana

Ortaez and Jose Ortaez. On November 20, 2002,
the Court of Appeals denied their petition and

B. IN FAILING TO SET ASIDE THE VOID

ORDERS OF THE INTESTATE COURT ON THE
ERRONEOUS GROUND THAT THE ORDERS

Page 49 of 118
WERE FINAL AND EXECUTORY WITH REGARD

E. IN DISREGARDING THE FINAL DECISION

TO PETITIONERS EVEN AS THE LATTER WERE

OF THE SUPREME COURT IN G.R. NO. 128525

NEVER NOTIFIED OF THE PROCEEDINGS OR

DATED

ORDER CANCELING ITS OWNERSHIP;

SUBSTANTIALLY THE SAME PARTIES, TO WIT,

DECEMBER

PETITIONERS
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

OWNERSHIP

OF

NULLIFYING

PETITIONER

THE

FLAG

OVER

SHARES OF STOCK WHICH WERE ALLEGED

TO BE PART OF THE ESTATE AND (2) WHEN IT
ISSUED

AGAINST

VOID

WRIT

PETITIONER

OWNER

TO

OF

FLAG

EXECUTION
AS

PRESENT

IMPLEMENT

MERELY

PROVISIONAL ORDERS, THEREBY VIOLATING

FLAGS

CONSTITUTIONAL

RIGHT

AGAINST

DEPRIVATION OF PROPERTY WITHOUT DUE

AGGABAO
CASE

17,

JOSE

WERE

WHILE

C.

1999

INVOLVING

LEE

AND

RESPONDENTS

RESPONDENT

ALMA

IN

MA.

THAT
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]

PROCESS;
The petition has no merit.
D. IN FAILING TO DECLARE NULL AND VOID
THE ORDERS OF THE INTESTATE COURT

Petitioners

WHICH NULLIFIED THE SALE OF SHARES OF

representing

STOCK BETWEEN THE LEGITIMATE HEIR

before us not only the validity of the writ of

JOSE S. ORTAEZ AND PETITIONER FLAG

execution issued by the intestate court dated

BECAUSE

AND

July 7, 2000 but also the validity of the August

JURISPRUDENCE, I.E., THAT AN HEIR HAS

11, 1997 order of the intestate court nullifying

THE RIGHT TO DISPOSE OF THE DECEDENTS

the sale of the 2,029 Philinterlife shares of stock

PROPERTY EVEN IF THE SAME IS UNDER

made by Juliana Ortaez and Jose Ortaez, in

ADMINISTRATION PURSUANT TO CIVIL CODE

their personal capacities and without court

PROVISION

approval, in favor of petitioner FLAG.

OF

SETTLED

THAT

LAW

POSSESSION

OF

Jose

Lee

and

Philinterlife

Alma

and

Aggabao,

FLAG,

assail

HEREDITARY PROPERTY IS TRANSMITTED TO

THE HEIR THE MOMENT OF DEATH OF THE
DECEDENT (ACEDEBO VS. ABESAMIS, 217
SCRA 194);

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.

Page 50 of 118
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

ATTY. CALIMAG:

for review on a technicality and thereafter

denying

the motion

for

reconsideration

on

January 13, 1999 on the ground that there was

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

is already known to them.

no compelling reason to reconsider said denial.

[18] Our decision became final on February 23,
1999 and was accordingly entered in the book of

JUSTICE AQUINO:

entry of judgments. For all intents and purposes

therefore,

the

nullity

of

the

sale

of

the

Philinterlife shares of stock made by Juliana

Ortaez and Jose Ortaez in favor of petitioner
FLAG is already a closed case. To reopen said
issue would set a bad precedent, opening the
door wide

open

for

dissatisfied

parties

to

relitigate unfavorable decisions no end. This is

completely inimical to the orderly and efficient
administration of justice.

The said decision of the Court of Appeals in CA-

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

judicially

the

legal

settling

justification
a

for

property

extraunder

administration without the approval of the

intestate court?

ATTY. CALIMAG:

G.R. SP No. 46342 affirming the nullity of the

sale made by Jose Ortaez and his mother
Juliana Ortaez of the Philinterlife shares of stock
read:

Well, Your Honor please, in that extra-judicial

settlement there is an approval of the honorable
court as to the propertys partition x x x. There
were as mentioned by the respondents counsel,

Petitioners

asseverations

relative

to

said

Your Honor.

[memorandum] agreement were scuttled during

the hearing before this Court thus:

ATTY. BUYCO:

JUSTICE AQUINO:

No

Counsel for petitioner, when the Memorandum

JUSTICE AQUINO:

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

The point is, there can be no adjudication of a

of Novicio?

property under intestate proceedings without

the approval of the court. That is basic unless

Page 51 of 118
you can present justification on that. In fact,

basis for demanding that public respondent [the

there are two steps: first, you ask leave and then

intestate

execute the document and then ask for approval

Philinterlife shares of the Estate by Juliana and

of the document executed. Now, is there any

Jose Ortaez in favor of the Filipino Loan

legal justification to exclude this particular

Assistance Group.

court]

approve

the

sale

of

the

transaction from those steps?

It is an undisputed fact that the parties to the
ATTY. CALIMAG:

Memorandum of Agreement dated March 4,

1982 (see Annex 7 of the Comment). . . are not
the only heirs claiming an interest in the estate

None, Your Honor.

left by Dr. Juvencio P. Ortaez. The records of

this case. . . clearly show that as early as March
3, 1981 an Opposition to the Application for

ATTY BUYCO:

Issuance of Letters of Administration was filed

by the acknowledged natural children of Dr.

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).

by private respondent:

the heirs of the decedent without securing court

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 petitioners
counsel,

there

was

Dr. Juvencio P. Ortaez is admittedly known to

the parties to the Memorandum of Agreement
before they executed the same. This much was
argument. xxx

Given the foregoing facts, and the applicable

What we have here is a situation where some of

have

claim by the acknowledged natural children of

admitted by petitioners counsel during the oral

Thus, We find merit in the following postulation

approval

Juvencio P. Ortaez with Ligaya Novicio. . . This

absolutely

no

jurisprudence, public respondent can never be

faulted for not approving. . . the subsequent sale
by the petitioner [Jose Ortaez] and his mother
[Juliana

Ortaez]

of

the

Philinterlife

shares

belonging to the Estate of Dr. Juvencio P.

Ortaez.

(pages

3-4

of

Private

Respondents

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]

legal

justification for this action by the heirs. There

being no legal justification, petitioner has no

From the above decision, it is clear that Juliana

Ortaez, and her three sons, Jose, Rafael and

Page 52 of 118
Antonio, all surnamed Ortaez, invalidly entered

Juliana Ortaez and Jose Ortaez sold specific

into a memorandum of agreement extrajudicially

properties of the estate, without court approval.

partitioning

It is well-settled that court approval is necessary

the

intestate

estate

among

themselves, despite their knowledge that there

for

the

validity

of

any

disposition

of

the

were other heirs or claimants to the estate and

decedents estate. In the early case of Godoy vs.

before final settlement of the estate by the

Orellano,[22] we laid down the rule that the sale

intestate court. Since the appropriation of the

of the property of the estate by an administrator

estate properties by Juliana Ortaez and her

without the order of the probate court is void

children (Jose, Rafael and Antonio Ortaez) was

and passes no title to the purchaser. And in the

invalid, the subsequent sale thereof by Juliana

case of Dillena vs. Court of Appeals,[23] we

and Jose to a third party (FLAG), without court

ruled that:

approval, was likewise void.

[I]t must be emphasized that the questioned
An

heir

can

participation

sell

his

in

the

right,

interest,

properties

(fishpond)

were

included

in

the

under

inventory of properties of the estate submitted

administration under Art. 533 of the Civil Code

by then Administratrix Fausta Carreon Herrera

which provides that possession of hereditary

on November 14, 1974. Private respondent was

property is deemed transmitted to the heir

appointed as administratrix of the estate on

without interruption from the moment of death

March 3, 1976 in lieu of Fausta Carreon

of the decedent.[20] However, an heir can only

Herrera. On November 1, 1978, the questioned

alienate such portion of the estate that may be

deed of sale of the fishponds was executed

allotted to him in the division of the estate by

between

the

final

without notice and approval of the probate

adjudication, that is, after all debtors shall have

court. Even after the sale, administratrix Aurora

been paid or the devisees or legatees shall have

Carreon still included the three fishponds as

been given their shares.[21] This means that an

among the real properties of the estate in her

heir may only sell his ideal or undivided share in

inventory submitted on August 13, 1981. In

the estate, not any specific property therein. In

fact,

the present case, Juliana Ortaez and Jose

petitioner, at the time of the sale of the

Ortaez sold specific properties of the estate

fishponds in question, knew that the same were

(1,014 and 1,011 shares of stock in Philinterlife)

part of the estate under administration.

probate

or

intestate

property

or

court

after

as

petitioner

stated

by

and

the

private

Court

respondent

of

Appeals,

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

xxxxxxxxx

undue prejudice it would cause the other

claimants to the estate, as what happened in
the present case.

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

Page 53 of 118
properties

under

administration.

More

probate court that has the power to authorize

emphatic is the declaration We made in Estate

and/or approve the sale (Section 4 and 7, Rule

of Olave vs. Reyes (123 SCRA 767) where We

89), hence, a fortiori, it is said court that can

stated that when the estate of the deceased

declare it null and void for as long as the

person is already the subject of a testate or

proceedings had not been closed or terminated.

intestate proceeding, the administrator cannot

To

enter into any transaction involving it without

probate court cannot annul the unauthorized

prior approval of the probate court.

sale, would render meaningless the power

uphold

petitioners

contention

that

the

pertaining to the said court. (Bonga vs. Soler, 2

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

SCRA 755). (emphasis ours)

of Appeals (149 SCRA 174), We held that the

sale of an immovable property belonging to the

Our jurisprudence is therefore clear that (1) any

estate of a decedent, in a special proceedings,

disposition

needs court approval. . . This pronouncement

administrator or prospective heir pending final

finds support in the previous case of Dolores

adjudication requires court approval and (2) any

Vda. De Gil vs. Agustin Cancio (14 SCRA 797)

unauthorized disposition of estate property can

wherein We emphasized that it is within the

be annulled by the probate court, there being no

jurisdiction of a probate court to approve the

need

sale of properties of a deceased person by his

unauthorized disposition.

for

of

estate

separate

property

action

to

by

annul

an

the

prospective heirs before final adjudication. x x x

The question now is: can the intestate or
It

being

settled

administration

needs

that
the

property
approval

under
of

the

probate court execute its order nullifying the

invalid sale?

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

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.

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 courts power to annul
unauthorized

or

fraudulent

transactions

to

There is hardly any doubt that the probate court

prevent the dissipation of estate property before

can declare null and void the disposition of the

final adjudication.

property under administration, made by private

respondent, the same having been effected
without authority from said court. It is the

Moreover, in this case, the order of the intestate

court nullifying the sale was affirmed by the

Page 54 of 118
appellate courts (the Court of Appeals in CA-

brother, Jose Ortaez, were appointed special

G.R. SP No. 46342 dated June 23, 1998 and

administrators by the intestate court.[25]

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 controversy here actually started when,

during the pendency of the settlement of the
estate of Dr. Ortaez, his wife Juliana Ortaez sold
the 1,014 Philinterlife shares of stock in favor
petitioner FLAG without the approval of the
intestate court. Her son Jose Ortaez later sold
the remaining 1,011 Philinterlife shares also in
favor of FLAG without the approval of the
intestate court.

We are not dealing here with the issue of

inclusion or exclusion of properties in the
inventory of the estate because there is no
question

that,

from

the

very

start,

the

Philinterlife shares of stock were owned by the

decedent, Dr. Juvencio Ortaez. Rather, we are

The

only

authority

given

by

law

is

for

concerned here with the effect of the sale made

respondent judge to determine provisionally

by the decedents heirs, Juliana Ortaez and Jose

whether said shares are included or excluded in

Ortaez, without the required approval of the

the inventory In ordering the execution of the

intestate court. This being so, the contention of

orders, respondent judge acted in excess of his

petitioners

jurisdiction and grossly violated settled law and

intestate court was merely provisional and

jurisprudence, i.e., that the determination by a

should have been threshed out in a separate

probate or intestate court of whether a property

proceeding is incorrect.

that

the

determination

of

the

is included or excluded in the inventory of the

estate being provisional in nature, cannot be the
subject of execution.[24] (emphasis ours)

The petitioners Jose Lee and Alma Aggabao next

contend that the writ of execution should not be
executed against them because they were not

Petitioners argument is misplaced. There is no

notified, nor they were aware, of the proceedings

question, based on the facts of this case, that

nullifying the sale of the shares of stock.

the Philinterlife shares of stock were part of the

estate of Dr. Juvencio Ortaez from the very start
as in fact these shares were included in the
inventory

of

the

properties

of

the

estate

submitted by Rafael Ortaez after he and his

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

Page 55 of 118
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

The facts show that petitioners, for reasons

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

approval of the court. The dispositive portion of

our decision read:

It must be noted that private respondent-Special

Administratrix Enderes filed before the intestate

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.

court (RTC of Quezon City, Branch 85) a Motion

to Declare Void Ab Initio Deeds of Sale of
Philinterlife Shares of Stock on March 22, 1996.
But as early as 1994, petitioners already knew
of the pending settlement proceedings and that
the

shares

they

bought

were

under

the

administration by the intestate court because

private respondent Ma. Divina Ortaez-Enderes
and her mother Ligaya Novicio had filed a case
against them at the Securities and Exchange
Commission on November 7, 1994, docketed as
SEC No. 11-94-4909, for annulment of transfer

It goes without saying that the increase in

Philinterlifes authorized capital stock, approved
on

the

vote

of

petitioners

non-existent

shareholdings and obviously calculated to make

it difficult for Dr. Ortaezs estate to reassume its
controlling interest in Philinterlife, was likewise
void ab initio.

of shares of stock, annulment of sale of

corporate

properties,

subscriptions

on

annulment

increased

capital

of
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

Petitioners next argue that they were denied due

officer in fact, in his resolution dated March 24,

process.

1995, deferred to the jurisdiction of the intestate

court to rule on the validity of the sale of shares

We do not think so.

of stock sold to petitioners by Jose Ortaez and

Juliana Ortaez:

Page 56 of 118
1996
Petitioners also averred that. . . the Philinterlife
shares of Dr. Juvencio Ortaez who died, in 1980,
are part of his estate which is presently the
subject matter of an intestate proceeding of the

(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:

RTC of Quezon City, Branch 85. Although,

private respondents [Jose Lee et al.] presented
the

documents

foregoing

share

of

partition

of

stocks

whereby
were

the

allegedly

partitioned and conveyed to Jose S. Ortaez who

allegedly assigned the same to the other private
respondents, approval of the Court was not
presented. Thus, the assignments to the private
respondents [Jose Lee et al.] of the subject
shares of stocks are void.

[T]he subject matter of the complaint is not

within the jurisdiction of the SEC but with the
Regional Trial Court; Ligaya Novicio and children
represented themselves to be the common law
wife and illegitimate children of the late Ortaez;
that on March 4, 1982, the surviving spouse
Juliana Ortaez, on her behalf and for her minor
son

Antonio,

executed

Memorandum

of

Agreement with her other sons Rafael and Jose,

both surnamed Ortaez, dividing the estate of the
deceased composed of his one-half (1/2) share

xxxxxxxxx

in the conjugal properties; that in the said

Memorandum of Agreement, Jose S. Ortaez
extrajudicial

acquired as his share of the estate the 1,329

partition of the shares of stock owned by the late

shares of stock in Philinterlife; that on March 4,

Dr. Juvencio Ortaez, we rule that the matter

1982,

properly belongs to the jurisdiction of the

respective shares of stock in Philinterlife to Jose;

regular court where the intestate proceedings

that contrary to the contentions of petitioners,

are currently pending.[28]

private

With

respect

to

the

alleged

Juliana

respondents

Benjamin
With this resolution of the SEC hearing officer
dated as early as March 24, 1995 recognizing
the

jurisdiction

determine

the

of

the

validity

intestate
of

the

court

to

extrajudicial

partition of the estate of Dr. Ortaez and the

subsequent sale by the heirs of the decedent of
the Philinterlife shares of stock to petitioners,
how can petitioners claim that they were not

and

Lee

and

Rafael

assigned

Jose

Lee,

Alma

Aggabao

their

Carlos

Lee,

became

stockholders of Philinterlife on March 23, 1983

when Jose S. Ortaez, the principal stockholder
at that time, executed a deed of sale of his
shares of stock to private respondents; and that
the

right

of

petitioners

to

question

the

Memorandum of Agreement and the acquisition

of shares of stock of private respondent is
barred by prescription.[29]

aware of the intestate proceedings?

Also, private respondent-Special Administratrix
Futhermore, when the resolution of the SEC
hearing officer reached the Supreme Court in

Enderes

offered

additional

proof

of

actual

knowledge of the settlement proceedings by

petitioners which petitioners never denied: (1)

Page 57 of 118
that

petitioners

were

represented

by

Atty.

they never intervened. When the court declared

Ricardo Calimag previously hired by the mother

the nullity of the sale, they did not bother to

of private respondent Enderes to initiate cases

appeal. And when they were notified of the

against petitioners Jose Lee and Alma Aggaboa

motion for execution of the Orders of the

for the nullification of the sale of the shares of

intestate court, they ignored the same. Clearly,

stock but said counsel made a conflicting turn-

petitioners alone should bear the blame.

around and appeared instead as counsel of

petitioners, and (2) that the deeds of sale
executed between petitioners and the heirs of
the decedent (vendors Juliana Ortaez and Jose
Ortaez) were acknowledged before Atty. Ramon
Carpio

who,

during

the

pendency

of

the

settlement proceedings, filed a motion for the

approval of the sale of Philinterlife shares of
stock to the Knights of Columbus Fraternal
Association, Inc. (which motion was, however,
later abandoned).[30] All this sufficiently proves
that petitioners, through their counsels, knew of
the pending settlement proceedings.

Petitioners next contend that we are bound by

our ruling in G.R. No. 128525 entitled Ma.
Divina Ortaez-Enderes vs. Court of Appeals,
dated December 17, 1999, where we allegedly
ruled that the intestate court may not pass
upon the title to a certain property for the
purpose

of

determining

whether

the

same

should or should not be included in the

inventory

but

such

determination

is

not

conclusive and is subject to final decision in a

separate action regarding ownership which may
be constituted by the parties.

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 respondents 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.

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

Considering these circumstances, we cannot

rights. Said case did not rule on the issue of the

accept petitioners claim of denial of due process.

validity of the sale of shares of stock belonging

The essence of due process is the reasonable

to the decedents estate without court approval

opportunity to be heard. Where the opportunity

nor of the validity of the writ of execution issued

to be heard has been accorded, there is no

by the intestate court. G.R. No. 128525 clearly

denial

involved a different issue and it does not

of

petitioners

due
knew

process.[32]
of

the

In

pending

this

case,

instestate

proceedings for the settlement of Dr. Juvencio

Ortaezs estate but for reasons they alone knew,

therefore apply to the present case.

Page 58 of 118
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 courts) August
11 and 29, 1997 orders, is hereby AFFIRMED.

2.

SO ORDERED.

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

3.

concur.

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

4.

JUDGE OF THE REGIONAL TRIAL COURT OF

PASIG, BRANCH 156, respondents.
SYLLABUS
1. REMEDIAL LAW; SPECIAL PROCEEDINGS;
SETTLEMENT OF ESTATE; ALLOWANCE
FOR SUPPORT; SHOULD NOT BE
LIMITED TO MINOR OR INCAPACITATED
CHILD-REN. - It is settled that allowances 5.
for support under Section 3 of Rule 83
should not be limited to the minor or

incapacitated children of the deceased.

Article 188 of the Civil Code of the
Philippines, the substantive law in force at
the time of the testators death, provides
that during the liquidation of the conjugal
partnership, the deceaseds legitimate
spouse and children, regardless of their
age, civil status or gainful employment, are
entitled to provisional support from the
funds of the estate. The law is rooted on the
fact that the right and duty to support,
especially the right to education, subsist
even beyond the age of majority.
ID.; ID.; ID.; ID.; DOES NOT EXTEND TO
DECEASEDS GRANDCHILDREN. - The law
clearly limits the allowance to widow and
children and does not extend it to the
deceaseds grandchildren, regardless of
their minority or incapacity.
ID.; ID.; ID.; ID.; WHEN DISTRIBUTION OF
ESTATE PROPERTIES CAN BE MADE. In
settlement of estate proceedings, the
distribution of the estate properties can
only be made: (1) after all the debts, funeral
charges,
expenses
of
administration,
allowance to the widow, and estate tax have
been paid; or (2) before payment of said
obligations only if the distributees or any of
them gives a bond in a sum fixed by the
court conditioned upon the payment of said
obligations within such time as the court
directs, or when provision is made to meet
those obligations.
ID.; ID.; ID.; PAYMENT OF ESTATE TAX; AN
OBLIGATION THAT MUST BE PAID
BEFORE
THE
DISTRIBUTION
OF
ESTATE. The estate tax is one of those
obligations that must be paid before
distribution of the estate. If not yet paid,
the rule requires that the distributees post
a bond or make such provisions as to meet
the said tax obligation in proportion to
their respective shares in the inheritance.
ID.; ID.; ID.; PURPOSE OF PROBATE. The
probate of a will is conclusive as to its due
execution and extrinsic validity and settles

Page 59 of 118
only the question of whether the testator,
being of sound mind, freely executed it in
accordance with the formalities prescribed
by law. Questions as to the intrinsic validity
and efficacy of the provisions of the will,
the legality of any devise or legacy may be
raised even after the will has been
authenticated.
6. ID.; ID.; ID.; RIGHT OF AN EXECUTOR OR
ADMINISTRATOR OVER PROPERTIES OF
THE DECEASED. - The right of an executor
or administrator to the possession and
management of the real and personal
properties of the deceased is not absolute
and can only be exercised so long as it is
necessary for the payment of the debts and
expenses of administration.
APPEARANCES OF COUNSEL
Hemedino M. Brondial for petitioner.
De Jesus & Associates for private respondents.

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
decedents

will.

For

unbeknown

reasons,

Edmond, the named executor, did not take any

action for the probate of his fathers holographic
will.
On June 29, 1992, four years after the testators
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 Ruizs 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

DECISION

and Maria Angeline4 - was leased out by

PUNO, J.:

Edmond Ruiz to third persons.

This petition for review on certiorari seeks to

On January 19, 1993, the probate court ordered

annul

dated

Edmond to deposit with the Branch Clerk of

November 10, 1994 and the resolution dated

Court the rental deposit and payments totalling

January 5, 1995 of the Court of Appeals in CA-

P540,000.00 representing the one-year lease of

G.R. SP No. 33045.

the Valle Verde property. In compliance, on

and

set

aside

the

decision

The facts show that on June 27, 1987, Hilario

M. Ruiz1 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

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

Maria

In March 1993, Edmond moved for the release of

Cathryn, Candice Albertine and Maria Angeline,

P50,000.00 to pay the real estate taxes on the

all children of Edmond Ruiz. The testator

real properties of the estate. The probate court

bequeathed

approved the release of P7,722.006

granddaughters,

personal

to

and

private

his
real

heirs

respondents

substantial

properties

and

Edmond Ruiz executor of his estate.

cash,
named

On May 14, 1993, Edmond withdrew

opposition

to

the

probate

of

the

his
will.

Page 60 of 118
Consequently, the probate court, on May 18,

his motion for release of funds in view of the fact

1993, admitted the will to probate and ordered

that the lease contract over Valle Verde property

the issuance of letters testamentary to Edmond

had been renewed for another year.7

conditioned upon the filing of a bond in the

amount of P50,000.00. The letters testamentary
were issued on June 23, 1993.

Despite petitioners manifestation, the probate

court, on December 22, 1993, ordered the
release of the funds to Edmond but only such

On July 28, 1993, petitioner Testate Estate of

amount as may be necessary to cover the

Hilario Ruiz as executor, filed an Ex-Parte

espenses of administration and allowanceas for

Motion for Release of Funds. It prayed for the

support of the testators three granddaughters

release of the rent payments deposited with the

subject to collation and deductible from their

Branch Clerk of Court. Respondent Montes

share in the inheritance. The court, however,

opposed the motion and concurrently filed a

held in abeyance the release of the titles to

Motion for Release of Funds to Certain Heirs

respondent

and

of

granddaughters until the lapse of six months

Allowance of Probate Will. Montes prayed for the

from the date of firast publication of the notice

release of the said rent payments to Maria

to creditors.8 The Court stated thus:

Motion

for

Issuance

of

Certificate

Cathryn, Candice Albertine and Maria Angeline

and

for

the

distribution

of

the

testators

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
petitioners motion for release of funds but
granted respondent Montes motion in view of
petitioners lack of opposition. It thus ordered
the

release

decedents

of

three

the

rent

payments

granddaughters.

It

to

the

further

ordered the delivery of the titleds to and

possession of the properties bequeathed to the
three granddaughters and respondent Montes
upon the filing of a bond of P50,000.00.
Petitioner moved for reconsideration alleging
that

he

actually

filed

his

opposition

to

respondent Montes motion for release of rent

payments which opposition the court failed to
consider.

Petitioner

likewise

reiterated

his

previous motion for release of funds.

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

Montes

and

the

three

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

Page 61 of 118
provisions for the support Of Maria Cathryn

The issue for resolution is whether the probate

Veronique Ruiz, Candice Albertine Ruiz and

court, after admitting the will to probate but

Maria Angeli Ruiz before the amount required

before

can be withdrawn and cause the publication of

obligations, has the authority: (1) to grant an

the

notice

to

creditors

with

reasonable

Petitioner assailed this order before the Court of

Appeals. Finding no grave abuse of discretion on
the part of respondent judge, the appellate court
probate

the

petition

courts

order

and
in

sustained

decision

the

dated

November 10, 199410 and a resolution dated

January 5, 1995.11

PUBLIC

debts

and

allowance from the funds of the estate for the

RESPONDENT

COURT

GRAVE

AMOUNTING

TO

OF

ABUSE

OF

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
GIVEN

EFFECTED

DUE

WOULD:

COURSE
(1)

AND

DISALLOW

IS
THE

EXECUTOR/ADMINISTRATOR OF THE ESTATE

OF THE LATE HILARIO M. RUIZ TO TAKE
POSSESSION

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

estate,

COMMITTED

DISCRETION

WHEN

estates

deceased person, during the settlement of the

Petitioner claims that:

APPEALS

the

widow and minor or incapacitated children of a

Hence, this petition.

THE

of

support of the testators grandchildren; (2) to

dispatch.9

dismissed

payment

OF

ALL

THE

REAL

AND

PERSONAL PROPERTIES OF THE ESTATE; (2)

GRANT SUPPORT, DURING THE PENDENCY OF

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

testators 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

deceased

which

states

children

excludes

the

of

the

latters

grandchildren.

TO

It is settled that allowances for support under

CERTAIN PERSONS NOT ENTITLED THERETO;

Section 3 of Rule 83 should not be limited to the

AND

AND

minor or incapacitated children of the deceased.

DISTRIBUTE THE ESTATE PURSUANT TO THE

Article 18813 of the Civil Code of the Philippines,

PROVISIONS OF THE HOLOGRAPHIC WILL

the substantive law in force at the time of the

EVEN BEFORE ITS INTRINSIC VALIDITY HAS

testators

BEEN

THE

SETTLEMENT
(3)

OF

AN

PREMATURELY

DETERMINED,

EXISTENCE

OF

ESTATE,

PARTITION

AND

UNPAID

OBLIGATIONS OF THE ESTATE.

death,

provides

that

during

the

DESPITE

THE

liquidation of the conjugal partnership, the

DEBTS

AND

deceaseds

12

legitimate

spouse

and

children,

regardless of their age, civil status or gainful

employment, are entitled to provisional support

Page 62 of 118
from the funds of the estate.14 The law is rooted

executor

on the fact that the right and duty to support,

interested in the estate, and after hearing upon

especially the right to education, subsist even

notice, shall assign the residue of the estate to

beyond the age of majority.

the persons entitled to the same, naming them

15

Be that as it may, grandchildren are not entitled

to provisional support from the funds of the
decedents estate. The law clearly limits the
allowance to widow and children and does not
extend

it

to

the

deceaseds

grandchildren,

regardless of their minority or incapacity. 16 It

was error, therefore, for the appellate court to
sustain the probate courts 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

or

administrator,

or of

person

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

properties to private respondents six months

has been made or provided for, unless the

after the date of first publication of notice to

distributees, or any of them, give a bond, in a

creditors. An order releasing titles to properties

sum to be fixed by the court, conditioned for

of the estate amounts to an advance distribution

the payment of said obligations within such

of the estate which is allowed only under the

following conditions:
Sec.

2.

Advance

proceedings.

distribution

Nothwithstanding

in

special

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

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

And Rule 90 provides that:

In the case at bar, the probate court ordered the

Sec. 1. When order for distribution of residue

release of the titles to the Valle Verde property

made. - When the debts, funeral charges, and

and the Blue Ridge apartments to the private

expenses of administration, the allowance to the

respondents after the lapse of six months from

widow, and inheritance tax, if any, chargeable to

the date of first publication of the notice to

the estate in accordance with law, have been

creditors. The questioned order speaks of notice

paid, the court, on the application of the

to

creditors,

not

payment

of

debts

and

Page 63 of 118
obligations. Hilario Ruiz allegedly left no debts

Still and all, petitioner cannot correctly claim

when he died but the taxes on his estate had

that the assailed order deprived him of his right

not hitherto been paid, much less ascertained.

to take possession of all the real and personal

The estate tax is one of those obligations that

properties of the estate. The right of an executor

must be paid before distribution of the estate. If

or

not

the

management of the real and personal properties

such

of the deceased is not absolute and can only be

provisions as to meet the said tax obligation in

exercised so long as it is necessary for the

proportion to their respective shares in the

payment

inheritance.

administration,

yet

paid,

distributees

the

post

20

rule
a

requires

bond

or

that

make

Notably, at the time the order was

issued the properties of the estate had not yet

been inventoried and appraised.

administrator

of

the

to

the

debts

possession

and

expenses

and

of

Section 3 of Rule 84 of the

27

Revised Rules of Court explicitly provides:

Sec. 3. Executor or administrator to retain whole

It was also too early in the day for the probate

estate to pay debts, and to administer estate not

court to order the release of the titles six

willed. - An executor or administrator shall have

months after admitting the will to probate. The

the right to the possession and management of

probate of a will is conclusive as to its due

the real as well as the personal estate of the

execution and extrinsic validity

and settles

deceased so long as it is necessary for the

only the question of whether the testator, being

payment of the debts and expenses for

21

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 Hilarios holographic will
was

controverted

by

petitioner

before

the

probate court in his Reply to Montes Opposition

to his motion for release of funds 24 and his
motion for reconsideration of the August 26,
1993

order

of

the

said

court.25

Therein,

petitioner assailed the distributive shares of the

devisees and legatees inasmuch as his fathers
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

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.

Page 64 of 118
Petitioner must be reminded that his right of

Annex D to the Petition, Rollo, pp. 46-60.

ownership over the properties of his father is

SP Proc. No. 10259.

Holographic Will, p. 10; RoIlo, p. 55.

he is a mere trustee of his fathers estate. The

Comment to the Petition, pp. 8-9; rollo, pp. 97-

funds of the estate in his hands are trust funds

98

and he is held to the duties and responsibilities

Reply to Comment, p.2; rollo, p. 114.

Comment, Annex 1; Rollo, p. 110.

Petition, Annex C; Rollo, p. 45.

Id.; Emphasis as copied.

merely inchoate as long as the estate has not

been fully settled and partitioned. 30 As executor,

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,

CA-G.R. SP No. 33045, Annex A to the

rendering a true account of his administration,

10

the expenses of administration, the amount of

Petition; Rollo, pp. 36-42.

the obligations and estate tax, all of which are

11

Id., Annex B to the Petition; Rollo, p. 44.

12

Petition, p. 8; Rollo, p. 17.

13

Art. 188. From the common mass of property

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 testators
grandchildren and ordering the release of the

support shall be given to the surviving spouse

and to the children during the liquidation of the
inventoried property and until what belongs to
them is delivered; but from this shall be
deducted that amount received for support
which exceeds fruits or rents pertaining to
them.

titles to the private respondents upon notice to

Article 188 is now Article 133 of the Family

creditors are annulled and set aside.

Code.

Respondent judge is ordered to proceed with

14

dispatch in the proceedings below.

153 SCRA 728 [1987].

SO ORDERED.

15

Regalado (Chairman), Romero, and Mendoza, JJ.,

Santero v. Court of First Instance of Cavite,

Id., pp. 733-734; Article 290, Civil Code of the

Philippines.

concur.

16

Babao v. Villavicencio, 44 Phil. 921 [1922].

[if !supportEndnotes]

17

Revised Rules of Court, Rule 109, Section 2.

18

Emphasis supplied.

[endif]
1

Predeceased by his wife who died on August 4,

1986

19

Castillo v. Castillo, 124 Phil. 485 [1966];

Edmands v. Philippine Trust Co., 87 Phil. 405

[1952].
20

Prieto v. Valdez, 95 Phil. 46 [1954].

Page 65 of 118
21
22

UNION

Rule 75, Section 1.

Acain v. Intermediate Appellate Court, 155

BANK

petitioner,

vs.

SCRA 100 [1987]; Pastor v. Court of Appeals,

FLORENCE

122 SCRA 885 [1983]; Maninang v. Court of

respondents.

Appeals, 114 SCRA 478 [1982].

23

Maninang

v.

Court

of

OF

THE

EDMUND

PHILIPPINES,

SANTIBAEZ

SANTIBAEZ

and

ARIOLA,

DECISION
Appeals,

supra;

Sumilang v. Ramagosa, 21 SCRA 1369 [1967];

CALLEJO, SR., J.:

[1965];

Before us is a petition for review on certiorari

Montanano v. Suesa, 14 Phil. 676, 679-680

under Rule 45 of the Revised Rules of Court

[1909].

which seeks the reversal of the Decision [1] of the

Cacho

24

v.

Udan,

13

SCRA

693

Reply to Opposition of Funds and Opposition

to Omnibus Motion, pp. 1-3; Rollo, pp. 69-71.

25

Motion for Reconsideration, p. 14; Rollo, p. 66.

26

Rule 90, Section 1, paragraph 1; Pimentel v.

5

Palanca,

Phil.

436

[1905];

II

Regalado,

Remedial Law Compendium 88 [1989].

Court of Appeals dated May 30, 2001 in CA-G.R.

CV No. 48831 affirming the dismissal [2] of the
petitioners 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

27

Mananquil v. Villegas, 189 SCRA 335 [1990].

Corporation (FCCC) and Efraim M. Santibaez

28

Emphasis supplied.

entered into a loan agreement[3] in the amount of

29

Comment to the Petition, p. 9; Rollo, p. 98.

30

Salvador v. Sta. Maria, 20 SCRA 603 [1967].

31

P128,000.00. The amount was intended for the

payment of the purchase price of one (1) unit

Noel v. Court qf Appeals, 240 SCRA 78,89

[1995];

Martin,

Rules

of

Court

of

the

Philippines 545-546 [1986] citing 21 Am. Jur.

370-371.
32

Rule 81, Section 1; Rule 85, Sections ito 9.

Ford

6600

Agricultural

All-Purpose

Diesel

Tractor. In view thereof, Efraim and his son,

Edmund, executed a promissory note in favor of
the FCCC, the principal sum payable in five
equal annual amortizations of P43,745.96 due
on May 31, 1981 and every May 31 st thereafter
up to May 31, 1985.
On December 13, 1980, the FCCC and Efraim
entered into another loan agreement,[4] this time
in the amount of P123,156.00. It was intended
to pay the balance of the purchase price of
another unit of Ford 6600 Agricultural AllPurpose Diesel Tractor, with accessories, and
one (1) unit Howard Rotamotor Model AR 60K.

SECOND DIVISION
[G.R. No. 149926. February 23, 2005]

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

Continuing

Guaranty

Page 66 of 118
Agreement[5] for the loan dated December 13,

Philippines.[12] Accordingly, the complaint was

1980.

narrowed down to respondent Florence S. Ariola.

Sometime

in

February

1981,

died,

On December 7, 1988, respondent Florence S.

Subsequently in

Ariola filed her Answer[13] and alleged that the

March 1981, testate proceedings commenced

loan documents did not bind her since she was

before the RTC of Iloilo City, Branch 7, docketed

not a party thereto. Considering that the joint

as Special Proceedings No. 2706. On April 9,

agreement signed by her and her brother

1981, Edmund, as one of the heirs, was

Edmund was not approved by the probate court,

appointed as the special administrator of the

it was null and void; hence, she was not liable to

estate of the decedent.

the petitioner under the joint agreement.

leaving a holographic will.

[7]

[6]

Efraim

During the pendency of

the testate proceedings, the surviving heirs,

Edmund and his sister Florence Santibaez
Ariola, executed a Joint Agreement[8] dated July
22, 1981, wherein they agreed to divide between
themselves and take possession of the three (3)
tractors; that is, two (2) tractors for Edmund
and one (1) tractor for Florence. Each of them
was to assume the indebtedness of their late
father to FCCC, corresponding to the tractor

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

respectively taken by them.

DISMISSING the complaint for lack of merit.[15]

On August 20, 1981, a Deed of Assignment with

The trial court found that the claim of the

Assumption of Liabilities[9] was executed by and

between FCCC and Union Savings and Mortgage
Bank, wherein the FCCC as the assignor, among
others, assigned all its assets and liabilities to
Union Savings and Mortgage Bank.
Demand letters[10] for the settlement of his
account were sent by petitioner Union Bank of
the Philippines (UBP) to Edmund, but the latter
failed to heed the same and refused to pay.
Thus, on February 5, 1988, the petitioner filed a
Complaint[11] for sum of money against the heirs
of Efraim Santibaez, Edmund and Florence,
before the RTC of Makati City, Branch 150,
docketed as Civil Case No. 18909. Summonses
were issued against both, but the one intended
for Edmund was not served since he was in the
United States and there was no information on
his address or the date of his return to the

petitioner should have been filed with the

probate court before which the testate estate of
the late Efraim Santibaez was pending, as the
sum of money being claimed was an obligation
incurred by the said decedent. The trial court
also found that the Joint Agreement apparently
executed by his heirs, Edmund and Florence, on
July 22, 1981, was, in effect, a partition of the
estate of the decedent. However, the said
agreement was void, considering that it had not
been approved by the probate court, and that
there can be no valid partition until after the
will has been probated. The trial court further
declared that petitioner failed to prove that it
was

the

now

defunct

Union

Savings

and

Mortgage Bank to which the FCCC had assigned

its assets and liabilities. The court also agreed
to the contention of respondent Florence S.
Ariola that the list of assets and liabilities of the

Page 67 of 118
FCCC assigned to Union Savings and Mortgage

tantamount to a waiver to re-litigate the claim in

Bank did not clearly refer to the decedents

the estate proceedings.

account.

Ruling

that

the

joint

agreement

executed by the heirs was null and void, the

trial court held that the petitioners 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:

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

1. THE COURT A QUO ERRED IN FINDING

partition made in the agreement was null and

THAT THE JOINT AGREEMENT (EXHIBIT A)

void, since no valid partition may be had until

SHOULD BE APPROVED BY THE PROBATE

after the will has been probated. According to

COURT.

the CA, page 2, paragraph (e) of the holographic

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

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

Page 68 of 118
SANTIBAEZ UNTIL AFTER THE WILL HAS

of the complaint, and, as such was beyond the

BEEN PROBATED.

ambit of the said will. The active participation

and resistance of respondent Florence S. Ariola

III.
THE COURT OF APPEALS ERRED IN NOT
FINDING

THAT

THE

RESPONDENT

HAD

WAIVED HER RIGHT TO HAVE THE CLAIM RELITIGATED IN THE ESTATE PROCEEDING.

in

the

ordinary

civil

action

against

the

petitioners 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

IV.
RESPONDENTS

CAN,

IN

FACT,

BE

HELD

JOINTLY AND SEVERALLY LIABLE WITH THE

PRINCIPAL

DEBTOR

THE

SANTIBAEZ

ON

STRENGTH

CONTINUING
EXECUTED

THE

LATE

GUARANTY
IN

FAVOR

OF

EFRAIM
OF

THE

AGREEMENT
PETITIONER-

APPELLANT UNION BANK.

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

V.

the

legal

bond

between

the

late

Efraim

THE PROMISSORY NOTES DATED MAY 31,

Santibaez and his heirs to be in the nature of a

1980 IN THE SUM OF P128,000.00 AND

solidary

DECEMBER 13, 1980 IN THE AMOUNT OF

Promissory Notes dated May 31, 1980 and

P123,000.00 CATEGORICALLY ESTABLISHED

December 13, 1980 executed by the late Efraim

THE FACT THAT THE RESPONDENTS BOUND

Santibaez, together with his heirs, Edmund and

THEMSELVES

respondent

JOINTLY

AND

SEVERALLY

obligation.

Furthermore,

Florence,

made

the

the

obligation

LIABLE WITH THE LATE DEBTOR EFRAIM

solidary as far as the said heirs are concerned.

SANTIBAEZ IN FAVOR OF PETITIONER UNION

The petitioner also proffers that, considering the

BANK.

express provisions of the continuing guaranty

[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

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.

position

In her comment to the petition, respondent

contrary thereto. The petitioner also points out

Florence S. Ariola maintains that the petitioner

that the holographic will of the deceased did not

is trying to recover a sum of money from the

include nor mention any of the tractors subject

deceased Efraim Santibaez; thus the claim

now

estopped

from

asserting

any

Page 69 of 118
should have been filed with the probate court.

administered.[20] The said court is primarily

She points out that at the time of the execution

concerned with the administration, liquidation

of the joint agreement there was already an

and distribution of the estate.[21]

existing

probate

proceedings

of

which

the

petitioner knew about. However, to avoid a claim

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

she

guaranty

had

not

agreement,

signed
nor

any
was

continuing
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.

In our jurisdiction, the rule is that there can be

no valid partition among the heirs until after the
will has been probated:
In testate succession, there can be no valid
partition among the heirs until after the will has
been probated. The law enjoins the probate of a
will and the public requires it, because unless a
will is probated and notice thereof given to the
whole world, the right of a person to dispose of
his property by will may be rendered nugatory.
The authentication of a will decides no other
question than such as touch upon the capacity
of the testator and the compliance with those
requirements or solemnities which the law
prescribes for the validity of a will.[22]
This, of course, presupposes that the properties
to be partitioned are the same properties
embraced in the will.[23] In the present case, the
deceased, Efraim Santibaez, left a holographic
will[24] which contained, inter alia, the provision
which reads as follows:
(e) All other properties, real or personal, which I
own and may be discovered later after my
demise, shall be distributed in the proportion

The Court is posed to resolve the following

indicated

issues: a) whether or not the partition in the

paragraph in favor of Edmund and Florence, my

Agreement executed by the heirs is valid; b)

children.

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.

in

the

immediately

preceding

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

At the outset, well-settled is the rule that a

he was making his will, and other properties he

probate court has the jurisdiction to determine

may acquire thereafter. Included therein are the

all the properties of the deceased, to determine

three (3) subject tractors. This being so, any

whether they should or should not be included

partition involving the said tractors among the

in the inventory or list of properties to be

heirs

is

not

valid.

The

joint

agreement [25]

Page 70 of 118
executed by Edmund and Florence, partitioning

Perusing the joint agreement, it provides that

the

invalid,

the heirs as parties thereto have agreed to

specially so since at the time of its execution,

divide between themselves and take possession

there was already a pending proceeding for the

and use the above-described chattel and each of

probate of their late fathers holographic will

them to assume the indebtedness corresponding

covering the said tractors.

to the chattel taken as herein after stated which

It must be stressed that the probate proceeding

is in favor of First Countryside Credit Corp. [29] The

tractors

among

themselves,

is

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

courts

approval

is

tantamount to divesting it with jurisdiction

which the Court cannot allow.[26] Every act
intended to put an end to indivision among coheirs 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

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

transaction.[27] Thus, in executing any joint

of liability cannot be given any force and effect.

agreement which appears to be in the nature of

The Court notes that the loan was contracted by

an extra-judicial partition, as in the case at bar,

the decedent. The petitioner, purportedly a

court approval is imperative, and the heirs

creditor of the late Efraim Santibaez, should

cannot just divest the court of its jurisdiction

have thus filed its money claim with the probate

over that part of the estate. Moreover, it is

court in accordance with Section 5, Rule 86 of

within the jurisdiction of the probate court to

the Revised Rules of Court, which provides:

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

premature act, and prejudicial to the other

possible heirs and creditors who may have a
valid claim against the estate of the deceased.

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

The question that now comes to fore is whether

an action, or prosecutes an action already

the heirs assumption of the indebtedness of the

commenced by the deceased in his lifetime, the

decedent is binding. We rule in the negative.

debtor may set forth by answer the claims he

Page 71 of 118
has against the decedent, instead of presenting

said promissory notes and continuing guaranty,

them independently to the court as herein

of course, subject to any defenses Edmund may

provided, and mutual claims may be set off

have as against the petitioner. As the court had

against each other in such action; and if final

not acquired jurisdiction over the person of

judgment is rendered in favor of the defendant,

Edmund, we find it unnecessary to delve into

the amount so determined shall be considered

the matter further.

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

decedents
mandatory.

of

estate
[30]

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

money
in

the

claim

against

probate

court

the

complaint alleged that by virtue of the Deed of

is

Assignment dated August 20, 1981 executed by

As we held in the vintage case of

and

between

First

Countryside

Credit

Py Eng Chong v. Herrera:

Corporation and Union Bank of the Philippines[34]

This requirement is for the purpose of protecting

However, the documentary evidence[35] clearly

[31]

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

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 petitioners
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.

against the decedent's estate in order to settle

As the trial court declared in its decision:

the affairs of the estate as soon as possible, pay

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

off its debts and distribute the residue.

defendant that plaintiff failed to prove or did not

[32]

Perusing the records of the case, nothing

therein could hold private respondent Florence
S. Ariola accountable for any liability incurred
by her late father. The documentary evidence
presented, particularly the promissory notes
and the continuing guaranty agreement, were
executed and signed only by the late Efraim
Santibaez

and

his

son

Edmund.

As

the

petitioner failed to file its money claim with the

probate court, at most, it may only go after
Edmund as co-maker of the decedent under the

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]

Page 72 of 118
This being the case, the petitioners personality

MAGLASANG, FELMA A. MAGLASANG, FE

to file the complaint is wanting. Consequently, it

DORIS

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.

A.

MAGLASANG,

MAGLASANG,

LEOLINO

MARGIE

A.

LEILA

A.

MAGLASANG,MA. MILALIE A. MAGLASANG,

SALUD A. MAGLASANG, and MA. FLASALIE

IN LIGHT OF ALL THE FOREGOING, the

A.

petition is hereby DENIED. The assailed Court

ESTATES

of Appeals Decision is AFFIRMED. No costs.

MAGLASANG,

REPRESENTING

OF

THEIR

THE

AFORE-

NAMEDDECEASED PARENTS, Petitioners,

SO ORDERED.

vs.

Puno, (Chairman), Austria-Martinez, Tinga, and

MANILA

Chico-Nazario, JJ., concur.

BANKING

CORPORATION,

now

substituted by FIRST SOVEREIGN ASSET

MANAGEMENT

SPV-AMC,

INC.

FSAMI,

Respondent.
DECISION
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari 1
are the Decision2 dated July 20, 2005 and
Resolution3 dated January 4, 2006 of the Court
of Appeals (CA) in CA-G.R. CV No. 50410 which
dismissed petitioners appeal and affirmed the
Decision4 dated April 6, 1987 of the Regional
Trial Court of Ormoc City, Branch 12 (RTC)
directing petitioners to jointly and severally pay
Republic of the Philippines

respondent Manila Banking Corporation the

SUPREME COURT

interests, representing the deficiency of the

amount

with

applicable

the extra-judicial foreclosure of the real estate

SECOND DIVISION
G.R. No. 171206

September 23,

2013

mortgage

subject

of

this

case,

including

attorneys fees and costs of suit.

The Facts

HEIRS OF THE LATE SPOUSES FLA VIANO

MAGLASANG,

P434,742.36,

formers total loan obligation to the latter after

Manila

MAGLASANG

of

and

SALUD

namely,

ADAZA-

OSCAR

A.

On June 16, 1975, spouses Flaviano and Salud

Maglasang (Sps.Maglasang) obtained a credit
line

from

respondent5

in

the

amount

of

MAGLASANG,

EDGAR

A.

MAGLASANG,

P350,000.00 which was secured by a real estate

CONCEPCION

CHONA

A.

MAGLASANG,

mortgage6

GLENDA A. MAGLASANG-ARNAIZ, LERMA A.

properties

executed
7

over

seven

of

their

located in Ormoc City and the

Page 73 of 118
Municipality of Kananga, Province of Leyte. 8

obtain several loans from respondent, secured

They availed of their credit line by securing

by promissory notes18 which they signed.

loans in the amounts of P209,790.50 and

P139,805.83 on October 24, 1975and March 15,
1976, respectively,9 both of which becoming due
and demandable within a period of one year.
Further, the parties agreed that the said loans
would earn interest at 12% per annum (p.a.)
and an additional 4% penalty would be charged
upon default.10
After

Flaviano

In

an

Order19

(Flaviano)

died

December

14,

1978

(December 14, 1978 Order),the probate court

terminated the proceedings with the surviving
heirs executing an extra-judicial partition of the
properties

of

Flavianos

estate.

The

loan

obligations owed by the estate to respondent,

however,

remained

respondents
Maglasang

dated

account

unsatisfied

certification

was

that

undergoing

Flavianos

restructuring.

Nonetheless,

Maglasang (Salud) and their surviving children,

recognized the rights of respondent under the

herein petitioners Oscar (Oscar), Concepcion

mortgage and promissory notes executed by the

Chona, Lerma, Felma, FeDoris, Leolino, Margie

Sps.

Leila, Ma. Milalie, Salud and Ma. Flasalie, all

foreclose

surnamed Maglasang, and Glenda Maglasang-

period."

Arnaiz,

appointed

their

brother

petitioner

Edgar Maglasang (Edgar) as their attorney-infact.12 Thus, on March 30, 1977, Edgar filed a
verified petition for letters of administration of
the intestate estate of Flaviano before the then
Court of First Instance of Leyte, Ormoc City,
Branch 5 (probate court), docketed as Sp. Proc.
No. 1604-0.13 On August 9, 1977, the probate
court issued an Order14 granting the petition,
thereby appointing Edgar as the administrator 15
of Flavianos estate.
In

view

of

the

issuance

of

letters

of

1977, issued a Notice to Creditors 16 for the filing

money

claims

against

Flavianos

estate.

Accordingly, as one of the creditors of Flaviano,

respondent notified17 the probate court of its
claim in the amount of P382,753.19 as of
October 11, 1978, exclusive of interests and
charges.
During

the

the

court

specifically,

same

within

expressly

its

"right

the

to

statutory

20

In this light, respondent proceeded to extrajudicially foreclose the mortgage covering the
Sps. Maglasangs properties and emerged as the
highest bidder at the public auction for the
amount

of

P350,000.00.21

There,

however,

remained a deficiency on Sps. Maglasangs

obligation to respondent. Thus, on June 24,
1981, respondent filed a suit to recover the
deficiency amount of P250,601.05 as of May 31,
1981 against the estate of Flaviano, his widow
Salud and petitioners, docketed as Civil Case

administration, the probate court, on August 30,

of

Maglasang,

probate

to

intestate on February 14,1977, his widow Salud

11

the

due

pendency

of

the

intestate

proceedings, Edgar and Oscar were able to

No. 1998-0.22
The RTC Ruling and Subsequent Proceedings
After trial on the merits, the RTC (formerly, the
probate court)23 rendered a Decision24 on April
6,

1987

directing

the

petitioners

to

pay

respondent, jointly and severally, the amount of

P434,742.36 with interest at the rate of 12%
p.a., plus a 4% penalty charge, reckoned from
September 5,1984 until fully paid.25 The RTC
found that it was shown, by a preponderance of
evidence,

that

petitioners,

after

the

extra-

Page 74 of 118
judicial

foreclosure

of

all

the

properties

apply to the present case since the same does

mortgaged, still have an outstanding obligation

not

in the amount and as of the date as above-

administrator over any property belonging to the

stated. The RTC also found in order the

estate of the decedent.32 According to the CA,

payment of interests and penalty charges as

what should apply is Act No. 313533 which

above-mentioned as well as attorneys fees

entitles respondent to claim the deficiency

equivalent

amount after the extra-judicial foreclosure of the

obligation.

to

10%

of

the

outstanding

real

26

Dissatisfied, petitioners elevated the case to the

involve

estate

properties.

mortgage

mortgage

of

made

Sps.

by

the

Maglasangs

34

CA on appeal, contending,27 inter alia, that the

Petitioners

remedies available to respondent under Section

subsequently denied in a Resolution

7, Rule 86 of the Rules of Court (Rules) are

January 4, 2006. Hence, the present recourse.

alternative and exclusive, such that the election

of one operates as a waiver or abandonment of
the others. Thus, when respondent filed its
claim against the estate of Flaviano in the
proceedings

before

the

probate

court,

it

motion

for

reconsideration
35

was
dated

The Issue Before the Court

The essential issue in this case is whether or not
the CA erred in affirming the RTCs award of the
deficiency amount in favor of respondent.

effectively abandoned its right to foreclose on

Petitioners assert36 that it is not Act No. 3135

the mortgage. Moreover, even on the assumption

but Section 7, Rule 86of the Rules which applies

that it has not so waived its right to foreclose, it

in this case. The latter provision provides

is nonetheless barred from filing any claim for

alternative

any deficiency amount.

satisfaction of respondents claim against the

During the pendency of the appeal, Flavianos

estate of Flaviano.37 Corollarily, having filed its

widow, Salud, passed away on July 25, 1997.28

The CA Ruling
In a Decision

and

exclusive

remedies

for

the

claim against the estate during the intestate

proceedings, petitioners argue that respondent
had effectively waived the remedy of foreclosure

dated July 20, 2005, the CA

and, even assuming that it still had the right to

denied the petitioners appeal and affirmed the

do so, it was precluded from filing a suit for the

RTCs Decision. At the outset, it pointed out that

recovery of the deficiency obligation.38

29

the probate court erred when it, through the

December

14,

1978

Order,

closed

and

terminated the proceedings in Sp. Proc. No.

1604-0 without first satisfying the claims of the
creditors

of

the

estate

in

particular,

respondent in violation of Section 1, Rule 90 of

the Rules.30 As a consequence, respondent was
not able to collect from the petitioners and
thereby was left with the option of foreclosing

Likewise, petitioners maintain that the extrajudicial foreclosure of the subject properties was
null and void, not having been conducted in the
capital of the Province of Leyte in violation of the
stipulations
contract.

39

in

the

real

estate

mortgage

They likewise deny any personal

liability for the loans taken by their deceased

parents.40

the real estate mortgage.31 Further, the CA held

The Courts Ruling

that Section 7, Rule 86 of the Rules does not

The petition is partly meritorious.

Page 75 of 118
Claims against deceased persons should be filed

As the foregoing generally speaks of "a creditor

during the settlement proceedings of their

holding a claim against the deceased secured by

estate.

a mortgage or other collateral security" as

Such

41

proceedings

are

primarily

governed by special rules found under Rules 73

above-highlighted,

to 90 of the Rules, although rules governing

concluded

ordinary actions may, as far as practicable,

covers all secured claims, whether by mortgage

apply suppletorily.

Among these special rules,

or any other form of collateral, which a creditor

Section 7, Rule 86 of the Rules (Section 7,

may enforce against the estate of the deceased

Rule86) provides the rule in dealing with

debtor. On the contrary, nowhere from its

secured claims against the estate:

language can it be fairly deducible that the said

42

SEC. 7. Mortgage debt due from estate. A

creditor holding a claim against the deceased
secured by a mortgage or other collateral
security,

may

abandon

the

security

and

prosecute his claim in the manner provided in

this rule, and share in the general distribution
of the assets of the estate; or he may foreclose
his mortgage or realize upon his security, by
action

in

court,

reasonably

aforementioned

section

section would as the CA interpreted narrowly

apply

only

to

mortgages

made

by

the

administrator over any property belonging to the

estate of the decedent. To note, mortgages of
estate property executed by the administrator,
are also governed by Rule 89 of the Rules,
captioned as "Sales, Mortgages, and Other
Encumbrances of Property of Decedent."

administrator a party defendant, and if there is

reliance on Philippine National Bank v. CA 43

a judgment for a deficiency, after the sale of the

(PNB) was misplaced as the said case did not, in

mortgaged premises, or the property pledged, in

any manner, limit the scope of Section 7, Rule

the foreclosure or other proceeding to realize

86. It only stated that the aforesaid section

upon the security, he may claim his deficiency

equally applies to cases where the administrator

judgment

mortgages the property of the estate to secure

manner

executor

be

In this accord, it bears to stress that the CAs

the

the

the

may

or

in

making

that

it

provided

in

the

preceding section; or he may rely upon his

the

mortgage or other security alone, and foreclose

pronouncement was a ruling of inclusion and

the same at any time within the period of the

not one which created a distinction. It cannot,

statute of limitations, and in that event he shall

therefore, be doubted that it is Section 7, Rule

not be admitted as a creditor, and shall receive

86which remains applicable in dealing with a

no share in the distribution of the other assets

creditors claim against the mortgaged property

of the estate; but nothing herein contained shall

of the deceased debtor, as in this case, as well

prohibit the executor or administrator from

as mortgages made by the administrator, as that

redeeming the property mortgaged or pledged,

in the PNB case.

by paying the debt for which it is held as

security, under the direction of the court, if the
court shall adjudged it to be for the best interest
of the estate that such redemption shall be
made. (Emphasis and underscoring supplied)

loan

he

obtained.44

Clearly,

the

Jurisprudence breaks down the rule under

Section 7, Rule 86 and explains that the
secured creditor has three remedies/options
that

he

may

alternatively

adopt

for

the

satisfaction of his indebtedness. In particular,

he may choose to: (a) waive the mortgage and

Page 76 of 118
claim the entire debt from the estate of the

Bank49 which overturned the earlier Pasno v.

mortgagor as an ordinary claim; (b) foreclose the

Ravina ruling:50

mortgage judicially and prove the deficiency as

an ordinary claim; and (c) rely on the mortgage
exclusively, or other security and foreclose the
same before it is barred by prescription, without
the right to file a claim for any deficiency. 45 It
must,

however,

be

emphasized

that

these

remedies are distinct, independent and mutually

exclusive from each other; thus, the election of
one effectively bars the exercise of the others.

Case law now holds that this rule grants to the

mortgagee
mutually

three

distinct,

exclusive

independent

remedies

that

can

and
be

alternatively pursued by the mortgage creditor

for the satisfaction of his credit in case the
mortgagor dies, among them:
(1) to waive the mortgage and claim the entire
debt from the estate of the mortgagor as an

With respect to real properties, the Court in

ordinary claim;

Bank

(2) to foreclose the mortgage judicially and prove

of

America

Corporation

46

v.

American

Realty

pronounced:

any deficiency as an ordinary claim; and

In our jurisdiction, the remedies available to the

(3)

mortgage creditor are deemed alternative and

foreclosing the same at anytime before it is

not cumulative. Notably, an election of one

barred by prescription without right to file a

remedy operates as a waiver of the other. For

claim for any deficiency

this purpose, a remedy is deemed chosen upon

the filing of the suit for collection or upon the
filing

of

foreclosure

the
of

complaint
mortgage,

in

an

action

pursuant

to

for
the

provision of Rule 68 of the 1997 Rules of Civil

Procedure. As to extrajudicial foreclosure, such
remedy is deemed elected by the mortgage
creditor upon filing of the petition not with any
court of justice but with the Office of the Sheriff
of the province where the sale is to be made, in
accordance with the provisions of Act No. 3135,
as

amended

by

Act

No.4118.47

(Emphasis

supplied)
Anent the third remedy, it must be mentioned
that the same includes the option of extrajudicially foreclosing the mortgage under Act No.
3135,as availed of by respondent in this case.
However, the plain result of adopting the last
mode of foreclosure is that the creditor waives
his right to recover any deficiency from the
estate.48 These precepts were discussed in the
PNB case, citing Perez v. Philippine National

to

rely

on

the

mortgage

exclusively,

In Perez v. Philippine National Bank, reversing

Pasno vs. Ravina, we held:
The ruling in Pasno v. Ravina not having been
reiterated in any other case, we have carefully
reexamined

the

same,

and

after

mature

deliberation have reached the conclusion that

the dissenting opinion is more in conformity
with reason and law. Of the three alternative
courses that section 7, Rule 87 (now Rule 86),
offers the mortgage creditor, to wit, (1) to waive
the mortgage and claim the entire debt from the
estate of the mortgagor as an ordinary claim; (2)
foreclose the mortgage judicially and prove any
deficiency as an ordinary claim; and (3) to rely
on the mortgage exclusively, foreclosing the
same at any time before it is barred by
prescription, without right to file a claim for any
deficiency, the majority opinion in Pasno v.
Ravina, in requiring a judicial foreclosure,
virtually

wipes

out

the

third

alternative

conceded by the Rules to the mortgage creditor,

Page 77 of 118
and which would precisely include extra-judicial

detail

foreclosures

foreclosures,

by

contrast

with

the

second

alternative.
foreclosure is that the creditor waives his right
to recover any deficiency from the estate.
Following the Perez ruling that the third mode
includes
extrajudicial foreclosure is that the creditor
waives any further deficiency claim. x x x.51
(Emphases and underscoring supplied; italics in
the original)
To obviate any confusion, the Court observes
that the operation of Act No. 3135 does not
entirely discount the application of Section 7,
86,

or

vice-versa.

Rather,

the

two

complement each other within their respective

spheres of operation. On the one hand, Section
7, Rule 86 lays down the options for the secured
to

claim

against

the

estate

and,

according to jurisprudence, the availment of the

third

option

bars

him

from

claiming

any

deficiency amount. On the other hand, after the

third option is chosen, the procedure governing
the

manner

foreclosure
governed

the

for

formalities

extra-judicial
governing

the

the place where the application for extra-judicial

foreclosure

is

filed,

the

requirements

of

publication and posting and the place of sale

must be governed by Act No. 3135.
In this case, respondent sought to extra-

extrajudicial foreclosure sales, the result of

creditor

procedure

manner of availing of the third option such as

The plain result of adopting the last mode of

Rule

the

in

should
by

the

which

the

proceed

extra-judicial

would

provisions

of

still
Act

be
No.

3135.Simply put, Section 7, Rule 86 governs the

parameters and the extent to which a claim may
be advanced against the estate, whereas Act No.
3135sets out the specific procedure to be
followed when the creditor subsequently chooses
the third option specifically, that of extrajudicially foreclosing real property belonging to
the estate. The application of the procedure
under Act No. 3135 must be concordant with
Section 7, Rule 86 as the latter is a special rule
applicable to claims against the estate, and at
the same time, since Section 7, Rule 86 does not

judicially

foreclose

the

mortgage

properties

previously

belonging

Maglasang

(and

their

now,

of

the

to

Sps.

estates)

and,

therefore, availed of the third option. Lest it be

misunderstood, it did not exercise the first
option of directly filing a claim against the
estate, as petitioners assert, since it merely
notified52 the probate court of the outstanding
amount of its claim against the estate of
Flaviano and that it was currently restructuring
the account.53 Thus, having unequivocally opted
to exercise the third option of extra-judicial
foreclosure

under

Section

7,

Rule

86,

respondent is now precluded from filing a suit to

recover

any

deficiency

amount

as

earlier

discussed.
As a final point, petitioners maintain that the
extra-judicial

foreclosure

of

the

subject

properties was null and void since the same was

conducted in violation of the stipulation in the
real estate mortgage contract stating that the
auction sale should be held in the capital of the
province where the properties are located, i.e.,
the Province of Leyte.
The Court disagrees.
As may be gleaned from the records, the
stipulation under the real estate mortgage 54
executed by Sps. Maglasang which fixed the
place of the foreclosure sale at Tacloban City
lacks words of exclusivity which would bar any

Page 78 of 118
other acceptable for a wherein the said sale may

Section 7, Rule 86. To reiterate, respondent

be conducted, to wit:

cannot, however, file any suit to recover any

It is hereby agreed that in case of foreclosure of

this mortgage under Act 3135, the auction sale
shall be held at the capital of the province if the

deficiency amount since it effectively waived its

right thereto when it chose to avail of extrajudicial foreclosure as jurisprudence instructs.

property is within the territorial jurisdiction of

WHEREFORE,

the province concerned, or shall be held in the

GRANTED. The complaint for the recovery of the

city if the property is within the territorial

deficiency

jurisdiction of the city concerned; x x x.

foreclosure filed by respondent Manila Banking

55

Case law states that absent such qualifying or

restrictive words to indicate the exclusivity of
the agreed forum, the stipulated place should
only be as an additional, not a limiting venue. 56

the

petition

amount

after

is

PARTLY

extra-judicial

Corporation is hereby DISMISSED. The extrajudicial foreclosure of the mortgaged properties,

however, stands.
SO ORDERED.

As a consequence, the stipulated venue and that

provided under Act No. 3135 can be applied
alternatively.

THIRD DIVISION

In particular, Section 2 of Act No. 3135 allows

the foreclosure sale to be done within the
province where the property to be sold is
situated, viz.:

ERLINDA PILAPIL and HEIRS OF DONATA

ORTIZ BRIONES, namely: ESTELA, ERIBERTO

SEC. 2. Said sale cannot be made legally outside

AND

of the province which the property sold is

CULTURA,

situated; and in case the place within said

ERNESTO

province in which the sale is to be made is

ADOLFO MENDOZA and PACITA MENDOZA,

subject to stipulation, such sale shall be made

in said place or in the municipal building of the

VIRGILIO

SANTOS,

ELVIRA

ANA

SANTOS

MENDOZA,

SANTOS

INOCENTES,

RIZALINA

SANTOS,

Petitioners,

municipality in which the property or part

thereof is situated. (Italics supplied) ..
In this regard, since the auction sale was

- versus-

conducted in Ormoc City, which is within the

territorial jurisdiction of the Province of Leyte,
then the Court finds sufficient compliance with
the above-cited requirement.
All

told,

finding

that

HEIRS OF MAXIMINO R. BRIONES, namely:

the

extra-judicial

foreclosure subject of this case was properly

conducted in accordance with the formalities of
Act No. 3135,the Court upholds the same as a
valid exercise of respondent's third option under

SILVERIO
BONIFACIO

S.

BRIONES,
CABAHUG,

PETRA

BRIONES,

JR.,

ANITA

TRASMONTE, CIRILITA FORTUNA, CRESENCIA

BRIONES,

FUGURACION

MERCEDES LAGBAS,

MEDALLE

and

Page 79 of 118
Respondents.

RESOLUTION

G.R. No. 150175

CHICO-NAZARIO, J.:

Present:

On 10 March 2006, this Court promulgated its

Decision[1] in the above-entitled case, ruling in

YNARES-SANTIAGO, J.,

favor

of

the

petitioners.

The

dispositive

portion[2] reads as follows:

Chairperson,
AUSTRIA-MARTINEZ,*

IN VIEW OF THE FOREGOING, the assailed

CALLEJO, SR., and

Decision of the Court of Appeals in CA-GR CV

CHICO-NAZARIO, JJ.

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,

Motion

for

Reconsideration[3] of the foregoing Decision was

filed by Atty. Celso C. Reales of the Reales Law
Promulgated:

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
February 5, 2007

counsel, filed an Opposition to Respondents

Motion for Reconsideration,[4] to which the

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

respondents filed a Rejoinder[5] on 23 May

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

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

Page 80 of 118
June 2006 and 16 June 2006, respectively, a
Reply[7] and Supplemental Reply[8] to the
petitioners Opposition to respondents Motion for
Reconsideration.

Finally,

petitioners

filed

xxxx

Rejoinder[9] to the respondents Reply and

The CFI would subsequently issue an Order,

Supplemental Reply on 5 July 2006.

dated 2 October 1952, awarding ownership of

the aforementioned real properties to Donata.

The facts of the case, as recounted in the

Decision,[10] are as follows

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

Petitioners are the heirs of the late Donata

Ortiz-Briones

(Donata),

consisting

of

her

surviving sister, Rizalina Ortiz-Aguila (Rizalina);

Rizalinas 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

her name.

of

Maximino.

Donata died on 1 November 1977. Erlinda, one

of Donatas nieces, instituted with the RTC a
petition for the administration of the intestate
estate of Donata. Erlinda and her husband,
Gregorio,

were

administrators

appointed
of

by

Donatas

the

RTC

intestate

as

estate.

Controversy arose among Donatas 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

xxxx

Donata. The other heirs of Donata opposed

Erlindas claim. This Court, however, was no

Maximino was married to Donata but their

longer informed of the subsequent development

union did not produce any children. When

in the intestate proceedings of the estate of

Maximino

Donata

Donata; and as far as this Petition is concerned,

instituted intestate proceedings to settle her

all the heirs of Donata, including Erlinda,

husbands estate with the Cebu City Court of

appear to be on the same side.

died

on

May

1952,

First Instance (CFI), 14th Judicial District,

designated as Special Proceedings No. 928-R.
On 8 July 1952, the CFI issued Letters of
Administration

appointing

administratrix

of

submitted

an

Donata

Maximinos
Inventory

of

as

estate.

the
She

Maximinos

properties, which included, among other things,

the following parcels of land x x x.

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

Page 81 of 118
to collect rentals from Maximinos properties.

said properties and to render an accounting of

But then, Gregorio filed with the RTC a Motion

the fruits thereof.

to Set Aside the Order, dated 5 December 1985,

claiming that the said properties were already
under his and his wifes administration as part
of the intestate estate of Donata. Silverios
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

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.

xxxx

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.

Unsatisfied with the afore-quoted Decision of the

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

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.

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

Complaint

for

Court

(RTC),

partition,

dismissed

annulment,

the
and

recovery of possession of real property filed by

xxxx

the heirs of Maximino in Civil Case No. CEB5794. This Court summed up its findings,[11]
thus

After trial in due course, the RTC rendered its

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

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

xxxx

of Maximino, registered in her name. In the

absence

of

fraud,

no

implied

trust

was

established between Donata and the heirs of

x x x[T]he RTC declared that the heirs of

Maximino under Article 1456 of the New Civil

Maximino were entitled to of the real properties

Code. Donata was able to register the real

covered by TCTs No. 21542, 21543, 21544,

properties in her name, not through fraud or

21545, 21546, and 58684. It also ordered

mistake, but pursuant to an Order, dated 2

Erlinda to reconvey to the heirs of Maximino the

October 1952, issued by the CFI in Special

Page 82 of 118
Proceedings

No.

928-R.

The

CFI

Order,

Decision, dated 10 March 2006, this Court has

presumed to be fairly and regularly issued,

sacrificed their substantive right to succession,

declared Donata as the sole, absolute, and

thus, making justice subservient to the dictates

exclusive heir of Maximino; hence, making

of mere procedural fiats.[14]

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

securing the Court of First Instance Order,

dated 2 October 1952, which declared her as the
sole heir of her deceased husband Maximino
authorized

her

to

have

Maximinos

properties registered exclusively in her name;

that respondents right to succession to the
disputed properties was transmitted or vested
from the moment of Maximinos 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

Courts

ruling

in

Quion

clarify some points in its previous Decision in

this case, it does not find any new evidence or
argument

that

would

adequately

justify

change in its previous position.

On the finding of fraud

the

arguments that Donata committed fraud in

and

While this Court is persuaded to reexamine and

v.

Claridad[12] and Sevilla, et al. v. De Los Angeles,

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.

[13] respondents action to recover title to and

possession of their shares in Maximinos estate,

In the Decision, this Court ruled in the negative,

held in trust for their benefit by Donata, and

since

eventually,

establish

by

petitioners

as

the

latters

there
that

was

insufficient

Donata

evidence

committed

fraud.

to
It

imprescriptible.

should be remembered that Donata was able to

Respondents also advance a fresh contention

secure certificates of title to the disputed

that the CFI Order, dated 2 October 1952, being

properties by virtue of the CFI Order in Special

based on the fraudulent misrepresentation of

Proceedings No. 928-R (the proceedings she

Donata that she was Maximinos sole heir, was a

instituted to settle Maximinos intestate estate),

void order, which produced no legal effect.

which declared her as Maximinos sole heir. In

Lastly, respondents asseverate that, by relying

the absence of proof to the contrary, the Court

on

accorded to Special Proceedings No. 928-R the

successors-in-interest,

certain

procedural

is

presumptions

in

its

Page 83 of 118
presumptions

of

regularity

and

validity.

xxxx

Reproduced below are the relevant portions[15]

of the Decision

The CFI Order, dated 2 October 1952, issued in

Special Proceedings No. 928-R, effectively settled

At the onset, it should be emphasized that

the intestate estate of Maximino by declaring

Donata was able to secure the TCTs covering the

Donata as the sole, absolute, and exclusive heir

real

of

of her deceased husband. The issuance by the

Maximino by virtue of a CFI Order, dated 2

CFI of the said Order, as well as its conduct of

October 1952. It is undisputed that the said CFI

the entire Special Proceedings No. 928-R, enjoy

Order

Special

the presumption of validity pursuant to the

Proceedings No. 928-R, instituted by Donata

Section 3(m) and (n) of Rule 131 of the Revised

herself,

Rules of Court, reproduced below

properties

was
to

belonging

issued

by

settle

the

to

the

the

CFI

intestate

estate

in

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

SEC. 3. Disputable presumptions. The following

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

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

xxxx

p.m., as Entry No. 1714. It was annotated on

the TCTs covering the real properties as having

(m)

declared

Donata

performed;

exclusive

heir

the
of

sole,

absolute,

Maximino.

The

and

That

official

duty

has

been

regularly

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

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

whether in the Philippines or elsewhere, was
acting in the lawful exercise of jurisdiction.

by the heirs of Maximino did not pertain to the

By reason of the foregoing provisions, this Court

CFI Order, but to the manner or procedure by

must presume, in the absence of any clear and

which

Donata.

convincing proof to the contrary, that the CFI in

Moreover, the non-presentation of the CFI Order,

Special Proceedings No. 928-R had jurisdiction

contrary to the declaration by the RTC, does not

of the subject matter and the parties, and to

amount to a willful suppression of evidence that

have rendered a judgment valid in every respect;

would give rise to the presumption that it would

and it could not give credence to the following

be adverse to the heirs of Donata if produced. x

statements made by the Court of Appeals in its

x x.

Decision.

it

was

issued

in

favor

of

Page 84 of 118
xxxx

Aurelias

testimony

deserves

scant

credit

considering that she was not testifying on

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

matters within her personal knowledge. The

phrase I dont 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.

Case No. CEB-5794 before the RTC. How then

could the Court of Appeals make a finding that

It

is

worth

Donata willfully excluded from the said Petition

ratiocination, the Court was proceeding from an

the names, ages, and residences of the other

evaluation of the evidence on record, which did

heirs of Maximino? Second, there was also no

not include an actual copy of the CFI Order in

evidence showing that the CFI actually failed to

Special Proceedings No. 928-R. Respondents

send notices of Special Proceedings No. 928-R to

only submitted a certified true copy thereof on

the heirs of Maximino or that it did not require

15 June 2006, annexed to their Supplemental

presentation of proof of service of such notices.

Reply to petitioners opposition to their motion

It should be remembered that there stands a

for reconsideration of this Courts Decision.

presumption that the CFI Judge had regularly

Respondents did not offer any explanation as to

performed his duties in Special Proceedings No.

why they belatedly produced a copy of the said

928-R, which included sending out of notices

Order,

and requiring the presentation of proof of

fortunate enough to obtain a copy thereof from

service of such notices; and, the heirs of

the Register of Deeds of Cebu.[16]

but

noting

merely

that,

in

claimed

its

to

foregoing

have

been

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.

Respondents should
springing

new

be taken

evidence

so

to

late

task for
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

xxxx

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.

Page 85 of 118
October 1952.[18] Other than such observation,
this Court finds nothing in the CFI Order which

The CFI Order[17] in question reads in full as

could

change

its

original

position

in

the

Decision under consideration.

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.

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

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 latters 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

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.

properties are those contained in the Inventory,

dated October 2, 1952.

This Court cannot stress enough that the CFI

Order was the result of the intestate proceedings
instituted by Donata before the trial court. As

Cebu City, January 15, 1960.

this Court pointed out in its earlier Decision, the

manner by which the CFI judge conducted the

From the contents of the afore-quoted Order,

proceedings

this Court is able to deduce that the CFI Order

regularity,

was in fact issued on 15 January 1960 and not

presumption is the order of publication of the

2 October 1952, as earlier stated in the

notice of the intestate proceedings. A review of

Decision. It was the inventory of properties,

the records fails to show any allegation or

submitted

of

concrete proof that the CFI also failed to order

Maximinos intestate estate, which was dated 2

the publication in newspapers of the notice of

by

Donata

as

administratrix

enjoys
and

the

presumption

encompassed

in

of
such

Page 86 of 118
the intestate proceedings and to require proof

circumstances. The presumptions relied upon by

from Donata of compliance therewith. Neither

this Court in the instant case are disputable

can this Court find any reason or explanation as

presumptions, which are satisfactory, unless

to why Maximinos siblings could have missed

contradicted or overcome by evidence. This

the published notice of the intestate proceedings

Court finds that the evidence presented by

of their brother.

respondents

failed

to

overcome

the

given

presumptions.
In relying on the presumptions of the regular
performance of official duty and lawful exercise
of jurisdiction by the CFI in rendering the
questioned Order, dated 15 January 1960, this
Court is not, as counsel for respondents allege,
sacrificing the substantive right of respondents
to their share in the inheritance in favor of mere
procedural fiats. There is a rationale for the
establishment of rules of procedure, as amply
explained by this Court in De Dios v. Court of
Appeals[20]

Although Donata may have alleged before the

CFI that she was her husbands 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 Maximinos 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

Procedural rules are designed to insure the

alive and each would have been capable to act to

orderly and expeditious administration of justice

protect his or her own right to Maximinos estate.

by providing for a practical system by which the

Letters of Administration of Maximinos estate

parties to a litigation may be accorded a full and

were issued in favor of Donata as early as 8 July

fair opportunity to present their respective

1952, and the CFI Order in question was issued

positions and refute each other's submissions

only

under the prescribed requirements, conditions

proceedings for the settlement of Maximinos

and

the

estate were thus pending for almost eight years,

counterfoil of substantive law. In fact, there is a

and it is the burden of the respondents to

symbiotic

By

establish that their parents or grandparents,

complying faithfully with the Rules of Court, the

Maximinos surviving siblings, had absolutely no

bench and the bar are better able to discuss,

knowledge of the said proceedings all these

analyze and understand substantive rights and

years. As established in Ramos v. Ramos,[21]

duties and consequently to more effectively

the degree of proof to establish fraud in a case

protect and enforce them. The other alternative

where the principal actors to the transaction

is judicial anarchy.

have already passed away is proof beyond

limitations.

Adjective

relationship

law

between

is

not

them.

on

15

January

1960.

The

intestate

reasonable doubt, to wit

Thus, compliance with the procedural rules is
the general rule, and abandonment thereof

"x x x But length of time necessarily obscures all

should only be done in the most exceptional

human evidence; and as it thus removes from

Page 87 of 118
the parties all the immediate means to verify the

On prescription of the right to recover based on

nature of the original transactions, it operates

implied trust

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

Assuming, for the sake of argument, that

Donatas 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 Maximinos 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 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

The

case

of

Ramos

v.

Ramos[23]

already

provides an elucidating discourse on the matter,

to wit

lightly to be imputed to the living; for, the legal

presumption is the other way; as to the dead,

"Trusts are either express or implied. Express

who are not here to answer for themselves, it

trusts are created by the intention of the trustor

would be the height of injustice and cruelty, to

or of the parties. Implied trusts come into being

disturb their ashes, and violate the sanctity of

by operation of law" (Art. 1441, Civil Code). "No

the grave, unless the evidence of fraud be clear,

express trusts concerning an immovable or any

beyond a reasonable doubt (Prevost vs. Gratz, 6

interest therein may be proven by oral evidence.

Wheat. [U.S.], 481, 498).

An

Moreover, even if Donatas allegation that she

implied

trust

may

be

proven

by

oral

evidence" (Ibid; Arts. 1443 and 1457).

was Maximinos 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.

"No

particular words are required for the

creation of an express trust, it being sufficient

that a trust is clearly intended" (Ibid; Art. 1444;
Tuason de Perez vs. Caluag, 96 Phil. 981; Julio
vs. Dalandan, L-19012, October 30, 1967, 21
SCRA 543, 546). "Express trusts are those
which are created by the direct and positive acts
of the parties, by some writing or deed, or will,
or

by

words

either

expressly

or

impliedly

evincing an intention to create a trust" (89 C.J.

S. 122).

Page 88 of 118
party." A constructive trust is not a trust in the
"Implied trusts are those which, without being
expressed, are deducible from the nature of the

technical sense (Gayondato vs. Treasurer of the

P.I., 49 Phil. 244; See Art. 1456, Civil Code).

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).

There is a rule that a trustee cannot acquire by

prescription the ownership of property entrusted
to him (Palma vs. Cristobal, 77 Phil. 712), or
that an action to compel a trustee to convey
property registered in his name in trust for the
benefit of the cestui qui trust does not prescribe
(Manalang vs. Canlas, 94 Phil. 776; Cristobal vs.

"A resulting trust is broadly defined as a trust

which is raised or created by the act or
construction of law, but in its more restricted
sense it is a trust raised by implication of law
and

presumed

always

to

have

been

contemplated by the parties, the intention as to

which is to be found in the nature of their
transaction, but not expressed in the deed or
instrument of conveyance" (89 C.J.S. 725).
Examples of resulting trusts are found in Article
1448 to 1455 of the Civil Code. See Padilla vs.

Gomez, 50 Phil. 810), or that the defense of

prescription cannot be set up in an action to
recover property held by a person in trust for the
benefit of another (Sevilla vs. De los Angeles, 97
Phil. 875), or that property held in trust can be
recovered by the beneficiary regardless of the
lapse of time (Marabilles vs. Quito, 100 Phil. 64;
Bancairen vs. Diones, 98 Phil. 122, 126; Juan
vs. Zuiga, 62 O.G. 1351; 4 SCRA 1221; Jacinto
vs. Jacinto, L-17957, May 31, 1962. See Tamayo
vs. Callejo, 147 Phil. 31, 37).

Court of Appeals, L-31569, September 28, 1973,

53 SCRA 168, 179).

That rule applies squarely to express trusts. The

basis of the rule is that the possession of a

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

trustee is not adverse. Not being adverse, he

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

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

The rule of imprescriptibility of the action to

recover property held in trust may possibly

Page 89 of 118
apply to resulting trusts as long as the trustee

Prescription may supervene in an implied trust

has

(Bueno vs. Reyes, L-22587, April 28, 1969, 27

not

repudiated

the

trust

(Heirs

of

Candelaria vs. Romero, 109 Phil. 500, 502-3;

SCRA

Martinez vs. Grao, 42 Phil. 35; Buencamino vs.

January 29, 1968; Jacinto vs. Jacinto, L-17957,

Matias, 63 O. G. 11033, 16 SCRA 849).

May 31, 1962, 5 SCRA 371).

The rule of imprescriptibility was misapplied to

And

constructive trusts (Geronimo and Isidoro vs.

constructive, its enforcement may be barred by

Nava and Aquino, 105 Phil. 145, 153. Compare

laches (90 C.J.S. 887-889; 54 Am Jur. 449-450;

with Cuison vs. Fernandez and Bengzon, 105

Diaz vs. Gorricho and Aguado, supra; Compare

Phil. 135, 139; De Pasion vs. De Pasion, 112

with

Phil. 403, 407).

[Emphases supplied.]

Acquisitive prescription may bar the action of

the beneficiary against the trustee in an express

Sevilla[25] cases, invoked by respondents, must

trust for the recovery of the property held in

be

trust where (a) the trustee has performed

accordingly by the principles established in the

unequivocal acts of repudiation amounting to an

afore-quoted case. Thus, while respondents right

ouster of the cestui qui trust; (b) such positive

to inheritance was transferred or vested upon

acts of repudiation have been made known to

them at the time of Maximinos death, their

the cestui qui trust and (c) the evidence thereon

enforcement of said right by appropriate legal

is clear and conclusive (Laguna vs. Levantino,

action may be barred by the prescription of the

supra;

action.

Salinas

vs.

Tuason,

55

Phil.

729.

1179;

Fabian

whether

Mejia

vs.

present
made

the

Fabian,

trust

is

Gampona,

reading
in

vs.

of

conjunction

resulting

100

the

L-20449,

Phil.

277).

Quion[24]

with

and

or

and

guided

Compare with the rule regarding co-owners

found in the last paragraph of Article 494, Civil
Code; Casaas vs. Rosello, 50 Phil. 97; Gerona
vs. De Guzman, L-19060, May 29, 1964, 11
SCRA 153, 157).

different. The prescriptibility of an action for

reconveyance based on constructive trust is now
(Alzona

disputed properties based on implied trust is

governed by Article 1144 of the New Civil Code,
which reads

With respect to constructive trusts, the rule is

settled

Prescription of the action for reconveyance of the

vs.

Capunitan,

L-10228,

ART. 1144. The following actions must be

brought within ten years from the time the right
of action accrues:

February 28, 1962, 4 SCRA 450; Gerona vs. De

Guzman, supra; Claridad vs. Henares, 97 Phil.
973; Gonzales vs. Jimenez, L-19073, January

(1) Upon a written contract;

30, 1965, 13 SCRA 80; Boaga vs. Soler, 112

Phil. 651; J. M. Tuason & Co., vs. Magdangal, L15539,

January

30,

1962,

SCRA

84).

(2) Upon an obligation created by law;

Page 90 of 118
does not make their action to enforce their right
to the said properties imprescriptible. While as a

(3) Upon a judgment.

general rule, the action for partition among coowners does not prescribe so long as the co-

Since an implied trust is an obligation created

ownership is expressly or impliedly recognized,

by law (specifically, in this case, by Article 1456

as provided for in Article 494, of the New Civil

of the New Civil Code), then respondents had 10

Code, it bears to emphasize that Donata had

years within which to bring an action for

never recognized respondents as co-owners or

reconveyance of their shares in Maximinos

co-heirs, either expressly or impliedly.[28] Her

properties. The next question now is when

assertion before the CFI in Special Proceedings

should

be

No. 928-R that she was Maximinos sole heir

reckoned from. The general rule is that an

necessarily excludes recognition of some other

action for reconveyance of real property based

co-owner or co-heir to the inherited properties;

on implied trust prescribes ten years from

Consequently, the rule on non-prescription of

registration and/or issuance of the title to the

action

property,[26]

common does not apply to the case at bar.

the

ten-year

not

prescriptive

only

because

period

registration

for

partition

of

property

owned

in

under the Torrens system is a constructive

notice

of

title,[27]

but

also

because

by

registering the disputed properties exclusively in

On laches as bar to recovery

her name, Donata had already unequivocally

repudiated any other claim to the same.

Other than prescription of action, respondents

right to recover possession of the disputed

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,

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]

and recovery of possession of the disputed real

properties, docketed as Civil Case No. CEB5794, 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.

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

Moreover, even though respondents Complaint

before the RTC in Civil Case No. CEB-5794 also
prays for partition of the disputed properties, it

the peace of society.[30]

Page 91 of 118
This Court has already thoroughly discussed in
its Decision the basis for barring respondents
action for recovery of the disputed properties
because of laches. This Court pointed out
therein[31] that

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 Maximinos death before one of

In further support of their contention of fraud

them, Silverio, filed a Petition for Letters of

by

Administration

Donata,

the

heirs

of

Maximino

even

for

the

intestate

estate

of

emphasized that Donata lived along the same

Maximino on 21 January 1985. After learning

street as some of the siblings of Maximino and,

that the intestate estate of Maximino was

yet, she failed to inform them of the CFI Order,

already settled in Special Proceedings No. 928-

dated [15 January 1960], in Special Proceedings

R,

No. 928-R, and the issuance in her name of new

instituting, on 3 March 1987, Civil Case No.

TCTs

CEB-5794,

covering

the

real

properties

which

they

waited
the

another

two

Complaint

years,
for

before

partition,

belonged to the estate of Maximino. This Court,

annulment and recovery of the real property

however,

belonging to the estate of Maximino. x x x

appreciates

such

information

differently. It actually works against the heirs of

Maximino.

Since

they

only

lived

nearby,

Maximinos siblings had ample opportunity to

inquire or discuss with Donata the status of the

Considering the circumstances in the afore-

estate of their deceased brother. Some of the

quoted paragraphs, as well as respondents

real properties, which belonged to the estate of

conduct before this Court, particularly the

Maximino, were also located within the same

belated submission of evidence and argument of

area as their residences in Cebu City, and

new

Maximinos

displaying

siblings

could

have

regularly

issues,
a

respondents
penchant

for

are

consistently

delayed

action,

observed the actions and behavior of Donata

without any proffered reason or justification for

with regard to the said real properties. It is

such delay.

uncontested that from the time of Maximinos

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 Donatas 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

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

heirs of Maximino on guard if they truly believed

that they still had rights thereto.

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]

ownership over the real properties, in exclusion

of all others, which must have already put the

laches,

On void judgment or order

Page 92 of 118
Respondents presented only in their Reply and

intents a valid sentence. If emanating from a

Supplemental

petitioners

court of general jurisdiction, it will be sustained

Opposition to their Motion for Reconsideration

by the ordinary presumptions of regularity, and

the argument that the CFI Order, dated 15

it is not open to impeachment in any collateral

January 1960, in Special Proceedings No. 928-R

action. * * *"

Reply

to

the

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.

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

This Court is unconvinced.

proceedings

founded

upon

it

are

equally

worthless. It neither binds nor bars any one. All

In

the

jurisprudence

respondents,[33]

an

referred

order

or

to

by

the

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.

acts performed under it and all claims flowing

out of it are void. The parties attempting to
enforce it may be responsible as trespassers.
The purchaser at a sale by virtue of its authority
finds himself without title and without redress."
(Freeman

on

Judgments,

sec.

117,

citing

Campbell vs. McCahan, 41 Ill., 45; Roberts vs.

Stowers, 7 Bush, 295, Huls vs. Buntin, 47 Ill.,

Distinction must be made between a void

judgment and a voidable one, thus

396; Sherrell vs. Goodrum, 3 Humph., 418;

Andrews vs. State, 2 Sneed, 549; Hollingsworth
vs. Bagley, 35 Tex., 345; Morton vs. Root, 2 Dill.,
312;

Commercial

Bank

of

Manchester

vs.

"* * * A voidable judgment is one which, though

Martin, 9 Smedes & M., 613; Hargis vs. Morse, 7

not a mere nullity, is liable to be made void

Kan., 259. See also Cornell vs. Barnes, 7 Hill,

when a person who has a right to proceed in the

35; Dawson and Another vs. Wells, 3 Ind., 399;

matter takes the proper steps to have its

Meyer vs. Mintonye, 106 Ill., 414; Olson vs.

invalidity declared. It always contains some

Nunnally, 47 Kan., 391; White vs. Foote L. & M.

defect which may become fatal. It carries within

Co., 29 W. Va., 385.)

it the means of its own overthrow. But unless

and until it is duly annulled, it is attended with
all

the

ordinary

consequences

of

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

It is not always easy to draw the line of

demarcation between a void judgment and a
voidable one, but all authorities agree that
jurisdiction over the subject-matter is essential
to the validity of a judgment and that want of
such jurisdiction renders it void and a mere
nullity. In the eye of the law it is non-existent.
(Fisher vs. Harnden, 1 Paine, 55; Towns vs.

Page 93 of 118
Springer, 9 Ga., 130; Mobley vs. Mobley, 9 Ga.,

the discovery of the fraud.[36] If it is conceded

247; Beverly and McBride vs. Burke, 9 Ga., 440;

that the respondents came to know of Donatas

Central Bank of Georgia vs. Gibson, 11 Ga.,

fraudulent acts only in 1985, during the course

453; Johnson vs. Johnson, 30 Ill., 215; St. Louis

of the RTC proceedings which they instituted for

and Sandoval Coal and Mining Co. vs. Sandoval

the settlement of Maximinos estate, then their

Coal and Mining Co., 111 Ill., 32; Swiggart vs.

right to file an action to annul the CFI Order,

Harber, 4 Scam., 364; Miller vs. Snyder, 6 Ind.,

dated 15 January 1960, in Special Proceedings

1; Seely vs. Reid, 3 Greene [Iowa], 374.)[34]

No. 928-R (earlier instituted by Donata for the

settlement of Maximinos estate), has likewise
prescribed by present time.

The fraud and misrepresentation fostered by

Donata on the CFI in Special Proceedings No.
928-R

did

not

deprive

the

trial

court

of

In

view

of

the

foregoing,

the

Motion

for

Reconsideration is DENIED.

jurisdiction over the subject-matter of the case,

namely,

the

intestate

estate

of

Maximino.

Donatas fraud and misrepresentation may have

SO ORDERED.

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 Donatas name. So
until and unless respondents bring a direct
action to nullify the CFI Order, dated 15
January 1960, in Special Proceedings No. 928R, 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

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.:

Page 94 of 118
The present administrative case stemmed from a

rejected

respondents

sworn letter-complaint1 dated May 29, 1999

application to purchase already filed by the

filed before this Court by Rodolfo C. Sabidong

actual occupant of Lot 12, "in line with the

(complainant) charging respondent Nicolasito S.

policy of the Probate Court to give priority to the

Solas, Clerk of Court IV, Municipal Trial Court

actual

in Cities (MTCC), Iloilo City with grave and

Offers".

serious misconduct, dishonesty, oppression and

payment tendered by respondent was returned

abuse of authority.

to him, he was nevertheless informed that he

occupants
While

the

offer

in

in

view

awarding
check

for

of

approval
initial

an

of

down

may file an offer to purchase Lot 11 and that if

he could put up a sufficient down payment, the

The Facts

Estate could immediately endorse it for approval

of the Probate Court so that the property can be

Trinidad Sabidong, complainants mother, is one

of the longtime occupants of a parcel of land,

awarded to him "should the occupant fail to

avail of the priority given to them."4

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,
attorneys fees, expenses and costs.3 At the
time, respondent was the Clerk of Court III of
MTCC, Branch 3, Iloilo City.

The following day, January 8, 1986, respondent

again submitted an Offer to Purchase Lot 11
with an area of 234 square meters for the
amount of P35,100. Under the Order dated
November 18, 1986 issued by the probate court
(Regional Trial Court of Iloilo, Branch 27) in
Special Proceedings No. 1672 ("Testate Estate of
the Late Charles Newton Hodges, Rosita R.
Natividad, Administratrix"), respondents Offer
to Purchase Lot 11 was approved upon the
courts 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 respondents
motion for issuance of a writ of possession in his
favor. The writ of possession over Lot 11 was

Sometime

in

October

1984,

respondent

eventually issued on June 27, 1989.5

submitted an Offer to Purchase on installment

Lots 11 and 12. In a letter dated January 7,
1986, the Administratrix of the Hodges Estate

On November 21, 1994, a Deed of Sale With

Mortgage covering Lot 11 was executed between

Page 95 of 118
respondent and the Hodges Estate represented

monthly rentals until sometime in 1979 when

by its Administratrix, Mrs. Ruth R. Diocares. Lot

the Estate of Hodges stopped accepting rentals.

11 was thereby conveyed to respondent on

xxx

installment for the total purchase price of

P50,000.

4. Upon knowing sometime in 1987 that the

property over which their house is standing, was

Consequently, Transfer Certificate of Title (TCT)

being offered for sale by the Estate, the mother

No. T-11836 in the name of C. N. Hodges was

of

cancelled and a new certificate of title, TCT No.

SABIDONG (now deceased), took interest in

T-107519 in the name of respondent was issued

buying said property, Lot 11;

on

December

5,

1994.

Lot

11

was

complainant,

TRINIDAD

CLAVERIO

later

subdivided into two lots, Lots 11-A and 11-B for

which the corresponding titles (TCT Nos. T116467 and T-116468), also in the name of
respondent, were issued on February 28, 1997.6

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

On motion of Ernesto Pe Benito, Administrator

children and the complainant in this case, tried

of the Hodges Estate, a writ of demolition was

to negotiate with the Estate for the sale of the

issued on March 3, 1998 by the probate court in

subject property, they were informed that all

favor of respondent and against all adverse

papers for transaction must pass through the

occupants of Lot 11.7

respondent in this case, Nicolasito Solas. This is

unusual, so they made inquiries and they

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

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;

faith), commit deception, dishonesty, oppression

and grave abuse of authority. Complainant

6. The respondent Nicolasito Solas, then Clerk

specifically alleged the following:

of Court III, MTCC, Iloilo City, has knowledge, by

reason of his position that in 1983 Hodges

3. Complainant and his siblings, are possessors

and occupants of a parcel of land situated at
Brgy.

San

identified

Vicente,
as

Lot

Jaro,
No.

Iloilo

City,

then

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

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

Clerk

of

Court

III,

the

respondent surreptitiously offered to buy the

said lot in litigation. x x x

Page 96 of 118
7. Complainant nor any member of his family

10. True enough, they were not ejected instead it

did not know that as early as 1984, the

took the respondent some time to see them

respondent had offered to purchase the subject

again and demanded additional payment. In the

lot from the estate x x x. After receiving the

meanwhile, the complainant waited for the

notice of denial of his offer to purchase, dated

papers of the supposed sale and transfer of title,

January 7, 1986, respondent made a second

which respondent had promised after receiving

offer to purchase the subject property the

the downpayment of P10,000.00;

following day, January 8, 1986, knowing fully

well

that

the

subject

property

was

being

occupied. x x x

11. That sometime again in 1995, respondent

again received from the mother of complainant
the amount of Two Thousand (P2,000.00) Pesos,

8. Because of this denial, respondent met with

allegedly for the expenses of the documentation

the family of the complainant and negotiated for

of

the sale of the property and transfer of the title

respondent promised that the Sabidong family

in favor of the latter. Respondent made the

will not be ejected;

sale

and

transfer

of

title,

and

again

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

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;

authorized to facilitate the sale, with more

reason that respondent represented himself as
the City Sheriff;

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

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

possession was issued on June 27, 1989 x x x;

complainant who was fortunate to have worked

abroad, sent the amount of Ten Thousand
(P10,000.00) Pesos to complainants 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;

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 hardearned monies purportedly for the sale of the
subject property, respondent was also exercising

Page 97 of 118
acts of ownership adverse to the interest of the

20. Meanwhile, respondent prepared a Contract

complainant and his family;

to Sell, for the complainant and his neighbor

Norberto Saplagio to affix their signatures,

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;

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.

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;

question

When

about

complainant

this,

raised

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

17.

After

the

death

of

Trinidad

Claverio

estate;

Sabidong x x x the respondent received from the

complainant the amount of Five Thousand
(P5,000.00) 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;

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

xxxx

the HDMF. Complainant freely and voluntarily

19. The complainant again, through his sisterin-law, Socorro Sabidong, delivered and gave to
the respondent the amount of Three Thousand
(P3,000.00)

Pesos

as

expenses

for

the

subdivision of the subject lot. The respondent

facilitated the subdivision and after the same
was approved, the complainant did not know
that two (2) titles were issued in the name of the
respondent. x x x;

delivered

all

respondent,

pertinent
thinking

documents

that

to

the

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;

Page 98 of 118
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

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

serve the same with the assistance of the

military. x x x;

In a Resolution11 dated July 19, 1999, Public

Prosecutor Constantino C. Tubilleja dismissed

23. After learning of the demolition order,

complainant attempted to settle the matter with

the

Estafa

charge

against

respondent

for

insufficiency of evidence.

the respondent, however, the same proved futile

as respondent boasted that the property would

On November 29, 2000, Court Administrator

now cost at Four Thousand Five Hundred

Benipayo

(P4,500.00) Pesos;

Recommendation12 finding respondent guilty of

issued

an

Evaluation

and

violating Article 149113 of the Civil Code. Said

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

rule prohibits the purchase by certain court

officers of property and rights in litigation
within their jurisdiction. Court Administrator
Benipayo recommended that:

good faith and trust. Complainant later was

informed that the subject property was awarded

1. this administrative complaint be treated as an

to

administrative matter;

the

respondent

considering

that

as

his

respondent

Sheriffs
executed

Fees,
the

decisions in ejectment cases filed by the Hodges

estate against the adverse occupants of its vast
properties;

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

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

more severely;

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

complainant against the respondent.8

[by]

the

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

Page 99 of 118
evidence

and

to

make

report

and

Judge Hortillo informed the Court that per the

recommendation within sixty (60) days from

records,

the

parties

have

presented

their

receipt.14

testimonial and documentary evidence before

retired Executive Judge Tito G. Gustilo.

In a Resolution15 dated January 22, 2001, this

Court adopted the recommendation of the Court

On

Administrator to treat the present administrative

Hortillo

action as a regular administrative matter and to

respective memoranda within 60 days from

designate the Executive Judge of the RTC of

notice, upon submission of which the case shall

Iloilo City to hear the evidence of the parties.

be deemed submitted for resolution.22

The Court, however, noted without action the

In his Memorandum,23 respondent maintained

Court

that his purchase of the subject land is not

Administrators

recommendation

to

suspend respondent for six months.

September

12,

required

2005,

the

Executive

parties

to

file

Judge
their

covered by the prohibition in paragraph 5,

Article 1491 of the Civil Code. He pointed out

On March 13, 2001, Acting Court Administrator

Zenaida N. Elepao forwarded the records of
this case to Executive Judge Tito G. Gustilo of
the Iloilo City RTC.16 In a 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.

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 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

On

September

10,

2007,

respondent

compulsorily retired from service. Prior to this,

he

wrote

then

Senior

Deputy

Court

Administrator Zenaida N. Elepao, requesting

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 Letter21 dated September 15, 2005, Executive

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
Elepao made the following recommendations:

Page 100 of 118

a) The request of Nicolasito S. Solas, former

possession of the subject property, respondent

Clerk of Court, MTCC, Iloilo City for partial

caused the issuance of a writ of demolition

release of his retirement benefits be GRANTED;

against

and

recommended the forfeiture of respondents

them.

Thus,

Judge

Patricio

salary for six months to be deducted from his

b) Atty. Lilian Barribal Co, Chief, Financial
Management

Office,

Office

of

the

retirement benefits.

Court

Administrator be DIRECTED to (1) WITHHOLD

In a Resolution28 dated September 29, 2008,

the amount of Two Hundred Thousand Pesos

the Court noted Judge Patricios Investigation

(P200,000.00) from the retirement benefits of

Report and referred the same to the Office of the

Nicolasito

Court Administrator (OCA) for evaluation, report

S.

Solas

to

answer

for

any

administrative liability that the Court may find

and recommendation.

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;

Findings and Recommendation of the OCA

and OCA IPI No. 99-753-P; and (2) RELEASE the

balance of his retirement benefits.26

In a Memorandum29 dated January 16, 2009,

then Court Administrator Jose P. Perez found

Eventually, the case was assigned to Judge

Roger B. Patricio, the new Executive Judge of
the Iloilo City RTC for investigation, report and
recommendation.

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
evidence

liable

for

serious

and

grave

misconduct and dishonesty and recommended

the forfeiture of respondents salary for six
months, which shall be deducted from his
retirement benefits.

On June 2, 2008, Judge Patricio submitted his

the

respondent

presented,

Judge

Patricio

concluded that respondent misappropriated the

money which he received for the filing of
complainants 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 respondents promise
to keep complainant and his family in peaceful

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 respondents 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

complainant and Saplagio.

given

to

him

by

Page 101 of 118

this prohibition includes the act of acquiring by
On February 11, 2009, the Court issued a
Resolution30 requiring the parties to manifest
whether they are willing to submit the case for
decision on the basis of the pleadings and

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.

records already filed with the Court. However,

the copy of the Resolution dated February 11,
2009 which was sent to complainant was

x x x x (Emphasis supplied.)

returned unserved with the postal carriers

notation

"RTS-Deceased."

The rationale advanced for the prohibition is

2009,

that public policy disallows the transactions in

respondent expressed his willingness to submit

view of the fiduciary relationship involved, i.e.,

the case for decision and prayed for an early

the relation of trust and confidence and the

resolution of the case.

peculiar control exercised by these persons.32

Compliance31

dated

Meanwhile,

August

24,

in

"In so providing, the Code tends to prevent

fraud, or more precisely, tends not to give

Our Ruling

occasion for fraud, which is what can and must

be done."33

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:

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

Article 1491. The following persons cannot

acquire by purchase, even at a public or judicial
auction,

either

in

person

or

through

paragraph 5, Article 1491 of the Civil Code

attaches.35

the

mediation of another:

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

xxxx

May 31, 1983 had long become final. Be that as

it may, it can not be said that the property is no
attorneys,

longer "in litigation" at that time considering

clerks of superior and inferior courts, and other

that it was part of the Hodges Estate then under

officers and employees connected with the

settlement proceedings (Sp. Proc. No. 1672).

(5)

Justices,

judges,

prosecuting

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;

A thing is said to be in litigation not only if there

is some contest or litigation over it in court, but

Page 102 of 118

also from the moment that it becomes subject to

grave, serious, important, weighty, momentous

the judicial action of the judge.36 A property

and not trifling. The misconduct must imply

forming

judicial

wrongful intention and not a mere error of

settlement continues to be subject of litigation

judgment. The misconduct must also have a

until the probate court issues an order declaring

direct relation to and be connected with the

the estate proceedings closed and terminated.

performance of the public officers official duties

The rule is that as long as the order for the

amounting

distribution of the estate has not been complied

willful,

with, the probate proceedings cannot be deemed

discharge the duties of the office.39

part

of

the

estate

under

either

to

intentional

maladministration

neglect,

or

failure

or
to

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

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

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.

In this case, respondent deceived complainants

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 estates properties

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.

like complainant. Boasting of his position as a

court

officer,

City

Sheriff

at

that,

complainants 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,
complainants family readily gave the amounts
he

On the charges against the respondent, we find

him liable for dishonesty and grave misconduct.

demanded

and,

along

with

Saplagio,

complied with the requirements for a loan

application with PAG-IBIG. All the while and
unknown to complainants family, respondent
was actually working to acquire Lot 11 for

Misconduct

is

transgression

of

some

himself.

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

Thus, while respondent was negotiating with the

Hodges Estate for the sale of the property to

Page 103 of 118

him, he collected as down payment P5,000 from

in the name of respondent on February 28,

complainants family in July 1986. Four months

1997 only eight months after he executed the

later, on November 18, 1986, the probate court

Contract to Sell47 in favor of complainant on

approved respondents offer to purchase Lot 11.

June 3, 1996.

The latter received further down payment from

complainant in the amount of P10,000 between
1992 and 1993, or before the Deed of Sale with
Mortgage41 dated November 21, 1994 could be
executed in respondents favor.

Respondents

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

Thereafter, respondent demanded P3,000 from

misrepresenting

complainant supposedly for the subdivision of

representative and as a court officer having the

Lot 11 between the latter and the Saplagios. Yet,

power to protect complainants family from

it was not until respondent obtained title over

eviction, respondent was able to collect sums

said lot that the same was subdivided into Lots

totaling P20,000 from complainants family.

11-A and 11-B. The records42 of the case show

Even after the latter realized they were duped

that the Subdivision Plan dated April 25, 1996,

since respondent was already the owner of Lot

duly

Management

11, they still offered to buy the property from

Services (DENR) subdividing Lot 11 into sublots

him. Respondent, however, changed his mind

11-A and 11-B, was inscribed on February 28,

and no longer wanted to sell the property after

1997 two years after TCT No. T-107519

nothing happened to the loan applications of

covering Lot 11 was issued in respondents

complainant and Saplagio. This subsequent

name on December 5, 1994.

unilateral cancellation by respondent of the

approved

by

the

Land

himself

as

the

estates

contract to sell with complainant may have been

Finally,

in

1995,

respondent

received

the

amount of P2,000 to defray the expenses for

documentation

and

transfer

of

title

in

complainants 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.

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 complainants family who

were forced into submission by the constant
threat of eviction. Such acts constitute grave
misconduct for which respondent should be
held answerable.

T-1183643 in the name of C.N. Hodges that

respondent executed a Request dated February

In Re: Complaint Filed by Paz De Vera Lazaro

19, 1997 "for the issuance of separate titles in

Against Edna Magallanes, Court Stenographer

the name of the registered owner."44 Soon after,

III, RTC Br. 28 and Bonifacio G. Magallanes,

TCT No. T-11646745 covering Lot 11-A and TCT

Process Server, RTC Br. 30, Bayombong, Nueva

No. T-11646846 covering Lot 11-B were issued

Vizcaya,48 the Court stressed that to preserve

Page 104 of 118

decency within the judiciary, court personnel

the erring government employee. However, no

must comply with just contractual obligations,

such mitigating circumstance had been shown.

act fairly and adhere to high ethical standards.

On

In that case, we said that court employees are

previously

expected to be paragons of uprightness, fairness

irregularities in the performance of his duties as

and honesty not only in their official conduct

Clerk of Court. In A.M. No. P-01-1484,52 this

but also in their personal dealings, including

Court imposed on respondent a fine of P5,000

business and commercial transactions to avoid

for acting imprudently in notarizing documents

becoming the courts albatross of infamy.49

and administering oath on matters alien to his

the

contrary,
held

respondent

had

administratively

liable

been
for

official duties. And in A.M. Nos. P-08-2567

More importantly, Section 4(c) of Republic Act
No. 671350 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

(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.

not discriminate against anyone, especially the

poor and the underprivileged.1wphi1 They

Since respondent had compulsorily retired from

shall at all times respect the rights of others,

service

and shall refrain from doing acts contrary to

additional administrative case he should be

law, good morals, good customs, public policy,

fined in an amount equivalent to his salary for

public order, public safety and public interest.

six months which shall likewise be deducted

on

September

10,

2007,

for

this

from his retirement benefits.

Under Section 52,51 Rule IV of the Uniform
Rules on Administrative Cases in the Civil

WHEREFORE,

Service, dishonesty and grave misconduct are

Nicolasito S. Solas, retired Clerk of Court IV,

classified

Municipal Trial Court in Cities, Iloilo City,

as

grave

offenses

with

the

the

FOR

Court

GRAVE

finds

respondent

corresponding penalty of dismissal for the first

LIABLE

MISCONDUCT

offense. Section 58(a) states that the penalty of

DISHONESTY. Respondent is FINED in an

dismissal shall carry with it the cancellation of

amount equivalent to his salary for six (6)

eligibility, forfeiture of retirement benefits, and

months to be deducted from his retirement

the perpetual disqualification for reemployment

benefits.

in the government service.

SO ORDERED.
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

MARTIN S. VILLARAMA, JR.

Associate Justice

AND

Page 105 of 118

collateral to the settlement and distribution of
the estate, such as the determination of the
status of each heir and whether property
G.R. No. 156407, January 15, 2014 - THELMA

included in the inventory is the conjugal or

M.

exclusive property of the deceased spouse.

ARANAS,

MERCADO,

Petitioner,
FELIMON

v.

TERESITA

V.

V.

MERCADO,

CARMENCITA M. SUTHERLAND, RICHARD V.

MERCADO, MA. TERESITA M. ANDERSON,

Antecedents

AND FRANKLIN L. MERCADO, Respondents.

PHILIPPINE SUPREME COURT DECISIONS

Emigdio S. Mercado (Emigdio) died intestate on

January 12, 1991, survived by his second wife,
Teresita V. Mercado (Teresita), and their five

FIRST DIVISION

children, namely: Allan V. Mercado, Felimon V.

Mercado, Carmencita M. Sutherland, Richard V.
Mercado, and Maria Teresita M. Anderson; and

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

his two children by his first marriage, namely:

respondent Franklin L. Mercado and petitioner

THELMA M. ARANAS, Petitioner, v. TERESITA V.

MERCADO,

FELIMON

V.

Thelma M. Aranas (Thelma).

MERCADO,

CARMENCITA M. SUTHERLAND, RICHARD V.

MERCADO, MA. TERESITA M. ANDERSON,
AND FRANKLIN L. MERCADO, Respondents.

Emigdio inherited and acquired real properties

during his lifetime. He owned corporate shares
in Mervir Realty Corporation (Mervir Realty) and
Cebu

DECISION

Emerson

Transportation

Corporation

(Cebu Emerson). He assigned his real properties

in exchange for corporate stocks of Mervir

BERSAMIN, J.:

Realty, and sold his real property in Badian,

Cebu (Lot 3353 covered by Transfer Certificate of
Title No. 3252) to Mervir Realty.

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

On June 3, 1991, Thelma filed in the Regional

Trial Court (RTC) in Cebu City a petition for the
appointment of Teresita as the administrator of
Emigdios estate (Special Proceedings No. 3094
CEB).1

The

RTC

granted

the

petition

considering that there was no opposition. The

letters of administration in favor of Teresita were
issued on September 7, 1992.

Page 106 of 118

As the administrator, Teresita submitted an

to or comment on the inventory and the

inventory of the estate of Emigdio on December

supporting documents Teresita had submitted.

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

P20,000.00;

pieces

and

of

fixtures

jewelry

worth

valued

at

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

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

On April 19, 1993, Thelma opposed the approval

of the inventory, and asked leave of court to
examine Teresita on the inventory.

Claiming
properties

that

Emigdio

that

were

had

owned

excluded

other

from

the

inventory, Thelma moved that the RTC direct

Teresita to amend the inventory, and to be
examined

regarding

it.

The

RTC

granted

Thelmas motion through the order of January

8, 1993.

On

January

21,

1993,

Teresita

filed

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

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

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 administratrixs motion for approval
of inventory. The Court hereby orders the said
administratrix

to

redo

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

Page 107 of 118

hereof and then submit the revised inventory

inventory, and in ordering her as administrator

within sixty (60) days from notice of this order.

to

include

real

properties

that

had

been

transferred to Mervir Realty, Teresita, joined by

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

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:

accounting within sixty (60) days from notice

hereof.

SO ORDERED.9ChanRoblesVirtualawlibrary

THE HONORABLE RESPONDENT JUDGE HAS

COMMITTED GRAVE ABUSE OF JURISDICTION

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

(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

PRIVATE

CORPORATION

(MERVIR

REALTY CORPORATION) BE INCLUDED IN THE

INVENTORY OF THE ESTATE OF THE LATE
EMIGDIO S. MERCADO.

possession of and registered in the name of

Mervir Realty.10 Thelma opposed the motion.

II

On May 18, 2001, the RTC denied the motion

THE HONORABLE RESPONDENT JUDGE HAS

for reconsideration,11 stating that there was no

COMMITTED GRAVE ABUSE OF JURISDICTION

cogent reason for the reconsideration, and that

(sic) AMOUNTING TO LACK OR EXCESS OF

the movants agreement as heirs to submit to

JURISDICTION

the RTC the issue of what properties should be

PROPERTIES WHICH ARE IN THE POSSESSION

included or excluded from the inventory already

OF AND ALREADY REGISTERED IN THE NAME

estopped them from questioning its jurisdiction

(OF) PRIVATE CORPORATION (MERVIR REALTY

to pass upon the issue.

CORPORATION)

IN

HOLDING

BE

THAT

INCLUDED

IN

REAL

THE

INVENTORY OF THE ESTATE OF THE LATE

Decision of the CA

Alleging that the RTC thereby acted with grave

abuse of discretion in refusing to approve the

EMIGDIO S. MERCADO.

III

Page 108 of 118

THE HONORABLE RESPONDENT JUDGE HAS

constructive delivery, and to Article 1498 of the

COMMITTED GRAVE ABUSE OF DISCRETION

Civil Code, to the effect that the sale made

AMOUNTING

OF

through a public instrument was equivalent to

THAT

the delivery of the object of the sale, the sale by

TO

JURISDICTION

LACK
IN

OR

EXCESS

HOLDING

PETITIONERS ARE NOW ESTOPPED FROM

Emigdio

and

Teresita

had

transferred

the

QUESTIONING ITS JURISDICTION IN PASSING

ownership of Lot No. 3353 to Mervir Realty

UPON THE ISSUE OF WHAT PROPERTIES

because the deed of absolute sale executed on

SHOULD BE INCLUDED IN THE INVENTORY

November 9, 1989 had been notarized; that

OF THE ESTATE OF THE LATE EMIGDIO

Emigdio had thereby ceased to have any more

MERCADO.12

interest in Lot 3353; that Emigdio had assigned

the parcels of land to Mervir Realty as early as

On May 15, 2002, the CA partly granted the

petition for certiorari, disposing as follows:13

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

WHEREFORE,
CONSIDERED,

FOREGOING
this

PREMISES

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

Assignment

dated

matter

of

the

February

17,

Deeds
1989

of
and

January 10, 1991 in the revised inventory to be

submitted by the administratrix is concerned
and affirmed in all other respects.

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

SO ORDERED.

should

be

afforded

the

presumptive conclusiveness of title; that the

The CA opined that Teresita, et al. had properly

filed the petition for certiorari because the order
of the RTC

system

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

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

Page 109 of 118

the issue of which properties should be included

corporate fiction and even if public respondent

in the inventory.

court was not merely acting in a limited capacity

as

probate

nonetheless

The CA further opined as follows:

court,

failed

to

private

respondent

adjudge

competent

evidence that would have justified the court to

impale the veil of corporate fiction because to

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

disregard the separate jurisdictional personality

of a corporation, the wrongdoing must be clearly
and convincingly established since it cannot be
presumed.14

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

On November 15, 2002, the CA denied the

motion for reconsideration of Teresita, et al.15

of petitioners Motion for Reconsideration dated

March 26, 2001 filed before public respondent

Issue

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

administratrixs motion for approval of the

inventory of properties which were already titled

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

decedent during his lifetime?

and in possession of a third person that is,

Mervir

Realty

Corporation,

private

corporation, which under the law possessed a

personality

distinct

and

separate

from

Ruling of the Court

its

stockholders, and in the absence of any cogency

to shred the veil of corporate fiction, the

The appeal is meritorious.

presumption of conclusiveness of said titles in

favor of Mervir Realty Corporation should stand
undisturbed.

Besides, public respondent court acting as a

Was certiorari the proper recourse

probate court had no authority to determine the

applicability of the doctrine of piercing the veil of

to assail the questioned orders of the RTC?

the

Page 110 of 118

The first issue to be resolved is procedural.

from

an

interlocutory

order

is

to

avoid

Thelma contends that the resort to the special

multiplicity of appeals in a single action, which

civil action for certiorari to assail the orders of

necessarily suspends the hearing and decision

the RTC by Teresita and her corespondents was

on the merits of the action during the pendency

not proper.

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

Thelmas contention cannot be sustained.

compel the adverse party to incur unnecessary

expenses, for one of the parties may interpose as

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 PahilaGarrido v.
Tortogo,16 the Court distinguished between
final and interlocutory orders as follows:

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 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

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.

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 assailed order of March 14, 2001 denying

Teresitas

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

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

The order dated November 12, 2002, which

motion

approval

of

the

inventory

and

the

concomitant determination of the ownership as

basis

for

inventory

inclusion
were

or

exclusion

provisional

and

from
subject

the
to

revision at anytime during the course of the

administration proceedings.

Page 111 of 118

In Valero Vda. De Rodriguez v. Court

of

All that the said court could do as regards the

Appeals,17 the Court, in affirming the decision

said

properties

is

determine

whether

they

of the CA to the effect that the order of the

should or should not be included in the

intestate court excluding certain real properties

inventory or list of properties to be administered

from the inventory was interlocutory and could

by the administrator. If there is a dispute as to

be changed or modified at anytime during the

the ownership, then the opposing parties and

course of the administration proceedings, held

the administrator have to resort to an ordinary

that the order of exclusion was not a final but

action for a final determination of the conflicting

an interlocutory order in the sense that it did

claims of title because the probate court cannot

not settle once and for all the title to the San

do so. (Bold emphasis supplied)

Lorenzo Village lots. The Court observed there

that:

On the other hand, an appeal would not be the

correct recourse for Teresita, et al. to take

The prevailing rule is that for the purpose of

against the assailed orders. The final judgment

determining whether a certain property should

rule embodied in the first paragraph of Section

or should not be included in the inventory, the

1, Rule 41, Rules of Court,21 which also

probate court may pass upon the title thereto

governs

but such determination is not conclusive and is

stipulates that only the judgments, final orders

subject to the final decision in a separate action

(and resolutions) of a

court

regarding ownership which may be instituted by

completely

the

the parties (3 Morans Comments on the Rules

particular matter therein when declared by

of Court, 1970 Edition, pages 4489 and 473;

these Rules to be appealable may be the

Lachenal vs. Salas, L42257, June 14, 1976, 71

subject of an appeal in due course. The same

SCRA 262, 266).18 (Bold emphasis supplied)

rule states that an interlocutory order or

appeals

in

disposes

of

special

proceedings,
of law

case,

or

that
of

resolution (interlocutory because it deals with

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

preliminary matters, or that the trial on the

merits is yet to be held and the judgment
rendered) is expressly made nonappealable.

proceeding, can only pass upon questions of title

provisionally, and reminded, citing Jimenez v.

Multiple

Court of Appeals, that the patent reason is the

proceedings as a practical recognition of the

probate courts limited jurisdiction and the

possibility that material issues may be finally

principle that questions of title or ownership,

determined at various stages of the special

which result in inclusion or exclusion from the

proceedings. Section 1, Rule 109 of the Rules of

inventory of the property, can only be settled in

Court enumerates the specific instances in

a separate action. Indeed, in the cited case of

which multiple appeals may be resorted to in

Jimenez v. Court of Appeals,20 the Court

special proceedings, viz:

pointed out:

appeals

are

permitted

in

special

Page 112 of 118

Clearly, the assailed orders of the RTC, being
Section 1. Orders or judgments from which
appeals may be taken. An interested person
may appeal in special proceedings from an order

interlocutory, did not come under any of the

instances

in

which

multiple

appeals

are

permitted.

or judgment rendered by a Court of First

Instance or a Juvenile and Domestic Relations
Court, where such order or judgment:

II
Did the RTC commit grave abuse of discretion
in directing the inclusion of the properties

(a) Allows or disallows a will;

in the estate of the decedent?

(b) Determines who are the lawful heirs of a

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

In its assailed decision, the CA concluded that

the RTC committed grave abuse of discretion for

(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;

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

(d)

Settles

the

account

of

an

executor,

veil of corporate fiction.

administrator, trustee or guardian;

Was the CA correct in its conclusion?
(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

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.

a special administrator; and

Under Section 6(a), Rule 78 of the Rules of
(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.

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 dutybound
to direct the preparation and submission of the

Page 113 of 118

inventory of the properties of the estate, and the

final and equitable distribution (partition) of the

surviving spouse, as the administrator, has the

estate

duty and responsibility to submit the inventory

administration of the estate.23 Hence, the RTC

within three months from the issuance of letters

that presides over the administration of an

of administration pursuant to Rule 83 of the

estate is vested with wide discretion on the

Rules of Court, viz:

question of what properties should be included

in

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.

and

the

otherwise

inventory.

to

According

facilitate

to

Peralta

the

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

administration

of
of

discretion,
the

estates

for
of

in

the

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

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

abuse of discretion, its orders must be respected

as part of the regular performance of its judicial
duty.

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.

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

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

administrator. Such determination is provisional

and may be still revised. As the Court said in
Agtarap v. Agtarap:26

Page 114 of 118

The general rule is that the jurisdiction of the

is one of collation or advancement, or the

trial court, either as a probate court or an

parties consent to the assumption of jurisdiction

intestate court, relates only to matters having to

by the probate court and the rights of third

do with the probate of the will and/or settlement

parties are not impaired, then the probate court

of the estate of deceased persons, but does not

is competent to resolve issues on ownership.

extend to the determination of questions of

Verily,

ownership that arise during the proceedings.

incidental or collateral to the settlement and

The patent rationale for this rule is that such

distribution

court

determination of the status of each heir and

merely

exercises

special

and

limited

its

jurisdiction

the

of

the

property

extends

estate,
in

to

such

the

matters
as

inventory

the

jurisdiction. As held in several cases, a probate

whether

is

court or one in charge of estate proceedings,

conjugal or exclusive property of the deceased

whether testate or intestate, cannot adjudicate

spouse.27 (Italics in the original; bold emphasis

or determine title to properties claimed to be a

supplied)

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

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:

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

final

determination of the conflicting claims of title.

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. 306R which are supposed to
be divided among her heirs. The administratrix
admitted, while being examined in Court by the

However,
exceptions

this

general

rule

as

justified

by

is

subject

expediency

to
and

convenience.

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 Mercados share

First, the probate court may provisionally pass

in the estate of Severina Mercado should be

upon in an intestate or a testate proceeding the

included in the inventory of properties required

question of inclusion in, or exclusion from, the

to be submitted to the Court in this particular

inventory

case.

of

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

Page 115 of 118

In the second place, the administratrix of the

located in Badian, Cebu should be included in

estate of Emigdio Mercado also admitted in

the inventory in this case.

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, onehalf thereof or of the value
thereof should be included in the inventory of
the estate of her husband.

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

In the third place, the administratrix of the

by the thought that the transferor has not long

estate of Emigdio Mercado admitted, too, in

to live and made in place of a testamentary

Court that she had a bank account in her name

disposition

at Union Bank which she opened when her

Section 78 of the National Internal Revenue

husband was still alive. Again, the money in

Code of 1977 provides that the gross estate of

said bank account partakes of being conjugal in

the decedent shall be determined by including

character, and so, onehalf thereof should be

the value at the time of his death of all property

included in the inventory of the properties

to the extent of any interest therein of which the

constituting as estate of her husband.

decedent has at any time made a transfer in

(1959

Prentice

Hall,

p.

3909).

contemplation of death. So, the inventory to be

In the fourth place, it has been established
during the hearing in this case that Lot No.
3353 of Pls657D 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. CEB12690 which

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 Assessors Office on October 31,
1991 (Exhibit O).28

was decided on October 19, 1995, it was the

estate of the late Emigdio Mercado which

Thereby, the RTC strictly followed the directives

claimed to be the owner thereof. Mervir Realty

of the Rules of Court and the jurisprudence

Corporation never intervened in the said case in

relevant to the procedure for preparing the

order to be the owner thereof. This fact was

inventory by the administrator. The aforequoted

admitted by Richard Mercado himself when he

explanations indicated that the directive to

testified in Court. x x x So the said property

include

the

properties

in

question

in

the

Page 116 of 118

inventory rested on good and valid reasons, and

and Transfer Certificate of Title No. 3252

thus was far from whimsical, or arbitrary, or

covering Lot 3353 was still in Emigdios name.

capricious.

Indeed, the RTC noted in the order of March 14,

2001, or ten years after his death, that Lot 3353

Firstly, the shares in the properties inherited by

had remained registered in the name of Emigdio.

Emigdio from Severina Mercado should be

included in the inventory because Teresita, et al.

Interestingly, Mervir Realty did not intervene at

did not dispute the fact about the shares being

all in Civil Case No. CEB12692. Such lack of

inherited by Emigdio.

interest in Civil Case No. CEB12692 was

susceptible of various interpretations, including

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 Emigdios estate, it
was unavoidable for Teresita to include his
shares in the conjugal partnership of gains. The
party asserting that specific property acquired

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.

during that property regime did not pertain to

the conjugal partnership of gains carried the

Also, the fact that the deed of absolute sale

burden of proof, and that party must prove the

executed by Emigdio in favor of Mervir Realty

exclusive ownership by one of them by clear,

was a notarized instrument did not sufficiently

categorical, and convincing evidence.30 In the

justify the exclusion from the inventory of the

absence of or pending the presentation of such

properties involved. A notarized deed of sale only

proof, the conjugal partnership of Emigdio and

enjoyed the presumption of regularity in favor of

Teresita must be provisionally liquidated to

its execution, but its notarization did not per se

establish who the real owners of the affected

guarantee the legal efficacy of the transaction

properties were,31 and which of the properties

under

should form part of the estate of Emigdio. The

purported to be. The presumption of regularity

portions that pertained to the estate of Emigdio

could be rebutted by clear and convincing

must be included in the inventory.

evidence to the contrary.32 As the Court has

the

deed,

and

what

the

contents

observed in Suntay v. Court of Appeals:33

Moreover, although the title over Lot 3353 was
already registered in the name of Mervir Realty,

x x x. Though the notarization of the deed of

the RTC made findings that put that title in

sale

dispute. Civil Case No. CEB12692, a dispute

presumption of regularity, it is not the intention

that had involved the ownership of Lot 3353,

nor the function of the notary public to validate

was resolved in favor of the estate of Emigdio,

and make binding an instrument never, in the

in

question

vests

in

its

favor

the

Page 117 of 118

first place, intended to have any binding legal

land and put a stop forever to any question as to

effect upon the parties thereto. The intention of

the legality of the title, except claims that were

the parties still and always is the primary

noted in the certificate at the time of registration

consideration in determining the true nature of

or

a contract. (Bold emphasis supplied)

Otherwise, the integrity of the Torrens system

that

may

arise

subsequent

thereto.

shall forever be sullied by the ineptitude and

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

inefficiency of land registration officials, who are

ordinarily presumed to have regularly performed
their duties.35

have to be inquired into. That Emigdio executed

the deed of assignment two days prior to his

Assuming that only seven titled lots were the

death was a circumstance that should put any

subject of the deed of assignment of January

interested party on his guard regarding the

10, 1991, such lots should still be included in

exchange, considering that there was a finding

the

about Emigdio having been sick of cancer of the

themselves, and with the assistance of the RTC

pancreas at the time.34 In this regard, whether

itself, to test and resolve the issue on the

the CA correctly characterized the exchange as a

validity

form of an estate planning scheme remained to

jurisdiction of the RTC as an intestate court

be validated by the facts to be established in

might have constricted the determination of the

court.

rights to the properties arising from that

inventory

of

to

the

enable

the

assignment.

parties,

The

by

limited

deed,36 but it does not prevent the RTC as

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 States 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

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

Page 118 of 118

donation, or any other gratuitous title, in order

of its judicial duty. Grave abuse of discretion

that it may be computed in the determination of

means either that the judicial or quasijudicial

the legitime of each heir, and in the account of

power was exercised in an arbitrary or despotic

the partition. Section 2, Rule 90 of the Rules of

manner by reason of passion or personal

Court also provided that any advancement by

hostility, or that the respondent judge, tribunal

the decedent on the legitime of an heir may be

or board evaded a positive duty, or virtually

heard and determined by the court having

refused to perform the duty enjoined or to act in

jurisdiction of the estate proceedings, and the

contemplation of law, such as when such judge,

final order of the court thereon shall be binding

tribunal or board exercising judicial or quasi

on the person raising the questions and on the

judicial

heir. Rule 90 thereby expanded the special and

whimsical manner as to be equivalent to lack of

limited jurisdiction of the RTC as an intestate

jurisdiction.39

powers

acted

in

capricious

or

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

In light of the foregoing, the CAs conclusion of

grave abuse of discretion on the part of the RTC

heir by the decedent.38

was unwarranted and erroneous.

The determination of which properties should be

WHEREFORE, the Court GRANTS the petition

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

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

3094CEB

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

patent grave abuse of discretion, its orders must

be respected as part of the regular performance

No.

SO ORDERED.