Special Proceedings

001 San Luis vs San Luis

THIRD DIVISION [ G.R. No. 133743, February 06, 2007 ]

EDGAR SAN LUIS, PETITIONER, VS. FELICIDAD SAN LUIS, RESPONDENT.
[G.R. NO. 134029] RODOLFO SAN LUIS, PETITIONER, VS. FELICIDAD SAGALONGOS ALIAS FELICIDAD SAN LUIS, RESPONDENT.

Facts:
Felicisimo T. San Luis, the former governor of the Province of Laguna, died on December 18, 1992.

During his lifetime, he contracted three marriages. The first marriage was with Virginia Sulit with whom Felicisimo had six children, namely: Rodolfo,
Mila, Edgar, Linda, Emilita and Manuel. Virginia predeceased Felicisimo.

The second marriage was with Mary Lee Corwin, 5 years after the death of Virginia. Mary Lee, an American Citizen, file for a divorce with the Family
Court of the First Circuit, Hawaii, USA. The Decree Granting Absolute Divorce and Awarding Child Custody was issued on December 14, 1973.

On June 20, 1974, Felicisimo married respondent Felicidad San Luis. He had no children with Felicidad but lived with her for 18 years from the time
of their marriage up to his death.

Felicidad filed a petition for letters of administration on December 17, 1993 before the Trial Court of Makati. Rodolfo San Luis, one of the children of
Felicisimo with Virginia, opposed the application on the grounds of improper venue and failure to state a cause of action. Rodolfo claimed that the
petition for letters of administration should have been filed in the Province of Laguna because this was Felicisimo's place of residence prior to his
death. He further claimed that respondent has no legal personality to file the petition because she was only a mistress of Felicisimo since the latter,
at the time of his death, was still legally married to Merry Lee.

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

On September 12, 1995, the trial court dismissed the petition for letters of administration. It held that, at the time of his death, Felicisimo was the duly
elected governor and a resident of the Province of Laguna. Hence, the petition should have been filed in Sta. Cruz, Laguna and not in Makati City. It
also ruled that respondent was without legal capacity to file the petition for letters of administration because her marriage with Felicisimo was
bigamous, thus, void ab initio. It found that the decree of absolute divorce dissolving Felicisimo's marriage to Merry Lee was not valid in the
Philippines and did not bind Felicisimo who was a Filipino citizen. It also ruled that paragraph 2, Article 26 of the Family Code cannot be retroactively
applied because it would impair the vested rights of Felicisimo's legitimate children. Respondent moved for reconsideration and for the
disqualification of Judge Arcangel but said motions were denied. Respondent appealed to the Court of Appeals which reversed and set aside the
orders of the trial court in its assailed Decision dated February 4, 1998. CA denied the motion for reconsideration. Hence this petition for certiorari.

Issue 1: Whether the venue is improper?

Held: No. Under Section 1, Rule 73 of the Rules of Court, the petition for letters of administration of the estate of Felicisimo should be filed in the
Regional Trial Court of the province "in which he resides at the time of his death." [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.

The word "resides" should be viewed or understood in its popular sense, meaning, the personal, actual or physical habitation of a person, actual
residence or place of abode. It signifies physical presence in a place and actual stay thereat. In this popular sense, the term means merely
residence, that is, personal residence, not legal residence or domicile. Residence simply requires bodily presence as an inhabitant in a given place,
while domicile requires bodily presence in that place and also an intention to make it one's domicile. No particular length of time of residence is
required though; however, the residence must be more than temporary.

Needless to say, there is a distinction between "residence" for purposes of election laws and "residence" for purposes of fixing the venue of actions.
In election cases, "residence" and "domicile" are treated as synonymous terms, that is, the fixed permanent residence to which when absent, one
has the intention of returning. However, for purposes of fixing venue under the Rules of Court, the "residence" of a person is his personal, actual or

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physical habitation, or actual residence or place of abode, which may not necessarily be his legal residence or domicile provided he resides therein
with continuity and consistency. Hence, it is possible that a person may have his residence in one place and domicile in another.

In the instant case, while petitioners established that Felicisimo was domiciled in Sta. Cruz, 39 40 41 42 43 Page 5 Laguna, respondent proved that
he also maintained a residence in Alabang, Muntinlupa from 1982 up to the time of his death. Respondent submitted in evidence the Deed of
Absolute Sale dated January 5, 1983 showing that the deceased purchased the aforesaid property. She also presented billing statements from the
Philippine Heart Center and Chinese General Hospital for the period August to December 1992 indicating the address of Felicisimo at "100 San
Juanico, Ayala Alabang, Muntinlupa." Respondent also presented proof of membership of the deceased in the Ayala Alabang Village Association
and Ayala Country Club, Inc., letter-envelopes from 1988 to 1990 sent by the deceased's children to him at his Alabang address, and the deceased's
calling cards stating that his home/city address is at "100 San Juanico, Ayala Alabang Village, Muntinlupa" while his office/provincial address is in
"Provincial Capitol, Sta. Cruz, Laguna." From the foregoing, we find that Felicisimo was a resident of Alabang, Muntinlupa for purposes of fixing the
venue of the settlement of his estate. Consequently, the subject petition for letters of administration was validly filed in the Regional Trial Court which
has territorial jurisdiction over Alabang, Muntinlupa.

Issue 2: Whether Felicidad has the legal personality to file the petition for letter of Administration?

Held: Yes. Pursuant to the rulings in Van Dorn vs Romillo Jr and Pilapil vs Ibay-Somera, the divorce obtained by Mary Lee Corwin should be
recognized by Philippine Court as capacitating Felicisimo to remarry. 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.

Applying the above doctrine in the instant case, the divorce decree allegedly obtained by Merry Lee which absolutely allowed Felicisimo to remarry,
would have vested Felicidad with the legal personality to file the present petition as Felicisimo's surviving spouse.

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

With regard to respondent's marriage to Felicisimo allegedly solemnized in California, U.S.A., she submitted photocopies of the Marriage Certificate
and the annotated text of the Family Law Act of California which purportedly show that their marriage was done in accordance with the said law. As
stated in Garcia, however, the Court cannot take judicial notice of foreign laws as they must be alleged and proved. Therefore, this case should be
remanded to the trial court for further reception of evidence on the divorce decree obtained by Merry Lee and the marriage of respondent and
Felicisimo.

Even assuming that Felicisimo was not capacitated to marry respondent in 1974, nevertheless, we find that the latter has the legal personality to file
the subject petition for letters of administration, as she may be considered the co-owner of Felicisimo as regards the properties that were acquired
through their joint efforts during their cohabitation. Section 6, Rule 78 of the Rules of Court states that letters of administration may be granted to the
surviving spouse of the decedent. However, Section 2, Rule 79 thereof also provides in part: SEC. 2. Contents of petition for letters of administration.
- A petition for letters of administration must be filed by an interested person and must show, as far as known to the petitioner: x x x. An "interested
person" has been defined as one who would be benefited by the estate, such as an heir, or one who has a claim against the estate, such as a
creditor. The interest must be material and direct, and not merely indirect or contingent.

In the instant case, respondent would qualify as an interested person who has a direct interest in the estate of Felicisimo by virtue of their
cohabitation, the existence of which was not denied by petitioners. If she proves the validity of the divorce and Felicisimo's capacity to remarry, but
fails to prove that her marriage with him was validly performed under the laws of the U.S.A., then she may be considered as a co-owner under Article
144 of the Civil Code. This 70 71 72 73 74 75 76 Page 10 provision governs the property relations between parties who live together as husband and
wife without the benefit of marriage, or their marriage is void from the beginning. It provides that the property acquired by either or both of them
through their work or industry or their wages and salaries shall be governed by the rules on co-ownership. In a co-ownership, it is not necessary that
the property be acquired through their joint labor, efforts and industry. Any property acquired during the union is prima facie presumed to have been
obtained through their joint efforts. Hence, the portions belonging to the co-owners shall be presumed equal, unless the contrary is proven.

Meanwhile, if respondent fails to prove the validity of both the divorce and the marriage, the applicable provision would be Article 148 of the Family
Code which has filled the hiatus in Article 144 of the Civil Code by expressly regulating the property relations of couples living together as husband
and wife but are incapacitated to marry.

002 Garcia-Quiazon vs Belen

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[ G.R. No. 189121, July 31, 2013 ] AMELIA GARCIA-QUIAZON, JENNETH QUIAZON AND MARIA JENNIFER QUIAZON, PETITIONERS, VS. MA.
LOURDES BELEN, FOR AND IN BEHALF OF MARIA LOURDES ELISE QUIAZON, RESPONDENT.

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. 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, 1 2 3 attached to the Petition for Letters of Administration her Certificate of Live Birth
signed by Eliseo as her father.

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. The petitioners asserted that as shown by his Death Certificate, 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, 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.

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. On appeal, the decision of the trial court was affirmed in toto in the 28 November 2008 Decision.

Issue 1: Whether there is improper venue?

Held: No. 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.

The term resides connotes ex vi termini actual residence as distinguished from legal residence or domicile. This term resides, like the terms
residing and residence, is elastic and should be interpreted in the light of the object or purpose of the statute or rule in which it is employed. In the
application of venue statutes and rules Section 1, Rule 73 of the Revised Rules of Court is of such nature residence rather than domicile is the
significant factor. 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. Venue for ordinary civil actions and that for special proceedings have one and the same meaning. 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.

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. 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.

Issue 2: Whether the CA erred in declaring Amelia's marriage to Eliseo as void ab initio?

Held: No. 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. [C]onsequently, void
marriages can be questioned even after the death of either party but voidable marriages can be assailed only during the lifetime of the parties and
not after death of either, in which case the parties and their offspring will be left as if the marriage had been perfectly valid. That is why the action or
defense for nullity is imprescriptible, unlike voidable marriages where the action prescribes. Only the parties to a voidable marriage can assail it but
any proper interested party may attack a void marriage.

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There is no doubt that Elise, whose successional rights would be 20 21 22 23 24 25 Page 4 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, 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.

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.

Issue 3: Whether Elise has shown to have any interest in the Petition for Letters of Administration?

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

003 Agtarap vs Agtarap

[ G.R. No. 177099, June 08, 2011 ]

EDUARDO G. AGTARAP, PETITIONER, VS. SEBASTIAN AGTARAP, JOSEPH AGTARAP, TERESA AGTARAP, WALTER DE SANTOS, AND
ABELARDO DAGORO, RESPONDENTS.

[G.R. NO. 177192] SEBASTIAN G. AGTARAP, PETITIONER, VS. EDUARDO G. AGTARAP, JOSEPH AGTARAP, TERESA AGTARAP, WALTER
DE SANTOS, AND ABELARDO DAGORO, RESPONDENTS.

Facts:
On September 15, 1994, Eduardo filed with the Regional Trial Court (RTC), Branch 114, Pasay City, a verified petition for the judicial settlement of
the estate of his deceased father Joaquin Agtarap (Joaquin). 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), and second with
Caridad Garcia (Caridad). Lucia died on April 24, 1924. Joaquin and Lucia had three children--Jesus (died without issue), Milagros, and Jose
(survived by three children, namely, Gloria, Joseph, and Teresa ). Joaquin married Caridad on February 9, 1926. They also had three children--
Eduardo, Sebastian, and Mercedes (survived by her daughter Cecile). At the time of his death, Joaquin left two parcels of land with improvements in
Pasay City, covered by Transfer Certificates of Title (TCT) Nos. 873-(38254) and 874-(38255). Joseph, a grandson of Joaquin, had been leasing and
improving the said realties and had been appropriating for himself P26,000.00 per month since April 1994.

Joseph, Gloria, and Teresa filed their answer/opposition. They alleged that the two subject lots belong to the conjugal partnership of Joaquin with
Lucia, and that, upon Lucia's death in April 1924, they became the pro indiviso owners of the subject properties. They said that their residence was
built with the exclusive money of their late father Jose, and the expenses of the extensions to the house were shouldered by Gloria and Teresa,
while the restaurant (Manong's Restaurant) was built with the exclusive money of Joseph and his business partner.

On February 16, 1995, the RTC issued a resolution appointing Eduardo as regular administrator of Joaquin's estate. Consequently, it issued him
letters of administration. The RTC, on October 23, 2000, issued an Order of Partition. Eduardo, Sebastian, and oppositors Joseph and Teresa filed
their respective motions for reconsideration. On August 27, 2001, the RTC issued a resolution denying the motions for reconsideration of Eduardo
and Sebastian, and granting that of Joseph and Teresa. It also declared that the real estate properties belonged to the conjugal partnership of
Joaquin and Lucia. It also directed the modification of the October 23, 2000 Order of Partition to reflect the correct sharing of the heirs. However,
before the RTC could issue a new order of partition, Eduardo and Sebastian both appealed to the CA. CA dismissed the appeals for lack of merit.

Aggrieved, Sebastian and Eduardo filed their respective motions for reconsideration. In its Resolution dated March 27, 2007, the CA denied both
motions.

Issue: Whether the trial court has the jurisdiction to resolve the issue of ownership over the subject real properties?

Held: Yes.

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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. The patent rationale for this rule is that such court merely exercises special and limited jurisdiction.

However, this general rule is subject to exceptions as justified by expediency and convenience, to wit:

1. The probate court may provisionally pass upon in an intestate or a testate proceeding the question of inclusion in, or exclusion from, the
inventory of a piece of property without prejudice to the final determination of ownership in a separate action.
2. If the interested parties are all heirs to the estate;
3. If the question is one of collation or advancement; or
4. If the parties consent to the assumption of jurisdiction by the probate court and the rights of third parties are not impaired.

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

004 Suntary vs Cojuangco-Suntay

[ G.R. No. 183053, October 10, 2012 ]

EMILIO A.M. SUNTAY III, PETITIONER, VS. ISABEL COJUANGCO-SUNTAY, RESPONDENT.

Facts:
The decedent Cristina Aguinaldo-Suntay (Cristina) died intestate on 4 June 1990. Cristina was survived by her spouse, Dr. Federico Suntay
(Federico) and five grandchildren: three legitimate grandchildren, including herein respondent, Isabel; and two illegitimate grandchildren, including
petitioner Emilio III, all by Federicos and Cristinas only child, Emilio A. Suntay (Emilio I), who predeceased his parents.

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

On 27 September 1993, more than three years after Cristinas death, Federico adopted his illegitimate grandchildren, Emilio III and Nenita. On 26
October 1995, respondent Isabel, filed before the Regional Trial Court (RTC), Malolos, Bulacan, a petition for the issuance of letters of administration
over Cristinas estate docketed as Special Proceeding Case No. 117-M-95. Federico, opposed the petition. 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 the Civil Code, were legitimate children of Emilio I, who can all represent him in the estate of their legitimate grandmother, the decedent,
Cristina.

Federico nominated Emilio III to administer the decedents estate on his behalf in the event letters of administration issues to Federico.
Consequently, Emilio III filed an Opposition-In-Intervention, echoing the allegations in his grandfathers opposition, alleging that Federico, or in his
stead, Emilio III, was better equipped than respondent to administer and manage the estate of the decedent, Cristina. On 13 November 2000,
Federico died.

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

On appeal, the Court of Appeals reversed and set aside the decision of the RTC, revoked the Letters of Administration issued to Emilio III, and
appointed respondent as administratrix of the subject estate. On appeal by certiorari, SC reversed and set aside the ruling of CA and included Emilio
III as co-administrator of Cristina's estate, giving weight to his interest in Federico's estate.
In this motion, Isabel pleads for total affirmance of the Court of Appeals Decision in favor of her sole administratorship based on her status as a
legitimate grandchild of Cristina, whose estate she seeks to administer. Isabel contends that the explicit provisions of Section 6, Rule 78 of the Rules
of Court on the order of preference for the issuance of letters of administration cannot be ignored and that Article 992 of the Civil Code must be
followed. Isabel further asserts that Emilio III had demonstrated adverse interests and disloyalty to the estate, thus, he does not deserve to become a
co-administrator thereof.

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Issue: Whether Emilio III should appointed as co-administrator of Cristina's Estate?

Held: No.

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

SEC. 6. When and to whom letters of administration granted. If no executor is named in the will, or the executor or executors are incompetent,
refuse the trust, or fail to give bond, or a person dies intestate, administration shall be granted:

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

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

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

Textually, the rule lists a sequence to be observed, an order of preference, in the appointment of an administrator. This order of preference, which
categorically seeks out the surviving spouse, the next of kin and the creditors in the appointment of an administrator, has been reinforced in
jurisprudence

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 for the estate. The rationale behind the rule is that those who will reap the benefit of a wise, speedy and economical administration of
the estate, or, in the alternative, suffer the consequences of waste, improvidence or mismanagement, have the highest interest and most influential
motive to administer the estate correctly.10 In all, given that the rule speaks of an order of preference, the person to be appointed administrator of a
decedents estate must demonstrate not only an interest in the estate, but an interest therein greater than any other candidate.

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 Section 6(a) of Rule 78 of the Rules of Court which specifically states
that letters of administration may be issued to both the surviving spouse and the next of kin. In addition and impliedly, we can refer to Section 2 of
Rule 82 of the Rules of Court which say that "x x x when an executor or administrator dies, resigns, or is removed, the remaining executor or
administrator may administer the trust alone, x x x."

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

The collected teaching is that mere demonstration of interest in the estate to be settled does not ipso facto entitle an interested person to co-
administration thereof. Neither does squabbling among the heirs nor adverse interests necessitate the discounting of the order of preference set forth
in Section 6, Rule 78. Indeed, in the appointment of administrator of the estate of a deceased person, the principal consideration reckoned with is the
interest in said estate of the one to be appointed as administrator. 31 Given Isabels unassailable interest in the estate as one of the decedents
legitimate grandchildren and undoubted nearest "next of kin," the appointment of Emilio III as co-administrator of the same estate, cannot be a
demandable right. It is a matter left entirely to the sound discretion of the Court 32 and depends on the facts and the attendant circumstances of the
case.33

Contrary to the assumption made in the Decision that Emilio IIIs demonstrable interest in the estate makes him a suitable co-administrator thereof,
the evidence reveals that Emilio III has turned out to be an unsuitable administrator of the estate. Respondent Isabel points out that after Emilio IIIs
appointment as administrator of the subject estate in 2001, he has not looked after the welfare of the subject estate and has actually acted to the
damage and prejudice thereof. As administrator, Emilio III enters into the office, posts a bond and executes an oath to faithfully discharge the duties
of settling the 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.

Page 6 of 19
005 Lee vs RTC
[ G.R. No. 146006, February 23, 2004 ]
JOSE C. LEE AND ALMA AGGABAO, IN THEIR CAPACITIES AS PRESIDENT AND CORPORATE SECRETARY, RESPECTIVELY, OF
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 OF COURT JANICE
Y. ANTERO, DEPUTY SHERIFFS ADENAUER G. RIVERA AND PEDRO L. BORJA, ALL OF THE REGIONAL TRIAL COURT OF QUEZON CITY
BRANCH 85, MA. DIVINA ENDERES CLAIMING TO BE SPECIAL ADMINISTRATRIX, AND OTHER PERSONS/ PUBLIC OFFICERS ACTING FOR
AND IN THEIR BEHALF, RESPONDENTS.

Facts:
Dr. Juvencio P. Ortaez incorporated the Philippine International Life Insurance Company, Inc. on July 6, 1956. At the time of the companys
incorporation, Dr. Ortaez owned ninety percent (90%) of the subscribed capital stock.

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

On September 24, 1980, Rafael Ortaez filed before the Court of First Instance of Rizal, Quezon City Branch (now Regional Trial Court of Quezon
City) a petition for letters of administration of the intestate estate of Dr. Ortaez. Private respondent Ma. Divina Ortaez-Enderes and her siblings
filed an opposition to the petition for letters of administration and, in a subsequent urgent motion, prayed that the intestate court appoint a special
administrator.

On March 10, 1982, the RTC appointed Rafael and Jose Ortaez joint special administrators of their fathers estate. Hearings continued for the
appointment of a regular administrator. 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 shares of stock in Philippine International Life Insurance Company (hereafter
Philinterlife), representing 50.725% of the companys outstanding capital stock.

During the pendency of the intestate proceedings, Juliana Ortaez and her two children, Special Administrators Rafael and Jose Ortaez, entered
into a memorandum of agreement dated March 4, 1982 for the extrajudicial settlement of the estate of Dr. Juvencio Ortaez, partitioning the estate
(including the Philinterlife shares of stock) among themselves. These shares were 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 the basis of the extrajudicial settlement but
without approval e of the probate court. FLAG consolidated the ownership in its name when Juliana and Jose failed to redeem the shares.

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 special administrator of Philinterlife shares of stock. This move was opposed by Special Administrator Jose
Ortaez. On November 8, 1995, the intestate court granted the motion of private respondents Enderes et al. and appointed private respondent
Enderes special administratrix of the Philinterlife shares of stock. Special Administratrix Enderes filed an urgent motion to declare void ab initio the
deeds of sale of Philinterlife shares of stock, which move was opposed by Special Administrator Jose Ortaez. On February 4, 1997, Jose Ortaez
filed an omnibus motion for (1) the approval of the deeds of sale of the Philinterlife shares of stock and (2) the release of Ma. Divina Ortaez-
Enderes as special administratrix of the Philinterlife shares of stock on the ground that there were no longer any shares of stock for her to administer.

The intestate court denied the omnibus motion of Special Administrator Jose Ortaez for the approval of the deeds of sale, stating that the same is
void and passes no title to the purchaser and annulled the extrajudicial partition of the estate.

On appeal, the appellate court ruled that there was no legal justification whatsoever for the extrajudicial partition of the estate, 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
of the stocks was declared void by the appellate court. CA denied Jose Ortaez' motion for reconsideration. He elavated the case to the SC via
petition for review under Rule 45 which the SC dismissed on a technicality. His motion for reconsideration was denied with finality on January 13,
1999. On February 23, 1999, the decision of SC became final and was subsequently recorded in the book of entries of judgments.

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, but petitioners ignored the same. On July 6, 2000, the intestate court granted the motion for
execution. Petitioner defy the execution of the decision.

Page 7 of 19
Petitioners Lee and Aggabao subsequently filed before the Court of Appeals a petition for certiorari, docketed as CA G.R. SP No. 59736. Petitioners
alleged that the intestate court gravely abused its discretion in (1) declaring that the ownership of FLAG over the Philinterlife shares of stock was null
and void; (2) ordering the execution of its order declaring such nullity and (3) depriving the petitioners of their right to due process. On July 26, 2000,
the Court of Appeals dismissed the petition outright and denied petitioners' motion for reconsideration.

Petitioners elevated the issue to the SC which denied the same. However, upon filing of a MR, the SC directed the parties to file their respective
memoranda.

Issue 1: Whether the sale of the stocks is null and void?

Held: Yes. The sale is null and void.

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

An heir can sell his right, interest, or participation in the property under administration under Art. 533 of the Civil Code which provides that
possession of hereditary property is deemed transmitted to the heir without interruption from the moment of death of the decedent. However, an heir
can only alienate such portion of the estate that may be allotted to him in the division of the estate by the probate or intestate court after final
adjudication, that is, after all debtors shall have been paid or the devisees or legatees shall have been given their shares. This means that an heir
may only sell his ideal or undivided share in the estate, not any specific property therein. In the present case, Juliana Ortaez and Jose Ortaez sold
specific properties of the estate (1,014 and 1,011 shares of stock in Philinterlife) in favor of petitioner FLAG. This they could not lawfully do pending
the final adjudication of the estate by the intestate court because of the undue prejudice it would cause the other claimants to the estate, as what
happened in the present case.

Juliana Ortaez and Jose Ortaez sold specific properties of the estate, without court approval. It is well-settled that court approval is
necessary for the validity of any disposition of the decedents estate. It being settled that property under administration needs the
approval of the probate court before it can be disposed of, any unauthorized disposition does not bind the estate and is null and void.

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

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

Issue 2: Can the intestate or probate court execute its order nullifying the invalid sale?

Held: Yes. 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 prevent the dissipation of estate property before
Page 12 final adjudication. Moreover, in this case, the order of the intestate court nullifying the sale was affirmed by the appellate courts.

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.

Furthermore, contrary to petitioners' argument 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, there is no question, based on the facts of this case, that the Philinterlife shares of stock were part of the
estate of Dr. Juvencio Ortaez from the very start as in fact these shares were included in the inventory of the properties of the estate submitted by
Rafael Ortaez after he and his brother, Jose Ortaez, were appointed special administrators by the intestate court.

Issue 3: Whether petitioners were denied due process?

Held: No.
Page 8 of 19
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.

Considering these circumstances, we cannot accept petitioners claim of denial of due process. The essence of due process is the reasonable
opportunity to be heard. Where the opportunity to be heard has been accorded, there is no denial of due process.

006 Estate of Hilario Ruiz vs CA

006 Estate of Hilario Ruiz vs CA

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 RUIZMONTES, MARIA CATHRYN RUIZ, CANDICE
ALBERTINE RUIZ, MARIA ANGELINE RUIZ AND THE PRESIDING JUDGE OF THE REGIONAL TRIAL COURT OF PASIG, BRANCH 156,
RESPONDENTS.

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

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 death of Hilario, Maria Pilar Ruiz Montes filed before the RTC, Branch 156, Pasig, a petition for the probate
and approval of Hilario Ruiz' will and for the issuance of letters of testamentary to Edmond Ruiz. Edmond Ruiz however opposed the petition on the
ground that the will was executed under undue influence but later withdrew the same.

Edmond Ruiz leased out one of the properties of the estate, Valle Verde Property, to third persons. The probate court ordered Edmond to deposit
with the Branch Clerk of the Court the rental deposits and payment representing the one-year lease of the Valle Verde property. In compliance,
Edmond turned over P348,583.56 out of the P450,000.00 after deducting expenses for repair and maintenance of the estate.

On July 28, 1993, petitioner Testate Estate of Hilario Ruiz as executor, filed an "Ex Parte Motion for Release of Funds", praying for the release of the
rent payments deposited with the Branch Clerk of Court. Montes opposed the motion and concurrently filed a "Motion for Release of Funds to
Certain Heirs" and "Motion for Issuance of Certificate of Allowance of Probate Will".

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

Petitioner filed a Motion for Reconsideration. On November 23, 1993, petitioner, through counsel, manifested that he was withdrawing his motion for
release of funds in view of the fact that the lease contract over Valle Verde property had been renewed for another year.

Despite petitioners manifestation, the probate court, on December 22, 1993, ordered the release of the funds to Edmond but only "such amount as
may be necessary to cover the expenses of administration and allowances for support" of the testators three granddaughters subject to collation and
deductible from their share in the inheritance. The court, however, held in abeyance the release of the titles to respondent Montes and the three
granddaughters until the lapse of 6 months from the date of first publication of the notice to creditor.

Page 9 of 19
Petitioner assailed this order before the CA which dismissed the petition and sustained the probate court's order dated November 10, 1994 and a
resolution dated January 5, 1995. Hence this petition.

Issue 1: Whether the probate court has the authority to grant an allowance from the funds of the estate for the support of the testator's
grandchildren before payment of the estate's debts and obligations?

Held: No. The Court has no such authority.

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

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

It is settled that allowances for support under Section 3 of Rule 83 should not be limited to the "minor or incapacitated" children of the deceased.
Article 188 of the Civil Code of the Philippines, the substantive law in force at the time of the 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.

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. 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.

Issue 2: Whether the probate court has the authority to order the release of the titles to certain heirs before payment of the estate's debts
and obligations?

Held: No. Respondent courts also erred when they ordered the release of the titles of the bequeathed properties to private respondents six months
after the date of first publication of notice to creditors. An order releasing titles to properties of the estate amounts to an advance distribution of the
estate which is allowed only under the following conditions:

"Sec. 2. Advance distribution in special proceedings. - Nothwithstanding a pending controversy or appeal in proceedings to settle the estate of a
decedent, the court may, in its discretion and upon such terms as it may deem proper and just, permit that such part of the estate as may not be
affected by the controversy or appeal be distributed among the heirs or legatees, upon compliance with the conditions set forth in Rule 90 of these
Rules."

And Rule 90 provides that:

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

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

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

Page 10 of 19
(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 thoseobligations.

In the case at bar, the probate court ordered the release of the titles to the Valle Verde property and the Blue Ridge apartments to the private
respondents after the lapse of six months from the date of first publication of the notice to creditors. The questioned order speaks of "notice" to
creditors, not payment of debts and obligations. Hilario Ruiz allegedly left no debts when he died but the taxes on his estate had not hitherto been
paid, much less ascertained. The estate tax is one of those obligations that must be paid before distribution of the estate. If not yet paid, the rule
requires that the distributees post a bond or make such provisions as to meet the said tax obligation in proportion to their respective shares in the
inheritance. Notably, at the time the order was issued the properties of the estate had not yet been inventoried and appraised.

It was also too early in the day for the probate court to order the release of the titles six months after admitting the will to probate. The probate of a
will is conclusive as to its due execution and extrinsic validity and settles only the question of whether the testator, being of sound mind, freely
executed it in accordance with the formalities prescribed by law. Questions as to the intrinsic validity and efficacy of the provisions of the will, the
legality of any devise or legacy may be raised even after the will has been authenticated. 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

Issue 2: Whether the probate court has the authority to grant possession of all properties of the estate to the executor of the will before
payment of the estate's debts and obligations?

Held: Yes.

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

007 Union Bank vs Santibaez

[ G.R. No. 149926, February 23, 2005 ]
UNION BANK OF THE PHILIPPINES, PETITIONER,
VS.
EDMUND SANTIBAEZ AND FLORENCE SANTIBAEZ ARIOLA, RESPONDENTS
Fact:
On May 31, 1980, the First Countryside Credit Corporation (FCCC) and Efraim M. Santibaez entered into a loan agreement in the amount of
P128,000.00. The amount was intended for the payment of the purchase price of one (1) unit Ford 6600 Agricultural All-Purpose Diesel Tractor. In
view thereof, Efraim and his son, Edmund, executed a promissory note in favor of the FCCC, the principal sum payable in five equal annual
amortizations of P43,745.96 due on May 31, 1981 and every May 31st thereafter up to May 31, 1985.

On December 13, 1980, the FCCC and Efraim entered into another loan agreement, this time in the amount of P123,156.00. It was intended to pay
the balance of the purchase price of another unit of Ford 6600 Agricultural All-Purpose Diesel Tractor, with accessories, and one (1) unit Howard
Rotamotor Model AR 60K. Again, Efraim and his son, Edmund, executed a promissory note for the said amount in favor of the FCCC. Aside from
such promissory note, they also signed a Continuing Guaranty Agreement for the loan dated December 13, 1980.

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

Subsequently in March 1981, testate proceedings commenced before the RTC of Iloilo City, Branch 7. Edmund, as one of the heirs, was appointed
as the special administrator of the estate of the decedent. During the pendency of the testate proceedings, the surviving heirs, Edmund and his sister
Florence Santibaez Ariola, executed a Joint Agreement dated July 22, 1981, wherein they agreed to divide between themselves and take
possession of the three (3) tractors; that is, two (2) tractors for Edmund and one (1) tractor for Florence. Each of them was to assume the
indebtedness of their late father to FCCC, corresponding to the tractor respectively taken by them.

On August 20, 1981, a Deed of Assignment with Assumption of Liabilities 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.

Page 11 of 19
Edmund failed to settle the loans with Union Bank which prompted the latter to file a complaint for sum of money against the heirs of Efraim
Santibaez, Edmund and Florence, before the RTC of Makati. Summonses were issued against both, but the one intended for Edmund was not
served since he was in the United States and there was no information on his address or the date of his return to the Philippines. Accordingly, the
complaint was narrowed down to respondent Florence S. Ariola.

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

The trial court dismissed the complaint for lack of merit and held that the claim of Union Bank should be 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.

Union Bank elevated its case to the cA which found that the appeal was not meritorious and held that the petitioner should have filed its claim with
the probate court as provided under Sections 1 and 5, Rule 86 of the Rules of Court. It further held that the partition made in the agreement was null
and void, since no valid partition may be had until after the will has been probated. Hence, this petition.

Issue 1: Whether the partition in the Agreement executed by the heirs is valid?

Held: No. The partition in the Agreement is not valid.

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

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. This, of course, presupposes that the properties to be partitioned are
the same properties embraced in the will.

The joint agreement executed by Edmund and Florence, partitioning the tractors among themselves, is invalid, specially so since at the time of its
execution, there was already a pending proceeding for the probate of their late fathers holographic will covering the said tractors. It must be stressed
that the probate proceeding had already acquired jurisdiction over all the properties of the deceased, including the three (3) tractors.

To dispose of them in any way without the probate courts approval is tantamount to divesting it with jurisdiction which the Court cannot allow. Every
act intended to put an end to indivision among co-heirs and legatees or devisees is deemed to be a partition, although it should purport to be a sale,
an exchange, a compromise, or any other transaction. Thus, in executing any joint agreement which appears to be in the nature of an extra-judicial
partition, as in the case at bar, court approval is imperative, and the heirs cannot just divest the court of its jurisdiction over that part of the estate

Issue 2: Whether the heirs assumption of the indebtedness of the deceased is valid?

Held: No. The heirs' assumption of the indebtedness of the deceased is invalid.

The assumption of liability was conditioned upon the happening of an event, that is, that each heir shall take possession and use of their respective
share under the agreement. It was made dependent on the validity of the partition, and that they were to assume the indebtedness corresponding to
the chattel that they were each to receive. The partition being invalid as earlier discussed, the heirs in effect did not receive any such tractor. It
follows then that the assumption of liability cannot be given any force and effect.

Issue 3: Whether the Union Bank can hold the heirs liable on the obligation of the deceased.

Held: No.

The Court notes that the loan was contracted by the decedent. The petitioner, purportedly a creditor of the late Efraim Santibaez, should have thus
filed its money claim with the probate court in accordance with Section 5, Rule 86 of the Revised Rules of Court. The filing of a money claim against
the decedents estate in the probate court is mandatory.

Page 12 of 19
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 29 presented, particularly the promissory notes and the continuing guaranty agreement, were executed and
signed only by the late Efraim Santibaez and his son Edmund. As the petitioner failed to file its money claim with the probate court, at most, it may
only go after Edmund as co-maker of the decedent under the said promissory notes and continuing guaranty, of course, subject to any defenses
Edmund may have as against the petitioner.

008 Heirs of the Late Sps. Magsalang vs Manila Banking Corporation

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

HEIRS OF THE LATE SPOUSES FLAVIANO MAGLASANG AND SALUD ADAZAMAGLASANG, NAMELY, OSCAR A. MAGLASANG, EDGAR
A. MAGLASANG, CONCEPCION CHONA A. MAGLASANG, GLENDA A. MAGLASANG-ARNAIZ, LERMA A. MAGLASANG, FELMA A.
MAGLASANG, FE DORIS A. MAGLASANG, LEOLINO A. MAGLASANG, MARGIE LEILA A. MAGLASANG, MA. MILALIE A. MAGLASANG,
SALUD MAGLASANG, AND MA. FLASALIE A. MAGLASANG, REPRESENTING THE ESTATES OF THEIR AFORE-NAMED DECEASED
PARENTS, PETITIONERS,

VS.
MANILA BANKING CORPORAT ON, NOW SUBSTITUTED BY FIRST SOVEREIGN ASSET MANAGEMENT [SPV-AMC], INC. [FSAMI],
RESPONDENT.

Fact:
Spouses Maglasang secured loans from Manila Banking in the amounts of P209,790.50 and P139,805.83 on October 24, 1975 and March 15, 1976,
respectively. The loans were secured by a real estate mortgage over seven of the Sps. Maglasang's properties located in Ormoc City.

On February 14, 1977, Flaviano Maglasang died. Edgar, one of the heirs, was appointed administrator of Flaviano's estate. In view of the issuance of
letters of administration, the probate court issued a Notice to Creditors for the filing of money claims against Flaviano's estate. Accordingly, Manila
Banking notified the probate court of its claim.

In an Order dated December 14, 1978 (December 14, 1978 Order), the probate court terminated the proceedings with the surviving heirs executing
an extra-judicial partition of the properties of Flavianos estate. The loan obligations owed by the estate to respondent, however, remained
unsatisfied due to respondents certification that Flavianos account was undergoing a restructuring. Nonetheless, the probate court expressly
recognized the rights of respondent under the mortgage and promissory notes executed by the Sps. Maglasang, specifically, its right to foreclose
the same within the statutory period.

In this light, respondent proceeded to extra-judicially 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. 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.

The RTC, deciding in favor of Manila Banking, ordered petitioners to pay the deficiency. On appeal, CA affirmed the decision of the RTC and later on
denied the petitioners' MR. During the pendency of the appeal, Salud passed away on July 25, 1997.

Issue: Whether Manila Banking is entitled to the deficiency notwithstanding that it had extra-judicially foreclosed the mortgage?

Held: No.

Claims against deceased persons should be filed during the settlement proceedings of their estate. Such proceedings are primarily governed by
special rules found under Rules 73 to 90 of the Rules, although rules governing ordinary actions may, as far as practicable, apply suppletorily.

Jurisprudence breaks down the rule under Section 7, Rule 86 and explains that the secured credit r has three remedies/options that he may
alternatively adopt for the satisfaction of his indebtedness. In particular, he may choose to:
(a) waive the mortgage and claim the entire debt from the estate of the mortgagor as an ordinary claim;
(b) foreclose the mortgage judicially and prove the deficiency as an ordinary claim; and
(c) rely on the mortgage exclusively, or other security and foreclose the same before it is barred by prescription, without the right to file a claim for
any deficiency.

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.

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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.

Simply put, Section 7, Rule 86 governs the parameters and the extent to which a claim may be advanced against the estate, whereas Act No. 3135
sets out the specific procedure to be followed when the creditor subsequently chooses the third option specifically, that of extra-judicially
foreclosing real property belonging to the estate. The application of the procedure under Act No. 3135 must be concordant with Section 7, Rule 86 as
the latter is a special rule applicable to claims against the estate, and at the same time, since Section 7, Rule 86 does not detail the procedure
forextra-judicial foreclosures, the formalities governing the manner of availing of the third option such as the place where the application for extra-
judicial foreclosure is filed, the requirements of publication and posting and the place of sale must be governed by Act No. 3135.

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.

009 Pilapil vs Heirs of Maximo R. Briones

[ G.R. No. 150175, February 05, 2007 ]

ERLINDA PILAPIL AND HEIRS OF DONATA ORTIZ BRIONES, NAMELY: ESTELA, ERIBERTO AND VIRGILIO SANTOS, ANA SANTOS
CULTURA, ELVIRA SANTOS INOCENTES, ERNESTO MENDOZA, RIZALINA SANTOS, ADOLFO MENDOZA AND PACITA MENDOZA,
PETITIONERS,
VS.
HEIRS OF MAXIMINO R. BRIONES, NAMELY: SILVERIO S. BRIONES, PETRA BRIONES, BONIFACIO CABAHUG, JR., ANITA TRASMONTE,
CIRILITA FORTUNA, CRESENCIA BRIONES, FUGURACION MEDALLE AND MERCEDES LAGBAS, RESPONDENTS.

Fact:
Petitioners are the heirs of the late Donata Ortiz-Briones. Respondents, on the other hand, are the heirs of the late Maximino Briones, composed of
his newphews and nieces, and grandnephews and grandnieces, in representation of the deceased siblings of Maximino.

Maximo was maried to Donata bu their union did not produce any children. When Maximo died on May 1, 1952, Donata instituted intestate
proceedings to settle her husband's estate and was instituted by the probate court as the administratrix of Maximo's estate. Donata submitted an
Inventory of Maximo's properties which included parcels of land.

The CFI would subsequently issue an Order, dated October 2, 1952, awarding ownership of the subject parcels of land to Donata. The said Order
was recorded in the Primary Entry Book of the Register of Deeds and by virtue thereof, Donata received new TCTs, covering the subject properties,
now in her name.

On November 1, 1977, Donata died. Erlinda, one of her nieces, instituted with the RTC a petition for administration of the intestate estate of Donata.
Erlinda and her husband, Gregorio, were appointed by the RTC as administrators of Donata's intestate estate.

On 21 January 1985, Silverio Briones (Silverio), a nephew of Maximino, filed a Petition with the RTC for Letters of Administration for the intestate
estate of Maximino, which was initially granted by the RTC. The RTC also issued an Order, dated 5 December 1985, allowing Silverio to collect
rentals from Maximino's properties. But then, Gregorio filed with the RTC a Motion to Set Aside the Order, dated 5 December 1985, claiming that the
said properties were already Letters of Administration for the intestate estate of Maximino was subsequently set aside by the RTC.

On 3 March 1987, the heirs of Maximino filed a Complaint with the RTC against the heirs of Donata for the partition, annulment, and recovery of
possession of real property. 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.

The RTC rendered a decision in favor of the heirs of Maximino. The court declared that the heirs of Maximino were entitled to 1/2 of the subject real
properties. It also ordered Erlinda to reconvey to the heirs of Maximino the said properties and to render an accounting of the fruits thereof.

On appeal, CA affirmed the decision of the RTC. SC, however, reversed the decision of the CA and RTC and dismissed the complaint for partition,
annulment and recovery of possession of the subject real properties file by the heir of Maximino.

The heirs of Maximino filed a motion for reconsideration raising the arguments that Donata committed fraud in securing the CFI Order declaring her
as the sole heir of her deceased husband Maximino and authorized her to have Maximino's properties registered exclusively in her name; that
respondents' right to succession to the disputed properties was transmitted or vested from the moment of Maximino's death and which they could no
longer be deprived of; that Donata merely possessed and held the properties in trust for her co-heirs/owners; and that, by virtue of this Court's ruling
in Quion v. Claridad and Sevilla, et al. v. De Los Angeles, respondents' action to recover title to and possession of their shares in Maximino's estate,
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held in trust for their benefit by Donata, and eventually, by petitioners as the latter's successors-in-interest, is imprescriptible. Respondents also
advance a fresh contention that the CFI Order, dated 2 October 1952, being based on the fraudulent misrepresentation of Donata that she was
Maximino's sole heir, was a void order, which produced no legal effect. Lastly, respondents asseverate that, by relying on certain procedural
presumptions in its Decision, dated 10 March 2006, this Court has sacrificed their substantive right to succession, thus, making justice "subservient
to the dictates of mere procedural fiats."

Issue: Whether the heirs of Maximino are entitled to reconveyance?

Held: No.

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." Implied trust, specifically constructive trust,
requires fraud. In this case, there was insufficient evidence to establish that Donata committed fraud. It should be remembered that Donata was able
to secure certificates of title to the disputed properties by virtue of the CFI Order in Special Proceedings No. 928-R (the proceedings she instituted to
settle Maximino's intestate estate), which declared her as Maximino's sole heir. In the absence of proof to the contrary, the Court accorded to
Special Proceedings No. 928-R the presumptions of regularity and validity.

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, and that the publication in the newspapers of the filing of the application and of the date set for the hearing of the same, in the
manner prescribed by law, is a notice to the whole world of the existence of the proceedings and of the hearing on the date and time indicated in the
publication. The publication requirement of the notice in newspapers is precisely for the purpose of informing all interested parties in the estate of the
deceased of the existence of the settlement proceedings, most especially those who were not named as heirs or creditors in the petition, regardless
of whether such omission was voluntarily or involuntarily made.

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

Although Donata may have alleged before the CFI that she was her husband's sole heir, it was not established that she did so knowingly, maliciously
and in bad faith, so as for this Court to conclude that she indeed committed fraud. This Court again brings to the fore the delay by which respondents
filed the present case, when the principal actors involved, particularly, Donata and Maximino's siblings, have already passed away and their lips
forever sealed as to what truly transpired between them. The degree of proof to establish fraud in a case where the principal actors to the transaction
have already passed away is proof beyond reasonable doubt.

Moreover, even if Donata's allegation that she was Maximino's sole heir does constitute fraud, it is insufficient to justify abandonment of the CFI
Order, dated 15 January 1960, 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.

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

Prescription of the action for reconveyance of the disputed properties based on implied trust is governed by Article 1144 of the New Civil Code.
Since an implied trust is an obligation created by law (specifically, in this case, by Article 1456 of the New Civil Code), then respondents had 10
years within which to bring an action for reconveyance of their shares in Maximino's properties. The general rule is that an action for reconveyance of
real property based on implied trust prescribes ten years from registration and/or issuance of the title to the property, not only because registration
under the Torrens system is a constructive notice of title, but also because by registering the disputed properties exclusively in her name, Donata
had already unequivocally repudiated any other claim to the same. By virtue of the CFI Order, dated 15 January 1960, Donata was able to register
and secure certificates of title over the disputed properties in her name on 27 June 1960. The respondents filed with the RTC their Complaint for
partition, annulment, and recovery of possession of the disputed real properties, only on 3 March 1987, almost 27 years after the registration of the
said properties in the name of Donata. Therefore, respondents' action for recovery of possession of the disputed properties had clearly prescribed.

Moreover, even though respondents' Complaint before the RTC in Civil Case No. CEB-5794 also prays for partition of the disputed properties, it
does not make their action to enforce their right to the said properties imprescriptible. While as a general rule, the action for partition among co-
Page 15 of 19
owners does not prescribe so long as the co-ownership is expressly or impliedly recognized, as provided for in Article 494, of the New Civil Code, it
bears to emphasize that Donata had never recognized respondents as co-owners or co-heirs, either expressly or impliedly. Her assertion before the
CFI in Special Proceedings No. 928-R that she was Maximino's sole heir necessarily excludes recognition of some other co-owner or co-heir to the
inherited properties; Consequently, the rule on non-prescription of action for partition of property owned in common does not apply to the case at bar.

Furthermore, other than prescription, respondents' right to recover possession of the disputed properties, based on implied trust, is also barred by
laches. The defense of laches, which is a question of inequity in permitting a claim to be enforced, applies independently of prescription, which is a
question of time. Prescription is statutory; laches is equitable.

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

The heirs of Maximino knew he died on 1 May 1952. They even attended his wake. They did not offer any explanation as to why they had waited 33
years from Maximino's death before one of them, Silverio, filed a Petition for Letters of Administration for the intestate estate of Maximino on 21
January 1985. After learning that the intestate estate of Maximino was already settled in Special Proceedings No. 928-R, they waited another two
years, before instituting, on 3 March 1987, Civil Case No. CEB-5794, the Complaint for partition, annulment and recovery of the real property
belonging to the estate of Maximino.

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

010 Sabidong vs Solas

[ A.M. No. P-01-1448 (FORMERLY OCA IPI NO. 99-664-P), June 23, 2013 ]
RODOLFO C. SABIDONG, COMPLAINANT,
VS.
NICOLASITO S. SOLAS (CLERK OF COURT IV), RESPONDENT.

Fact:
Trinidad Sabidong, complainants mother, is one of the longtime occupants of a parcel of land, designated as Lot 11 (Lot 1280-D-4-11 of
consolidation-subdivision plan [LRC] Pcs-483) originally registered in the name of C. N. Hodges and situated at Barangay San Vicente, Jaro, Iloilo
City. 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. At the time, respondent was the Clerk of Court III of MTCC, Branch 3, Iloilo City.

Solas offered to purchase on installment Lot 11 and 12. On November 21, 1994, a deed of sale with mortgage covering Lot 11 was executed
between Solas and the Hodges Estate. Consequently, TCT No. T-11836 in the name of CN Hodges was cancelled and a new certificate of title was
issued, TCT No. T-107519 in the name of Solas was issued.

On June 14, 1999, a letter-complaint asserting that as court employee Solas cannot buy the subject property since it is still in litigation. In his
Memorandum, respondent maintained that his purchase of the subject land is not covered by the prohibition in paragraph 5, Article 1491 of the Civil
Code. He pointed out that he bought Lot 11-A a decade after the MTCC of Iloilo, Branch 3, had ordered the ejectment of Priscila Saplagio and
Trinidad Sabidong from the subject lot. He insisted that public trust was observed when complainant was accorded his right of first refusal in the
purchase of Lot 11-A, albeit the latter failed to avail said right. Asserting that he is a buyer in good faith and for value, respondent cited the dismissal
of the cases for Estafa and annulment of title and damages which complainant filed against him.

Issue: Whether Solas, as a court employee, is proscribed from purchasing the subject property?

Held: No.

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.

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

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

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

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

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

011 Aranas vs Mercado

[ G.R. No. 156407, January 15, 2014 ]
THELMA M. ARANAS, PETITIONER,
VS.
TERESITA V. MERCADO, FELIMON V. MERCADO, CARMENCITA M. SUTHERLAND,
RICHARD V. MERCADO, MA. TERESITA M. ANDERSON, AND FRANKLIN L. MERCADO,
RESPONDENTS.

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

Emigdio inherited and acquired real properties during his lifetime. He owned corporate shares in Mervir Realty Corporation (Mervir Realty) and Cebu
Emerson Transportation Corporation (Cebu Emerson). He assigned his real properties in exchange for corporate stocks of Mervir Realty, and sold
his real property in Badian, Cebu (Lot 3353 covered by Transfer Certificate of Title No. 3252) to Mervir Realty.

On June 3, 1991, Thelma filed in the RTC of Cebu City a petition for the appointment of Teresita as the administrator of Emigdio's estate. The RTC
granted the petition considering that there was no opposition and issued the letters of administration in favor of Teresita.

As the administrator, Teresita submitted an inventory of the estate of Emigdio on December 14, 1992 for the consideration and approval by the RTC.
She indicated in the inventory that at the time of his death, Emigdio had left no real properties but only personal properties worth P6,675,435.25 in
all, consisting of cash of P32,141.20; furniture and fixtures worth P20,000.00; pieces of jewelry valued at P15,000.00; 44,806 shares of stock of
Mervir Realty worth P6,585,585.80; and 30 shares of stock of Cebu Emerson worth P22,708.25.

Claiming that Emigdio had owned other properties that were excluded from the inventory, Thelma moved that the RTC direct Teresita to amend the
inventory, and to be examined regarding it. The RTC granted Thelmas motion through the order of January 8, 1993. On January 21, 1993, Teresita
filed a compliance with the order of January 8, 1993, supporting her inventory with copies of three certificates of stocks covering the 44,806 Mervir
Realty shares of stock; 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; and the certificate of stock issued on
January 30, 1979 for 300 shares of stock of Cebu Emerson worth P30,000.00.

On January 26, 1993, Thelma again moved to require Teresita to be examined under oath on the inventory, and that she (Thelma) be allowed 30
days within which to file a formal opposition to or comment on the inventory and the supporting documents Teresita had submitted.

On February 4, 1993, the RTC issued an order expressing the need for the parties to present evidence and for Teresita to be examined to enable the
court to resolve the motion for approval of the inventory. On April 19, 1993, Thelma opposed the approval of the inventory, and asked leave of court
to examine Teresita on the inventory.

Page 17 of 19
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. On March 14, 2001, RTC issued an order finding and holding that the inventory
submitted by Teresita had excluded properties that should be included.

On March 29, 2001, Teresita, joined by other heirs of Emigdio, timely sought the reconsideration of the order of March 14, 2001 on the ground that
one of the real properties affected, Lot No. 3353 located in Badian, Cebu, had already been sold to Mervir Realty, and that the parcels of land
covered by the deed of assignment had already come into the possession of and registered in the name of Mervir Realty. Thelma opposed the
motion.

On May 18, 2001, the RTC denied the motion for reconsideration. CA, on appeal by certiorari, opined that the sale by Emigdio and Teresita had
transferred the ownership of Lot No. 3353 to Mervir Realty because the deed of absolute executed on November 9, 1989 had been notarized, that
the RTC, as an intestate court, also had no power to take cognizance of and determine the issue of title to property registered in the name of third
persons or corporation; that a property covered by the Torrens system should be afforded the presumptive conclusiveness of title; that the RTC, by
disregarding the presumption, had transgressed the clear provisions of law and infringed settled jurisprudence on the matter; and that the RTC also
gravely abused its discretion in holding that Teresita, et al. were estopped from questioning its jurisdiction because of their agreement to submit to
the RTC the issue of which properties should be included in the inventory. CA denied the motion of Teresita et al.

Issue: Whether RTC committed grave abuse of discretion amounting amounting tolack or excess of jurisdiction in directing the inclusion of certain
properties in the inventory notwithstanding that such properties had been either transferred by sale or exchanged for corporate shares in Mervir
Realty by the decedent during his lifetime?

Held: No.

Under Section 6(a), Rule 78 of the Rules of Court, the letters of administration may be granted at the discretion of the court to the surviving spouse,
who is competent and willing to serve when the person dies intestate. Upon issuing the letters of administration to the surviving spouse, the RTC
becomes duty-bound to direct the preparation and submission of the inventory of the properties of the estate, and the surviving spouse, as the
administrator, has the duty and responsibility to submit the inventory within three months from the issuance of letters of administration pursuant to
Rule 83 of the Rules of Court.

The usage of the word all in Section 1, supra, demands the inclusion of all the real and personal properties of the decedent in the inventory.
However, the word all is qualified by the phrase which has come into his possession or knowledge, which signifies that the properties must be known
to the administrator to belong to the decedent or are in her possession as the administrator. Section 1 allows no exception, for the phrase true
inventory implies that no properties appearing to belong to the decedent can be excluded from the inventory, regardless of their being in the
possession of another person or entity. The objective of the Rules of Court in requiring the inventory and appraisal of the estate of the decedent is to
aid the court in revising the accounts and determining the liabilities of the executor or the administrator, and in making a final and equitable
distribution (partition) of the estate and otherwise to facilitate the administration of the estate

There is no dispute that the jurisdiction of the trial court as an intestate court is special and limited. The trial court cannot adjudicate title
to properties claimed to be a part of the estate but are claimed to belong to third parties by title adverse to that of the decedent and the
estate, not by virtue of any right of inheritance from the decedent. All that the trial court can do regarding said properties is to determine
whether or not they should be included in the inventory of properties to be administered by the administrator. Such determination is
provisional and may be still revised.

However, this general rule is subject to exceptions as justified by expediency and convenience.

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

Firstly, the shares in the properties inherited by Emigdio from Severina Mercado should be included in the inventory because Teresita, et al. did not
dispute the fact about the shares being inherited by Emigdio.

Secondly, with Emigdio and Teresita having been married prior to the effectivity of the Family Code in August 3, 1988, their property regime was the
conjugal partnership of gains. 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 during that property regime did not pertain to the conjugal
partnership of gains carried the burden of proof, and that party must prove the exclusive ownership by one of them by clear, categorical, and
Page 18 of 19
convincing evidence. In the absence of or pending the presentation of such proof, the conjugal partnership of Emigdio and Teresita must be
provisionally liquidated to establish who the real owners of the affected properties were, and which of the properties should form part of the estate of
Emigdio. The portions that pertained to the estate of Emigdio must be included in the inventory.

Moreover, although the title over Lot 3353 was already registered in the name of Mervir Realty, the RTC made findings that put that title in dispute.
Civil Case No. CEB-12692, a dispute that had involved the ownership of Lot 3353, was resolved in favor of the estate of Emigdio, and Transfer
Certificate of Title No. 3252 covering Lot 3353 was still in Emigdios name. Indeed, the RTC noted in the order of March 14, 2001, or ten years after
his death, that Lot 3353 had remained registered in the name of Emigdio.

Also, the fact that the deed of absolute sale executed by Emigdio in favor of Mervir Realty was a notarized instrument did not sufficiently justify the
exclusion from the inventory of the properties involved. A notarized deed of sale only enjoyed the presumption of regularity in favor of its execution,
but its notarization did not per se guarantee the legal efficacy of the transaction under the deed, and what the contents purported to be. The
presumption of regularity could be rebutted by clear and convincing evidence to the contrary.

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.

Lastly, the inventory of the estate of Emigdio must be prepared and submitted for the important purpose of resolving the difficult issues of collation
and advancement to the heirs. Article 1061 of the Civil Code required every compulsory heir and the surviving spouse, herein Teresita herself, to
bring into the mass of the estate any property or right which he (or she) may have received from the decedent, during the lifetime of the latter, by
way of donation, or any other gratuitous title, in order that it may be computed in the determination of the legitime of each heir, and in the account of
the partition.
31
32

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