14. ALONZO ANCHETA v.
CANDELARIA GUERSEY-DALAYGON willfully breached his fiduciary duty when he disregarded the laws of the State of
G.R. No. 139868, June 8, 2006
Doctrines: (underlined)
Facts:
(1) Sps. Audrey O’Neill (Audrey) and W. Richard Guersey (Richard) were American
citizens who have resided in the Philippines for 30 years. Their adopted daughter is
Kyle Guersey Hill (Kyle).
(2) Audrey died on July 29, 1979 and left a will wherein she bequeathed her entire
estate to Richard, who was also designated as executor. The will was admitted to
probate before the Orphan’s Court of Baltimore, Maryland, USA. The court also
named Atty. Alonzo Ancheta (petitioner) of the Quasha Asperilla Ancheta Peña &
Nolasco Law Offices as ancillary administrator.
(3) In 1981, Richard married Candelaria Guersey-Dalaygon (respondent) with whom he
has 2 children: Kimberly & Kevin.
(4) On Oct. 12, 1982: Audrey’s will was also admitted to probate by the CFI of Rizal in
Special Proceeding No. 9625. As administrator, Ancheta filed an inventory and
appraisal of Audrey’s conjugal share in real estate in Forbes Parks, a current
account in Audrey’s name with cash balance, and 64,444 shares of stock in A/G
Interiors, Inc.
(5) On July 20, 1984: Richard died, leaving a will, wherein he bequeathed his entire
estate to Candelaria, save for his rights & interests over the A/G Interiors, Inc.
shares, which he left to Kyle. The will was also admitted to probate by the Orphan’s
Court of Baltimore, Maryland, USA.
(6) Richard’s will was submitted for probate before the RTC of Makati docketed as
Special Proceeding No. M-888.
(7) On Oct. 19, 1987, Ancheta filed in Special Proceeding No. 9625 a motion to declare
Richard and Kyle as heirs of Audrey. Ancheta also filed a project of partition of
Audrey’s estate, with Richard being apportioned the 3/4 undivided interest in the
Makati property, 48.333 shares in A/G Interiors, Inc., and P9,313.48 from the
Citibank current account; and Kyle, the 1/4 undivided interest in the Makati
property, 16,111 shares in A/G Interiors, Inc., and P3,104.49 in cash. This was
granted by the trial court. The Register of Deeds of Makati issued a TCT in the
names of the Estate of W. Richard Guersey and Kyle.
(8) Meanwhile, the ancillary administrator in Special Proceeding No. M-888 also filed a
project of partition wherein 2/5 of Richard’s 3/4 undivided interest in the Makati
property was allocated to Candelaria, while 3/5 thereof were allocated to Richard’s
three children. This was opposed by Candelaria on the ground that under the law of
the State of Maryland, “a legacy passes to the legatee the entire interest of the
testator in the property subject of the legacy.” Since Richard left his entire estate to
Candelaria, except for his rights and interests over the A/G Interiors, Inc, shares,
then his entire 3/4 undivided interest in the Makati property should be given to
her.
(9) The trial court found merit in the opposition, thus, it disapproved the project of
partition as to the Makati property. It also adjudicated Richard’s entire ¾ undivided
interest in the Makati property to Candelaria.
(10) On Oct. 20, 1993, Candelaria filed an amended complaint with the CA for the
annulment of the trial court’s order on Spec. Pro. 9625, contending that Ancheta
Maryland on the distribution of Audrey’s estate in accordance with her will.
(11) Candelaria argued that since Audrey devised her entire estate to Richard, then the
Makati property should be wholly adjudicated to him, and not merely 3/4 thereof,
and since Richard left his entire estate, except for his rights and interests over the
A/G Interiors, Inc., to Candelaria, then the entire Makati property should now
pertain to her.
(12) Ancheta alleged that he had no knowledge of the State of Maryland’s laws on
testate and intestate succession.
(13) CA: annulled the trial court’s Orders. Hence, this petition for review on certiorari.
Issue:
(1) WON Ancheta did not commit fraud, either extrinsic or intrinsic, in the
performance of his duties as ancillary administrator of Audrey’s estate in the PH ->
YES.
(2) WON Audrey’s and Richard’s estate should be distributed according to their
respective wills, and not according to the project of partition submitted by Ancheta
-> YES.
Held:
Issue 1: A decree of distribution of the estate of a deceased person vests the title to the land
of the estate in the distributees, which, if erroneous may be corrected by a timely appeal.
Once it becomes final, its binding effect is like any other judgment in rem. However, in
exceptional cases, a final decree of distribution of the estate may be set aside for lack of
jurisdiction or fraud. Further, in Ramon v. Ortuzar, the Court ruled that a party interested in a
probate proceeding may have a final liquidation set aside when he is left out by reason of
circumstances beyond his control or through mistake or inadvertence not imputable to
negligence.
Under BP 129, an annulment of judgment may be based on the ground that a judgment is
void for want of jurisdiction or that the judgment was obtained by extrinsic fraud. For fraud
to become a basis for annulment of judgment, it has to be extrinsic or actual, and must be
brought within 4 years from discovery of fraud. In this case, Candelaria alleged extrinsic fraud
as basis for the annulment of RTC Orders. This fraud being complained of refers to the failure
to introduce in evidence the pertinent law of the State of Maryland.
Ancheta is the ancillary administrator of Audrey’s estate. As such, he occupies a position of
the highest trust and confidence, and he is required to exercise reasonable diligence and act
in entire good faith in the performance of that trust. Ancheta’s failure to proficiently manage
the distribution of Audrey’s estate according to the terms of her will and as dictated by the
applicable law amounted to extrinsic fraud. Hence the CA Decision annulling the RTC Orders
dated February 12, 1988 and April 7, 1988, must be upheld.
Issue 2: Being a foreign national, the intrinsic validity of Audrey’s will, especially with regard
as to who are her heirs, is governed by her national law, i.e., the law of the State of
Maryland, as provided in Article 16 of the Civil Code. Article 1039 of the Civil Code further
provides that “capacity to succeed is governed by the law of the nation of the decedent.”
As a corollary rule, Section 4, Rule 77 of the Rules of Court on Allowance of Will Proved
Outside the Philippines and Administration of Estate Thereunder, states:
SEC. 4. Estate, how administered.—When a will is thus allowed, the court shall grant letters
testamentary, or letters of administration with the will annexed, and such letters
testamentary or of administration, shall extend to all the estate of the testator in the
Philippines. Such estate, after the payment of just debts and expenses of administration,
shall be disposed of according to such will, so far as such will may operate upon it; and the
residue, if any, shall be disposed of as is provided by law in cases of estates in the Philippines
belonging to persons who are inhabitants of another state or country.
While foreign laws do not prove themselves in our jurisdiction and our courts are not
authorized to take judicial notice of them; however, Ancheta, as ancillary administrator of
Audrey’s estate, was duty­bound to introduce in evidence the pertinent law of the State of
Maryland.
except only by way of legal succession or if the acquisition was made by a former
natural-born citizen.
In any case, the Court has also ruled that if land is invalidly transferred to an alien who
subsequently becomes a citizen or transfers it to a citizen, the flaw in the original transaction
is considered cured and the title of the transferee is rendered valid. In this case, since the
Makati property had already passed on to respondent who is a Filipino, then whatever flaw,
if any, that attended the acquisition by the Guerseys of the Makati property is now
inconsequential, as the objective of the constitutional provision to keep our lands in Filipino
hands has been achieved.
WHEREFORE, the petition is denied. The Decision dated March 18, 1999 and the Resolution
dated August 27, 1999 of the Court of Appeals are AFFIRMED.
Petitioner is ADMONISHED to be more circumspect in the performance of his duties as an
official of the court

Petitioner admitted that he failed to introduce in evidence. As held by the CA, While such
breach of duty admittedly cannot be considered extrinsic fraud under ordinary
circumstances, the fiduciary nature of the said defendant’s position, as well as the resultant
frustration of the decedent’s last will, combine to create a circumstance that is tantamount
to extrinsic fraud.

The trial court in its Order dated December 6, 1991 in Special Proceeding No. M-888 noted
the law of the State of Maryland on Estates and Trusts, as follows:

“Under Section 1­301, Title 3, Sub­Title 3 of the Annotated Code of the Public General Laws
of Maryland on Estates and Trusts, “all property of a decedent shall be subject to the estate
of decedents law, and upon his death shall pass directly to the personal representative, who
shall hold the legal title for administration and distribution,” while Section 4­408 expressly
provides that “unless a contrary intent is expressly indicated in the will, a legacy passes to the
legatee the entire interest of the testator in the property which is the subject of the legacy.”
Section 7­101, Title 7, Sub­Title 1, on the other hand, declares that “a personal representative
is a fiduciary” and as such he is “under the general duty to settle and distribute the estate of
the decedent in accordance with the terms of the will and the estate of decedents law as
expeditiously and with as little sacrifice of value as is reasonable under the circumstances.”

When Richard subsequently died, the entire Makati property should have then passed on to
Candelaria. This, of course, assumes the proposition that the law of the State of Maryland
which allows “a legacy to pass to the legatee the entire estate of the testator in the property
which is the subject of the legacy,” was sufficiently proven in Special Proceeding No. 9625.

Audrey’s and Richard’s estate should be distributed according to their respective wills, and
not according to the project of partition submitted by Ancheta. Consequently, the entire
Makati property belongs to Candelaria.

Note: (Addt’l Ruling)

As it now stands, Article XII, Sections 7 and 8 of the 1986 Constitution explicitly prohibits
non-Filipinos from acquiring or holding title to private lands or to lands of the public domain,