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OTHER SPECIAL PROCEEDINGS: 2.

1. G.R. No. 109373 March 20, 1995 PACIFIC BANKING


Hagans vs. Wislizenus CORPORATION EMPLOYEES ORGANIZATION, PAULA S. PAUG, vs.
GR No. 16680 CA
September 13, 1920
FACTS
Facts:
Judge Wizlizenus of CFI of Cebu ordered the appointment of an
assessor in a special proceeding, for the purpose of fixing the Pacific Banking Corporation (PaBC) was placed under receivership by
amount due to an administrator or executor for his services and the Central Bank of the Philippines. A few months later, it was
expenses in the care, management, and settlement of the estate of placed under liquidation1 and a Liquidator was appointed.2
the deceased person.
The Central Bank filed with the RTC a "Petition for Assistance in the
Hagans contends that no authority in law exist for the appointment Liquidation of Pacific Banking Corporation." 3 The petition was
of assessors in such proceedings. approved, after which creditors filed their claims with the court.

Issue: The Pacific Banking Union, filed a complaint-in-intervention seeking


WON the judge in a special proceeding is authorized to appoint an payment of holiday pay, 13th month pay differential, salary increase
assessor. NO differential, Christmas bonus, and cash equivalent of Sick Leave
Benefit due its members. In its order dated September 13, 1991, the
Held: trial court ordered payment of claims of the Union.5
The only provision in law that applies in this case is Section 154 of
Act 190 which provides:
“Either party to an action may apply in writing to the judge for The Liquidator received a copy of the order on September 16, 1991.
assessors to sit in the trial. Upon the filing of such application, the On October 16, 1991, he filed a Motion for Reconsideration. In his
judge shall direct that assessors be provided.” order, the judge disallowed the Liquidator's Notice of Appeal on the
ground that it was late, i.e., more than 15 days after receipt of the
The present case is a special proceeding, not an action. There is a decision.
distinction between an action and a special proceeding as provided
for in Section 1 of Act 190. The Liquidator received the order on September 16, 1992. On
September 30, 1992 he moved for reconsideration, but his motion
ACTION – means an ordinary suit in court of justice; is a formal was denied by the court on October 2, 1992. He received the order
demand of one’s legal right in a court of justice in the manner denying his Motion for Reconsideration on October 5, 1992. On
prescribed by the court or by the law; it is the method of applying October 14, 1992 he filed a Notice of Appeal from the orders of
legal remedies according to definite established rules. September 16, 1992 and October 2, 1992. The judge ordered the
Notice of Appeal stricken off the record on the ground that it had
SPECIAL PROCEEDING – every other remedy furnished by law; is an been filed without authority of the Central Bank and beyond 15
application or proceeding to establish the status or right of a party days.
or a particular fact; no formal pleadings are required, unless the
statute expressly so provides; is generally acted upon an application ISSUE
or motion.
WON a petition for liquidation under §29 of Rep. Act No. 265 is in
Proceedings for the appointment of an administrator, guardians, the nature of a special proceeding, hence the period of appeal is 30
tutors, contest of wills, to perpetuate testimony, to change the days YES
name of persons, applications for admission to the bar are all
examples of special proceedings. WON the notice of appeal filed by the liquidator was filed on time
YES
Therefore, the appointment of assessor by the judge is annulled and
set aside. HELD

The Interim Rules and Guidelines to implement BP Blg. 129


provides:

19. Period of Appeals. —

(a) All appeals, except in habeas corpus cases and in the


cases referred to in paragraph (b) hereof, must be taken
within fifteen (15) days from notice of the judgment, order,
resolution or award appealed from.

(b) In appeals in special proceedings in accordance with Rule


109 of the Rules of Court and other cases wherein multiple
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appeals are allowed, the period of appeals shall be thirty corporation and the estate is not disputed. The court's concern is
(30) days, a record on appeal being required. with the declaration of creditors and their rights and the
determination of their order of payment.
Rule 2 of the Rules of Court provide:

§1. Action defined. — Action means an ordinary suit in a


court of justice, by which the party prosecutes another for
APPLICABILITY OF RULES ON CIVIL ACTIONS: RULE 33
the enforcement or protection of a right, or the prevention
(Demurrer)
or redress of a wrong.
3.
§2. Special Proceeding Distinguished. — Every other remedy, Matute vs. Court of Appeals
including one to establish the status or right of a party or a
particular fact, shall be by special proceeding. Facts: On August 20, 1965 when Carlos S. Matute, one of the
Matute heirs and a full-blood brother of both the petitioner and the
Action is the act by which one sues another in a court of justice for herein respondent Matias S. Matute, filed in Special Proceeding
the enforcement or protection of a right, or the prevention or (settlement of the Matute estate) a petition praying for the removal
redress of a wrong while special proceeding is the act by which one of Matias as co-administrator and his appointment in such capacity.
seeks to establish the status or right of a party, or a particular fact.
Hence, action is distinguished from special proceeding in that the Carlos alleged that for a period of more than two years
former is a formal demand of a right by one against another, while from the date of his appointment, said Matias S. Matute has
the latter is but a petition for a declaration of a status, right or fact. neglected to render a true, just and complete account of his
Where a party litigant seeks to recover property from another, his administration and that he is not only incompetent but also
remedy is to file an action. Where his purpose is to seek the negligent in his management of the estate under his charge
appointment of a guardian for an insane, his remedy is a special consisting of five haciendas.
proceeding to establish the fact or status of insanity calling for an
appointment of guardianship. The respondent Matias opposed the allegation that it is
completely without basis and false. Records show that he made an
Considering this distinction, a petition for liquidation of an insolvent accounting and the same was submitted to the court. That his
corporation should be classified a special proceeding and not an competence to act as administrator has been established to the
satisfaction of the court.
ordinary action. Such petition does not seek the enforcement or
protection of a right nor the prevention or redress of a wrong
against a party. It does not pray for affirmative relief for injury It appears that during the reception of evidence
arising from a party's wrongful act or omission nor state a cause of conducted on December 29, 1965 by the probate court, Carlos S.
action that can be enforced against any person. Matute and the other heirs submitted their respective lists of
exhibits in supportof their motion to ousts Matias. On January 8,
1966 Matias filed a written objection to the admission of the
What it seeks is merely a declaration by the trial court of the movants’ exhibits on the ground that the same were hearsay, self-
corporation's insolvency so that its creditors may be able to file their serving, irrelevant and/or mere photostatic copies of supposed
claims in the settlement of the corporation's debts and obligations. originals which never properly identified nor shown in court. four
Put in another way, the petition only seeks a declaration of the days later, the Counsel for Matias filed with leave of Court a “Motion
corporation's debts and obligations. Put in another way, the petition to Dismiss and/or Demurrer to Evidence” which avers that there is
only seeks a declaration of the corporation's state of insolvency and no sufficient evidence on record to justify and support the motions
the concomitant right of creditors and the order of payment of their for the removal of the herein co-administrator Matias S. Matute.
claims in the disposition of the corporation's assets.
The probate court issued an order removing Matias S.
Contrary to the rulings of the Fourteenth Division, liquidation Matute as co-administrator. Hence, the certiorari. The respondent
proceedings do not resemble petitions for interpleader. For one, an contends that the disputed order removing him as co-administrator
action for interpleader involves claims on a subject matter against a is a patent nullity. Upon the other hand, the petitioner advances the
person who has no interest therein. This is not the case in a reason in support of the order of removal that the probate judge
liquidation proceeding where the Liquidator, as representative of accorded the respondent all the opportunity to adduce his evidence
the corporation, takes charge of its assets and liabilities for the but the latter resorted to dilatory tactics such as filing a motion to
dismiss or demurrer to evidence.
benefit of the creditors. He is thus charged with insuring that the
assets of the corporation are paid only to rightful claimants and in
Issue: Whether or not Rule 33 regarding judgment on demurrer to
the order of payment provided by law. evidence is applicable to special proceedings such that its’ disregard
Rather, a liquidation proceeding resembles the proceeding for the by the probate court amounts to grave abuse of discretion.
settlement of state of deceased persons under Rules 73 to 91 of the
Held: Yes. Section 2, Rule 72 of the Rules of Court provides that in
Rules of Court. The two have a common purpose: the determination
the absence of special provisions, the rules provided for in ordinary
of all the assets and the payment of all the debts and liabilities of civil actions shall be, as far as practicable, applicable in special
the insolvent corporation or the estate. The Liquidator and the proceedings. The application of the above cited Rule in special
administrator or executor are both charged with the assets for the proceedings, like the case at bar, is authorized by the Rules. Instead
benefit of the claimants. In both instances, the liability of the of resolving the foregoing motion, the probate judge issued the
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controverted order removing the respondent as co-administrator The argument is presented that Sec. 79 of Act No. 496 and
without giving him the opportunity to adduce his own evidence Sec. 24 of Rule 7 indicate the cases wherein lis pendens
despite his explicit reservation that he be afforded the chance to may be annotated, and that guardianship proceedings is
introduce evidence in his behalf in the event of denial of his not included therein. In the first place sec. 79 is not an
motion to dismiss and/or demurrer to evidence. The Court view that exclusive enumeration. In the second place, these
the above actuation of the probate judge constituted grave abuse of proceedings affect "the use" or possession of the real
discretion which dooms his improvident order as nullity. estate within the meaning of above sections, even "the
title", in the sense that the proceedings will curtail or take
away the right of the owner to dispose of the same. In this
4. connection, it is insisted that both sections only apply to
"actions" which are different from "Special proceedings",
like guardianship. It is enough to point out that the Rules
ROBERTA DIAZ Y CRUZ,
provided for civil actions are generally applicable to special
vs.
proceedings. (Rule 73, section 2.)
PEREZ, presiding Judge, Pasay City, ET AL.
G.R. No. L-12053
May 30, 1958
EXCEPTIONS: RULE 2 SECTION 5

FACTS: 5.
Guy vs. Court of Appeals
Roberta Diaz y Cruz is an old woman, 83 years of age, residing in GR No. 163707
Pasay City possessing real and personal properties roughly September 15, 2006
estimated at half a million pesos.
Facts:
On August 18, 1956, three of her nine legitimate children, and two The private respondents-minors Karen and Kamille Wei represented
of her grandchildren by another daughter, joined in a Petition by their mother filed a petition for letters of administration before
addressed to the Rizal Court of First Instance, to declare her the RTC of Makati., they alleged that they are the duly
incompetent to take care of herself and manage her properties and acknowledged illegitimate children of Sima Wei who died intestate.
to appoint a guardian of her person and her properties. The
allegations, too long to relate, set out a prima facie case of The heirs of the deceased are his wife Shirley Guy and 5 children all
incompetency1 (Special Proceeding 1483-P). surnamed Guy.

Private respondents prayed for the appointment of regular


On November 7, 1956 while the above special proceeding was administrator for orderly settlement of Sima Wei’s estate. They
pending hearing before respondent Judge Perez, Roberta received prayed that Michael Guy, son of the decedent be appointed as
from the Register of deeds of Rizal a letter advising her that by Special Administrator.
reason of said proceedings, a notice of lis pendens had been
annotated on her Transfer Certificate of Title to real property No. Michael Guy prayed for the dismissal of the petition and asserted
32872 of that Province. that his father left no debts and his estate can be settled without
securing letters of administration pursuant to Section 1, Rule 74 of
Wherefore, on November 29, 1956, she filed in the above- Rules of Court; that respondents status as illegitimate children
mentioned proceedings a petition to cancel the lis pendens; Judge should have been established during the lifetime of Sima Wei
Perez denied the petition. Respondent judge disapproved the record pursuant to Article 175 of the Family Code.
on appeal, holding the appealed orders to be interlocutory, and
therefore not appealable. This petition Michael also alleged that private respondents’ claim had been
for mandamus and certiorari was filed in this Court. waived, abandoned or extinguished by reason that Remedios, the
mother of the minors executed a Release and Waiver of Claim
ISSUE: (document) stating that in exchange for financial and educational
WON Certiorari will lie to annul the order refusing cancellation of assistance received by the minors, Remedios and the minors
the notice of lis pendens. discharge the estate of Sima Wei from any and all liabilities.

RTC denied the motion to dismiss on the ground that it had not been
RULING: NO.
established that Remedios was the duly constituted guardian of her
minor daughters when she signed the Release and Waiver of Claim.
As to the certiorari, petitioner may not seriously urge lack
of jurisdiction. In asking the Court to annul the lis pendens CA denied petitioner’s motion for reconsideration.
she admitted its jurisdiction to annul — and also to refuse
annulment. Was there abuse of discretion? The lis Issues:
pendens had been obviously annotated for the purpose of 1. WON the Release and Waiver of Claim precludes private
advising any one who might wish to buy the realty, that respondents from claiming their successional rights. NO
there is in court a petition to declare Roberta Diaz 2. WON private respondents are barred by prescription from
incompetent to dispose of her properties. proving their filiation. NO

Held:
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1. SETTLEMENT OF ESTATE OF DECEASED PERSONS:
To be valid and effective, a waiver must be couched in clear and
unequivocal terms which leave no doubt as to the intention of a 6.
party to give up a right or benefit which legally pertains to him. The G.R. No. L-770 April 27, 1948
document does not state with clarity the purpose of its execution, it ANGEL T. LIMJOCO, vs. INTESTATE ESTATE OF PEDRO O.
merely states that Remedios received P300k and an educational FRAGRANTE
plan for her minor daughters by way of financial assistance and in
full settlement of any and all claims of whatsoever nature and kind
against the estate of the deceased. FACTS:

Moreover, Article 1044 of Civil Code provides that: Pedro Fragante, a Filipino citizen at the time of his death, applied for
”Any inheritance left to minors or incapacitated persons may be a certificate of public convenience to install and maintain an ice
accepted by their parents or guardians. Parents or guardians may plant in San Juan Rizal. His intestate estate is financially capable of
repudiate the inheritance left to their wards only by judicial maintaining the proposed service. The Public Service Commission
authorization.” issued a certificate of public convenience to Intestate Estate of the
deceased, authorizing said Intestate Estate through its special or
Thus, there was no waiver of hereditary rights. The minors could not Judicial Administrator, appointed by the proper court of competent
have possibly waived their successional rights because they are yet jurisdiction, to maintain and operate the said plant. Petitioner claims
to prove their status as acknowledged illegitimate children of the that the granting of certificate applied to the estate is a
deceased. contravention of law.

2. Petitioner contends that it was error on the part of the commission


To prove private respondents’ filiation they have to present to allow the substitution of the legal representative of the estate of
evidence based on the governing law on actions for recognition of Pedro O. Fragante for the latter as party applicant in the case then
illegitimate children before the Family Code took effect, was Article pending before the commission, and in subsequently granting to
285 of the Civil Code which provides:
said estate the certificate applied for, which is said to be in
The action for the recognition of natural children may be brought
contravention of law.
only during the lifetime of the presumed parents, except in the
following cases; ISSUES:
1. If the father or mother died during the minority of the
child, in which case the latter may file the action before the 1. Whether the PSC erred in granting the application for CPC
expiration of 4 years from the attainment of his majority. 2. Whether the estate of Fragante is a person.
xxxx 3. Whether the estate of Fragante may be considered as a
citizen within the meaning of section 16 of the Public
Under the Family Code, when filiation of an illegitimate child is
Service Act, as amended, particularly the proviso thereof
established by a record of birth appearing in the civil register or a
expressly and categorically limiting the power of the
final judgment, or an admission of filiation in a public document or a
private handwritten instrument signed by the parent concerned, the commission to issue certificates of public convenience or
action for recognition may be brought by the child during his or her certificates of public convenience and necessity "only to
lifetime. If the action is based on open and continuous possession of citizens of the Philippines
status of an illegitimate child, it may only be brought during the HELD:
lifetime of the alleged parent.
1. NO. The right of Fragante to prosecute the application to its final
The resolution of prescription depends on the type of evidence to be conclusion was one which by its nature did not lapse through his
adduced by private respondents. Case is remanded to RTC as SC is death. It constitutes a part of the assets of his estate, for such a right
not a trier of facts. was property despite the possibility that in the end the PSC might
have denied the application. Rule 88, Sec. 2 provides that the
While the original action was a petition for letters of administration, executor or administrator may bring or defend actions for the
RTC is not precluded from receiving evidence on private protection of the property or rights of the deceased which survive. It
respondents’ filiation. Its jurisdiction extends to matters incidental is true that a proceeding upon an application for a CPC before the
and collateral to the exercise of its recognized powers in handling PSC is not an "action”. But the provisions of the law go to prove that
the settlement of the estate including the determination of the the decedent’s rights which by their nature are not extinguished by
status of each heir.
death, go to make up a part and parcel of the assets of his estate
which, being placed under the control and management of the
Two causes of action are joined in this case, one to compel
recognition and the other to claim inheritance. executor or administrator, cannot be exercised but by him in
representation of the estate for the benefit of the creditors,
devisees or legatees, if any and the heirs of the decedent.

2. YES. Within the framework and principles of the constitution


itself, under the Bill of Rights, it seems clear that while the civil rights
guaranteed therein in the majority of cases relate to natural
persons, the term “person” must be deemed to include artificial or
juridical persons. It was the intent of the framers to include artificial

Page | 4
or juridical, no less than natural, persons in these constitutional wrong-doing must be clearly and convincingly established. It cannot
immunities and in other of similar nature. Among these artificial or be presumed.
juridical persons figure estates of deceased persons.
DEBTS
Hence, the Court held that within the framework of the
Constitution, the estate of Fragante should be considered an 8.
artificial or juridical person for the purposes of the settlement and EMILIA FIGURACION-GERILLA, Petitioner,
distribution of his estate which include the exercise during the -versus-
judicial administration thereof of those rights and the fulfillment of CAROLINA VDA. DE FIGURACION, et.al., Respondents
those obligations of his which survived after his death.
G.R. No. 154322;
3. YES. August 22, 2006

The fiction of such extension of Fragante’s citizenship is made


FACTS:
necessary to avoid the injustice of subjecting his estate, creditors
and heirs, solely by reason of his death, to the loss of the investment
Spouses Leandro and respondent Carolina Figuracion (now both
which he had already made in the ice plant, not counting the other
deceased) had six children: petitioner and respondents Elena
expenses occasioned by the instant proceeding.
Figuracion-Ancheta (now deceased), HilariaFiguracion, Felipa
Figuracion-Manuel, Quintin Figuracion and Mary Figuracion-Ginez.

7. On August 23, 1955, Leandro executed a deed of quitclaim over his


Lim vs. CA real properties in favor of his six children. When he died in 1958, he
left behind two parcels of land.
Facts:
What gave rise to the complaint for partition, however, was a
In 1994, Pastor Lim died. His wife, Rufina Lim petitioned with the dispute between petitioner and her sister, respondent Mary, over
lower court, acting as a probate court, for the inclusion of 5
the eastern half of one lot.
corporations into the inventory of the estate of Pastor Lim. The 5
corporations were: Auto Truck Corporation, Alliance Marketing
Respondents claim that: (1) the properties constituting Leandro’s
Corporation, Speed Distributing, Inc., Active Distributing, Inc. and
Action Company. Rufina alleged that the assets of these estate cannot be partitioned before his estate is settled and (2)
corporations were owned wholly by Pastor; that these corporations there should be an accounting before anything else, considering that
themselves are owned by Pastor and they are mere dummies of they (respondents) had to spend for the maintenance of the
Pastor. The corporations filed a motion for exclusion from the deceased Leandro Figuracion and his wife in their final years, which
estate. They presented proof (Torrens Titles) showing that the assets support was supposed to come from the income of the properties.
of the corporations are in their respective names and titles. The
probate court denied their motion. The Court of Appeals reversed Among other things, respondents apparently wanted petitioner to
the decision of the probate court.
share in the expenses incurred for the care of their parents during
Issue: Whether or not the corporations and/or their assets should the ten years she stayed in the United States, before she could get
be included in the inventory of the estate. her part of the estate while petitioner apparently wanted her gross
share, without first contributing to the expenses.
Ruling:
No. As regards the assets, the corporations were able to present ISSUE: Whether or not there needs to be a prior settlement of
their respective Torrens Titles over the disputed assets. It is true that Leandro’s intestate estate (that is, an accounting of the income of
a probate court may pass upon the question ownership albeit in a the prperties, the payment of expenses, liabilities and taxes, plus
provisional manner but still, a Torrens Title cannot be attacked
compliance with other legal requirements, etc.) before the
collaterally in a probate proceeding, it must be attacked directly in a
separate proceeding. properties can be partitioned or distributed?

As regards the corporations, to include them in the inventory is RULING:


tantamount to the piercing of the veil of corporate fiction because
the probate court effectively adopted the theory of Rufina. This YES. While Section 8 of Rule 69 provides that there shall be an
cannot be done. Firstly, the probate court is sitting in a limited accounting of the real property’s income (rentals and profits) in the
capacity. Secondly, Rufina was not able to present sufficient course of an action for partition, there is no provision for the
evidence that indeed the corporations are mere conduits of Pastor. accounting of expenses for which property belonging to the
Mere ownership by a single stockholder or by another corporation decedent’s estate may be answerable, such as funeral expenses,
of all or nearly all of the capital stock of a corporation is not of itself
inheritance taxes and similar expenses enumerated under Section 1,
a sufficient reason for disregarding the fiction of separate corporate
personalities. The veil can’t be pierced without any showing that Rule 90 of the Rules of Court.
indeed the corporation is being used merely as a dummy. To
disregard the separate juridical personality of a corporation, the In a situation where there remains an issue as to the expenses
chargeable to the estate, partition is inappropriate. While petitioner
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points out that the estate is allegedly without any debt and she and The general rule is that when a person dies leaving property, the
respondents are Leandro Figuracion’s only legal heirs, she does not same should be judicially administered and the competent court
dispute the finding of the CA that “certain expenses” including those should appoint a qualified administrator, in the order established in
Section 6, Rule 78, in case the deceased left no will, or in case he had
related to her father’s final illness and burial have not been properly
left one, should he fail to name an executor therein.
settled. Thus, the heirs (petitioner and respondents) have to submit
their father’s estate to settlement because the determination of An exception to the rule is in Section 1 of Rule 74 which provides
these expenses cannot be done in an action for partition. that when all heirs are of lawful age and there are no debts due
from the estate, they may agree in writing to partition the property
In estate settlement proceedings, there is a proper procedure for without instituting the judicial administration or applying for the
the accounting of all expenses for which the estate must answer. If it appointment of an administrator. The rule however, does not
is any consolation at all to petitioner, the heirs or distributees of the preclude the heirs from instituting administration proceedings even
properties may take possession thereof even before the settlement if the estate has no debts or obligations, if they do not desire to
resort for good reasons to an ordinary action for partition.
of accounts, as long as they first file a bond conditioned on the
payment of the estates obligations. Thus, when a person dies without leaving pending obligations to be
paid, the heirs, whether of age or not are not bound to submit the
property to a judicial administration which is always long and costly,
or to apply for the appointment of an administrator by the Court. It
9. has been held that the judicial administration and the appointment
Pereira vs. Court of Appeals of an administrator are superfluous and unnecessary proceedings.
GR No. L-81147
June 20, 1984 The only conceivable reason why Rita seeks appointment as
administratrix is for her to obtain possession of the alleged
Facts: properties of the deceased for her own purpose, since these
Andres Pereira an employee of PAL died without a will. He was properties are presently in the hands of Victoria who supposedly
survived by his legitimate spouse of 10 months, the herein petitioner disposed of them fraudulently. This is not a compelling reason which
Victoria Pereira, and his sister Rita Nagac, the herein private will necessitate a judicial administration of the estate of the
respondent. deceased.

Rita Nagac instituted a Special Proceeding case for the issuance of The claims of both parties as to the properties left by the deceased
letters of administration in her favor pertaining to the estate of may be properly ventilated in simple partition proceedings where
Andres Pereira. Victoria filed an opposition alleging that here exist the creditors should there be any, are protected in any event.
no estate of the deceased for purposes of administration for the
reason that the death benefits from PAL, PALEA, PESALA and SSS
belong exclusively to her, being the sole beneficiary and that the PARTITION (RULE 69)
saving deposits of her deceased husband had been used to defray
the funeral expenses and the only real property of the deceased has 10.
been extrajudicially settled by her and the private respondent as the HEIRS OF JOAQUIN TEVES vs. COURT OF APPEALS, HEIRS OF
only surviving hairs; that if an estate does exist, the letters of ASUNCION IT-IT
administration relating to the said estate be issued in her favor as G.R. No. 109963 October 13, 1999
the surviving spouse.

RTC appointed Rita as the administratrix of the intestate estate of FACTS:


Andres. CA affirmed the appointment.
Spouses Marcelina Cimafranca and Joaquin Teves died intestate and
Issues:
without debts in 1943 and 1953, respectively. During their lifetime,
1. WON there exists an estate of the deceased Andres for
purposes of administration. the spouses own two parcels of land registered in the name of
2. WON a judicial administration proceeding is necessary Marcelina and another lot registered in the name of Joaquin and his
where there are no debts left by the decedent. two sisters.

Held: However, Joaquin’s sisters died without issue, causing the entire
1. property to pass to him. After Marcelina and Joaquin died, their
The function of resolving whether or not a certain property should children executed extrajudicial settlements purporting to adjudicate
be included in the inventory of list of properties to be administered
unto themselves the ownership over the two parcels of land and to
by the administrator is one clearly within the competence of the
probate court. However, the court’s determination is only alienate their shares thereto in favor of their sister Asuncion Teves
provisional in character, not conclusive, and is subject to the final for a consideration. The validity of these settlements executed
decision in a separate action which may be instituted by the parties. pursuant to section 1 of Rule 74 of the Rules of Court is the primary
issue in the present case. The division of the subject lot was
2. embodied in two deeds. The first Deed of Extrajudicial Settlement
The administration proceeding instituted by Rita is unnecessary. and Sale was entered into on June 13, 1956 while the second deed
was executed on April 21, 1959.
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The Deed of Extrajudicial Settlement and sale was executed on sisters, and that there are witnesses ready to prove such partition.
December 14, 1971. After the death of Asuncion Teves, her children, However, Cresencia asserted that under the Rules of
private respondents, extrajudicially settled her property, Court, parol evidence of partition is inadmissible.
adjudicating unto themselves said lots.
Issue: Whether or not oral evidence is admissible in proving a
contract of partition among heirs?

On May 9, 1984, herein petitioners, heirs of Marcelina and Joaquin, Ruling: As a general proposition, transactions, so far as they affect
filed a complaint with the Regional Trial Court of Negros Occidental the parties, are required to be reduced to writing either as a
against private respondents for the partition and reconveyance of condition of jural validity or as a means of providing evidence to
the aforesaid parcels of land, alleging that the extrajudicial prove the transactions.
settlements were spurious.
Written form exacted by the statute of
ISSUE: Should the extrajudicial settlements be upheld? frauds, for example, “is for evidential purposes only.” The Civil Code,
too, requires the accomplishment of acts or contracts in a public
YES. An extrajudicial settlement is a contract and it is a well- instrument, not in order to validate the act or contract but only
entrenched doctrine that the law does not relieve a party from the to insure its efficacy so that after the existence of the acts or
effects of a contract, entered into with all the required formalities contracts has been admitted, the party bound may be compelled to
and with full awareness of what he was doing, simply because the execute the document.
contract turned out to be a foolish or unwise investment. Therefore,
although plaintiffs-appellants may regret having alienated their It must be noted that where the law intends writing or
hereditary shares in favor of their sister Asuncion, they must now other formality to be the essential requisite to the validity of the
be considered bound by their own contractual acts. The subject transactions it says so in clear and
extrajudicial settlements were never registered. unequivocal terms. Section 1 of Rule 74 of the Rules of Court
contains no such express or clear declaration that the required
However, in the case of Vda. de Reyes vs. CA, the Court, interpreting public instruments is to be constitutive of a contract of partition or
Section 1 of Rule 74 of the Rules of Court, upheld the validity of an an inherent element of its effectiveness as between the parties.
oral partition of the decedent’s estate and declared that the non-
registration of an extrajudicial settlement does not affect its intrinsic The requirement that a partition be put in a public
validity. It was held in this case that the requirement that a partition document and registered has for its purpose the protection of
be put in a public document and registered has for its purpose the creditors and at the same time the protection of the heirs
protection of creditors and at the same time the protection of the themselves against tardy claims. The object of registration is to
heirs themselves against tardy claims. serve as constructive
notice.
The object of registration is to serve as constructive notice to others.
Thus, despite its non-registration, the extrajudicial settlements are It must follow that the intrinsic validity of partition not
legally effective and binding among the heirs of Marcelina executed with the prescribed formalities does not come into play
Cimafranca since their mother had no creditors at the time of her when, as in this case, there are no creditors or the rights of creditors
death. are not affected. No rights of creditors being involved, it is
competent for the heirs of an estate to enter into an agreement for
distribution in a
manner and upon a plan different from those provided by law.
Judgment reversed.
REGISTRATION

Hernandez v. Andal

Facts: Cresencia, Maria, Aquilina, Pedro and Basilia Hernandez are


brother and sisters, who acquired in common a parcel of land from
their deceased father. Maria and Aquilina sold to the spouses Andal
a portion thereof, which they purport to be their combined shares
by virtue of a verbal partition made among the siblings Hernandez.

After the sale, Cresencia attempted to repurchase the land


sold to Andal but the latter refused to sell the same. Later, Andal
resold the same to Maria and Aquilina. Maria and Aquilina alleged
that there had been an oral partition among them and their brother
and

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