Additional readings..For next meeting pls read up to de Borja case. UNION BANK OF THE PHILIPPINES, petitioner, Pls acknowledge. Thanks vs. EDMUND SANTIBAÑEZ and FLORENCE SANTIBAÑEZ · Union Bank v. Santibanez, G.R. No. 149926, February 23, 2005, ARIOLA, respondents. 452 SCRA 228 (2005). DECISION CALLEJO, SR., J.: · Tanedo v CA 252 SCRA 89; G.R. No. 104482. January 22, 1996. Before us is a petition for review on certiorari under Rule 45 of the Revised Rules of Court which seeks the reversal of the Decision1 of the · Santos v Lumbao 519 SCRA 409; G.R. No. 169129. March 28, Court of Appeals dated May 30, 2001 in CA-G.R. CV No. 48831 2007. affirming the dismissal2 of the petitioner’s complaint in Civil Case No. 18909 by the Regional Trial Court (RTC) of Makati City, Branch 63. · Parish priest of Victoria v Rigor 89 SCRA 493; G.R. No. L-22036. The antecedent facts are as follows: April 30, 1979. On May 31, 1980, the First Countryside Credit Corporation (FCCC) and Efraim M. Santibañez entered into a loan agreement3 in the amount of · Borromeo-Herrera v. Borromeo. 152 SCRA 171; G.R. No. L- ₱128,000.00. The amount was intended for the payment of the 41171. July 23, 1987. purchase price of one (1) unit Ford 6600 Agricultural All-Purpose Diesel Tractor. In view thereof, Efraim and his son, Edmund, executed a · Lorenzo v. Posadas, 64 Phil 353; G.R. No. 43082. June 18, 1937. promissory note in favor of the FCCC, the principal sum payable in five equal annual amortizations of ₱43,745.96 due on May 31, 1981 and · Uson v del Rosario, 92 Phil 530; G.R. No. L-4963. January 29, every May 31st thereafter up to May 31, 1985. 1953. On December 13, 1980, the FCCC and Efraim entered into another loan agreement,4 this time in the amount of ₱123,156.00. It was intended to · Bonilla v Barcena, 71 SCRA 491; G.R. No. L-41715. June 18, pay the balance of the purchase price of another unit of Ford 6600 1976. Agricultural All-Purpose Diesel Tractor, with accessories, and one (1) unit Howard Rotamotor Model AR 60K. Again, Efraim and his son, · De Borja v vda, de Borja, 46 SCRA 577; G.R. No. L-28040. Edmund, executed a promissory note for the said amount in favor of the August 18, 1972. FCCC. Aside from such promissory note, they also signed a Continuing Guaranty Agreement5 for the loan dated December 13, 1980. · Butte v Manuel Uy & Sons, Inc., 4 SCRA 526; G.R. No. L-15499. Sometime in February 1981, Efraim died, leaving a holographic February 28, 1962 and reconsideration April 23, 1962. will.6 Subsequently in March 1981, testate proceedings commenced before the RTC of Iloilo City, Branch 7, docketed as Special · Reganon v Imperial, 22 SCRA 80; G.R. No. L-24434. January 17, Proceedings No. 2706. On April 9, 1981, Edmund, as one of the heirs, 1968. was appointed as the special administrator of the estate of the decedent.7 During the pendency of the testate proceedings, the · Salvador v Sta, Maria, 20 SCRA 603; G.R. No. L-25952. June 30, surviving heirs, Edmund and his sister Florence Santibañez Ariola, 1967. executed a Joint Agreement8 dated July 22, 1981, wherein they agreed to divide between themselves and take possession of the three (3) · Ramirez v Baltazar, 24 SCRA 918; G.R. No. L-25049. August 30, tractors; that is, two (2) tractors for Edmund and one (1) tractor for 1968. Florence. Each of them was to assume the indebtedness of their late father to FCCC, corresponding to the tractor respectively taken by them. · Gevero v IAC 189 SCRA 201; G.R. No. 77029. August 30, 1990. On August 20, 1981, a Deed of Assignment with Assumption of Liabilities9 was executed by and between FCCC and Union Savings and · Locsin v CA 206 SCRA 383; G.R. No. 89783. February 19, 1992 Mortgage Bank, wherein the FCCC as the assignor, among others, assigned all its assets and liabilities to Union Savings and Mortgage · Emnace v CA 370 SCRA 431; G.R. No. 126334. November 23, Bank. 2001. Demand letters10 for the settlement of his account were sent by petitioner Union Bank of the Philippines (UBP) to Edmund, but the latter · Cayetano v Leonidas 129 SCRA 522; G.R. No. 54919. May 30, failed to heed the same and refused to pay. Thus, on February 5, 1988, 1984. the petitioner filed a Complaint11 for sum of money against the heirs of Sent from my iPhone Efraim Santibañez, Edmund and Florence, before the RTC of Makati City, Branch 150, docketed as Civil Case No. 18909. Summonses were issued against both, but the one intended for Edmund was not served since he was in the United States and there was no information on his address or the date of his return to the Philippines.12 Accordingly, the complaint was narrowed down to respondent Florence S. Ariola. On December 7, 1988, respondent Florence S. Ariola filed her Answer13 and alleged that the loan documents did not bind her since she was not a party thereto. Considering that the joint agreement signed by her and her brother Edmund was not approved by the probate court, it was null and void; hence, she was not liable to the petitioner under the joint agreement. On January 29, 1990, the case was unloaded and re-raffled to the RTC WHEREFORE, premises considered, the appealed Decision of the of Makati City, Branch 63.14 Consequently, trial on the merits ensued Regional Trial Court of Makati City, Branch 63, is hereby AFFIRMED in and a decision was subsequently rendered by the court dismissing the toto. complaint for lack of merit. The decretal portion of the RTC decision SO ORDERED.18 reads: In the present recourse, the petitioner ascribes the following errors to WHEREFORE, judgment is hereby rendered DISMISSING the the CA: complaint for lack of merit.15 I. The trial court found that the claim of the petitioner should have been THE HONORABLE COURT OF APPEALS ERRED IN FINDING THAT filed with the probate court before which the testate estate of the late THE JOINT AGREEMENT SHOULD BE APPROVED BY THE Efraim Santibañez was pending, as the sum of money being claimed PROBATE COURT. was an obligation incurred by the said decedent. The trial court also II. found that the Joint Agreement apparently executed by his heirs, THE COURT OF APPEALS ERRED IN FINDING THAT THERE CAN Edmund and Florence, on July 22, 1981, was, in effect, a partition of the BE NO VALID PARTITION AMONG THE HEIRS OF THE LATE estate of the decedent. However, the said agreement was void, EFRAIM SANTIBAÑEZ UNTIL AFTER THE WILL HAS BEEN considering that it had not been approved by the probate court, and that PROBATED. there can be no valid partition until after the will has been probated. The III. trial court further declared that petitioner failed to prove that it was the THE COURT OF APPEALS ERRED IN NOT FINDING THAT THE now defunct Union Savings and Mortgage Bank to which the FCCC had RESPONDENT HAD WAIVED HER RIGHT TO HAVE THE CLAIM RE- assigned its assets and liabilities. The court also agreed to the LITIGATED IN THE ESTATE PROCEEDING. contention of respondent Florence S. Ariola that the list of assets and IV. liabilities of the FCCC assigned to Union Savings and Mortgage Bank RESPONDENTS CAN, IN FACT, BE HELD JOINTLY AND did not clearly refer to the decedent’s account. Ruling that the joint SEVERALLY LIABLE WITH THE PRINCIPAL DEBTOR THE LATE agreement executed by the heirs was null and void, the trial court held EFRAIM SANTIBAÑEZ ON THE STRENGTH OF THE CONTINUING that the petitioner’s cause of action against respondent Florence S. GUARANTY AGREEMENT EXECUTED IN FAVOR OF PETITIONER- Ariola must necessarily fail. APPELLANT UNION BANK. The petitioner appealed from the RTC decision and elevated its case to V. the Court of Appeals (CA), assigning the following as errors of the trial THE PROMISSORY NOTES DATED MAY 31, 1980 IN THE SUM OF court: ₱128,000.00 AND DECEMBER 13, 1980 IN THE AMOUNT OF 1. THE COURT A QUO ERRED IN FINDING THAT THE ₱123,000.00 CATEGORICALLY ESTABLISHED THE FACT THAT JOINT AGREEMENT (EXHIBIT A) SHOULD BE APPROVED THE RESPONDENTS BOUND THEMSELVES JOINTLY AND BY THE PROBATE COURT. SEVERALLY LIABLE WITH THE LATE DEBTOR EFRAIM 2. THE COURT A QUO ERRED IN FINDING THAT THERE SANTIBAÑEZ IN FAVOR OF PETITIONER UNION BANK.19 CAN BE NO VALID PARTITION AMONG THE HEIRS UNTIL The petitioner claims that the obligations of the deceased were AFTER THE WILL HAS BEEN PROBATED. transmitted to the heirs as provided in Article 774 of the Civil Code; 3. THE COURT A QUO ERRED IN NOT FINDING THAT THE there was thus no need for the probate court to approve the joint DEFENDANT HAD WAIVED HER RIGHT TO HAVE THE agreement where the heirs partitioned the tractors owned by the CLAIM RE-LITIGATED IN THE ESTATE PROCEEDING.16 deceased and assumed the obligations related thereto. Since The petitioner asserted before the CA that the obligation of the respondent Florence S. Ariola signed the joint agreement without any deceased had passed to his legitimate children and heirs, in this case, condition, she is now estopped from asserting any position contrary Edmund and Florence; the unconditional signing of the joint agreement thereto. The petitioner also points out that the holographic will of the marked as Exhibit "A" estopped respondent Florence S. Ariola, and that deceased did not include nor mention any of the tractors subject of the she cannot deny her liability under the said document; as the complaint, and, as such was beyond the ambit of the said will. The agreement had been signed by both heirs in their personal capacity, it active participation and resistance of respondent Florence S. Ariola in was no longer necessary to present the same before the probate court the ordinary civil action against the petitioner’s claim amounts to a for approval; the property partitioned in the agreement was not one of waiver of the right to have the claim presented in the probate those enumerated in the holographic will made by the deceased; and proceedings, and to allow any one of the heirs who executed the joint the active participation of the heirs, particularly respondent Florence S. agreement to escape liability to pay the value of the tractors under Ariola, in the present ordinary civil action was tantamount to a waiver to consideration would be equivalent to allowing the said heirs to enrich re-litigate the claim in the estate proceedings. themselves to the damage and prejudice of the petitioner. On the other hand, respondent Florence S. Ariola maintained that the The petitioner, likewise, avers that the decisions of both the trial and money claim of the petitioner should have been presented before the appellate courts failed to consider the fact that respondent Florence S. probate court.17 Ariola and her brother Edmund executed loan documents, all The appellate court found that the appeal was not meritorious and held establishing the vinculum jurisor the legal bond between the late Efraim that the petitioner should have filed its claim with the probate court as Santibañez and his heirs to be in the nature of a solidary obligation. provided under Sections 1 and 5, Rule 86 of the Rules of Court. It Furthermore, the Promissory Notes dated May 31, 1980 and December further held that the partition made in the agreement was null and void, 13, 1980 executed by the late Efraim Santibañez, together with his since no valid partition may be had until after the will has been heirs, Edmund and respondent Florence, made the obligation solidary probated. According to the CA, page 2, paragraph (e) of the holographic as far as the said heirs are concerned. The petitioner also proffers that, will covered the subject properties (tractors) in generic terms when the considering the express provisions of the continuing guaranty deceased referred to them as "all other properties." Moreover, the agreement and the promissory notes executed by the named active participation of respondent Florence S. Ariola in the case did not respondents, the latter must be held liable jointly and severally liable amount to a waiver. Thus, the CA affirmed the RTC decision, viz.: thereon. Thus, there was no need for the petitioner to file its money claim before the probate court. Finally, the petitioner stresses that both It must be stressed that the probate proceeding had already acquired surviving heirs are being sued in their respective personal capacities, jurisdiction over all the properties of the deceased, including the three not as heirs of the deceased. (3) tractors. To dispose of them in any way without the probate court’s In her comment to the petition, respondent Florence S. Ariola maintains approval is tantamount to divesting it with jurisdiction which the Court that the petitioner is trying to recover a sum of money from the cannot allow.26 Every act intended to put an end to indivision among co- deceased Efraim Santibañez; thus the claim should have been filed with heirs and legatees or devisees is deemed to be a partition, although it the probate court. She points out that at the time of the execution of the should purport to be a sale, an exchange, a compromise, or any other joint agreement there was already an existing probate proceedings of transaction.27 Thus, in executing any joint agreement which appears to which the petitioner knew about. However, to avoid a claim in the be in the nature of an extra-judicial partition, as in the case at bar, court probate court which might delay payment of the obligation, the petitioner approval is imperative, and the heirs cannot just divest the court of its opted to require them to execute the said agreement.1a\^/phi1.net jurisdiction over that part of the estate. Moreover, it is within the According to the respondent, the trial court and the CA did not err in jurisdiction of the probate court to determine the identity of the heirs of declaring that the agreement was null and void. She asserts that even if the decedent.28 In the instant case, there is no showing that the the agreement was voluntarily executed by her and her brother signatories in the joint agreement were the only heirs of the decedent. Edmund, it should still have been subjected to the approval of the court When it was executed, the probate of the will was still pending before as it may prejudice the estate, the heirs or third parties. Furthermore, the court and the latter had yet to determine who the heirs of the she had not waived any rights, as she even stated in her answer in the decedent were. Thus, for Edmund and respondent Florence S. Ariola to court a quo that the claim should be filed with the probate court. Thus, adjudicate unto themselves the three (3) tractors was a premature act, the petitioner could not invoke or claim that she is in estoppel. and prejudicial to the other possible heirs and creditors who may have a Respondent Florence S. Ariola further asserts that she had not signed valid claim against the estate of the deceased. any continuing guaranty agreement, nor was there any document The question that now comes to fore is whether the heirs’ assumption of presented as evidence to show that she had caused herself to be the indebtedness of the decedent is binding. We rule in the negative. bound by the obligation of her late father. Perusing the joint agreement, it provides that the heirs as parties The petition is bereft of merit. thereto "have agreed to divide between themselves and take The Court is posed to resolve the following issues: a) whether or not the possession and use the above-described chattel and each of them to partition in the Agreement executed by the heirs is valid; b) whether or assume the indebtedness corresponding to the chattel taken as herein not the heirs’ assumption of the indebtedness of the deceased is valid; after stated which is in favor of First Countryside Credit Corp."29 The and c) whether the petitioner can hold the heirs liable on the obligation assumption of liability was conditioned upon the happening of an event, of the deceased.1awphi1.nét that is, that each heir shall take possession and use of their respective At the outset, well-settled is the rule that a probate court has the share under the agreement. It was made dependent on the validity of jurisdiction to determine all the properties of the deceased, to determine the partition, and that they were to assume the indebtedness whether they should or should not be included in the inventory or list of corresponding to the chattel that they were each to receive. The properties to be administered.20 The said court is primarily concerned partition being invalid as earlier discussed, the heirs in effect did not with the administration, liquidation and distribution of the estate.21 receive any such tractor. It follows then that the assumption of liability In our jurisdiction, the rule is that there can be no valid partition among cannot be given any force and effect. the heirs until after the will has been probated: The Court notes that the loan was contracted by the In testate succession, there can be no valid partition among the heirs decedent.l^vvphi1.net The petitioner, purportedly a creditor of the late until after the will has been probated. The law enjoins the probate of a Efraim Santibañez, should have thus filed its money claim with the will and the public requires it, because unless a will is probated and probate court in accordance with Section 5, Rule 86 of the Revised notice thereof given to the whole world, the right of a person to dispose Rules of Court, which provides: of his property by will may be rendered nugatory. The authentication of Section 5. Claims which must be filed under the notice. If not filed a will decides no other question than such as touch upon the capacity of barred; exceptions. — All claims for money against the decedent, the testator and the compliance with those requirements or solemnities arising from contract, express or implied, whether the same be due, not which the law prescribes for the validity of a will.22 due, or contingent, all claims for funeral expenses for the last sickness This, of course, presupposes that the properties to be partitioned are of the decedent, and judgment for money against the decedent, must the same properties embraced in the will.23 In the present case, the be filed within the time limited in the notice; otherwise they are barred deceased, Efraim Santibañez, left a holographic will24 which forever, except that they may be set forth as counterclaims in any action contained, inter alia, the provision which reads as follows: that the executor or administrator may bring against the claimants. (e) All other properties, real or personal, which I own and may be Where an executor or administrator commences an action, or discovered later after my demise, shall be distributed in the proportion prosecutes an action already commenced by the deceased in his indicated in the immediately preceding paragraph in favor of Edmund lifetime, the debtor may set forth by answer the claims he has against and Florence, my children. the decedent, instead of presenting them independently to the court as We agree with the appellate court that the above-quoted is an all- herein provided, and mutual claims may be set off against each other in encompassing provision embracing all the properties left by the such action; and if final judgment is rendered in favor of the defendant, decedent which might have escaped his mind at that time he was the amount so determined shall be considered the true balance against making his will, and other properties he may acquire thereafter. the estate, as though the claim had been presented directly before the Included therein are the three (3) subject tractors. This being so, any court in the administration proceedings. Claims not yet due, or partition involving the said tractors among the heirs is not valid. The contingent, may be approved at their present value. joint agreement25 executed by Edmund and Florence, partitioning the The filing of a money claim against the decedent’s estate in the probate tractors among themselves, is invalid, specially so since at the time of court is mandatory.30 As we held in the vintage case of Py Eng Chong v. its execution, there was already a pending proceeding for the probate of Herrera:31 their late father’s holographic will covering the said tractors. … This requirement is for the purpose of protecting the estate of the THE COURT OF APPEALS, SPOUSES RICARDO M. TAÑEDO AND deceased by informing the executor or administrator of the claims TERESITA BARERA TAÑEDO,respondents. against it, thus enabling him to examine each claim and to determine DECISION whether it is a proper one which should be allowed. The plain and PANGANIBAN, J.: obvious design of the rule is the speedy settlement of the affairs of the Is a sale of future inheritance valid? In multiple sales of the same real deceased and the early delivery of the property to the distributees, property, who has preference in ownership? What is the probative value legatees, or heirs. `The law strictly requires the prompt presentation and of the lower court's finding of good faith in registration of such sales in disposition of the claims against the decedent's estate in order to settle the registry of property? These are the main questions raised in this the affairs of the estate as soon as possible, pay off its debts and Petition for review on certiorari under Rule 45 of the Rules of Court to distribute the residue.32 set aside and reverse the Decision1 of the Court of Appeals2 in CA-G.R. Perusing the records of the case, nothing therein could hold private CV NO. 24987 promulgated on September 26, 1991 affirming the respondent Florence S. Ariola accountable for any liability incurred by decision of the Regional Trial Court, Branch 63, Third Judicial Region, her late father. The documentary evidence presented, particularly the Tarlac, Tarlac in Civil Case No. 6328, and its Resolution denying promissory notes and the continuing guaranty agreement, were reconsideration thereof, promulgated on May 27, 1992. executed and signed only by the late Efraim Santibañez and his son By the Court's Resolution on October 25, 1995, this case (along with Edmund. As the petitioner failed to file its money claim with the probate several others) was transferred from the First to the Third Division and court, at most, it may only go after Edmund as co-maker of the after due deliberation, the Court assigned it to the decedent under the said promissory notes and continuing guaranty, of undersigned ponente for the writing of this Decision. course, subject to any defenses Edmund may have as against the The Facts petitioner. As the court had not acquired jurisdiction over the person of On October 20, 1962, Lazardo Tañedo executed a notarized deed of Edmund, we find it unnecessary to delve into the matter further. absolute sale in favor of his eldest brother, Ricardo Tañedo, and the We agree with the finding of the trial court that the petitioner had not latter's wife, Teresita Barera, private respondents herein, whereby he sufficiently shown that it is the successor-in-interest of the Union conveyed to the latter in consideration of P1,500.00, "one hectare of Savings and Mortgage Bank to which the FCCC assigned its assets and whatever share I shall have over Lot No. 191 of the cadastral survey of liabilities.33 The petitioner in its complaint alleged that "by virtue of the Gerona, Province of Tarlac and covered by Title T-13829 of the Deed of Assignment dated August 20, 1981 executed by and between Register of Deeds of Tarlac", the said property being his "future First Countryside Credit Corporation and Union Bank of the inheritance" from his parents (Exh. 1). Upon the death of his father Philippines…"34 However, the documentary evidence35 clearly reflects Matias, Lazaro executed an "Affidavit of Conformity" dated February 28, that the parties in the deed of assignment with assumption of liabilities 1980 (Exh. 3) to "re-affirm, respect, acknowledge and validate the sale I were the FCCC, and the Union Savings and Mortgage Bank, with the made in 1962." On January 13, 1981, Lazaro executed another conformity of Bancom Philippine Holdings, Inc. Nowhere can the notarized deed of sale in favor of private respondents covering his petitioner’s participation therein as a party be found. Furthermore, no "undivided ONE TWELVE (1/12) of a parcel of land known as Lot 191 . . documentary or testimonial evidence was presented during trial to show . " (Exh. 4). He acknowledged therein his receipt of P10,000.00 as that Union Savings and Mortgage Bank is now, in fact, petitioner Union consideration therefor. In February 1981, Ricardo learned that Lazaro Bank of the Philippines. As the trial court declared in its decision: sold the same property to his children, petitioners herein, through a … [T]he court also finds merit to the contention of defendant that deed of sale dated December 29, 1980 (Exh. E). On June 7, 1982, plaintiff failed to prove or did not present evidence to prove that Union private respondents recorded the Deed of Sale (Exh. 4) in their favor in Savings and Mortgage Bank is now the Union Bank of the Philippines. the Registry of Deeds and the corresponding entry was made in Judicial notice does not apply here. "The power to take judicial notice is Transfer Certificate of Title No. 166451 (Exh. 5). to [be] exercised by the courts with caution; care must be taken that the Petitioners on July 16, 1982 filed a complaint for rescission (plus requisite notoriety exists; and every reasonable doubt upon the subject damages) of the deeds of sale executed by Lazaro in favor of private should be promptly resolved in the negative." (Republic vs. Court of respondents covering the property inherited by Lazaro from his father. Appeals, 107 SCRA 504).36 Petitioners claimed that their father, Lazaro, executed an "Absolute This being the case, the petitioner’s personality to file the complaint is Deed of Sale" dated December 29, 1980 (Exit. E). Conveying to his ten wanting. Consequently, it failed to establish its cause of action. Thus, children his allotted portion tinder the extrajudicial partition executed by the trial court did not err in dismissing the complaint, and the CA in the heirs of Matias, which deed included the land in litigation (Lot 191). affirming the same. Petitioners also presented in evidence: (1) a private writing purportedly IN LIGHT OF ALL THE FOREGOING, the petition is hereby DENIED. prepared and signed by Matias dated December 28, 1978, stating that it The assailed Court of Appeals Decision is AFFIRMED. No costs. was his desire that whatever inheritance Lazaro would receive from him SO ORDERED. should be given to his (Lazaro's) children (Exh. A); (2) a typewritten document dated March 10, 1979 signed by Lazaro in the presence of two witnesses, wherein he confirmed that he would voluntarily abide by the wishes of his father, Matias, to give to his (Lazaro's) children all the property he would inherit from the latter (Exh. B); and (3) a letter dated January 1, 1980 of Lazaro to his daughter, Carmela, stating that his share in the extrajudicial settlement of the estate of his father was G.R. No. 104482 January 22, 1996 intended for his children, petitioners herein (Exh. C). BELINDA TAÑEDO, for herself and in representation of her Private respondents, however presented in evidence a "Deed of brothers and sisters, and TEOFILA CORPUZ TAÑEDO, Revocation of a Deed of Sale" dated March 12, 1981 (Exh. 6), wherein representing her minor daughter VERNA TAÑEDO, petitioners, Lazaro revoked the sale in favor of petitioners for the reason that it was vs. "simulated or fictitious without any consideration whatsoever". Shortly after the case a quo was filed, Lazaro executed a sworn Consequently, said contract made in 1962 is not valid and cannot be statement (Exh. G) which virtually repudiated the contents of the Deed the source of any right nor the creator of any obligation between the of Revocation of a Deed of Sale (Exh. 6) and the Deed of Sale (Exh. 4) parties. in favor of private respondents. However, Lazaro testified that he sold Hence, the "affidavit of conformity" dated February 28, 1980, insofar as the property to Ricardo, and that it was a lawyer who induced him to it sought to validate or ratify the 1962 sale, is also useless and, in the execute a deed of sale in favor of his children after giving him five pesos words of the respondent Court, "suffers from the same infirmity." Even (P5.00) to buy a "drink" (TSN September 18, 1985, pp. 204-205). private respondents in their memorandum4 concede this. The trial court decided in favor of private respondents, holding that However, the documents that are critical to the resolution of this case petitioners failed "to adduce a proponderance of evidence to support are: (a) the deed of sale of January 13, 1981 in favor of private (their) claim." On appeal, the Court of Appeals affirmed the decision of respondents covering Lazaro's undivided inheritance of one-twelfth the trial court, ruling that the Deed of Sale dated January 13, 1981 (Exh. (1/12) share in Lot No. 191, which was subsequently registered on June 9) was valid and that its registration in good faith vested title in said 7, 1982; and (b) the deed of sale dated December 29, 1980 in favor of respondents. petitioners covering the same property. These two documents were The Issues executed after the death of Matias (and his spouse) and after a deed of Petitioners raised the following "errors" in the respondent Court, which extra-judicial settlement of his (Matias') estate was executed, thus they also now allege in the instant Petition: vesting in Lazaro actual title over said property. In other words, these I. The trial court erred in concluding that the Contract of Sale dispositions, though conflicting, were no longer infected with the of October 20, 1962 (Exhibit 7, Answer) is merely voidable or infirmities of the 1962 sale. annulable and not void ab initio pursuant to paragraph 2 of Petitioners contend that what was sold on January 13, 1981 was only Article 1347 of the New Civil Code involving as it does a one-half hectare out of Lot No. 191, citing as authority the trial court's "future inheritance". decision. As earlier pointed out, what is on review in these proceedings II. The trial court erred in holding that defendants-appellees by this Court is the Court of Appeals' decision — which correctly acted in good faith in registering the deed of sale of January identified the subject matter of the January 13, 1981 sale to be the 13, 1981 (Exhibit 9) with the Register of Deeds of Tarlac and entire undivided 1/12 share of Lazaro in Lot No. 191 and which is the therefore ownership of the land in question passed on to same property disposed of on December 29, 1980 in favor of defendants-appellees. petitioners. III. The trial court erred in ignoring and failing to consider the Critical in determining which of these two deeds should be given effect testimonial and documentary evidence of plaintiffs-appellants is the registration of the sale in favor of private respondents with the which clearly established by preponderance of evidence that register of deeds on June 7, 1982. they are indeed the legitimate and lawful owners of the Article 1544 of the Civil Code governs the preferential rights of vendees property in question. in cases of multiple sales, as follows: IV. The decision is contrary to law and the facts of the case Art. 1544. If the same thing should have been sold to different and the conclusions drawn from the established facts are vendees, the ownership shall be transferred to the person illogical and off-tangent. who may have first taken possession thereof in good faith, if it From the foregoing, the issues may be restated as follows: should be movable property. 1. Is the sale of a future inheritance valid? Should it be immovable property, the ownership shall belong 2. Was the subsequent execution on January 13, 1981 (and to the person acquiring it who in good faith first recorded it in registration with the Registry of Property) of a deed of sale the Registry of Property. covering the same property to the same buyers valid? Should there be no inscription, the ownership shall pertain to 3. May this Court review the findings of the respondent Court the person who in good faith was first in the possession; and, (a) holding that the buyers acted in good faith in registering in the absence thereof, to the person who presents the oldest the said subsequent deed of sale and (b) in "failing to title, provided there is good faith. consider petitioners' evidence"? Are the conclusions of the The property in question is land, an immovable, and following the respondent Court "illogical and off-tangent"? above-quoted law, ownership shall belong to the buyer who in good The Court's Ruling faith registers it first in the registry of property. Thus, although the deed At the outset, let it be clear that the "errors" which are reviewable by this of sale in favor of private respondents was later than the one in favor of Court in this petition for review on certiorariare only those allegedly petitioners, ownership would vest in the former because of the committed by the respondent Court of Appeals and not directly those of undisputed fact of registration. On the other hand, petitioners have not the trial court, which is not a party here. The "assignment of errors" in registered the sale to them at all. the petition quoted above are therefore totally misplaced, and for that Petitioners contend that they were in possession of the property and reason, the petition should be dismissed. But in order to give the parties that private respondents never took possession thereof. As between substantial justice we have decided to delve into the issues as above two purchasers, the one who registered the sale in his favor has a re-stated. The errors attributed by petitioners to the latter (trial) court will preferred right over the other who has not registered his title, even if the be discussed only insofar as they are relevant to the appellate court's latter is in actual possession of the immovable property.5 assailed Decision and Resolution. As to third issue, while petitioners conceded the fact of registration, they The sale made in 1962 involving future inheritance is not really at issue nevertheless contended that it was done in bad faith. On this issue, the here. In context, the assailed Decision conceded "it may be legally respondent Court ruled; correct that a contract of sale of anticipated future inheritance is null and Under the second assignment of error, plaintiffs-appellants void."3 contend that defendants-appellees acted in bad faith when But to remove all doubts, we hereby categorically rule that, pursuant to they registered the Deed of Sale in their favor as appellee Article 1347 of the Civil Code, "(n)o contract may be entered into upon a Ricardo already knew of the execution of the deed of sale in future inheritance except in cases expressly authorized by law." favor of the plaintiffs; appellants cite the testimony of plaintiff Belinda Tañedo to the effect that defendant Ricardo Tañedo reason for setting aside such findings. We are far from convinced that called her up on January 4 or 5, 1981 to tell her that he was both courts gravely abused their respective authorities and judicial already the owner of the land in question "but the contract of prerogatives. sale between our father and us were (sic) already As held in the recent case of Chua Tiong Tay vs. Court of Appeals and consumated" (pp. 9-10, tsn, January 6, 1984). This testimony Goldrock Construction and Development Corp.7 is obviously self-serving, and because it was a telephone The Court has consistently held that the factual findings of the trial conversation, the deed of sale dated December 29, 1980 was court, as well as the Court of Appeals, are final and conclusive and may not shown; Belinda merely told her uncle that there was not be reviewed on appeal. Among the exceptional circumstances already a document showing that plaintiffs are the owners (p. where a reassessment of facts found by the lower courts is allowed are 80). Ricardo Tañedo controverted this and testified that he when the conclusion is a finding grounded entirely on speculation, learned for the first time of the deed of sale executed by surmises or conjectures; when the inference made is manifestly absurd, Lazaro in favor of his children "about a month or sometime in mistaken or impossible; when there is grave abuse of discretion in the February 1981" (p. 111, tsn, Nov. 28, 1984). . . .6 appreciation of facts; when the judgment is premised on a The respondent Court, reviewing the trial court's findings, refused to misapprehension of facts; when the findings went beyond the issues of overturn the latter's assessment of the testimonial evidence, as follows; the case and the same are contrary to the admissions of both appellant We are not prepared to set aside the finding of the lower court and appellee. After a careful study of the case at bench, we find none of upholding Ricardo Tañedo's testimony, as it involves a matter the above grounds present to justify the re-evaluation of the findings of of credibility of witnesses which the trial judge, who presided fact made by the courts below. at the hearing, was in a better position to resolve. (Court of In the same vein, the ruling in the recent case of South Sea Surety and Appeals' Decision, p. 6.) Insurance Company, Inc. vs. Hon. Court of Appeals, et al.8 is equally In this connection, we note the tenacious allegations made by applicable to the present case: petitioners, both in their basic petition and in their memorandum, as We see no valid reason to discard the factual conclusions of follows: the appellate court. . . . (I)t is not the function of this Court to 1. The respondent Court allegedly ignored the claimed fact assess and evaluate all over again the evidence, testimonial that respondent Ricardo "by fraud and deceit and with and documentary, adduced by the parties, particularly where, foreknowledge" that the property in question had already such as here, the findings of both the trial court and the been sold to petitioners, made Lazaro execute the deed of appellate court on the matter coincide. (emphasis supplied) January 13, 1981; WHEREFORE, the petition is DENIED and the assailed Decision of the 2. There is allegedly adequate evidence to show that only 1/2 Court of Appeals is AFFIRMED. No Costs. of the purchase price of P10,000.00 was paid at the time of SO ORDERED. the execution of the deed of sale, contrary to the written acknowledgment, thus showing bad faith; 3. There is allegedly sufficient evidence showing that the deed of revocation of the sale in favor of petitioners "was tainted G.R. No. 169129 March 28, 2007 with fraud or deceit." SPS. VIRGILIO F. SANTOS & ESPERANZA LATI SANTOS, 4. There is allegedly enough evidence to show that private SPS.VICTORINO F. SANTOS, & LAGRIMAS SANTOS, ERNESTO F. respondents "took undue advantage over the weakness and SANTOS, and TADEO F. SANTOS, Petitioners, unschooled and pitiful situation of Lazaro Tañedo . . ." and vs. that respondent Ricardo Tañedo "exercised moral SPS. JOSE LUMBAO and PROSERFINA LUMBAO, Respondents. ascendancy over his younger brother he being the eldest DECISION brother and who reached fourth year college of law and at one CHICO-NAZARIO, J.: time a former Vice-Governor of Tarlac, while his younger Before this Court is a Petition for Review on Certiorari under Rule 45 of brother only attained first year high school . . . ; the 1997 Revised Rules of Civil Procedure seeking to annul and set 5. The respondent Court erred in not giving credence to aside the Decision1 and Resolution2 of the Court of Appeals in CA-G.R. petitioners' evidence, especially Lazaro CV No. 60450 entitled, Spouses Jose Lumbao and Proserfina Lumbao Tañedo's Sinumpaang Salaysay dated July 27, 1982 stating v. Spouses Virgilio F. Santos and Esperanza Lati, Spouses Victorino F. that Ricardo Tañedo deceived the former in executing the Santos and Lagrimas F. Santos, Ernesto F. Santos and Tadeo F. deed of sale in favor of private respondents. Santos, dated 8 June 2005 and 29 July 2005, respectively, which To be sure, there are indeed many conflicting documents and granted the appeal filed by herein respondents Spouses Jose Lumbao testimonies as well as arguments over their probative value and and Proserfina Lumbao (Spouses Lumbao) and ordered herein significance. Suffice it to say, however, that all the above contentions petitioners Spouses Virgilio F. Santos and Esperanza Lati, Spouses involve questions of fact, appreciation of evidence and credibility of Victorino F. Santos and Lagrimas F. Santos, Ernesto F. Santos and witnesses, which are not proper in this review. It is well-settled that the Tadeo F. Santos to reconvey to respondents Spouses Lumbao the Supreme Court is not a trier of facts. In petitions for review under Rule subject property and to pay the latter attorney’s fees and litigation 45 of the Revised Rules of Court, only questions of law may be raised expenses, thus, reversing the Decision3 of the Regional Trial Court and passed upon. Absent any whimsical or capricious exercise of (RTC) of Pasig City, dated 17 June 1998 which dismissed the judgment, and unless the lack of any basis for the conclusions made by Complaint for Reconveyance with Damages filed by respondents the lower courts be amply demonstrated, the Supreme Court will not Spouses Lumbao for lack of merit. disturb their findings. At most, it appears that petitioners have shown Herein petitioners Virgilio, Victorino, Ernesto and Tadeo, all surnamed that their evidence was not believed by both the trial and the appellate Santos, are the legitimate and surviving heirs of the late Rita Catoc courts, and that the said courts tended to give more credence to the Santos (Rita), who died on 20 October 1985. The other petitioners evidence presented by private respondents. But this in itself is not a Esperanza Lati and Lagrimas Santos are the daughters-in-law of Rita. Herein respondents Spouses Jose Lumbao and Proserfina Lumbao are During the trial, respondents Spouses Lumbao presented Proserfina the alleged owners of the 107-square meter lot (subject property), which Lumbao and Carolina Morales as their witnesses, while the petitioners they purportedly bought from Rita during her lifetime. presented only the testimony of petitioner Virgilio. The facts of the present case are as follows: The trial court rendered a Decision on 17 June 1998, the dispositive On two separate occasions during her lifetime, Rita sold to respondents portion of which reads as follows: Spouses Lumbao the subject property which is a part of her share in the Premises considered, the instant complaint is hereby denied for lack of estate of her deceased mother, Maria Catoc (Maria), who died intestate merit. on 19 September 1978. On the first occasion, Rita sold 100 square Considering that [petitioners] have incurred expenses in order to protect meters of her inchoate share in her mother’s estate through a document their interest, [respondents spouses Lumbao] are hereby directed to pay denominated as "Bilihan ng Lupa," dated 17 August [petitioners], to wit: 1) the amount of ₱30,000.00 as attorney’s fees and 1979.4 Respondents Spouses Lumbao claimed the execution of the litigation expenses, and 2) costs of the suit.11 aforesaid document was witnessed by petitioners Virgilio and Tadeo, as Aggrieved, respondents Spouses Lumbao appealed to the Court of shown by their signatures affixed therein. On the second occasion, an Appeals. On 8 June 2005, the appellate court rendered a Decision, additional seven square meters was added to the land as evidenced by thus: a document also denominated as "Bilihan ng Lupa," dated 9 January WHEREFORE, premises considered, the present appeal is hereby 1981.5 GRANTED. The appealed Decision dated June 17, 1998 of the After acquiring the subject property, respondents Spouses Lumbao took Regional Trial Court of Pasig City, Branch 69 in Civil Case No. 62175 is actual possession thereof and erected thereon a house which they have hereby REVERSED and SET ASIDE. A new judgment is hereby been occupying as exclusive owners up to the present. As the exclusive entered ordering [petitioners] to reconvey 107 square meters of the owners of the subject property, respondents Spouses Lumbao made subject [property] covered by TCT No. PT-81729 of the Registry of several verbal demands upon Rita, during her lifetime, and thereafter Deeds of Pasig City, Metro Manila, and to pay to [respondents spouses upon herein petitioners, for them to execute the necessary documents Lumbao] the sum of ₱30,000.00 for attorney’s fees and litigation to effect the issuance of a separate title in favor of respondents expenses. Spouses Lumbao insofar as the subject property is concerned. No pronouncement as to costs.12 Respondents Spouses Lumbao alleged that prior to her death, Rita Dissatisfied, petitioners filed a Motion for Reconsideration of the informed respondent Proserfina Lumbao she could not deliver the title aforesaid Decision but it was denied in the Resolution of the appellate to the subject property because the entire property inherited by her and court dated 29 July 2005 for lack of merit. her co-heirs from Maria had not yet been partitioned. Hence, this Petition. On 2 May 1986, the Spouses Lumbao claimed that petitioners, acting The grounds relied upon by the petitioners are the following: fraudulently and in conspiracy with one another, executed a Deed of I. THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR IN Extrajudicial Settlement,6 adjudicating and partitioning among REVERSING THE DECISION OF THE TRIAL COURT, THEREBY themselves and the other heirs, the estate left by Maria, which included CREATING A VARIANCE ON THE FINDINGS OF FACTS OF TWO the subject property already sold to respondents Spouses Lumbao and COURTS. now covered by TCT No. 817297 of the Registry of Deeds of Pasig City. II. THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR On 15 June 1992, respondents Spouses Lumbao, through counsel, IN ORDERING THE PETITIONERS TO RECONVEY THE SUBJECT sent a formal demand letter8 to petitioners but despite receipt of such [PROPERTY] TO THE RESPONDENTS [SPOUSES LUMBAO] AND IN demand letter, petitioners still failed and refused to reconvey the subject NOT RULING THAT THEY ARE GUILTY OF LACHES, HENCE THEY property to the respondents Spouses Lumbao. Consequently, the latter CANNOT RECOVER THE LOT ALLEGEDLY SOLD TO THEM. filed a Complaint for Reconveyance with Damages9 before the RTC of III. THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR Pasig City. IN NOT FINDING HEREIN PETITIONER[S] TO BE IN GOOD FAITH IN Petitioners filed their Answer denying the allegations that the subject EXECUTING THE "DEED OF EXTRAJUDICIAL SETTLEMENT" property had been sold to the respondents Spouses Lumbao. They DATED [2 MAY 1986]. likewise denied that the Deed of Extrajudicial Settlement had been IV. THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR fraudulently executed because the same was duly published as IN NOT FINDING THAT PETITIONERS ARE NOT LEGALLY BOUND required by law. On the contrary, they prayed for the dismissal of the TO COMPLY WITH THE SUPPOSED BILIHAN NG LUPA DATED [17 Complaint for lack of cause of action because respondents Spouses AUGUST 1979] AND [9 JANUARY 1981] THAT WERE SUPPOSEDLY Lumbao failed to comply with the Revised Katarungang Pambarangay EXECUTED BY THE LATE RITA CATOC. Law under Republic Act No. 7160, otherwise known as the Local V. THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR Government Code of 1991, which repealed Presidential Decree No. IN NOT FINDING THAT RESPONDENTS [SPOUSES LUMBAO’S] 150810 requiring first resort to barangay conciliation. ACTION FOR RECONVEYANCE WITH DAMAGES CANNOT BE Respondents Spouses Lumbao, with leave of court, amended their SUPPORTED WITH AN UNENFORCEABLE DOCUMENTS, SUCH AS Complaint because they discovered that on 16 February 1990, without THE BILIHAN NG LUPA DATED [17 AUGUST 1979] AND [9 JANUARY their knowledge, petitioners executed a Deed of Real Estate Mortgage 1981]. in favor of Julieta S. Esplana for the sum of ₱30,000.00. The said Deed VI. THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR of Real Estate Mortgage was annotated at the back of TCT No. PT- IN NOT FINDING THAT RESPONDENTS [SPOUSES LUMBAO’S] 81729 on 26 April 1991. Also, in answer to the allegation of the COMPLAINT FOR RECONVEYANCE IS DISMISSABLE (SIC) FOR petitioners that they failed to comply with the mandate of the Revised NON COMPLIANCE OF THE MANDATE OF [P.D. NO.] 1508, AS Katarungang Pambarangay Law, respondents Spouses Lumbao said AMENDED BY Republic Act No. 7160. that the Complaint was filed directly in court in order that prescription or VII. THE APPELLATE COURT COMMITTED A REVERSIBLE ERROR the Statute of Limitations may not set in. IN NOT FINDING THAT RESPONDENTS [SPOUSES LUMBAO] SHOULD BE HELD LIABLE FOR PETITIONERS’ CLAIM FOR DAMAGES AND ATTORNEY[‘]S FEES. Petitioners ask this Court to scrutinize the evidence presented in this the re-examination of the evidence presented by the contending parties case, because they claim that the factual findings of the trial court and during the trial of the case considering that the findings of fact of the the appellate court are conflicting. They allege that the findings of fact Court of Appeals are conclusive and binding on the Court.13 But, the by the trial court revealed that petitioners Virgilio and Tadeo did not rule is not without exceptions. There are several recognized witness the execution of the documents known as "Bilihan ng Lupa"; exceptions14 in which factual issues may be resolved by this Court. One hence, this finding runs counter to the conclusion made by the appellate of these exceptions is when the findings of the appellate court are court. And even assuming that they were witnesses to the aforesaid contrary to those of the trial court. This exception is present in the case documents, still, respondents Spouses Lumbao were not entitled to the at bar. reconveyance of the subject property because they were guilty of Going to the first issue presented in this case, it is the argument of the laches for their failure to assert their rights for an unreasonable length of petitioners that the Complaint for Reconveyance with Damages filed by time. Since respondents Spouses Lumbao had slept on their rights for a respondents Spouses Lumbao should be dismissed for failure to comply period of more than 12 years reckoned from the date of execution of the with the barangay conciliation proceedings as mandated by the Revised second "Bilihan ng Lupa," it would be unjust and unfair to the petitioners Katarungang Pambarangay Law under Republic Act No. 7160. This if the respondents will be allowed to recover the subject property. argument cannot be sustained. Petitioners allege they are in good faith in executing the Deed of Section 408 of the aforesaid law and Administrative Circular No. 14- Extrajudicial Settlement because even respondents Spouses Lumbao’s 9315 provide that all disputes between parties actually residing in the witness, Carolina Morales, testified that neither petitioner Virgilio nor same city or municipality are subject to barangay conciliation. A prior petitioner Tadeo was present during the execution of the "Bilihan ng recourse thereto is a pre-condition before filing a complaint in court or Lupa," dated 17 August 1979 and 9 January 1981. Petitioners affirm any government offices. Non-compliance with the said condition that the Deed of Extrajudicial Settlement was published in a newspaper precedent could affect the sufficiency of the plaintiff’s cause of action of general circulation to give notice to all creditors of the estate subject and make his complaint vulnerable to dismissal on ground of lack of of partition to contest the same within the period prescribed by law. cause of action or prematurity; but the same would not prevent a court Since no claimant appeared to interpose a claim within the period of competent jurisdiction from exercising its power of adjudication over allowed by law, a title to the subject property was then issued in favor of the case before it, where the defendants failed to object to such the petitioners; hence, they are considered as holders in good faith and exercise of jurisdiction.16 therefore cannot be barred from entering into any subsequent While it is true that the present case should first be referred to the transactions involving the subject property. Barangay Lupon for conciliation because the parties involved herein Petitioners also contend that they are not bound by the documents actually reside in the same city (Pasig City) and the dispute between denominated as "Bilihan ng Lupa" because the same were null and void them involves a real property, hence, the said dispute should have been for the following reasons: 1) for being falsified documents because one brought in the city in which the real property, subject matter of the of those documents made it appear that petitioners Virgilio and Tadeo controversy, is located, which happens to be the same city where the were witnesses to its execution and that they appeared personally contending parties reside. In the event that respondents Spouses before the notary public, when in truth and in fact they did not; 2) the Lumbao failed to comply with the said condition precedent, their identities of the properties in the "Bilihan ng Lupa," dated 17 August Complaint for Reconveyance with Damages can be dismissed. In this 1979 and 9 January 1981 in relation to the subject property in litigation case, however, respondents Spouses Lumbao’s non-compliance with were not established by the evidence presented by the respondents the aforesaid condition precedent cannot be considered fatal. Although Spouses Lumbao; 3) the right of the respondents Spouses Lumbao to petitioners alleged in their answer that the Complaint for Reconveyance lay their claim over the subject property had already been barred with Damages filed by respondents spouses Lumbao should be through estoppel by laches; and 4) the respondents Spouses Lumbao’s dismissed for their failure to comply with the condition precedent, which claim over the subject property had already prescribed. in effect, made the complaint prematurely instituted and the trial court Finally, petitioners claim that the Complaint for Reconveyance with acquired no jurisdiction to hear the case, yet, they did not file a Motion Damages filed by respondents Spouses Lumbao was dismissible to Dismiss the said complaint. because they failed to comply with the mandate of Presidential Decree Emphasis must be given to the fact that the petitioners could have No. 1508, as amended by Republic Act No. 7160, particularly Section prevented the trial court from exercising jurisdiction over the case had 412 of Republic Act No. 7160. they filed a Motion to Dismiss. However, instead of doing so, they Given the foregoing, the issues presented by the petitioners may be invoked the very same jurisdiction by filing an answer seeking an restated as follows: affirmative relief from it. Worse, petitioners actively participated in the I. Whether or not the Complaint for Reconveyance with trial of the case by presenting their own witness and by cross-examining Damages filed by respondents spouses Lumbao is the witnesses presented by the respondents Spouses Lumbao. It is dismissible for their failure to comply with the mandate of the elementary that the active participation of a party in a case pending Revised Katarungang Pambarangay Law under R.A. No. against him before a court is tantamount to recognition of that court’s 7160. jurisdiction and a willingness to abide by the resolution of the case II. Whether or not the documents known as "Bilihan ng Lupa" which will bar said party from later on impugning the court’s are valid and enforceable, thus, they can be the bases of the jurisdiction.17 It is also well-settled that the non-referral of a case for respondents spouses Lumbao’s action for reconveyance with barangay conciliation when so required under the law is not damages. jurisdictional in nature and may therefore be deemed waived if not III. Whether or not herein petitioners are legally bound to raised seasonably in a motion to dismiss.18 Hence, herein petitioners comply with the "Bilihan ng Lupa" dated 17 August 1979 and can no longer raise the defense of non-compliance with the barangay 9 January 1981 and consequently, reconvey the subject conciliation proceedings to seek the dismissal of the complaint filed by property to herein respondents spouses Lumbao. the respondents Spouses Lumbao, because they already waived the It is well-settled that in the exercise of the Supreme Court’s power of said defense when they failed to file a Motion to Dismiss. review, the court is not a trier of facts and does not normally undertake As regards the second issue, petitioners maintain that the "Bilihan ng quibbled. Hence, the general rule that the admissions made by a party Lupa," dated 17 August 1979 and 9 January 1981 are null and void for in a pleading are binding and conclusive upon him applies in this case. being falsified documents as it is made to appear that petitioners Virgilio On the testimony of respondents Spouses Lumbao’s witness Carolina and Tadeo were present in the execution of the said documents and Morales, this Court adopts the findings made by the appellate court. that the identities of the properties in those documents in relation to the Thus - subject property has not been established by the evidence of the [T]he trial court gave singular focus on her reply to a question during respondents Spouses Lumbao. Petitioners also claim that the cross-examination if the [petitioners Virgilio and Tadeo] were not with enforceability of those documents is barred by prescription of action and her and the vendor [Rita] during the transaction. It must be pointed out laches. that earlier in the direct examination of said witness, she confirmed that It is the petitioners’ incessant barking that the "Bilihan ng Lupa" [respondents spouses Lumbao] actually bought the lot from [Rita] documents dated 17 August 1979 and 9 January 1981 were falsified ("nagkabilihan"). Said witness positively identified and confirmed the because it was made to appear that petitioners Virgilio and Tadeo were two (2) documents evidencing the sale in favor of [respondents spouse present in the executions thereof, and their allegation that even Lumbao]. Thus, her subsequent statement that the [petitioners Virgilio respondents Spouses Lumbao’s witness Carolina Morales proved that and Tadeo] were not with them during the transaction does not said petitioners were not present during the execution of the automatically imply that [petitioners Virgilio and Tadeo] did not at any aforementioned documents. This is specious. time sign as witnesses as to the deed of sale attesting to their mother’s Upon examination of the aforesaid documents, this Court finds that in voluntary act of selling a portion of her share in her deceased mother’s the "Bilihan ng Lupa," dated 17 August 1979, the signatures of property. The rule is that testimony of a witness must be considered and petitioners Virgilio and Tadeo appeared thereon. Moreover, in calibrated in its entirety and not by truncated portions thereof or isolated petitioners’ Answer and Amended Answer to the Complaint for passages therein.24 Reconveyance with Damages, both petitioners Virgilio and Tadeo made Furthermore, both "Bilihan ng Lupa" documents dated 17 August 1979 an admission that indeed they acted as witnesses in the execution of and 9 January 1981 were duly notarized before a notary public. It is the "Bilihan ng Lupa," dated 17 August 1979.19 However, in order to well-settled that a document acknowledged before a notary public is a avoid their obligations in the said "Bilihan ng Lupa," petitioner Virgilio, in public document25that enjoys the presumption of regularity. It is a prima his cross-examination, denied having knowledge of the sale transaction facie evidence of the truth of the facts stated therein and a conclusive and claimed that he could not remember the same as well as his presumption of its existence and due execution.26 To overcome this appearance before the notary public due to the length of time that had presumption, there must be presented evidence that is clear and passed. Noticeably, petitioner Virgilio did not categorically deny having convincing. Absent such evidence, the presumption must be signed the "Bilihan ng Lupa," dated 17 August 1979 and in support upheld.27 In addition, one who denies the due execution of a deed thereof, his testimony in the cross-examination propounded by the where one’s signature appears has the burden of proving that contrary counsel of the respondents Spouses Lumbao is quoted hereunder: to the recital in the jurat, one never appeared before the notary public ATTY. CHIU: and acknowledged the deed to be a voluntary act. Nonetheless, in the Q. Now, you said, Mr. Witness…Virgilio Santos, that you don’t know present case petitioners’ denials without clear and convincing evidence about this document which was marked as Exhibit "A" for the to support their claim of fraud and falsity were not sufficient to overthrow [respondents spouses Lumbao]? the above-mentioned presumption; hence, the authenticity, due ATTY. BUGARING: execution and the truth of the facts stated in the aforesaid "Bilihan ng The question is misleading, your Honor. Counsel premised the question Lupa" are upheld. that he does not have any knowledge but not that he does not know. The defense of petitioners that the identities of the properties described ATTY. CHIU: in the "Bilihan ng Lupa," dated 17 August 1979 and 9 January 1981 in Q. Being… you are one of the witnesses of this document? [I]s it not? relation to the subject property were not established by respondents WITNESS: Spouses Lumbao’s evidence is likewise not acceptable. A. No, sir. It is noteworthy that at the time of the execution of the documents Q. I am showing to you this document, there is a signature at the left denominated as "Bilihan ng Lupa," the entire property owned by Maria, hand margin of this document Virgilio Santos, will you please go over the mother of Rita, was not yet divided among her and her co-heirs and the same and tell the court whose signature is this? so the description of the entire estate is the only description that can be A. I don’t remember, sir, because of the length of time that had passed. placed in the "Bilihan ng Lupa, dated 17 August 1979 and 9 January Q. But that is your signature? 1981" because the exact metes and bounds of the subject property sold A. I don’t have eyeglasses… My signature is different. to respondents Spouses Lumbao could not be possibly determined at Q. You never appeared before this notary public Apolinario Mangahas? that time. Nevertheless, that does not make the contract of sale A. I don’t remember.20 between Rita and respondents Spouses Lumbao invalid because both As a general rule, facts alleged in a party’s pleading are deemed the law and jurisprudence have categorically held that even while an admissions of that party and are binding upon him, but this is not an estate remains undivided, co-owners have each full ownership of their absolute and inflexible rule. An answer is a mere statement of fact respective aliquots or undivided shares and may therefore alienate, which the party filing it expects to prove, but it is not evidence.21 And in assign or mortgage them.28 The co-owner, however, has no right to sell spite of the presence of judicial admissions in a party’s pleading, the or alienate a specific or determinate part of the thing owned in common, trial court is still given leeway to consider other evidence because such right over the thing is represented by an aliquot or ideal presented.22 However, in the case at bar, as the Court of Appeals portion without any physical division. In any case, the mere fact that the mentioned in its Decision, "[herein petitioners] had not adduced any deed purports to transfer a concrete portion does not per se render the other evidence to override the admission made in their [A]nswer that sale void. The sale is valid, but only with respect to the aliquot share of [petitioners Virgilio and Tadeo] actually signed the [Bilihan ng Lupa the selling co-owner. Furthermore, the sale is subject to the results of dated 17 August 1979] except that they were just misled as to the the partition upon the termination of the co-ownership.29 purpose of the document, x x x."23 Virgilio’s answers were unsure and In the case at bar, when the estate left by Maria had been partitioned on knowledge of that prior unregistered interest has the effect of 2 May 1986 by virtue of a Deed of Extrajudicial Settlement, the 107- registration as to him.31 Hence, the "Bilihan ng Lupa" documents dated square meter lot sold by the mother of the petitioners to respondents 17 August 1979 and 9 January 1981, being valid and enforceable, Spouses Lumbao should be deducted from the total lot, inherited by herein petitioners are bound to comply with their provisions. In short, them in representation of their deceased mother, which in this case such documents are absolutely valid between and among the parties measures 467 square meters. The 107-square meter lot already sold to thereto. respondents Spouses Lumbao can no longer be inherited by the Finally, the general rule that heirs are bound by contracts entered into petitioners because the same was no longer part of their inheritance as by their predecessors-in-interest applies in the present case. Article it was already sold during the lifetime of their mother. 131132 of the NCC is the basis of this rule. It is clear from the said Likewise, the fact that the property mentioned in the two "Bilihan ng provision that whatever rights and obligations the decedent have over Lupa" documents was described as "a portion of a parcel of land the property were transmitted to the heirs by way of succession, a mode covered in Tax Declarations No. A-018-01674," while the subject matter of acquiring the property, rights and obligations of the decedent to the of the Deed of Extrajudicial Settlement was the property described in extent of the value of the inheritance of the heirs.33 Thus, the heirs Transfer Certificate of Title (TCT) No. 3216 of the Registry of Deeds of cannot escape the legal consequence of a transaction entered into by the Province of Rizal in the name of Maria is of no moment because in their predecessor-in-interest because they have inherited the property the "Bilihan ng Lupa," dated 17 August 1979 and 9 January 1981, it is subject to the liability affecting their common ancestor. Being heirs, clear that there was only one estate left by Maria upon her death. And there is privity of interest between them and their deceased mother. this fact was not refuted by the petitioners. Besides, the property They only succeed to what rights their mother had and what is valid and described in Tax Declaration No. A-018-01674 and the property binding against her is also valid and binding as against them. The death mentioned in TCT No. 3216 are both located in Barrio Rosario, of a party does not excuse nonperformance of a contract which involves Municipality of Pasig, Province of Rizal, and almost have the same a property right and the rights and obligations thereunder pass to the boundaries. It is, thus, safe to state that the property mentioned in Tax personal representatives of the deceased. Similarly, nonperformance is Declaration No. A-018-01674 and in TCT No. 3216 are one and the not excused by the death of the party when the other party has a same. property interest in the subject matter of the contract.34 The defense of prescription of action and laches is likewise unjustifiable. In the end, despite the death of the petitioners’ mother, they are still In an action for reconveyance, the decree of registration is respected as bound to comply with the provisions of the "Bilihan ng Lupa," dated 17 incontrovertible. What is sought instead is the transfer of the property or August 1979 and 9 January 1981. Consequently, they must reconvey to its title which has been wrongfully or erroneously registered in another herein respondents Spouses Lumbao the 107-square meter lot which person’s name to its rightful or legal owner, or to the one with a better they bought from Rita, petitioners’ mother. And as correctly ruled by the right. It is, indeed, true that the right to seek reconveyance of registered appellate court, petitioners must pay respondents Spouses Lumbao property is not absolute because it is subject to extinctive prescription. attorney’s fees and litigation expenses for having been compelled to However, when the plaintiff is in possession of the land to be litigate and incur expenses to protect their interest.35 On this matter, we reconveyed, prescription cannot set in. Such an exception is based on do not find reasons to reverse the said findings. the theory that registration proceedings could not be used as a shield WHEREFORE, premises considered, the instant Petition is hereby for fraud or for enriching a person at the expense of another.30 DENIED. The Decision and Resolution of the Court of Appeals dated 8 In the case at bar, the right of the respondents Spouses Lumbao to June 2005 and 29 July 2005, respectively, are hereby AFFIRMED. seek reconveyance does not prescribe because the latter have been Herein petitioners are ordered to reconvey to respondents Spouses and are still in actual possession and occupation as owners of the Lumbao the subject property and to pay the latter attorney’s fees and property sought to be reconveyed, which fact has not been refuted nor litigation expenses. Costs against petitioners. denied by the petitioners. Furthermore, respondents Spouses Lumbao SO ORDERED. cannot be held guilty of laches because from the very start that they bought the 107-square meter lot from the mother of the petitioners, they have constantly asked for the transfer of the certificate of title into their names but Rita, during her lifetime, and the petitioners, after the death of Rita, failed to do so on the flimsy excuse that the lot had not been partitioned yet. Inexplicably, after the partition of the entire estate of Maria, petitioners still included the 107-square meter lot in their inheritance which they divided among themselves despite their knowledge of the contracts of sale between their mother and the respondents Spouses Lumbao. Under the above premises, this Court holds that the "Bilihan ng Lupa" documents dated 17 August 1979 and 9 January 1981 are valid and enforceable and can be made the basis of the respondents Spouses Lumbao’s action for reconveyance. The failure of respondents Spouses Lumbao to have the said documents registered does not affect its validity and enforceability. It must be remembered that registration is not G.R. No. L-22036 April 30, 1979 a requirement for validity of the contract as between the parties, for the TESTATE ESTATE OF THE LATE REVEREND FATHER PASCUAL effect of registration serves chiefly to bind third persons. The principal RIGOR. THE PARISH PRIEST OF THE ROMAN CATHOLIC CHURCH purpose of registration is merely to notify other persons not parties to a OF VICTORIA, TARLAC, petitioner-appellant, contract that a transaction involving the property had been entered into. vs. Where the party has knowledge of a prior existing interest which is BELINA RIGOR, NESTORA RIGOR, FRANCISCA ESCOBAR DE unregistered at the time he acquired a right to the same land, his RIGOR and JOVITA ESCOBAR DE FAUSTO, respondents-appellees. D. Tañedo, Jr. for appellants. puede tener estate legado, ganando o sacando de J. Palanca, Sr. for appellee. los productos anuales el CINCO (5) por ciento para su administracion, y los derechos correspondientes AQUINO, J.: de las VEINTE (20) Misas rezadas que debiera el This case is about the efficaciousness or enforceability of a devise of Parroco celebrar cada año, depositando todo lo ricelands located at Guimba, Nueva Ecija, with a total area of around restante de los productos de estate legado, en un forty- four hectares That devise was made in the will of the late Father banco, a nombre de estate legado. Pascual Rigor, a native of Victoria Tarlac, in favor of his nearest male To implement the foregoing bequest, the administratix in 1940 relative who would study for the priesthood. submitted a project containing the following item: The parish priest of Victoria, who claimed to be a trustee of the said 5. LEGACY OF THE CHURCH lands, appealed to this Court from the decision of the Court of Appeals That it be adjudicated in favor of the legacy affirming the order of the probate court declaring that the said devise purported to be given to the nearest male relative was inoperative (Rigor vs. Parish Priest of the Roman Catholic Church who shall take the priesthood, and in the interim to of Victoria, Tarlac, CA-G.R. No. 24319-R, August 1, 1963). be administered by the actual Catholic Priest of the The record discloses that Father Rigor, the parish priest of Pulilan, Roman Catholic Church of Victoria, Tarlac, Bulacan, died on August 9, 1935, leaving a will executed on October Philippines, or his successors, the real properties 29, 1933 which was probated by the Court of First Instance of Tarlac in hereinbelow indicated, to wit: its order of December 5, 1935. Named as devisees in the will were the Title Lot Area in Tax testators nearest relatives, namely, his three sisters: Florencia Rigor- No. No. Has. Dec. Escobar, Belina Rigor-Manaloto and Nestora Rigor-Quiambao. The testator gave a devise to his cousin, Fortunato Gamalinda. T- 3663 1.6249 18740 In addition, the will contained the following controversial bequest 6530 (paragraphing supplied to facilitate comprehension of the testamentary provisions): T- 3445- 24.2998 18730 Doy y dejo como legado CUATRO (4) PARCELAS 6548 C de terreno palayeros situados en el municipiooo de Guimba de la provinciaaa de NUEVA ECIJA, T- cuyo 3670 6.2665 18736 num. de CERTIFICADO DE TRANSFERENCIA 6525 DE TITULO SON; — Titulo Num. 6530, mide 16,249 m. cuadrados de superficie Titulo Num. 6548, T- mide 3666 11.9251 18733 242,998 m. cuadrados de superficie y annual6521 6525, mide 62,665 m. cuadrados de superficie; y Titulo Num. 6521, mide 119,251 m. cuadrados de Total amount and value — 44.1163 P13,090.00 superficie; a cualquier pariente mio varon mas Judge Roman A. Cruz in his order of August 15, 1940, approving the cercano que estudie la carrera eclesiatica hasta project of partition, directed that after payment of the obligations of the ordenarse de Presbiterado o sea Sacerdote; las estate (including the sum of P3,132.26 due to the church of the Victoria condiciones de estate legado son; parish) the administratrix should deliver to the devisees their respective (1.a) Prohibe en absoluto la venta de estos terrenos shares. arriba situados objectos de este legado; It may be noted that the administratrix and Judge Cruz did not bother to (2.a) Que el legatario pariente mio mas cercano analyze the meaning and implications of Father Rigor's bequest to his tendra derecho de empezar a gozar y administrar nearest male relative who would study for the priesthood. Inasmuch as de este legado al principiar a curzar la Sagrada no nephew of the testator claimed the devise and as the administratrix Teologio, y ordenado de Sacerdote, hasta su and the legal heirs believed that the parish priest of Victoria had no right muerte; pero que pierde el legatario este derecho to administer the ricelands, the same were not delivered to that de administrar y gozar de este legado al dejar de ecclesiastic. The testate proceeding remained pending. continuar sus estudios para ordenarse de About thirteen years after the approval of the project of partition, or on Presbiterado (Sacerdote). February 19, 1954, the parish priest of Victoria filed in the pending Que el legatario una vez Sacerdote ya estara testate proceeding a petition praying for the appointment of a new obligado a celebrar cada año VEINTE (20) Misas administrator (succeeding the deceased administration Florencia Rigor), rezadas en sufragio de mi alma y de mis padres who should deliver to the church the said ricelands, and further praying difuntos, y si el actual legatario, quedase that the possessors thereof be ordered to render an accounting of the excomulgado, IPSO FACTO se le despoja este fruits. The probate court granted the petition. A new administrator was legado, y la administracion de esto pasara a cargo appointed. On January 31, 1957 the parish priest filed another petition del actual Parroco y sus sucesores de la Iglecia for the delivery of the ricelands to the church as trustee. Catolica de Victoria, Tarlac. The intestate heirs of Father Rigor countered with a petition dated Y en intervalo de tiempo que no haya legatario March 25, 1957 praying that the bequest be d inoperative and that they acondicionado segun lo arriba queda expresado, be adjudged as the persons entitled to the said ricelands since, as pasara la administracion de este legado a cargo del admitted by the parish priest of Victoria, "no nearest male relative of" actual Parroco Catolico y sus sucesores, de the testator "has ever studied for the priesthood" (pp. 25 and 35, Record Victoria, Tarlac. on Appeal). That petition was opposed by the parish priest of Victoria. El Parroco administrador de estate legado, Finding that petition to be meritorious, the lower court, through Judge acumulara, anualmente todos los productos que Bernabe de Aquino, declared the bequest inoperative and adjudicated the ricelands to the testator's legal heirs in his order of June 28, 1957. 5. That if the devisee is excommunicated, he would be divested of the The parish priest filed two motions for reconsideration. legacy and the administration of the riceland would pass to the Judge De Aquino granted the respond motion for reconsideration in his incumbent parish priest of Victoria and his successors. order of December 10, 1957 on the ground that the testator had a 6. That during the interval of time that there is no qualified devisee as grandnephew named Edgardo G. Cunanan (the grandson of his first contemplated above, the administration of the ricelands would be under cousin) who was a seminarian in the San Jose Seminary of the Jesuit the responsibility of the incumbent parish priest of Victoria and his Fathers in Quezon City. The administrator was directed to deliver the successors, and ricelands to the parish priest of Victoria as trustee. 7. That the parish priest-administrator of the ricelands would The legal heirs appealed to the Court of Appeals. It reversed that order. accumulate annually the products thereof, obtaining or getting from the It held that Father Rigor had created a testamentary trust for his nearest annual produce five percent thereof for his administration and the fees male relative who would take the holy orders but that such trust could corresponding to the twenty masses with prayers that the parish priest exist only for twenty years because to enforce it beyond that period would celebrate for each year, depositing the balance of the income of would violate "the rule against perpetuities. It ruled that since no legatee the devise in the bank in the name of his bequest. claimed the ricelands within twenty years after the testator's death, the From the foregoing testamentary provisions, it may be deduced that the same should pass to his legal heirs, citing articles 888 and 912(2) of the testator intended to devise the ricelands to his nearest male relative old Civil Code and article 870 of the new Civil Code. who would become a priest, who was forbidden to sell the ricelands, The parish priest in this appeal contends that the Court of Appeals erred who would lose the devise if he discontinued his studies for the in not finding that the testator created a public charitable trust and in not priesthood, or having been ordained a priest, he was excommunicated, liberally construing the testamentary provisions so as to render the trust and who would be obligated to say annually twenty masses with prayers operative and to prevent intestacy. for the repose of the souls of the testator and his parents. As refutation, the legal heirs argue that the Court of Appeals d the On the other hand, it is clear that the parish priest of Victoria would bequest inoperative because no one among the testator's nearest male administer the ricelands only in two situations: one, during the interval of relatives had studied for the priesthood and not because the trust was a time that no nearest male relative of the testator was studying for the private charitable trust. According to the legal heirs, that factual finding priesthood and two, in case the testator's nephew became a priest and is binding on this Court. They point out that appellant priest's change of he was excommunicated. theory cannot be countenanced in this appeal . What is not clear is the duration of "el intervalo de tiempo que no haya In this case, as in cases involving the law of contracts and statutory legatario acondicionado", or how long after the testator's death would it construction, where the intention of the contracting parties or of the be determined that he had a nephew who would pursue an lawmaking body is to be ascertained, the primary issue is the ecclesiastical vocation. It is that patent ambiguity that has brought about determination of the testator's intention which is the law of the case the controversy between the parish priest of Victoria and the testator's (dicat testor et erit lex. Santos vs. Manarang, 27 Phil. 209, 215; legal heirs. Rodriguez vs. Court of Appeals, L-28734, March 28, 1969, 27 SCRA Interwoven with that equivocal provision is the time when the nearest 546). male relative who would study for the priesthood should be The will of the testator is the first and principal law in the matter of determined. Did the testator contemplate only his nearest male testaments. When his intention is clearly and precisely expressed, any relative at the time of his death? Or did he have in mind any of his interpretation must be in accord with the plain and literal meaning of his nearest male relatives at anytime after his death? words, except when it may certainly appear that his intention was We hold that the said bequest refers to the testator's nearest male different from that literally expressed (In re Estate of Calderon, 26 Phil. relative living at the time of his death and not to any indefinite time 333). thereafter. "In order to be capacitated to inherit, the heir, devisee or The intent of the testator is the cardinal rule in the construction of wills." legatee must be living at the moment the succession opens, except in It is "the life and soul of a will It is "the first greatest rule, the sovereign case of representation, when it is proper" (Art. 1025, Civil Code). guide, the polestar, in giving effect to a will". (See Dissent of Justice The said testamentary provisions should be sensibly or reasonably Moreland in Santos vs. Manarang, 27 Phil. 209, 223, 237-8.) construed. To construe them as referring to the testator's nearest male One canon in the interpretation of the testamentary provisions is that relative at anytime after his death would render the provisions difficult to "the testator's intention is to be ascertained from the words of the wilt apply and create uncertainty as to the disposition of his estate. That taking into consideration the circumstances under which it was made", could not have been his intention. but excluding the testator's oral declarations as to his intention (Art. In 1935, when the testator died, his nearest leagal heirs were his three 789, Civil Code of the Philippines). sisters or second-degree relatives, Mrs. Escobar, Mrs. Manaloto and To ascertain Father Rigor's intention, it may be useful to make the Mrs. Quiambao. Obviously, when the testator specified his nearest male following re-statement of the provisions of his will. relative, he must have had in mind his nephew or a son of his sister, 1. that he bequeathed the ricelands to anyone of his nearest male who would be his third-degree relative, or possibly a grandnephew. But relatives who would pursue an ecclesiastical career until his ordination since he could not prognosticate the exact date of his death or state as a priest. with certitude what category of nearest male relative would be living at 2. That the devisee could not sell the ricelands. the time of his death, he could not specify that his nearest male relative 3. That the devisee at the inception of his studies in sacred theology would be his nephew or grandnephews (the son of his nephew or niece) could enjoy and administer the ricelands, and once ordained as a priest, and so he had to use the term "nearest male relative". he could continue enjoying and administering the same up to the time of It is contended by the legal heirs that the said devise was in reality his death but the devisee would cease to enjoy and administer the intended for Ramon Quiambao, the testator's nephew and godchild, ricelands if he discontinued his studies for the priesthood. who was the son of his sister, Mrs. Quiambao. To prove that contention, 4. That if the devisee became a priest, he would be obligated to the legal heirs presented in the lower court the affidavit of Beatriz celebrate every year twenty masses with prayers for the repose of the Gamalinda, the maternal grandmother of Edgardo Cunanan, who souls of Father Rigor and his parents. deposed that after Father Rigor's death her own son, Valentin Gamalinda, Jr., did not claim the devise, although he was studying for contingencies did not arise, and could not have arisen in this case the priesthood at the San Carlos Seminary, because she (Beatriz) knew because no nephew of the testator manifested any intention to enter the that Father Rigor had intended that devise for his nearest male seminary or ever became a priest. relative beloning to the Rigor family (pp. 105-114, Record on Appeal). The Court of Appeals correctly ruled that this case is covered by article Mrs. Gamalinda further deposed that her own grandchild, Edgardo G. 888 of the old Civil Code, now article 956, which provides that if "the Cunanan, was not the one contemplated in Father Rigor's will and that bequest for any reason should be inoperative, it shall be merged into Edgardo's father told her that he was not consulted by the parish priest the estate, except in cases of substitution and those in which the right of of Victoria before the latter filed his second motion for reconsideration accretion exists" ("el legado ... por qualquier causa, no tenga efecto se which was based on the ground that the testator's grandnephew, refundira en la masa de la herencia, fuera de los casos de sustitucion y Edgardo, was studying for the priesthood at the San Jose Seminary. derecho de acrecer"). Parenthetically, it should be stated at this juncture that Edgardo ceased This case is also covered by article 912(2) of the old Civil Code, now to be a seminarian in 1961. For that reason, the legal heirs apprised the article 960 (2), which provides that legal succession takes place when Court of Appeals that the probate court's order adjudicating the the will "does not dispose of all that belongs to the testator." There ricelands to the parish priest of Victoria had no more leg to stand on (p. being no substitution nor accretion as to the said ricelands the same 84, Appellant's brief). should be distributed among the testator's legal heirs. The effect is as if Of course, Mrs. Gamalinda's affidavit, which is tantamount to the testator had made no disposition as to the said ricelands. evidence aliunde as to the testator's intention and which is hearsay, has The Civil Code recognizes that a person may die partly testate and no probative value. Our opinion that the said bequest refers to the partly intestate, or that there may be mixed succession. The old rule as testator's nephew who was living at the time of his death, when his to the indivisibility of the testator's win is no longer valid. Thus, if a succession was opened and the successional rights to his estate conditional legacy does not take effect, there will be intestate became vested, rests on a judicious and unbiased reading of the terms succession as to the property recovered by the said legacy (Macrohon of the will. Ong Ham vs. Saavedra, 51 Phil. 267). Had the testator intended that the "cualquier pariente mio varon mas We find no merit in the appeal The Appellate Court's decision is cercano que estudie la camera eclesiatica" would include indefinitely affirmed. Costs against the petitioner. anyone of his nearest male relatives born after his death, he could have SO ORDERED so specified in his will He must have known that such a broad provision would suspend for an unlimited period of time the efficaciousness of his bequest. What then did the testator mean by "el intervalo de tiempo que no haya legatario acondicionado"? The reasonable view is that he was referring to a situation whereby his nephew living at the time of his death, who would like to become a priest, was still in grade school or in high school or was not yet in the seminary. In that case, the parish priest of Victoria G.R. No. L-41171 July 23, 1987 would administer the ricelands before the nephew entered the INTESTATE ESTATE OF THE LATE VITO BORROMEO, seminary. But the moment the testator's nephew entered the seminary, PATROCINIO BORROMEO-HERRERA, petitioner, then he would be entitled to enjoy and administer the ricelands and vs. receive the fruits thereof. In that event, the trusteeship would be FORTUNATO BORROMEO and HON. FRANCISCO P. BURGOS, terminated. Judge of the Court of First Instance of Cebu, Branch Following that interpretation of the will the inquiry would be whether at II, respondents. the time Father Rigor died in 1935 he had a nephew who was studying x - - - - - - - - - - - - - - - - - - - - - - -x for the priesthood or who had manifested his desire to follow the No. L-55000 July 23, 1987 ecclesiastical career. That query is categorically answered in paragraph IN THE MATTER OF THE ESTATE OF VITO BORROMEO, 4 of appellant priest's petitions of February 19, 1954 and January 31, DECEASED, PILAR N. BORROMEO, MARIA B. PUTONG, 1957. He unequivocally alleged therein that "not male relative of the late FEDERICO V. BORROMEO, JOSE BORROMEO, CONSUELO B. (Father) Pascual Rigor has ever studied for the priesthood" (pp. 25 and MORALES, AND CANUTO V. BORROMEO, JR., heirs-appellants, 35, Record on Appeal). vs. Inasmuch as the testator was not survived by any nephew who became FORTUNATO BORROMEO, claimant-appellee. a priest, the unavoidable conclusion is that the bequest in question was x - - - - - - - - - - - - - - - - - - - - - - -x ineffectual or inoperative. Therefore, the administration of the ricelands No. L-62895 July 23, 1987 by the parish priest of Victoria, as envisaged in the wilt was likewise JOSE CUENCO BORROMEO, petitioner, inoperative. vs. The appellant in contending that a public charitable trust was HONORABLE COURT OF APPEALS, HON. FRANCISCO P. constituted by the testator in is favor assumes that he was a trustee or a BURGOS, As presiding Judge of the (now) Regional Trial Court, substitute devisee That contention is untenable. A reading of the Branch XV, Region VII, RICARDO V. REYES, as Administrator of testamentary provisions regarding the disputed bequest not support the the Estate of Vito Borromeo in Sp. Proc. No. 916-R, NUMERIANO view that the parish priest of Victoria was a trustee or a substitute G. ESTENZO and DOMINGO L. ANTIGUA, respondents. devisee in the event that the testator was not survived by a nephew who x - - - - - - - - - - - - - - - - - - - - - - -x became a priest. No. L-63818 July 23, 1987 It should be understood that the parish priest of Victoria could become a DOMINGO ANTIGUA AND RICARDO V. REYES, as Administrator of trustee only when the testator's nephew living at the time of his death, the Intestate Estate of VITO BORROMEO, Sp. Proceedings No. 916- who desired to become a priest, had not yet entered the seminary or, R, Regional Trial Court of Cebu, joined by HON. JUDGE having been ordained a priest, he was excommunicated. Those two FRANCISCO P. BURGOS, as Presiding Judge of Branch XV of the Regional Trial Court of Cebu, as a formal party, and ATTYS. When the aforementioned petitions and claims were heard jointly, the FRANCIS M. ZOSA, GAUDIOSO RUIZ and NUMERIANO following facts were established: ESTENZO, petitioners, 1. Maximo Borromeo and Hermenegilda Galan, husband and wife (the vs. latter having predeceased the former), were survived by their eight (8) HONORABLE INTERMEDIATE APPELLATE COURT, JOSE children, namely, CUENCO BORROMEO, and PETRA O. BORROMEO, respondents. Jose Ma. Borromeo x - - - - - - - - - - - - - - - - - - - - - - -x Cosme Borromeo No. L-65995 July 23, 1987 Pantaleon Borromeo PETRA BORROMEO, VITALIANA BORROMEO, AMELINDA Vito Borromeo BORROMEO, and JOSE CUENCO BORROMEO,petitioners, Paulo Borromeo vs. Anecita Borromeo HONORABLE FRANCISCO P. BURGOS, Presiding Judge of Branch Quirino Borromeo and XV, Regional Trial Court of Cebu; RICARDO V. REYES, Julian Borromeo Administrator of the Estate of VITO BORROMEO in Sp. Proc. No. 2. Vito Borromeo died a widower on March 13, 1952, without any issue, 916-R; and DOMINGO L. ANTIGUA, respondents. and all his brothers and sisters predeceased him. GUTIERREZ, JR., J.: 3. Vito's brother Pantaleon Borromeo died leaving the following These cases before us all stem from SP. PROC. NO. 916-R of the then children: Court of First Instance of Cebu. a. Ismaela Borromeo,who died on Oct. 16, 1939 G.R. No. 41171 b. Teofilo Borromeo, who died on Aug. 1, 1955, or 3 years Vito Borromeo, a widower and permanent resident of Cebu City, died on after the death of Vito Borromeo. He was married to March 13, 1952, in Paranaque, Rizal at the age of 88 years, without Remedios Cuenco Borromeo, who died on March 28, 1968. forced heirs but leaving extensive properties in the province of Cebu. He had an only son-Atty. Jose Cuenco Borromeo one of the On April 19, 1952, Jose Junquera filed with the Court of First Instance petitioners herein. of Cebu a petition for the probate of a one page document as the last c. Crispin Borromeo, who is still alive. will and testament left by the said deceased, devising all his properties 4. Anecita Borromeo, sister of Vito Borromeo, died ahead of him and left to Tomas, Fortunato and Amelia, all surnamed Borromeo, in equal and an only daughter, Aurora B. Ocampo, who died on Jan. 30, 1950 undivided shares, and designating Junquera as executor thereof. The leaving the following children: case was docketed as Special Proceedings No. 916-R. The document, a. Anecita Ocampo Castro drafted in Spanish, was allegedly signed and thumbmarked by the b. Ramon Ocampo deceased in the presence of Cornelio Gandionco, Eusebio Cabiluna, c. Lourdes Ocampo and Felixberto Leonardo who acted as witnesses. d. Elena Ocampo, all living, and Oppositions to the probate of the will were filed. On May 28, 1960, after e. Antonieta Ocampo Barcenilla (deceased), survived by due trial, the probate court held that the document presented as the will claimant Jose Barcenilla, Jr. of the deceased was a forgery. 5. Cosme Borromeo, another brother of Vito Borromeo, died before the On appeal to this Court, the decision of the probate court disallowing war and left the following children: the probate of the will was affirmed in Testate Estate of Vito Borromeo, a. Marcial Borromeo Jose H. Junquera et al. v. Crispin Borromeo et al. (19 SCRA 656). b. Carlos Borromeo,who died on Jan. 18, 1965,survived by The testate proceedings was converted into an intestate proceedings. his wife, Remedios Alfonso, and his only daughter, Amelinda Several parties came before the court filing claims or petitions alleging Borromeo Talam themselves as heirs of the intestate estate of Vito Borromeo. c. Asuncion Borromeo The following petitions or claims were filed: d. Florentina Borromeo, who died in 1948. 1. On August 29, 1967, the heirs of Jose Ma. Borromeo and e. Amilio Borromeo, who died in 1944. Cosme Borromeo filed a petition for declaration of heirs and f. Carmen Borromeo, who died in 1925. determination of heirship. There was no opposition filed The last three died leaving no issue. against said petition. 6. Jose Ma. Borromeo, another brother of Vito Borromeo, died before 2. On November 26, 1967, Vitaliana Borromeo also filed a the war and left the following children: petition for declaration as heir. The heirs of Jose Ma. a. Exequiel Borromeo,who died on December 29, 1949 Borromeo and Cosme Borromeo filed an opposition to this b. Canuto Borromeo, who died on Dec. 31, 1959, leaving the petition. following children: 3. On December 13, 1967, Jose Barcenilla, Jr., Anecita aa. Federico Borromeo Ocampo de Castro, Ramon Ocampo, Lourdes Ocampo, bb. Marisol Borromeo (Maria B. Putong, Rec. p. 85) Elena Ocampo, Isagani Morre, Rosario Morre, Aurora Morre, cc. Canuto Borromeo, Jr. Lila Morre, Lamberto Morre, and Patricia Morre, filed a dd. Jose Borromeo petition for declaration of heirs and determination of shares. ee. Consuelo Borromeo The petition was opposed by the heirs of Jose and Cosme ff. Pilar Borromeo Borromeo. gg. Salud Borromeo 4. On December 2, 1968, Maria Borromeo Atega, Luz hh. Patrocinio Borromeo Herrera Borromeo, Hermenegilda Borromeo Nonnenkamp, Rosario c. Maximo Borromeo, who died in July, 1948 Borromeo, and Fe Borromeo Queroz filed a claim. Jose d. Matilde Borromeo, who died on Aug. 6, 1946 Cuenco Borromeo, Crispin Borromeo, Vitaliana Borromeo and e. Andres Borromeo, who died on Jan. 3, 1923, but survived the heirs of Carlos Borromeo represented by Jose Talam filed by his children: oppositions to this claim. aa. Maria Borromeo Atega bb. Luz Borromeo hereditary rights to Fortunato Borromeo had lost the same rights, cc. Hermenegilda Borromeo Nonnenkamp declared the latter as entitled to 5/9 of the estate of Vito Borromeo. dd. Rosario Borromeo A motion for reconsideration of this order was denied on July 7, 1975. ee. Fe Borromeo Queroz In the present petition, the petitioner seeks to annul and set aside the On April 10, 1969, the trial court, invoking Art. 972 of the Civil Code, trial court's order dated December 24, 1974, declaring respondent issued an order declaring the following, to the exclusion of all others, as Fortunato Borromeo entitled to 5/9 of the estate of Vito Borromeo and the intestate heirs of the deceased Vito Borromeo: the July 7, 1975 order, denying the motion for reconsideration. 1. Jose Cuenco Borromeo The petitioner argues that the trial court had no jurisdiction to take 2. Judge Crispin Borromeo cognizance of the claim of respondent Fortunato Borromeo because it is 3. Vitaliana Borromeo not a money claim against the decedent but a claim for properties, real 4. Patrocinio Borromeo Herrera and personal, which constitute all of the shares of the heirs in the 5. Salud Borromeo decedent's estate, heirs who allegedly waived their rights in his favor. 6. Asuncion Borromeo The claim of the private respondent under the waiver agreement, 7. Marcial Borromeo according to the petitioner, may be likened to that of a creditor of the 8. Amelinda Borromeo de Talam, and heirs which is improper. He alleges that the claim of the private 9. The heirs of Canuto Borromeo respondent under the waiver agreement was filed beyond the time The court also ordered that the assets of the intestate estate of Vito allowed for filing of claims as it was filed only sometime in 1973, after Borromeo shall be divided into 4/9 and 5/9 groups and distributed in there had been a declaration of heirs (April 10, 1969), an agreement of equal and equitable shares among the 9 abovenamed declared partition (April 30, 1969), the approval of the agreement of partition and intestate heirs. an order directing the administrator to partition the estate (August 15, On April 21 and 30, 1969, the declared heirs, with the exception of 1969), when in a mere memorandum, the existence of the waiver Patrocinio B. Herrera, signed an agreement of partition of the properties agreement was brought out. of the deceased Vito Borromeo which was approved by the trial court, in It is further argued by the petitioner that the document entitled " waiver its order of August 15, 1969. In this same order, the trial court ordered of Hereditary Rights" executed on July 31, 1967, aside from having the administrator, Atty Jesus Gaboya, Jr., to partition the properties of been cancelled and revoked on June 29, 1968, by Tomas L. Borromeo, the deceased in the way and manner they are divided and partitioned in Fortunato Borromeo and Amelia Borromeo, is without force and effect the said Agreement of Partition and further ordered that 40% of the because there can be no effective waiver of hereditary rights before market value of the 4/9 and 5/9 of the estate shall be segregated. All there has been a valid acceptance of the inheritance the heirs intend to attorney's fees shall be taken and paid from this segregated portion. transfer. Pursuant to Article 1043 of the Civil Code, to make acceptance On August 25, 1972, respondent Fortunato Borromeo, who had earlier or repudiation of inheritance valid, the person must be certain of the claimed as heir under the forged will, filed a motion before the trial court death of the one from whom he is to inherit and of his right to the praying that he be declared as one of the heirs of the deceased Vito inheritance. Since the petitioner and her co-heirs were not certain of Borromeo, alleging that he is an illegitimate son of the deceased and their right to the inheritance until they were declared heirs, their rights that in the declaration of heirs made by the trial court, he was omitted, in were, therefore, uncertain. This view, according to the petitioner, is also disregard of the law making him a forced heir entitled to receive a supported by Article 1057 of the same Code which directs heirs, legitime like all other forced heirs. As an acknowledged illegitimate devicees, and legatees to signify their acceptance or repudiation within child, he stated that he was entitled to a legitime equal in every case to thirty days after the court has issued an order for the distribution of the four-fifths of the legitime of an acknowledged natural child. estate. Finding that the motion of Fortunato Borromeo was already barred by Respondent Fortunato Borromeo on the other hand, contends that the order of the court dated April 12, 1969 declaring the persons named under Article 1043 of the Civil Code there is no need for a person to be therein as the legal heirs of the deceased Vito Borromeo, the court first declared as heir before he can accept or repudiate an inheritance. dismissed the motion on June 25, 1973. What is required is that he must first be certain of the death of the Fortunato Borromeo filed a motion for reconsideration. In the person from whom he is to inherit and that he must be certain of his memorandum he submitted to support his motion for reconsideration, right to the inheritance. He points out that at the time of the signing of Fortunato changed the basis for his claim to a portion of the estate. He the waiver document on July 31, 1967, the signatories to the waiver asserted and incorporated a Waiver of Hereditary Rights dated July 31, document were certain that Vito Borromeo was already dead as well as 1967, supposedly signed by Pilar N. Borromeo, Maria B. Putong, Jose of their rights to the inheritance as shown in the waiver document itself. Borromeo, Canuto V. Borromeo, Jr., Salud Borromeo, Patrocinio With respect to the issue of jurisdiction of the trial court to pass upon the Borromeo-Herrera, Marcial Borromeo, Asuncion Borromeo, Federico V. validity of the waiver of hereditary rights, respondent Borromeo asserts Borromeo, Consuelo B. Morales, Remedios Alfonso and Amelinda B. that since the waiver or renunciation of hereditary rights took place after Talam In the waiver, five of the nine heirs relinquished to Fortunato their the court assumed jurisdiction over the properties of the estate it shares in the disputed estate. The motion was opposed on the ground partakes of the nature of a partition of the properties of the estate that the trial court, acting as a probate court, had no jurisdiction to take needing approval of the court because it was executed in the course of cognizance of the claim; that respondent Fortunato Borromeo is the proceedings. lie further maintains that the probate court loses estopped from asserting the waiver agreement; that the waiver jurisdiction of the estate only after the payment of all the debts of the agreement is void as it was executed before the declaration of heirs; estate and the remaining estate is distributed to those entitled to the that the same is void having been executed before the distribution of same. the estate and before the acceptance of the inheritance; and that it is The prevailing jurisprudence on waiver of hereditary rights is that "the void ab initio and inexistent for lack of subject matter. properties included in an existing inheritance cannot be considered as On December 24, 1974, after due hearing, the trial court concluding that belonging to third persons with respect to the heirs, who by fiction of law the five declared heirs who signed the waiver agreement assigning their continue the personality of the former. Nor do such properties have the character of future property, because the heirs acquire a right to succession from the moment of the death of the deceased, by principle affirmed the decision of the lower court on March 30, 1967, in G.R. No. established in article 657 and applied by article 661 of the Civil Code, L-18498. Subsequently, several parties came before the lower court according to which the heirs succeed the deceased by the mere fact of filing claims or petitions alleging themselves as heirs of the intestate death. More or less, time may elapse from the moment of the death of estate of Vito Borromeo. We see no impediment to the trial court in the deceased until the heirs enter into possession of the hereditary exercising jurisdiction and trying the said claims or petitions. Moreover, property, but the acceptance in any event retroacts to the moment of the jurisdiction of the trial court extends to matters incidental and the death, in accordance with article 989 of the Civil Code. The right is collateral to the exercise of its recognized powers in handling the vested, although conditioned upon the adjudication of the settlement of the estate. corresponding hereditary portion." (Osorio v. Osorio and Ynchausti In view of the foregoing, the questioned order of the trial court dated Steamship Co., 41 Phil., 531). The heirs, therefore, could waive their December 24, 1974, is hereby SET ASIDE. hereditary rights in 1967 even if the order to partition the estate was G.R. No. 55000 issued only in 1969. This case was originally an appeal to the Court of Appeals from an In this case, however, the purported "Waiver of Hereditary Rights" order of the Court of First Instance of Cebu, Branch 11, dated cannot be considered to be effective. For a waiver to exist, three December 24, 1974, declaring the waiver document earlier discussed in elements are essential: (1) the existence of a right; (2) the knowledge of G.R. No. 41171 valid. The appellate court certified this case to this the existence thereof; and (3) an intention to relinquish such right. Court as the questions raised are all of law. (People v. Salvador, (CA) 53 O.G. No. 22, p. 8116, 8120). The intention The appellants not only assail the validity of the waiver agreement but to waive a right or advantage must be shown clearly and convincingly, they also question the jurisdiction of the lower court to hear and decide and when the only proof of intention rests in what a party does, his act the action filed by claimant Fortunato Borromeo. should be so manifestly consistent with, and indicative of an intent to, The appellants argue that when the waiver of hereditary right was voluntarily relinquish the particular right or advantage that no other executed on July 31, 1967, Pilar Borromeo and her children did not yet reasonable explanation of his conduct is possible (67 C.J., 311). possess or own any hereditary right in the intestate estate of the (Fernandez v. Sebido, et al., 70 Phil., 151, 159). deceased Vito Borromeo because said hereditary right was only The circumstances of this case show that the signatories to the waiver acquired and owned by them on April 10, 1969, when the estate was document did not have the clear and convincing intention to relinquish ordered distributed. their rights, Thus: (1) On October 27, 1967. Fortunato, Tomas, and They further argue that in contemplation of law, there is no such Amelia Borromeo filed a pleading entitled "Compliance" wherein they contract of waiver of hereditary right in the present case because there submitted a proposal for the amicable settlement of the case. In that was no object, which is hereditary right, that could be the subject matter Compliance, they proposed to concede to all the eight (8) intestate heirs of said waiver, and, therefore, said waiver of hereditary right was not of Vito Borromeo all properties, personal and real, including all cash and only null and void ab initio but was inexistent. sums of money in the hands of the Special Administrator, as of October With respect to the issue of jurisdiction, the appellants contend that 31, 1967, not contested or claimed by them in any action then pending without any formal pleading filed by the lawyers of Fortunato Borromeo in the Court of First Instance of Cebu. In turn, the heirs would waive and for the approval of the waiver agreement and without notice to the concede to them all the 14 contested lots. In this document, the parties concerned, two things which are necessary so that the lower respondent recognizes and concedes that the petitioner, like the other court would be vested with authority and jurisdiction to hear and decide signatories to the waiver document, is an heir of the deceased Vito the validity of said waiver agreement, nevertheless, the lower court set Borromeo, entitled to share in the estate. This shows that the "Waiver of the hearing on September 25, 1973 and without asking for the requisite Hereditary Rights" was never meant to be what the respondent now pleading. This resulted in the issuance of the appealed order of purports it to be. Had the intent been otherwise, there would not be any December 24, 1974, which approved the validity of the waiver reason for Fortunato, Tomas, and Amelia Borromeo to mention the agreement. The appellants contend that this constitutes an error in the heirs in the offer to settle the case amicably, and offer to concede to exercise of jurisdiction. them parts of the estate of the deceased; (2) On April 21 and 30, 1969, The appellee on the other hand, maintains that by waiving their the majority of the declared heirs executed an Agreement on how the hereditary rights in favor of Fortunato Borromeo, the signatories to the estate they inherited shall be distributed. This Agreement of Partition waiver document tacitly and irrevocably accepted the inheritance and by was approved by the trial court on August 15, 1969; (3) On June 29, virtue of the same act, they lost their rights because the rights from that 1968, the petitioner, among others, signed a document entitled Deed of moment on became vested in Fortunato Borromeo. Assignment" purporting to transfer and assign in favor of the respondent It is also argued by the appellee that under Article 1043 of the Civil and Tomas and Amelia Borromeo all her (Patrocinio B. Herrera's) Code there is no need for a person to be declared as heir first before he rights, interests, and participation as an intestate heir in the estate of can accept or repudiate an inheritance. What is required is that he is the deceased Vito Borromeo. The stated consideration for said certain of the death of the person from whom he is to inherit, and of his assignment was P100,000.00; (4) On the same date, June 29, 1968, right to the inheritance. At the time of the signing of the waiver the respondent Tomas, and Amelia Borromeo (assignees in the document on July 31, 1967, the signatories to the waiver document aforementioned deed of assignment) in turn executed a "Deed of were certain that Vito Borromeo was already dead and they were also Reconveyance" in favor of the heirs-assignors named in the same deed certain of their right to the inheritance as shown by the waiver document of assignment. The stated consideration was P50,000.00; (5) A itself. Cancellation of Deed of Assignment and Deed of Reconveyance was On the allegation of the appellants that the lower court did not acquire signed by Tomas Borromeo and Amelia Borromeo on October 15, 1968, jurisdiction over the claim because of the alleged lack of a pleading while Fortunato Borromeo signed this document on March 24, 1969. invoking its jurisdiction to decide the claim, the appellee asserts that on With respect to the issue of jurisdiction, we hold that the trial court had August 23, 1973, the lower court issued an order specifically calling on jurisdiction to pass upon the validity of the waiver agreement. It must be all oppositors to the waiver document to submit their comments within noted that in Special Proceedings No. 916-R the lower court disallowed ten days from notice and setting the same for hearing on September 25, the probate of the will and declared it as fake. Upon appeal, this Court 1973. The appellee also avers that the claim as to a 5/9 share in the inheritance involves no question of title to property and, therefore, the As stated in G.R. No. 41171, on April 21 and 30, 1969, the declared probate court can decide the question. heirs, with the exception of Patrocinio B. Herrera, signed an agreement The issues in this case are similar to the issues raised in G.R. No. of partition of the properties of the deceased Vito Borromeo which was 41171. The appellants in this case, who are all declared heirs of the late approved by the trial court, in its order dated August 15, 1969. In this Vito Borromeo are contesting the validity of the trial court's order dated same order, the trial court ordered the administrator, Atty. Jesus December 24, 1974, declaring Fortunato Borromeo entitled to 5/9 of the Gaboya, Jr., to partition the properties of the deceased in the way and estate of Vito Borromeo under the waiver agreement. manner they are divided and partitioned in the said Agreement of As stated in G.R. No. 41171, the supposed waiver of hereditary rights Partition and further ordered that 40% of the market value of the 4/9 and can not be validated. The essential elements of a waiver, especially the 5/9 of the estate shall be segregated and reserved for attorney's fees. clear and convincing intention to relinquish hereditary rights, are not According to the manifestation of Judge Francisco Burgos dated July 5, found in this case. 1982, (p. 197, Rollo, G. R. No. 41171) his court has not finally The October 27, 1967 proposal for an amicable settlement conceding to distributed to the nine (9) declared heirs the properties due to the all the eight (8) intestate heirs various properties in consideration for the following circumstances: heirs giving to the respondent and to Tomas, and Amelia Borromeo the 1. The court's determination of the market value of the estate fourteen (14) contested lots was filed inspite of the fact that on July 31, in order to segregate the 40% reserved for attorney's fees; 1967, some of the heirs had allegedly already waived or sold their 2. The order of December 24, 1974, declaring Fortunato hereditary rights to the respondent. Borromeo as beneficiary of the 5/9 of the estate because of The agreement on how the estate is to be distributed, the June 29, the waiver agreement signed by the heirs representing the 5/9 1968 deed of assignment, the deed of reconveyance, and the group which is still pending resolution by this Court (G.R. No. subsequent cancellation of the deed of assignment and deed of 4117 1); reconveyance all argue against the purported waiver of hereditary 3. The refusal of administrator Jose Cuenco Borromeo to rights. render his accounting; and Concerning the issue of jurisdiction, we have already stated in G.R. No. 4. The claim of Marcela Villegas for 1/2 of the estate causing 41171 that the trial court acquired jurisdiction to pass upon the validity annotations of notices of lis pendens on the different titles of of the waiver agreement because the trial court's jurisdiction extends to the properties of the estate. matters incidental and collateral to the exercise of its recognized powers Since there are still real properties of the estate that were not vet in handling the settlement of the estate. distributed to some of the declared heirs, particularly the 5/9 group of The questioned order is, therefore, SET ASIDE. heirs due to the pending resolution of the waiver agreement, this Court G.R. No. 62895 in its resolution of June 15, 1983, required the judge of the Court of First A motion dated April 28, 1972, was filed by Atty. Raul M. Sesbreno, Instance of Cebu, Branch 11, to expedite the determination of Special representative of some of the heirs-distributees, praying for the Proceedings No. 916-R and ordered the co-administrator Jose Cuenco immediate closure of Special Proceeding No. 916-R. A similar motion Borromeo to submit an inventory of real properties of the estate and to dated May 29, 1979 was filed by Atty. Jose Amadora. Both motions render an accounting of cash and bank deposits realized from rents of were grounded on the fact that there was nothing more to be done after several properties. the payment of all the obligations of the estate since the order of The matter of attorney's fees shall be discussed in G.R. No. 65995. partition and distribution had long become final. Considering the pronouncements stated in: Alleging that respondent Judge Francisco P. Burgos failed or refused to 1. G.R. No. 41171 & G.R. No. 55000, setting aside the Order resolve the aforesaid motions, petitioner Jose Cuenco Borromeo-filed a of the trial court dated December 24, 1974; petition for mandamus before the Court of Appeals to compel the 2. G.R. No. 63818, denying the petition for review seeking to respondent judge to terminate and close Special Proceedings No. 916- modify the decision of the Intermediate Appellate Court R. insofar as it disqualifies and inhibits Judge Francisco P. Finding that the inaction of the respondent judge was due to pending Burgos from further hearing the Intestate Estate of Vito motions to compel the petitioner, as co-administrator, to submit an Borromeo and ordering the remand of the case to the inventory of the real properties of the estate and an accounting of the Executive,Judge of the Regional trial Court of Cebu for re- cash in his hands, pending claims for attorney's fees, and that raffling; and mandamus will not lie to compel the performance of a discretionary 3. G.R. No. 65995, granting the petition to restrain the function, the appellate court denied the petition on May 14, 1982. The respondents from further acting on any and all incidents in petitioner's motion for reconsideration was likewise denied for lack of Special proceedings No. 916-11 because of the affirmation of merit. Hence, this petition. the decision of the Intermediate Appellate Court in G.R. No. The petitioner's stand is that the inaction of the respondent judge on the 63818. motion filed on April 28, 1972 for the closure of the administration the trial court may now terminate and close Special Proceedings No. proceeding cannot be justified by the filing of the motion for inventory 916-R, subject to the submission of an inventory of the real properties of and accounting because the latter motion was filed only on March 2, the estate and an accounting of the call and bank deposits of the 1979. He claimed that under the then Constitution, it is the duty of the petitioner, as co-administrator of the estate, if he has not vet done so, respondent judge to decide or resolve a case or matter within three as required by this Court in its Resolution dated June 15, 1983. This months from the date of its submission. must be effected with all deliberate speed. The respondents contend that the motion to close the administration G.R. No. 63818 had already been resolved when the respondent judge cancelled all On June 9, 1979, respondents Jose Cuenco Borromeo and Petra 0. settings of all incidents previously set in his court in an order dated June Borromeo filed a motion for inhibition in the Court of First Instance of 4, 1979, pursuant to the resolution and restraining order issued by the Cebu, Branch 11, presided over by Judge Francisco P. Burgos to inhibit Court of Appeals enjoining him to maintain status quo on the case. the judge from further acting in Special Proceedings No. 916-R. 'The movants alleged, among others, the following: xxx xxx xxx 16. With all due respect, petitioners regret the necessity of 6. To keep the agitation to sell moving, Atty. Antigua filed a having to state herein that respondent Hon. Francisco P. motion for the production of the certificates of title and to Burgos has shown undue interest in pursing the sale initiated deposit the same with the Branch Clerk of Court, presumably by Atty. Domingo L. Antigua, et al. Significantly, a brother of for the ready inspection of interested buyers. Said motion was respondent Hon. Francisco P. Burgos is married to a sister of granted by the Hon. Court in its order of October 2, 1978 Atty. Domingo L. Antigua. which, however, became the subject of various motions for 17. Evidence the proposed sale of the entire properties of the reconsideration from heirs-distributees who contended that as estate cannot be legally done without the conformity of the owners they cannot be deprived of their titles for the flimsy heirs-distributees because the certificates of title are already reasons advanced by Atty, Antigua. In view of the motions for registered in their names Hence, in pursuit of the agitation to reconsideration, Atty Antigua ultimately withdraw his motions sell, respondent Hon. Francisco P. Burgos urged the heirs- for production of titles. distributees to sell the entire property based on the rationale 7. The incident concerning the production of titles triggered that proceeds thereof deposited in the bank will earn interest another incident involving Atty. Raul H. Sesbreno who was more than the present income of the so called estate. Most of then the counsel of herein movants Petra O. Borromeo and the heirs-distributees, however. have been petitioner timid to Amelinda B. Talam In connection with said incident, Atty. say their piece. Only the 4/9 group of heirs led by Jose Sesbreno filed a pleading which the tion. presiding, Judge Cuenco Borromeo have had the courage to stand up and Considered direct contempt because among others, Atty. refuse the proposal to sell clearly favored by respondent Hon. Sesbreno insinuated that the Hon. Presiding Judge stands to Francisco P. Burgos. receive "fat commission" from the sale of the entire property. xxx xxx xxx Indeed, Atty. Sesbreno was seriously in danger of being 20. Petitioners will refrain from discussing herein the merits of declared in contempt of court with the dim prospect of the shotgun motion of Atty. Domingo L. Antigua as well as suspension from the practice of his profession. But obviously other incidents now pending in the court below which smack to extricate himself from the prospect of contempt and of harassment against the herein petitioners. For, regardless suspension. Atty. Sesbreno chose rapproachment and of the merits of said incidents, petitioners respectfully contend ultimately joined forces with Atty. Antigua, et al., who, that it is highly improper for respondent Hon. Francisco P. together, continued to harass administrator Burgos to continue to preside over Sp. Proc. No. 916-R by xxx xxx xxx reason of the following circumstances: 9. The herein movants are informed and so they allege, that a (a) He has shown undue interest in the sale of the brother of the Hon. Presiding Judge is married to a sister of properties as initiated by Atty. Domingo L. Antigua Atty. Domingo L. Antigua. whose sister is married to a brother of respondent. 10. There is now a clear tug of war bet ween Atty. Antigua, et (b) The proposed sale cannot be legally done al. who are agitating for the sale of the entire estate or to buy without the conformity of the heirs-distributees, and out the individual heirs, on the one hand, and the herein petitioners have openly refused the sale, to the movants, on the other, who are not willing to sell their great disappointment of respondent. distributive shares under the terms and conditions presently (c) The shot gun motion of Atty. Antigua and similar proposed. In this tug of war, a pattern of harassment has incidents are clearly intended to harass and become apparent against the herein movants, especially Jose embarrass administrator Jose Cuenco Borromeo in Cuenco Borromeo. Among the harassments employed by Atty order to pressure him into acceding to the proposed Antigua et al. are the pending motions for the removal of sale. administrator Jose Cuenco Borromeo, the subpoena duces (d) Respondent has shown bias and prejudice tecum issued to the bank which seeks to invade into the against petitioners by failing to resolve the claim for privacy of the personal account of Jose Cuenco Borromeo, attorney's fees filed by Jose Cuenco Borromeo and and the other matters mentioned in paragraph 8 hereof. More the late Crispin Borromeo. Similar claims by the harassment motions are expected until the herein movants other lawyers were resolved by respondent after shall finally yield to the proposed sale. In such a situation, the petitioners refused the proposed sale. (pp. 41-43, herein movants beg for an entirely independent and impartial Rollo) judge to pass upon the merits of said incidents. On March 1, 1983, the appellate court rendered its decision granting the 11. Should the Hon. Presiding Judge continue to sit and take petition for certiorari and/or prohibition and disqualifying Judge cognizance of this proceeding, including the incidents above- Francisco P. Burgos from taking further cognizance of Special mentioned, he is liable to be misunderstood as being biased Proceedings No. 916-R. The court also ordered the transmission of the in favor of Atty Antigua, et al. and prejudiced against the records of the case to the Executive Judge of the Regional Trial Court herein movants. Incidents which may create this impression of Region VII for re-raffling. need not be enumerated herein. (pp. 39-41, Rollo) A motion for reconsideration of the decision was denied by the appellate The motion for inhibition was denied by Judge Francisco P. Burgos. court on April 11, 1983. Hence, the present petition for review seeking Their motion for reconsideration having been denied, the private to modify the decision of the Intermediate Appellate Court insofar as it respondents filed a petition for certiorari and/or prohibition with disqualifies and inhibits Judge Francisco P. Burgos from further hearing preliminary injunction before the Intermediate Appellate Court. the case of Intestate Estate of Vito Borromeo and orders the remand of In the appellate court, the private respondents alleged, among others, the case to the Executive Judge of the Regional Trial Court of Cebu for the following: re-raffling. xxx xxx xxx The principal issue in this case has become moot and academic because Judge Francisco P. Burgos decided to retire from the Regional Trial Court of Cebu sometime before the latest reorganization of the Consequently. the Branch Clerk of Court issued a subpoena duces judiciary. However, we decide the petition on its merits for the guidance tecum commanding Atty. Jose Cuenco Borromeo to bring and produce of the judge to whom this case will be reassigned and others the titles in court. concerned. All the above-incidents were set for hearing on June 7, 1979 but on The petitioners deny that respondent Jose Cuenco Borromeo has been June 14, 1979, before the date of the hearing, Judge Burgos issued an harassed. They contend that Judge Burgos has benn shown unusual order denying the private respondents' motion for reconsideration and interest in the proposed sale of the entire estate for P6,700,000.00 in the motion to quash the subpoena.1avvphi1 favor of the buyers of Atty. Antigua. They claim that this disinterest is It was further argued by the private respondents that if ,judge Francisco shown by the judge's order of March 2, 1979 assessing the property of P. Burgos is not inhibited or disqualified from trying Sp. Proc. No. 916- the estate at P15,000,000.00. They add that he only ordered the R, there would be a miscarriage of justice Because for the past twelve administrator to sell so much of the properties of the estate to pay the years, he had not done anything towards the closure of the estate attorney's fees of the lawyers-claimants. To them, the inhibition of proceedings except to sell the properties of the heirs-distributees as Judge Burgos would have been unreasonable because his orders initiated by petitioner Domingo L. Antigua at 6.7 million pesos while the against the failure of Jose Cuenco Borromeo, as administrator, to give Intestate Court had already evaluated it at 15 million pesos. an accounting and inventory of the estate were all affirmed by the The allegations of the private respondents in their motion for inhibition, appellate court. They claim that the respondent court, should also have more specifically, the insistence of the trial judge to sell the entire estate taken judicial notice of the resolution of this Court directing the said at P6,700,000.00, where 4/9 group of heirs objected, cannot easily be judge to "expedite the settlement and adjudication of the case" in G.R. ignored. Suspicion of partiality on the part of a trial judge must be No. 54232. And finally, they state that the disqualification of judge avoided at all costs. In the case of Bautista v. Rebeuno (81 SCRA 535), Burgos would delay further the closing of the administration proceeding this Court stated: as he is the only judge who is conversant with the 47 volumes of the ... The Judge must maintain and preserve the trust and faith records of the case. of the parties litigants. He must hold himself above reproach Respondent Jose Cuenco Borromeo, to show that he had been and suspicion. At the very first sign of lack of faith and trust to harassed. countered that Judge Burgos appointed Ricardo V. Reyes as his actions, whether well grounded or not, the Judge has no co-administrator of the estate on October 11, 1972, yet Borromeo was other alternative but inhibit himself from the case. A judge singled out to make an accounting of what t he was supposed to have may not be legally Prohibited from sitting in a litigation, but received as rentals for the land upon which the Juliana Trade Center is when circumstances appear that will induce doubt to his erected, from January, 1977 to February 1982, inclusive, without honest actuations and probity in favor or of either partly or mentioning the withholding tax for the Bureau of Internal Revenue. In incite such state of mind, he should conduct a careful self- order to bolster the agitation to sell as proposed by Domingo L. Antigua, examination. He should exercise his discretion in a way that Judge Burgos invited Antonio Barredo, Jr., to a series of conferences the people's faith in the Courts of Justice is not impaired, "The from February 26 to 28, 1979. During the conferences, Atty. Antonio better course for the Judge under such circumstances is to Barredo, Jr., offered to buy the shares of the heirs-distributees disqualify himself "That way he avoids being misunderstood, presumably to cover up the projected sale initiated by Atty. Antigua. his reputation for probity and objectivity is preserve ed. what On March 2, 1979, or two days after the conferences, a motion was filed is more important, the Ideal of impartial administration of by petitioner Domingo L. Antigua praying that Jose Cuenco Borromeo justice is lived up to. be required to file an inventory when he has already filed one to account In this case, the fervent distrust of the private respondents is based on for cash, a report on which the administrators had already rendered: sound reasons. As Earlier stated, however, the petition for review and to appear and be examined under oath in a proceeding conducted seeking to modify the decision of the Intermediate Appellate Court by Judge Burgos lt was also prayed that subpoena duces tecum be insofar as it disqualifies and inhibits Judge Francisco P. Burgos from issued for the appearance of the Manager of the Consolidated Bank further hearing the Intestate Estate of Vito Borromeo case and ordering and Trust Co., bringing all the bank records in the name of Jose Cuenco the remand of the case to the Executive Judge of the Regional Trial Borromeo jointly with his wife as well as the appearance of heirs- Court for re-raffling should be DENIED for the decision is not only valid distributees Amelinda Borromeo Talam and another heir distributee but the issue itself has become moot and academic. Vitaliana Borromeo. Simultaneously with the filing of the motion of G.R. No. 65995 Domingo Antigua, Atty. Raul H. Sesbreno filed a request for the The petitioners seek to restrain the respondents from further acting on issuance of subpoena duces tecum to the Manager of Consolidated any and all incidents in Special Proceedings No. 916-R during the Bank and 'Trust Co., Inc.; Register of Deeds of Cebu City; Register of pendency of this petition and No. 63818. They also pray that all acts of Deeds for the Province of Cebu and another subpoena duces tecum to the respondents related to the said special proceedings after March 1, Atty. Jose Cuenco Borromeo. 1983 when the respondent Judge was disqualified by the appellate On the same date, the Branch Clerk of Court issued a subpoena duces court be declared null and void and without force and effect whatsoever. tecum to the Managert of the bank, the Register of deeds for the City of The petitioners state that the respondent Judge has set for hearing all Cebu, the Register of Deeds for the Province, of Cebu. and to Jose incidents in Special Proceedings No. 916-R, including the reversion Cuenco Borromeo. from the heirs-distributees to the estate, of the distributed properties On the following day, March 3, 1979, Atty Gaudioso v. Villagonzalo in already titled in their names as early as 1970, notwithstanding the behalf of the heirs of Marcial Borromeo who had a common cause with pending inhibition case elevated before this Court which is docketed as Atty Barredo, Jr., joined petitioner Domingo L. Antigua by filing a motion G.R. No. 63818. for relief of the administrator. The petitioners further argue that the present status of Special On March 5, 1979, Atty. Villagonzalo filed a request for the issuance of Proceeding No. 916-R requires only the appraisal of the attorney's fees a subpoena duces tecum to private respondent Jose Cuenco Borromeo of the lawyers-claimants who were individually hired by their respective to bring and produce all the owners" copies of the titles in the court heirs-clients, so their attorney's fees should be legally charged against presided order by Judge Burgos. their respective clients and not against the estate. On the other hand, the respondents maintain that the petition is a dilatory one and barred by res judicata because this Court on July 8, 1981, in G.R. No. 54232 directed the respondent Judge to expedite the settlement and liquidation of the decedent's estate. They claim that this resolution, which was already final and executory, was in effect reversed and nullified by the Intermediate Appellate Court in its case- AC G.R.-No. SP - 11145 — when it granted the petition for certiorari and or prohibition and disqualified Judge Francisco P. Burgos from taking further cognizance of Special Proceedings No. 916R as well as ordering the transmission of the records of the case to the Executive Judge of the Regional Trial Court of Region VII for re-raffling on March 1, 1983, which was appealed to this Court by means of a Petition for Review (G.R. No. 63818). We agree with the petitioners' contention that attorney's fees are not the obligation of the estate but of the individual heirs who individually hired their respective lawyers. The portion, therefore, of the Order of August 15, 1969, segregating the exhorbitantly excessive amount of 40% of the market value of the estate from which attorney's fees shall be taken and paid should be deleted. Due to our affirmance of the decision of the Intermediate Appellate Court in G.R. No. 63818, we grant the petition. WHEREFORE, — (1) In G.R. No. 41171, the order of the respondent judge G.R. No. L-43082 June 18, 1937 dated December 24, 1974, declaring the respondent entitled PABLO LORENZO, as trustee of the estate of Thomas Hanley, to 5/9 of the estate of the late Vito Borromeo and the order deceased, plaintiff-appellant, dated July 7, 1975, denying the petitioner's motion for vs. reconsideration of the aforementioned order are hereby SET JUAN POSADAS, JR., Collector of Internal Revenue, defendant- ASIDE for being NULL and VOID; appellant. (2) In G.R. No. 55000, the order of the trial court declaring the Pablo Lorenzo and Delfin Joven for plaintiff-appellant. waiver document valid is hereby SET ASIDE; Office of the Solicitor-General Hilado for defendant-appellant. (3) In G.R. No. 63818, the petition is hereby DENIED. The LAUREL, J.: issue in the decision of the Intermediate Appellate Court On October 4, 1932, the plaintiff Pablo Lorenzo, in his capacity as disqualifying and ordering the inhibition of Judge Francisco P. trustee of the estate of Thomas Hanley, deceased, brought this action in Burgos from further hearing Special Proceedings No. 916-R is the Court of First Instance of Zamboanga against the defendant, Juan declared moot and academic. The judge who has taken over Posadas, Jr., then the Collector of Internal Revenue, for the refund of the sala of retired Judge Francisco P. Burgos shall the amount of P2,052.74, paid by the plaintiff as inheritance tax on the immediately conduct hearings with a view to terminating the estate of the deceased, and for the collection of interst thereon at the proceedings. In the event that the successor-judge is likewise rate of 6 per cent per annum, computed from September 15, 1932, the disqualified, the order of the Intermediate Appellate Court date when the aforesaid tax was [paid under protest. The defendant set directing the Executive Judge of the Regional Trial Court of up a counterclaim for P1,191.27 alleged to be interest due on the tax in Cebu to re-raffle the case shall be implemented: question and which was not included in the original assessment. From (4) In G.R. No. 65995, the petition is hereby GRANTED. 'The the decision of the Court of First Instance of Zamboanga dismissing issue seeking to restrain Judge Francisco P. Burgos from both the plaintiff's complaint and the defendant's counterclaim, both further acting in G.R. No. 63818 is MOOT and ACADEMIC: parties appealed to this court. (5) In G.R, No, 62895, the trial court is hereby ordered to It appears that on May 27, 1922, one Thomas Hanley died in speedily terminate the close Special Proceedings No. 916-R, Zamboanga, Zamboanga, leaving a will (Exhibit 5) and considerable subject to the submission of an inventory of the real properties amount of real and personal properties. On june 14, 1922, proceedings of the estate and an accounting of the cash and bank for the probate of his will and the settlement and distribution of his deposits by the petitioner-administrator of the estate as estate were begun in the Court of First Instance of Zamboanga. The will required by this Court in its Resolution dated June 15, 1983; was admitted to probate. Said will provides, among other things, as and follows: (6) The portion of the Order of August 15, 1969, segregating 4. I direct that any money left by me be given to my nephew 40% of the market value of the estate from which attorney's Matthew Hanley. fees shall be taken and paid should be, as it is hereby 5. I direct that all real estate owned by me at the time of my DELETED. The lawyers should collect from the heirs- death be not sold or otherwise disposed of for a period of ten distributees who individually hired them, attorney's fees (10) years after my death, and that the same be handled and according to the nature of the services rendered but in managed by the executors, and proceeds thereof to be given amounts which should not exceed more than 20% of the to my nephew, Matthew Hanley, at Castlemore, market value of the property the latter acquired from the Ballaghaderine, County of Rosecommon, Ireland, and that he estate as beneficiaries. be directed that the same be used only for the education of SO ORDERED. my brother's children and their descendants. 6. I direct that ten (10) years after my death my property be be satisfied? (b) Should the inheritance tax be computed on the basis of given to the above mentioned Matthew Hanley to be disposed the value of the estate at the time of the testator's death, or on its value of in the way he thinks most advantageous. ten years later? (c) In determining the net value of the estate subject to xxx xxx xxx tax, is it proper to deduct the compensation due to trustees? (d) What 8. I state at this time I have one brother living, named Malachi law governs the case at bar? Should the provisions of Act No. 3606 Hanley, and that my nephew, Matthew Hanley, is a son of my favorable to the tax-payer be given retroactive effect? (e) Has there said brother, Malachi Hanley. been deliquency in the payment of the inheritance tax? If so, should the The Court of First Instance of Zamboanga considered it proper for the additional interest claimed by the defendant in his appeal be paid by the best interests of ther estate to appoint a trustee to administer the real estate? Other points of incidental importance, raised by the parties in properties which, under the will, were to pass to Matthew Hanley ten their briefs, will be touched upon in the course of this opinion. years after the two executors named in the will, was, on March 8, 1924, (a) The accrual of the inheritance tax is distinct from the obligation to appointed trustee. Moore took his oath of office and gave bond on pay the same. Section 1536 as amended, of the Administrative Code, March 10, 1924. He acted as trustee until February 29, 1932, when he imposes the tax upon "every transmission by virtue of inheritance, resigned and the plaintiff herein was appointed in his stead. devise, bequest, gift mortis causa, or advance in anticipation of During the incumbency of the plaintiff as trustee, the defendant inheritance,devise, or bequest." The tax therefore is upon transmission Collector of Internal Revenue, alleging that the estate left by the or the transfer or devolution of property of a decedent, made effective deceased at the time of his death consisted of realty valued at P27,920 by his death. (61 C. J., p. 1592.) It is in reality an excise or privilege tax and personalty valued at P1,465, and allowing a deduction of P480.81, imposed on the right to succeed to, receive, or take property by or assessed against the estate an inheritance tax in the amount of under a will or the intestacy law, or deed, grant, or gift to become P1,434.24 which, together with the penalties for deliquency in payment operative at or after death. Acording to article 657 of the Civil Code, "the consisting of a 1 per cent monthly interest from July 1, 1931 to the date rights to the succession of a person are transmitted from the moment of of payment and a surcharge of 25 per cent on the tax, amounted to his death." "In other words", said Arellano, C. J., ". . . the heirs succeed P2,052.74. On March 15, 1932, the defendant filed a motion in the immediately to all of the property of the deceased ancestor. The testamentary proceedings pending before the Court of First Instance of property belongs to the heirs at the moment of the death of the ancestor Zamboanga (Special proceedings No. 302) praying that the trustee, as completely as if the ancestor had executed and delivered to them a plaintiff herein, be ordered to pay to the Government the said sum of deed for the same before his death." (Bondad vs. Bondad, 34 Phil., P2,052.74. The motion was granted. On September 15, 1932, the 232. See also, Mijares vs. Nery, 3 Phil., 195; Suilong & Co., vs. Chio- plaintiff paid said amount under protest, notifying the defendant at the Taysan, 12 Phil., 13; Lubrico vs. Arbado, 12 Phil., 391; Innocencio vs. same time that unless the amount was promptly refunded suit would be Gat-Pandan, 14 Phil., 491; Aliasas vs.Alcantara, 16 Phil., 489; Ilustre brought for its recovery. The defendant overruled the plaintiff's protest vs. Alaras Frondosa, 17 Phil., 321; Malahacan vs. Ignacio, 19 Phil., 434; and refused to refund the said amount hausted, plaintiff went to court Bowa vs. Briones, 38 Phil., 27; Osario vs. Osario & Yuchausti with the result herein above indicated. Steamship Co., 41 Phil., 531; Fule vs. Fule, 46 Phil., 317; Dais vs. Court In his appeal, plaintiff contends that the lower court erred: of First Instance of Capiz, 51 Phil., 396; Baun vs. Heirs of Baun, 53 I. In holding that the real property of Thomas Hanley, Phil., 654.) Plaintiff, however, asserts that while article 657 of the Civil deceased, passed to his instituted heir, Matthew Hanley, from Code is applicable to testate as well as intestate succession, it operates the moment of the death of the former, and that from the time, only in so far as forced heirs are concerned. But the language of article the latter became the owner thereof. 657 of the Civil Code is broad and makes no distinction between II. In holding, in effect, that there was deliquency in the different classes of heirs. That article does not speak of forced heirs; it payment of inheritance tax due on the estate of said does not even use the word "heir". It speaks of the rights of succession deceased. and the transmission thereof from the moment of death. The provision III. In holding that the inheritance tax in question be based of section 625 of the Code of Civil Procedure regarding the upon the value of the estate upon the death of the testator, authentication and probate of a will as a necessary condition to effect and not, as it should have been held, upon the value thereof transmission of property does not affect the general rule laid down in at the expiration of the period of ten years after which, article 657 of the Civil Code. The authentication of a will implies its due according to the testator's will, the property could be and was execution but once probated and allowed the transmission is effective to be delivered to the instituted heir. as of the death of the testator in accordance with article 657 of the Civil IV. In not allowing as lawful deductions, in the determination Code. Whatever may be the time when actual transmission of the of the net amount of the estate subject to said tax, the inheritance takes place, succession takes place in any event at the amounts allowed by the court as compensation to the moment of the decedent's death. The time when the heirs legally "trustees" and paid to them from the decedent's estate. succeed to the inheritance may differ from the time when the heirs V. In not rendering judgment in favor of the plaintiff and in actually receive such inheritance. "Poco importa", says Manresa denying his motion for new trial. commenting on article 657 of the Civil Code, "que desde el falleimiento The defendant-appellant contradicts the theories of the plaintiff and del causante, hasta que el heredero o legatario entre en posesion de assigns the following error besides: los bienes de la herencia o del legado, transcurra mucho o poco The lower court erred in not ordering the plaintiff to pay to the tiempo, pues la adquisicion ha de retrotraerse al momento de la muerte, defendant the sum of P1,191.27, representing part of the y asi lo ordena el articulo 989, que debe considerarse como interest at the rate of 1 per cent per month from April 10, complemento del presente." (5 Manresa, 305; see also, art. 440, par. 1, 1924, to June 30, 1931, which the plaintiff had failed to pay on Civil Code.) Thomas Hanley having died on May 27, 1922, the the inheritance tax assessed by the defendant against the inheritance tax accrued as of the date. estate of Thomas Hanley. From the fact, however, that Thomas Hanley died on May 27, 1922, it The following are the principal questions to be decided by this court in does not follow that the obligation to pay the tax arose as of the date. this appeal: (a) When does the inheritance tax accrue and when must it The time for the payment on inheritance tax is clearly fixed by section 1544 of the Revised Administrative Code as amended by Act No. 3031, in value. (61 C. J., pp. 1692, 1693; 26 R. C. L., p. 232; Blakemore and in relation to section 1543 of the same Code. The two sections follow: Bancroft, Inheritance Taxes, p. 137. See also Knowlton vs. Moore, 178 SEC. 1543. Exemption of certain acquisitions and U.S., 41; 20 Sup. Ct. Rep., 747; 44 Law. ed., 969.) "The right of the transmissions. — The following shall not be taxed: state to an inheritance tax accrues at the moment of death, and hence (a) The merger of the usufruct in the owner of the is ordinarily measured as to any beneficiary by the value at that time of naked title. such property as passes to him. Subsequent appreciation or (b) The transmission or delivery of the inheritance or depriciation is immaterial." (Ross, Inheritance Taxation, p. 72.) legacy by the fiduciary heir or legatee to the Our attention is directed to the statement of the rule in Cyclopedia of trustees. Law of and Procedure (vol. 37, pp. 1574, 1575) that, in the case of (c) The transmission from the first heir, legatee, or contingent remainders, taxation is postponed until the estate vests in donee in favor of another beneficiary, in accordance possession or the contingency is settled. This rule was formerly with the desire of the predecessor. followed in New York and has been adopted in Illinois, Minnesota, In the last two cases, if the scale of taxation appropriate to the Massachusetts, Ohio, Pennsylvania and Wisconsin. This rule, horever, new beneficiary is greater than that paid by the first, the is by no means entirely satisfactory either to the estate or to those former must pay the difference. interested in the property (26 R. C. L., p. 231.). Realizing, perhaps, the SEC. 1544. When tax to be paid. — The tax fixed in this defects of its anterior system, we find upon examination of cases and article shall be paid: authorities that New York has varied and now requires the immediate (a) In the second and third cases of the next appraisal of the postponed estate at its clear market value and the preceding section, before entrance into possession payment forthwith of the tax on its out of the corpus of the estate of the property. transferred. (In re Vanderbilt, 172 N. Y., 69; 69 N. E., 782; In re Huber, (b) In other cases, within the six months subsequent 86 N. Y. App. Div., 458; 83 N. Y. Supp., 769; Estate of Tracy, 179 N. Y., to the death of the predecessor; but if judicial 501; 72 N. Y., 519; Estate of Brez, 172 N. Y., 609; 64 N. E., 958; Estate testamentary or intestate proceedings shall be of Post, 85 App. Div., 611; 82 N. Y. Supp., 1079. Vide also, Saltoun vs. instituted prior to the expiration of said period, the Lord Advocate, 1 Peter. Sc. App., 970; 3 Macq. H. L., 659; 23 Eng. Rul. payment shall be made by the executor or Cas., 888.) California adheres to this new rule (Stats. 1905, sec. 5, p. administrator before delivering to each beneficiary 343). his share. But whatever may be the rule in other jurisdictions, we hold that a If the tax is not paid within the time hereinbefore prescribed, transmission by inheritance is taxable at the time of the predecessor's interest at the rate of twelve per centum per annum shall be death, notwithstanding the postponement of the actual possession or added as part of the tax; and to the tax and interest due and enjoyment of the estate by the beneficiary, and the tax measured by the unpaid within ten days after the date of notice and demand value of the property transmitted at that time regardless of its thereof by the collector, there shall be further added a appreciation or depreciation. surcharge of twenty-five per centum. (c) Certain items are required by law to be deducted from the appraised A certified of all letters testamentary or of admisitration shall gross in arriving at the net value of the estate on which the inheritance be furnished the Collector of Internal Revenue by the Clerk of tax is to be computed (sec. 1539, Revised Administrative Code). In the Court within thirty days after their issuance. case at bar, the defendant and the trial court allowed a deduction of It should be observed in passing that the word "trustee", appearing in only P480.81. This sum represents the expenses and disbursements of subsection (b) of section 1543, should read "fideicommissary" or "cestui the executors until March 10, 1924, among which were their fees and que trust". There was an obvious mistake in translation from the the proven debts of the deceased. The plaintiff contends that the Spanish to the English version. compensation and fees of the trustees, which aggregate P1,187.28 The instant case does fall under subsection (a), but under subsection (Exhibits C, AA, EE, PP, HH, JJ, LL, NN, OO), should also be deducted (b), of section 1544 above-quoted, as there is here no fiduciary heirs, under section 1539 of the Revised Administrative Code which provides, first heirs, legatee or donee. Under the subsection, the tax should have in part, as follows: "In order to determine the net sum which must bear been paid before the delivery of the properties in question to P. J. M. the tax, when an inheritance is concerned, there shall be deducted, in Moore as trustee on March 10, 1924. case of a resident, . . . the judicial expenses of the testamentary or (b) The plaintiff contends that the estate of Thomas Hanley, in so far as intestate proceedings, . . . ." the real properties are concerned, did not and could not legally pass to A trustee, no doubt, is entitled to receive a fair compensation for his the instituted heir, Matthew Hanley, until after the expiration of ten years services (Barney vs. Saunders, 16 How., 535; 14 Law. ed., 1047). But from the death of the testator on May 27, 1922 and, that the inheritance from this it does not follow that the compensation due him may lawfully tax should be based on the value of the estate in 1932, or ten years be deducted in arriving at the net value of the estate subject to tax. after the testator's death. The plaintiff introduced evidence tending to There is no statute in the Philippines which requires trustees' show that in 1932 the real properties in question had a reasonable commissions to be deducted in determining the net value of the estate value of only P5,787. This amount added to the value of the personal subject to inheritance tax (61 C. J., p. 1705). Furthermore, though a property left by the deceased, which the plaintiff admits is P1,465, testamentary trust has been created, it does not appear that the testator would generate an inheritance tax which, excluding deductions, interest intended that the duties of his executors and trustees should be and surcharge, would amount only to about P169.52. separated. (Ibid.; In re Vanneck's Estate, 161 N. Y. Supp., 893; 175 If death is the generating source from which the power of the estate to App. Div., 363; In re Collard's Estate, 161 N. Y. Supp., 455.) On the impose inheritance taxes takes its being and if, upon the death of the contrary, in paragraph 5 of his will, the testator expressed the desire decedent, succession takes place and the right of the estate to tax that his real estate be handled and managed by his executors until the vests instantly, the tax should be measured by the vlaue of the estate expiration of the period of ten years therein provided. Judicial expenses as it stood at the time of the decedent's death, regardless of any are expenses of administration (61 C. J., p. 1705) but, in State vs. subsequent contingency value of any subsequent increase or decrease Hennepin County Probate Court (112 N. W., 878; 101 Minn., 485), it was said: ". . . The compensation of a trustee, earned, not in the (See Sutherland, Statutory Construction, 361; Twine Co. vs. administration of the estate, but in the management thereof for the Worthington, 141 U. S., 468; 12 Sup. Ct., 55; Rice vs. U. S., 4 C. C. A., benefit of the legatees or devises, does not come properly within the 104; 53 Fed., 910; Com. vs. Standard Oil Co., 101 Pa. St., 150; State class or reason for exempting administration expenses. . . . Service vs. Wheeler, 44 P., 430; 25 Nev. 143.) Article 22 of the Revised Penal rendered in that behalf have no reference to closing the estate for the Code is not applicable to the case at bar, and in the absence of clear purpose of a distribution thereof to those entitled to it, and are not legislative intent, we cannot give Act No. 3606 a retroactive effect. required or essential to the perfection of the rights of the heirs or (e) The plaintiff correctly states that the liability to pay a tax may arise at legatees. . . . Trusts . . . of the character of that here before the court, a certain time and the tax may be paid within another given time. As are created for the the benefit of those to whom the property ultimately stated by this court, "the mere failure to pay one's tax does not render passes, are of voluntary creation, and intended for the preservation of one delinqent until and unless the entire period has eplased within the estate. No sound reason is given to support the contention that such which the taxpayer is authorized by law to make such payment without expenses should be taken into consideration in fixing the value of the being subjected to the payment of penalties for fasilure to pay his taxes estate for the purpose of this tax." within the prescribed period." (U. S. vs. Labadan, 26 Phil., 239.) (d) The defendant levied and assessed the inheritance tax due from the The defendant maintains that it was the duty of the executor to pay the estate of Thomas Hanley under the provisions of section 1544 of the inheritance tax before the delivery of the decedent's property to the Revised Administrative Code, as amended by section 3 of Act No. trustee. Stated otherwise, the defendant contends that delivery to the 3606. But Act No. 3606 went into effect on January 1, 1930. It, trustee was delivery to the cestui que trust, the beneficiery in this case, therefore, was not the law in force when the testator died on May 27, within the meaning of the first paragraph of subsection (b) of section 1922. The law at the time was section 1544 above-mentioned, as 1544 of the Revised Administrative Code. This contention is well taken amended by Act No. 3031, which took effect on March 9, 1922. and is sustained. The appointment of P. J. M. Moore as trustee was It is well-settled that inheritance taxation is governed by the statute in made by the trial court in conformity with the wishes of the testator as force at the time of the death of the decedent (26 R. C. L., p. 206; 4 expressed in his will. It is true that the word "trust" is not mentioned or Cooley on Taxation, 4th ed., p. 3461). The taxpayer can not foresee used in the will but the intention to create one is clear. No particular or and ought not to be required to guess the outcome of pending technical words are required to create a testamentary trust (69 C. J., p. measures. Of course, a tax statute may be made retroactive in its 711). The words "trust" and "trustee", though apt for the purpose, are operation. Liability for taxes under retroactive legislation has been "one not necessary. In fact, the use of these two words is not conclusive on of the incidents of social life." (Seattle vs. Kelleher, 195 U. S., 360; 49 the question that a trust is created (69 C. J., p. 714). "To create a trust Law. ed., 232 Sup. Ct. Rep., 44.) But legislative intent that a tax statute by will the testator must indicate in the will his intention so to do by should operate retroactively should be perfectly clear. (Scwab vs. using language sufficient to separate the legal from the equitable Doyle, 42 Sup. Ct. Rep., 491; Smietanka vs. First Trust & Savings estate, and with sufficient certainty designate the beneficiaries, their Bank, 257 U. S., 602; Stockdale vs. Insurance Co., 20 Wall., 323; Lunch interest in the ttrust, the purpose or object of the trust, and the property vs. Turrish, 247 U. S., 221.) "A statute should be considered as or subject matter thereof. Stated otherwise, to constitute a valid prospective in its operation, whether it enacts, amends, or repeals an testamentary trust there must be a concurrence of three circumstances: inheritance tax, unless the language of the statute clearly demands or (1) Sufficient words to raise a trust; (2) a definite subject; (3) a certain or expresses that it shall have a retroactive effect, . . . ." (61 C. J., P. ascertain object; statutes in some jurisdictions expressly or in effect so 1602.) Though the last paragraph of section 5 of Regulations No. 65 of providing." (69 C. J., pp. 705,706.) There is no doubt that the testator the Department of Finance makes section 3 of Act No. 3606, amending intended to create a trust. He ordered in his will that certain of his section 1544 of the Revised Administrative Code, applicable to all properties be kept together undisposed during a fixed period, for a estates the inheritance taxes due from which have not been paid, Act stated purpose. The probate court certainly exercised sound judgment No. 3606 itself contains no provisions indicating legislative intent to give in appointment a trustee to carry into effect the provisions of the will it retroactive effect. No such effect can begiven the statute by this court. (see sec. 582, Code of Civil Procedure). The defendant Collector of Internal Revenue maintains, however, that P. J. M. Moore became trustee on March 10, 1924. On that date trust certain provisions of Act No. 3606 are more favorable to the taxpayer estate vested in him (sec. 582 in relation to sec. 590, Code of Civil than those of Act No. 3031, that said provisions are penal in nature and, Procedure). The mere fact that the estate of the deceased was placed therefore, should operate retroactively in conformity with the provisions in trust did not remove it from the operation of our inheritance tax laws of article 22 of the Revised Penal Code. This is the reason why he or exempt it from the payment of the inheritance tax. The corresponding applied Act No. 3606 instead of Act No. 3031. Indeed, under Act No. inheritance tax should have been paid on or before March 10, 1924, to 3606, (1) the surcharge of 25 per cent is based on the tax only, instead escape the penalties of the laws. This is so for the reason already of on both the tax and the interest, as provided for in Act No. 3031, and stated that the delivery of the estate to the trustee was in esse delivery (2) the taxpayer is allowed twenty days from notice and demand by rthe of the same estate to the cestui que trust, the beneficiary in this case. A Collector of Internal Revenue within which to pay the tax, instead of ten trustee is but an instrument or agent for the cestui que trust (Shelton vs. days only as required by the old law. King, 299 U. S., 90; 33 Sup. Ct. Rep., 689; 57 Law. ed., 1086). When Properly speaking, a statute is penal when it imposes punishment for an Moore accepted the trust and took possesson of the trust estate he offense committed against the state which, under the Constitution, the thereby admitted that the estate belonged not to him but to his cestui Executive has the power to pardon. In common use, however, this que trust (Tolentino vs. Vitug, 39 Phil.,126, cited in 65 C. J., p. 692, n. sense has been enlarged to include within the term "penal statutes" all 63). He did not acquire any beneficial interest in the estate. He took status which command or prohibit certain acts, and establish penalties such legal estate only as the proper execution of the trust required (65 for their violation, and even those which, without expressly prohibiting C. J., p. 528) and, his estate ceased upon the fulfillment of the testator's certain acts, impose a penalty upon their commission (59 C. J., p. wishes. The estate then vested absolutely in the beneficiary (65 C. J., p. 1110). Revenue laws, generally, which impose taxes collected by the 542). means ordinarily resorted to for the collection of taxes are not classed The highest considerations of public policy also justify the conclusion as penal laws, although there are authorities to the contrary. we have reached. Were we to hold that the payment of the tax could be postponed or delayed by the creation of a trust of the type at hand, the Revenuen or this court may remit or decrease such interest, no matter result would be plainly disastrous. Testators may provide, as Thomas how heavily it may burden the taxpayer. Hanley has provided, that their estates be not delivered to their To the tax and interest due and unpaid within ten days after the date of beneficiaries until after the lapse of a certain period of time. In the case notice and demand thereof by the Collector of Internal Revenue, a at bar, the period is ten years. In other cases, the trust may last for fifty surcharge of twenty-five per centum should be added (sec. 1544, years, or for a longer period which does not offend the rule against subsec. (b), par. 2, Revised Administrative Code). Demand was made petuities. The collection of the tax would then be left to the will of a by the Deputy Collector of Internal Revenue upon Moore in a private individual. The mere suggestion of this result is a sufficient communiction dated October 16, 1931 (Exhibit 29). The date fixed for warning against the accpetance of the essential to the very exeistence the payment of the tax and interest was November 30, 1931. November of government. (Dobbins vs. Erie Country, 16 Pet., 435; 10 Law. ed., 30 being an official holiday, the tenth day fell on December 1, 1931. As 1022; Kirkland vs. Hotchkiss, 100 U. S., 491; 25 Law. ed., 558; Lane the tax and interest due were not paid on that date, the estate became County vs. Oregon, 7 Wall., 71; 19 Law. ed., 101; Union Refrigerator liable for the payment of the surcharge. Transit Co. vs. Kentucky, 199 U. S., 194; 26 Sup. Ct. Rep., 36; 50 Law. In view of the foregoing, it becomes unnecessary for us to discuss the ed., 150; Charles River Bridge vs. Warren Bridge, 11 Pet., 420; 9 Law. fifth error assigned by the plaintiff in his brief. ed., 773.) The obligation to pay taxes rests not upon the privileges We shall now compute the tax, together with the interest and surcharge enjoyed by, or the protection afforded to, a citizen by the government due from the estate of Thomas Hanley inaccordance with the but upon the necessity of money for the support of the state (Dobbins conclusions we have reached. vs. Erie Country, supra). For this reason, no one is allowed to object to At the time of his death, the deceased left real properties valued at or resist the payment of taxes solely because no personal benefit to him P27,920 and personal properties worth P1,465, or a total of P29,385. can be pointed out. (Thomas vs. Gay, 169 U. S., 264; 18 Sup. Ct. Rep., Deducting from this amount the sum of P480.81, representing allowable 340; 43 Law. ed., 740.) While courts will not enlarge, by construction, deductions under secftion 1539 of the Revised Administrative Code, we the government's power of taxation (Bromley vs. McCaughn, 280 U. S., have P28,904.19 as the net value of the estate subject to inheritance 124; 74 Law. ed., 226; 50 Sup. Ct. Rep., 46) they also will not place tax. upon tax laws so loose a construction as to permit evasions on merely The primary tax, according to section 1536, subsection (c), of the fanciful and insubstantial distictions. (U. S. vs. Watts, 1 Bond., 580; Fed. Revised Administrative Code, should be imposed at the rate of one per Cas. No. 16,653; U. S. vs. Wigglesirth, 2 Story, 369; Fed. Cas. No. centum upon the first ten thousand pesos and two per centum upon the 16,690, followed in Froelich & Kuttner vs. Collector of Customs, 18 Phil., amount by which the share exceed thirty thousand pesos, plus an 461, 481; Castle Bros., Wolf & Sons vs. McCoy, 21 Phil., 300; Muñoz & additional two hundred per centum. One per centum of ten thousand Co. vs. Hord, 12 Phil., 624; Hongkong & Shanghai Banking Corporation pesos is P100. Two per centum of P18,904.19 is P378.08. Adding to vs. Rafferty, 39 Phil., 145; Luzon Stevedoring Co. vs. Trinidad, 43 Phil., these two sums an additional two hundred per centum, or P965.16, we 803.) When proper, a tax statute should be construed to avoid the have as primary tax, correctly computed by the defendant, the sum of possibilities of tax evasion. Construed this way, the statute, without P1,434.24. resulting in injustice to the taxpayer, becomes fair to the government. To the primary tax thus computed should be added the sums collectible That taxes must be collected promptly is a policy deeply intrenched in under section 1544 of the Revised Administrative Code. First should be our tax system. Thus, no court is allowed to grant injunction to restrain added P1,465.31 which stands for interest at the rate of twelve per the collection of any internal revenue tax ( sec. 1578, Revised centum per annum from March 10, 1924, the date of delinquency, to Administrative Code; Sarasola vs. Trinidad, 40 Phil., 252). In the case of September 15, 1932, the date of payment under protest, a period Lim Co Chui vs. Posadas (47 Phil., 461), this court had occassion to covering 8 years, 6 months and 5 days. To the tax and interest thus demonstrate trenchment adherence to this policy of the law. It held that computed should be added the sum of P724.88, representing a "the fact that on account of riots directed against the Chinese on surhcarge of 25 per cent on both the tax and interest, and also P10, the October 18, 19, and 20, 1924, they were prevented from praying their compromise sum fixed by the defendant (Exh. 29), giving a grand total internal revenue taxes on time and by mutual agreement closed their of P3,634.43. homes and stores and remained therein, does not authorize the As the plaintiff has already paid the sum of P2,052.74, only the sums of Collector of Internal Revenue to extend the time prescribed for the P1,581.69 is legally due from the estate. This last sum is P390.42 more payment of the taxes or to accept them without the additional penalty of than the amount demanded by the defendant in his counterclaim. But, twenty five per cent." (Syllabus, No. 3.) as we cannot give the defendant more than what he claims, we must ". . . It is of the utmost importance," said the Supreme Court of the hold that the plaintiff is liable only in the sum of P1,191.27 the amount United States, ". . . that the modes adopted to enforce the taxes levied stated in the counterclaim. should be interfered with as little as possible. Any delay in the The judgment of the lower court is accordingly modified, with costs proceedings of the officers, upon whom the duty is developed of against the plaintiff in both instances. So ordered. collecting the taxes, may derange the operations of government, and thereby, cause serious detriment to the public." (Dows vs. Chicago, 11 Wall., 108; 20 Law. ed., 65, 66; Churchill and Tait vs. Rafferty, 32 Phil., 580.) It results that the estate which plaintiff represents has been delinquent in the payment of inheritance tax and, therefore, liable for the payment of interest and surcharge provided by law in such cases. The delinquency in payment occurred on March 10, 1924, the date when Moore became trustee. The interest due should be computed from that date and it is error on the part of the defendant to compute it one month later. The provisions cases is mandatory (see and cf. Lim Co Chui vs. Posadas, supra), and neither the Collector of Internal inheritance cannot be the subject of a contract nor can it be renounced (1 Manresa, 123, sixth edition; Tolentino on Civil Code, p. 12; Osorio vs. Osorio and Ynchausti Steamship Co., 41 Phil., 531). But defendants contend that, while it is true that the four minor defendants are illegitimate children of the late Faustino Nebreda and under the old Civil Code are not entitled to any successional rights, however, under the new Civil Code which became in force in June, 1950, they are given the status and rights of natural children and are G.R. No. L-4963 January 29, 1953 entitled to the successional rights which the law accords to the latter MARIA USON, plaintiff-appellee, (article 2264 and article 287, new Civil Code), and because these vs. successional rights were declared for the first time in the new code, they MARIA DEL ROSARIO, CONCEPCION NEBREDA, CONRADO shall be given retroactive effect even though the event which gave rise NEBREDA, DOMINADOR NEBREDA, AND FAUSTINO NEBREDA, to them may have occurred under the prior legislation (Article 2253, new Jr., defendants-appellants. Civil Code). Priscilo Evangelista for appellee. There is no merit in this claim. Article 2253 above referred to provides Brigido G. Estrada for appellant. indeed that rights which are declared for the first time shall have BAUTISTA ANGELO, J.: retroactive effect even though the event which gave rise to them may This is an action for recovery of the ownership and possession of five have occurred under the former legislation, but this is so only when the (5) parcels of land situated in the Municipality of Labrador, Province of new rights do not prejudice any vested or acquired right of the same Pangasinan, filed by Maria Uson against Maria del Rosario and her four origin. Thus, said article provides that "if a right should be declared for children named Concepcion, Conrado, Dominador, and Faustino, the first time in this Code, it shall be effective at once, even though the surnamed Nebreda, who are all of minor age, before the Court of First act or event which gives rise thereto may have been done or may have Instance of Pangasinan. occurred under the prior legislation, provided said new right does not Maria Uson was the lawful wife of Faustino Nebreda who upon his prejudice or impair any vested or acquired right, of the same origin." As death in 1945 left the lands involved in this litigation. Faustino Nebreda already stated in the early part of this decision, the right of ownership of left no other heir except his widow Maria Uson. However, plaintiff claims Maria Uson over the lands in question became vested in 1945 upon the that when Faustino Nebreda died in 1945, his common-law wife Maria death of her late husband and this is so because of the imperative del Rosario took possession illegally of said lands thus depriving her of provision of the law which commands that the rights to succession are their possession and enjoyment. transmitted from the moment of death (Article 657, old Civil Code). The Defendants in their answer set up as special defense that on February new right recognized by the new Civil Code in favor of the illegitimate 21, 1931, Maria Uson and her husband, the late Faustino Nebreda, children of the deceased cannot, therefore, be asserted to the executed a public document whereby they agreed to separate as impairment of the vested right of Maria Uson over the lands in dispute. husband and wife and, in consideration of their separation, Maria Uson As regards the claim that Maria Uson, while her deceased husband was was given a parcel of land by way of alimony and in return she lying in state, in a gesture of pity or compassion, agreed to assign the renounced her right to inherit any other property that may be left by her lands in question to the minor children for the reason that they were husband upon his death (Exhibit 1). acquired while the deceased was living with their mother and Maria After trial, at which both parties presented their respective evidence, the Uson wanted to assuage somewhat the wrong she has done to them, court rendered decision ordering the defendants to restore to the this much can be said; apart from the fact that this claim is disputed, we plaintiff the ownership and possession of the lands in dispute without are of the opinion that said assignment, if any, partakes of the nature of special pronouncement as to costs. Defendants interposed the present a donation of real property, inasmuch as it involves no material appeal. consideration, and in order that it may be valid it shall be made in a There is no dispute that Maria Uson, plaintiff-appellee, is the lawful wife public document and must be accepted either in the same document or of Faustino Nebreda, former owner of the five parcels of lands litigated in a separate one (Article 633, old Civil Code). Inasmuch as this in the present case. There is likewise no dispute that Maria del Rosario, essential formality has not been followed, it results that the alleged one of the defendants-appellants, was merely a common-law wife of the assignment or donation has no valid effect. late Faustino Nebreda with whom she had four illegitimate children, her WHEREFORE, the decision appealed from is affirmed, without costs. now co-defendants. It likewise appears that Faustino Nebreda died in 1945 much prior to the effectivity of the new Civil Code. With this background, it is evident that when Faustino Nebreda died in 1945 the five parcels of land he was seized of at the time passed from the moment of his death to his only heir, his widow Maria Uson (Article 657, old Civil Code).As this Court aptly said, "The property belongs to the heirs at the moment of the death of the ancestor as completely as if the ancestor had executed and delivered to them a deed for the same before his death" (Ilustre vs. Alaras Frondosa, 17 Phil., 321). From that moment, therefore, the rights of inheritance of Maria Uson over the lands in question became vested. The claim of the defendants that Maria Uson had relinquished her right over the lands in question because she expressly renounced to inherit any future property that her husband may acquire and leave upon his death in the deed of separation they had entered into on February 21, 1931, cannot be entertained for the simple reason that future over her person. If thereafter she died, the Rules of Court prescribes the procedure whereby a party who died during the pendency of the proceeding can be substituted. Under Section 16, Rule 3 of the Rules of Court "whenever a party to a pending case dies ... it shall be the duty of G.R. No. L-41715 June 18, 1976 his attorney to inform the court promptly of such death ... and to give the ROSALIO BONILLA (a minor) SALVACION BONILLA (a minor) and name and residence of his executor, administrator, guardian or other PONCIANO BONILLA (their father) who represents the legal representatives." This duty was complied with by the counsel for minors, petitioners, the deceased plaintiff when he manifested before the respondent Court vs. that Fortunata Barcena died on July 9, 1975 and asked for the proper LEON BARCENA, MAXIMA ARIAS BALLENA, ESPERANZA substitution of parties in the case. The respondent Court, however, BARCENA, MANUEL BARCENA, AGUSTINA NERI, widow of instead of allowing the substitution, dismissed the complaint on the JULIAN TAMAYO and HON. LEOPOLDO GIRONELLA of the Court ground that a dead person has no legal personality to sue. This is a of First Instance of Abra, respondents. grave error. Article 777 of the Civil Code provides "that the rights to the Federico Paredes for petitioners. succession are transmitted from the moment of the death of the Demetrio V. Pre for private respondents. decedent." From the moment of the death of the decedent, the heirs become the absolute owners of his property, subject to the rights and MARTIN, J: obligations of the decedent, and they cannot be deprived of their rights This is a petition for review 1 of the Order of the Court of First Instance thereto except by the methods provided for by law. 3 The moment of of Abra in Civil Case No. 856, entitled Fortunata Barcena vs. Leon death is the determining factor when the heirs acquire a definite right to Barcena, et al., denying the motions for reconsideration of its order the inheritance whether such right be pure or contingent. 4 The right of dismissing the complaint in the aforementioned case. the heirs to the property of the deceased vests in them even before On March 31, 1975 Fortunata Barcena, mother of minors Rosalio judicial declaration of their being heirs in the testate or intestate Bonilla and Salvacion Bonilla and wife of Ponciano Bonilla, instituted a proceedings. 5 When Fortunata Barcena, therefore, died her claim or civil action in the Court of First Instance of Abra, to quiet title over right to the parcels of land in litigation in Civil Case No. 856, was not certain parcels of land located in Abra. extinguished by her death but was transmitted to her heirs upon her On May 9, 1975, defendants filed a written motion to dismiss the death. Her heirs have thus acquired interest in the properties in litigation complaint, but before the hearing of the motion to dismiss, the counsel and became parties in interest in the case. There is, therefore, no for the plaintiff moved to amend the complaint in order to include certain reason for the respondent Court not to allow their substitution as parties allegations therein. The motion to amend the complaint was granted in interest for the deceased plaintiff. and on July 17, 1975, plaintiffs filed their amended complaint. Under Section 17, Rule 3 of the Rules of Court "after a party dies and On August 4, 1975, the defendants filed another motion to dismiss the the claim is not thereby extinguished, the court shall order, upon proper complaint on the ground that Fortunata Barcena is dead and, therefore, notice, the legal representative of the deceased to appear and be has no legal capacity to sue. Said motion to dismiss was heard on substituted for the deceased, within such time as may be granted ... ." August 14, 1975. In said hearing, counsel for the plaintiff confirmed the The question as to whether an action survives or not depends on the death of Fortunata Barcena, and asked for substitution by her minor nature of the action and the damage sued for. 6 In the causes of action children and her husband, the petitioners herein; but the court after the which survive the wrong complained affects primarily and principally hearing immediately dismissed the case on the ground that a dead property and property rights, the injuries to the person being merely person cannot be a real party in interest and has no legal personality to incidental, while in the causes of action which do not survive the injury sue. complained of is to the person, the property and rights of property On August 19, 1975, counsel for the plaintiff received a copy of the affected being incidental. 7 Following the foregoing criterion the claim of order dismissing the complaint and on August 23, 1975, he moved to the deceased plaintiff which is an action to quiet title over the parcels of set aside the order of the dismissal pursuant to Sections 16 and 17 of land in litigation affects primarily and principally property and property Rule 3 of the Rules of Court. 2 rights and therefore is one that survives even after her death. It is, On August 28, 1975, the court denied the motion for reconsideration therefore, the duty of the respondent Court to order the legal filed by counsel for the plaintiff for lack of merit. On September 1, 1975, representative of the deceased plaintiff to appear and to be substituted counsel for deceased plaintiff filed a written manifestation praying that for her. But what the respondent Court did, upon being informed by the the minors Rosalio Bonilla and Salvacion Bonilla be allowed to counsel for the deceased plaintiff that the latter was dead, was to substitute their deceased mother, but the court denied the counsel's dismiss the complaint. This should not have been done for under the prayer for lack of merit. From the order, counsel for the deceased same Section 17, Rule 3 of the Rules of Court, it is even the duty of the plaintiff filed a second motion for reconsideration of the order dismissing court, if the legal representative fails to appear, to order the opposing the complaint claiming that the same is in violation of Sections 16 and party to procure the appointment of a legal representative of the 17 of Rule 3 of the Rules of Court but the same was denied. deceased. In the instant case the respondent Court did not have to Hence, this petition for review. bother ordering the opposing party to procure the appointment of a legal The Court reverses the respondent Court and sets aside its order representative of the deceased because her counsel has not only asked dismissing the complaint in Civil Case No. 856 and its orders denying that the minor children be substituted for her but also suggested that the motion for reconsideration of said order of dismissal. While it is true their uncle be appointed as guardian ad litem for them because their that a person who is dead cannot sue in court, yet he can be substituted father is busy in Manila earning a living for the family. But the by his heirs in pursuing the case up to its completion. The records of respondent Court refused the request for substitution on the ground that this case show that the death of Fortunata Barcena took place on July the children were still minors and cannot sue in court. This is another 9, 1975 while the complaint was filed on March 31, 1975. This means grave error because the respondent Court ought to have known that that when the complaint was filed on March 31, 1975, Fortunata under the same Section 17, Rule 3 of the Rules of Court, the court is Barcena was still alive, and therefore, the court had acquired jurisdiction directed to appoint a guardian ad litem for the minor heirs. Precisely in the instant case, the counsel for the deceased plaintiff has suggested to Case No. L-28568 is an appeal by administrator Jose Borja from the the respondent Court that the uncle of the minors be appointed to act as disapproval of the same compromise agreement by the Court of First guardian ad litem for them. Unquestionably, the respondent Court has Instance of Nueva Ecija, Branch II, in its Special Proceeding No. 832, gravely abused its discretion in not complying with the clear provision of entitled, "Testate Estate of Francisco de Borja, Tasiana O. Vda. de de the Rules of Court in dismissing the complaint of the plaintiff in Civil Borja, Special Administratrix". Case No. 856 and refusing the substitution of parties in the case. And Case No. L-28611 is an appeal by administrator Jose de Borja from IN VIEW OF THE FOREGOING, the order of the respondent Court the decision of the Court of First Instance of Rizal, Branch X, in its Civil dismissing the complaint in Civil Case No. 856 of the Court of First Case No. 7452, declaring the Hacienda Jalajala Poblacion, which is the Instance of Abra and the motions for reconsideration of the order of main object of the aforesaid compromise agreement, as the separate dismissal of said complaint are set aside and the respondent Court is and exclusive property of the late Francisco de Borja and not a conjugal hereby directed to allow the substitution of the minor children, who are asset of the community with his first wife, Josefa Tangco, and that said the petitioners therein for the deceased plaintiff and to appoint a hacienda pertains exclusively to his testate estate, which is under qualified person as guardian ad litem for them. Without pronouncement administrator in Special Proceeding No. 832 of the Court of First as to costs. Instance of Nueva Ecija, Branch II. SO ORDERED. It is uncontested that Francisco de Borja, upon the death of his wife Josefa Tangco on 6 October 1940, filed a petition for the probate of her will which was docketed as Special Proceeding No. R-7866 of the Court of First Instance of Rizal, Branch I. The will was probated on 2 April 1941. In 1946, Francisco de Borja was appointed executor and administrator: in 1952, their son, Jose de Borja, was appointed co- administrator. When Francisco died, on 14 April 1954, Jose became the sole administrator of the testate estate of his mother, Josefa Tangco. While a widower Francisco de Borja allegedly took unto himself a second wife, Tasiana Ongsingco. Upon Francisco's death, Tasiana G.R. No. L-28040 August 18, 1972 instituted testate proceedings in the Court of First Instance of Nueva TESTATE ESTATE OF JOSEFA TANGCO, JOSE DE BORJA, Ecija, where, in 1955, she was appointed special administratrix. The administrator-appellee; JOSE DE BORJA, as administrator, validity of Tasiana's marriage to Francisco was questioned in said CAYETANO DE BORJA, MATILDE DE BORJA and CRISANTO DE proceeding. BORJA (deceased) as Children of Josefa Tangco, appellees, The relationship between the children of the first marriage and Tasiana vs. Ongsingco has been plagued with several court suits and counter-suits; TASIANA VDA. DE DE BORJA, Special Administratrix of the including the three cases at bar, some eighteen (18) cases remain Testate Estate of Francisco de Borja, appellant. . pending determination in the courts. The testate estate of Josefa G.R. No L-28568 August 18, 1972 Tangco alone has been unsettled for more than a quarter of a century. TESTATE ESTATE OF THE LATE FRANCISCO DE BORJA, In order to put an end to all these litigations, a compromise agreement TASIANA O. VDA. DE DE BORJA, special Administratrix appellee, was entered into on 12 October 1963,2 by and between "[T]he heir and vs. son of Francisco de Borja by his first marriage, namely, Jose de Borja JOSE DE BORJA, oppositor-appellant. personally and as administrator of the Testate Estate of Josefa G.R. No. L-28611 August 18, 1972 Tangco," and "[T]he heir and surviving spouse of Francisco de Borja by TASIANA 0. VDA. DE BORJA, as Administratrix of the Testate his second marriage, Tasiana Ongsingco Vda. de Borja, assisted by her Estate of the late Francisco de Borja, plaintiff-appellee, lawyer, Atty. Luis Panaguiton Jr." The terms and conditions of the vs. compromise agreement are as follows: JOSE DE BORJA, as Administrator of the Testate Estate of the late AGREEMENT Josefa Tangco, defendant-appellant. THIS AGREEMENT made and entered into by and L-28040 between Pelaez, Jalandoni & Jamir for administrator-appellee. The heir and son of Francisco de Borja by his first Quiogue & Quiogue for appellee Matilde de Borja. marriage, namely, Jose de Borja personally and as Andres Matias for appellee Cayetano de Borja. administrator of the Testate Estate of Josefa Sevilla & Aquino for appellant. Tangco, L-28568 AND Sevilla & Aquino for special administratrix-appellee. The heir and surviving spouse of Francisco de Borja Pelaez, Jalandoni & Jamir for oppositor-appellant. by his second marriage, Tasiana Ongsingco Vda. L-28611 de Borja, assisted by her lawyer, Atty. Luis Sevilla & Aquino for plaintiff-appellee. Panaguiton Jr. Pelaez, Jalandoni & Jamir and David Gueverra for defendant-appellant. WITNESSETH THAT it is the mutual desire of all the parties herein REYES, J.B.L., J.:p terminate and settle, with finality, the various court Of these cases, the first, numbered L-28040 is an appeal by Tasiana litigations, controversies, claims, counterclaims, Ongsingco Vda. de de Borja, special administratrix of the testate estate etc., between them in connection with the of Francisco de Borja,1 from the approval of a compromise agreement administration, settlement, partition, adjudication by the Court of First Instance of Rizal, Branch I, in its Special and distribution of the assets as well as liabilities of Proceeding No. R-7866, entitled, "Testate Estate of Josefa Tangco, the estates of Francisco de Borja and Josefa Jose de Borja, Administrator". Tangco, first spouse of Francisco de Borja. THAT with this end in view, the parties herein have Borja, corresponding certified checks/treasury agreed voluntarily and without any reservations to warrants, who, in turn, will issue the corresponding enter into and execute this agreement under the receipt to Jose de Borja. following terms and conditions: 5. In consideration of above payment to Tasiana 1. That the parties agree to sell the Poblacion Ongsingco Vda. de de Borja, Jose de Borja portion of the Jalajala properties situated in Jalajala, personally and as administrator of the Testate Rizal, presently under administration in the Testate Estate of Josefa Tangco, and Tasiana Ongsingco Estate of Josefa Tangco (Sp. Proc. No. 7866, Vda. de de Borja, for themselves and for their heirs, Rizal), more specifically described as follows: successors, executors, administrators, and assigns, Linda al Norte con el Rio hereby forever mutually renounce, withdraw, waive, Puwang que la separa de la remise, release and discharge any and all manner jurisdiccion del Municipio de of action or actions, cause or causes of action, Pililla de la Provincia de Rizal, y suits, debts, sum or sums of money, accounts, con el pico del Monte damages, claims and demands whatsoever, in law Zambrano; al Oeste con Laguna or in equity, which they ever had, or now have or de Bay; por el Sur con los may have against each other, more specifically Sp. herederos de Marcelo de Borja; Proceedings Nos. 7866 and 1955, CFI-Rizal, and y por el Este con los terrenos de Sp. Proc. No. 832-Nueva Ecija, Civil Case No. la Familia Maronilla 3033, CFI Nueva Ecija and Civil Case No. 7452- with a segregated area of approximately 1,313 CFI, Rizal, as well as the case filed against Manuel hectares at the amount of P0.30 per square meter. Quijal for perjury with the Provincial Fiscal of Rizal, 2. That Jose de Borja agrees and obligates himself the intention being to completely, absolutely and to pay Tasiana Ongsingco Vda. de de Borja the finally release each other, their heirs, successors, total amount of Eight Hundred Thousand Pesos and assigns, from any and all liability, arising wholly (P800,000) Philippine Currency, in cash, which or partially, directly or indirectly, from the represent P200,000 as his share in the payment administration, settlement, and distribution of the and P600,000 as pro-rata shares of the heirs assets as well as liabilities of the estates of Crisanto, Cayetano and Matilde, all surnamed de Francisco de Borja and Josefa Tangco, first spouse Borja and this shall be considered as full and of Francisco de Borja, and lastly, Tasiana complete payment and settlement of her hereditary Ongsingco Vda. de de Borja expressly and share in the estate of the late Francisco de Borja as specifically renounce absolutely her rights as heir well as the estate of Josefa Tangco, Sp. Proc. No. over any hereditary share in the estate of Francisco 832-Nueva Ecija and Sp. Proc. No. 7866-Rizal, de Borja. respectively, and to any properties bequeathed or 6. That Tasiana Ongsingco Vda. de de Borja, upon devised in her favor by the late Francisco de Borja receipt of the payment under paragraph 4 hereof, by Last Will and Testament or by Donation Inter shall deliver to the heir Jose de Borja all the papers, Vivos or Mortis Causa or purportedly conveyed to titles and documents belonging to Francisco de her for consideration or otherwise. The funds for this Borja which are in her possession and said heir payment shall be taken from and shall depend upon Jose de Borja shall issue in turn the corresponding the receipt of full payment of the proceeds of the receive thereof. sale of Jalajala, "Poblacion." 7. That this agreement shall take effect only upon 3. That Tasiana Ongsingco Vda. de de Borja hereby the fulfillment of the sale of the properties assumes payment of that particular obligation mentioned under paragraph 1 of this agreement and incurred by the late Francisco de Borja in favor of upon receipt of the total and full payment of the the Rehabilitation Finance Corporation, now proceeds of the sale of the Jalajala property Development Bank of the Philippines, amounting to "Poblacion", otherwise, the non-fulfillment of the approximately P30,000.00 and also assumes said sale will render this instrument NULL AND payment of her 1/5 share of the Estate and VOID AND WITHOUT EFFECT THEREAFTER. Inheritance taxes on the Estate of the late Francisco IN WITNESS WHEREOF, the parties hereto have de Borja or the sum of P3,500.00, more or less, her unto set their hands in the City of Manila, which shall be deducted by the buyer of Jalajala, Philippines, the 12th of October, 1963. "Poblacion" from the payment to be made to On 16 May 1966, Jose de Borja submitted for Court approval the Tasiana Ongsingco Vda. de Borja under paragraph agreement of 12 October 1963 to the Court of First Instance of Rizal, in 2 of this Agreement and paid directly to the Special Proceeding No. R-7866; and again, on 8 August 1966, to the Development Bank of the Philippines and the heirs- Court of First Instance of Nueva Ecija, in Special Proceeding No. 832. children of Francisco de Borja. Tasiana Ongsingco Vda. de de Borja opposed in both instances. The 4. Thereafter, the buyer of Jalajala "Poblacion" is Rizal court approved the compromise agreement, but the Nueva Ecija hereby authorized to pay directly to Tasiana court declared it void and unenforceable. Special administratrix Tasiana Ongsingco Vda. de de Borja the balance of the Ongsingco Vda. de de Borja appealed the Rizal Court's order of payment due her under paragraph 2 of this approval (now Supreme Court G.R. case No. L-28040), while Agreement (approximately P766,500.00) and issue administrator Jose de Borja appealed the order of disapproval (G.R. in the name of Tasiana Ongsingco Vda. de de case No. L-28568) by the Court of First Instance of Nueva Ecija. The genuineness and due execution of the compromised agreement of course, the effect of such alienation is to be deemed limited to what is 12 October 1963 is not disputed, but its validity is, nevertheless, ultimately adjudicated to the vendor heir. However, the aleatory attacked by Tasiana Ongsingco on the ground that: (1) the heirs cannot character of the contract does not affect the validity of the transaction; enter into such kind of agreement without first probating the will of neither does the coetaneous agreement that the numerous litigations Francisco de Borja; (2) that the same involves a compromise on the between the parties (the approving order of the Rizal Court enumerates validity of the marriage between Francisco de Borja and Tasiana fourteen of them, Rec. App. pp. 79-82) are to be considered settled and Ongsingco; and (3) that even if it were valid, it has ceased to have force should be dismissed, although such stipulation, as noted by the Rizal and effect. Court, gives the contract the character of a compromise that the law In assailing the validity of the agreement of 12 October 1963, Tasiana favors, for obvious reasons, if only because it serves to avoid a Ongsingco and the Probate Court of Nueva Ecija rely on this Court's multiplicity of suits. decision in Guevara vs. Guevara. 74 Phil. 479, wherein the Court's It is likewise worthy of note in this connection that as the surviving majority held the view that the presentation of a will for probate is spouse of Francisco de Borja, Tasiana Ongsingco was his compulsory mandatory and that the settlement and distribution of an estate on the heir under article 995 et seq. of the present Civil Code. Wherefore, basis of intestacy when the decedent left a will, is against the law and barring unworthiness or valid disinheritance, her successional interest public policy. It is likewise pointed out by appellant Tasiana Ongsingco existed independent of Francisco de Borja's last will and testament and that Section 1 of Rule 74 of the Revised Rules explicitly conditions the would exist even if such will were not probated at all. Thus, the validity of an extrajudicial settlement of a decedent's estate by prerequisite of a previous probate of the will, as established in the agreement between heirs, upon the facts that "(if) the decedent left no Guevara and analogous cases, can not apply to the case of Tasiana will and no debts, and the heirs are all of age, or the minors are Ongsingco Vda. de de Borja. represented by their judicial and legal representatives ..." The will of Since the compromise contract Annex A was entered into by and Francisco de Borja having been submitted to the Nueva Ecija Court and between "Jose de Borja personally and as administrator of the Testate still pending probate when the 1963 agreement was made, those Estate of Josefa Tangco" on the one hand, and on the other, "the heir circumstances, it is argued, bar the validity of the agreement. and surviving spouse of Francisco de Borja by his second marriage, Upon the other hand, in claiming the validity of the compromise Tasiana Ongsingco Vda. de de Borja", it is clear that the transaction agreement, Jose de Borja stresses that at the time it was entered into, was binding on both in their individual capacities, upon the perfection of on 12 October 1963, the governing provision was Section 1, Rule 74 of the contract, even without previous authority of the Court to enter into the original Rules of Court of 1940, which allowed the extrajudicial the same. The only difference between an extrajudicial compromise and settlement of the estate of a deceased person regardless of whether he one that is submitted and approved by the Court, is that the latter can left a will or not. He also relies on the dissenting opinion of Justice be enforced by execution proceedings. Art. 2037 of the Civil Code is Moran, in Guevara vs. Guevara, 74 Phil. 479, wherein was expressed explicit on the point: the view that if the parties have already divided the estate in 8. Art. 2037. A compromise has upon the parties the accordance with a decedent's will, the probate of the will is a useless effect and authority of res judicata; but there shall ceremony; and if they have divided the estate in a different manner, the be no execution except in compliance with a judicial probate of the will is worse than useless. compromise. The doctrine of Guevara vs. Guevara, ante, is not applicable to the case It is argued by Tasiana Ongsingco that while the at bar. This is apparent from an examination of the terms of the agreement Annex A expressed no definite period for agreement between Jose de Borja and Tasiana Ongsingco. Paragraph its performance, the same was intended to have a 2 of said agreement specifically stipulates that the sum of P800,000 resolutory period of 60 days for its effectiveness. In payable to Tasiana Ongsingco — support of such contention, it is averred that such a shall be considered as full — complete payment — limit was expressly stipulated in an agreement in settlement of her hereditary share in the estate of similar terms entered into by said Ongsingco with the late Francisco de Borja as well as the estate of the brothers and sister of Jose de Borja, to wit, Josefa Tangco, ... and to any properties Crisanto, Matilde and Cayetano, all surnamed de bequeathed or devised in her favor by the late Borja, except that the consideration was fixed at Francisco de Borja by Last Will and Testament or P600,000 (Opposition, Annex/Rec. of Appeal, L- by Donation Inter Vivos or Mortis Causa or 28040, pp. 39- 46) and which contained the purportedly conveyed to her for consideration or following clause: otherwise. III. That this agreement shall take effect only upon This provision evidences beyond doubt that the ruling in the Guevara the consummation of the sale of the property case is not applicable to the cases at bar. There was here no attempt to mentioned herein and upon receipt of the total and settle or distribute the estate of Francisco de Borja among the heirs full payment of the proceeds of the sale by the thereto before the probate of his will. The clear object of the contract herein owner heirs-children of Francisco de Borja, was merely the conveyance by Tasiana Ongsingco of any and all her namely, Crisanto, Cayetano and Matilde, all individual share and interest, actual or eventual in the estate of surnamed de Borja; Provided that if no sale of the Francisco de Borja and Josefa Tangco. There is no stipulation as to any said property mentioned herein is consummated, or other claimant, creditor or legatee. And as a hereditary share in a the non-receipt of the purchase price thereof by the decedent's estate is transmitted or vested immediately from the moment said owners within the period of sixty (60) days from of the death of such causante or predecessor in interest (Civil Code of the date hereof, this agreement will become null the Philippines, Art. 777)3 there is no legal bar to a successor (with and void and of no further effect. requisite contracting capacity) disposing of her or his hereditary share Ongsingco's argument loses validity when it is considered that Jose de immediately after such death, even if the actual extent of such share is Borja was not a party to this particular contract (Annex 1), and that the not determined until the subsequent liquidation of the estate.4 Of same appears not to have been finalized, since it bears no date, the day being left blank "this — day of October 1963"; and while signed by "A") had been abandoned, as shown by the fact that, after its execution, the parties, it was not notarized, although plainly intended to be so the Court of First Instance of Nueva Ecija, in its order of 21 September done, since it carries a proposed notarial ratification clause. 1964, had declared that "no amicable settlement had been arrived at by Furthermore, the compromise contract with Jose de Borja (Annex A), the parties", and that Jose de Borja himself, in a motion of 17 June provides in its par. 2 heretofore transcribed that of the total 1964, had stated that the proposed amicable settlement "had failed to consideration of P800, 000 to be paid to Ongsingco, P600,000 materialize". represent the "prorata share of the heirs Crisanto, Cayetano and It is difficult to believe, however, that the amicable settlement referred to Matilde all surnamed de Borja" which corresponds to the consideration in the order and motion above-mentioned was the compromise of P600,000 recited in Annex 1, and that circumstance is proof that the agreement of 13 October 1963, which already had been formally signed duly notarized contract entered into wit Jose de Borja under date 12 and executed by the parties and duly notarized. What the record October 1963 (Annex A), was designed to absorb and supersede the discloses is that some time after its formalization, Ongsingco had separate unformalize agreement with the other three Borja heirs. unilaterally attempted to back out from the compromise agreement, Hence, the 60 days resolutory term in the contract with the latter (Annex pleading various reasons restated in the opposition to the Court's 1) not being repeated in Annex A, can not apply to the formal approval of Annex "A" (Record on Appeal, L-20840, page 23): that the compromise with Jose de Borja. It is moreover manifest that the same was invalid because of the lapse of the allegedly intended stipulation that the sale of the Hacienda de Jalajala was to be made resolutory period of 60 days and because the contract was not within sixty days from the date of the agreement with Jose de Borja's preceded by the probate of Francisco de Borja's will, as required by this co-heirs (Annex 1) was plainly omitted in Annex A as improper and Court's Guevarra vs. Guevara ruling; that Annex "A" involved a ineffective, since the Hacienda de Jalajala (Poblacion) that was to be compromise affecting Ongsingco's status as wife and widow of sold to raise the P800,000 to be paid to Ongsingco for her share formed Francisco de Borja, etc., all of which objections have been already part of the estate of Francisco de Borja and could not be sold until discussed. It was natural that in view of the widow's attitude, Jose de authorized by the Probate Court. The Court of First Instance of Rizal so Borja should attempt to reach a new settlement or novatory agreement understood it, and in approving the compromise it fixed a term of 120 before seeking judicial sanction and enforcement of Annex "A", since days counted from the finality of the order now under appeal, for the the latter step might ultimately entail a longer delay in attaining final carrying out by the parties for the terms of the contract. remedy. That the attempt to reach another settlement failed is apparent This brings us to the plea that the Court of First Instance of Rizal had no from the letter of Ongsingco's counsel to Jose de Borja quoted in pages jurisdiction to approve the compromise with Jose de Borja (Annex A) 35-36 of the brief for appellant Ongsingco in G.R. No. 28040; and it is because Tasiana Ongsingco was not an heir in the estate of Josefa more than probable that the order of 21 September 1964 and the Tangco pending settlement in the Rizal Court, but she was an heir of motion of 17 June 1964 referred to the failure of the parties' quest for a Francisco de Borja, whose estate was the object of Special Proceeding more satisfactory compromise. But the inability to reach a novatory No. 832 of the Court of First Instance of Nueva Ecija. This circumstance accord can not invalidate the original compromise (Annex "A") and is irrelevant, since what was sold by Tasiana Ongsingco was only her justifies the act of Jose de Borja in finally seeking a court order for its eventual share in the estate of her late husband, not the estate itself; approval and enforcement from the Court of First Instance of Rizal, and as already shown, that eventual share she owned from the time of which, as heretofore described, decreed that the agreement be Francisco's death and the Court of Nueva Ecija could not bar her selling ultimately performed within 120 days from the finality of the order, now it. As owner of her undivided hereditary share, Tasiana could dispose of under appeal. it in favor of whomsoever she chose. Such alienation is expressly We conclude that in so doing, the Rizal court acted in accordance with recognized and provided for by article 1088 of the present Civil Code: law, and, therefore, its order should be upheld, while the contrary Art. 1088. Should any of the heirs sell his hereditary resolution of the Court of First Instance of Nueva Ecija should be, and rights to a stranger before the partition, any or all of is, reversed. the co-heirs may be subrogated to the rights of the In her brief, Tasiana Ongsingco also pleads that the time elapsed in the purchaser by reimbursing him for the price of the appeal has affected her unfavorably, in that while the purchasing power sale, provided they do so within the period of one of the agreed price of P800,000 has diminished, the value of the month from the time they were notified in writing of Jalajala property has increased. But the fact is that her delay in the sale of the vendor. receiving the payment of the agreed price for her hereditary interest was If a sale of a hereditary right can be made to a stranger, then a primarily due to her attempts to nullify the agreement (Annex "A") she fortiori sale thereof to a coheir could not be forbidden. had formally entered into with the advice of her counsel, Attorney Tasiana Ongsingco further argues that her contract with Jose de Borja Panaguiton. And as to the devaluation de facto of our currency, what (Annex "A") is void because it amounts to a compromise as to her We said in Dizon Rivera vs. Dizon, L-24561, 30 June 1970, 33 SCRA status and marriage with the late Francisco de Borja. The point is 554, that "estates would never be settled if there were to be a without merit, for the very opening paragraph of the agreement with revaluation with every subsequent fluctuation in the values of currency Jose de Borja (Annex "A") describes her as "the heir and surviving and properties of the estate", is particularly opposite in the present spouse of Francisco de Borja by his second marriage, Tasiana case. Ongsingco Vda. de de Borja", which is in itself definite admission of her Coming now to Case G.R. No. L-28611, the issue is whether the civil status. There is nothing in the text of the agreement that would Hacienda de Jalajala (Poblacion), concededly acquired by Francisco de show that this recognition of Ongsingco's status as the surviving spouse Borja during his marriage to his first wife, Josefa Tangco, is the of Francisco de Borja was only made in consideration of the cession of husband's private property (as contended by his second spouse, her hereditary rights. Tasiana Ongsingco), or whether it forms part of the conjugal (ganancial) It is finally charged by appellant Ongsingco, as well as by the Court of partnership with Josefa Tangco. The Court of First Instance of Rizal First Instance of Nueva Ecija in its order of 21 September 1964, in (Judge Herminio Mariano, presiding) declared that there was adequate Special Proceedings No. 832 (Amended Record on Appeal in L-28568, evidence to overcome the presumption in favor of its conjugal character page 157), that the compromise agreement of 13 October 1963 (Annex established by Article 160 of the Civil Code. We are of the opinion that this question as between Tasiana Ongsingco submitted therein in December, 1955, an inventory wherein she listed and Jose de Borja has become moot and academic, in view of the the Jalajala Hacienda under the heading "Conjugal Property of the conclusion reached by this Court in the two preceding cases (G.R. No. Deceased Spouses Francisco de Borja and Josefa Tangco, which are L-28568), upholding as valid the cession of Tasiana Ongsingco's in the possession of the Administrator of the Testate Estate of the eventual share in the estate of her late husband, Francisco de Borja, for Deceased Josefa Tangco in Special Proceedings No. 7866 of the Court the sum of P800,000 with the accompanying reciprocal quit-claims of First Instance of Rizal" (Exhibit "4"). between the parties. But as the question may affect the rights of Notwithstanding the four statements aforesaid, and the fact that they possible creditors and legatees, its resolution is still imperative. are plain admissions against interest made by both Francisco de Borja It is undisputed that the Hacienda Jalajala, of around 4,363 hectares, and the Administratrix of his estate, in the course of judicial proceedings had been originally acquired jointly by Francisco de Borja, Bernardo de in the Rizal and Nueva Ecija Courts, supporting the legal presumption in Borja and Marcelo de Borja and their title thereto was duly registered in favor of the conjugal community, the Court below declared that the their names as co-owners in Land Registration Case No. 528 of the Hacienda de Jalajala (Poblacion) was not conjugal property, but the province of Rizal, G.L.R.O. Rec. No. 26403 (De Barjo vs. Jugo, 54 Phil. private exclusive property of the late Francisco de Borja. It did so on the 465). Subsequently, in 1931, the Hacienda was partitioned among the strength of the following evidences: (a) the sworn statement by Francis co-owners: the Punta section went to Marcelo de Borja; the Bagombong de Borja on 6 August 1951 (Exhibit "F") that — section to Bernardo de Borja, and the part in Jalajala proper (Poblacion) He tomado possession del pedazo de terreno ya corresponded to Francisco de Borja (V. De Borja vs. De Borja 101 Phil. delimitado (equivalente a 1/4 parte, 337 hectareas) 911, 932). adjunto a mi terreno personal y exclusivo The lot allotted to Francisco was described as — (Poblacion de Jalajala, Rizal). Una Parcela de terreno en Poblacion, Jalajala: N. and (b) the testimony of Gregorio de Borja, son of Bernardo de Borja, Puang River; E. Hermogena Romero; S. Heirs of that the entire Hacienda had been bought at a foreclosure sale for Marcelo de Borja O. Laguna de Bay; containing an P40,100.00, of which amount P25,100 was contributed by Bernardo de area of 13,488,870 sq. m. more or less, assessed at Borja and P15,000. by Marcelo de Borja; that upon receipt of a P297,410. (Record on Appeal, pages 7 and 105) subsequent demand from the provincial treasurer for realty taxes the On 20 November 1962, Tasiana O. Vda. de Borja, as Administratrix of sum of P17,000, Marcelo told his brother Bernardo that Francisco (son the Testate Estate of Francisco de Borja, instituted a complaint in the of Marcelo) wanted also to be a co-owner, and upon Bernardo's assent Court of First Instance of Rizal (Civil Case No. 7452) against Jose de to the proposal, Marcelo issue a check for P17,000.00 to pay the back Borja, in his capacity as Administrator of Josefa Tangco (Francisco de taxes and said that the amount would represent Francisco's contribution Borja's first wife), seeking to have the Hacienda above described in the purchase of the Hacienda. The witness further testified that — declared exclusive private property of Francisco, while in his answer Marcelo de Borja said that that money was defendant (now appellant) Jose de Borja claimed that it was conjugal entrusted to him by Francisco de Borja when he property of his parents (Francisco de Borja and Josefa Tangco), was still a bachelor and which he derived from his conformably to the presumption established by Article 160 of the business transactions. (Hearing, 2 February 1965, Philippine Civil Code (reproducing Article 1407 of the Civil Code of t.s.n., pages 13-15) (Emphasis supplied) 1889), to the effect that: The Court below, reasoning that not only Francisco's sworn statement Art. 160. All property of the marriage is presumed to overweighed the admissions in the inventories relied upon by belong to the conjugal partnership, unless it be defendant-appellant Jose de Borja since probate courts can not finally proved that it pertains exclusively to the husband or determine questions of ownership of inventoried property, but that the to the wife. testimony of Gregorio de Borja showed that Francisco de Borja Defendant Jose de Borja further counterclaimed for damages, acquired his share of the original Hacienda with his private funds, for compensatory, moral and exemplary, as well as for attorney's fees. which reason that share can not be regarded as conjugal partnership After trial, the Court of First Instance of Rizal, per Judge Herminio property, but as exclusive property of the buyer, pursuant to Article Mariano, held that the plaintiff had adduced sufficient evidence to rebut 1396(4) of Civil Code of 1889 and Article 148(4) of the Civil Code of the the presumption, and declared the Hacienda de Jalajala (Poblacion) to Philippines. be the exclusive private property of the late Francisco de Borja, and his The following shall be the exclusive property of each spouse: Administratrix, Tasiana Ongsingco Vda. de Borja, to be entitled to its xxx xxx xxx possession. Defendant Jose de Borja then appealed to this Court. (4) That which is purchased with exclusive money of The evidence reveals, and the appealed order admits, that the the wife or of the husband. character of the Hacienda in question as owned by the conjugal We find the conclusions of the lower court to be untenable. In the first partnership De Borja-Tangco was solemnly admitted by the late place, witness Gregorio de Borja's testimony as to the source of the Francisco de Borja no less than two times: first, in the Reamended money paid by Francisco for his share was plain hearsay, hence Inventory that, as executor of the estate of his deceased wife Josefa inadmissible and of no probative value, since he was merely repeating Tangco, he filed in the Special Proceedings No. 7866 of the Court of what Marcelo de Borja had told him (Gregorio). There is no way of First Instance of Rizal on 23 July 1953 (Exhibit "2"); and again, in the ascertaining the truth of the statement, since both Marcelo and Reamended Accounting of the same date, also filed in the proceedings Francisco de Borja were already dead when Gregorio testified. In aforesaid (Exhibit "7"). Similarly, the plaintiff Tasiana O. Vda. de Borja, addition, the statement itself is improbable, since there was no need or herself, as oppositor in the Estate of Josefa Tangco, submitted therein occasion for Marcelo de Borja to explain to Gregorio how and when an inventory dated 7 September 1954 (Exhibit "3") listing the Jalajala Francisco de Borja had earned the P17,000.00 entrusted to Marcelo. A property among the "Conjugal Properties of the Spouses Francisco de ring of artificiality is clearly discernible in this portion of Gregorio's Borja and Josefa Tangco". And once more, Tasiana Ongsingco, as testimony. administratrix of the Estate of Francisco de Borja, in Special As to Francisco de Borja's affidavit, Exhibit "F", the quoted portion Proceedings No. 832 of the Court of First Instance of Nueva Ecija, thereof (ante, page 14) does not clearly demonstrate that the "mi terreno personal y exclusivo (Poblacion de Jalajala, Rizal) " refers to Mrs. Angela M. Butte, hereinafter referred to as plaintiff-appellant, precisely to the Hacienda in question. The inventories (Exhibits 3 and 4) has been admitted to probate, the estate proceedings are still pending disclose that there were two real properties in Jalajala owned by up to the present on account of the claims of creditors which exceed the Francisco de Borja, one of 72.038 sq. m., assessed at P44,600, and a assets of the deceased. The Bank of the Philippine Islands was much bigger one of 1,357.260.70 sq. m., which is evidently the appointed judicial administrator. Hacienda de Jalajala (Poblacion). To which of these lands did the Meanwhile, on December 9, 1958, Mrs. Marie Garnier Vda. de Ramirez, affidavit of Francisco de Borja (Exhibit "F") refer to? In addition, one of the co-owners of the late Jose V. Ramirez in the Sta. Cruz Francisco's characterization of the land as "mi terreno personal y property, sold her undivided 1/6 share to Manuel Uy & Sons, Inc. exclusivo" is plainly self-serving, and not admissible in the absence of defendant-appellant herein, for the sum of P500,000.00. After the cross examination. execution by her attorney-in-fact, Mrs. Elsa R. Chambers, of an affidavit It may be true that the inventories relied upon by defendant-appellant to the effect that formal notices of the sale had been sent to all possible (Exhibits "2", "3", "4" and "7") are not conclusive on the conjugal redemptioners, the deed of sale was duly registered and Transfer character of the property in question; but as already noted, they are Certificate of Title No. 52789 was cancelled in lieu of which a new one clear admissions against the pecuniary interest of the declarants, was issued in the name of the vendee and the other-co-owners. Francisco de Borja and his executor-widow, Tasiana Ongsingco, and as On the same day (December 9, 1958), Manuel Uy & Sons, Inc. sent a such of much greater probative weight than the self-serving statement letter to the Bank of the Philippine Islands as judicial administrator of the of Francisco (Exhibit "F"). Plainly, the legal presumption in favor of the estate of the late Jose V. Ramirez informing it of the above-mentioned conjugal character of the Hacienda de Jalajala (Poblacion) now in sale. This letter, together with that of the bank, was forwarded by the dispute has not been rebutted but actually confirmed by proof. Hence, latter to Mrs. Butte c/o her counsel Delgado, Flores & Macapagal, the appealed order should be reversed and the Hacienda de Jalajala Escolta, Manila, and having received the same on December 10, 1958, (Poblacion) declared property of the conjugal partnership of Francisco said law office delivered them to plaintiff-appellant's son, Mr. Miguel de Borja and Josefa Tangco. Papa, who in turn personally handed the letters to his mother, Mrs. No error having been assigned against the ruling of the lower court that Butte, on December 11 and 12, 1958. Aside from this letter of claims for damages should be ventilated in the corresponding special defendant-appellant, the vendor, thru her attorney-in-fact Mrs. proceedings for the settlement of the estates of the deceased, the same Chambers, wrote said bank on December 11, 1958 confirming vendee's requires no pro announcement from this Court. letter regarding the sale of her 1/6 share in the Sta. Cruz property for IN VIEW OF THE FOREGOING, the appealed order of the Court of the sum of P500,000.00. Said letter was received by the bank on First Instance of Rizal in Case No. L-28040 is hereby affirmed; while December 15, 1958 and having endorsed it to Mrs. Butte's counsel, the those involved in Cases Nos. L-28568 and L-28611 are reversed and latter received the same on December 16, 1958. Appellant received the set aside. Costs against the appellant Tasiana Ongsingco Vda. de Borja letter on December 19, 1958. in all three (3) cases. On January 15, 1959, Mrs. Angela M. Butte, thru Atty. Resplandor Concepcion, C.J., Makalintal, Zaldivar, Castro, Teehankee, Barredo, Sobretodo, sent a letter and a Philippine National Bank cashier's check Makasiar, Antonio and Esguerra, JJ., concur. in the amount of P500,000.00 to Manuel Uy & Sons, Inc. offering to Fernando, J., took no part. redeem the 1/6 share sold by Mrs. Marie Garnier Vda. de Ramirez. This tender having been refused, plaintiff on the same day consigned the amount in court and filed the corresponding action for legal redemption. Without prejudice to the determination by the court of the reasonable and fair market value of the property sold which she alleged to be grossly excessive, plaintiff prayed for conveyance of the property, and for actual, moral and exemplary damages. After the filing by defendant of its answer containing a counterclaim, and plaintiff's reply thereto, trial was held, after which the court rendered decision on May 13, 1959, dismissing plaintiff's complaint on the G.R. No. L-15499 February 28, 1962 grounds that she has no right to redeem the property and that, if ever ANGELA M. BUTTE, plaintiff-appellant, she had any, she exercised the same beyond the statutory 30-day vs. period for legal redemptions provided by the Civil Code. The MANUEL UY and SONS, INC., defendant-appellee. counterclaim of defendant for damages was likewise dismissed for not Delgado, Flores and Macapagal for plaintiff-appellant. being sufficiently established. Both parties appealed directly to this Pelaez and Jalandoni for defendant-appellee. Court. REYES, J.B.L., J.: Based on the foregoing facts, the main issues posed in this appeal are: Appeal from a decision of the Court of First instance of Manila (1) whether or not plaintiff-appellant, having been bequeathed 1/3 of the dismissing the action for legal redemption filed by plaintiff-appellant. free portion of the estate of Jose V. Ramirez, can exercise the right of It appears that Jose V. Ramirez, during his lifetime, was a co-owner of a legal redemption over the 1/6 share sold by Mrs. Marie Garnier Vda. de house and lot located at Sta. Cruz, Manila, as shown by Transfer Ramirez despite the presence of the judicial administrator and pending Certificate of Title No. 52789, issued in the name of the following co- the final distribution of her share in the testate proceedings; and (2) owners: Marie Garnier Vda. de Ramirez, 1/6; Jose V. Ramirez, 1/6; whether or not she exercised the right of legal redemption within the Jose E. Ramirez, 1/6; Rita de Ramirez, 1/6; and Jose Ma. Ramirez, 1/6. period prescribed by law. On October 20, 1951, Jose V. Ramirez died. Subsequently, Special The applicable law involved in the present case is contained in Articles Proceeding No. 15026 was instituted to settle his estate, that included 1620, p. 1, and 1623 of the Civil Code of the Philippines, which read as the one-sixth (1/6) undivided share in the aforementioned property. And follows: although his last will and testament, wherein he bequeathed his estate ART. 1620. A co-owner of a thing may exercise the right of to his children and grandchildren and one-third (1/3) of the free portion redemption in case the shares of all the other-co-owners or of any of them, are sold to a third person. If the price of the legal redemption of the undivided share sold to Uy & Company by Mrs. alienation is grossly excessive, the redemptioner shall pay Garnier Ramirez. The reason is obvious: this right of legal redemption only a reasonable one. only came into existence when the sale to Uy & Sons, Inc. was Should two or more co-owners desire to exercise the right of perfected, eight (8) years after the death of Jose V. Ramirez, and redemption, they may only do so in proportion to the share formed no part of his estate. The redemption right vested in the heirs they may respectively have in the thing owned in common. originally, in their individual capacity, they did not derivatively acquire it (1522a) from their decedent, for when Jose V. Ramirez died, none of the other ART. 1623. The right of legal predemption or redemption shall co-owners of the Sta. Cruz property had as yet sold his undivided share not be exercised except within thirty days from the notice in to a stranger. Hence, there was nothing to redeem and no right of writing by the respective vendor, or by the vendor, as the case redemption; and if the late Ramirez had no such right at his death, he may be. The deed of sale shall not be accorded in the could not transmit it to his own heirs. Much less could Ramirez acquire Registry of Property, unless accompanied by an affidavit of such right of redemption eight years after his death, when the sale to Uy the vendor that he has given written notice thereof at all & Sons, Inc. was made; because death extinguishes civil personality, possible redemptioners. and, therefore, all further juridical capacity to acquire or transmit rights The right of redemption of co-owners excludes that of and obligations of any kind (Civil Code of the Phil., Art. 42). adjoining owners. (1524a) It is argued that the actual share of appellant Mrs. Butte in the estate of That the appellant Angela M. Butte is entitled to exercise the right of Jose V. Ramirez has not been specifically determined as yet, that it is legal redemption is clear. As testamentary heir of the estate of J.V. still contingent; and that the liquidation of estate of Jose V. Ramirez Ramirez, she and her co-heirs acquired an interest in the undivided may require the alienation of the decedent's undivided portion in the one-sixth (1/6) share owned by her predecessor (causante) in the Santa Sta. Cruz property, in which event Mrs. Butte would have no interest in Cruz property, from the moment of the death of the aforesaid co-owner, said undivided portion. Even if it were true, the fact would remain that so J.V. Ramirez. By law, the rights to the succession of a deceased long as that undivided share remains in the estate, the heirs of Jose V. persons are transmitted to his heirs from the moment of his death, and Ramirez own it, as the deceased did own it before his demise, so that the right of succession includes all property rights and obligations that his heirs are now as much co-owners of the Sta. Cruz property as Jose survive the decedent. V. Ramirez was himself a co-owner thereof during his lifetime. As co- ART. 776. The inheritance includes all the property, rights and owners of the property, the heirs of Jose V. Ramirez, or any one of obligations of a person which are not extinguished by his them, became personally vested with right of legal redemption as soon death. (659) as Mrs. Garnier sold her own pro-indiviso interest to Uy & Sons. Even if ART. 777. The rights to the succession are transmitted from subsequently, the undivided share of Ramirez (and of his heirs) should the moment of the death of the decedent. (657a) eventually be sold to satisfy the creditors of the estate, it would not ART. 947. The legatee or devisee acquires a right to the pure destroy their ownership of it before the sale, but would only convey or and simple legacies or devisees from the death of the transfer it as in turn sold (of it actually is sold) to pay his creditors. testator, and transmits it to his heirs. (881a) Hence, the right of any of the Ramirez heirs to redeem the Garnier The principle of transmission as of the time of the predecessor's death share will not be retroactively affected. All that the law requires is that is basic in our Civil Code, and is supported by other related articles. the legal redemptioner should be a co-owner at the time the undivided Thus, the capacity of the heir is determined as of the time the decedent share of another co-owner is sold to a stranger. Whether or not the died (Art. 1034); the legitime is to be computed as of the same redemptioner will continue being a co-owner after exercising the legal moment(Art. 908), and so is the in officiousness of the donation inter redemptioner is irrelevant for the purposes of law. vivos (Art. 771). Similarly, the legacies of credit and remission are valid Nor it can be argued that if the original share of Ramirez is sold by the only in the amount due and outstanding at the death of the testator (Art. administrator, his heirs would stand in law as never having acquired that 935),and the fruits accruing after that instant are deemed to pertain to share. This would only be true if the inheritance is repudiated or the the legatee (Art. 948). heir's quality as such is voided. But where the heirship is undisputed, As a consequence of this fundamental rule of succession, the heirs of the purchaser of hereditary property is not deemed to have acquired the Jose V. Ramirez acquired his undivided share in the Sta. Cruz property title directly from the deceased Ramirez, because a dead man can not from the moment of his death, and from that instant, they became co- convey title, nor from the administrator who owns no part of the estate; owners in the aforesaid property, together with the original surviving co- the purchaser can only derive his title from the Ramirez heirs, owners of their decedent (causante). A co-owner of an undivided share represented by the administrator, as their trustee or legal is necessarily a co-owner of the whole. Wherefore, any one of the representative. Ramirez heirs, as such co-owner, became entitled to exercise the right The right of appellant Angela M. Butte to make the redemption being of legal redemption (retracto de comuneros) as soon as another co- established, the next point of inquiry is whether she had made or owner (Maria Garnier Vda. de Ramirez) had sold her undivided share to tendered the redemption price within the 30 days from notices as a stranger, Manuel Uy & Sons, Inc. This right of redemption vested prescribed by law. This period, be it noted, is peremptory, because the exclusively in consideration of the redemptioner's share which the law policy of the law is not to leave the purchaser's title in uncertainty nowhere takes into account. beyond the established 30-day period. In considering whether or not the The situation is in no wise altered by the existence of a judicial offer to redeem was timely, we think that the notice given by the vendee administrator of the estate of Jose V. Ramirez while under the Rules of (buyer) should not be taken into account. The text of Article 1623 clearly Court the administrator has the right to the possession of the real and and expressly prescribes that the thirty days for making the redemption personal estate of the deceased, so far as needed for the payment of are to be counted from notice in writing by the vendor. Under the old law the decedent's debts and the expenses of administration (sec. 3, Rule (Civ. Code of 1889, Art. 1524), it was immaterial who gave the notice; 85), and the administrator may bring or defend actions for the recovery so long as the redeeming co-owner learned of the alienation in favor of or protection of the property or rights of the deceased (sec. 2, Rule 88), the stranger, the redemption period began to run. It is thus apparent such rights of possession and administration do not include the right of that the Philippine legislature in Article 1623 deliberately selected a particular method of giving notice, and that method must be deemed exclusive (39 Am. Jur., 237; Payne vs. State, 12 S.W. [2d] 528). As ruled in Wampler vs. Lecompte, 150 Atl. 458 (affd. in 75 Law Ed. [U.S.] 275) — Why these provisions were inserted in the statute we are not informed, but we may assume until the contrary is shown, that a state of facts in respect thereto existed, which warranted the legislature in so legislating. The reasons for requiring that the notice should be given by the seller, and not by the buyer, are easily divined. The seller of an undivided interest is in the best position to know who are his co-owners that under the law must be notified of the sale. Also, the notice by the seller removes all doubts as to the fact of the sale, its perfection; and its validity, the notice being a reaffirmation thereof, so that the party need not entertain doubt that the seller may still contest the alienation. This assurance would not exist if the notice should be given by the buyer. The notice which became operative is that given by Mrs. Chambers, in her capacity as attorney-in-fact of the vendor Marie Garnier Vda. de Ramirez. Under date of December 11, 1958, she wrote the Administrator Bank of the Philippine Islands that her principal's one- sixth (1/6) share in the Sta. Cruz property had been sold to Manuel Uy G.R. No. L-24434 January 17, 1968 & Sons, Inc. for P500,000.00. The Bank received this notice on HEIRS OF PEDRO REGANON, JOVENCIA REGANON, MENCIA December 15, 1958, and on the same day endorsed it to Mrs. Butte, REGANON, JOSEFA REGANON, VIOLETA REGANON, and FLORA care of Delgado, Flores and Macapagal (her attorneys), who received REGANON, plaintiffs-appellees, the same on December 16, 1958. Mrs. Butte tendered redemption and vs. upon the vendee's refusal, judicially consigned the price of P500,000.00 RUFINO IMPERIAL, defendant-appellant. on January 15, 1959. The latter date was the last one of the thirty days Torcuato L. Galon for plaintiffs-appellees. allowed by the Code for the redemption, counted by excluding V. Lacaya for defendant-appellant. December 16, 1958 and including January 15, 1959, pursuant to Article BENGZON, J.P., J.: 13 of the Civil Code. Therefore, the redemption was made in due time. This is an appeal from the orders dated June 9, 1964, July 14, 1964 The date of receipt of the vendor's notice by the Administrator Bank and August 11, 1964, respectively, of the Court of First Instance of (December 15) can not be counted as determining the start of thirty Zamboanga del Norte (Dipolog, Branch II). days; for the Administrator of the estate was not a proper redemptioner, The facts of the case are admitted by both parties. since, as previously shown, the right to redeem the share of Marie On February 22, 1963, the heirs of Pedro Reganon filed a complaint for Garnier did not form part of the estate of Jose V. Ramirez. recovery of ownership and possession of about one-hectare portion of a We find no jurisdiction for appellant's claim that the P500,000,00. paid parcel of land (Lot No. 1 or Lot No. 4952, situated at Miasi, Polanco, by Uy & Sons, Inc. for the Garnier share is grossly excessive. Gross Zamboanga del Norte, covered by O.T.C. No. 1447, with an area of excess cannot be predicated on mere individual estimates of market 7.9954 hectares), with damages, against Rufino Imperial. price by a single realtor. Defendant not having filed an answer within the reglementary period, The redemption and consignation having been properly made, the Uy the plaintiffs on April 8, 1963 filed a motion to declare the former in counterclaim for damages and attorney's fees predicated on the default. The trial court granted the motion in its order dated April 10, assumption that plaintiff's action was clearly unfounded, becomes 1963. untenable. On April 23, 1963, the plaintiffs presented their evidence ex parte before PREMISES CONSIDERED, the judgment appealed from is hereby the Clerk of Court acting as Commissioner. The court a quo on May 6, reversed and set aside, and another one entered: 1963, rendered a decision declaring the plaintiffs lawful owners of the (a) Declaring the consignation of P500,000,00 made by land in question and entitled to its peaceful possession and enjoyment; appellant Angela M. Butte duly and properly made; ordering defendant immediately to vacate the portion occupied by him (b) Declaring that said appellant properly exercised in due and to restore the peaceful possession thereof to plaintiffs; and time the legal redemption of the one-sixth (1/6) undivided sentencing defendant to pay plaintiffs the amount of P1,929.20 and the portion of the land covered by Certificate of Title No. 59363 of costs. the Office of the Register of Deeds of the City of Manila, sold On November 29, 1963, the plaintiffs filed a motion for issuance of a on December 9, 1958 by Marie Garnier Vda. de Ramirez to writ of execution. This was granted by the trial court in its order of appellant Manuel Uy & Sons, Inc. December 9, 1963. (c) Ordering appellant Manuel Uy & Sons, Inc. to accept the The Deputy Provincial Sheriff submitted on February 8, 1964 a sheriff's consigned price and to convey to Angela M. Butte the return of proceedings reporting the garnishment and sale of a carabao undivided portion above referred to, within 30 days from the and goat belonging to defendant for P153.00, and the attachment and time our decision becomes final, and subsequently to account sale of defendant's parcel of land covered by Tax Declaration No. 4694, for the rentals and fruits of the redeemed share from and after situated in Sicet, Polanco, Zamboanga del Norte, for P500.00 — both January 15, 1958, until its conveyance; and. sales having been made to the only bidder, plaintiffs' counsel Atty. Vic (d) Ordering the return of the records to the court of origin for T. Lacaya. further proceedings conformable to this opinion. On March 13, 1964, the Philippine National Bank deposited in the Without finding as to costs. Philippine National Bank-Dipolog Branch the residuary estate of its former ward, Eulogio Imperial, in the sum of P10,303.80, pursuant to an forthwith be relieved from any responsibility as such, and this order of Branch I of the Court of First Instance of Zamboanga del Norte proceeding shall be considered closed and terminated. 5 in Sp. Proc. No. R-145. And the condition has long been fulfilled, because on March 13, 1964 On May 25, 1964, the heirs of said Eulogio Imperial, one of whom is the Philippine National Bank-Manila deposited the residuary estate of defendant, executed a Deed of Extrajudicial Partition of the residuary the ward with the Philippine National Bank-Dipolog Branch, evidenced estate, wherein was apportioned P1,471.97 as defendant Rufino by a receipt attached to the records in Sp. Proc. No. R-145. 6 Imperial's share. When Eulogio Imperial died on September 13, 1962, the rights to his Informed of this development, the plaintiffs filed on June 5, 1964 an ex succession — from the moment of his death — were transmitted to his parte motion for issuance of an alias writ of execution and of an order heirs, one of whom is his son and heir, defendant-appellant directing the manager, or the representative, of the Philippine National herein. 7 This automatic transmission can not but proceed with greater Bank-Dipolog Branch, to hold the share of defendant and deliver the ease and certainty than in this case where the parties agree that the same to the provincial sheriff of the province to be applied to the residuary estate is not burdened with any debt. For, satisfaction of the balance of the money judgment. This was granted by The rights to the succession of a person are transmitted from the trial court (Branch II) in its order dated June 9, 1964. the moment of death, and where, as in this case, the heir is of On June 17, 1964, the Deputy Provincial Sheriff issued a sheriffs legal age and the estate is not burdened with any debts, said notification for levy addressed to defendant, giving notice of the heir immediately succeeds, by force of law, to the dominion, garnishment of the rights, interests, shares and participation that ownership, and possession of the properties of his defendant may have over the residuary estate of the late Eulogio predecessor and consequently stands legally in the shoes of Imperial, consisting of the money deposited in the Philippine National the latter. 8 Bank-Dipolog Branch. That the interest of an heir in the estate of a deceased person may be Defendant, through counsel, appearing for the first time before the trial attached for purposes of execution, even if the estate is in the process court, on June 24, 1964 filed a motion for reconsideration of the order of settlement before the courts, is already a settled matter in this dated June 9, 1964, and to quash the alias writ of execution issued jurisdiction. 9 pursuant to it, to which plaintiffs filed their opposition on July 6, 1964. It is admitted that the heirs of Eulogio Imperial, including herein On July 14, 1964, the trial court denied defendant's aforesaid motion. defendant-appellant, have on May 25, 1964 executed a Deed of Defendant's second motion for reconsideration likewise having denied Extrajudicial Partition. This instrument suffices to settle the entire estate by the trial court in its order of August 11, 1964, defendant appealed to of the decedent — provided all the requisites for its validity are Us, raising the following issues: fulfilled 10 — even without the approval of the court. Therefore, the (1) Upon the death of a ward, is the money accumulated in his estate for all practical purposes have been settled. The heirs are at full guardianship proceedings and deposited in a bank, still liberty to withdraw the residuary estate from the Philippine National considered in custodia legis and therefore cannot be Bank-Dipolog Branch and divide it among themselves. The only reason attached? they have not done so is because of the alleged illegal withdrawal from (2) Is the residuary estate of a U.S. veteran, which consists in said estate of the amount of P1,080.00 by one Gloria Gomez by the aggregate accumulated sum from the monthly allowances authority of Branch I of the Court of First Instance of Zamboanga del given him by the United States Veterans Administration Norte, which incident is now on appeal before the Court of Appeals. (USVA) during his lifetime, exempt from execution? This appeal, however, does not detract any from the fact that the Defendant-appellant argues that the property of an incompetent under guardianship proceedings is closed and terminated and the residuary guardianship is in custodia legis and therefore can not be attached. estate no longer under custodia legis. It is true that in a former case 1 it was held that property under custodia Finally, it is defendant-appellant's position that the residuary estate of legis can not be attached. But this was under the old Rules of Court. Eulogio Imperial, a former U.S. veteran, having been set aside from the The new Rules of Court 2 now specifically provides for the procedure to monthly allowances given him by the United States Veterans be followed in case what is attached is in custodia legis. 3 The clear Administration (USVA) during his lifetime, is exempt from execution. import of this new provision is that property under custodia legis is now Any pension, annuity, or gratuity granted by a Government to its officers attachable, subject to the mode set forth in said rule. or employees in recognition of past services rendered, is primordially Besides, the ward having died, the guardianship proceedings no longer aimed at tiding them over during their old age and/or disability. This is subsist: therefore a right personalissima, purely personal because founded on The death of the ward necessarily terminates the necessity. It requires no argument to show that where the recipient dies, guardianship, and thereupon all powers and duties of the the necessity motivating or underlying its grant necessarily ceases to guardian cease, except the duty, which remains, to make a be. Even more so in this case where the law 11 providing for the proper accounting and settlement in the probate court. 4 exemption is calculated to benefit U.S. veterans residing here, and is As a matter of fact, the guardianship proceedings was ordered therefore merely a manifestation of comity. conditionally closed by Branch I of the Court of First Instance of Besides, as earlier stated, the heirs of Eulogio Imperial, one of whom is Zamboanga del Norte in which it was pending, in its order of February appellant, have already executed a Deed of Extrajudicial Partition — the 8, 1964, where it stated — end result of which is that the property is no longer the property of the In the meantime, the guardian Philippine National Bank is estate but of the individual heirs. And it is settled that: hereby directed to deposit the residuary estate of said ward When the heirs by mutual agreement have divided the estate with its bank agency in Dipolog, this province, in the name of among themselves, one of the heirs can not therefore secure the estate of the deceased ward Eulogio Imperial, preparatory the appointment of an administrator to take charge of and to the eventual distribution of the same to the heirs when the administer the estate or a part thereof. The property is no latter shall be known, and upon proof of deposit of said longer the property of the estate, but of the individual heirs, residuary estate, the guardian Philippine National Bank shall whether it remains undivided or not. 12 WHEREFORE, the orders appealed from are hereby affirmed, with On August 12, 1961, the Court of Appeals affirmed the reconveyance costs against defendant-appellant. So ordered.1äwphï1.ñët judgment, with the correction that reconveyance be in favor of the twenty-one (21) heirs substituted as plaintiffs therein. About three years later, pursuant to an order of the CFI of Bulacan, Br. II, in the testacy proceedings, dated April 21, 1964, one of the parcels of land involved, Lot 6, was sold so that with its proceeds debtors who filed claims may be paid. The Philippine National Bank bought it at P41,184.00. Said amount was then deposited in the same bank by the administrator, subject to Court order. On December 18, 1964, defendants in the suit for reconveyance executed a deed of reconveyance over the subject parcels of land, in favor of Celestino Salvador's estate. Revoking the same as lot in accordance with the final judgment therein, the CFI of Bulacan, Br. I, on September 24, 1965, ordered a new deed of reconveyance to be executed, in favor of the twenty-one persons substituted as plaintiffs in that action. Accordingly, on September 30, 1965, a new deed of reconveyance was made, in favor of said twenty-one (21) persons as heirs of Celestino. Following this, on November 22, 1965, said Br. I, ordered the G.R. No. L-25952 June 30, 1967 corresponding title certificate (TCT No. 54639) in the administrator's MARGARITA SALVADOR, in her own behalf and as Attorney-in- name, cancelled; new title certificate to be issued in the names of the fact of CANDIDA SALVADOR, ET AL.,petitioners, same twenty-one (21) persons. Said order was carried out, and TCT vs. No. 63734 was issued in the names of the twenty-one persons. 3 THE HON. JUDGE ANDRES STA. MARIA, DOMINADOR On December 7, 1965, Br. I (reconveyance court) ordered the Philippine CARDENAS, REMEDIOS CABRERA, ALBERTO M. K. JAMIR and National Bank to release the P41,184.00 proceeds of the sale of Lot 6, SIMEON ENRIQUEZ, respondents. to the twenty-one (21) plaintiffs in the reconveyance case. Apparently, Arturo Joaquin for petitioners. although the passbook was given by the administrator to said twenty- Pelaez, Jalandoni and Jamir and S. V. Enriquez, for respondent Simeon one persons, no release was made, as the Philippine National Bank Enriquez. awaited Br. II's order. C. E. Medina and J. M. Locsin for respondent Philippine National Bank. Br. II, on March 1, 1966, approved the following claims against the Bala and Enriquez for the other respondents. estate: BENGZON, J.P., J.: Taxes — Nat'l. gov't P5,328.23 Seven parcels of titled land and two parcels of untitled land, situated in Bigaa, Bulacan, were owned by Celestino Salvador. In 1941, he Atty's fees — Atty. Enriquez 8,000.00 executed a deed of sale over them in favor of the spouses Alfonso Salvador and Anatolia Halili. Alleging that the sale was void for lack of Atty's fees — Atty. Jamir 12,000.00 consideration, he filed on May 12,1955, against said vendees, a suit for reconveyance of said parcels of land (CFI of Bulacan, Br. I, Civil Case Loan — R. Cabrera 13,544.35 No. 1082). On April 27, 1956, Celestino Salvador died, testate. As his alleged heirs, twenty-one persons1 were on May 18, 1956 substituted as TOTAL........ 38,872.58 plaintiffs in the action for reconveyance. And meanwhile, special ========= proceedings for the probate of his will and for letters testamentary was On March 30, 1966, said Br. II (probate court), ordered return of the instituted (CFI of Bulacan, Br. II, Sp. Proceedings No. 940). In said passbook to the administrator; and release to the administrator by the proceedings, Dominador Cardenas was appointed on June 11, 1956 PNB of the P41,184.00, or so much thereof is needed to pay the afore- special administrator of Celestino Salvador's testate estate.1äwphï1.ñët stated debts of the estate. On September 4, 1956 the administrator filed in Sp. Proceedings No. After failing to get reconsideration of said order, the twenty-one (21) 940 an inventory of properties of the estate, covering the same parcels substituted heirs, on April 25, 1966, filed with Us the present special of land subject matter of the reconveyance action. On September 7, civil action for certiorari with preliminary injunction to assail the order to 1956, Celestino Salvador's will was admitted to probate and Dominador pay the debts of the estate with the P41,184.00 proceeds of the sale of Cardenas was appointed executor of said will. Actual issuance of letters Lot 6; and to question Br. II's (probate court) power to dispose of the testamentary to him was made on October 27, 1956. parcels of land involved in the reconveyance suit in Br. I. Twenty-three (23) persons were instituted heirs in the will. Of these, Raised are these issues: (1) Are the parcels of land and the proceeds of nine (9) were not among the twenty-one (21) alleged relatives the sale of one of them, properties of the estate or not? (2) Does final substituted in the reconveyance case; and of the twenty-one (21) judgment in the reconveyance suit in favor of the twenty-one so-called substituted alleged heirs seven (7) were not instituted in the will. 2 heirs who substituted Celestino Salvador, bar the disposition of the In the suit for reconveyance, on November 26, 1956, the Court (CFI of reconveyed properties by the settlement court? Bulacan, Br. I) rendered judgment, ordering the defendants therein (the It is a settled point of law that the right of heirs to specific, distributive spouses Alfonso and Anatolia), to reconvey the parcels of land to the shares of inheritance does not become finally determinable until all the estate of Celestino Salvador. Appeal therefrom to the Court of Appeals debts of the estate are paid. Until then, in the face of said claims, their was interposed by said defendants.1äwphï1.ñët rights cannot be enforced, are inchoate, and subject to the existence of a residue after payment of the debts (Castellvi de Raquiza v. Castellvi, L-17630, October 31, 1963; Jimoga-on v. Belmonte, 84 Phil. 545; Sec. defendant-administrator was duly served with summons but he failed to 1, Rule 90, Rules of Court). answer, whereupon, on petition of the plaintiffs said defendant was Petitioners do not question the existence of the debts abovementioned. declared in default. The case was referred to a commissioner to receive They only contend that the properties involved having been ordered by the evidence for the plaintiffs, and defendant-administrator, as deputy final judgment reconveyed to them, not to the estate the same are not clerk of court, acted as such hearing commissioner. 1äwphï1.ñët properties of the estate but their own, and thus, not liable for debts of On 16 August 1961, decision was rendered decreeing the foreclosure of the estate. the mortgaged property and the sale thereof, if, within ninety days from Said contention is self-refuting. Petitioners rely for their rights on their finality of the decision, the obligation was not fully paid. The judgment alleged character as heirs of Celestino; as such, they were substituted not having been satisfied, a writ of execution was issued for the sale of in the reconveyance case; the reconveyance to them was the mortgaged property, and after compliance with the requirements of reconveyance to them as heirs of Celestino Salvador. It follows that the the law regarding the sending, posting and publication of the notice of properties they claim are, even by their own reasoning, part of sale, the Sheriff sold the property at public auction to the highest bidder, Celestino's estate. The right thereto as allegedly his heirs would arise who happened to be the plaintiffs themselves, for the sum of P2,888.50 only if said parcels of land are part of the estate of Celestino, not covering the amount of the judgment, plus the expenses of the sale and otherwise. Their having received the same, therefore, in the the Sheriff's fees. On petition of the plaintiffs, the sale was confirmed by reconveyance action, was perforce in trust for the estate, subject to its the court on 26 January 1962. obligations. They cannot distribute said properties among themselves On 6 February 1962, Filemon Ramirez, Monica Ramirez and Jose as substituted heirs without the debts of the estate being first satisfied. Eguaras, the first two being the heirs named in the petition for intestate At any rate, the proceeds of Lot 6 alone (P41,184.00) appears more proceedings, filed a complaint designated "For the Annulment of all than sufficient to pay the debt (P38,872.58); and there will remain the Proceedings in said Civil Case No. SC-292 for the Foreclosure of the other parcels of land not sold. As to the question of who will receive how Mortgage", against the spouses Artemio Baltazar and Susana Flores, much as heirs, the same is properly determinable by the settlement and Artemio Diawan, in his capacity as administrator of the estate of court, after payment of the debts (Pimentel v. Palanca, 5 Phil. 436; Victoriana Eguaras, deceased, and Silverio Talabis, in his capacity as Maningat v. Castillo, 75 Phil. 532; Jimoga-on v. Belmonte, supra). deputy provincial sheriff of Laguna, docketed as Civil Case No. SC-319 Wherefore, the petition for certiorari is denied, without costs. So of the Court of First Instance of Laguna. ordered. The facts hereinabove narrated are, succinctly, contained in the Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar Sanchez complaint in said Civil Case No. SC-319, with the additional averments and Castro JJ., concur. that the defendant Diawan, the deputy clerk of court appointed as administrator of the intestate estate of the deceased, acted in collusion with the other defendants Artemio Baltazar and Susana Flores, deliberately and in fraud of the plaintiffs: (a) in allowing the reglementary period within which to file an answer to lapse without notifying and/or G.R. No. L-25049 August 30, 1968 informing the said plaintiffs of the complaint for foreclosure, as a result FILEMON RAMIREZ, MONICA RAMIREZ, and JOSE of which he was declared in default to the prejudice of the estate which EGUARAS, plaintiffs-appellants, he represents; (b) that had the plaintiffs (Monica and Filemon) been vs. notified of the pendency of the case, the defendant administrator could ARTEMIO BALTAZAR, ET AL., defendants-appellees. have interposed a counterclaim because payment in the sum of Eduardo M. Peralta for plaintiffs-appellants. P1,548.52 had been made and received by the mortgagees on account Tomas P. Anonuevo for defendants-appellees Artemio Baltazar and of the debt; (c) in presiding as hearing officer in the ex parte hearing in Susana Flores. Civil Case No. 292, to receive evidence for plaintiffs therein, Tirso Caballero for defendant-appellee Artemio Diawan. notwithstanding the fact that there was another deputy clerk of court ANGELES, J.: available who could have acted in his stead, as a result of which an On appeal from an order dismissing the complaint, on motion to anomalous situation was created whereby he was a defendant and at dismiss, in Civil Case No. SC-319 of the Court of First Instance of the same time a commissioner receiving evidence against himself as Laguna. administrator; (d) in allowing judgment to become final without notifying It appears that on 6 January 1959, Victoriana Eguaras single, made and the plaintiffs; (e) in deliberately, allowing the 90-day period within which executed a real estate mortgage over a parcel of land, owned by her in to make payment to expire without notifying the heirs, as a result of fee simple, as security for a loan of P2,170.00 in favor of the spouses which the said heirs were not afforded an opportunity to make payments Artemio Baltazar and Susana Flores. ordered by the Court in its decision; and (f) in refusing to help the heirs Upon the demise of the mortgagor, the mortgagees, as creditors of the seek postponement of the auction sale. It is also alleged that it was only deceased, on 16 September 1960 filed a petition for the intestate when the property foreclosed was published for sale at public auction proceedings of her estate, in the Court of First Instance of Laguna, that the heirs came to know about the foreclosure proceedings. docketed as Civil Case No. SC-99 wherein said mortgages, as The defendants spouses, Artemio Baltazar and Susana Flores, filed a petitioners, alleged that Filemon Ramirez and Monica Ramirez are the motion to dismiss the complaint on the ground that the plaintiffs have no heirs of the deceased. Filemon Ramirez was appointed administrator of legal capacity to sue; defendant Diawan likewise moved to dismiss on the estate; however, having failed to qualify, on 16 January 1961, the two grounds: that plaintiffs have no legal capacity to sue and that the court appointed Artemio Diawan, then a deputy clerk of court, complaint states no cause of action. 1äwphï1.ñët administrator of the estate who, in due time, qualified for the office. Despite vigorous opposition interposed by the plaintiffs against the On 19 April 1961, the mortgagees, Artemio Baltazar and Susana Flores, aforesaid motions to dismiss, the court, on 13 March 1962, dismissed filed a complaint for foreclosure of the aforesaid mortgage, against the complaint with costs against the plaintiffs, reasoning thus: that Artemio Diawan, in his capacity as administrator of the estate, docketed "upon consideration of the evidence, said defendant could not have as Civil Case No. SC-292 of the Court of First Instance of Laguna. The offered any evidence to avoid the foreclosure of the mortgage which the Court found to be in order. Under the circumstances and with the allegations in the motions to dismiss filed by defendants-appellees does apparent disinterestedness of Filemon and Rolando to qualify as not indicate that that question was ever put at issue therein. On the administrator when appointed, there could not have been any other hand, the controversy — on the existence or inexistence of connivance and/or collusion between plaintiffs in this case and Artemio collusion between the parties as a result of which judgment was Diawan as administrator"; and that plaintiffs have no legal capacity to rendered against the estate — is the very core of the complaint that was sue since their status as legal heirs of the deceased has yet to be dismissed. Undoubtedly, the cause of action is based on Section 30, determined precisely in Special Proceeding No. SC-99, and until such Rule 132 of the Rules of Court. status is so fixed by the Court, they have no cause of action against We are not, however, in accord with the third assigned error — the defendants. denial of the motion for the issuance of preliminary injunction — for it In that order of 13 March 1962, the court also denied plaintiffs' petition puts at issue the factual finding made by the lower court that the for the issuance of a writ of preliminary injunction to enjoin defendants defendants had already been placed in possession of the property. At from entering and taking physical possession of the land in question on this stage of the proceeding, and considering the nature of the case the ground "that possession thereof was effected and delivered by the before Us, such a question is, at this time, beyond the competence of Provincial Sheriff to Artemio Baltazar and Susana Flores on February, the Court. 1962." PREMISES CONSIDERED, the order appealed from is hereby set Reconsideration of the aforesaid order having been denied, the plaintiffs aside insofar as it dismissed the complaint in Civil Case No. SC-319, took the present appeal where they assigned the following errors: (1) in and the records be remanded to the lower court for further proceedings. holding that plaintiffs-appellants have no legal capacity to sue until their Costs against defendants-appellees. The Clerk of Court is directed to status as legal heirs of the deceased is determined in Special furnish a copy of this decision to the Department of Justice for its Proceeding No. SC-99; (2) in ruling that there was no collusion or information. connivance among the defendants-appellees, despite the fact that the Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez, issue in the motion to dismiss is purely legal, not factual; and (3) in Castro and Fernando, JJ., concur. denying the petition for a writ of preliminary injunction. At the outset, let it be remembered that the defendants-appellees, in availing themselves of the defense that the plaintiffs-appellants had not been declared to be the heirs of the deceased Victoriana Eguaras, have overlooked the fact that the (defendants-appellees) themselves in their petition for intestate proceedings (Case SC-99) have alleged that Filemon Ramirez and Monica Ramirez, two of herein plaintiffs- appellants, are the heirs of the deceased. Insofar as defendants- appellees are concerned, it is our opinion that they are estopped from questioning the heirship of these two named persons to the estate of the deceased. There is no question that the rights to succession are automatically transmitted to the heirs from the moment of the death of the decedent.1 While, as a rule, the formal declaration or recognition to such successional rights needs judicial confirmation, this Court has, under special circumstances, protected these rights from encroachments made or attempted before the judicial declaration.2 In Pascual vs. Pascual,3 it was ruled that although heirs have no legal standing in court upon the commencement of testate or intestate proceedings, this rule admits of an exception as "when the administrator fails or refuses to act in which event the heirs may act in his place." A similar situation obtains in the case at bar. The administrator is being charged to have been in collusion and connivance with the mortgagees G.R. No. 77029 August 30, 1990 of a property of the deceased, allowing its foreclosure without notifying BIENVENIDO, ESTELITA, MACARIO, LUIS, ADELAIDE, ENRIQUITA the heirs, to the prejudice of the latter. Since the ground for the present and CLAUDIO, all surnamed, GEVERO, petitioners, action to annul the aforesaid foreclosure proceedings is the fraud vs. resulting from such insidious machinations and collusion in which the INTERMEDIATE APPELLATE COURT and DEL MONTE administrator has allegedly participated, it would be farfetched to expect DEVELOPMENT CORPORATION, respondents. the said administrator himself to file the action in behalf of the estate. Carlito B. Somido for petitioners. And who else but the heirs, who have an interest to assert and to Benjamin N. Tabios for private respondent. protect, would bring the action? Inevitably, this case should fall under the exception, rather than the general rule that pending proceedings for PARAS, J.: the settlement of the estate, the heirs have no right to commence an This is a petition for review on certiorari of the March 20, 1988 action arising out of the rights belonging to the deceased. decision 1 of the then Intermediate Appellate Court (now Court of On the second point raised, We fully agree with the plaintiffs-appellants Appeals) in AC-GR CV No. 69264, entitled Del Monte Development that the lower court had gone too far in practically adjudicating the case Corporation vs. Enrique Ababa, et al., etc. affirming the decision 2 of the on the merits when it made the observation that "there could not have then Court of First Instance (now Regional Trial Court) of Misamis been any connivance and/or collusion between plaintiffs in this case Oriental declaring the plaintiff corporation as the true and absolute and Artemio Diawan as administrator." A thorough scrutiny of the owner of that portion of Lot 476 of the Cagayan Cadastre, particularly Lot No. 2476-D of the subdivision plan (LRC) Psd-80450, containing an WHEREFORE, premises considered, judgment is area of Seven Thousand Eight Hundred Seventy Eight (7,878) square hereby rendered declaring the plaintiff corporation meters more or less. as the true and absolute owner of that portion of Lot As found by the Appellate Court, the facts are as follows: No. 2476 of the Cagayan Cadastre, particularly Lot The parcel of land under litigation is Lot No. 2476 of No. 2476-D of the subdivision plan (LRC) Psd- the Subdivision Plan Psd-37365 containing an area 80450, containing an area of SEVEN THOUSAND of 20,119 square meters and situated at Gusa, EIGHT HUNDRED SEVENTY EIGHT (7,878) Cagayan de Oro City. Said lot was acquired by square meters, more or less. The other portions of purchase from the late Luis Lancero on September Lot No. 2476 are hereby adjudicated as follows: 15, 1964 as per Deed of Absolute Sale executed in Lot No. 2476 – B – to the heirs of Elena Gevero; favor of plaintiff and by virtue of which Transfer Lot No. 2476 – C – to the heirs of Restituto Gevero; Certificate of Title No. 4320 was issued to plaintiff Lot No. 2476 – E – to the defendant spouses (DELCOR for brevity). Luis Lancero, in turn Enrique C. Torres and Francisca Aquino; acquired the same parcel from Ricardo Gevero on Lot No. 2476 – F – to the defendant spouses February 5, 1952 per deed of sale executed by Eduard Rumohr and Emilia Merida Rumohf ; Ricardo Gevero which was duly annotated as entry Lot Nos. 2476-H, 2476-I and 2476 — G — to No. 1128 at the back of Original Certificate of Title defendant spouses Enrique Abada and Lilia Alvarez No. 7610 covering the mother lot identified as Lot Abada. No. 2476 in the names of Teodorica Babangha — No adjudication can be made with respect to Lot 1/2 share and her children: Maria; Restituto, Elena, No. 2476-A considering that the said lot is the Ricardo, Eustaquio and Ursula, all surnamed subject of a civil case between the Heirs of Maria surnamed Gevero, 1/2 undivided share of the whole Gevero on one hand and the spouses Daniel area containing 48,122 square meters. Borkingkito and Ursula Gevero on the other hand, Teodorica Babangha died long before World War II which case is now pending appeal before the Court and was survived by her six children of Appeals. No pronouncement as to costs, aforementioned. The heirs of Teodorica Babangha SO ORDERED. (Decision, Record on Appeal, p. on October 17,1966 executed an Extra-Judicial 203; Rollo, pp. 21-22) Settlement and Partition of the estate of Teodorica From said decision, defendant heirs of Ricardo Gevero (petitioners Babangha, consisting of two lots, among them was herein) appealed to the IAC (now Court of Appeals) which lot 2476. By virtue of the extra-judicial settlement subsequently, on March 20, 1986, affirmed the decision appealed from. and partition executed by the said heirs of Petitioners, on March 31, 1986, filed a motion for reconsideration (Rollo, Teodorica Babangha, Lot 2476-A to Lot 2476-I, p. 28) but was denied on April 21, 1986. inclusive, under subdivision plan (LRC) Psd-80450 Hence, the present petition. duly approved by the Land Registration This petition is devoid of merit. Commission, Lot 2476-D, among others, was Basically, the issues to be resolved in the instant case are: 1) adjudicated to Ricardo Gevero who was then alive whether or not the deed of sale executed by Ricardo Gevero at the time of extra-judicial settlement and partition to Luis Lancero is valid; 2) in the affirmative, whether or not in 1966. Plaintiff (private respondent herein) filed an the 1/2 share of interest of Teodorica Babangha in one of the action with the CFI (now RTC) of Misamis Oriental litigated lots, lot no. 2476 under OCT No. 7610 is included in to quiet title and/or annul the partition made by the the deed of sale; and 3) whether or not the private heirs of Teodorica Babangha insofar as the same respondents' action is barred by laches. prejudices the land which it acquired a portion of lot Petitioners maintain that the deed of sale is entirely invalid citing alleged 2476. flaws thereto, such as that: 1) the signature of Ricardo was forged Plaintiff now seeks to quiet title and/or annul the without his knowledge of such fact; 2) Lancero had recognized the fatal partition made by the heirs of Teodorica Babangha defect of the 1952 deed of sale when he signed the document in 1968 insofar as the same prejudices the land which it entitled "Settlement to Avoid the Litigation"; 3) Ricardo's children acquired, a portion of Lot 2476. Plaintiff proved that remained in the property notwithstanding the sale to Lancero; 4) the before purchasing Lot 2476-A it first investigated designated Lot No. is 2470 instead of the correct number being Lot No. and checked the title of Luis Lancero and found the 2476; 5) the deed of sale included the share of Eustaquio Gevero same to be intact in the office of the Register of without his authority; 6) T.C.T. No. 1183 of Lancero segregated the area Deeds of Cagayan de Oro City. The same with the of 20,119 square meters from the bigger area (OCT No. 7616) without subdivision plan (Exh. "B"), the corresponding the consent of the other co-owners; 7) Lancero caused the 1952 technical description (Exh. "P") and the Deed of Subdivision survey without the consent of the Geveros' to bring about Sale executed by Ricardo Gevero — all of which the segregation of the 20,119 square meters lot from the mother lot were found to be unquestionable. By reason of all 2476 which brought about the issuance of his title T-1183 and to these, plaintiff claims to have bought the land in DELCOR's title T4320, both of which were illegally issued; and 8) the good faith and for value, occupying the land since area sold as per document is 20,649 square meters whereas the the sale and taking over from Lancero's possession segregated area covered by TCT No. T-1183 of Lancero turned out to until May 1969, when the defendants Abadas be 20,119 square meters (Petitioners Memorandum, pp. 62-78). forcibly entered the property. (Rollo, p. 23) As to petitioners' claim that the signature of Ricardo in the 1952 deed of After trial the court a quo on July 18, 1977 rendered judgment, the sale in favor of Lancero was forged without Ricardo's knowledge of dispositive portion of which reads as follows: such fact (Rollo, p. 71) it will be observed that the deed of sale in question was executed with all the legal formalities of a public sisters listed in the Title and that the Deed did not include the share of document. The 1952 deed was duly acknowledged by both parties Ricardo, as inheritance from Teodorica, because the Deed did not recite before the notary public, yet petitioners did not bother to rebut the legal that she was deceased at the time it was executed (Rollo, pp. 67-68). presumption of the regularity of the notarized document (Dy v. Sacay, The hereditary share in a decedents' estate is transmitted or vested 165 SCRA 473 [1988]); Nuguid v. C.A., G.R. No. 77423, March 13, immediately from the moment of the death of the "causante" or 1989). In fact it has long been settled that a public document executed predecessor in interest (Civil Code of the Philippines, Art. 777), and and attested through the intervention of the notary public is evidence of there is no legal bar to a successor (with requisite contracting capacity) the facts in clear, unequivocal manner therein expressed. It has the disposing of his hereditary share immediately after such death, even if presumption of regularity and to contradict all these, evidence must be the actual extent of such share is not determined until the subsequent clear, convincing and more than merely preponderant (Rebuleda v. liquidation of the estate (De Borja v. Vda. de Borja, 46 SCRA 577 I.A.C., 155 SCRA 520-521 [1987]). Forgery cannot be presumed, it [1972]). must be proven (Siasat v. IAC, No. 67889, October 10, 1985). Likewise, Teodorica Babangha died long before World War II, hence, the rights to petitioners allegation of absence of consideration of the deed was not the succession were transmitted from the moment of her death. It is substantiated. Under Art. 1354 of the Civil Code, consideration is therefore incorrect to state that it was only in 1966, the date of presumed unless the contrary is proven. extrajudicial partition, when Ricardo received his share in the lot as As to petitioners' contention that Lancero had recognized the fatal inheritance from his mother Teodorica. Thus, when Ricardo sold his defect of the 1952 deed when he signed the document in 1968 entitled share over lot 2476 that share which he inherited from Teodorica was "Settlement to Avoid Litigation" (Rollo, p. 71), it is a basic rule of also included unless expressly excluded in the deed of sale. evidence that the right of a party cannot be prejudiced by an act, Petitioners contend that Ricardo's share from Teodorica was excluded declaration, or omission of another (Sec. 28. Rule 130, Rules of Court). in the sale considering that a paragraph of the aforementioned deed This particular rule is embodied in the maxim "res inter alios acta alteri refers merely to the shares of Ricardo and Eustaquio (Rollo, p. 67-68). nocere non debet." Under Section 31, Rule 130, Rules of Court "where It is well settled that laws and contracts shall be so construed as to one derives title to property from another, the act, declaration, or harmonize and give effect to the different provisions thereof omission of the latter, while holding the title, in relation to the property is (Reparations Commission v. Northern Lines, Inc., 34 SCRA 203 [1970]), evidence against the former." It is however stressed that the admission to ascertain the meaning of the provisions of a contract, its entirety must of the former owner of a property must have been made while he was be taken into account (Ruiz v. Sheriff of Manila, 34 SCRA 83 [1970]). the owner thereof in order that such admission may be binding upon the The interpretation insisted upon by the petitioners, by citing only one present owner (City of Manila v. del Rosario, 5 Phil. 227 [1905]; Medel paragraph of the deed of sale, would not only create contradictions but v. Avecilla, 15 Phil. 465 [1910]). Hence, Lanceros' declaration or acts of also, render meaningless and set at naught the entire provisions executing the 1968 document have no binding effect on DELCOR, the thereof. ownership of the land having passed to DELCOR in 1964. Petitioners claim that DELCOR's action is barred by laches considering Petitioners' claim that they remained in the property, notwithstanding that the petitioners have remained in the actual, open, uninterrupted the alleged sale by Ricardo to Lancero (Rollo, p. 71) involves a question and adverse possession thereof until at present (Rollo, p. 17). of fact already raised and passed upon by both the trial and appellate An instrument notarized by a notary public as in the case at bar is a courts. Said the Court of Appeals: public instrument (Eacnio v. Baens, 5 Phil. 742). The execution of a Contrary to the allegations of the appellants, the trial public instrument is equivalent to the delivery of the thing (Art. 1498, 1st court found that Luis Lancero had taken possession Par., Civil Code) and is deemed legal delivery. Hence, its execution was of the land upon proper investigation by plaintiff the considered a sufficient delivery of the property (Buencamino v. Viceo, latter learned that it was indeed Luis Lancero who 13 Phil. 97; [1906]; Puato v. Mendoza, 64 Phil. 457 [1937]; Vda. de was the owner and possessor of Lot 2476 D. . . . Sarmiento v. Lesaca, 108 Phil. 900 [1960]; Phil. Suburban Development (Decision, C.A., p. 6). Corp. v. Auditor Gen., 63 SCRA 397 (1975]). As a finding of fact, it is binding upon this Court (De Gola-Sison v. Besides, the property sold is a registered land. It is the act of Manalo, 8 SCRA 595 [1963]; Gaduco vs. C.A., 14 SCRA 282 [1965]; registration that transfers the ownership of the land sold. (GSIS v. C.A., Ramos v. Pepsi-Cola, 19 SCRA 289 [1967]; Tan v. C.A., 20 SCRA 54 G.R. No. 42278, January 20, 1989). If the property is a registered land, [1967]; Ramirez Tel. Co. v. Bank of America, 33 SCRA 737 [1970]; the purchaser in good, faith has a right to rely on the certificate of title Lucero v. Loot, 25 SCRA 687 [1968]; Guerrero v. C.A., 142 SCRA 130 and is under no duty to go behind it to look for flaws (Mallorca v. De [1986]). Ocampo, No. L-26852, March 25, 1970; Unchuan v. C.A., 161 SCRA Suffice it to say that the other flaws claimed by the petitioners which 710 [1988]; Nuguid v. CA-G.R. No. 77427, March 13, 1989). allegedly invalidated the 1952 deed of sale have not been raised before Under the established principles of land registration law, the person the trial court nor before the appellate court. It is settled jurisprudence dealing with registered land may generally rely on the correctness of its that an issue which was neither averred in the complaint nor raised certificate of title and the law will in no way oblige him to go behind the during the trial in the court below cannot be raised for the first time on certificate to determine the condition of the property (Tiongco v. de la appeal as it would be offensive to the basic rules of fair play, justice and Merced, L-2446, July 25, 1974; Lopez vs. CA., G.R. No. 49739, January due process. (Matienzo v. Servidad, 107 SCRA 276 [1981]; Dela Santa 20, 1989; Davao Grains Inc. vs. IAC, 171 SCRA 612 [1989]). This v. C.A., 140 SCRA 44 [1985]; Dihiansan v. C.A., 157 SCRA 434 [1987]; notwithstanding, DELCOR did more than that. It did not only rely on the Anchuelo v. IAC, 147 SCRA 434 [1987]; Dulos Realty and Development certificate of title. The Court of Appeals found that it had first Corporation v. C.A., 157 SCRA [1988]; Kamos v. IAC, G.R. No. 78282, investigated and checked the title (T.C.T. No. T-1183) in the name of July 5, 1989). Luis Lancero. It likewise inquired into the Subdivision Plan, the Petitioners aver that the 1/2 share of interest of Teodorica (mother of corresponding technical description and the deed of sale executed by Ricardo) in Lot 2476 under OCT No. 7610 was not included in the deed Ricardo Gevero in favor of Luis Lancero and found everything in order. of sale as it was intended to limit solely to Ricardos' proportionate share It even went to the premises and found Luis Lancero to be in out of the undivided 1/2 of the area pertaining to the six (6) brothers and possession of the land to the exclusion of any other person. DELCOR brought into his marriage to Catalina Jaucian in 1908. Catalina, for her had therefore acted in good faith in purchasing the land in question. part, brought into the marriage untitled properties which she had Consequently, DELCOR's action is not barred by laches. inherited from her parents, Balbino Jaucian and Simona Anson. These The main issues having been disposed of, discussion of the other were augmented by other properties acquired by the spouses in the issues appear unnecessary. course of their union,1 which however was not blessed with children. PREMISES CONSIDERED, the instant petition is hereby DISMISSED Eventually, the properties of Mariano and Catalina were brought under and the decision of the Court of Appeals is hereby AFFIRMED. the Torrens System. Those that Mariano inherited from his father, SO ORDERED. Getulio Locsin, were surveyed cadastrally and registered in the name of "Mariano Locsin, married to Catalina Jaucian.'' 2 Mariano Locsin executed a Last Will and Testament instituting his wife, Catalina, as the sole and universal heir of all his properties. 3 The will was drawn up by his wife's nephew and trusted legal adviser, Attorney Salvador Lorayes. Attorney Lorayes disclosed that the spouses being childless, they had agreed that their properties, after both of them shall have died should revert to their respective sides of the family, i.e., Mariano's properties would go to his "Locsin relatives" (i.e., brothers and sisters or nephews and nieces), and those of Catalina to her "Jaucian relatives." 4 Don Mariano Locsin died of cancer on September 14, 1948 after a lingering illness. In due time, his will was probated in Special Proceedings No. 138, CFI of Albay without any opposition from both sides of the family. As directed in his will, Doña Catalina was appointed G.R. No. 89783 February 19, 1992 executrix of his estate. Her lawyer in the probate proceeding was MARIANO B. LOCSIN, JULIAN J. LOCSIN, JOSE B. LOCSIN, Attorney Lorayes. In the inventory of her husband's estate 5 which she AUREA B. LOCSIN, MATILDE L. CORDERO, SALVADOR B. submitted to the probate court for approval, 6Catalina declared that "all LOCSIN and MANUEL V. DEL ROSARIO, petitioners, items mentioned from Nos. 1 to 33 are the private properties of the vs. deceased and form part of his capital at the time of the marriage with THE HON. COURT OF APPEALS, JOSE JAUCIAN, FLORENTINO the surviving spouse, while items Nos. 34 to 42 are conjugal." 7 JAUCIAN, MERCEDES JAUCIAN ARBOLEDA, HEIRS OF JOSEFINA Among her own and Don Mariano's relatives, Doña Catalina was J. BORJA, HEIRS OF EDUARDO JAUCIAN and HEIRS OF VICENTE closest to her nephew, Attorney Salvador Lorayes, her nieces, Elena JAUCIAN, respondents. Jaucian, Maria Lorayes-Cornelio and Maria Olbes-Velasco, and the Aytona Law Office and Siquia Law Offices for petitioners. husbands of the last two: Hostilio Cornelio and Fernando Mabella, Sangil & Associates for private respondents. Velasco. 8 Her trust in Hostilio Cornelio was such that she made him custodian of all the titles of her properties; and before she disposed of NARVASA, C.J.: any of them, she unfailingly consulted her lawyer-nephew, Attorney Reversal of the decision of the Court of Appeals in CA-G.R. No. CV- Salvador Lorayes. It was Atty. Lorayes who prepared the legal 11186 — affirming with modification the judgment of the Regional Trial documents and, more often than not, the witnesses to the transactions Court of Albay in favor of the plaintiffs in Civil Case No. 7152 entitled were her niece Elena Jaucian, Maria Lorayes-Cornelio, Maria Olbes- "Jose Jaucian, et al. v. Mariano B. Locsin, et al.," an action for recovery Velasco, or their husbands. Her niece, Elena Jaucian, was her life-long of real property with damages — is sought. in these proceedings companion in her house. initiated by petition for review on certiorari in accordance with Rule 45 of Don Mariano relied on Doña Catalina to carry out the terms of their the Rules of Court. compact, hence, nine (9) years after his death, as if in obedience to his The petition was initially denied due course and dismissed by this Court. voice from the grave, and fully cognizant that she was also advancing in It was however reinstated upon a second motion for reconsideration years, Doña Catalina began transferring, by sale, donation or filed by the petitioners, and the respondents were required to comment assignment, Don Mariano's as well as her own, properties to their thereon. The petition was thereafter given due course and the parties respective nephews and nieces. She made the following sales and were directed to submit their memorandums. These, together with the donation of properties which she had received from her husband's evidence, having been carefully considered, the Court now decides the estate, to his Locsin nephews and nieces: case. EXHIBIT DATE PARTICULARS AREA/SQ.M. PRICE WITNESSES First, the facts as the Court sees them in light of the evidence on record: 23 Jan. 26, 1957 Deed of Absolute Sale in 962 P 481 The late Getulio Locsin had three children named Mariano, Julian and favor of Mariano Locsin Magdalena, all surnamed Locsin. He owned extensive residential and 1-JRL Apr. 7, 1966 Deed of Sale in favor of 430,203 P 20,000 agricultural properties in the provinces of Albay and Sorsogon. After his Jose R. Locsin death, his estate was divided among his three (3) children as follows: 1-JJL Mar. 22, 1967 Deed of Sale in favor of 5,000 P 1,000 Hostilio (a) the coconut lands of some 700 hectares in Bual, Pilar, Sorsogon, Cornello were adjudicated to his daughter, Magdalena Locsin; Julian Locsin (Lot 2020) Helen M. Jaucian (b) 106 hectares of coconut lands were given to Julian Locsin, father of 1 Nov. 29, 1974 Deed of Donation in 26,509 the petitioners Julian, Mariano, Jose, Salvador, Matilde, and Aurea, all favor Aurea Locsin, surnamed Locsin; Matilde L. Cordero (c) more than forty (40) hectares of coconut lands in Bogtong, eighteen and Salvador Locsin (18) hectares of riceland in Daraga, and the residential lots in Daraga, 2 Feb. 4, 1975 Deed of Donation in 34,045 Albay and in Legazpi City went to his son Mariano, which Mariano favor Aurea Locsin, Matilde L. Cordero 32 Mar. 1, 1973 Deed of Absolute Sale in 112 P 1,200 and Salvador Locsin favor of Juan Saballa 3 Sept. 9, 1975 Deed of Donation in (Lot 2059) 25 Dec. 28, 1973 Deed of Absolute Sale in 250 P 2,500 favor Aurea Locsin, of Rogelio Marticio Matilde L. Cordero Doña Catalina died on July 6, 1977. and Salvador Locsin Four years before her death, she had made a will on October 22, 1973 4 July 15, 1974 Deed of Absolute Sale in 1,424 Hostilio Cornelio affirming and ratifying the transfers she had made during her lifetime in favor of Aurea B. Locsin Fernando Velasco favor of her husband's, and her own, relatives. After the reading of her 5 July 15, 1974 Deed of Absolute Sale in 1,456 P 5,750 Hostilio will, all the relatives agreed that there was no need to submit it to the Cornelio court for probate because the properties devised to them under the will favor of Aurea B. Locsin Elena Jaucian had already been conveyed to them by the deceased when she was still 6 July 15, 1974 Deed of Absolute Sale in 1,237 P 5,720 - ditto - alive, except some legacies which the executor of her will or estate, favor of Aurea B. Locsin Attorney Salvador Lorayes, proceeded to distribute. 7 July 15, 1974 Deed of Absolute Sale in 1,404 P 4,050 - ditto - In 1989, or six (6) years after Doña Catalina's demise, some of her favor of Aurea B. Locsin Jaucian nephews and nieces who had already received their legacies 15 Nov. 26, 1975 Deed of Sale in favor of 261 P 4,930 - ditto - and hereditary shares from her estate, filed action in the Regional Trial Aurea Locsin Court of Legaspi City (Branch VIII, Civil Case No. 7152) to recover the 16 Oct. 17, 1975 Deed of Sale in favor of 533 P 2,000 Delfina Anson properties which she had conveyed to the Locsins during her lifetime, Aurea Locsin M. Acabado alleging that the conveyances were inofficious, without consideration, 17 Nov. 26, 1975 Deed of Sale in favor of 373 P 1,000 Leonor Satuito and intended solely to circumvent the laws on succession. Those who Aurea Locsin Mariano B. Locsin were closest to Doña Catalina did not join the action. 19 Sept. 1, 1975 Conditional Donation in 1,130 P 3,000 - ditto - After the trial, judgment was rendered on July 8, l985 in favor of the favor of Mariano Locsin plaintiffs (Jaucian), and against the Locsin defendants, the dispositive 1-MVRJ Dec. 29, 1972 Deed of Reconveyance 1,5110.66 P 1,000 part of which reads: Delfina Anson WHEREFORE, this Court renders judgment for the in favor of Manuel V. del (Lot 2155) Antonio Illegible plaintiffs and against the defendants: Rosario whose maternal (1) declaring the, plaintiffs, except the heirs of grandfather was Getulio Josefina J. Borja and Eduardo Jaucian, who Locsin withdrew, the rightful heirs and entitled to the entire 2-MVRJ June 30, 1973 Deed of Reconveyance 319.34 P 500 Antonio estate, in equal portions, of Catalina Jaucian Vda. Illegible de Locsin, being the nearest collateral heirs by right in favor of Manuel V. del (Lot 2155) Salvador Nical of representation of Juan and Gregorio, both Rosario but the rentals surnamed Jaucian, and full-blood brothers of from bigger portion of Catalina; Lot 2155 leased to Filoil (2) declaring the deeds of sale, donations, Refinery were assigned to reconveyance and exchange and all other Maria Jaucian Lorayes instruments conveying any part of the estate of Cornelio Catalina J. Vda. de Locsin including, but not limited Of her own properties, Doña Catalina conveyed the following to her own to those in the inventory of known properties (Annex nephews and nieces and others: B of the complaint) as null and void ab-initio; EXHIBIT DATE PARTICULARS AREA/SQ.M. PRICE (3) ordering the Register of Deeds of Albay and/or 2-JJL July 16, 1964 Deed of Sale in favor 5,000 P 1,000 Legazpi City to cancel all certificates of title and Vicente Jaucian (lot 2020) other transfers of the real properties, subject of this (6,825 sqm. when case, in the name of defendants, and derivatives resurveyed) therefrom, and issue new ones to the plaintiffs; 24 Feb. 12, 1973 Deed of Absolute Sale 100 P 1,000 (4) ordering the defendants, jointly and severally, to in favor of Francisco M. reconvey ownership and possession of all such Maquiniana properties to the plaintiffs, together with all 26 July 15, 1973 Deed of Absolute Sale in 130 P 1,300 muniments of title properly endorsed and delivered, favor of Francisco and all the fruits and incomes received by the Maquiniana defendants from the estate of Catalina, with legal 27 May 3, 1973 Deed of Absolute Sale in 100 P 1,000 interest from the filing of this action; and where favor of Ireneo Mamia reconveyance and delivery cannot be effected for 28 May 3, 1973 Deed of Absolute Sale in 75 P 750 reasons that might have intervened and prevent the favor of Zenaida Buiza same, defendants shall pay for the value of such 29 May 3, 1973 Deed of Absolute Sale in 150 P 1,500 properties, fruits and incomes received by them, favor of Felisa Morjella also with legal interest from the filing, of this case 30 Apr. 3, 1973 Deed of Absolute Sale in 31 P 1,000 (5) ordering each of the defendants to pay the favor of Inocentes Motocinos plaintiffs the amount of P30,000.00 as exemplary 31 Feb. 12, 1973 Deed of Absolute Sale in 150 P 1,500 damages; and the further sum of P20,000.00 each favor of Casimiro Mondevil as moral damages; and (6) ordering the defendants to pay the plaintiffs On March 27, 1967, Lot 2020 16 was partitioned by and among Doña attorney's fees and litigation expenses, in the Catalina, Julian Locsin, Vicente Jaucian and Agapito Lorete.17 At least amount of P30,000.00 without prejudice to any Vicente Jaucian, among the other respondents in this case, is estopped contract between plaintiffs and counsel. from assailing the genuineness and due execution of the sale of Costs against the defendants.9 portions of Lot 2020 to himself, Julian Locsin, and Agapito Lorete, and The Locsins appealed to the Court of Appeals (CA-G.R. No. CV-11186) the partition agreement that he (Vicente) concluded with the other co- which rendered its now appealed judgment on March 14, 1989, owners of Lot 2020. affirming the trial court's decision. Among Doña, Catalina's last transactions before she died in 1977 were The petition has merit and should be granted. the sales of property which she made in favor of Aurea Locsin and The trial court and the Court of Appeals erred in declaring the private Mariano Locsin in 1975.18 respondents, nephews and nieces of Doña Catalina J. Vda. de Locsin, There is not the slightest suggestion in the record that Doña Catalina entitled to inherit the properties which she had already disposed of more was mentally incompetent when she made those dispositions. Indeed, than ten (10) years before her death. For those properties did not form how can any such suggestion be made in light of the fact that even as part of her hereditary estate, i.e., "the property and transmissible rights she was transferring properties to the Locsins, she was also and obligations existing at the time of (the decedent's) death and those contemporaneously disposing of her other properties in favor of the which have accrued thereto since the opening of the Jaucians? She sold to her nephew, Vicente Jaucian, on July 16, 1964 succession." 10 The rights to a person's succession are transmitted from (21 years before her death) one-half (or 5,000 sq.m.) of Lot 2020. Three the moment of his death, and do not vest in his heirs until such years later, or on March 22, 1967, she sold another 5000 sq.m. of the time.11 Property which Doña Catalina had transferred or conveyed to same lot to Julian Locsin.19 other persons during her lifetime no longer formed part of her estate at From 1972 to 1973 she made several other transfers of her properties the time of her death to which her heirs may lay claim. Had she died to her relatives and other persons, namely: Francisco Maquiniana, intestate, only the property that remained in her estate at the time of her Ireneo Mamia, Zenaida Buiza, Feliza Morjella, Inocentes Motocinos, death devolved to her legal heirs; and even if those transfers were, one Casimiro Mondevil, Juan Saballa and Rogelio Marticio. 20 None of those and all, treated as donations, the right arising under certain transactions was impugned by the private respondents. circumstances to impugn and compel the reduction or revocation of a In 1975, or two years before her death, Doña Catalina sold some lots decedent's gifts inter vivos does not inure to the respondents since not only to Don Mariano's niece, Aurea Locsin, and his nephew, neither they nor the donees are compulsory (or forced) heirs. 12 Mariano Locsin There is thus no basis for assuming an intention on the part of Doña II, 21 but also to her niece, Mercedes Jaucian Arboleda. 22 If she was Catalina, in transferring the properties she had received from her late competent to make that conveyance to Mercedes, how can there be husband to his nephews and nieces, an intent to circumvent the law in any doubt that she was equally competent to transfer her other pieces violation of the private respondents' rights to her succession. Said of property to Aurea and Mariano II? respondents are not her compulsory heirs, and it is not pretended that The trial court's belief that Don Mariano Locsin bequeathed his entire she had any such, hence there were no legitimes that could conceivably estate to his wife, from a "consciousness of its real origin" which carries be impaired by any transfer of her property during her lifetime. All that the implication that said estate consisted of properties which his wife the respondents had was an expectancy that in nowise restricted her had inherited from her parents, flies in the teeth of Doña Catalina's freedom to dispose of even her entire estate subject only to the admission in her inventory of that estate, that "items 1 to 33 are the limitation set forth in Art. 750, Civil Code which, even if it were private properties of the deceased (Don Mariano) and forms (sic) part of breached, the respondents may not invoke: his capital at the time of the marriage with the surviving spouse, while Art. 750. The donation may comprehend all the items 34 to 42 are conjugal properties, acquired during the marriage." present property of the donor or part thereof, She would have known better than anyone else whether the listing provided he reserves, in full ownership or in included any of her paraphernal property so it is safe to assume that usufruct, sufficient means for the support of himself, none was in fact included. The inventory was signed by her under oath, and of all relatives who, at the time of the and was approved by the probate court in Special Proceeding No. 138 acceptance of the donation, are by law entitled to be of the Court of First Instance of Albay. It was prepared with the supported by the donor. Without such reservation, assistance of her own nephew and counsel, Atty. Salvador Lorayes, the donation shall be reduced on petition of any who surely would not have prepared a false inventory that would have person affected. (634a) been prejudicial to his aunt's interest and to his own, since he stood to The lower court capitalized on the fact that Doña Catalina was already inherit from her eventually. 90 years old when she died on July 6, 1977. It insinuated that because This Court finds no reason to disbelieve Attorney Lorayes' testimony of her advanced years she may have been imposed upon, or unduly that before Don Mariano died, he and his wife (Doña Catalina), being influenced and morally pressured by her husband's nephews and childless, had agreed that their respective properties should eventually nieces (the petitioners) to transfer to them the properties which she had revert to their respective lineal relatives. As the trusted legal adviser of inherited from Don Mariano's estate. The records do not support that the spouses and a full-blood nephew of Doña Catalina, he would not conjecture. have spun a tale out of thin air that would also prejudice his own For as early as 1957, or twenty-eight (28) years before her death, Doña interest. Catalina had already begun transferring to her Locsin nephews and Little significance, it seems, has been attached to the fact that among nieces the properties which she received from Don Mariano. She sold a Doña Catalina's nephews and nieces, those closest to her: (a) her 962-sq.m. lot on January 26, 1957 to his nephew and namesake lawyer-nephew Attorney Salvador Lorayes; (b) her niece and Mariano Locsin II. 13 On April 7, 1966, or 19 years before she passed companion Elena Jaucian: (c) her nieces Maria Olbes-Velasco and away, she also sold a 43 hectare land to another Locsin nephew, Jose Maria Lorayes-Cornelio and their respective husbands, Fernando R. Locsin.14 The next year, or on March 22, 1967, she sold a 5,000- Velasco and Hostilio Cornelio, did not join the suit to annul and undo the sq.m. portion of Lot 2020 to Julian Locsin.15 dispositions of property which she made in favor of the Locsins, although it would have been to their advantage to do so. Their Divinagracia's withdrawal from the partnership.1 Among the assets to be desistance persuasively demonstrates that Doña Catalina acted as a distributed were five (5) fishing boats, six (6) vehicles, two (2) parcels of completely free agent when she made the conveyances in favor of the land located at Sto. Niño and Talisay, Negros Occidental, and cash petitioners. In fact, considering their closeness to Doña Catalina it would deposits in the local branches of the Bank of the Philippine Islands and have been well-nigh impossible for the petitioners to employ "fraud, Prudential Bank. undue pressure, and subtle manipulations" on her to make her sell or Throughout the existence of the partnership, and even after Vicente donate her properties to them. Doña Catalina's niece, Elena Jaucian, Tabanao's untimely demise in 1994, petitioner failed to submit to daughter of her brother, Eduardo Jaucian, lived with her in her house. Tabanao's heirs any statement of assets and liabilities of the Her nephew-in-law, Hostilio Cornelio, was the custodian of the titles of partnership, and to render an accounting of the partnership's finances. her properties. The sales and donations which she signed in favor of the Petitioner also reneged on his promise to turn over to Tabanao's heirs petitioners were prepared by her trusted legal adviser and nephew, the deceased's 1/3 share in the total assets of the partnership, Attorney Salvador Lorayes. The (1) deed of donation dated November amounting to P30,000,000.00, or the sum of P10,000,000.00, despite 19, formal demand for payment thereof.2 197423 in favor of Aurea Locsin, (2) another deed of donation dated Consequently, Tabanao' s heirs, respondents herein, filed against February 4, 1975 24 in favor of Matilde Cordero, and (3) still another petitioner an action for accounting, payment of shares, division of deed dated September 9, 1975 25 in favor of Salvador Lorayes, were all assets and damages.3 In their complaint, respondents prayed as witnessed by Hostilio Cornelio (who is married to Doña Catalina's niece, follows: Maria Lorayes) and Fernando Velasco who is married to another niece, 1. Defendant be ordered to render the proper accounting of all Maria Olbes.26 The sales which she made in favor of Aurea Locsin on the assets and liabilities of the partnership at bar; and July 15, 1974 27 were witnessed by Hostilio Cornelio and Elena Jaucian. 2. After due notice and hearing defendant be ordered to Given those circumstances, said transactions could not have been pay/remit/deliver/surrender/yield to the plaintiffs the following: anything but free and voluntary acts on her part. A. No less than One Third (1/3) of the assets, Apart from the foregoing considerations, the trial court and the Court of properties, dividends, cash, land(s), fishing vessels, Appeals erred in not dismissing this action for annulment and trucks, motor vehicles, and other forms and reconveyance on the ground of prescription. Commenced decades after substance of treasures which belong and/or should the transactions had been consummated, and six (6) years after Doña belong, had accrued and/or must accrue to the Catalina's death, it prescribed four (4) years after the subject partnership; transactions were recorded in the Registry of Property,28 whether B. No less than Two Hundred Thousand Pesos considered an action based on fraud, or one to redress an injury to the (P200,000.00) as moral damages; rights of the plaintiffs. The private respondents may not feign ignorance C. Attorney's fees equivalent to Thirty Percent of said transactions because the registration of the deeds was (30%) of the entire share/amount/award which the constructive notice thereof to them and the whole world.29 Honorable Court may resolve the plaintiffs as WHEREFORE, the petition for review is granted. The decision dated entitled to plus P1,000.00 for every appearance in March 14, 1989 of the Court of Appeals in CA-G.R. CV No. 11186 is court.4 REVERSED and SET ASIDE. The private respondents' complaint for Petitioner filed a motion to dismiss the complaint on the grounds of annulment of contracts and reconveyance of properties in Civil Case improper venue, lack of jurisdiction over the nature of the action or suit, No. 7152 of the Regional Trial Court, Branch VIII of Legazpi City, is and lack of capacity of the estate of Tabanao to sue.5 On August 30, DISMISSED, with costs against the private respondents, plaintiffs 1994, the trial court denied the motion to dismiss. It held that venue was therein. properly laid because, while realties were involved, the action was SO ORDERED. directed against a particular person on the basis of his personal liability; hence, the action is not only a personal action but also an action in personam. As regards petitioner's argument of lack of jurisdiction over the action because the prescribed docket fee was not paid considering the huge amount involved in the claim, the trial court noted that a request for accounting was made in order that the exact value of the partnership may be ascertained and, thus, the correct docket fee may be paid. Finally, the trial court held that the heirs of Tabanao had aright to sue in their own names, in view of the provision of Article 777 of the Civil Code, which states that the rights to the succession are transmitted G.R. No. 126334 November 23, 2001 from the moment of the death of the decedent.6 EMILIO EMNACE, petitioner, The following day, respondents filed an amended vs. complaint,7 incorporating the additional prayer that petitioner be ordered COURT OF APPEALS, ESTATE OF VICENTE TABANAO, SHERWIN to "sell all (the partnership's) assets and thereafter TABANAO, VICENTE WILLIAM TABANAO, JANETTE TABANAO pay/remit/deliver/surrender/yield to the plaintiffs" their corresponding DEPOSOY, VICENTA MAY TABANAO VARELA, ROSELA share in the proceeds thereof. In due time, petitioner filed a TABANAO and VINCENT TABANAO, respondents. manifestation and motion to dismiss,8arguing that the trial court did not YNARES-SANTIAGO, J.: acquire jurisdiction over the case due to the plaintiffs' failure to pay the Petitioner Emilio Emnace, Vicente Tabanao and Jacinto Divinagracia proper docket fees. Further, in a supplement to his motion to were partners in a business concern known as Ma. Nelma Fishing dismiss,9 petitioner also raised prescription as an additional ground Industry. Sometime in January of 1986, they decided to dissolve their warranting the outright dismissal of the complaint. partnership and executed an agreement of partition and distribution of On June 15, 1995, the trial court issued an Order,10 denying the motion the partnership properties among them, consequent to Jacinto to dismiss inasmuch as the grounds raised therein were basically the same as the earlier motion to dismiss which has been denied. Anent the Nevertheless, unlike in the case of Manchester Development issue of prescription, the trial court ruled that prescription begins to run Corp. v. Court of Appeals,16 where there was clearly an effort to defraud only upon the dissolution of the partnership when the final accounting is the government in avoiding to pay the correct docket fees, we see no done. Hence, prescription has not set in the absence of a final attempt to cheat the courts on the part of respondents. In fact, the lower accounting. Moreover, an action based on a written contract prescribes courts have noted their expressed desire to remit to the court "any in ten years from the time the right of action accrues. payable balance or lien on whatever award which the Honorable Court Petitioner filed a petition for certiorari before the Court of may grant them in this case should there be any deficiency in the Appeals,11 raising the following issues: payment of the docket fees to be computed by the Clerk of I. Whether or not respondent Judge acted without Court."17 There is evident willingness to pay, and the fact that the jurisdiction or with grave abuse of discretion in taking docket fee paid so far is inadequate is not an indication that they are cognizance of a case despite the failure to pay the required trying to avoid paying the required amount, but may simply be due to an docket fee; inability to pay at the time of filing. This consideration may have moved II. Whether or not respondent Judge acted without the trial court and the Court of Appeals to declare that the unpaid jurisdiction or with grave abuse of discretion in insisting to try docket fees shall be considered a lien on the judgment award. the case which involve (sic) a parcel of land situated outside Petitioner, however, argues that the trial court and the Court of Appeals of its territorial jurisdiction; erred in condoning the non-payment of the proper legal fees and in III. Whether or not respondent Judge acted without allowing the same to become a lien on the monetary or property jurisdiction or with grave abuse of discretion in allowing the judgment that may be rendered in favor of respondents. There is merit estate of the deceased to appear as party plaintiff, when there in petitioner's assertion. The third paragraph of Section 16, Rule 141 of is no intestate case and filed by one who was never appointed the Rules of Court states that: by the court as administratrix of the estates; and The legal fees shall be a lien on the monetary or property IV. Whether or not respondent Judge acted without judgment in favor of the pauper-litigant. jurisdiction or with grave abuse of discretion in not dismissing Respondents cannot invoke the above provision in their favor because it the case on the ground of prescription. specifically applies to pauper-litigants. Nowhere in the records does it On August 8, 1996, the Court of Appeals rendered the assailed appear that respondents are litigating as paupers, and as such are decision,12 dismissing the petition for certiorari, upon a finding that no exempted from the payment of court fees.18 grave abuse of discretion amounting to lack or excess of jurisdiction The rule applicable to the case at bar is Section 5(a) of Rule 141 of the was committed by the trial court in issuing the questioned orders Rules of Court, which defines the two kinds of claims as: (1) those denying petitioner's motions to dismiss. which are immediately ascertainable; and (2) those which cannot be Not satisfied, petitioner filed the instant petition for review, raising the immediately ascertained as to the exact amount. This second class of same issues resolved by the Court of Appeals, namely: claims, where the exact amount still has to be finally determined by the I. Failure to pay the proper docket fee; courts based on evidence presented, falls squarely under the third II. Parcel of land subject of the case pending before the paragraph of said Section 5(a), which provides: trial court is outside the said court's territorial jurisdiction; In case the value of the property or estate or the sum claimed III. Lack of capacity to sue on the part of plaintiff heirs of is less or more in accordance with the appraisal of the court, Vicente Tabanao; and the difference of fee shall be refunded or paid as the case IV. Prescription of the plaintiff heirs' cause of action. may be. (Underscoring ours) It can be readily seen that respondents' primary and ultimate objective In Pilipinas Shell Petroleum Corporation v. Court of Appeals,19 this in instituting the action below was to recover the decedent's 1/3 share in Court pronounced that the above-quoted provision "clearly the partnership' s assets. While they ask for an accounting of the contemplates an Initial payment of the filing fees corresponding to the partnership' s assets and finances, what they are actually asking is for estimated amount of the claim subject to adjustment as to what later the trial court to compel petitioner to pay and turn over their share, or may be proved."20 Moreover, we reiterated therein the principle that the the equivalent value thereof, from the proceeds of the sale of the payment of filing fees cannot be made contingent or dependent on the partnership assets. They also assert that until and unless a proper result of the case. Thus, an initial payment of the docket fees based on accounting is done, the exact value of the partnership' s assets, as well an estimated amount must be paid simultaneous with the filing of the as their corresponding share therein, cannot be ascertained. complaint. Otherwise, the court would stand to lose the filing fees Consequently, they feel justified in not having paid the commensurate should the judgment later turn out to be adverse to any claim of the docket fee as required by the Rules of Court.1âwphi1.nêt respondent heirs. We do not agree. The trial court does not have to employ guesswork in The matter of payment of docket fees is not a mere triviality. These fees ascertaining the estimated value of the partnership's assets, for are necessary to defray court expenses in the handling of cases. respondents themselves voluntarily pegged the worth thereof at Thirty Consequently, in order to avoid tremendous losses to the judiciary, and Million Pesos (P30,000,000.00). Hence, this case is one which is really to the government as well, the payment of docket fees cannot be made not beyond pecuniary estimation, but rather partakes of the nature of a dependent on the outcome of the case, except when the claimant is a simple collection case where the value of the subject assets or amount pauper-litigant. demanded is pecuniarily determinable.13 While it is true that the exact Applied to the instant case, respondents have a specific claim - 1/3 of value of the partnership's total assets cannot be shown with certainty at the value of all the partnership assets - but they did not allege a specific the time of filing, respondents can and must ascertain, through informed amount. They did, however, estimate the partnership's total assets to be and practical estimation, the amount they expect to collect from the worth Thirty Million Pesos (P30,000,000.00), in a letter21 addressed to partnership, particularly from petitioner, in order to determine the proper petitioner. Respondents cannot now say that they are unable to make amount of docket and other fees.14 It is thus imperative for respondents an estimate, for the said letter and the admissions therein form part of to pay the corresponding docket fees in order that the trial court may the records of this case. They cannot avoid paying the initial docket fees acquire jurisdiction over the action.15 by conveniently omitting the said amount in their amended complaint. This estimate can be made the basis for the initial docket fees that where the defendant resides or may be found, or where the plaintiffs respondents should pay. Even if it were later established that the reside, at the election of the latter.26 amount proved was less or more than the amount alleged or estimated, Petitioner, however, insists that venue was improperly laid since the Rule 141, Section 5(a) of the Rules of Court specifically provides that action is a real action involving a parcel of land that is located outside the court may refund the 'excess or exact additional fees should the the territorial jurisdiction of the court a quo. This contention is not well- initial payment be insufficient. It is clear that it is only the difference taken. The records indubitably show that respondents are asking that between the amount finally awarded and the fees paid upon filing of this the assets of the partnership be accounted for, sold and distributed complaint that is subject to adjustment and which may be subjected to according to the agreement of the partners. The fact that two of the alien. assets of the partnership are parcels of land does not materially change In the oft-quoted case of Sun Insurance Office, Ltd. v. Hon. Maximiano the nature of the action. It is an action in personam because it is an Asuncion,22 this Court held that when the specific claim "has been left action against a person, namely, petitioner, on the basis of his personal for the determination by the court, the additional filing fee therefor shall liability. It is not an action in rem where the action is against the thing constitute a lien on the judgment and it shall be the responsibility of the itself instead of against the person.27 Furthermore, there is no showing Clerk of Court or his duly authorized deputy to enforce said lien and that the parcels of land involved in this case are being disputed. In fact, assess and collect the additional fee." Clearly, the rules and it is only incidental that part of the assets of the partnership under jurisprudence contemplate the initial payment of filing and docket fees liquidation happen to be parcels of land. based on the estimated claims of the plaintiff, and it is only when there The time-tested case of Claridades v. Mercader, et al.,28 settled this is a deficiency that a lien may be constituted on the judgment award issue thus: until such additional fee is collected. The fact that plaintiff prays for the sale of the assets of the Based on the foregoing, the trial court erred in not dismissing the partnership, including the fishpond in question, did not change complaint outright despite their failure to pay the proper docket fees. the nature or character of the action, such sale being merely a Nevertheless, as in other procedural rules, it may be liberally construed necessary incident of the liquidation of the partnership, which in certain cases if only to secure a just and speedy disposition of an should precede and/or is part of its process of dissolution. action. While the rule is that the payment of the docket fee in the proper The action filed by respondents not only seeks redress against amount should be adhered to, there are certain exceptions which must petitioner. It also seeks the enforcement of, and petitioner's compliance be strictly construed.23 with, the contract that the partners executed to formalize the In recent rulings, this Court has relaxed the strict adherence to partnership's dissolution, as well as to implement the liquidation and the Manchester doctrine, allowing the plaintiff to pay the proper docket partition of the partnership's assets. Clearly, it is a personal action that, fees within a reasonable time before the expiration of the applicable in effect, claims a debt from petitioner and seeks the performance of a prescriptive or reglementary period.24 personal duty on his part.29 In fine, respondents' complaint seeking the In the recent case of National Steel Corp. v. Court of Appeals,25 this liquidation and partition of the assets of the partnership with damages is Court held that: a personal action which may be filed in the proper court where any of The court acquires jurisdiction over the action if the filing of the parties reside.30 Besides, venue has nothing to do with jurisdiction the initiatory pleading is accompanied by the payment of the for venue touches more upon the substance or merits of the case.31 As requisite fees, or, if the fees are not paid at the time of the it is, venue in this case was properly laid and the trial court correctly filing of the pleading, as of the time of full payment of the fees ruled so. within such reasonable time as the court may grant, unless, of On the third issue, petitioner asserts that the surviving spouse of course, prescription has set in the meantime. Vicente Tabanao has no legal capacity to sue since she was never It does not follow, however, that the trial court should have appointed as administratrix or executrix of his estate. Petitioner's dismissed the complaint for failure of private respondent to objection in this regard is misplaced. The surviving spouse does not pay the correct amount of docket fees. Although the payment need to be appointed as executrix or administratrix of the estate before of the proper docket fees is a jurisdictional requirement, the she can file the action. She and her children are complainants in their trial court may allow the plaintiff in an action to pay the same own right as successors of Vicente Tabanao. From the very moment of within a reasonable time before the expiration of the Vicente Tabanao' s death, his rights insofar as the partnership was applicable prescriptive or reglementary period. If the plaintiff concerned were transmitted to his heirs, for rights to the succession are fails to comply within this requirement, the defendant should transmitted from the moment of death of the decedent.32 timely raise the issue of jurisdiction or else he would be Whatever claims and rights Vicente Tabanao had against the considered in estoppel. In the latter case, the balance partnership and petitioner were transmitted to respondents by operation between the appropriate docket fees and the amount actually of law, more particularly by succession, which is a mode of acquisition paid by the plaintiff will be considered a lien or any award he by virtue of which the property, rights and obligations to the extent of the may obtain in his favor. (Underscoring ours) value of the inheritance of a person are transmitted.33Moreover, Accordingly, the trial court in the case at bar should determine the respondents became owners of their respective hereditary shares from proper docket fee based on the estimated amount that respondents the moment Vicente Tabanao died.34 seek to collect from petitioner, and direct them to pay the same within a A prior settlement of the estate, or even the appointment of Salvacion reasonable time, provided the applicable prescriptive or reglementary Tabanao as executrix or administratrix, is not necessary for any of the period has not yet expired, Failure to comply therewith, and upon heirs to acquire legal capacity to sue. As successors who stepped into motion by petitioner, the immediate dismissal of the complaint shall the shoes of their decedent upon his death, they can commence any issue on jurisdictional grounds. action originally pertaining to the decedent.35 From the moment of his On the matter of improper venue, we find no error on the part of the trial death, his rights as a partner and to demand fulfillment of petitioner's court and the Court of Appeals in holding that the case below is a obligations as outlined in their dissolution agreement were transmitted personal action which, under the Rules, may be commenced and tried to respondents. They, therefore, had the capacity to sue and seek the court's intervention to compel petitioner to fulfill his obligations. Finally, petitioner contends that the trial court should have dismissed the complaint on the ground of prescription, arguing that respondents' action prescribed four (4) years after it accrued in 1986. The trial court and the Court of Appeals gave scant consideration to petitioner's hollow arguments, and rightly so. The three (3) final stages of a partnership are: (1) dissolution; (2) winding-up; and (3) termination.36 The partnership, although dissolved, continues to exist and its legal personality is retained, at which time it completes the winding up of its affairs, including the partitioning and distribution of the net partnership assets to the partners.37 For as long as the partnership exists, any of the partners may demand an accounting of the partnership's business. Prescription of the said right starts to run only upon the dissolution of the partnership when the final accounting is done.38 Contrary to petitioner's protestations that respondents' right to inquire into the business affairs of the partnership accrued in 1986, prescribing four (4) years thereafter, prescription had not even begun to run in the absence of a final accounting. Article 1842 of the Civil Code provides: The right to an account of his interest shall accrue to any partner, or his legal representative as against the winding up partners or the surviving partners or the person or partnership continuing the business, at the date of dissolution, in the absence of any agreement to the contrary. Applied in relation to Articles 1807 and 1809, which also deal with the duty to account, the above-cited provision states that the right to demand an accounting accrues at the date of dissolution in the absence of any agreement to the contrary. When a final accounting is made, it is only then that prescription begins to run. In the case at bar, no final accounting has been made, and that is precisely what respondents are seeking in their action before the trial court, since petitioner has failed or refused to render an accounting of the partnership's business and assets. Hence, the said action is not barred by prescription. In fine, the trial court neither erred nor abused its discretion when it denied petitioner's motions to dismiss. Likewise, the Court of Appeals did not commit reversible error in upholding the trial court's orders. Precious time has been lost just to settle this preliminary issue, with petitioner resurrecting the very same arguments from the trial court all the way up to the Supreme Court. The litigation of the merits and substantial issues of this controversy is now long overdue and must proceed without further delay. WHEREFORE, in view of all the foregoing, the instant petition is DENIED for lack of merit, and the case is REMANDED to the Regional Trial Court of Cadiz City, Branch 60, which is ORDERED to determine the proper docket fee based on the estimated amount that plaintiffs therein seek to collect, and direct said plaintiffs to pay the same within a reasonable time, provided the applicable prescriptive or reglementary period has not yet expired. Thereafter, the trial court is ORDERED to conduct the appropriate proceedings in Civil Case No. 416-C. Costs against petitioner.1âwphi1.nêt SO ORDERED.