SECOND DIVISION

[G.R. No. L-27952. February 15, 1982.]

TESTATE ESTATE OF JOSE EUGENIO RAMIREZ, MARIA LUISA PALACIOS, Administratrix, petitioner-appellee,
vs. MARCELLE D. VDA. DE RAMIREZ, ET AL., oppositors, JORGE and ROBERTO RAMIREZ, Legatees, oppositorsappellants.
DECISION
ABAD SANTOS, J p:
The main issue in this appeal is the manner of partitioning the testate estate of Jose Eugenio Ramirez among the
principal beneficiaries, namely: his widow Marcelle Demoron de Ramirez; his two grandnephews Roberto and Jorge
Ramirez; and his companion Wanda de Wrobleski. cdasia2005
The task is not trouble-free because the widow Marcelle is a French who lives in Paris, while the companion
Wanda is an Austrian who lives in Spain. Moreover, the testator provided for substitutions. llcd
Jose Eugenio Ramirez, a Filipino national, died in Spain on December 11, 1964, with only his widow as
compulsory heir. His will was admitted to probate by the Court of First Instance of Manila, Branch X, on July 27, 1965.
Maria Luisa Palacios was appointed administratrix of the estate. In due time she submitted an inventory of the estate as
follows:
"INVENTARIO
Una sexta parte (1/6) pro-indivisa de un terreno,
con su mejoras y edificaciones, situado en la
Escolta, Manila P500,000.00
Una sexta parte (1/6) pro-indivisa de dos parcelas
de terreno situadas en Antipolo, Rizal 658.34
Cuatrocientos noventa y un (491) acciones de la 'Central
Azucarera de la Carlota' a P17.00 por accion
8,347.00
Diez mil ochocientos seiz (10,806) acciones de la
'Central Luzon Milling Co.,' disuelta y en liquidacion,
a P0.15 por accion
1,620.90
Cuenta de Ahorros en el Philippine Trust Co.
2,350.73

TOTAL P512,976.97
MENOS:
Deuda al Banco de las Islas Pilipinas, garantizada
con prenda de las acciones de La Carlota
P5,000.00

VALOR LIQUIDO
P507,976.97"
The testamentary dispositions are as follows:
"A. En nuda propiedad, a D. Roberto y D. Jorge Ramirez, ambos menores de edad, residentes en Manila, I. F.,
calle Wright, No. 1818, Malate, hijos de su sobrino D. Jose Ma. Ramirez, con sustitucion vulgar a favor de sus respectivos
descendientes, y, en su defecto, con sustitucion vulgar reciproca entre ambos. 2005SE
"El precedente legado en nuda propiedad de la participacion indivisa de la finca Santa-Cruz Building, lo ordena el
testador a favor de los legatarios nombrados, en atencion a que dicha propiedad fue creacion del querido padre del
otorgante y por ser aquellos continuadores del apellido Ramirez.
"B. Y en usufructo a saber:
a. En cuanto a una tercera parte, a favor de la esposa del testador, Da. Marcelle Ramirez, domiciliada en IE
PECO, calle del General Gallieni, No. 33, Seine, Francia, con sustitucion vulgar u fideicomisaria a favor de Da. Wanda de
Wrobleski, de Palma de Mallorca, Son Rapia, Avenida de los Reyes 13,
b. Y en cuanto a las dos terceras partes restantes, a favor de la nombrado Da. Wanda de Wrobleski, con
sustitucion vulgar y fideicomisaria, a saber:
"En cuanto a la mitad de dichas dos terceras partes, a favor de D. Juan Pablo Jankowski, de Son Rapia, Palma
de Mallorca; y en cuanto a la mitad restante, a favor de su sobrino, D. Horace V. Ramirez, San Luis Building, Florida St.
Ermita, Manila, I.F.
"A pesar de las sustituciones fideicomisarias precedentemente ordinadas, las usufructuarias nombradas
conjuntamente con los nudo propietarios, podran en cualquier momento vender a tercero los bienes objeto delegado, sin
intervencion alguna de los titulares fideicomisarios."
On June 23, 1966, the administratrix submitted a project of partition as follows: the property of the deceased is to
be divided into two parts. One part shall go to the widow "en pleno dominio" in satisfaction of her legitime; the other part or
"free portion" shall go to Jorge and Roberto Ramirez "en nuda propriedad." Furthermore, one third (1/3) of the free portion
is charged with the widow's usufruct and the remaining two-third (2/3) with a usufruct in favor of Wanda.
Jorge and Roberto opposed the project of partition on the grounds: (a) that the provisions for vulgar substitution in
favor of Wanda de Wrobleski with respect to the widow's usufruct and in favor of Juan Pablo Jankowski and Horacio V.
Ramirez, with respect to Wanda's usufruct are invalid because of the first heirs (Marcelle and Wanda) survived the
testator; (b) that the provisions for fideicommissary substitutions are also invalid because the first heirs are not related to
the second heirs or substitutes within the first degree, as provided in Article 863 of the Civil Code; (c) that the grant of a
usufruct over real property in the Philippines in favor of Wanda de Wrobleski, who is an alien, violates Section 5, Article
XIII of the Philippine Constitution; and that (d) the proposed partition of the testator's interest in the Santa Cruz (Escolta)
Building between the widow Marcelle, and the appellants, violates the testator's express will to give this property to them.
Nonetheless, the lower court approved the project of partition in its order dated May 3, 1967. It is this order which Jorge
and Roberto have appealed to this Court. 05SEcdasia
1.
The widow's legitime.
The appellant's do not question the legality of giving Marcelle one-half of the estate in full ownership. They admit
that the testator's dispositions impaired his widow's legitime. Indeed, under Art. 900 of the Civil Code "If the only survivor
is the widow or widower, she or he shall be entitled to one-half of the hereditary estate." And since Marcelle alone survived
the deceased, she is entitled to one-half of his estate over which he could impose no burden, encumbrance, condition or
substitution of any kind whatsoever. (Art. 904, par. 2, Civil Code). cdrep

It is the one-third usufruct over the free portion which the appellants question and justifiably so. It appears that the
court a quo approved the usufruct in favor of Marcelle because the testament provides for a usufruct in her favor of onethird of the estate. The court a quo erred for Marcelle who is entitled to one-half of the estate "en pleno dominio" as her
legitime and which is more than what she is given under the will is not entitled to have any additional share in the estate.
To give Marcelle more than her legitime will run counter to the testator's intention for as stated above his dispositions even
impaired her legitime and tended to favor Wanda.
2.
The substitutions.
It may be useful to recall that "Substitution is the appointment of another heir so that he may enter into the
inheritance in default of the heir originally instituted." (Art. 857, Civil Code.) And that there are several kinds of
substitutions, namely: simple or common, brief or compendious, reciprocal, and fideicommissary. (Art. 858, Civil Code.)
According to Tolentino, "Although the Code enumerates four classes, there are really only two principal classes of
substitutions: the simple and the fideicommissary. The others are merely variations of these two." (III Civil Code, p. 185
[1973]).
The simple or vulgar is that provided in Art. 859 of the Civil Code which reads:
"ART. 859.
The testator may designate one or more persons to substitute the heir or heirs instituted in case
such heir or heirs should die before him, or should not wish, or should be incapacitated to accept the inheritance.
"A simple substitution, without a statement of the cases to which it refers, shall comprise the three mentioned in
the preceding paragraph, unless the testator has otherwise provided."
The fideicommissary substitution is described in the Civil Code as follows: cdStud05
"ART. 863.
A fideicommissary substitution by virtue of which the fiduciary or first heir instituted is entrusted
with the obligation to preserve and to transmit to a second heir the whole or part of inheritance, shall be valid and shall
take effect, provided such substitution does not go beyond one degree from the heir originally instituted, and provided
further that the fiduciary or first heir and the second heir are living at time of the death of the testator."
It will be noted that the testator provided for a vulgar substitution in respect of the legacies of Roberto and Jorge
Ramirez, the appellants, thus: "con sustitucion vulgar a favor de sus respectivos descendientes, y, en su defecto, con
substitucion vulgar reciproca entre ambos." The appellants do not question the legality of the substitution so provided.
The appellants question the "sustitucion vulgar y fideicomisaria a favor de Da. Wanda de Wrobleski" in connection
with the one-third usufruct over the estate given to the widow Marcelle. However, this question has become moot because
as We have ruled above, the widow is not entitled to any usufruct.
The appellants also question the "sustitucion vulgar y fideicomisaria" in connection with Wanda's usufruct over
two-thirds of the estate in favor of Juan Pablo Jankowski and Horace V. Ramirez.
They allege that the substitution in its vulgar aspect is void because Wanda survived the testator or stated
differently because she did not predecease the testator. But dying before the testator is not the only case for vulgar
substitution for it also includes refusal or incapacity to accept the inheritance as provided in Art. 859 of the Civil Code,
supra. Hence, the vulgar substitution is valid.
As regards the substitution in its fideicommissary aspect, the appellants are correct in their claim that it is void for
the following reasons:
(a)
The substitutes (Juan Pablo Jankowski and Horace V. Ramirez) are not related to Wanda, the heir
originally instituted. Art. 863 of the Civil Code validates a fideicommissary substitution "provided such substitution does not
go beyond one degree from the heir originally instituted."
What is meant by "one degree" from the first heir is explained by Tolentino as follows:
"Scaevola, Maura, and Traviesas construe 'degree' as designation, substitution, or transmission. The Supreme
Court of Spain has decidedly adopted this construction. From this point of view, there can be only one transmission or
substitution, and the substitute need not be related to the first heir. Manresa, Morell, and Sanchez Roman, however,
construe the word 'degree' as generation, and the present Code has obviously followed this interpretation, by providing
that the substitution shall not go beyond one degree 'from the heir originally instituted.' The Code thus clearly indicates
that the second heir must be related to and be one generation from the first heir. 05Studcd
"From this, it follows that the fideicommissary can only be either a child or a parent of the first heir. These are the
only relatives who are one generation or degree from the fiduciary." (Op. cit., pp. 193-194.).
(b)
There is no absolute duty imposed on Wanda to transmit the usufruct to the substitutes as required by
Arts. 865 and 867 of the Civil Code. In fact, the appellee admits "that the testator contradicts the establishment of a
fideicommissary substitution when he permits the properties subject of the usufruct to be sold upon mutual agreement of
the usufructuaries and the naked owners." (Brief, p. 26).
3.
The usufruct of Wanda.
The appellants claim that the usufruct over real properties of the estate in favor of Wanda is void because it
violates the constitutional prohibition against the acquisition of lands by aliens.
The 1935 Constitution which is controlling provides as follows:
"SEC. 5.
Save in cases of hereditary succession, no private agricultural land shall be transferred or
assigned except to individuals, corporations, or associations qualified to acquire or hold lands of the public domain in the
Philippines." (Art. XIII.).
The court a quo upheld the validity of the usufruct given to Wanda on the ground that the Constitution covers not
only succession by operation of law but also testamentary succession. We are of the opinion that the Constitutional
provision which enables aliens to acquire private lands does not extend to testamentary succession for otherwise the
prohibition will be for naught and meaningless. Any alien would be able to circumvent the prohibition by paying money to a
Philippine landowner in exchange for a devise of a piece of land.
This opinion notwithstanding, We uphold the usufruct in favor of Wanda because a usufruct, albeit a real right,
does not vest title to the land in the usufructuary and it is the vesting of title to land in favor of aliens which is proscribed by
the Constitution. LexLib
IN VIEW OF THE FOREGOING, the estate of Jose Eugenio Ramirez is hereby ordered distributed as follows:
One-half (1/2) thereof to his widow as her legitime; Stud2005
One-half (1/2) thereof which is the free portion to Roberto and Jorge Ramirez in naked ownership and the usufruct
to Wanda de Wrobleski with a simple substitution in favor of Juan Pablo Jankowski and Horace V. Ramirez.
The distribution herein ordered supersedes that of the court a quo. No special pronouncement as to costs.
SO ORDERED.

THIRD DIVISION
[G.R. No. L-44628. August 27, 1987.]
CONSUELO SEVILLE JUTIC, JUAN JUTIC, CELESTINO SEVILLE, TIBURCIO SEVILLE, RAVELLO SEVILLE,
SONITA SEVILLE, LUCY SEVILLE, EPIFANIA SEVILLE, NARACY SEVILLE, EMMANUEL SEVILLE, ORLANDO
MANICAN, and PACIFICO MANICAN, petitioner, vs. THE COURT OF APPEALS, MANILA, VICENTE SULLAN,
TRINIDAD SULLAN, TERESITA SULLAN, ULYSSES SULLAN, ALEJANDRINO SULLAN, BUENAVENTURA SEVILLE,
and ZOILO SEVILLE, respondents.
DECISION
GUTIERREZ, JR., J p:
This is a petition to review on appeal by certiorari the decision of the Court of Appeals which affirmed the decision
of the then Court of First Instance of Davao del Norte, Branch 9. The dispositive portion of the decision reads:
"WHEREFORE, the decision appealed from is hereby affirmed and this case is remanded to the court a quo for
implementation of, and compliance with Rule 69, Revised Rules of Court, and to partition the property in accordance with
the rights as herein determined, defined and declared, with costs against defendants-appellants." (p. 48, Petitioner's brief)
Vicente Sullan and the other respondents filed a complaint with the then Court of First Instance at Tagum, Davao
del Norte against the petitioners for partition and accounting of the properties of Arsenio Seville, alleging they are heirs of
the decedent.
The petitioners, averred the following in their answer: cdrep
xxx
xxx
xxx
"7.
That the defendants are the owners of Lots 170 and 172 and improvements thereon, containing an area
of 11.9499 and 9.6862 hectares, respectively, both covered by Original Certificates of Title No. P-15964.
"8.
That defendants are the surviving heirs of Melquiades Seville. Melquiades Seville in turn is the brother of
the deceased Arsenio Seville. Arsenio Seville died ahead. Melquiades Seville died later. During the lifetime of Arsenio
Seville he executed an instrument . . . .
xxx
xxx
xxx
"9.
That Melquiades Seville and his family have been in actual possession, occupation and cultivation of Lots
Nos. 170 and 172, Cad-283, since 1954 continuously and peacefully in concept of owner, up to the time of his death, and
had introduced valuable improvements thereon. After his demise his heirs, the defendants herein, succeeded to the
occupation and possession of the said parcel of land and improvements with the knowledge of the plaintiffs and with the
acquiescence of Arsenio Seville during his lifetime.
"10.
That even during the lifetime of the deceased Arsenio Seville it had been his desire, intention and his wish
that Lots 170 and 172 shall be owned by Melquiades Seville, the father of the herein defendants.
"11.
That the ownership over the said Lots 170 and 172, Cad-283 and improvements had been vested,
transmitted, conveyed and or descended unto the defendants by virtue of Exhibit '1' of this answer and through continuous
possession and cultivation of the land since 1954 continuously up to the present, in concept of owner as alleged under
paragraph '9' hereof.
"12.
That by reason of this unfounded action by the plaintiffs, defendants have been compelled to engage
services of counsel for which they bound themselves to pay P3,000.00 as attorney's fees.
"13.
That Melquiades Seville during his lifetime had taken legal steps to perfect titles to these parcels of land
in his name." (pp. 11, 14-15, Record on Appeal).
On September 19, 1972, the trial court rendered judgment in favor of the private respondents. The petitioners
appealed to the Court of Appeals. The Court of Appeals affirmed the trial court's decision.
Involved in this appeal is the issue of whether or not there was a valid donation from Arsenio Seville to
Melquiades Seville. The facts of the case are briefly stated as follows
During his lifetime, Arsenio Seville owned (1) a parcel of agricultural land described as Lot No. 170 situated at
Anquibit, Asuncion (Saug), Davao del Norte containing an area of 11.9499 hectares, more or less; (2) a parcel of
agricultural land described as Lot No. 172 likewise situated at Anquibit, Asuncion (Saug), Davao del Norte with an area of
9.6862 hectares; (3) a residential house erected on Lot 172; (4) rice and corn mills and their respective paraphernalia
valued at P5,000.00; and (5) five (5) carabaos in the possession of the then defendants (pp. 6-9, Petitioners' brief). Cdpr
On March 4, 1963, Arsenio Seville executed an affidavit in favor of Melquiades Seville, which reads:
"A F F I D A V I T
"I, ARSENIO SEVILLE, of legal age, WIDOWER, Filipino, and a resident of Anquibit, Cambanogoy, Saug, Davao,
Philippines, after having been duly sworn to in accordance with law do hereby depose and say, as follows:
"That I am the declared and legal owner of a certain parcel of land otherwise known as Lot Nos. 172 and 170
Cad. 283, containing an area of 21.6361 has., and situated at Cambanogoy, Saug, Davao and covered by H.A. No. V77791 (E-69793) and approved by the Director of Lands as per Order issued on March 5, 1954;
"That I am a widower as indicated above and that I have no one to inherit all my properties except my brother
Melquiades Seville who appears to be the only and rightful person upon whom I have the most sympathy since I have no
wife and children: "That it is my desire that in case I will die I will assign all my rights, interest share and participation over
the above-mentioned property and that he shall succeed to me in case of my death, however, as long as I am alive I will
be the one to possess, enjoy and benefit from the produce of my said land and that whatever benefits it will give me in the
future I shall be the one to enjoy it;
"That I make this affidavit to make manifest my intention and desire as to the way the above mentioned property
shall be dispose of and for whatever purpose it may serve.
xxx
xxx
xxx
"(SGD.) ARSENIO SEVILLE
Affiant"
(p. 7. Appellees' brief; Exh. 4, p. 52, Folder of Exhibits).
On May 24, 1968, Arsenio Seville mortgaged said properties to the Philippine National Bank in consideration of a
loan. This was done with the knowledge and acquiescence of Melquiades Seville.
On May 15, 1970, Arsenio Seville died intestate, single, without issue, and without any debt. He was survived by
his brothers, Buenaventura Seville and Zoilo Seville who are included as respondents; brother Melquiades Seville; and
sisters Encarnacion Seville and Petra Seville. Thereafter, Melquiades died and is survived by his children Consuelo,
Celestino, Tiburcio, Ravelo, Sonita, Lucy, Epifania, Naracy and Emmanuel, all surnamed Seville. Sisters Encarnacion and
Petra died later. Encarnacion is survived by her children Trinidad, Teresita, Ulysses and Alejandrino, all surnamed Sullan,

and her husband Vicente Sullan while Petra Seville is survived by her children Orlando Manican and Pacifico Manican.
cdrep
The children of Melquiades Seville are now claiming exclusive ownership of the properties and improvements
thereon on the basis of the instrument executed by Arsenio Seville in favor of Melquiades Seville and on their alleged
actual possession, occupation, and cultivation of Lots Nos. 170 and 172 since 1954 continuously and peacefully in the
concept of owner up to the time of Arsenio Seville's death.
The petitioners assign the following alleged errors of the respondent court:
I
THE COURT OF APPEALS ERRED IN NOT CONSIDERING THE AFFIDAVIT IN QUESTION A DEED OR
INSTRUMENT OF DONATION INTER VIVOS:
II
THE COURT OF APPEALS ERRED IN NOT RULING CATEGORICALLY THAT ARSENIO SEVILLE COULD
VALIDLY DISPOSE OR DONATE THE PROPERTIES IN QUESTION.
III
THE COURT OF APPEALS ERRED IN NOT VACATING THE JUDGMENT OF THE LOWER COURT AND
ENTERED (SIC) A NEW ONE HOLDING THAT THE AFFIDAVIT IN QUESTION IS A DEED OF DONATION AND THAT
THE DONATION IS A DONATION INTER VIVOS THUS VALIDLY CONVEYING THE LAND UNTO THE DONEE
MELQUIADES SEVILLE. (p. 10, Petitioners' brief).
All the above assigned errors discuss the issues as relating to a donation. The trial court was correct in stating
that "a close reading reveals that Exhibit 4 is not a donation inter vivos or mortis causa but a mere declaration of an
intention and a desire. Certainly, it is not a concrete and formal act of giving or donating. The form and contents of said
Exhibit 4 amply support this conclusion." (p. 37, Record on Appeal).
A discussion of the different kinds of donations and the requisites for their effectivity is irrelevant in the case at bar.
There clearly was no intention to transfer ownership from Arsenio Seville to Melquiades Seville at the time of the
instrument's execution. It was a mere intention or a desire on the part of Arsenio Seville that in the event of his death at
some future time, his properties should go to Melquiades Seville. LLpr
In Aldaba v. Court of Appeals (27 SCRA 263, 269-270) we ruled on a similar expression of an intention, as follows:
"The question to be resolved in the instant case is: Was there a disposition of the property in question made by
the deceased Belen Aldaba in favor of herein petitioners? The note, Exhibit 6, considered alone, was, as held by the Court
of Appeals, confirming the opinion of the lower court, only an indication of the intention of Belen Aldaba to donate to the
petitioners the property occupied by the latter. We agree with this conclusion of the trial court and the Court of Appeals.
The note, in fact, expressed that the property was really intended for the petitioners, 'talagang iyan ay para sa inyo.' If the
property was only intended for petitioners then, at the time of its writing, the property had not yet been disposed of in their
favor. There is no evidence in the record that such intention was effectively carried out after the writing of the note.
Inasmuch as the mere expression of an intention is not a promise, because a promise is an undertaking to carry the
intention into effect, (17 American Jurisprudence, 2d p. 334) We cannot, considering Exhibit 6 alone, conclude that the
deceased promised, much less did convey, the property in question to the petitioners. . . . . "
It is quite apparent that Arsenio Seville was thinking of succession (". . . in case I will die, I will assign all my rights,
share and participation over the above-mentioned properties and that he shall succeed to me in case of my death. . . . ").
Donations which are to take effect upon the death of the donor partake of the nature of testamentary provisions and shall
be governed by the rules established in the title on succession (Art. 728, Civil Code).
The petitioners likewise contend that the document was a valid donation as only donations are accepted by the
donees. However, the petitioners could not have accepted something, which by the terms of the supposed "donation" was
not given to them at the time. The affidavit could not transmit ownership except in clear and express terms.
Furthermore, the homestead application was later prosecuted in the name of Arsenio Seville and the land, much
later, was mortgaged by him to the Philippine National Bank (Annex 1, p. 100, Rollo) in consideration of a loan. Arsenio
dealt with the land and entered into transactions as its owner. All these happened with the knowledge and acquiescence
of the supposed donee, Melquiades Seville. Contrary to the petitioners' allegations in their brief, there was no immediate
transfer of title upon the execution of Exhibit 4.
Contrary to what the petitioners aver, private respondents as legal heirs of Arsenio Seville have actual and
substantial interests in the subject of litigation thus qualifying them as real parties-in-interest.
Common ownership is shown by the records. Therefore, any claim of ownership of the petitioners is not based on
Exhibit 4 but on the fact that they are heirs of Arsenio Seville together with the private respondents. prcd
It is likewise significant to note the respondents' assertion that the signed affidavit is a forgery because Arsenio
Seville was illiterate during his lifetime. He could not write his name. He executed documents by affixing his thumbmark as
shown in the Real Estate Mortgage (Exhibit A-4), which he executed on May 24,1968 in favor of the Philippine National
Bank. The real estate mortgage came much later or more than five years after the supposed donation (Exhibit 4) to
Melquiades Seville where Arsenio Seville allegedly affixed his signature. This fact was not disputed by the petitioners.
Moreover, the petitioners' actions do not support their claim of ownership. During the lifetime of Arsenio Seville, he
paid the PNB amortization out of his personal funds and out of the income on his property. The payments were not
continued by the petitioners when Arsenio Seville died so much so that the property was extrajudicially foreclosed and had
to be repurchased by Zoilo Seville, one of the respondents, through installment arrangements. (Deed of Promise to Sell
appended as Annex 4 to respondents' brief). The actions of the respondents are in consonance with their claim of coownership.
Finally, it is a well-established rule that the factual findings of the trial court are generally not disturbed except
where there is a clear cause or a strong reason appearing in the record to warrant a departure from such findings (Alcaraz
v. Racimo, 125 SCRA 328; People v. Tala, 141 SCRA 240; and People v. Alcid, 135 SCRA 280). There is no such clear
cause or strong reason in this case.
WHEREFORE, the petition is hereby DISMISSED. The judgment of the Court of Appeals is AFFIRMED.
SO ORDERED.

THIRD DIVISION

[G.R. No. 123968. April 24, 2003.]

URSULINA GANUELAS, METODIO GANUELAS and ANTONIO GANUELAS, petitioners, vs. HON. ROBERT T.
CAWED, Judge of the Regional Trial Court of San Fernando, La Union (Branch 29), LEOCADIA G. FLORES,
FELICITACION G. AGTARAP, CORAZON G. SIPALAY and ESTATE OF ROMANA GANUELAS DE LA ROSA,
represented by GREGORIO DELA ROSA, Administrator, respondents.
DECISION
CARPIO MORALES, J p:
The present petition for review under Rule 45 of the Rules of Court assails, on a question of law, the February 22,
1996 decision 1 of the Regional Trial Court of San Fernando, La Union, Branch 29, in Civil Case No. 3947, an action for
declaration of nullity of a deed of donation.
The facts, as culled from the records of the case, are as follows:
On April 11, 1958, Celestina Ganuelas Vda. de Valin (Celestina) executed a Deed of Donation of Real Property 2
covering seven parcels of land in favor of her niece Ursulina Ganuelas (Ursulina), one of herein petitioners.
The pertinent provision of the deed of donation reads, quoted verbatim:
xxx
xxx
xxx
That, for and in consideration of the love and affection which the DONOR has for the DONEE, and of the faithful
services the latter has rendered in the past to the former, the said DONOR does by these presents transfer and convey,
by way of DONATION, unto the DONEE the property above, described, to become effective upon the death of the
DONOR; but in the event that the DONEE should die before the DONOR, the present donation shall be deemed
rescinded and of no further force and effect.
xxx
xxx
xxx. 3
On June 10, 1967, Celestina executed a document denominated as Revocation of Donation 4 purporting to set
aside the deed of donation. More than a month later or on August 18, 1967, Celestina died without issue and any
surviving ascendants and siblings. cDSAEI
After Celestina's death, Ursulina had been sharing the produce of the donated properties with private respondents
Leocadia G. Flores, et al., nieces of Celestina.
In 1982, or twenty-four years after the execution of the Deed of Donation, Ursulina secured the corresponding tax
declarations, in her name, over the donated properties, to wit: Tax Declarations Nos. 18108, 18109, 18110, 18111, 18112,
18113 and 18114, and since then, she refused to give private respondents any share in the produce of the properties
despite repeated demands.
Private respondents were thus prompted to file on May 26, 1986 with the RTC of San Fernando, La Union a
complaint 5 against Ursulina, along with Metodio Ganuelas and Antonio Ganuelas who were alleged to be unwilling
plaintiffs. The complaint alleged that the Deed of Donation executed by Celestina in favor of Ursulina was void for lack of
acknowledgment by the attesting witnesses thereto before notary public Atty. Henry Valmonte, and the donation was a
disposition mortis causa which failed to comply with the provisions of the Civil Code regarding formalities of wills and
testaments, hence, it was void. The plaintiffs-herein private respondents thus prayed that judgment be rendered ordering
Ursulina to return to them as intestate heirs the possession and ownership of the properties. They likewise prayed for the
cancellation of the tax declarations secured in the name of Ursulina, the partition of the properties among the intestate
heirs of Celestina, and the rendering by Ursulina of an accounting of all the fruits of the properties since 1982 and for her
to return or pay the value of their shares.
The defendants-herein petitioners alleged in their Answer 6 that the donation in favor of Ursulina was inter vivos
as contemplated under Article 729 of the Civil Code, 7 hence, the deed did not have to comply with the requirements for
the execution of a valid will; the Revocation of Donation is null and void as the ground mentioned therein is not among
those provided by law to be the basis thereof; and at any rate, the revocation could only be legally enforced upon filing of
the appropriate complaint in court within the prescriptive period provided by law, which period had, at the time the
complaint was filed, already lapsed. cHSTEA
By Decision of February 22, 1996, the trial court, holding that the provision in the Deed of Donation that in the
event that the DONEE should predecease the DONOR, the "donation shall be deemed rescinded and of no further force
and effect" is an explicit indication that the deed is a donation mortis causa, 8 found for the plaintiffs-herein private
respondents, thus:
WHEREFORE the Court renders judgment declaring null and void the Deed of Donation of Real Property
executed by Celestina Ganuelas, and orders the partition of the estate of Celestina among the intestate heirs.
SO ORDERED. 9
The trial court also held that the absence of a reservation clause in the deed implied that Celestina retained
complete dominion over her properties, thus supporting the conclusion that the donation is mortis causa, 10 and that while
the deed contained an attestation clause and an acknowledgment showing the intent of the donor to effect a postmortem
disposition, the acknowledgment was defective as only the donor and donee appear to have acknowledged the deed
before the notary public, thereby rendering the entire document void. 11
Lastly, the trial court held that the subsequent execution by Celestina of the Revocation of Donation showed that
the donor intended the revocability of the donation ad nutum, thus sustaining its finding that the conveyance was mortis
causa. 12
On herein petitioners' argument that the Revocation of Donation was void as the ground mentioned therein is not
one of those allowed by law to be a basis for revocation, the trial court held that the legal grounds for such revocation as
provided under the Civil Code arise only in cases of donations inter vivos, but not in donations mortis causa which are
revocable at will during the lifetime of the donor. The trial court held, in any event, that given the nullity of the disposition
mortis causa in view of a failure to comply with the formalities required therefor, the Deed of Revocation was a superfluity.
13
Hence, the instant petition for review, petitioners contending that the trial court erred:
I.
. . . WHEN IT DECLARED NULL AND VOID THE DONATION EXECUTED BY CELESTINA GANUELAS;
II.
. . . WHEN IT UPHELD THE REVOCATION OF DONATION;
III.
. . . IN RENDERING ITS DECISION ADVERSE TO PETITIONER URSULINA GANUELAS. 14
Petitioners argue that the donation contained in the deed is inter vivos as the main consideration for its execution
was the donor's affection for the donee rather than the donor's death; 15 that the provision on the effectivity of the
donation after the donor's death simply meant that absolute ownership would pertain to the donee on the donor's

death; 16 and that since the donation is inter vivos, it may be revoked only for the reasons provided in Articles 760, 17 764
18 and 765 19 of the Civil Code.
In a letter of March 16, 1998, 20 private respondent Corazon Sipalay, reacting to this Court's January 28, 1998
Resolution requiring private respondents "to SHOW CAUSE why they should not be disciplinarily dealt with or held in
contempt" for failure to submit the name and address of their new counsel, explains that they are no longer interested in
pursuing the case and are "willing and ready to waive whatever rights" they have over the properties subject of the
donation. Petitioners, who were required to comment on the letter, by Comment of October 28, 1998, 21 welcome private
respondents' gesture but pray that "for the sake of enriching jurisprudence, their [p]etition be given due course and
resolved."
The issue is thus whether the donation is inter vivos or mortis causa.
Crucial in the resolution of the issue is the determination of whether the donor intended to transfer the ownership
over the properties upon the execution of the deed. 22
Donation inter vivos differs from donation mortis causa in that in the former, the act is immediately operative even
if the actual execution may be deferred until the death of the donor, while in the latter, nothing is conveyed to or acquired
by the donee until the death of the donor-testator. 23 The following ruling of this Court in Alejandro v. Geraldez is
illuminating: 24
If the donation is made in contemplation of the donor's death, meaning that the full or naked ownership of the
donated properties will pass to the donee only because of the donor's death, then it is at that time that the donation takes
effect, and it is a donation mortis causa which should be embodied in a last will and testament.
But if the donation takes effect during the donor's lifetime or independently of the donor's death, meaning that the
full or naked ownership (nuda proprietas) of the donated properties passes to the donee during the donor's lifetime, not by
reason of his death but because of the deed of donation, then the donation is inter vivos.
The distinction between a transfer inter vivos and mortis causa is important as the validity or revocation of the
donation depends upon its nature. If the donation is inter vivos, it must be executed and accepted with the formalities
prescribed by Articles 748 25 and 749 26 of the Civil Code, except when it is onerous in which case the rules on contracts
will apply. If it is mortis causa, the donation must be in the form of a will, with all the formalities for the validity of wills,
otherwise it is void and cannot transfer ownership. 27
The distinguishing characteristics of a donation mortis causa are the following:
1.
It conveys no title or ownership to the transferee before the death of the transferor; or, what amounts to
the same thing, that the transferor should retain the ownership (full or naked) and control of the property while alive;
2.
That before his death, the transfer should be revocable by the transferor at will, ad nutum; but revocability
may be provided for indirectly by means of a reserved power in the donor to dispose of the properties conveyed;
3.
That the transfer should be void if the transferor should survive the transferee. 28
In the donation subject of the present case, there is nothing therein which indicates that any right, title or interest
in the donated properties was to be transferred to Ursulina prior to the death of Celestina. CTSDAI
The phrase "to become effective upon the death of the DONOR" admits of no other interpretation but that
Celestina intended to transfer the ownership of the properties to Ursulina on her death, not during her lifetime. 29
More importantly, the provision in the deed stating that if the donee should die before the donor, the donation shall
be deemed rescinded and of no further force and effect shows that the donation is a postmortem disposition.
As stated in a long line of cases, one of the decisive characteristics of a donation mortis causa is that the transfer
should be considered void if the donor should survive the donee. 30
More. The deed contains an attestation clause expressly confirming the donation as mortis causa:
SIGNED by the above-named donor, Celestina Ganuelas, at the foot of this deed of donation mortis causa,
consisting of two (2) pages and on the left margin of each and every page thereof in the joint presence of all of us who at
her request and in her presence and that of each other have in like manner subscribed our names as witnesses. 31
(Emphasis supplied)
To classify the donation as inter vivos simply because it is founded on considerations of love and affection is
erroneous. That the donation was prompted by the affection of the donor for the donee and the services rendered by the
latter is of no particular significance in determining whether the deed constitutes a transfer inter vivos or not, because a
legacy may have an identical motivation. 32 In other words, love and affection may also underline transfers mortis causa.
33
In Maglasang v. Heirs of Cabatingan, 34 the deeds of donation contained provisions almost identical to those
found in the deed subject of the present case:
That for and in consideration of the love and affection of the DONOR for the DONEE, . . . the DONOR does
hereby, by these presents, transfer, convey, by way of donation, unto the DONEE the above-described property, together
with the buildings and all improvements existing thereon, to become effective upon the death of the DONOR; PROVIDED,
HOWEVER, that in the event that the DONEE should die before the DONOR, the present donation shall be deemed
automatically rescinded and of no further force and effect. (Emphasis supplied)
In that case, this Court held that the donations were mortis causa, for the above-quoted provision conclusively
establishes the donor's intention to transfer the ownership and possession of the donated property to the donee only after
the former's death. Like in the present case, the deeds therein did not contain any clear provision that purports to pass
proprietary rights to the donee prior to the donor's death. CcTIDH
As the subject deed then is in the nature of a mortis causa disposition, the formalities of a will under Article 728 of
the Civil Code should have been complied with, failing which the donation is void and produces no effect. 35
As noted by the trial court, the attesting witnesses failed to acknowledge the deed before the notary public, thus
violating Article 806 of the Civil Code which provides:
Art. 806.
Every will must be acknowledged before a notary public by the testator and the witnesses. The
notary public shall not be required to retain a copy of the will, or file another with the office of the Clerk of Court.
(Emphasis supplied)
The trial court did not thus commit any reversible error in declaring the Deed of Donation to be mortis causa.
WHEREFORE, the petition is hereby DENIED for lack of merit. STECAc
SO ORDERED.

FIRST DIVISION
[G.R. No. 131953. June 5, 2002.]
MA. ESTELA MAGLASANG, NICOLAS CABATINGAN and MERLY S. CABATINGAN, petitioners, vs. THE HEIRS
OF CORAZON CABATINGAN, namely, LUZ M. BOQUIA, PERLA M. ABELLA, ESTRELLA M. CAETE, LOURDES M.
YUSON, and JULIA L. MAYOL, HEIRS OF GENOVIVA C. NATIVIDAD namely, OSCAR C. NATIVIDAD, OLGA
NATIVIDAD, ODETTE NATIVIDAD, OPHELIA NATIVIDAD, RICHARD NATIVIDAD, RAYMUND NATIVIDAD, RICHIE
NATIVIDAD, SONIA NATIVIDAD and ENCARNACION CABATINGAN VDA. DE TRINIDAD, ALFREDO CABATINGAN and
JESUSA C. NAVADA, respondents.
DECISION
AUSTRIA-MARTINEZ, J p:
Posed for resolution before the Court in this petition for review on certiorari filed under Rule 45 of the Rules of
Court is the sole issue of whether the donations made by the late Conchita Cabatingan are donations inter vivos or mortis
causa. ISaCTE
The facts of the case are as follows: DSEIcT
On February 17, 1992, Conchita Cabatingan executed in favor of her brother, petitioner Nicolas Cabatingan, a
"Deed of Conditional of Donation (sic) Inter Vivos for House and Lot" covering one-half () portion of the former's house
and lot located at Cot-cot, Liloan, Cebu. 1 Four (4) other deeds of donation were subsequently executed by Conchita
Cabatingan on January 14, 1995, bestowing upon: (a) petitioner Estela C. Maglasang, two (2) parcels of land one
located in Cogon, Cebu (307 sq. m.) and the other, a portion of a parcel of land in Masbate (50,232 sq. m.); (b) petitioner
Nicolas Cabatingan, a portion of a parcel of land located in Masbate (80,000 sq. m.); and (c) petitioner Merly S.
Cabatingan, a portion of the Masbate property (80,000 sq. m.). 2 These deeds of donation contain similar provisions, to
wit:
"That for and in consideration of the love and affection of the DONOR for the DONEE, . . . the DONOR does
hereby, by these presents, transfer, convey, by way of donation, unto the DONEE the above-described property, together
with the buildings and all improvements existing thereon, to become effective upon the death of the DONOR; PROVIDED,
HOWEVER, that in the event that the DONEE should die before the DONOR, the present donation shall be deemed
automatically rescinded and of no further force and effect; xxx
xxx
xxx " 3 (Emphasis Ours)
On May 9, 1995, Conchita Cabatingan died.
Upon learning of the existence of the foregoing donations, respondents filed with the Regional Trial Court of
Mandaue, Branch 55, an action for Annulment And/Or Declaration of Nullity of Deeds of Donations and Accounting,
docketed as Civil Case No. MAN-2599, seeking the annulment of said four (4) deeds of donation executed on January 14,
1995. Respondents allege, inter alia, that petitioners, through their sinister machinations and strategies and taking
advantage of Conchita Cabatingan's fragile condition, caused the execution of the deeds of donation, and, that the
documents are void for failing to comply with the provisions of the Civil Code regarding formalities of wills and testaments,
considering that these are donations mortis causa. 4 Respondents prayed that a receiver be appointed in order to
preserve the disputed properties, and, that they be declared as co-owners of the properties in equal shares, together with
petitioner Nicolas Cabatingan. 5
Petitioners in their Amended Answer, deny respondents' allegations contending that Conchita Cabatingan freely,
knowingly and voluntarily caused the preparation of the instruments. 6
On respondents' motion, the court a quo rendered a partial judgment on the pleadings on December 2, 1997 in
favor of respondents, with the following dispositive portion:
"WHEREFORE, and in consideration of all the foregoing, judgment is hereby rendered in favor of the plaintiffs and
against the defendant and unwilling co-plaintiff with regards (sic) to the four Deeds of Donation Annexes "A", "A-1", "B"
and Annex "C" which is the subject of this partial decision by:
a)
Declaring the four Deeds of Donation as null and void ab initio for being a donation Mortis Causa and for
failure to comply with formal and solemn requisite under Art. 806 of the New Civil Code;
b)
To declare the plaintiffs and defendants as well as unwilling co-plaintiff as the heirs of the deceased
Conchita Cabatingan and therefore hereditary co-owners of the properties subject of this partial decision, as mandated
under Art. 777 of the New Civil Code;
SO ORDERED." 7
The court a quo ruled that the donations are donations mortis causa and therefore the four (4) deeds in question
executed on January 14, 1995 are null and void for failure to comply with the requisites of Article 806 of the Civil Code on
solemnities of wills and testaments. 8
Raising questions of law, petitioners elevated the court a quo's decision to this Court, 9 alleging that:
"THE LOWER COURT PALPABLY DISREGARDED THE LONG-AND-WELL-ESTABLISHED RULINGS OF THIS
HONORABLE SUPREME COURT ON THE CHARACTERIZATION OF DONATIONS AS INTER VIVOS OR MORTIS
CAUSA AND, INSTEAD, PROCEEDED TO INTERPRET THE DONATIONS IN QUESTION IN A MANNER CONTRARY
THERETO." 10
Petitioners insist that the donations are inter vivos donations as these were made by the late Conchita Cabatingan
"in consideration of the love and affection of the donor" for the donee, and there is nothing in the deeds which indicate that
the donations were made in consideration of Cabatingan's death. 11 In addition, petitioners contend that the stipulation on
rescission in case petitioners die ahead of Cabatingan is a resolutory condition that confirms the nature of the donation as
inter vivos. 2005SE
Petitioners' arguments are bereft of merit.
In a donation mortis causa, "the right of disposition is not transferred to the donee while the donor is still alive." 12
In determining whether a donation is one of mortis causa, the following characteristics must be taken into account:
(1)
It conveys no title or ownership to the transferee before the death of the transferor; or what amounts to
the same thing, that the transferor should retain the ownership (full or naked) and control of the property while alive;
(2)
That before his death, the transfer should be revocable by the transferor at will, ad nutum; but revocability
may be provided for indirectly by means of a reserved power in the donor to dispose of the properties conveyed;
and
(3)
That the transfer should be void if the transferor should survive the transferee. 13
In the present case, the nature of the donations as mortis causa is confirmed by the fact that the donations do not
contain any clear provision that intends to pass proprietary rights to petitioners prior to Cabatingan's death. 14 The phrase
"to become effective upon the death of the DONOR" admits of no other interpretation but that Cabatingan did not intend to

transfer the ownership of the properties to petitioners during her lifetime. Petitioners themselves expressly confirmed the
donations as mortis causa in the following Acceptance and Attestation clauses, uniformly found in the subject deeds of
donation, to wit:
"That the DONEE does hereby accept the foregoing donation mortis causa under the terms and conditions set
forth therein, and avail herself of this occasion to express her profound gratitude for the kindness and generosity of the
DONOR."
xxx
xxx
xxx
"SIGNED by the above-named DONOR and DONEE at the foot of this Deed of Donation mortis causa, which
consists of two (2) pages . . . " 15
That the donations were made "in consideration of the love and affection of the donor" does not qualify the
donations as inter vivos because transfers mortis causa may also be made for the same reason. 16
Well in point is National Treasurer of the Phils. v. Vda. de Meimban. 17 In said case; the questioned donation
contained the provision:
"That for and in consideration of the love and affection which the DONOR has for the DONEE, the said Donor by
these presents does hereby give, transfer, and convey unto the DONEE, her heirs and assigns a portion of ONE
HUNDRED THOUSAND (100,000) SQUARE METERS, on the southeastern part Pro-indiviso of the above described
property. (The portion herein donated is within Lot 2-B of the proposed amendment Plan Subdivision of Lots Nos. 1 and 2,
Psu-109393), with all the buildings and improvements thereon, to become effective upon the death of the DONOR.
(emphasis supplied)" 18
Notably, the foregoing provision is similar to that contained in the donation executed by Cabatingan. We held in
Meimban case that the donation is a mortis causa donation, and that the above quoted provision establishes the donor's
intention to transfer the ownership and possession of the donated property to the donee only after the former's death.
Further:
"As the donation is in the nature of a mortis causa disposition, the formalities of a will should have been complied
with under Article 728 of the Civil Code, otherwise, the donation is void and would produce no effect. As we have held in
Alejandro v. Geraldez (78 SCRA 245, 253), "If the donation is made in contemplation of the donor's death, meaning that
the full or naked ownership of the donated properties will pass to the donee because of the donor's death, then it is at that
time that the donation takes effect, and it is a donation mortis causa which should be embodied in a last will and
testament. (Citing Bonsato v. Court of Appeals, 95 Phil. 481)." 19
We apply the above rulings to the present case. The herein subject deeds expressly provide that the donation
shall be rescinded in case petitioners predecease Conchita Cabatingan. As stated in Reyes v. Mosqueda, 20 one of the
decisive characteristics of a donation mortis causa is that the transfer should be considered void if the donor should
survive the donee. This is exactly what Cabatingan provided for in her donations. If she really intended that the donation
should take effect during her lifetime and that the ownership of the properties donated be transferred to the donee or
independently of, and not by reason of her death, she would have not expressed such proviso in the subject deeds.
05SEcdasia
Considering that the disputed donations are donations mortis causa, the same partake of the nature of
testamentary provisions 21 and as such, said deeds must be executed in accordance with the requisites on solemnities of
wills and testaments under Articles 805 and 806 of the Civil Code, to wit:
"ART. 805.
Every will, other than a holographic will, must be subscribed at the end thereof by the testator
himself or by the testator's name written by some other person in his presence, and by his express direction, and attested
and subscribed by three or more credible witnesses in the presence of the testator and of one another.
The testator or the person requested by him to write his name and the instrumental witnesses of the will, shall
also sign, as aforesaid, each and every page thereof, except the last, on the left margin, and all the pages shall be
numbered correlatively in letters placed on the upper part of each page.
The attestation shall state the number of pages used upon which the will is written, and the fact that the testator
signed the will and every page thereof, or caused some other person to write his name, under his express direction, in the
presence of the instrumental witnesses, and that the latter witnessed and signed the will and all the pages thereof in the
presence of the testator and of one another.
If the attestation clause is in a language not known to the witnesses, it shall be interpreted to them. (n)
ART. 806.
Every will must be acknowledged before a notary public by the testator and the witnesses. The
notary public shall not be required to retain a copy of the will, or file another with the office of the Clerk of Court. (n)"
The deeds in question although acknowledged before a notary public of the donor and the donee, the documents
were not executed in the manner provided for under the above-quoted provisions of law.
Thus, the trial court did not commit any reversible error in declaring the subject deeds of donation null and void.
ACSaHc
WHEREFORE, the petition is hereby DENIED for lack of merit. ECAaTS
SO ORDERED.

THIRD DIVISION
[G.R. No. 103577. October 7, 1996.]
ROMULO A. CORONEL, ALARICO A. CORONEL, ANNETTE A. CORONEL, ANNABELLE C. GONZALES (for
herself and on behalf of Floraida C. Tupper, as attorney-in-fact), CIELITO A. CORONEL, FLORAIDA A. ALMONTE, and
CATALINA BALAIS MABANAG, petitioners, vs. THE COURT OF APPEALS, CONCEPCION D. ALCARAZ and RAMONA
PATRICIA ALCARAZ, assisted by GLORIA F. NOEL as attorney-in-fact, respondents.
DECISION
MELO, J p:
The petition before us has its roots in a complaint for specific performance to compel herein petitioners (except
the last named, Catalina Balais Mabanag) to consummate the sale of a parcel of land with its improvements located along
Roosevelt Avenue in Quezon City entered into by the parties sometime in January 1985 for the price of P1,240,000.00
The undisputed facts of the case were summarized by respondent court in this wise:
On January 19, 1985, defendants-appellants Romulo Coronel, et al. (hereinafter referred to as Coronels)
executed a document entitled "Receipt of Down Payment" (Exh. "A") in favor of plaintiff Ramona Patricia Alcaraz
(hereinafter referred to as Ramona) which is reproduced hereunder:
RECEIPT OF DOWN PAYMENT
P1,240,000.00 Total amount
50,000.00 Down payment

P1,190,000.00 Balance
Received from Miss Ramona Patricia Alcaraz of 146 Timog, Quezon City, the sum of Fifty Thousand Pesos
purchase price of our inherited house and lot, covered by TCT No. 119627 of the Registry of Deeds of Quezon City, in the
total amount of P1,240,000.00.
We bind ourselves to effect the transfer in our names from our deceased father, Constancio P. Coronel, the
transfer certificate of title immediately upon receipt of the down payment above-stated.
On our presentation of the TCT already in or name, We will immediately execute the deed of absolute sale of said
property and Miss Ramona Patricia Alcaraz shall immediately pay the balance of the P1,190,000.00.
Clearly, the conditions appurtenant to the sale are the following:
1.
Ramona will make a down payment of Fifty Thousand (P50,000.00) Pesos upon execution of the
document aforestated;
2.
The Coronels will cause the transfer in their names of the title of the property registered in the name of
their deceased father upon receipt of the Fifty Thousand (P50,000.00) Pesos down payment.
3.
Upon the transfer in their names of the subject property, the Coronels will execute the deed of absolute
sale in favor of Ramona and the latter will pay the former the whole balance of One Million One Hundred Ninety Thousand
(P1,190,000.00) Pesos.
On the same date (January 15, 1985), plaintiff-appellee Concepcion D. Alcaraz (hereinafter referred to as
Concepcion), mother of Ramona, paid the down payment of Fifty Thousand (P50,000.00) Pesos (Exh. "B", Exh. "2").
On February 6, 1985, the property originally registered in the name of the Coronels' father was transferred in their
names under TCT No. 327043 (Exh. "D"; Exh. "4")
On February 18, 1985, the Coronels sold the property covered by TCT No. 327043 to intervenor-appellant
Catalina B. Mabanag (hereinafter referred to as Catalina) for One Million Five Hundred Eighty Thousand (P1,580,000.00)
Pesos after the latter has paid Three Hundred Thousand (P300,000.00) Pesos (Exhs. "F-3"; Exh. "6-C")
For this reason, Coronels canceled and rescinded the contract (Exh. "A") with Ramona by depositing the down
payment paid by Concepcion in the bank in trust for Ramona Patricia Alcaraz.
On February 22, 1985, Concepcion, et al., filed a complaint for specific performance against the Coronels and
caused the annotation of a notice of lis pendens at the back of TCT No. 327403 (Exh. "E"; Exh. "5").
On April 2, 1985, Catalina caused the annotation of a notice of adverse claim covering the same property with the
Registry of Deeds of Quezon City (Exh. "F"; Exh. "6").
On April 25, 1985, the Coronels executed a Deed of Absolute Sale over the subject property in favor of Catalina
(Exh. "G"; Exh. "7").
On June 5, 1985, a new title over the subject property was issued in the name of Catalina under TCT No. 351582
(Exh. "H"; Exh. "8").
(Rollo, pp. 134-136)
In the course of the proceedings before the trial court (Branch 83, RTC, Quezon City) the parties agreed to submit
the case for decision solely on the basis of documentary exhibits. Thus, plaintiffs therein (now private respondents)
proffered their documentary evidence accordingly marked as Exhibits "A" through "J", inclusive of their corresponding
submarkings. Adopting these same exhibits as their own, then defendants (now petitioners) accordingly offered and
marked them as Exhibits "1" through "10", likewise inclusive of their corresponding submarkings. Upon motion of the
parties, the trial court gave them thirty (30) days within which to simultaneously submit their respective memoranda, and
an additional 15 days within which to submit their corresponding comment or reply thereto, after which, the case would be
deemed submitted for resolution.
On April 14, 1988, the case was submitted for resolution before Judge Reynaldo Roura, who was then temporarily
detailed to preside over Branch 82 of the RTC of Quezon City. On March 1, 1989, judgment was handed down by Judge
Roura from his regular bench at Macabebe, Pampanga for the Quezon City branch, disposing as follows:
WHEREFORE, judgment for specific performance is hereby rendered ordering defendant to execute in favor of
plaintiffs a deed of absolute sale covering that parcel of land embraced in and covered by Transfer Certificate of Title No.
327403 (now TCT No. 331582) of the Registry of Deeds for Quezon City, together with all the improvements existing
thereon free from all liens and encumbrances, and once accomplished, to immediately deliver the said document of sale
to plaintiffs and upon receipt thereof, the plaintiffs are ordered to pay defendants the whole balance of the purchase price
amounting to P1,190,000.00 in cash. Transfer Certificate of Title No. 331582 of the Registry of Deeds for Quezon City in
the name of intervenor is hereby canceled and declared to be without force and effect. Defendants and intervenor and all
other persons claiming under them are hereby ordered to vacate the subject property and deliver possession thereof to
plaintiffs. Plaintiffs' claim for damages and attorney's fees, as well as the counterclaims of defendants and intervenors are
hereby dismissed.
No pronouncement as to costs.

So Ordered.
Macabebe, Pampanga for Quezon City, March 1, 1989.
(Rollo, p. 106)
A motion for reconsideration was filed by petitioners before the new presiding judge of the Quezon City RTC but
the same was denied by Judge Estrella T. Estrada, thusly:
The prayer contained in the instant motion, i.e., to annul the decision and to render anew decision by the
undersigned Presiding Judge should be denied for the following reasons: (1) The instant case became submitted for
decision as of April 14, 1988 when the parties terminated the presentation of their respective documentary evidence and
when the Presiding Judge at that time was Judge Reynaldo Roura. The fact that they were allowed to file memoranda at
some future date did not change the fact that the hearing of the case was terminated before Judge Roura and therefore
the same should be submitted to him for decision; (2) When the defendants and intervenor did not object to the authority
of Judge Reynaldo Roura to decide the case prior to the rendition of the decision, when they met for the first time before
the undersigned Presiding Judge at the hearing of a pending incident in Civil Case No. Q-46145 on November 11, 1988,
they were deemed to have acquiesced thereto and they are now estopped from questioning said authority of Judge Roura
after they received the decision in question which happens to be adverse to them; (3) While it is true that Judge Reynaldo
Roura was merely a Judge-on-detail at this Branch of the Court, he was in all respects the Presiding Judge with full
authority to act on any pending incident submitted before this Court during his incumbency. When he returned to his
Official Station at Macabebe, Pampanga, he did not lose his authority to decide or resolve such cases submitted to him for
decision or resolution because he continued as Judge of the Regional Trial Court and is of co-equal rank with the
undersigned Presiding Judge. The standing rule and supported by jurisprudence is that a Judge to whom a case is
submitted for decision has the authority to decide the case notwithstanding his transfer to another branch or region of the
same court (Sec. 9, Rule 135, Rule of Court).
Coming now to the twin prayer for reconsideration of the Decision dated March 1, 1989 rendered in the instant
case, resolution of which now pertains to the undersigned Presiding Judge, after a meticulous examination of the
documentary evidence presented by the parties, she is convinced that the Decision of March 1, 1989 is supported by
evidence and, therefore, should not be disturbed.
IN VIEW OF THE FOREGOING, the "Motion for Reconsideration and/or to Annul Decision and Render Anew
Decision by the Incumbent Presiding Judge" dated March 20, 1989 is hereby DENIED.
SO ORDERED.
Quezon City, Philippines, July 12, 1989.
(Rollo, pp. 108-109)
Petitioners thereupon interposed an appeal, but on December 16, 1991, the Court of Appeals (Buena, GonzagaReyes, Abad Santos (P), JJ.) rendered its decision fully agreeing with the trial court.
Hence, the instant petition which was filed on March 5, 1992. The last pleading, private respondents' Reply
Memorandum, was filed on September 15, 1993. The case was, however, re-raffled to undersigned ponente only on
August 28, 1996, due to the voluntary inhibition of the Justice to whom the case was last assigned.
While we deem it necessary to introduce certain refinements in the disquisition of respondent court in the
affirmance of the trial court's decision, we definitely find the instant petition bereft of merit.
The heart of the controversy which is the ultimate key in the resolution of the other issues in the case at bar is the
precise determination of the legal significance of the document entitled "Receipt of Down Payment" which was offered in
evidence by both parties. There is no dispute as to the fact that said document embodied the binding contract between
Ramona Patricia Alcaraz on the one hand, and the heirs of Constancio P. Coronel on the other, pertaining to a particular
house and lot covered by TCT No. 119627, as defined in Article 1305 of the Civil Code of the Philippines which reads as
follows:
Art. 1305.
A contract is a meeting of minds between two persons whereby one binds himself, with respect to
the other, to give something or to render some service.
While, it is the position of private respondents that the "Receipt of Down Payment" embodied a perfected contract
of sale, which perforce, they seek to enforce by means of an action for specific performance, petitioners on their part insist
that what the document signified was a mere executory contract to sell, subject to certain suspensive conditions, and
because of the absence of Ramona P. Alcaraz, who left for the United States of America, said contract could not possibly
ripen into a contract of absolute sale.
Plainly, such variance in the contending parties' contentions is brought about by the way each interprets the terms
and/or conditions set forth in said private instrument. Withal, based on whatever relevant and admissible evidence may be
available on record, this Court, as were the courts below, is now called upon to adjudge what the real intent of the parties
was at the time the said document was executed.
The Civil Code defines a contract of sale, thus:
Art. 1458.
By the contract of sale one of the contracting parties obligates himself to transfer the ownership of
and to deliver a determinate thing, and the other to pay therefor a price certain in money or its equivalent.
Sale, by its very nature, is a consensual contract because it is perfected by mere consent. The essential elements
of a contract of sale are the following:
a)
Consent or meeting of the minds, that is, consent to transfer ownership in exchange for the price;
b)
Determinate subject matter; and
c)
Price certain in money or its equivalent.
Under this definition, a Contract to Sell may not be considered as a Contract of Sale because the first essential
element is lacking. In a contract to sell, the prospective seller explicitly reserves the transfer of title to the prospective
buyer, meaning, the prospective seller does not as yet agree or consent to transfer ownership of the property subject of
the contract to sell until the happening of an event, which for present purposes we shall take as the full payment of the
purchase price. What the seller agrees or obliges himself to do is to fulfill his promise to sell the subject property when the
entire amount of the purchase price is delivered to him. In other words the full payment of the purchase price partakes of a
suspensive condition, the non-fulfillment of which prevents the obligation to sell from arising and thus, ownership is
retained by the prospective seller without further remedies by the prospective buyer. In Roque vs. Lapuz (96 SCRA 741
[1980]), this Court had occasion to rule:
Hence, We hold that the contract between the petitioner and the respondent was a contract to sell where the
ownership or title is retained by the seller and is not to pass until the full payment of the price, such payment being a

positive suspensive condition and failure of which is not a breach, casual or serious, but simply an event that prevented
the obligation of the vendor to convey title from acquiring binding force.
Stated positively, upon the fulfillment of the suspensive condition which is the full payment of the purchase price,
the prospective seller's obligation to sell the subject property by entering into a contract of sale with the prospective buyer
becomes demandable as provided in Article 1479 of the Civil Code which states:
Art. 1479.
A promise to buy and sell a determinate thing for a price certain is reciprocally demandable.
An accepted unilateral promise to buy or to sell a determinate thing for a price certain is binding upon the
promissor if the promise is supported by a consideration distinct from the price.
A contract to sell may thus be defined as a bilateral contract whereby the prospective seller, while expressly
reserving the ownership of the subject property despite delivery thereof to the prospective buyer, binds himself to sell the
said property exclusively to the prospective buyer upon fulfillment of the condition agreed upon, that is, full payment of the
purchase price.
A contract to sell as defined hereinabove, may not even be considered as a conditional contract of sale where the
seller may likewise reserve title to the property subject of the sale until the fulfillment of a suspensive condition, because
in a conditional contract of sale, the first element of consent is present, although it is conditioned upon the happening of a
contingent event which may or may not occur. If the suspensive condition is not fulfilled, the perfection of the contract of
sale is completely abated (cf. Homesite and Housing Corp. vs. Court of Appeals, 133 SCRA 777 [1984]). However, if the
suspensive condition is fulfilled, the contract of sale is thereby perfected, such that if there had already been previous
delivery of the property subject of the sale to the buyer, ownership thereto automatically transfers to the buyer by
operation of law without any further act having to be performed by the seller.
In a contract to sell, upon the fulfillment of the suspensive condition which is the full payment of the purchase
price, ownership will not automatically transfer to the buyer although the property may have been previously delivered to
him. The prospective seller still has to convey title to the prospective buyer by entering into a contract of absolute sale.
It is essential to distinguish between a contract to sell and a conditional contract of sale specially in cases where
the subject property is sold by the owner not to the party the seller contracted with, but to a third person, as in the case at
bench. In a contract to sell, there being no previous sale of the property, a third person buying such property despite the
fulfillment of the suspensive condition such as the full payment of the purchase price, for instance, cannot be deemed a
buyer in bad faith and the prospective buyer cannot seek the relief of reconveyance of the property. There is no double
sale in such case. Title to the property will transfer to the buyer after registration because there is no defect in the ownerseller's title per se, but the latter, of course, may be sued for damages by the intending buyer.
In a conditional contract of sale, however, upon the fulfillment of the suspensive condition, the sale becomes
absolute and this will definitely affect the seller's title thereto. In fact, if there had been previous delivery of the subject
property, the seller's ownership or title to the property is automatically transferred to the buyer such that, the seller will no
longer have any title to transfer to any third person. Applying Article 1544 of the Civil Code, such second buyer of the
property who may have had actual or constructive knowledge of such defect in the seller's title, or at least was charged
with the obligation to discover such defect, cannot be a registrant in good faith. Such second buyer cannot defeat the first
buyer's title. In case a title is issued to the second buyer, the first buyer may seek reconveyance of the property subject of
the sale.
With the above postulates as guidelines, we now proceed to the task of deciphering the real nature of the contract
entered into by petitioners and private respondents.
It is a canon in the interpretation of contracts that the words used therein should be given their natural and
ordinary meaning unless a technical meaning was intended (Tan vs. Court of Appeals, 212 SCRA 586 [1992]). Thus, when
petitioners declared in the said "Receipt of Down Payment" that they
Received from Miss Ramona Patricia Alcaraz of 146 Timog, Quezon City, the sum of Fifty Thousand Pesos
purchase price of our inherited house and lot, covered by TCT No. 1199627 of the Registry of Deeds of Quezon City, in
the total amount of P1,240,000.00.
without any reservation of title until full payment of the entire purchase price, the natural and ordinary idea
conveyed is that they sold their property.
When the "Receipt of Down Payment" is considered in its entirety, it becomes more manifest that there was a
clear intent on the part of petitioners to transfer title to the buyer, but since the transfer certificate of title was still in the
name of petitioner's father, they could not fully effect such transfer although the buyer was then willing and able to
immediately pay the purchase price. Therefore, petitioners-sellers undertook upon receipt of the down payment from
private respondent Ramona P. Alcaraz, to cause the issuance of a new certificate of title in their names from that of their
father, after which, they promised to present said title, now in their names, to the latter and to execute the deed of
absolute sale whereupon, the latter shall, in turn, pay the entire balance of the purchase price.
The agreement could not have been a contract to sell because the sellers herein made no express reservation of
ownership or title to the subject parcel of land. Furthermore, the circumstance which prevented the parties from entering
into an absolute contract of sale pertained to the sellers themselves (the certificate of title was not in their names) and not
the full payment of the purchase price. Under the established facts and circumstances of the case, the Court may safely
presume that, had the certificate of title been in the names of petitioners-sellers at that time, there would have been no
reason why an absolute contract of sale could not have been executed and consummated right there and then.
Moreover, unlike in a contract to sell, petitioners in the case at bar did not merely promise to sell the property to
private respondent upon the fulfillment of the suspensive condition. On the contrary, having already agreed to sell the
subject property, they undertook to have the certificate of title changed to their names and immediately thereafter, to
execute the written deed of absolute sale.
Thus, the parties did not merely enter into a contract to sell where the sellers, after compliance by the buyer with
certain terms and conditions, promised to sell the property to the latter. What may be perceived from the respective
undertakings of the parties to the contract is that petitioners had already agreed to sell the house and lot they inherited
from their father, completely willing to transfer full ownership of the subject house and lot to the buyer if the documents
were then in order. It just so happened, however, that the transfer certificate of title was then still in the name of their
father. It was more expedient to first effect the change in the certificate of title so as to bear their names. That is why they
undertook to cause the issuance of a new transfer of the certificate of title in their names upon receipt of the down
payment in the amount of P50,000.00. As soon as the new certificate of title is issued in their names, petitioners were
committed to immediately execute the deed of absolute sale. Only then will the obligation of the buyer to pay the
remainder of the purchase price arise.

There is no doubt that unlike in a contract to sell which is most commonly entered into so as to protect the seller
against a buyer who intends to buy the property in installment by withholding ownership over the property until the buyer
effects full payment therefor, in the contract entered into in the case at bar, the sellers were the ones who were unable to
enter into a contract of absolute sale by reason of the fact that the certificate of title to the property was still in the name of
their father. It was the sellers in this case who, as it were, had the impediment which prevented, so to speak, the execution
of a contract of absolute sale.
What is clearly established by the plain language of the subject document is that when the said "Receipt of Down
Payment" was prepared and signed by petitioners Romulo A. Coronel, et al., the parties had agreed to a conditional
contract of sale, consummation of which is subject only to the successful transfer of the certificate of title from the name of
petitioners' father, Constancio P. Coronel to their names.
The Court significantly notes that this suspensive condition was, in fact, fulfilled on February 6, 1985 (Exh. "D";
Exh. "4"). Thus, on said date, the conditional contract of sale between petitioners and private respondent Ramona P.
Alcaraz became obligatory, the only act required for the consummation thereof being the delivery of the property by
means of the execution of the deed of absolute sale in a public instrument, which petitioners unequivocally committed
themselves to do as evidenced by the "Receipt of Down Payment."
Article 1475, in correlation with Article 1181, both of the Civil Code, plainly applies to the case at bench. Thus,
Art. 1475.
The contract of sale is perfected at the moment there is a meeting of minds upon the thing which
is the object of the contract and upon the price.
From that moment, the parties may reciprocally demand performance, subject to the provisions of the law
governing the form of contracts.
Art. 1181.
In conditional obligations, the acquisition of rights, as well as the extinguishment or loss of those
already acquired, shall depend upon the happening of the event which constitutes the condition.
Since the condition contemplated by the parties which is the issuance of a certificate of title in petitioners' names
was fulfilled on February 6, 1985, the respective obligations of the parties under the contract of sale became mutually
demandable, that is, petitioners, as sellers, were obliged to present the transfer certificate of title already in their names to
private respondent Ramona P. Alcaraz, the buyer, and to immediately execute the deed of absolute sale, while the buyer
on her part, was obliged to forthwith pay the balance of the purchase price amounting to P1,190,000.00.
It is also significant to note that in the first paragraph in page 9 of their petition, petitioners conclusively admitted
that:
3.
The petitioners-sellers Coronel bound themselves "to effect the transfer in our names from our deceased
father Constancio P. Coronel, the transfer certificate of title immediately upon receipt of the downpayment above-stated".
The sale was still subject to this suspensive condition. (Emphasis supplied.)
(Rollo, p. 16)
Petitioners themselves recognized that they entered into a contract of sale subject to a suspensive condition.
Only, they contend, continuing in the same paragraph, that:
. . . Had petitioners-sellers not complied with this condition of first transferring the title to the property under their
names, there could be no perfected contract of sale. (Emphasis supplied.)
(Ibid.)
not aware that they have set their own trap for themselves, for Article 1186 of the Civil Code expressly provides
that:
Art. 1186.
The condition shall be deemed fulfilled when the obligor voluntarily prevents its fulfillment.
Besides, it should be stressed and emphasized that what is more controlling these mere hypothetical arguments
is the fact that the condition herein referred to was actually and indisputably fulfilled on February 6. 1985, when a new title
was issued in the names of petitioners as evidenced by TCT No. 327403 (Exh "D"; Exh. "4").
The inevitable conclusion is that on January 19, 1985, as evidenced by the document denominated as "Receipt of
Down Payment" (Exh. "A"; Exh "1"), the parties entered into a contract of sale subject only to the suspensive condition
that the sellers shall effect the issuance of new certificate of title from that of their father's name to their names and that,
on February 6, 1985, this condition was fulfilled (Exh. "D"; Exh "4").
We, therefore, hold that, in accordance with Article 1187 which pertinently provides
Art. 1187.
The effects of conditional obligation to give, once the condition has been fulfilled, shall retroact to
the day of the constitution of the obligation . . .
In obligations to do or not to do, the courts shall determine, in each case, the retroactive effect of the condition
that has been complied with.
the rights and obligations of the parties with respect to the perfected contract of sale became mutually due and
demandable as of the time of fulfillment or occurrence of the suspensive condition on February 6, 1985. As of that point in
time, reciprocal obligations of both seller and buyer arose.
Petitioners also argue there could been no perfected contract on January 19, 1985 because they were then not
yet the absolute owners of the inherited property.
We cannot sustain this argument.
Article 774 of the Civil Code defines Succession as a mode of transferring ownership as follows:
Art. 774.
Succession is a mode of acquisition by virtue of which the property, rights and obligations to the
extent and value of the inheritance of a person are transmitted through his death to another or others by his will or by
operation of law.
Petitioners-sellers in the case at bar being the sons and daughters of the decedent Constancio P. Coronel are
compulsory heirs who were called to succession by operation of law. Thus, at the point their father drew his last breath,
petitioners stepped into his shoes insofar as the subject property is concerned, such that any rights or obligations
pertaining thereto became binding and enforceable upon them. It is expressly provided that rights to the succession are
transmitted from the moment of death of the decedent (Article 777, Civil Code; Cuison vs. Villanueva, 90 Phil. 850 [1952]).
Be it also noted that petitioners' claim that succession may not be declared unless the creditors have been paid is
rendered moot by the fact that they were able to effect the transfer of the title to the property from the decedent's name to
their names on February 6. 1985.
Aside from this, petitioners are precluded from raising their supposed lack of capacity to enter into an agreement
at that time and they cannot be allowed to now take a posture contrary to that which they took when they entered into the
agreement with private respondent Ramona P. Alcaraz. The Civil Code expressly states that:

Art. 1431.
Through estoppel an admission or representation is rendered conclusive upon the person making
it, and cannot be denied or disproved as against the person relying thereon.
Having represented themselves as the true owners of the subject property at the time of sale, petitioners cannot
claim now that they were not yet the absolute owners thereof at that time.
Petitioners also contend that although there was in fact a perfected contract of sale between them and Ramona P.
Alcaraz, the latter breached her reciprocal obligation when she rendered impossible the consummation thereof by going to
the United States of America, without leaving her address, telephone number, and Special Power of Attorney (Paragraphs
14 and 15, Answer with Compulsory Counterclaim to the Amended Complaint, p. 2; Rollo, p. 43), for which reason, so
petitioners conclude, they were correct in unilaterally rescinding the contract of sale.
We do not agree with petitioners that there was a valid rescission of the contract of sale in the instant case. We
note that these supposed grounds for petitioners' rescission, are mere allegations found only in their responsive
pleadings, which by express provision of the rules, are deemed controverted even if no reply is filed by the plaintiffs (Sec.
11, Rule 6, Revised Rules of Court). The records are absolutely bereft of any supporting evidence to substantiate
petitioners' allegations. We have stressed time and again that allegations must be proven by sufficient evidence (Ng Cho
Cio vs. Ng Diong, 110 Phil. 882 [1961]; Recaro vs. Embisan, 2 SCRA 598 [1961]). Mere allegation is not an evidence
(Lagasca vs. De Vera, 79 Phil. 376 [19471]).
Even assuming arguendo that Ramona P. Alcaraz was in the United States of America on February 6, 1985, we
cannot justify petitioners-sellers' act of unilaterally and extrajudicially rescinding the contract of sale, there being no
express stipulation authorizing the sellers to extrajudicially rescind the contract of sale. (cf Dignos vs. CA, 158 SCRA 375
[1988]; Taguba vs. Vda. de Leon, 132 SCRA 722 [1984])
Moreover, petitioners are estopped from raising the alleged absence of Ramona P. Alcaraz because although the
evidence on record shows that the sale was in the name of Ramona P. Alcaraz as the buyer, the sellers had been dealing
with Concepcion D. Alcaraz, Ramona's mother, who had acted for and in behalf of her daughter, if not also in her own
behalf. Indeed, the down payment was made by Concepcion D. Alcaraz with her own personal check (Exh. "B"; Exh. "2")
for and in behalf of Ramona P. Alcaraz. There is no evidence showing that petitioners ever questioned Concepcion's
authority to represent Ramona P. Alcaraz when they accepted her personal check. Neither did they raise any objection as
regards payment being effected by a third person. Accordingly, as far as petitioners are concerned, the physical absence
of Ramona P. Alcaraz is not a ground to rescind the contract of sale.
Corollarily, Ramona P. Alcaraz cannot even be deemed to be in default, insofar as her obligation to pay the full
purchase price is concerned. Petitioners who are precluded from setting up the defense of the physical absence of
Ramona P. Alcaraz as above-explained offered no proof whatsoever to show that they actually presented the new transfer
certificate of title in their names and signified their willingness and readiness to execute the deed of absolute sale in
accordance with their agreement. Ramona's corresponding obligation to pay the balance of the purchase price in the
amount of P1,190,000.00 (as buyer) never became due and demandable and, therefore, she cannot be deemed to have
been in default.
Article 1169 of the Civil Code defines when a party in a contract involving reciprocal obligations may be
considered in default, to wit:
Art. 1169.
Those obliged to deliver or to do something, incur in delay from the time the obligee judicially or
extrajudicially demands from them the fulfillment of their obligation.
xxx
xxx
xxx
In reciprocal obligations, neither party incurs in delay if the other does not comply or is not ready to comply in a
proper manner with what is incumbent upon him. From the moment one of the parties fulfill his obligation, delay by the
other begins. (Emphasis supplied.)
There is thus neither factual nor legal basis to rescind the contract of sale between petitioners and respondents.
With the foregoing conclusions, the sale to the other petitioner, Catalina B. Mabanag, gave rise to a case of
double sale where Article 1544 of the Civil Code will apply, to wit:
Art. 1544.
If the same thing should have been sold to different vendees, the ownership shall be transferred
to the person who may have first taken possession thereof in good faith, if it should be movable property.
Should if be immovable property, the ownership shall belong to the person acquiring it who in good faith first
recorded it in the Registry of Property.
Should there be no inscription, the ownership shall pertain to the person who in good faith was first in the
possession; and, in the absence thereof to the person who presents the oldest title, provided there is good faith.
The record of the case shows that the Deed of Absolute Sale dated April 25, 1985 as proof of the second contract
of sale was registered with the Registry of Deeds of Quezon City giving rise to the issuance of a new certificate of title in
the name of Catalina B. Mabanag on June 5, 1985. Thus, the second paragraph of Article 1544 shall apply.
The above-cited provision on double sale presumes title or ownership to pass to the first buyer, the exceptions
being: (a) when the second buyer, in good faith, registers the sale ahead of the first buyer, and (b) should there be no
inscription by either of the two buyers, when the second buyer, in good faith, acquires possession of the property ahead of
the first buyer. Unless, the second buyer satisfies these requirements, title or ownership will not transfer to him to the
prejudice of the first buyer.
In his commentaries on the Civil Code, an accepted authority on the subject, now a distinguished member of the
Court, Justice Jose C. Vitug, explains:
The governing principle is prius tempore, potior jure (first in time, stronger in right). Knowledge by the first buyer of
the second sale cannot defeat the first buyer's rights except when the second buyer first registers in good faith the second
sale (Olivares vs. Gonzales, 159 SCRA 33). Conversely, knowledge gained by the second buyer of the first sale defeats
his rights even if he is first to register, since knowledge taints his registration with bad faith (see also Astorga vs. Court of
Appeals, G.R. No. 58530, 26 December 1984). In Cruz vs. Cabana (G.R. No. 56232, 22 June 1984, 129 SCRA 656), it
was held that it is essential, to merit the protection of Art. 1544, second paragraph, that the second realty buyer must act
in good faith in registering his deed of sale (citing Carbonell vs. Court of Appeals, 69 SCRA 99, Crisostomo vs. CA, G.R.
No. 95843, 02 September 1992).
(J. Vitug, Compendium of Civil Law and Jurisprudence, 1993 Edition, p. 604).
Petitioners point out that the notice of lis pendens in the case at bar was annotated on the title of the subject
property only on February 22, 1985, whereas, the second sale between petitioners Coronels and petitioner Mabanag was
supposedly perfected prior thereto or on February 18, 1985. The idea conveyed is that at the time petitioner Mabanag, the

second buyer, bought the property under a clean title, she was unaware of any adverse claim or previous sale, for which
reason she is a buyer in good faith.
We are not persuaded by such argument.
In a case of double sale, what finds relevance and materiality is not whether or not the second buyer was a buyer
in good faith but whether or not said second buyer registers such second sale in good faith, that is, without knowledge of
any defect in the title of the property sold.
As clearly borne out by the evidence in this case, petitioner Mabanag could not have in good faith, registered the
sale entered into on February 18, 1985 because as early as February 22, 1985, a notice of lis pendens had been
annotated on the transfer certificate of title in the names of petitioners, whereas petitioner Mabanag registered the said
sale sometime in April, 1985. At the time of registration, therefore, petitioner Mabanag knew that the same property had
already been previously sold to private respondents, or, at least, she was charged with knowledge that a previous buyer is
claiming title to the same property. Petitioner Mabanag cannot close her eyes to the defect in petitioners' title to the
property at the time of the registration of the property.
This Court had occasions to rule that:
If a vendee in a double sale registers the sale after he has acquired knowledge that there was a previous sale of
the same property to a third party or that another person claims said property in a previous sale, the registration will
constitute a registration in bad faith and will not confer upon him any right. (Salvoro vs. Tanega, 87 SCRA 349 [1981];citing
Palarca vs. Director of Land, 43 Phil. 146; Cagaoan vs. Cagaoan, 43 Phil. 554; Fernandez vs. Mercader, 43 Phil. 581.)
Thus, the sale of the subject parcel of land between petitioners and Ramona P. Alcaraz, perfected on February 6,
1985, prior to that between petitioners and Catalina B. Mabanag on February 18, 1985, was correctly upheld by both the
courts below.
Although there may be ample indications that there was in fact an agency between Ramona as principal and
Concepcion, her mother, as agent insofar as the subject contract of sale is concerned, the issue of whether or not
Concepcion was also acting in her own behalf as a co-buyer is not squarely raised in the instant petition, nor in such
assumption disputed between mother and daughter. Thus, We will not touch this issue and no longer disturb the lower
courts' ruling on this point.
WHEREFORE, premises considered, the instant petition is hereby DISMISSED and the appealed judgment
AFFIRMED.
SO ORDERED.

EN BANC

[G.R. No. 4275. March 23, 1909.]

PAULA CONDE, plaintiff-appellee, vs. ROMAN ABAYA, defendant-appellant.
C. Oben, for appellant.
L. Joaquin, for appellee.
DECISION
ARELLANO, C.J p:
From the hearing of the appeal interposed by Roman Abaya in the special proceedings brought in the Court of
First Instance of La Laguna for the settlement of the intestate estate and the distribution of the property of Casiano Abaya
it appears:
I.
As antecedents: that Casiano Abaya, unmarried, the son of Romualdo Abaya and Sabina Labadia, died
on the 6th of April 1899; that Paula Conde, as the mother of the natural children Jose and Teopista Conde, whom she
states she had by Casiano Abaya, on the 6th of November, 1905, moved the settlement of the said intestate succession;
that an administrator having been appointed for the said estate on the 25th of November, 1905, Roman Abaya, a son of
the said Romualdo Abaya and Sabina Labadia, the parents of the late Casiano Abaya, came forward and opposed said
appointment and claimed it for himself as being the nearest relative of the deceased; that this was granted by the court
below on the 9th of January, 1906; that on the 17th of November, 1906, Roman Abaya moved that, after due process of
law, the court declare him to be the sole heir of Casiano Abaya, to the exclusion of all other persons, especially of Paula
Conde, and to be therefore entitled to take possession of all the property of said estate, and that it be adjudicated to him;
and that on November 22, 1906, the court ordered the publication of notices for the declaration of heirs and distribution of
the property of the estate.
II.
That on the 28th of November, 1906, Paula Conde, in reply to the foregoing motion of Roman Abaya, filed
a petition wherein she stated that she acknowledged the relationship alleged by Roman Abaya, but that she considered
that her right was superior to his and moved for a hearing of the matter, and, in consequence of the evidence that she
intended to present she prayed that she be declared to have preferential rights to the property left by Casiano Abaya, and
that the same be adjudicated to her together with the corresponding products thereof.
III.
That the trial was held, both parties presenting documentary and oral evidence, and the court below
entered the following judgment:
"That the administrator of the estate of Casiana Abaya should recognize Teopista and Jose Conde as being
natural children of Casiano Abaya; that the petitioner Paula Conde should succeed to the hereditary rights of her children
with respect to the inheritance of their deceased natural father Casiano Abaya; and therefore, it is hereby declared that
she is the only heir to the property of the said intestate estate, to the exclusion of the administrator, Roman Abaya."
IV.
That Roman Abaya excepted to the foregoing judgment, appealed to this court, and presented the
following statement of errors:
1.
The fact that the court below found that an ordinary action for the acknowledgment of natural children
under articles 135 and 137 of the Civil Code, might be brought in special probate proceedings.
2.
The finding that after the death of a person claimed to be an unacknowledged natural child, the mother of
such presumed natural child, as heir to the latter, may bring an action to enforce the acknowledgment of her deceased
child in accordance with articles 135 and 137 of the Civil Code.
3.
The finding in the judgment that the alleged continuous possession of the deceased children of Paula
Conde of the status of natural children of the late Casiano Abaya, has been fully proven in these proceedings; and
4.
On the hypothesis that it was proper to adjudicate the property of this intestate estate to Paula Conde, as
improperly found by the court below, the court erred in not having declared that said property should be reserved in favor
of relatives of Casiano Abaya to the third degree, and in not having previously demanded securities from Paula Conde to
guarantee the transmission of the property to those who might fall within the reservation.
As to the first error assigned, the question is set up as to whether in special proceedings for the administration
and distribution of an intestate estate, an action might be brought to enforce the acknowledgment of the natural child of
the person from whom the inheritance is derived, that is to say, whether one might appear as heir on the ground that he is
a recognized natural child of the deceased, not having been so recognized by the deceased either voluntarily or
compulsory by reason of a preexisting judicial decision, but asking at the same time that, in the special proceeding itself,
he be recognized by the presumed legitimate heirs of the deceased who claim to be entitled to the succession opened in
the special proceeding.
According to section 782 of the Code of Civil Procedure
"If there shall be a controversy before the Court of First Instance as to who the lawful heirs of the deceased
person are, or as to the distributive share to which each person is entitled under the law, the testimony as to such
controversy shall be taken in writing by the judge, under oath and signed by witness. Any party in interest whose
distributive share is affected by the determination of such controversy, may appeal from the judgment of the Court of First
Instance determining such controversy to the Supreme Court, within the time and in the manner provided in the last
preceding section."
This court has decided the present question in the manner shown in the case of Juana Pimental vs. Engracio
Palanca (5 Phil. Rep. 436.)
The main question with regard to the second error assigned, is whether or not the mother of a natural child now
deceased, but who survived the person who, it is claimed, was his natural father, also deceased, may bring an action for
the acknowledgment of the natural filiation in favor of such child in order to appear in his behalf to receive the inheritance
from the person who is supposed to be his natural father.
In order to decide in the affirmative the court below has assigned the following as the only foundation:
"In resolving a similar question Manresa says: 'An acknowledgment can only be demanded by the natural child
and his descendants whom it shall benefit, and should they be minors or otherwise incapacitated, such person as legally
represents them; the mother may ask it in behalf of her child so long as he is under her authority.' On this point no positive
declaration has been made, undoubtedly because it was not considered necessary. A private action is in question and the
general rule must be followed. Elsewhere the same author adds: 'It may so happen that the child dies before four years
have expired after attaining majority, or that the document supporting his petition for acknowledgment is discovered after
his death, such death perhaps occurring after his parents had died, as is supposed by article 137, or during their lifetime.
In any case such right of action shall pertain to the descendants of the child whom the acknowledgment may interest.'
(See Commentaries to arts. 135 and 137, Civil Code. Vol. I.)'

The above doctrine, advanced by one of the most eminent commentators of the Civil Code, lacks legal and
doctrinal foundation. The power to transmit the right of such action by the natural child to his descendants can not be
sustained under the law, and still less to his mother.
It is without any support in law because the rule laid down in the code is most positive, limiting in form, when
establishing the exception for the exercise of such right of action after the death of the presumed parents, as is shown
hereafter. It is not supported by any doctrine, because up to the present time no argument has been presented, upon
which even an approximate conclusion could be based.
Although the Civil Code considerably improved the condition of recognized natural children, granting them rights
and actions that they did not possess under the former laws, they were not, however, placed upon the same plane as
legitimate ones. The difference that separates these two classes of children is still great, as proven by so many articles
dealing with the rights of the family and with succession in relation to the members thereof. It may be laid down as a legal
maxim, that whatever the code does not grant to the legitimate children, or in connection with their rights, must still less be
understood as granted to recognized natural children or in connection with their rights. There is not a single exception in
its provisions.
If legitimacy is the attribute that constitutes the basis of the absolute family rights of the child, the acknowledgment
of the natural child is, among illegitimate ones, that which unites him to the family of the father or the mother who
recognizes him, and affords him a participation in the rights of the family, relatively advantageous according to whether
they are alone or whether they concur with other individuals of the family of his purely natural father or mother.
Thus, in order to consider the spirit of the Civil Code nothing is more logical than to establish a comparison
between an action to claim the legitimacy, and one to enforce acknowledgment.
"Art. 118.
The action to claim its legitimacy may be brought by the child at any time of its lifetime and shall
be transmitted to its heirs, should it die during minority or in a state of insanity. In such cases the heirs shall be allowed a
period of five years in which to institute the action.
"The action already instituted by the child is transmitted by its death to the heirs, if it has not lapsed before then.
"Art. 137.
The actions for the acknowledgment of natural children can be instituted only during the life of the
presumed parents, except in the following cases:
"1.
If the father or mother died during the minority of the child, in which case the latter may institute the action
before the expiration of the first four years of its majority.
"2.
If, after the death of the father or mother, some instrument, before unknown, should be discovered in
which the child is expressly acknowledged.
"In this case the action must be instituted within the six months following the discovery of such instrument."
On this supposition the first difference that results between one action and the other consists in that the right of
action for legitimacy lasts during the whole lifetime of the child, that is, it can always be brought against the presumed
parents or their heirs by the child itself, while the right of action for the acknowledgment of a natural child does not last his
whole lifetime, and, as a general rule, it can not be instituted against the heirs of the presumed parents, inasmuch as it
can be exercised only during the life of the presumed parents.
With regard to the question at issue, that is, the transmission to the heirs of the presumed parents of the
obligation to admit the legitimate filiation, or to recognize the natural filiation, there exists the most radical difference in that
the former continues during the life of the child who claims to be legitimate, and he may demand it either directly and
primarily from the said presumed parents, or indirectly and secondarily from the heirs of the latter; while the second does
not endure for life; as a general rule, it only lasts during the life of the presumed parents. Hence the other difference,
derived as a consequence, that an action for legitimacy is always brought against the heirs of the presumed parents in
case of the death of the latter, while the action for acknowledgment is not brought against the heirs of such parents, with
the exception of the two cases prescribed by article 137 transcribed above.
So much for the passive transmission of the obligation to admit the legitimate filiation, or to acknowledge the
natural filiation.
As to the transmission to the heirs of the child of the latter's action to claim his legitimacy, or to obtain the
acknowledgment of his natural filiation, it is seen that the code grants it in the first case, but not the second. It contains
provisions for the transmission of the right of action which, for the purpose of claiming his legitimacy inheres in the child,
but it does not say a word with regard to the transmission of the right to obtain the acknowledgment of the natural filiation.
Therefore, the respective corollary of each of the two above-cited articles is: (1) That the right of action which
devolves upon the child to claim his legitimacy under article 118, may be transmitted to his heirs in certain cases
designated in the said article; (2) That the right of action for the acknowledgment of natural children to which article 137
refers, can never be transmitted, for the reason that the code makes no mention of it in any case, not even as an
exception.
It is most illogical and contrary to every rule of correct interpretation, that the right of action to secure
acknowledgment by the natural child should be presumed to be transmitted, independently, as a rule, to his heirs, while
the right of action to claim legitimacy from his predecessor is not expressly, independently, or, as a general rule, conceded
to the heirs of the legitimate child, but only relatively and as an exception. Consequently, the pretension that the right of
action on the part of the child to obtain the acknowledgment of his natural filiation is transmitted to his descendants is
altogether unfounded. No legal provision exists to sustain such pretension, nor can an argument of presumption be based
on the lesser claim when there is no basis for the greater one, and when it is only given as an exception in well-defined
cases. It is placing the heirs of the natural child on a better footing than the heirs of the legitimate one, when, as a matter
of fact, the position of a natural child is no better than, nor even equal to, that of a legitimate child.
From the express and precise precepts of the code the following conclusions are derived:
The right of action that devolves upon the child to claim his legitimacy lasts during his whole life, while the right to
claim the acknowledgment of a natural child lasts only during the life of his presumed parents.
Inasmuch as the right of action accruing to the child to claim his legitimacy lasts during his whole life, he may
exercise it either against the presumed parents, or their heirs; while the right of action to secure the acknowledgment of a
natural child, since it does not last during his whole life, but depends on that of the presumed parents, as a general rule
can only be exercised against the latter.
Usually the right of action for legitimacy devolving upon the child is of a personal character and pertains
exclusively to him, only the child may exercise it at any time during his lifetime. As an exception, and in three cases only, it
may be transmitted to the heirs of the child, to wit, if he died during his minority, or while insane, or after action had been
already instituted.

An action for the acknowledgment of a natural child may, as an exception, be exercised against the heirs of the
presumed parents in two cases: first, in the event of the death of the latter during the minority of the child, and second,
upon the discovery of some instrument of express acknowledgment of the child, executed by the father or mother, the
existence of which was unknown during the life of the latter.
But as such action for the acknowledgment of a natural child can only be exercised by him. It can not be
transmitted to his descendants, or to his ascendants.
In support of the foregoing the following authorities may be cited:
Sanchez Roman, in his Treatise on Civil Law, propounds the question as to whether said action should be
considered transmissive to the heirs or descendants of the natural child, whether he had or had not exercised it up to the
time of his death, and decides it as follows;
"There is an entire absence of legal provisions, and at most, it might be deemed admissible as a solution, that the
right of action to claim the acknowledgment of a natural child is transmitted by analogy to his heirs on the same conditions
and terms that it is transmitted to the descendants of a legitimate child, to claim his legitimacy, under article 118, but
nothing more; because on this point nothing warrants placing the heirs of a natural child on a better footing than those of
the legitimate child, and even to compare them would not fail to be a strained and questionable matter, and one of great
difficulty for decision by the courts, for the simple reason that for the heirs of the legitimate child, the said article 118
exists, while for those of the natural child, as we have said, there is no provision in the code authorizing the same,
although on the other hand there is none that prohibits it." (Vol. V.)
Diaz Guijarro and Martinez Ruiz in their work on "The Civil Code as construed by the supreme court of Spain,"
commenting upon article 137, say:
"Article 118, taking into account the privileges due to the legitimacy of children, grants them the right to claim said
legitimacy during their lifetime, and even authorizes the transmission of said right for the space of five years to the heirs
thereof, if the child die during his minority or in a state of insanity. But as article 137 is based on the consideration that in
the case of a natural child, ties are less strong and sacred in the eyes of the law, it does not fix such a long and indefinite
period for the exercise of the action; it limits it to the life of the parents, excepting in the two cases mentioned in said
article; and it does not allow, as does article 118, the action to pass on to the heirs, inasmuch as, although it does not
prohibit it, and for that reason it might be deemed on general principles of law to consent to it, such a supposition is
inadmissible for the reason that a comparison of both articles shows that the silence of the law in the latter case is not, nor
can it be, an omission, but a deliberate intent to establish a wide difference between the advantages granted to a
legitimate child and to a natural one."
(Ibid., Vol. II, 171.)
Navarro Amandi (Cuestionario del Codigo Civil) raises the question: "Can the heirs of a natural child claim the
acknowledgment in those cases wherein the father or mother are under obligation to acknowledge"? And says:
"Opinions are widely divergent. The court of Rennes held (on April 13, 1844) that the right of investigation forms a
part of the estate of the child, and along with his patrimony is transmitted to his heirs. The affirmation is altogether too
categorical to be admissible. If it were correct the same thing would happen as when the legitimacy of a child is claimed,
and as already seen, the right of action to demand the legitimacy is not transmitted to the heirs in every case and as an
absolute right, but under certain limitations and circumstances. Now, were we to admit the doctrine of the court of Rennes,
the result would be that the claim for natural filiation would be more favored than one for legitimate filiation. This would be
absurd, because it can not be conceived that the legislator should have granted a right of action to the heirs of the natural
child, which is only granted under great limitations and in very few cases to those of a legitimate one. Some persons insist
that the same rules that govern legitimate filiation apply by analogy to natural filiation, and that in this conception the heirs
of the natural child are entitled to claim it in the cases prescribed by article 118. The majority, however, are inclined to
consider the right to claim acknowledgment as a personal right, and consequently, not transmissive to the heirs. Really
there are not legal grounds to warrant the transmission." (Vol. 2, 229.)
In a decision like the present one it is impossible to bring forward the argument of analogy for the purpose of
considering that the heirs of the natural child are entitled to the right of action which article 118 concedes to the heirs of
the legitimate child. The existence of a provision for the one case and the absence thereof for the other is a conclusive
argument that inclusio unius est exclusio alterius, and it can not be understood that the provision of law should be the
same when the same reason does not hold in the one case as in the other.
The theory of the law of transmission is also entirely inapplicable in this case. This theory, which in the Roman
Law expressed the general rule that an heir who did not accept an inheritance during his lifetime was incapacitated from
transmitting it to his own heirs, included at the same time the idea that if the inheritance was not transmitted because the
heir did not possess it, there were, however, certain things which the heir held and could transmit. Such was the law and
the right to accept the inheritance, for the existing reason that all rights, both real and personal, shall pass to the heir; quia
haeres representat defunctum in omnibus et per omnia. According to article 659 of the Civil Code, "the inheritance
includes all the property, rights, and obligations of a person, which are not extinguished by his death." If the mother is the
heir of her natural child, and the latter, among other rights during his lifetime was entitled to exercise an action for his
acknowledgment against his father, during the life of the latter, or after his death in some of the excepting cases of article
137, such right, which is a portion of his inheritance, is transmitted to his mother as being his heir, and it was so
understood by the court of Rennes when it considered the right in question, not as a personal and exclusive right of the
child which is extinguished by his death, but as any other right which might be transmitted after his death. This right of
supposed transmission is even less tenable than that sought to be sustained by the argument of analogy.
The right of action pertaining to the child to claim his legitimacy is in all respects superior to that of the child who
claims acknowledgment as a natural child. And it is evident that the right of action to claim his legitimacy is not one of
those rights which the legitimate child may transmit by inheritance to his heirs; it forms no part of the component rights of
his inheritance. If it were so, there would have been no necessity to establish its transmissibility to heirs as an exception in
the terms and conditions of article 118 of the code. So that, in order that it may constitute a portion of the child's
inheritance, it is necessary that the conditions and the terms contained in article 118 shall be present, since without them,
the right that the child held during his lifetime, being personal and exclusive in principle, and therefore, as a general rule
not susceptible of transmission, would and should have been extinguished by his death. Therefore, where no express
provision like that of article 118 exists, the right of action for the acknowledgment of a natural child is, in principle and
without exception, extinguished by his death, and can not be transmitted as a portion of the inheritance of the deceased
child.

On the other hand, it said right of action formed a part of the child's inheritance, it would be necessary to establish
the doctrine that the right to claim such an acknowledgment from the presumed natural father and from his heirs is an
absolute right of the heirs of the child, not limited by certain circumstances as in the case of the heirs of a legitimate child;
and if it is unreasonable to compare a natural child with a legitimate one to place the heirs of a natural child and his
inheritance on a better footing than those of a legitimate child would not only be unreasonable, but, as stated in one of the
above citations, most absurd and illegal in the present state of the law and in accordance with the general principles
thereof.
For all of the foregoing reasons we hereby reverse the judgment appealed from in all its parts, without any special
ruling as to the costs of this instance.

SECOND DIVISION
[G.R. No. 113899. October 13, 1999.]
GREAT PACIFIC LIFE ASSURANCE CORP., petitioner, vs. COURT OF APPEALS AND MEDARDA V.
LEUTERIO, respondents.
DECISION
QUISUMBING, J p:
This petition for review, under Rule 45 of the Rules of Court, assails the Decision 1 dated May 17, 1993, of the
Court of Appeals and its Resolution 2 dated January 4, 1994 in CA-G.R. CV No. 18341. The appellate court affirmed in
toto the judgment of the Misamis Oriental Regional Trial Court, Branch 18, in an insurance claim filed by private
respondent against Great Pacific Life Assurance Co. The dispositive portion of the trial courts decision reads: cdphil
"WHEREFORE, judgment is rendered adjudging the defendant GREAT PACIFIC LIFE ASSURANCE
CORPORATION as insurer under its Group policy No. G-1907, in relation to Certification B-18558 liable and ordered to
pay to the DEVELOPMENT BANK OF THE PHILIPPINES as creditor of the insured Dr. Wilfredo Leuterio, the amount of
EIGHTY SIX THOUSAND TWO HUNDRED PESOS (P86,200.00); dismissing the claims for damages, attorneys fees and
litigation expenses in the complaint and counterclaim, with costs against the defendant and dismissing the complaint in
respect to the plaintiffs, other than the widow-beneficiary, for lack of cause of action." 3
The facts, as found by the Court of Appeals, are as follows: cdtai
A contract of group life insurance was executed between petitioner Great Pacific Life Assurance Corporation
(hereinafter Grepalife) and Development Bank of the Philippines (hereinafter DBP). Grepalife agreed to insure the lives of
eligible housing loan mortgagors of DBP.
On November 11, 1983, Dr. Wilfredo Leuterio, a physician and a housing debtor of DBP applied for membership
in the group life insurance plan. In an application form, Dr. Leuterio answered questions concerning his health condition as
follows:
"7.
Have you ever had, or consulted, a physician for a heart condition, high blood pressure, cancer, diabetes,
lung, kidney or stomach disorder or any other physical impairment?
Answer: No. If so give details ___________.
8.
Are you now, to the best of your knowledge, in good health?
Answer: [ x ] Yes [ ] No." 4 cda
On November 15, 1983, Grepalife issued Certificate No. B-18558, as insurance coverage of Dr. Leuterio, to the
extent of his DBP mortgage indebtedness amounting to eighty-six thousand, two hundred (P86,200.00) pesos.
On August 6, 1984, Dr. Leuterio died due to "massive cerebral hemorrhage." Consequently, DBP submitted a
death claim to Grepalife. Grepalife denied the claim alleging that Dr. Leuterio was not physically healthy when he applied
for an insurance coverage on November 15, 1983. Grepalife insisted that Dr. Leuterio did not disclose he had been
suffering from hypertension, which caused his death. Allegedly, such non-disclosure constituted concealment that justified
the denial of the claim.
On October 20, 1986, the widow of the late Dr. Leuterio, respondent Medarda V. Leuterio, filed a complaint with
the Regional Trial Court of Misamis Oriental, Branch 18, against Grepalife for "Specific Performance with Damages." 5
During the trial, Dr. Hernando Mejia, who issued the death certificate, was called to testify. Dr. Mejias findings, based
partly from the information given by the respondent widow, stated that Dr. Leuterio complained of headaches presumably
due to high blood pressure. The inference was not conclusive because Dr. Leuterio was not autopsied, hence, other
causes were not ruled out. cdtai
On February 22, 1988, the trial court rendered a decision in favor of respondent widow and against Grepalife. On
May 17, 1993, the Court of Appeals sustained the trial courts decision. Hence, the present petition. Petitioners interposed
the following assigned errors:
"1.
THE LOWER COURT ERRED IN HOLDING DEFENDANT-APPELLANT LIABLE TO THE
DEVELOPMENT BANK OF THE PHILIPPINES (DBP) WHICH IS NOT A PARTY TO THE CASE FOR PAYMENT OF THE
PROCEEDS OF A MORTGAGE REDEMPTION INSURANCE ON THE LIFE OF PLAINTIFFS HUSBAND WILFREDO
LEUTERIO ONE OF ITS LOAN BORROWERS, INSTEAD OF DISMISSING THE CASE AGAINST DEFENDANTAPPELLANT [Petitioner Grepalife] FOR LACK OF CAUSE OF ACTION.
2.
THE LOWER COURT ERRED IN NOT DISMISSING THE CASE FOR WANT OF JURISDICTION OVER
THE SUBJECT OR NATURE OF THE ACTION AND OVER THE PERSON OF THE DEFENDANT.
3.
THE LOWER COURT ERRED IN ORDERING DEFENDANT-APPELLANT TO PAY TO DBP THE
AMOUNT OF P86,200.00 IN THE ABSENCE OF ANY EVIDENCE TO SHOW HOW MUCH WAS THE ACTUAL AMOUNT
PAYABLE TO DBP IN ACCORDANCE WITH ITS GROUP INSURANCE CONTRACT WITH DEFENDANT-APPELLANT.
dctai
4.
THE LOWER COURT ERRED IN - HOLDING THAT THERE WAS NO CONCEALMENT OF MATERIAL
INFORMATION ON THE PART OF WILFREDO LEUTERIO IN HIS APPLICATION FOR MEMBERSHIP IN THE GROUP
LIFE INSURANCE PLAN BETWEEN DEFENDANT-APPELLANT OF THE INSURANCE CLAIM ARISING FROM THE
DEATH OF WILFREDO LEUTERIO." 6
Synthesized below are the assigned errors for our resolution:
1.
Whether the Court of Appeals erred in holding petitioner liable to DBP as beneficiary in a group life
insurance contract from a complaint filed by the widow of the decedent/mortgagor?
2.
Whether the Court of Appeals erred in not finding that Dr. Leuterio concealed that he had hypertension,
which would vitiate the insurance contract?
3.
Whether the Court of Appeals erred in holding Grepalife liable in the amount of eighty six thousand, two
hundred (P86,200.00) pesos without proof of the actual outstanding mortgage payable by the mortgagor to DBP.
Petitioner alleges that the complaint was instituted by the widow of Dr. Leuterio, not the real party in interest,
hence the trial court acquired no jurisdiction over the case. It argues that when the Court of Appeals affirmed the trial
courts judgment, Grepalife was held liable to pay the proceeds of insurance contract in favor of DBP, the indispensable
party who was not joined in the suit. prcd
To resolve the issue, we must consider the insurable interest in mortgaged properties and the parties to this type
of contract. The rationale of a group insurance policy of mortgagors, otherwise known as the "mortgage redemption
insurance," is a device for the protection of both the mortgagee and the mortgagor. On the part of the mortgagee, it has to
enter into such form of contract so that in the event of the unexpected demise of the mortgagor during the subsistence of
the mortgage contract, the proceeds from such insurance will be applied to the payment of the mortgage debt, thereby

relieving the heirs of the mortgagor from paying the obligation. 7 In a similar vein, ample protection is given to the
mortgagor under such a concept so that in the event of death; the mortgage obligation will be extinguished by the
application of the insurance proceeds to the mortgage indebtedness. 8 Consequently, where the mortgagor pays the
insurance premium under the group insurance policy, making the loss payable to the mortgagee, the insurance is on the
mortgagors interest, and the mortgagor continues to be a party to the contract. In this type of policy insurance, the
mortgagee is simply an appointee of the insurance fund, such loss-payable clause does not make the mortgagee a party
to the contract. 9
Section 8 of the Insurance Code provides:
"Unless the policy provides, where a mortgagor of property effects insurance in his own name providing that the
loss shall be payable to the mortgagee, or assigns a policy of insurance to a mortgagee, the insurance is deemed to be
upon the interest of the mortgagor, who does not cease to be a party to the original contract, and any act of his, prior to
the loss, which would otherwise avoid the insurance, will have the same effect, although the property is in the hands of the
mortgagee, but any act which, under the contract of insurance, is to be performed by the mortgagor, may be performed by
the mortgagee therein named, with the same effect as if it had been performed by the mortgagor." prcd
The insured private respondent did not cede to the mortgagee all his rights or interests in the insurance, the policy
stating that: "In the event of the debtors death before his indebtedness with the Creditor [DBP] shall have been fully paid,
an amount to pay the outstanding indebtedness shall first be paid to the creditor and the balance of sum assured, if there
is any, shall then be paid to the beneficiary/ies designated by the debtor." 10 When DBP submitted the insurance claim
against petitioner, the latter denied payment thereof, interposing the defense of concealment committed by the insured.
Thereafter, DBP collected the debt from the mortgagor and took the necessary action of foreclosure on the residential lot
of private respondent. 11 In Gonzales La O vs. Yek Tong Lin Fire & Marine Ins. Co. 12 we held:
"Insured, being the person with whom the contract was made, is primarily the proper person to bring suit
thereon. . . . Subject to some exceptions, insured may thus sue, although the policy is taken wholly or in part for the
benefit of another person named or unnamed, and although it is expressly made payable to another as his interest may
appear or otherwise. . . . Although a policy issued to a mortgagor is taken out for the benefit of the mortgagee and is made
payable to him, yet the mortgagor may sue thereon in his own name, especially where the mortgagees interest is less
than the full amount recoverable under the policy, . . . .
And in volume 33, page 82, of the same work, we read the following:
Insured may be regarded as the real party in interest, although he has assigned the policy for the purpose of
collection, or has assigned as collateral security any judgment he may obtain." 13 Cdpr
And since a policy of insurance upon life or health may pass by transfer, will or succession to any person, whether
he has an insurable interest or not, and such person may recover it whatever the insured might have recovered, 14 the
widow of the decedent Dr. Leuterio may file the suit against the insurer, Grepalife.
The second assigned error refers to an alleged concealment that the petitioner interposed as its defense to annul
the insurance contract. Petitioner contends that Dr. Leuterio failed to disclose that he had hypertension, which might have
caused his death. Concealment exists where the assured had knowledge of a fact material to the risk, and honesty, good
faith, and fair dealing requires that he should communicate it to the assured, but he designedly and intentionally withholds
the same. 15
Petitioner merely relied on the testimony of the attending physician, Dr. Hernando Mejia, as supported by the
information given by the widow of the decedent. Grepalife asserts that Dr. Mejias technical diagnosis of the cause of
death of Dr. Leuterio was a duly documented hospital record, and that the widows declaration that her husband had
"possible hypertension several years ago" should not be considered as hearsay, but as part of res gestae.
On the contrary the medical findings were not conclusive because Dr. Mejia did not conduct an autopsy on the
body of the decedent. As the attending physician, Dr. Mejia stated that he had no knowledge of Dr. Leuterios any previous
hospital confinement. 16 Dr. Leuterios death certificate stated that hypertension was only "the possible cause of death."
The private respondents statement, as to the medical history of her husband, was due to her unreliable recollection of
events. Hence, the statement of the physician was properly considered by the trial court as hearsay. cdtai
The question of whether there was concealment was aptly answered by the appellate court, thus:
"The insured, Dr. Leuterio, had answered in his insurance application that he was in good health and that he had
not consulted a doctor or any of the enumerated ailments, including hypertension; when he died the attending physician
had certified in the death certificate that the former died of cerebral hemorrhage, probably secondary to hypertension.
From this report, the appellant insurance company refused to pay the insurance claim. Appellant alleged that the insured
had concealed the fact that he had hypertension.
Contrary to appellants allegations, there was no sufficient proof that the insured had suffered from hypertension.
Aside from the statement of the insureds widow who was not even sure if the medicines taken by Dr. Leuterio were for
hypertension, the appellant had not proven nor produced any witness who could attest to Dr. Leuterios medical history. . .
xxx
xxx
xxx
Appellant insurance company had failed to establish that there was concealment made by the insured, hence, it
cannot refuse payment of the claim." 17 prcd
The fraudulent intent on the part of the insured must be established to entitle the insurer to rescind the contract.
18 Misrepresentation as a defense of the insurer to avoid liability is an affirmative defense and the duty to establish such
defense by satisfactory and convincing evidence rests upon the insurer. 19 In the case at bar, the petitioner failed to
clearly and satisfactorily establish its defense, and is therefore liable to pay the proceeds of the insurance.
And that brings us to the last point in the review of the case at bar. Petitioner claims that there was no evidence as
to the amount of Dr. Leuterios outstanding indebtedness to DBP at the time of the mortgagors death. Hence, for private
respondents failure to establish the same, the action for specific performance should be dismissed. Petitioners claim is
without merit. A life insurance policy is a valued policy. 20 Unless the interest of a person insured is susceptible of exact
pecuniary measurement, the measure of indemnity under a policy of insurance upon life or health is the sum fixed in the
policy. 21 The mortgagor paid the premium according to the coverage of his insurance, which states that:
"The policy states that upon receipt of due proof of the Debtors death during the terms of this insurance, a death
benefit in the amount of P86,200.00 shall be paid. cda
In the event of the debtors death before his indebtedness with the creditor shall have been fully paid, an amount
to pay the outstanding indebtedness shall first be paid to the Creditor and the balance of the Sum Assured, if there is any
shall then be paid to the beneficiary/ies designated by the debtor." 22 (Emphasis omitted)

However, we noted that the Court of Appeals decision was promulgated on May 17, 1993. In private respondents
memorandum, she states that DBP foreclosed in 1995 their residential lot, in satisfaction of mortgagors outstanding loan.
Considering this supervening event, the insurance proceeds shall inure to the benefit of the heirs of the deceased person
or his beneficiaries. Equity dictates that DBP should not unjustly enrich itself at the expense of another (Nemo cum
alterius detrimenio protest). Hence, it cannot collect the insurance proceeds, after it already foreclosed on the mortgage.
The proceeds now rightly belong to Dr. Leuterios heirs represented by his widow, herein private respondent Medarda
Leuterio.
WHEREFORE, the petition is hereby DENIED. The Decision and Resolution of the Court of Appeals in CA-G.R.
CV 18341 is AFFIRMED with MODIFICATION that the petitioner is ORDERED to pay the insurance proceeds amounting
to Eighty-six thousand, two hundred (P86,200.00) pesos to the heirs of the insured, Dr. Wilfredo Leuterio (deceased),
upon presentation of proof of prior settlement of mortgagors indebtedness to Development Bank of the Philippines. Costs
against petitioner. LLjur
SO ORDERED.

FIRST DIVISION
[G.R. No. L-46978. October 12, 1987.]
ERNESTO ROBLES, petitioner, vs. HON. DELFIN FL. BATACAN, HON. CONRADO M. VASQUEZ, HON. JOSE
B. JIMENEZ, ATANACIO GERONIMO and BENEDICTO GERONIMO, respondents.
DECISION
CRUZ, J p:
The central figure in this case is Severino Geronimo, petitioner's land for twenty years until 1969 and died the
following year at the age of 86. The central question in this case in the nature of the work be performed and the
compensation he was supposed to receive. cdrep
After his death, an ejectment suit was filed against his two sons by the petitioner, who claimed they had no right to
remain in his land. 1 Benedicto Geronimo did not choose to answer and so was declared in default. 2 The other
defendant, Atanacio Geronimo, averred that he was entitled to succeed his father as the petitioner's agricultural tenant in
accordance with R.A. No. 1199 and Section 9 of R.A. No. 3844.
The private respondent's position is that his father was an agricultural tenant of the petitioner during the twenty
years the former worked in the latter's land. Hence, in accordance with the aforementioned laws, he could remain in the
petitioner's land under the same terms and conditions of the original tenancy share arrangement entered into between his
father and the petitioner. His share should also be P100.00 more or less per harvest every forty days during the time he
continued discharging his father's work as his statutory successor. 3
The petitioner, for his part, insists that Severino Geronimo was never an agricultural tenant of his but worked
merely as a watcher in his land. He did receive the sum of P100.00 every harvest but not as his share therein for that
amount was given to him as a reward for his past services. The only work he did was watch over the petitioner's land and
make brooms out of the fallen coconut leaves he would gather. He sold these brooms and kept the proceeds for himself
without sharing them with the petitioner. 4
After trial, the Court of Agrarian Relations * rendered judgment recognizing the defendant as the agricultural
tenant of the plaintiff and ordering the payment to him of the sum of P12,000.00 as his tenancy share. 5 Not satisfied, the
petitioner went to the Court of Appeals, ** which affirmed the challenged decision in toto. 6 The petitioner is now before
us and faults the respondent court with grave abuse of discretion for upholding the trial court.
We do not agree that the respondent court erred. On the contrary, we find that its findings are supported by the
evidence of record and in accord with the applicable law and doctrine.
Thus, on the nature of the work performed by Severino Geronimo, it quoted with approval the conclusion of the
trial court that he "was the tenant on the subject parcel for quite a time and was recognized by Ernesto Robles as such,"
discharging such tasks as supervising the harvest, cutting down bushes, clearing the land. picking up the fallen nuts, and
paying the laborers, like the coconut gatherers and huskers, from his 1/3 share. 7 This was based on the declarations of
several witnesses, 8 including the petitioner himself, and the several documents presented by Atanacio in which his
father was described by the petitioner as his "kasama" to whom was being given his "bahagui" or share. 9
As for the private respondent's right to succeed his father, the respondent court was correct in affirming the ruling
of the trial court that, as the son of Severino Geronimo, Atanacio had the right to take over as agricultural tenant in the
petitioner's land in accordance with R.A. No. 1199 and R.A. No. 3844.
10 Obviously, Atanacio was the only heir
interested in succeeding his father as his brother, Benedicto, had not seen fit to claim his right and in fact defaulted in
resisting the petitioner's claims in the ejectment suit. Significantly, when in his prayer the petitioner asks for authority to
appoint the said Benedicto to succeed his father, it is presumably as his watcher only and not as agricultural tenant. The
petitioner's consistent claim, it should be noted, is that Severino Geronimo was not his tenant but only his watcher. prLL
The Court gave limited due course to this petition to enable the parties to argue on the amount of damages in
view of the apparent lack of a credible basis therefor as observed by the trial court. 11 In his memorandum, the petitioner
says the basis should be the weight of the coconut harvested and then, consistent with his main thesis, urges that no
damages should be awarded at all. 12 The private respondent says that the basis should be the number of nuts
harvested and then asks that the damages be doubled. 13 In his reply, realizing probably that the matter may have
gotten out of hand, the petitioner now counters that the private respondent cannot claim an increase in the amount of
damages because he has not, providentially, appealed the same. 14 This is correct and estops the private respondent.
In La Mallorca v. Court of Appeals, 15 the Court said:
"The increase of the award of damages from P3,000.00 to P6,000.00 by the Court of Appeals, however, cannot be
sustained. Generally, the Appellate Court can only pass upon the consider questions or issues raised and argued in
appellant's brief. Plaintiff did not appeal from that portion of judgment of the trial court awarding them damages. Neither
does it appear that, as appellees to the Court of Appeals, plaintiffs have pointed out in their brief inadequacy of the award
or that the inclusion of the figure P3,000.00 was merely a clerical error, in order that the matter may be treated as an
exception to the general rule. Thus, the court of Appeals committed error in raising the amount for damages."
In Dy v. Kuizon 16 we declared:
"It is a well-settled rule in this jurisdiction that whenever an appeal is taken in a civil case, an appellee who has
not himself appealed cannot obtain from the appellate court any affirmative relief other than the ones granted in the
decision of the court below. An appellee who is not appellant may assign errors in his brief where his purpose is to
maintain the judgment on other grounds, but he may not do so if this purpose is to have the judgment modified or
reversed for, in such a case, he must appeal. Here, the respondent did not appeal and so it was error for the Court of
Appeals to award him a relief not granted by the lower court."
In Madrideo v. Hon. Court of Appeals 17 our ruling was:
". . . whenever an appeal is taken in a civil case, an appellee who has not appealed cannot obtain from the
appellate court any affirmative relief other than the ones granted in the decision of the court below."
The latest decision on this matter is Aguilar v. Chan, 18 where the Court noted that although the actual damages
suffered by the plaintiff-appellee exceeded the amount awarded to her by the lower court, this amount could not be
increased because she had not appealed.
The trial court had the opportunity to assess the evidence first-hand and so was in the best position to determine
the factual relationship between the parties as well as the share to which the private respondent was entitled. We do not
find that the respondent court committed grave abuse of discretion in affirming the decision of the court a quo and see no
reason to reverse it. We too affirm. cdll
WHEREFORE, the petition is DENIED, with costs against the petitioner. This decision is immediately executory.
SO ORDERED.

SECOND DIVISION
[G.R. No. 121940. December 4, 2001.]
JESUS SAN AGUSTIN, petitioner, vs. HON. COURT OF APPEALS and MAXIMO MENEZ, JR., respondents.
DECISION
QUISUMBING, J p:
This petition for review on certiorari seeks the reversal of the decision 1 of the Court of Appeals dated May 19,
1995, affirming that of the Regional Trial Court in LRC Case No. R-4659.
The relevant facts, as summarized by the CA, are as follows:
On February 11, 1974, the Government Service Insurance System (GSIS) sold to a certain Macaria Vda. de
Caiquep, a parcel of residential land with an area of 168 square meters located in Rosario, Pasig City and denominated
as Lot 13, Block 7, Pcs-5816 of the Government Service and Insurance System Low Cost Housing Project (GSIS-LCHP).
The sale is evidenced by a Deed of Absolute Sale. 2 On February 19, 1974, the Register of Deeds of Rizal issued in the
name of Macaria Vda. de Caiquep. Transfer Certificate of Title (TCT) No. 436465 with the following encumbrance
annotated at the back of the title:
This Deed of Absolute Sale is subject to the conditions enumerated below which shall be permanent
encumbrances on the property, the violation of any of which shall entitle the vendor to cancel . . . this Deed of Absolute
Sale and reenter the property;
The purpose of the sale be to aid the vendee in acquiring a lot for himself/themselves and not to provide him/them
with a means for speculation or profit by a future assignment of his/their right herein acquired or the resale of the lot
through rent, lease or subletting to others of the lot and subject of this deed, and therefore, the vendee shall not sell,
convey, lease or sublease, or otherwise encumber the property in favor of any other party within five (5) years from the
dates final and absolute ownership thereof becomes vested in the vendee, except in cases of hereditary succession or
resale in favor of the vendor:
. . . (emphasis supplied). 3
A day after We issuance of TCT No. 436465, or on February 20, 1974, Macaria Vda. de Caiquep sold the subject
lot to private respondent, Maximo Menez, Jr., as evidenced by a Deed of Absolute Sale (Exhibit "D"). 4 This deed was
notarized but was not registered immediately upon its execution in 1974 because GSIS prohibited him from registering the
same in view of the five-year prohibition to sell during the period ending in 1979.
Sometime in 1979, for being suspected as a subversive, an Arrest, Search and Seizure Order (ASSO) was issued
against private respondent. Military men ransacked his house in Cainta, Rizal. Upon learning that he was wanted by the
military, he voluntarily surrendered and was detained for two (2) years. When released, another order for his re-arrest was
issued so he hid in Mindanao for another four (4) years or until March 1984. In December of 1990, he discovered that the
subject TCT was missing. He consulted a lawyer but the latter did not act immediately on the matter. Upon consulting a
new counsel, an Affidavit of Loss 5 was filed with the Register of Deeds of Pasig and a certified copy 6 of TCT No. 436465
was issued. Private respondent also declared the property for tax purposes and obtained a certification thereof from the
Assessor's Office. 7
Private respondent sent notices to the registered owner at her address appearing in the title and in the Deed of
Sale. And, with his counsel, he searched for the ,registered owner in Metro Manila and Rizal and as far as Samar, Leyte,
Calbayog City, Tacloban City, and in Eastern and Northern Samar. However, their search proved futile.
On July 8, 1992 private respondent filed a petition docketed as LRC Case No. R-4659 with the RTC, Branch 154,
Pasig, Metro Manila for the issuance of owner's duplicate copy of TCT No. 436465 to replace the lost one. To show he
was the owner of the contested lot, he showed the Deed of Absolute Sale, Exhibit "D". The petition was set for hearing
and the court's order dated July 10, 1992 was published once in Malaya, a nationally circulated newspaper in the
Philippines. 8
During the hearing on September 3, 1992, only Menez and his counsel appeared. The Register of Deeds who
was not served notice, and the Office of the Solicitor General and the Provincial Prosecutor who were notified did not
attend.
On September 18, 1992, there being no opposition, Menez presented his evidence ex-parte. The trial court
granted his petition in its decision 9 dated September 30, 1992, the dispositive portion of which reads:
WHEREFORE, the petition is hereby GRANTED and the Registry of Deeds of Pasig, Metro Manila, is hereby
directed to issue a new Owner's Duplicate Copy of Transfer Certificate of Title No. 436465 based on the original thereon
filed in his office which shall contain the memorandum of encumbrance and an additional memorandum of the fact that it
was issued in place of the lost duplicate and which shall, in all respect, be entitled to like faith and credit as the original
duplicate, for all legal intents and purposes.
Issuance of new owner's duplicate copy shall be made only after this decision shall have become final and
executory. The said lost owner's duplicate is hereby declared null and void.
Petitioner shall pay all legal fees in connection with the issuance of the new owner's copy.
Let copies of this Order be furnished the petitioner, the registered owner of his given address in the title, in the
deed of sale, and in the tax declaration; the Registry of Deeds of Pasig, the Office of the Solicitor General; and the
Provincial Fiscal of Pasig, Metro Manila.
SO ORDERED. 10
On October 13, 1992, herein petitioner, Jesus San Agustin, received a copy of the abovecited decision. Heclaimed this was the first time he became aware of the case of her aunt, Macaria Vda. de Caiquep who, according to him,
died sometime in 1974. Claiming that he was the present occupant of the property and the heir of Macaria, he filed his
"Motion to Reopen Reconstitution Proceedings'' 11 on October 27, 1992. On December 3, 1992, RTC issued an order
denying said motion. 12
Petitioner filed an appeal with the Court of Appeals, which, as earlier stated, was denied in its decision of May 19,
1995. Petitioner moved for a reconsideration, but it was denied in a resolution dated September 11, 1995. 13
Thus, the present petition, attributing the following errors to the court a quo:
A.
THE RESPONDENT COURT GRAVELY ERRED IN HOLDING THAT LRC CASE NO. R-4659 BEING ONLY A
PETITION FOR THE ISSUANCE OF A NEW OWNER'S DUPLICATE OF TITLE, THERE IS NO NEED OF PERSONAL
NOTICE TO THE PETITIONER, THE ACTUAL POSSESSOR [WHO HAS] AND ACTUALLY BEEN PAYING THE REAL
ESTATE TAX, DESPITE PRIVATE RESPONDENT'S KNOWLEDGE OF ACTUAL POSSESSION OF AND INTEREST
OVER THE PROPERTY COVERED BY TCT NO. 436465. 14

B.
RESPONDENT COURT GRAVELY ERRED IN HOLDING THAT THE SALE BETWEEN THE PRIVATE
RESPONDENT AND MACARIA VDA. DE CAIQUEP IS NOT NULL AND VOID AND UNDER ARTICLE 1409 OF THE
CIVIL CODE SPECIFICALLY PARAGRAPH (7) THEREOF WHICH REFERS TO CONTRACTS EXPRESSLY
PROHIBITED OR DECLARED VOID BY LAW. 15
Considering the above assignment of errors, let us resolve the corresponding issues raised by petitioner.
The first issue involves private respondent's alleged failure to send notice to petitioner who is the actual
possessor of the disputed lot. Stated briefly, is petitioner entitled to notice? Our finding is in the negative.
Presidential Decree No. 1529, otherwise known as the "Property Registration Decree" is decisive. It provides:
Sec. 109.
Notice and replacement of lost duplicate certificate. In case of loss or theft of an owner's
duplicate certificate of title, due notice under oath shall be sent by the owner or by someone in his behalf to the Register
of Deeds of the province or city where the land lies as soon as the loss or theft is discovered. If a duplicate certificate is
lost or destroyed, or cannot be produced by a person applying for the entry of a new certificate to him or for :the
registration of any instrument, a sworn statement of the fact of such loss or destruction may be filed by the registered
owner or other person it interest and registered.
Upon the petition of the registered owner or other person in interest, the court may, after notice and due hearing,
direct the issuance of a new duplicate certificate, which shall contain a memorandum of the fact that it is issued in place of
the lost duplicate certificate, but shall in all respects be entitled to like faith and credit as the original duplicate, and shall
thereafter be regarded as such for all purposes of this decree.
In Office of Court Administrator vs. Matas, A.M. No. RTJ-92-836, 247 SCRA 9, 16-17 (1995), we held:
In the case at bar, the respective certificate of title of the properties in question on file with the Register of Deeds
are existing, and it is the owner's copy of the certificate of title that was alleged to have been lost or destroyed. Thus, it is
Section 109 of P.D. 1529 which was approved on June 11, 1978 that becomes effective and is applicable, a reading of
which shows that it is practically the same as Section 109 of Act No. 496, governing reconstitution of a duplicate certificate
of title lost or destroyed. Consequently, it is sufficient that the notice under Section 109 is sent to the Register of Deeds
and to those persons who are known to have, or appear to have, an interest in the property as shown in the Memorandum
of encumbrances at the back of the original or transfer certificate of title on file in the office of the Register of Deeds. From
a legal standpoint, there are no other interested parties who should be notified, except those abovementioned since they
are the only ones who may be deemed to have a claim to the property involved. A person dealing with registered is not
charged with notice of encumbrances not annotated on the back of the title. (Emphasis supplied.)
Here, petitioner does not appear to have an interest in the property based on the memorandum of encumbrances
annotated at the back of the title. His claim, that he is an heir (nephew) of the original owner of the lot covered by the
disputed lot and the present occupant thereof is not annotated in the said memorandum of encumbrances. Neither was
his claim entered on the Certificate of Titles in the name of their original/former owners on file with the Register of Deeds
at the time of the filing or pendency of LRC Case No. R-4659. Clearly, petitioner is not entitled to notice.
Noteworthy is the fact that there was compliance by private respondent of the RTC's order of publication of the
petition in a newspaper of general circulation. This is sufficient notice of the petition to the public at large.
Petitioner contends that as possessor or actual occupant of the lot in controversy, he is entitled under the law to
be notified. He relies on Alabang Development Corporation vs. Valenzuela, G.R. No. L-54094, 116 SCRA 261, 277 (1982))
which held that in reconstitution proceedings, courts must make sure that indispensable parties, i.e.. the actual owners
and possessors of the lands involved, are duly served with actual and personal notice of the petition. As pointed out by the
appellate court, his reliance on Alabang is misplaced because the cause of action in that case is based on Republic Act i
No. 26, entitled "An Act Providing A Special Procedure for the Reconstitution of Torrens Certificate of Title Lost or
Destroyed," while the present case is based on Section 109 of P.D. 1529 as above explained.
Under Republic Act No. 26, reconstitution is validly made only in case the original copy of the certificate of title
with the Register of Deeds is lost or destroyed. And if no notice of the date of hearing of a reconstitution case is served on
a possessor or one having interest in the property involved, he is deprived of his day in court and the order of
reconstitution is null and void. 16 The case at bar is not for reconstitution, but merely for replacement of lost duplicate
certificate.
On the second assigned error, petitioner contends that Exhibit "D" is null and void under Article 1409 of the Civil
Code, specifically paragraph (7), 17 because the deed of sale was executed within the five-year prohibitory period under
Commonwealth Act No. 141, as amended, otherwise known as "The Public Land Act." 18
We find petitioner's contention less than meritorious. We agree with respondent court that the proscription under
Com. Act No. 141 on sale within the 5-year restrictive period refers to homestead lands only. Here the lot in dispute is not
a homestead land, as found by the trial and appellate courts. Said lot is owned by GSIS, under TCT No. 10028 in its
proprietary capacity.
Moreover, as far as the violation of the 5-year restrictive condition imposed by GSIS in its contract with petitioner's
predecessor-in-interest is concerned, it is the GSIS and not petitioner who had a cause of action against private
respondent. Vide the instructive case of Sarmiento vs. Salud:
The condition that the appellees Sarmiento spouses could not resell the property except to the People's Homesite
and Housing Corporation (PHHC for short) within the next 25 years after appellees' purchasing the lot is manifestly a
condition in favor of the PHHC, and not one in favor of the Sarmiento spouses. The condition conferred no actionable right
on appellees herein, since it operated as a restriction upon their jus disponendi of the property they bought, and thus
limited their right of ownership. It follows that on the assumption that the mortgage to appellee Salud and the foreclosure
sale violated the condition in the Sarmiento contract, only the PHHC was entitled to invoke the condition aforementioned,
and not the Sarmientos. The validity or invalidity of the sheriff's foreclosure sale to appellant Salud thus violative of its
right of exclusive reacquisition; but it (PHHC) also could waive the condition and treat the sale as good, in which event,
the sale can not be assailed for breach of the condition aforestated. 19
In this case, the GSIS has not filed any action for the annulment of Exhibit "D", nor for the forfeiture of the lot in
question. In our view, the contract of sale remains valid between the parties, unless and until annulled in the proper suit
filed by the rightful party, the GSIS. For now, the said contract of sale is binding upon the heirs of Macaria Vda. de
Caiquep, including petitioner who alleges to be one of her heirs, in line with the rule that heirs are bound by contracts
entered into by their predecessors-in-interest. 20
We are not unmindful of the social justice policy of R.A. 8291 otherwise known as "Government Service Insurance
Act of 1997" in granting housing assistance to the less-privileged GSIS members and their dependents payable at an

affordable payment scheme. 21 This is the same policy which the 5-year restrictive clause in the contract seeks to
implement by stating in the encumbrance itself annotated at the back of TCT No. 436465 that, "The purpose of the sale is
to aid the vendee in acquiring a lot for himself/themselves and not to provide him/them with a means for speculation or
profit by a future assignment of his/their right herein acquired or the resale of the lot through rent, lease or subletting to
others of the lot and subject of this deed, . . . within five (5) years from the date final and absolute ownership thereof
becomes vested in the vendee, except in cases of hereditary succession or resale in favor of the vendor." 22 However,
absent the proper action taken by the GSIS as the original vendor referred to, the contract between petitioner's
predecessor-in-interest and private respondent deserves to be upheld. For as pointed out by said private respondent, it is
protected by the Constitution under Section 10, Article III, of the Bill of Rights stating that, "No law impairing the obligation
of contracts shall be passed." Much as we would like to see a salutary policy triumph, that provision of the Constitution
duly calls for compliance. DaIACS
More in point, however, is the fact that, following Sarmiento v. Salud, 23 "Even if the transaction between the
original awardee and herein petitioner were wrongful, still, as between themselves, the purchaser and the seller were both
in pari delicto, being participes criminis as it were." As in Sarmiento, in this case both were aware of the existence of the
stipulated condition in favor of the original seller, GSIS, yet both entered into an agreement violating said condition and
nullifying its effects. Similarly, as Acting Chief Justice JBL Reyes concluded in Sarmiento, "Both parties being equally
guilty, neither is entitled to complain against the other. Having entered into the transaction with open eyes, and having
benefited from it, said parties should be held in estoppel to assail and annul their own deliberate acts."
WHEREFORE, the appeal is DENIED, and the decision of the respondent court is AFFIRMED.
SO ORDERED.

FIRST DIVISION
[G.R. No. 113725. June 29, 2000.]
JOHNNY S. RABADILLA, 1 petitioner, vs. COURT OF APPEALS AND MARIA MARLENA 2 COSCOLUELLA Y
BELLEZA VILLACARLOS, respondents.
DECISION
PURISIMA, J p:
This is a petition for review of the decision of the Court of Appeals, 3 dated December 23, 1993, in CA-G.R. No.
CV-35555, which set aside the decision of Branch 52 of the Regional Trial Court in Bacolod City, and ordered the
defendants-appellees (including herein petitioner), as heirs of Dr. Jorge Rabadilla, to reconvey title over Lot No. 1392,
together with its fruits and interests, to the estate of Aleja Belleza.
The antecedent facts are as follows:
In a Codicil appended to the Last Will and Testament of testatrix Aleja Belleza, Dr. Jorge Rabadilla, predecessorin-interest of the herein petitioner, Johnny S. Rabadilla, was instituted as a devisee of 511,855 square meters of that
parcel of land surveyed as Lot No. 1392 of the Bacolod Cadastre. The said Codicil, which was duly probated and admitted
in Special Proceedings No. 4046 before the then Court of First Instance of Negros Occidental, contained the following
provisions:
"FIRST
I give, leave and bequeath the following property owned by me to Dr. Jorge Rabadilla resident of 141 P.
Villanueva, Pasay City:
(a) Lot No. 1392 of the Bacolod Cadastre, covered by Transfer Certificate of Title No. RT-4002 (10942), which is
registered in my name according to the records of the Register of Deeds of Negros Occidental.
(b) That should Jorge Rabadilla die ahead of me, the aforementioned property and the rights which I shall set
forth hereinbelow, shall be inherited and acknowledged by the children and spouse of Jorge Rabadilla.
xxx
xxx
xxx
FOURTH
(a) It is also my command, in this my addition (Codicil), that should I die and Jorge Rabadilla shall have already
received the ownership of the said Lot No. 1392 of the Bacolod Cadastre, covered by Transfer Certificate of Title No. RT4002 (10942), and also at the time that the lease of Balbinito G. Guanzon of the said lot shall expire, Jorge Rabadilla shall
have the obligation until he dies, every year to give Maria Marlina Coscolluela y Belleza, Seventy (75) (sic) piculs of
Export sugar and Twenty Five (25) piculs of Domestic sugar, until the said Maria Marlina Coscolluela y Belleza dies.
Cdpr
FIFTH
(a) Should Jorge Rabadilla die, his heir to whom he shall give Lot No. 1392 of the Bacolod Cadastre, covered by
Transfer Certificate of Title No. RT-4002 (10492), shall have the obligation to still give yearly, the sugar as specified in the
Fourth paragraph of his testament, to Maria Marlina Coscolluela y Belleza on the month of December of each year.
SIXTH
I command, in this my addition (Codicil) that the Lot No. 1392, in the event that the one to whom I have left and
bequeathed, and his heir shall later sell, lease, mortgage this said Lot, the buyer, lessee, mortgagee, shall have also the
obligation to respect and deliver yearly ONE HUNDRED (100) piculs of sugar to Maria Marlina Coscolluela y Belleza, on
each month of December, SEVENTY FIVE (75) piculs of Export and TWENTY FIVE (25) piculs of Domestic, until Maria
Marlina shall die, lastly should the buyer, lessee or the mortgagee of this lot, not have respected my command in this my
addition (Codicil), Maria Marlina Coscolluela y Belleza, shall immediately seize this Lot No. 1392 from my heir and the
latter's heirs, and shall turn it over to my near desendants, (sic) and the latter shall then have the obligation to give the
ONE HUNDRED (100) piculs of sugar until Maria Marlina shall die. I further command in this my addition (Codicil) that my
heir and his heirs of this Lot No. 1392, that they will obey and follow that should they decide to sell, lease, mortgage, they
cannot negotiate with others than my near descendants and my sister." 4
Pursuant to the same Codicil, Lot No. 1392 was transferred to the deceased, Dr. Jorge Rabadilla, and Transfer
Certificate of Title No. 44498 thereto issued in his name.
Dr. Jorge Rabadilla died in 1983 and was survived by his wife Rufina and children Johnny (petitioner), Aurora,
Ofelia and Zenaida, all surnamed Rabadilla.
On August 21, 1989, Maria Marlena Coscolluela y Belleza Villacarlos brought a complaint, docketed as Civil Case
No. 5588, before Branch 52 of the Regional Trial Court in Bacolod City, against the above-mentioned heirs of Dr. Jorge
Rabadilla, to enforce the provisions of subject Codicil. The Complaint alleged that the defendant-heirs violated the
conditions of the Codicil, in that:
1.
Lot No. 1392 was mortgaged to the Philippine National Bank and the Republic Planters Bank in disregard
of the testatrix's specific instruction to sell, lease, or mortgage only to the near descendants and sister of the testatrix.
2.
Defendant-heirs failed to comply with their obligation to deliver one hundred (100) piculs of sugar (75
piculs export sugar and 25 piculs domestic sugar) to plaintiff Maria Marlena Coscolluela y Belleza from sugar crop years
1985 up to the filing of the complaint as mandated by the Codicil, despite repeated demands for compliance.
3.
The banks failed to comply with the 6th paragraph of the Codicil which provided that in case of the sale,
lease, or mortgage of the property, the buyer, lessee, or mortgagee shall likewise have the obligation to deliver 100 piculs
of sugar per crop year to herein private respondent.
The plaintiff then prayed that judgment be rendered ordering defendant-heirs to reconvey/return Lot No. 1392 to
the surviving heirs of the late Aleja Belleza, the cancellation of TCT No. 44498 in the name of the deceased, Dr. Jorge
Rabadilla, and the issuance of a new certificate of title in the names of the surviving heirs of the late Aleja Belleza.
On February 26, 1990, the defendant-heirs were declared in default but on March 28, 1990 the Order of Default
was lifted, with respect to defendant Johnny S. Rabadilla, who filed his Answer, accordingly.
During the pre-trial, the parties admitted that:
On November 15, 1998, the plaintiff (private respondent) and a certain Alan Azurin, son-in-law of the herein
petitioner who was lessee of the property and acting as attorney-in-fact of defendant heirs, arrived at an amicable
settlement and entered into a Memorandum of Agreement on the obligation to deliver one hundred piculs of sugar, to the
following effect:
"That for crop year 1988-89, the annuity mentioned in Entry No. 49074 of TCT No. 44489 will be delivered not
later than January of 1989, more specifically, to wit:

75 piculs of 'A' sugar, and 25 piculs of 'B' sugar, or then existing in any of our names, Mary Rose Rabadilla y
Azurin or Alan Azurin, during December of each sugar crop year; in Azucar Sugar Central; and, this is considered
compliance of the annuity as mentioned, and in the same manner will compliance of the annuity be in the next succeeding
crop years.
That the annuity above stated for crop year 1985-86, 1986-87, and 1987-88, will be complied in cash equivalent of
the number of piculs as mentioned therein and which is as herein agreed upon, taking into consideration the composite
price of sugar during each sugar crop year, which is in the total amount of ONE HUNDRED FIVE THOUSAND PESOS
(P105,000.00).
That the above-mentioned amount will be paid or delivered on a staggered cash installment, payable on or before
the end of December of every sugar crop year, to wit:
For 1985-86, TWENTY SIX THOUSAND TWO HUNDRED FIFTY (P26,250.00) Pesos, payable on or before
December of crop year 1988-89;
For 1986-87, TWENTY SIX THOUSAND TWO HUNDRED FIFTY (P26,250.00) Pesos, payable on or before
December of crop year 1989-90;
For 1987-88, TWENTY SIX THOUSAND TWO HUNDRED FIFTY (P26,250.00) Pesos, payable on or before
December of crop year 1990-91; and
For 1988-89, TWENTY SIX THOUSAND TWO HUNDRED FIFTY (P26,250.00) Pesos, payable on or before
December of crop year 1991-92." 5
However, there was no compliance with the aforesaid Memorandum of Agreement except for a partial delivery of
50.80 piculs of sugar corresponding to sugar crop year 1988-1989.
On July 22, 1991, the Regional Trial Court came out with a decision, dismissing the complaint and disposing as
follows:
"WHEREFORE, in the light of the aforegoing findings, the Court finds that the action is prematurely filed as no
cause of action against the defendants has as yet arose in favor of plaintiff. While there maybe the non-performance of
the command as mandated exaction from them simply because they are the children of Jorge Rabadilla, the title
holder/owner of the lot in question, does not warrant the filing of the present complaint. The remedy at bar must fall.
Incidentally, being in the category as creditor of the left estate, it is opined that plaintiff may initiate the intestate
proceedings, if only to establish the heirs of Jorge Rabadilla and in order to give full meaning and semblance to her claim
under the Codicil.
In the light of the aforegoing findings, the Complaint being prematurely filed is DISMISSED without prejudice.
LexLib
SO ORDERED." 6
On appeal by plaintiff, the First Division of the Court of Appeals reversed the decision of the trial court;
ratiocinating and ordering thus:
"Therefore, the evidence on record having established plaintiff-appellant's right to receive 100 piculs of sugar
annually out of the produce of Lot No. 1392; defendants-appellee's obligation under Aleja Belleza's codicil, as heirs of the
modal heir, Jorge Rabadilla, to deliver such amount of sugar to plaintiff-appellant; defendants-appellee's admitted noncompliance with said obligation since 1985; and, the punitive consequences enjoined by both the codicil and the Civil
Code, of seizure of Lot No. 1392 and its reversion to the estate of Aleja Belleza in case of such non-compliance, this
Court deems it proper to order the reconveyance of title over Lot No. 1392 from the estates of Jorge Rabadilla to the
estate of Aleja Belleza. However, plaintiff-appellant must institute separate proceedings to re-open Aleja Belleza's estate,
secure the appointment of an administrator, and distribute Lot No. 1392 to Aleja Belleza's legal heirs in order to enforce
her right, reserved to her by the codicil, to receive her legacy of 100 piculs of sugar per year out of the produce of Lot No.
1392 until she dies.
Accordingly, the decision appealed from is SET ASIDE and another one entered ordering defendants-appellees,
as heirs of Jorge Rabadilla, to reconvey title over Lot No. 1392, together with its fruits and interests, to the estate of Aleja
Belleza.
SO ORDERED." 7
Dissatisfied with the aforesaid disposition by the Court of Appeals, petitioner found his way to this Court via the
present petition, contending that the Court of Appeals erred in ordering the reversion of Lot 1392 to the estate of the
testatrix Aleja Belleza on the basis of paragraph 6 of the Codicil, and in ruling that the testamentary institution of Dr. Jorge
Rabadilla is a modal institution within the purview of Article 882 of the New Civil Code.
The petition is not impressed with merit.
Petitioner contends that the Court of Appeals erred in resolving the appeal in accordance with Article 882 of the
New Civil Code on modal institutions and in deviating from the sole issue raised which is the absence or prematurity of the
cause of action. Petitioner maintains that Article 882 does not find application as there was no modal institution and the
testatrix intended a mere simple substitution i.e. the instituted heir, Dr. Jorge Rabadilla, was to be substituted by the
testatrix's "near descendants" should the obligation to deliver the fruits to herein private respondent be not complied with.
And since the testatrix died single and without issue, there can be no valid substitution and such testamentary provision
cannot be given any effect.
The petitioner theorizes further that there can be no valid substitution for the reason that the substituted heirs are
not definite, as the substituted heirs are merely referred to as "near descendants" without a definite identity or reference
as to who are the "near descendants" and therefore, under Articles 843 8 and 845 9 of the New Civil Code, the
substitution should be deemed as not written.
The contentions of petitioner are untenable. Contrary to his supposition that the Court of Appeals deviated from
the issue posed before it, which was the propriety of the dismissal of the complaint on the ground of prematurity of cause
of action, there was no such deviation. The Court of Appeals found that the private respondent had a cause of action
against the petitioner. The disquisition made on modal institution was, precisely, to stress that the private respondent had
a legally demandable right against the petitioner pursuant to subject Codicil; on which issue the Court of Appeals ruled in
accordance with law.
It is a general rule under the law on succession that successional rights are transmitted from the moment of death
of the decedent 10 and compulsory heirs are called to succeed by operation of law. The legitimate children and
descendants, in relation to their legitimate parents, and the widow or widower, are compulsory heirs. 11 Thus, the
petitioner, his mother and sisters, as compulsory heirs of the instituted heir, Dr. Jorge Rabadilla, succeeded the latter by

operation of law, without need of further proceedings, and the successional rights were transmitted to them from the
moment of death of the decedent, Dr. Jorge Rabadilla. dctai
Under Article 776 of the New Civil Code, inheritance includes all the property, rights and obligations of a person,
not extinguished by his death. Conformably, whatever rights Dr. Jorge Rabadilla had by virtue of subject Codicil were
transmitted to his forced heirs, at the time of his death. And since obligations not extinguished by death also form part of
the estate of the decedent; corollarily, the obligations imposed by the Codicil on the deceased Dr. Jorge Rabadilla, were
likewise transmitted to his compulsory heirs upon his death.
In the said Codicil, testatrix Aleja Belleza devised Lot No. 1392 to Dr. Jorge Rabadilla, subject to the condition that
the usufruct thereof would be delivered to the herein private respondent every year. Upon the death of Dr. Jorge
Rabadilla, his compulsory heirs succeeded to his rights and title over said property, and they also assumed his
(decedent's) obligation to deliver the fruits of the lot involved to herein private respondent. Such obligation of the instituted
heir reciprocally corresponds to the right of private respondent over the usufruct, the fulfillment or performance of which is
now being demanded by the latter through the institution of the case at bar. Therefore, private respondent has a cause of
action against petitioner and the trial court erred in dismissing the complaint below.
Petitioner also theorizes that Article 882 of the New Civil Code on modal institutions is not applicable because
what the testatrix intended was a substitution Dr. Jorge Rabadilla was to be substituted by the testatrix's near
descendants should there be non-compliance with the obligation to deliver the piculs of sugar to private respondent.
Again, the contention is without merit.
Substitution is the designation by the testator of a person or persons to take the place of the heir or heirs first
instituted. Under substitutions in general, the testator may either (1) provide for the designation of another heir to whom
the property shall pass in case the original heir should die before him/her, renounce the inheritance or be incapacitated to
inherit, as in a simple substitution, 12 or (2) leave his/her property to one person with the express charge that it be
transmitted subsequently to another or others, as in a fideicommissary substitution. 13 The Codicil sued upon
contemplates neither of the two.
In simple substitutions, the second heir takes the inheritance in default of the first heir by reason of incapacity,
predecease or renunciation. 14 In the case under consideration, the provisions of subject Codicil do not provide that
should Dr. Jorge Rabadilla default due to predecease, incapacity or renunciation, the testatrix's near descendants would
substitute him. What the Codicil provides is that, should Dr. Jorge Rabadilla or his heirs not fulfill the conditions imposed in
the Codicil, the property referred to shall be seized and turned over to the testatrix's near descendants.
Neither is there a fideicommissary substitution here and on this point, petitioner is correct. In a fideicommissary
substitution, the first heir is strictly mandated to preserve the property and to transmit the same later to the second heir. 15
In the case under consideration, the instituted heir is in fact allowed under the Codicil to alienate the property provided the
negotiation is with the near descendants or the sister of the testatrix. Thus, a very important element of a fideicommissary
substitution is lacking; the obligation clearly imposing upon the first heir the preservation of the property and its
transmission to the second heir. "Without this obligation to preserve clearly imposed by the testator in his will, there is no
fideicommissary substitution." 16 Also, the near descendants' right to inherit from the testatrix is not definite. The property
will only pass to them should Dr. Jorge Rabadilla or his heirs not fulfill the obligation to deliver part of the usufruct to
private respondent.
Another important element of a fideicommissary substitution is also missing here. Under Article 863, the second
heir or the fideicommissary to whom the property is transmitted must not be beyond one degree from the first heir or the
fiduciary. A fideicommissary substitution is therefore, void if the first heir is not related by first degree to the-second heir. 17
In the case under scrutiny, the near descendants are not at all related to the instituted heir, Dr. Jorge Rabadilla.
The Court of Appeals erred not in ruling that the institution of Dr. Jorge Rabadilla under subject Codicil is in the
nature of a modal institution and therefore, Article 882 of the New Civil Code is the provision of law in point. Articles 882
and 883 of the New Civil Code provide:
ARTICLE 882. The statement of the object of the institution or the application of the property left by the testator,
or the charge imposed on him, shall not be considered as a condition unless it appears that such was his intention.
That which has been left in this manner may be claimed at once provided that the instituted heir or his heirs give
security for compliance with the wishes of the testator and for the return of anything he or they may receive, together with
its fruits and interests, if he or they should disregard this obligation.
ARTICLE 883. When without the fault of the heir, an institution referred to in the preceding article cannot take
effect in the exact manner stated by the testator, it shall be complied with in a manner most analogous to and in
conformity with his wishes.
The institution of an heir in the manner prescribed in Article 882 is what is known in the law of succession as an
institucion sub modo or a modal institution. In a modal institution, the testator states (1) the object of the institution, (2) the
purpose or application of the property left by the testator, or (3) the charge imposed by the testator upon the heir. 18 A
"mode" imposes an obligation upon the heir or legatee but it does not affect the efficacy of his rights to the succession. 19
On the other hand, in a conditional testamentary disposition, the condition must happen or be fulfilled in order for the heir
to be entitled to succeed the testator. The condition suspends but does not obligate; and the mode obligates but does not
suspend. 20 To some extent, it is similar to a resolutory condition. 21
From the provisions of the Codicil litigated upon, it can be gleaned unerringly that the testatrix intended that the
subject property be inherited by Dr. Jorge Rabadilla. It is likewise clearly worded that the testatrix imposed an obligation
on the said instituted heir and his successors-in-interest to deliver one hundred piculs of sugar to the herein private
respondent, Marlena Coscolluela Belleza, during the lifetime of the latter. However, the testatrix did not make Dr. Jorge
Rabadilla's inheritance and the effectivity of his institution as a devisee, dependent on the performance of the said
obligation. It is clear, though, that should the obligation be not complied with, the property shall be turned over to the
testatrix's near descendants. The manner of institution of Dr. Jorge Rabadilla under subject Codicil is evidently modal in
nature because it imposes a charge upon the instituted heir without, however, affecting the efficacy of such institution.
Then too, since testamentary dispositions are generally acts of liberality, an obligation imposed upon the heir
should not be considered a condition unless it clearly appears from the Will itself that such was the intention of the
testator. In case of doubt, the institution should be considered as modal and not conditional. 22
Neither is there tenability in the other contention of petitioner that the private respondent has only a right of
usufruct but not the right to seize the property itself from the instituted heir because the right to seize was expressly
limited to violations by the buyer, lessee or mortgagee.

In the interpretation of Wills, when an uncertainty arises on the face of the Will, as to the application of any of its
provisions, the testator's intention is to be ascertained from the words of the Will, taking into consideration the
circumstances under which it was made. 23 Such construction as will sustain and uphold the Will in all its parts must be
adopted. 24
Subject Codicil provides that the instituted heir is under obligation to deliver One Hundred (100) piculs of sugar
yearly to Marlena Belleza Coscuella. Such obligation is imposed on the instituted heir, Dr. Jorge Rabadilla, his heirs, and
their buyer, lessee, or mortgagee should they sell, lease, mortgage or otherwise negotiate the property involved. The
Codicil further provides that in the event that the obligation to deliver the sugar is not respected, Marlena Belleza
Coscuella shall seize the property and turn it over to the testatrix's near descendants. The non-performance of the said
obligation is thus with the sanction of seizure of the property and reversion thereof to the testatrix's near descendants.
Since the said obligation is clearly imposed by the testatrix, not only on the instituted heir but also on his successors-ininterest, the sanction imposed by the testatrix in case of non-fulfillment of said obligation should equally apply to the
instituted heir and his successors-in-interest.
Similarly unsustainable is petitioner's submission that by virtue of the amicable settlement, the said obligation
imposed by the Codicil has been assumed by the lessee, and whatever obligation petitioner had become the obligation of
the lessee; that petitioner is deemed to have made a substantial and constructive compliance of his obligation through the
consummated settlement between the lessee and the private respondent, and having consummated a settlement with the
petitioner, the recourse of the private respondent is the fulfillment of the obligation under the amicable settlement and not
the seizure of subject property.
Suffice it to state that a Will is a personal, solemn, revocable and free act by which a person disposes of his
property, to take effect after his death. 25 Since the Will expresses the manner in which a person intends how his
properties be disposed, the wishes and desires of the testator must be strictly followed. Thus, a Will cannot be the subject
of a compromise agreement which would thereby defeat the very purpose of making a Will.
WHEREFORE, the petition is hereby DISMISSED and the decision of the Court of Appeals, dated December 23,
1993, in CA-G.R. No. CV-35555 AFFIRMED. No Pronouncement as to costs. prcd
SO ORDERED.

FIRST DIVISION
[G.R. No. 118248. April 5, 2000.]
DKC HOLDINGS CORPORATION, petitioner, vs. COURT OF APPEALS, VICTOR U. BARTOLOME and
REGISTER OF DEEDS FOR METRO MANILA, DISTRICT III, respondents.
DECISION
YNARES-SANTIAGO, J p:
This is a petition for review on certiorari seeking the reversal of the December 5, 1994 Decision of the Court of
Appeals in CA-G.R. CV No. 40849 entitled "DKC Holdings Corporation vs. Victor U. Bartolome, et al.", 1 affirming in toto
the January 4, 1993 Decision of the Regional Trial Court of Valenzuela, Branch 172, 2 which dismissed Civil Case No.
3337-V-90 and ordered petitioner to pay P30,000.00 as attorneys fees. cdrep
The subject of the controversy is a 14,021 square meter parcel of land located in Malinta, Valenzuela, Metro
Manila which was originally owned by private respondent Victor U. Bartolomes deceased mother, Encarnacion Bartolome,
under Transfer Certificate of Title No. B-37615 of the Register of Deeds of Metro Manila, District III. This lot was in front of
one of the textile plants of petitioner and, as such, was seen by the latter as a potential warehouse site.
On March 16, 1988, petitioner entered into a Contract of Lease with Option to Buy with Encarnacion Bartolome,
whereby petitioner was given the option to lease or lease with purchase the subject land, which option must be exercised
within a period of two years counted from the signing of the Contract. In turn, petitioner undertook to pay P3,000.00 a
month as consideration for the reservation of its option. Within the two-year period, petitioner shall serve formal written
notice upon the lessor Encarnacion Bartolome of its desire to exercise its option. The contract also provided that in case
petitioner chose to lease the property, it may take actual possession of the premises. In such an event, the lease shall be
for a period of six years, renewable for another six years, and the monthly rental fee shall be P15,000.00 for the first six
years and P18,000.00 for the next six years, in case of renewal.
Petitioner regularly paid the monthly P3,000.00 provided for by the Contract to Encarnacion until her death in
January 1990. Thereafter, petitioner coursed its payment to private respondent Victor Bartolome, being the sole heir of
Encarnacion. Victor, however, refused to accept these payments.
Meanwhile, on January 10, 1990, Victor executed an Affidavit of Self-Adjudication over all the properties of
Encarnacion, including the subject lot. Accordingly, respondent Register of Deeds cancelled Transfer Certificate of Title
No. B-37615 and issued Transfer Certificate of Title No. V-14249 in the name of Victor Bartolome.
On March 14, 1990, petitioner served upon Victor, via registered mail, notice that it was exercising its option to
lease the property, tendering the amount of P15,000.00 as rent for the month of March. Again, Victor refused to accept the
tendered rental fee and to surrender possession of the property to petitioner.
Petitioner thus opened Savings Account No. 1-04-02558-I-1 with the China Banking Corporation, Cubao Branch,
in the name of Victor Bartolome and deposited therein the P15,000.00 rental fee for March as well as P6,000.00
reservation fees for the months of February and March.
Petitioner also tried to register and annotate the Contract on the title of Victor to the property. Although respondent
Register of Deeds accepted the required fees, he nevertheless refused to register or annotate the same or even enter it in
the day book or primary register.
Thus, on April 23, 1990, petitioner filed a Complaint for specific performance and damages against Victor and the
Register of Deeds, 3 docketed as Civil Case No. 3337-V-90 which was raffled off to Branch 171 of the Regional Trial Court
of Valenzuela. Petitioner prayed for the surrender and delivery of possession of the subject land in accordance with the
Contract terms; the surrender of title for registration and annotation thereon of the Contract; and the payment of
P500,000.00 as actual damages, P500,000.00 as moral damages, P500,000.00 as exemplary damages and P300,000.00
as attorneys fees.
Meanwhile, on May 8, 1990, a Motion for Intervention with Motion to Dismiss 4 was filed by one Andres Lanozo,
who claimed that he was and has been a tenant-tiller of the subject property, which was agricultural riceland, for forty-five
years. He questioned the jurisdiction of the lower court over the property and invoked the Comprehensive Agrarian
Reform Law to protect his rights that would be affected by the dispute between the original parties to the case.
On May 18, 1990, the lower court issued an Order 5 referring the case to the Department of Agrarian Reform for
preliminary determination and certification as to whether it was proper for trial by said court.
On July 4, 1990, the lower court issued another Order 6 referring the case to Branch 172 of the RTC of
Valenzuela which was designated to hear cases involving agrarian land, after the Department of Agrarian Reform issued a
letter-certification stating that referral to it for preliminary determination is no longer required.
On July 16, 1990, the lower court issued an Order denying the Motion to Intervene, 7 holding that Lanozos rights
may well be ventilated in another proceeding in due time.
After trial on the merits, the RTC of Valenzuela, branch 172 rendered its Decision on January 4, 1993, dismissing
the Complaint and ordering petitioner to pay Victor P30,000.00 as attorneys fees. On appeal to the CA, the Decision was
affirmed in toto.
Hence, the instant Petition assigning the following errors:
(A)
FIRST ASSIGNMENT OF ERROR
THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE PROVISION ON THE NOTICE TO
EXERCISE OPTION WAS NOT TRANSMISSIBLE.
(B)
SECOND ASSIGNMENT OF ERROR
THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE NOTICE OF OPTION MUST BE
SERVED BY DKC UPON ENCARNACION BARTOLOME PERSONALLY.
(C)
THIRD ASSIGNMENT OF ERROR
THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE CONTRACT WAS ONE-SIDED AND
ONEROUS IN FAVOR OF DKC.
(D)
FOURTH ASSIGNMENT OF ERROR
THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE EXISTENCE OF A REGISTERED
TENANCY WAS FATAL TO THE VALIDITY OF THE CONTRACT.
(E)

FIFTH ASSIGNMENT OF ERROR

THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT PLAINTIFF-APPELLANT WAS LIABLE TO
DEFENDANT-APPELLEE FOR ATTORNEYS FEES. 8
The issue to be resolved in this case is whether or not the Contract of Lease with Option to Buy entered into by
the late Encarnacion Bartolome with petitioner was terminated upon her death or whether it binds her sole heir, Victor,
even after her demise.
Both the lower court and the Court of Appeals held that the said contract was terminated upon the death of
Encarnacion Bartolome and did not bind Victor because he was not a party thereto.
Article 1311 of the Civil Code provides, as follows"ARTICLE 1311.
Contracts take effect only between the parties, their assigns and heirs, except in case
where the rights and obligations arising from the contract are not transmissible by their nature, or by stipulation or by
provision of law. The heir is not liable beyond the value of the property he received from the decedent.
xxx
xxx
xxx."
The general rule, therefore, is that heirs are bound by contracts entered into by their predecessors-in-interest
except when the rights and obligations arising therefrom are not transmissible by (1) their nature, (2) stipulation or (3)
provision of law.
In the case at bar, there is neither contractual stipulation nor legal provision making the rights and obligations
under the contract intransmissible. More importantly, the nature of the rights and obligations therein are, by their nature,
transmissible.
The nature of intransmissible rights as explained by Arturo Tolentino, an eminent civilist, is as follows: cdrep
"Among contracts which are intransmissible are those which are purely personal, either by provision of law, such
as in cases of partnerships and agency, or by the very nature of the obligations arising therefrom, such as those requiring
special personal qualifications of the obligor. It may also be stated that contracts for the payment of money debts are not
transmitted to the heirs of a party, but constitute a charge against his estate. Thus, where the client in a contract for
professional services of a lawyer died, leaving minor heirs, and the lawyer, instead of presenting his claim for professional
services under the contract to the probate court, substituted the minors as parties for his client, it was held that the
contract could not be enforced against the minors; the lawyer was limited to a recovery on the basis of quantum meruit." 9
In American jurisprudence, "(W)here acts stipulated in a contract require the exercise of special knowledge,
genius, skill, taste, ability, experience, judgment, discretion, integrity, or other personal qualification of one or both parties,
the agreement is of a personal nature, and terminates on the death of the party who is required to render such service."
10
It has also been held that a good measure for determining whether a contract terminates upon the death of one of
the parties is whether it is of such a character that it may be performed by the promissors personal representative.
Contracts to perform personal acts which cannot be as well performed by others are discharged by the death of the
promissor. Conversely, where the service or act is of such a character that it may as well be performed by another, or
where the contract, by its terms, shows that performance by others was contemplated, death does not terminate the
contract or excuse nonperformance. 11
In the case at bar, there is no personal act required from the late Encarnacion Bartolome. Rather, the obligation of
Encarnacion in the contract to deliver possession of the subject property to petitioner upon the exercise by the latter of its
option to lease the same may very well be performed by her heir Victor.
As early as 1903, it was held that "(H)e who contracts does so for himself and his heirs." 12 In 1952, it was ruled
that if the predecessor was duty-bound to reconvey land to another, and at his death the reconveyance had not been
made, the heirs can be compelled to execute the proper deed for reconveyance. This was grounded upon the principle
that heirs cannot escape the legal consequence of a transaction entered into by their predecessor-in-interest because
they have inherited the property subject to the liability affecting their common ancestor. 13
It is futile for Victor to insist that he is not a party to the contract because of the clear provision of Article 1311 of
the Civil Code. Indeed, being an heir of Encarnacion, there is privity of interest between him and his deceased mother. He
only succeeds to what rights his mother had and what is valid and binding against her is also valid and binding as against
him. 14 This is clear from Paraaque Kings Enterprises vs. Court of Appeals, 15 where this Court rejected a similar
defense
With respect to the contention of respondent Raymundo that he is not privy to the lease contract, not being the
lessor nor the lessee referred to therein, he could thus not have violated its provisions, but he is nevertheless a proper
party. Clearly, he stepped into the shoes of the owner-lessor of the land as, by virtue of his purchase, he assumed all the
obligations of the lessor under the lease contract. Moreover, he received benefits in the form of rental payments.
Furthermore, the complaint, as well as the petition, prayed for the annulment of the sale of the properties to him. Both
pleadings also alleged collusion between him and respondent Santos which defeated the exercise by petitioner of its right
of first refusal.
In order then to accord complete relief to petitioner, respondent Raymundo was a necessary, if not indispensable,
party to the case. A favorable judgment for the petitioner will necessarily affect the rights of respondent Raymundo as the
buyer of the property over which petitioner would like to assert its right of first option to buy.
In the case at bar, the subject matter of the contract is likewise a lease, which is a property right. The death of a
party does not excuse nonperformance of a contract which involves a property right, and the rights and obligations
thereunder pass to the personal representatives of the deceased. Similarly, nonperformance is not excused by the death
of the party when the other party has a property interest in the subject matter of the contract. 16
Under both Article 1311 of the Civil Code and jurisprudence, therefore, Victor is bound by the subject Contract of
Lease with Option to Buy.
That being resolved, we now rule on the issue of whether petitioner had complied with its obligations under the
contract and with the requisites to exercise its option. The payment by petitioner of the reservation fees during the twoyear period within which it had the option to lease or purchase the property is not disputed. In fact, the payment of such
reservation fees, except those for February and March, 1990 were admitted by Victor. 17 This is clear from the transcripts,
to wit
"ATTY. MOJADO:
One request, Your Honor. The last payment which was allegedly made in January 1990 just indicate in
that stipulation that it was issued November of 1989 and postdated January 1990 and then we will admit all.

COURT:
All reservation fee?
ATTY. MOJADO:
Yes, Your Honor.
COURT:
All as part of the lease?
ATTY. MOJADO:
Reservation fee, Your Honor. There was no payment with respect to payment of rentals." 18
Petitioner also paid the P15,000.00 monthly rental fee on the subject property by depositing the same in China
Bank Savings Account No. 1-04-02558-I-1, in the name of Victor as the sole heir of Encarnacion Bartolome, 19 for the
months of March to July 30, 1990, or a total of five (5) months, despite the refusal of Victor to turn over the subject
property. 20
Likewise, petitioner complied with its duty to inform the other party of its intention to exercise its option to lease
through its letter dated March 12, 1990, 21 well within the two-year period for it to exercise its option. Considering that at
that time Encarnacion Bartolome had already passed away, it was legitimate for petitioner to have addressed its letter to
her heir.
It appears, therefore, that the exercise by petitioner of its option to lease the subject property was made in
accordance with the contractual provisions. Concomitantly, private respondent Victor Bartolome has the obligation to
surrender possession of and lease the premises to petitioner for a period of six (6) years, pursuant to the Contract of
Lease with Option to Buy.
Coming now to the issue of tenancy, we find that this is not for this Court to pass upon in the present petition. We
note that the Motion to Intervene and to Dismiss of the alleged tenant, Andres Lanozo, was denied by the lower court and
that such denial was never made the subject of an appeal. As the lower court stated in its Order, the alleged right of the
tenant may well be ventilated in another proceeding in due time.
WHEREFORE, in view of the foregoing, the instant Petition for Review is GRANTED. The Decision of the Court of
Appeals in CA-G.R. CV No. 40849 and that of the Regional Trial Court of Valenzuela in Civil Case No. 3337-V-90 are both
SET ASIDE and a new one rendered ordering private respondent Victor Bartolome to:
(a)
surrender and deliver possession of that parcel of land covered by Transfer Certificate of Title No. V14249 by way of lease to petitioner and to perform all obligations of his predecessor-in-interest, Encarnacion Bartolome,
under the subject Contract of Lease with Option to Buy;
(b)
surrender and deliver his copy of Transfer Certificate of Title No. V-14249 to respondent Register of
Deeds for registration and annotation thereon of the subject Contract of Lease with Option to Buy;
(c)
pay costs of suit.
Respondent Register of Deeds is, accordingly, ordered to register and annotate the subject Contract of Lease with
Option to Buy at the back of Transfer Certificate of Title No. V-14249 upon submission by petitioner of a copy thereof to
his office.
SO ORDERED. Cdll

THIRD DIVISION
[G.R. No. 68053. May 7, 1990.]
LAURA ALVAREZ, FLORA ALVAREZ and RAYMUNDO ALVAREZ, petitioners, vs. THE HONORABLE
INTERMEDIATE APPELLATE COURT and JESUS YANES, ESTELITA YANES, ANTONIO YANES, ROSARIO YANES,
and ILUMINADO YANES, respondents.
Francisco G. Banzon for petitioners.
Renecio R. Espiritu for private respondents.
DECISION
FERNAN, C.J p:
This is a petition for review on certiorari seeking the reversal of: (a) the decision of the Fourth Civil Cases Division
of the Intermediate Appellate Court dated August 31, 1983 in AC-G.R. CV No. 56626 entitled "Jesus Yanes et al. v. Dr.
Rodolfo Siason et al." affirming the decision dated July 8, 1974 of the Court of First Instance of Negros Occidental insofar
as it ordered the petitioners to pay jointly and severally the private respondents the sum of P20,000.00 representing the
actual value of Lots Nos. 773-A and 773-B of the cadastral survey of Murcia, Negros Occidental and reversing the subject
decision insofar as it awarded the sums of P2,000.00, P5,000.00 and P2,000.00 as actual damages, moral damages and
attorney's fees, respectively and (b) the resolution of said appellate court dated May 30, 1984, denying the motion for
reconsideration of its decision. llcd
The real properties involved are two parcels of land identified as Lot 773-A and Lot 773-B which were originally
known as Lot 773 of the cadastral survey of Murcia, Negros Occidental. Lot 773, with an area of 156,549 square meters,
was registered in the name of the heirs of Aniceto Yanes under Original Certificate of Title No. RO-4858 (8804) issued on
October 9, 1917 by the Register of Deeds of Occidental Negros (Exh. A).
Aniceto Yanes was survived by his children, Rufino, Felipe and Teodora. Herein private respondents, Estelita,
Iluminado and Jesus, are the children of Rufino who died in 1962 while the other private respondents, Antonio and
Rosario Yanes, are children of Felipe. Teodora was survived by her child, Jovita (Jovito) Alib. 1 It is not clear why the latter
is not included as a party in this case.
Aniceto left his children Lots 773 and 823. Teodora cultivated only three hectares of Lot 823 as she could not
attend to the other portions of the two lots which had a total area of around twenty-four hectares. The record does not
show whether the children of Felipe also cultivated some portions of the lots but it is established that Rufino and his
children left the province to settle in other places as a result of the outbreak of World War II. According to Estelita, from the
"Japanese time up to peace time", they did not visit the parcels of land in question but "after liberation", when her brother
went there to get their share of the sugar produced therein, he was informed that Fortunato Santiago, Fuentebella
(Puentevella) and Alvarez were in possession of Lot 773. 2 2005SE
It is on record that on May 19, 1938, Fortunato D. Santiago was issued Transfer Certificate of Title No. RF 2694
(29797) covering Lot 773-A with an area of 37,818 square meters. 3 TCT No. RF 2694 describes Lot 773-A as a portion of
Lot 773 of the cadastral survey of Murcia and as originally registered under OCT No. 8804.
The bigger portion of Lot 773 with an area of 118,831 square meters was also registered in the name of Fortunato
D. Santiago on September 6, 1938 under TCT No. RT-2695 (28192). 4 Said transfer certificate of title also contains a
certification to the effect that Lot 773-B was originally registered under OCT No. 8804.
On May 30, 1955, Santiago sold Lots 773-A and 773-B to Monico B. Fuentebella, Jr. in consideration of the sum
of P7,000.00. 5 Consequently, on February 20, 1956, TCT Nos. T-19291 and T-19292 were issued in Fuentebella's name.
6
After Fuentebella's death and during the settlement of his estate, the administratrix thereof (Arsenia R. Vda. de
Fuentebella, his wife) filed in Special Proceedings No. 4373 in the Court of First Instance of Negros Occidental, a motion
requesting authority to sell Lots 773-A and 773-B 7 By virtue of a court order granting said motion, 8 on March 24, 1958,
Arsenia Vda. de Fuentebella sold said lots for P6,000.00 to Rosendo Alvarez. 9 Hence, on April 1, 1958. TCT Nos. T23165 and T-23166 covering Lots 773-A and 773-B were respectively issued to Rosendo Alvarez. 10
Two years later or on May 26, 1960, Teodora Yanes and the children of her brother Rufino, namely, Estelita,
Iluminado and Jesus, filed in the Court of First Instance of Negros Occidental a complaint against Fortunato Santiago,
Arsenia Vda. de Fuentebella, Alvarez and the Register of Deeds of Negros Occidental for the "return" of the ownership
and possession of Lots 773 and 823. They also prayed that an accounting of the produce of the land from 1944 up to the
filing of the complaint be made by the defendants, that after court approval of said accounting, the share or money
equivalent due the plaintiffs be delivered to them, and that defendants be ordered to pay plaintiffs P500.00 as damages in
the form of attorney's fees. 11
During the pendency in court of said case or on November 13, 1961, Alvarez sold Lots 773-A, 773-B and another
lot for P25,000.00 to Dr. Rodolfo Siason. 12 Accordingly, TCT Nos. 30919 and 30920 were issued to Siason, 13 who,
thereafter, declared the two lots in his name for assessment purposes. 14
Meanwhile, on November 6, 1962, Jesus Yanes, in his own behalf and in behelf of the other plaintiffs, and
assisted by their counsel, filed a manifestation in Civil Case No. 5022 stating that the therein plaintiffs "renounce, forfeit
and quitclaims (sic) any claim, monetary or otherwise, against the defendant Arsenia Vda. de Fuentebella in connection
with the above entitled case." 15
On October 11, 1963, a decision was rendered by the Court of First Instance of Negros Occidental in Civil Case
No. 5022, the dispositive portion of which reads: cdll
WHEREFORE, judgment is rendered, ordering the defendant Rosendo Alvarez to reconvey to the plaintiffs lots
Nos. 773 and 823 of the Cadastral Survey of Murcia, Negros Occidental, now covered by Transfer Certificates of Title
Nos. T-23165 and T-23166 in the name of said defendant, and thereafter to deliver the possession of said lots to the
plaintiffs. No special pronouncement as to costs.
SO ORDERED." 16
It will be noted that the above-mentioned manifestation of Jesus Yanes was not mentioned in the aforesaid
decision.
However, execution of said decision proved unsuccessful with respect to Lot 773. In his return of service dated
October 20, 1965, the sheriff stated that he discovered that Lot 773 had been subdivided into Lots 773-A and 773-B; that
they were "in the name" of Rodolfo Siason who had purchased them from Alvarez, and that Lot 773 could not be delivered
to the plaintiffs as Siason was "not a party per writ of execution." 17
The execution of the decision in Civil Case No. 5022 having met a hindrance, herein private respondents (the
Yaneses) filed on July 31, 1965, in the Court of First Instance of Negros Occidental a petition for the issuance of a new

certificate of title and for a declaration of nullity of TCT Nos. T-23165 and T-23166 issued to Rosendo Alvarez. 18
Thereafter, the court required Rodolfo Siason to produce the certificates of title covering Lots 773 and 823.
Expectedly, Siason filed a manifestation stating that he purchased Lots 773-A, 773-B and 658, not Lots 773 and
823, "in good faith and for a valuable consideration without any knowledge of any lien or encumbrances against said
propert(ies)"; that the decision in the cadastral proceeding 19 could not be enforced against him as he was not a party
thereto; and that the decision in Civil Case No. 5022 could neither be enforced against him not only because he was not a
party-litigant therein but also because it had long become final and executory. 20 Finding said manifestation to be wellfounded, the cadastral court, in its order of September 4, 1965, nullified its previous order requiring Siason to surrender
the certificates of title mentioned therein. 21
In 1968, the Yaneses filed an ex-parte motion for the issuance of an alias writ of execution in Civil Case No. 5022.
Siason opposed it. 22 In its order of September 28, 1968 in Civil Case No. 5022, the lower court, noting that the Yaneses
had instituted another action for the recovery of the land in question, ruled that the judgment therein could not be enforced
against Siason as he was not a party in the case. 23 05SEcdasia
The action filed by the Yaneses on February 21, 1968 was for recovery of real property with damages. 24 Named
defendants therein were Dr. Rodolfo Siason, Laura Alvarez, Flora Alvarez, Raymundo Alvarez and the Register of Deeds
of Negros Occidental. The Yaneses prayed for the cancellation of TCT Nos. T-19291 and 19292 issued to Siason (sic) for
being null and void; the issuance of a new certificate of title in the name of the Yaneses "in accordance with the sheriff's
return of service dated October 20, 1965;" Siason's delivery of possession of Lot 773 to the Yaneses; and if, delivery
thereof could not be effected, or, if the issuance of a new title could not be made, that the Alvarezes and Siason jointly and
severally pay the Yaneses the sum of P45,000.00. They also prayed that Siason render an accounting of the fruits of Lot
773 from November 13, 1961 until the filing of the complaint; and that the defendants jointly and severally pay the
Yaneses moral damages of P20,000.00 and exemplary damages of P10,000.00 plus attorney's fees of P4,000.00. 25
In his answer to the complaint, Siason alleged that the validity of his titles to Lots 773-A and 773-B, having been
passed upon by the court in its order of September 4, 1965, had become res judicata and the Yaneses were estopped
from questioning said order. 26 On their part, the Alvarezes stated in their answer that the Yaneses' cause of action had
been "barred by res judicata, statute of limitation and estoppel." 27
In its decision of July 8, 1974, the lower court found that Rodolfo Siason, who purchased the properties in
question thru an agent as he was then in Mexico pursuing further medical studies, was a buyer in good faith for a valuable
consideration. Although the Yaneses were negligent in their failure to place a notice of lis pendens "before the Register of
Deeds of Negros Occidental in order to protect their rights over the property in question" in Civil Case No. 5022, equity
demanded that they recover the actual value of the land because the sale thereof executed between Alvarez and Siason
was without court approval. 28 The dispositive portion of the decision states: LexLib
"IN VIEW OF THE FOREGOING CONSIDERATION, judgment is hereby rendered in the following manner:
A.
The case against the defendant Dr. Rodolfo Siason and the Register of Deeds are (sic) hereby dismissed.
B.
The defendants, Laura, Flora and Raymundo, all surnamed Alvarez being the legitimate children of the
deceased Rosendo Alvarez are hereby ordered to pay jointly and severally the plaintiffs the sum of P20,000.00
representing the actual value of Lots Nos. 773-A and 773-B of Murcia Cadastre, Negros Occidental; the sum of P2,000.00
as actual damages suffered by the plaintiffs; the sum of P5,000.00 representing moral damages and the sum of P2,000 as
attorney's fees, all with legal rate of interest from date of the filing of this complaint up to final payment.
C.
The cross-claim filed by the defendant Dr. Rodolfo Siason against the defendants, Laura, Flora and
Raymundo, all surnamed Alvarez is hereby dismissed.
D.
Defendants, Laura, Flora and Raymundo, all surnamed Alvarez, are hereby ordered to pay the costs of
this suit.
SO ORDERED." 29
The Alvarezes appealed to the then Intermediate Appellate Court which, in its decision of August 31, 1983, 30
affirmed the lower court's decision "insofar as it ordered defendants-appellants to pay jointly and severally the plaintiffsappellees the sum of P20,000.00 representing the actual value of Lots Nos. 773-A and 773-B of the cadastral survey of
Murcia, Negros Occidental, and is reversed insofar as it awarded the sums of P2,000.00, P5,000.00 and P2,000.00 as
actual damages, moral damages and attorney's fees, respectively." 31
The dispositive portion of said decision reads:
"WHEREFORE, the decision appealed from is affirmed insofar as it ordered defendants-appellants to pay jointly
and severally the plaintiffs-appellees the sum of P20,000.00 representing the actual value of Lots Nos. 773-A and 773-B
of the cadastral survey of Murcia, Negros Occidental, and is reversed insofar as it awarded the sums of P2,000.00,
P5,000.00 and P2,000.00 as actual damages, moral damages and attorney's fees, respectively. No costs.
SO ORDERED. 32
Finding no cogent reason to grant appellants' motion for reconsideration, said appellate court denied the same.
Hence, the instant petition.
In their memorandum petitioners raised the following issues:
1.
Whether or not the defense of prescription and estoppel had been timely and properly invoked and raised
by the petitioners in the lower court.
2.
Whether or not the cause and/or causes of action of the private respondents, if ever there are any, as
alleged in their complaint dated February 21, 1968 which has been docketed in the trial court as Civil Case No. 8474
supra, are forever barred by statute of limitation and/or prescription of action and estoppel.
3.
Whether or not the late Rosendo Alvarez, a defendant in Civil Case No. 5022, supra, and father of the
petitioners become a privy and/or party to the waiver (Exhibit "4"-defendant Siason) in Civil Case No. 8474, supra, where
the private respondents had unqualifiedly and absolutely waived, renounced and quitclaimed all their alleged rights and
interests, if ever there is any, on Lots Nos. 773-A and 773-B of Murcia Cadastre as appearing in their written manifestation
dated November 6, 1962 (Exhibits "4"-Siason) which had not been controverted or even impliedly or indirectly denied by
them.
4.
Whether or not the liability or liabilities of Rosendo Alvarez arising from the sale of Lots Nos. 773-A and
773-B of Murcia Cadastre to Dr. Rodolfo Siason, if ever there is any, could be legally passed or transmitted by operations
(sic) of law to the petitioners without violation of law and due process." 33
The petition is devoid of merit. prcd
As correctly ruled by the Court of Appeals, it is powerless and for that matter so is the Supreme Court, to review
the decision in Civil Case No. 5022 ordering Alvarez to reconvey the lots in dispute to herein private respondents. Said

decision had long become final and executory and with the possible exception of Dr. Siason, who was not a party to said
case, the decision in Civil Case No. 5022 is the law of the case between the parties thereto. It ended when Alvarez or his
heirs failed to appeal the decision against them. 34
Thus, it is axiomatic that when a right or fact has been judicially tried and determined by a court of competent
jurisdiction, so long as it remains unreversed, it should be conclusive upon the parties and those in privity with them in law
or estate. 35 As consistently ruled by this Court, every litigation must come to an end. Access to the court is guaranteed.
But there must be a limit to it. Once a litigant's right has been adjudicated in a valid final judgment of a competent court,
he should not be granted an unbridled license to return for another try. The prevailing party should not be harassed by
subsequent suits. For, if endless litigation were to be allowed, unscrupulous litigations will multiply in number to the
detriment of the administration of justice. 36
There is no dispute that the rights of the Yaneses to the properties in question have been finally adjudicated in
Civil Case No. 5022. As found by the lower court, from the uncontroverted evidence presented, the Yaneses have been
illegally deprived of ownership and possession of the lots in question. 37 In fact, Civil Case No. 8474 now under review,
arose from the failure to execute Civil Case No. 5022, as subject lots can no longer be reconveyed to private respondents
Yaneses, the same having been sold during the pendency of the case by the petitioners' father to Dr. Siason who did not
know about the controversy, there being no lis pendens annotated on the titles. Hence, it was also settled beyond
question that Dr. Siason is a purchaser-in-good faith.
Under the circumstances, the trial court did not annul the sale executed by Alvarez in favor of Dr. Siason on
November 11, 1961 but in fact sustained it. The trial court ordered the heirs of Rosendo Alvarez who lost in Civil Case No.
5022 to pay the plaintiffs (private respondents herein) the amount of P20,000.00 representing the actual value of the
subdivided lots in dispute. It did not order defendant Siason to pay said amount. 38
As to the propriety of the present case, it has long been established that the sole remedy of the landowner whose
property has been wrongfully or erroneously registered in another's name is to bring an ordinary action in the ordinary
court of justice for reconveyance or, if the property has passed into the hands of an innocent purchaser for value, for
damages. 39 "It is one thing to protect an innocent third party; it is entirely a different matter and one devoid of justification
if deceit would be rewarded by allowing the perpetrator to enjoy the fruits of his nefarious deed. As clearly revealed by the
undeviating line of decisions coming from this Court, such an undesirable eventuality is precisely sought to be guarded
against." 40
The issue on the right to the properties in litigation having been finally adjudicated in Civil Case No. 5022 in favor
of private respondents, it cannot now be reopened in the instant case on the pretext that the defenses of prescription and
estoppel have not been properly considered by the lower court. Petitioners could have appealed in the former case but
they did not. They have therefore foreclosed their rights, if any, and they cannot now be heard to complain in another case
in order to defeat the enforcement of a judgment which has long become final and executory.
Petitioners further contend that the liability arising from the sale of Lots No. 773-A and 773-B made by Rosendo
Alvarez to Dr. Rodolfo Siason should be the sole liability of the late Rosendo Alvarez or of his estate, after his death. llcd
Such contention is untenable for it overlooks the doctrine obtaining in this jurisdiction on the general
transmissibility of the rights and obligations of the deceased to his legitimate children and heirs. Thus, the pertinent
provisions of the Civil Code state:
"Art. 774.
Succession is a mode of acquisition by virtue of which the property, rights and obligations to the
extent of the value of the inheritance, of a person are transmitted through his death to another or others either by his will
or by operation of law.
"Art. 776.
The inheritance includes all the property, rights and obligations of a person which are not
extinguished by his death.
"Art. 1311.
Contracts take effect only between the parties, their assigns and heirs, except in case where the
rights and obligations arising from the contract are not transmissible by their nature, or by stipulation or by provision of
law. The heir is not liable beyond the value of the property received from the decedent."
As explained by this Court through Associate Justice J.B.L. Reyes in the case of Estate of Hemady vs. Luzon
Surety Co., Inc. 41
"The binding effect of contracts upon the heirs of the deceased party is not altered by the provision of our Rules of
Court that money debts of a deceased must be liquidated and paid from his estate before the residue is distributed among
said heirs (Rule 89). The reason is that whatever payment is thus made from the state is ultimately a payment by the heirs
or distributees, since the amount of the paid claim in fact diminishes or reduces the shares that the heirs would have been
entitled to receive.
"Under our law, therefore, the general rule is that a party's contractual rights and obligations are transmissible to
the successors. The rule is a consequence of the progressive 'depersonalization' of patrimonial rights and duties that, as
observed by Victorio Polacco, has characterized the history of these institutions. From the Roman concept of a relation
from person to person, the obligation has evolved into a relation from patrimony to patrimony, with the persons occupying
only a representative position, barring those rare cases where the obligation is strictly personal, i.e., is contracted intuitu
personae, in consideration of its performance by a specific person and by no other. . . ."
Petitioners being the heirs of the late Rosendo Alvarez, they cannot escape the legal consequences of their
father's transaction, which gave rise to the present claim for damages. That petitioners did not inherit the property involved
herein is of no moment because by legal fiction, the monetary equivalent thereof devolved into the mass of their father's
hereditary estate, and we have ruled that the hereditary assets are always liable in their totality for the payment of the
debts of the estate. 42
It must, however, be made clear that petitioners are liable only to the extent of the value of their inheritance. With
this clarification and considering petitioners' admission that there are other properties left by the deceased which are
sufficient to cover the amount adjudged in favor of private respondents, we see no cogent reason to disturb the findings
and conclusions of the Court of Appeals. LibLex
WHEREFORE, subject to the clarification herein above stated, the assailed decision of the Court of Appeals is
hereby AFFIRMED. Costs against petitioners. cdStud05
SO ORDERED.
FIRST DIVISION
[G.R. No. L-33187. March 31, 1980.]

CORNELIO PAMPLONA alias GEMINIANO PAMPLONA and APOLONIA ONTE, petitioners, vs. VIVENCIO
MORETO, VICTOR MORETO, ELIGIO MORETO, MARCELO MORETO, PAULINA MORETO, ROSARIO MORETO,
MARTA MORETO, SEVERINA MENDOZA, PABLO MENDOZA, LAZARO MENDOZA, VICTORIA TUIZA, JOSEFINA
MORETO, LEANDRO MORETO and LORENZO MENDOZA, respondents.
E.P. Caguioa for petitioners.
Benjamin C. Yatco for respondents.
DECISION
GUERRERO, J p:
This is a petition for certiorari by way of appeal from the decision of the Court of Appeals 1 in CA-G.R. No. 35962R, entitled "Vivencio Moreto, et al., Plaintiff-Appellees vs. Cornelio Pamplona, et al., Defendants-Appellants," affirming the
decision of the Court of First Instance of Laguna, Branch I at Bian. SEcdtai
The facts, as stated in the decision appealed from, show that:
"Flaviano Moreto and Monica Maniega were husband and wife. During their marriage, they acquired adjacent lots
Nos. 1495, 4545, and 1496 of the Calamba Friar Land Estate, situated in Calamba, Laguna, containing 781-544 and
1,021 square meters respectively, and covered by certificates of title issued in the name of "Flaviano Moreto, married to
Monica Maniega."
"The spouses Flaviano Moreto and Monica Maniega begot during their marriage six (6) children, namely, Ursulo,
Marta, La Paz, Alipio, Pablo, and Leandro, all surnamed Moreto.
"Ursulo Moreto died intestate on May 24, 1959 leaving as his heirs herein plaintiffs Vivencio, Marcelo, Rosario,
Victor, Paulina, Marta and Eligio, all surnamed Moreto.
"Marta Moreto died also intestate on April 30, 1938 leaving as her heir plaintiff Victoria Tuiza.
"La Paz Moreto died intestate on July 17, 1954 leaving the following heirs, namely, herein plaintiffs Pablo,
Severina, Lazaro, and Lorenzo, all surnamed Mendoza.
"Alipio Moreto died intestate on June 30, 1943 leaving as his heir herein plaintiff Josefina Moreto.
"Pablo Moreto died intestate on April 25, 1942 leaving no issue and as his heirs his brother plaintiff Leandro
Moreto and the other plaintiffs herein.
"On May 6, 1946, Monica Maniega died intestate in Calamba, Laguna.
"On July 30, 1952, or more than six (6) years after the death of his wife Monica Maniega, Flaviano Moreto, without
the consent of the heirs of his said deceased wife Monica, and before any liquidation of the conjugal partnership of
Monica and Flaviano could be effected, executed in favor of Geminiano Pamplona, married to defendant Apolonia Onte,
the deed of absolute sale (Exh. "1") covering lot No. 1495 for P900.00. The deed of sale (Exh. "1") contained a description
of lot No. 1495 as having an area of 781 square meters and covered by transfer certificate of title No. 14570 issued in the
name of Flaviano Moreto, married to Monica Maniega, although the lot was acquired during their marriage. As a result of
the sale, the said certificate of title was cancelled and a new transfer certificate of title No. T-5671 was issued in the name
of Geminiano Pamplona married to Apolonia Onte (Exh. "A"). 2005iatdc
"After the execution of the above-mentioned deed of sale (Exh. "1"), the spouses Geminiano Pamplona and
Apolonia Onte constructed their house on the eastern part of lot 1496 as Flaviano Moreto, at the time of the sale, pointed
to it as the land which he sold to Geminiano Pamplona. Shortly thereafter, Rafael Pamplona, son of the spouses
Geminiano Pamplona and Apolonia Onte, also built his house within lot 1496 about one meter from its boundary with the
adjoining lot. The vendor Flaviano Moreto and the vendee Geminiano Pamplona thought all the time that the portion of
781 square meters which was the subject matter of their sale transaction was No. 1495 and so lot No. 1495 appears to be
the subject matter in the deed of sale (Exh. "1") although the fact is that the said portion sold thought of by the parties to
be lot No. 1495 is a part of lot No. 1496.
"From 1956 to 1960, the spouses Geminiano Pamplona and Apolonio Onte enlarged their house and they even
constructed a piggery corral at the back of their said house about one and one-half meters from the eastern boundary of
lot 1496.
"On August 12, 1956, Flaviano Moreto died intestate. In 1961, the plaintiffs demanded on the defendants to
vacate the premises where they had their house and piggery on the ground that Flaviano Moreto had no right to sell the
lot which he sold to Geminiano Pamplona as the same belongs to the conjugal partnership of Flaviano and his deceased
wife and the latter was already dead when the sale was executed without the consent of the plaintiffs who are the heirs of
Monica. The spouses Geminiano Pamplona and Apolonia Onte refused to vacate the premises occupied by them and
hence, this suit was instituted by the heirs of Monica Maniega seeking for the declaration of the nullity of the deed of sale
of July 30, 1952 above-mentioned as regards one half of the property subject matter of said deed; to declare the plaintiffs
as the rightful owners of the other half of said lot; to allow the plaintiffs to redeem the one-half portion thereof sold to the
defendants 'After payment of the other half of the purchase price'; to order the defendants to vacate the portions occupied
by them; to order the defendants to pay actual and moral damages and attorney's fees to the plaintiffs; to order the
defendants to pay plaintiffs P120.00 a year from August 1958 until they have vacated the premises occupied by them for
the use and occupancy of the same.
"The defendants claim that the sale made by Flaviano Moreto in their favor is valid as the lot sold is registered in
the name of Flaviano Moreto and they are purchasers believing in good faith that the vendor was the sole owner of the lot
sold. 2005iatdc
"After a relocation of lots 1495, 1496 and 4545 made by agreement of the parties, it was found out that there was
mutual error between Flaviano Moreto and the defendants in the execution of the deed of sale because while the said
deed recited that the lot sold is lot No. 1495, the real intention of the parties is that it was a portion consisting of 781
square meters of lot No. 1496 which was the subject matter of their sale transaction.
"After trial, the lower court rendered judgment, the dispositive part thereof being as follows:
'WHEREFORE, judgment is hereby rendered for the plaintiffs declaring the deed of absolute sale dated July 30,
1952 pertaining to the eastern portion of Lot 1496 covering an area of 781 square meters null and void as regards the
390.5 square meters of which plaintiffs are hereby declared the rightful owners and entitled to its possession.
'The sale is ordered valid with respect to the eastern one-half (1/2) of 1781 square meters of Lot 1496 measuring
390.5 square meters of which defendants are declared lawful owners and entitled to its possession.
After proper survey segregating the eastern one-half portion with an area of 390.5 square meters of Lot 1496, the
defendants shall be entitled to s certificate of title covering said portion and Transfer Certificate of Title No. 9843 of the

office of the Register of Deeds of Laguna shall be cancelled accordingly and new titles issued to the plaintiffs and to the
defendants covering their respective portions.
'Transfer Certificate of Title No. 5671 of the office of the Register of Deeds of Laguna covering Lot No. 1495 and
registered in the name of Cornelio Pamplona, married to Apolonia Onte, is by virtue of this decision ordered cancelled.
The defendants are ordered to surrender to the office of the Register of Deeds of Laguna the owner's duplicate of Transfer
Certificate of Title No. 5671 within thirty (30) days after this decision shall have become final for cancellation in
accordance with this decision.
'Let copy of this decision be furnished the Register of Deeds for the province of Laguna for his information and
guidance.
'With costs against the defendants.' 2
The defendants-appellants, not being satisfied with said judgment, appealed to the Court of Appeals, which
affirmed the judgment, hence they now come to this Court. cdasia2005
The fundamental and crucial issue in the case at bar is whether under the facts and circumstances duly
established by the evidence, petitioners are entitled to the full ownership of the property in litigation, or only one-half of the
same.
There is no question that when the petitioners purchased the property on July 30, 1952 from Flaviano Moreto for
the price of P900.00, his wife Monica Maniega had already been dead six years before, Monica having died on May 6,
1946. Hence, the conjugal partnership of the spouses Flaviano Moreto and Monica Maniega had already been dissolved.
(Article 175, (1) New Civil Code; Article 1417, Old Civil Code). The records show that the conjugal estate had not been
inventoried, liquidated, settled and divided by the heirs thereto in accordance with law. The necessary proceedings for the
liquidation of the conjugal partnership were not instituted by the heirs either in the testate or intestate proceedings of the
deceased spouse pursuant to Act 3176 amending Section 685 of Act 190. Neither was there an extra-judicial partition
between the surviving spouse and the heirs of the deceased spouse nor was an ordinary action for partition brought for
the purpose. Accordingly, the estate became the property of a community between the surviving husband, Flaviano
Moreto, and his children with the deceased Monica Maniega in the concept of a co-ownership.
"The community property of the marriage, at the dissolution of this bond by the death of one of the spouses,
ceases to belong to the legal partnership and becomes the property of a community, by operation of law, between the
surviving spouse and the heirs of the deceased spouse, or the exclusive property of the widower or the widow, if he or she
be the heir of the deceased spouse. Every co-owner shall have full ownership of his part and in the fruits and benefits
derived therefrom, and he therefore may alienate, assign or mortgage it and even substitute another person in its
enjoyment, unless personal rights are in question." (Marigsa vs. Macabuntoc, 17 Phil. 107)
In Borja vs. Addision, 44 Phil. 895, 906, the Supreme Court said that "(t)here is no reason in law why the heirs of
the deceased wife may not form a partnership with the surviving husband for the management and control of the
community property of the marriage and conceivably such a partnership, or rather community of property, between the
heirs and the surviving husband might be formed without a written agreement." In Prades vs. Tecson, 49 Phil. 230, the
Supreme Court held that "(a)lthough, when the wife dies, the surviving husband, as administrator of the community
property, has authority to sell the property without the concurrence of the children of the marriage, nevertheless this power
can be waived in favor of the children, with the result of bringing about a conventional ownership in common between the
father and children as to such property; and any one purchasing with knowledge of the changed status of the property will
acquire only the undivided interest of those members of the family who join in the act of conveyance." cdasia2005
It is also not disputed that immediately after the execution of the sale in 1952, the vendees constructed their
house on the eastern part of Lot 1496 which the vendor pointed out to them as the area sold, and two weeks thereafter,
Rafael who is a son of the vendees, also built his house within Lot 1496. Subsequently, a cemented piggery coral was
constructed by the vendees at the back of their house about one and one-half meters from the eastern boundary of Lot
1496. Both vendor and vendees believed all the time that the area of 781 sq. meters subject of the sale was Lot No. 1495
which according to its title (T.C.T. No. 14570) contains an area of 781 sq. meters so that the deed of sale between the
parties identified and described the land sold as Lot 1495. But actually, as verified later by a surveyor upon agreement of
the parties during the proceedings of the case below, the area sold was within Lot 1496. cdphil
Again, there is no dispute that the houses of the spouses Cornelio Pamplona and Apolonia Onte as well as that of
their son Rafael Pamplona, including the concrete piggery coral adjacent thereto, stood on the land from 1952 up to the
filing of the complaint by the private respondents on July 25, 1961, or a period of over nine (9) years. And during said
period, the private respondents who are the heirs of Monica Maniega as well as of Flaviano Moreto who also died
intestate on August 12, 1956, lived as neighbors to the petitioners-vendees, yet lifted no finger to question the occupation,
possession and ownership of the land purchased by the Pamplonas, so that We are persuaded and convinced to rule that
private respondents are in estoppel by laches to claim half of the property in dispute as null and void. Estoppel by laches
is a rule of equity which bars a claimant from presenting his claim when, by reason of abandonment and negligence, he
allowed a long time to elapse without presenting the same. (International Banking Corporation vs. Yared, 59 Phil. 92)
We have ruled that at the time of the sale in 1952, the conjugal partnership was already dissolved six years before
and therefore, the estate became a co-ownership between Flaviano Moreto, the surviving husband, and the heirs of his
deceased wife, Monica Maniega. Article 493 of the New Civil Code is applicable and it provides as follows:
"Art. 493.
Each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining
thereto, and he may therefore alienate, assign or mortgage it, and even substitute another person in its enjoyment, except
when personal rights are involved. But the effect of the alienation or the mortgage, with respect to the co-owners, shall be
limited to the portion which may be allotted to him in the division upon the termination of the co-ownership."
We agree with the petitioner that there was a partial partition of the co-ownership when at the time of the sale
Flaviano Moreto pointed out the area and location of the 781 sq. meters sold by him to the petitioners-vendees on which
the latter built their house and also that whereon Rafael, the son of petitioners likewise erected his house and an adjacent
coral for piggery. 2005SE
Petitioners point to the fact that spouses Flaviano Moreto and Monica Maniega owned three parcels of land
denominated as Lot 1495 having an area of 781 sq. meters, Lot 1496 with an area of 1,021 sq. meters, and Lot 4545 with
an area of 544 sq. meters. The three lots have a total area of 2,346 sq. meters. These three parcels of lots are contiguous
with one another as each is bounded on one side by the other, thus: Lot 4545 is bounded on the northeast by Lot 1495
and on the southeast by Lot 1496. Lot 1495 is bounded on the west by Lot 4545. Lot 1496 is bounded on the west by Lot
4545. It is therefore, clear that the three lots constitute one big land. They are not separate properties located in different
places but they abut each other. This is not disputed by private respondents. Hence, at the time of the sale, the co-

ownership constituted or covered these three lots adjacent to each other. And since Flaviano Moreto was entitled to onehalf pro-indiviso of the entire land area or 1,173 sq. meters as his share, he had a perfect legal and lawful right to dispose
of 781 sq. meters of his share to the Pamplona spouses. Indeed, there was still a remainder of some 392 sq. meters
belonging to him at the time of the sale.
We reject respondent Court's ruling that the sale was valid as to one-half and invalid as to the other half for the
very simple reason that Flaviano Moreto, the vendor, had the legal right to more than 781 sq. meters of the communal
estate, a title which he could dispose, alienate in favor of the vendees-petitioners. The title may be pro-indiviso or inchoate
but the moment the co-owner as vendor pointed out its location and even indicated the boundaries over which the fences
were to be erected without objection, protest or complaint by the other co-owners, on the contrary they acquiesced and
tolerated such alienation, occupation and possession, We rule that a factual partition or termination of the co-ownership,
although partial, was created, and barred not only the vendor, Flaviano Moreto, but also his heirs, the private respondents
herein from asserting as against the vendees-petitioners any right or title in derogation of the deed of sale executed by
said vendor Flaviano Moreto. LLjur
Equity commands that the private respondents, the successors of both the deceased spouses, Flaviano Moreto
and Monica Maniega be not allowed to impugn the sale executed by Flaviano Moreto who indisputably received the
consideration of P900.00 and which he, including his children, benefited from the same. Moreover, as the heirs of both
Monica Maniega and Flaviano Moreto, private respondents are duty-bound to comply with the provisions of Articles 1458
and 1495, Civil Code, which is the obligation of the vendor of the property of delivering and transferring the ownership of
the whole property sold, which is transmitted on his death to his heirs, the herein private respondents. The articles cited
provide, thus:
"Art. 1458.
By the contract of sale one of the contracting parties obligates himself to transfer the ownership of
and to deliver a determinate thing, and the other party to pay therefor a price certain in money or its equivalent.
A contract of sale may be absolute or conditional."
"Art. 1495.
The vendor is bound to transfer the ownership of and deliver, as well as warrant the thing which is
the object of the sale."
Under Article 776, New Civil Code, the inheritance which private respondents received from their deceased
parents and/or predecessors-in-interest included all the property rights and obligations which were not extinguished by
their parents' death. And under Art. 1311, paragraph 1, New Civil Code, the contract of sale executed by the deceased
Flaviano Moreto took effect between the parties, their assigns and heirs, who are the private respondents herein.
Accordingly, to the private respondents is transmitted the obligation to deliver in full ownership the whole area of 781 sq.
meters to the petitioners (which was the original obligation of their predecessor Flaviano Moreto) and not only one-half
thereof. Private respondents must comply with said obligation. 2005SE
The records reveal that the area of 781 sq. meters sold to and occupied by petitioners for more than 9 years
already as of the filing of the complaint in 1961 had been re-surveyed by private land surveyor Daniel Aranas. Petitioners
are entitled to a segregation of the area from Transfer Certificate of Title No. T-9843 covering Lot 1496 and they are also
entitled to the issuance of a new Transfer Certificate of Title in their name based on the relocation survey.
WHEREFORE, IN VIEW OF THE FOREGOING, the judgment appealed from is hereby AFFIRMED with
modification in the sense that the sale made and executed by Flaviano Moreto in favor of the petitioners-vendees is
hereby declared legal and valid in its entirely.
Petitioners are hereby declared owners in full ownership of the 781 sq. meters at the eastern portion of Lot 1496
now occupied by said petitioners and whereon their houses and piggery coral stand.
The Register of Deeds of Laguna is hereby ordered to segregate the area of 781 sq. meters from Certificate of
Title No. 9843 and to issue a new Transfer Certificate of Title to the petitioners covering the segregated area of 781 sq.
meters.
No costs.
SO ORDERED.

SPECIAL FIRST DIVISION

[G.R. No. 145982. September 13, 2004.]

FRANK N. LIU, deceased, substituted by his surviving spouse Diana Liu, and children, namely: Walter, Milton,
Frank, Jr., Henry and Jockson, all surnamed Liu, Rebecca Liu Shui and Pearl Liu Rodriguez, petitioners, vs. ALFREDO
LOY, JR., TERESITA A. LOY and ESTATE OF JOSE VAO, respondents.
RESOLUTION
CARPIO, J p:
The Loys seek a reconsideration of the Decision dated 3 July 2003 of this Court declaring void the deeds of sale
of Lot Nos. 5 and 6 executed by Teodoro Vao in favor of Alfredo Loy, Jr. and Teresita Loy. We held that Lot Nos. 5 and 6
belong to Frank Liu 1 since the probate court approved his deeds of sale in accordance with Section 8, 2 Rule 89 of the
Rules of Court. The deeds of sale of the Loys lacked a valid probate court approval. As a result, we ordered the Estate of
Jose Vao to reimburse the Loys the amounts they paid for Lot Nos. 5 and 6, with interest at 6% annually from 4 June
1976, the date of filing of the complaint, until finality of the decision, and 12% annually thereafter until full payment.
DICcTa
The Court heard the parties on oral arguments on 10 March 2004 and granted them time to submit their
memoranda. Frank Liu filed his memorandum on 29 March 2004 while the Loys filed their memorandum on 25 March
2004 by registered mail.
The issues that the Loys raise in their motion for reconsideration are not new. The Court already considered and
discussed extensively these issues in the assailed Decision. We find no compelling reason to reconsider the assailed
Decision.
The Loys insist that the transaction between Teodoro Vao and Benito Liu, the predecessor-in-interest of Frank
Liu, is a contract to sell. In contrast, the transactions between Teodoro Vao and Alfredo Loy, Jr. and Teresita A. Loy were
contracts of sale. According to the Loys, the contract to sell did not transfer ownership of Lot Nos. 5 and 6 to Benito Liu or
Frank Liu because it was only a promise to sell subject to the full payment of the consideration. On the other hand, the
contracts of sale in favor of the Loys transferred ownership, as the conveyances were absolute. 3 05SEcdasia
As we held in our Decision, a prior contract to sell made by the decedent during his lifetime prevails over a
subsequent contract of sale made by the administrator without probate court approval. It is immaterial if the prior contract
is a mere contract to sell and does not immediately convey ownership. Frank Liu's contract to sell became valid and
effective upon its execution and bound the estate to convey the property upon full payment of the consideration.
It is apparent from Teodoro Vao's letter 4 dated 16 October 1954 that the reason why Frank Liu stopped further
payments on the lots, leaving a balance of P1,000, was because Teodoro Vao could not yet transfer the titles to Benito
Liu, the predecessor-in-interest of Frank Liu. It would appear that Frank Liu and Teodoro Vao lost contact with each other
thereafter and it was only on 25 January 1964 that Frank Liu wrote Teodoro Vao informing the latter that he was ready to
pay the balance of the purchase price of the lots. Teodoro Vao did not reply to Frank Liu's letter. On 22 April 1966, Benito
Liu sold to Frank Liu the lots, including Lot Nos. 5 and 6, which Benito Liu purchased from Teodoro Vao on 13 January
1950. Frank Liu sent three letters dated 21 March 1968, 7 June 1968 and 29 July 1968 to Teodoro Vao reiterating his
request for the execution of the deed of sale covering the lots in his favor but to no avail. On 19 August 1968, Teodoro
Vao sold Lot No. 6 to Teresita Loy and on 16 December 1969, he sold Lot No. 5 to Alfredo Loy, Jr. The sales to the Loys
were made after Frank Liu offered to pay the balance of the purchase price of the lots and after he repeatedly requested
for the execution of the deeds of sale in his favor.
The sale of the lots by Teodoro Vao to Benito Liu was valid. The sale was made by Teodoro Vao on 13 January
1950 in his capacity as attorney-in-fact of Jose Vao. The sale to Benito Liu was made during the lifetime of Jose Vao,
not after the death of Jose Vao who died on 28 January 1950. 5 The power of attorney executed by Jose Vao in favor of
Teodoro Vao remained valid during the lifetime of Jose Vao. In his letter dated 16 October 1954, Teodoro Vao stated
that on 30 June 1954, the Supreme Court allowed the probate of the will of Jose Vao. Teodoro Vao likewise mentioned
in the letter that in July 1954, the Supreme Court held that all the sales made by Teodoro Vao of the properties of his
father were legal. 6 Thus, Benito Liu's deed of sale in favor of Frank Liu covering the lots sold to him by Teodoro Vao
constitutes a valid charge or claim against the estate of Jose Vao. EcTCAD
The Loys reiterate their contention that Teodoro Vao, as administrator and sole heir to the properties, can sell the
lots to them since the rights of an heir are transmitted from the moment of death of the testator. Although a property under
estate proceedings cannot be sold without judicial approval, the Loys allege that in their case, the probate court later
approved the sales to them, thereby ratifying the sales. 7
Well-settled is the rule that an administrator needs court approval to sell estate property, otherwise the sale is
void. 8 Court approval of the sale of estate property is clearly required under Rule 89 of the Rules of Court, which
enumerates the instances when the court may allow the sale or encumbrance of estate property. Section 7 of Rule 89 of
the Rules of Court even provides for the regulations for granting authority to sell, mortgage or otherwise encumber estate
property. 9
More importantly, Section 91 10 of Act No. 496 (Land Registration Act) and Section 88 11 of Presidential Decree
No. 1529 (Property Registration Decree) specifically require court approval for any sale of registered land by an executor
or administrator.
The laws, Rules of Court, jurisprudence and regulations explicitly require court approval before any sale of estate
property by an executor or administrator can take effect. The purpose of requiring court approval is to protect creditors. In
this case, Frank Liu is a creditor, and he is the person the law seeks to protect.
The orders of the probate court dated 19 and 23 March 1976 approving the contracts of the Loys are void. The
orders did not ratify the sales because there was already a prior order of the probate court dated 24 February 1976
approving the sale of Lot Nos. 5 and 6 to Frank Liu. Hence, the probate court had already lost jurisdiction over Lot Nos. 5
and 6 since the lots no longer formed part of the Estate of Jose Vao. In fact, the administratrix of the estate filed a motion
for reconsideration of the orders of the probate court approving the contracts of the Loys because she already executed a
deed of sale covering Lot Nos. 5 and 6 in favor of Frank Liu.
The Loys impliedly admitted that their contracts of sale dated 19 August 1968 and 16 December 1969 were
ineffective when they belatedly asked in 1976 for court approval of the sales. If the Loys believed that their deeds of sale
in 1968 and 1969 were valid, they would not have asked for court approval in 1976. By asking for court approval, they
necessarily admitted that without court approval, the sale to them was ineffectual.
The Loys are not buyers and registrants in good faith considering that they bought from a seller who was not a
registered owner. Teodoro Vao signed both contracts of sale but the titles to the lots sold were in the name of "Estate of
Jose Vao." And since the titles to Lot Nos. 5 and 6 were in name of "Estate of Jose Vao," the Loys were on notice that
court approval was needed for the sale of estate property. The ex-parte motion for the court approval of the sales filed by

the Loys some seven or eight years after the sales transaction reveals a less than honest actuation, prompting the
administratrix to object to the court's approval.
WHEREFORE, we DENY the motion for reconsideration. STECDc
SO ORDERED.

SECOND DIVISION
[G.R. No. 129008. January 13, 2004.]

TEODORA A. RIOFERIO, VERONICA O. EVANGELISTA assisted by her husband ZALDY EVANGELISTA,

ALBERTO ORFINADA, and ROWENA O. UNGOS, assisted by her husband BEDA UNGOS, petitioners, vs. COURT OF
APPEALS, ESPERANZA P. ORFINADA, LOURDES P. ORFINADA, ALFONSO ORFINADA, NANCY P. ORFINADA,
ALFONSO JAMES P. ORFINADA, CHRISTOPHER P. ORFINADA and ANGELO P. ORFINADA, respondents.
DECISION
TINGA, J p:
Whether the heirs may bring suit to recover property of the estate pending the appointment of an administrator is
the issue in this case.
This Petition for Review on Certiorari, under Rule 45 of the Rules of Court, seeks to set aside the Decision 1 of
the Court of Appeals in CA-G.R. SP No. 42053 dated January 31, 1997, as well as its Resolution 2 dated March 26, 1997,
denying petitioners' motion for reconsideration. EDSHcT
On May 13, 1995, Alfonso P. Orfinada, Jr. died without a will in Angeles City leaving several personal and real
properties located in Angeles City, Dagupan City and Kalookan City. 3 He also left a widow, respondent Esperanza P.
Orfinada, whom he married on July 11, 1960 and with whom he had seven children who are the herein respondents,
namely: Lourdes P. Orfinada, Alfonso "Clyde" P. Orfinada, Nancy P. Orfinada-Happenden, Alfonso James P. Orfinada,
Christopher P. Orfinada, Alfonso Mike P. Orfinada (deceased) and Angelo P. Orfinada. 4
Apart from the respondents, the demise of the decedent left in mourning his paramour and their children. They are
petitioner Teodora Riofero, who became a part of his life when he entered into an extra-marital relationship with her during
the subsistence of his marriage to Esperanza sometime in 1965, and co-petitioners Veronica, 5 Alberto and Rowena. 6
Stud2005
On November 14, 1995, respondents Alfonso James and Lourdes Orfinada discovered that on June 29, 1995,
petitioner Teodora Rioferio and her children executed an Extrajudicial Settlement of Estate of a Deceased Person with
Quitclaim involving the properties of the estate of the decedent located in Dagupan City and that accordingly, the Registry
of Deeds in Dagupan issued Certificates of Titles Nos. 63983, 63984 and 63985 in favor of petitioners Teodora Rioferio,
Veronica Orfinada-Evangelista, Alberto Orfinada and Rowena Orfinada-Ungos. Respondents also found out that
petitioners were able to obtain a loan of P700,000.00 from the Rural Bank of Mangaldan Inc. by executing a Real Estate
Mortgage over the properties subject of the extra-judicial settlement. 7
On December 1, 1995, respondent Alfonso "Clyde" P. Orfinada III filed a Petition for Letters of Administration
docketed as S.P. Case No. 5118 before the Regional Trial Court of Angeles City, praying that letters of administration
encompassing the estate of Alfonso P. Orfinada, Jr. be issued to him. 8 cdStud05
On December 4, 1995, respondents filed a Complaint for the Annulment/Rescission of Extra Judicial Settlement of
Estate of a Deceased Person with Quitclaim, Real Estate Mortgage and Cancellation of Transfer Certificate of Titles with
Nos. 63983, 63985 and 63984 and Other Related Documents with Damages against petitioners, the Rural Bank of
Mangaldan, Inc. and the Register of Deeds of Dagupan City before the Regional Trial Court, Branch 42, Dagupan City. 9
On February 5, 1996, petitioners filed their Answer to the aforesaid complaint interposing the defense that the
property subject of the contested deed of extra-judicial settlement pertained to the properties originally belonging to the
parents of Teodora Riofero 10 and that the titles thereof were delivered to her as an advance inheritance but the decedent
had managed to register them in his name. 11 Petitioners also raised the affirmative defense that respondents are not the
real parties-in-interest but rather the Estate of Alfonso O. Orfinada, Jr. in view of the pendency of the administration
proceedings. 12 On April 29, 1996, petitioners filed a Motion to Set Affirmative Defenses for Hearing 13 on the aforesaid
ground. 2005Stud
The lower court denied the motion in its Order 14 dated June 27, 1996, on the ground that respondents, as heirs,
are the real parties-in-interest especially in the absence of an administrator who is yet to be appointed in S.P. Case No.
5118. Petitioners moved for its reconsideration 15 but the motion was likewise denied. 16
This prompted petitioners to file before the Court of Appeals their Petition for Certiorari under Rule 65 of the Rules
of Court docketed as CA G.R. S.P. No. 42053. 17 Petitioners averred that the RTC committed grave abuse of discretion in
issuing the assailed order which denied the dismissal of the case on the ground that the proper party to file the complaint
for the annulment of the extrajudicial settlement of the estate of the deceased is the estate of the decedent and not the
respondents. 18 05Studcd
The Court of Appeals rendered the assailed Decision 19 dated January 31, 1997, stating that it discerned no
grave abuse of discretion amounting to lack or excess of jurisdiction by the public respondent judge when he denied
petitioners' motion to set affirmative defenses for hearing in view of its discretionary nature. DAEIHT
A Motion for Reconsideration was filed by petitioners but it was denied. 20 Hence, the petition before this Court.
The issue presented by the petitioners before this Court is whether the heirs have legal standing to prosecute the
rights belonging to the deceased subsequent to the commencement of the administration proceedings. 21
Petitioners vehemently fault the lower court for denying their motion to set the case for preliminary hearing on
their affirmative defense that the proper party to bring the action is the estate of the decedent and not the respondents. It
must be stressed that the holding of a preliminary hearing on an affirmative defense lies in the discretion of the court. This
is clear from the Rules of Court, thus: SEcdtai
SEC. 5. Pleadings grounds as affirmative defenses. Any of the grounds for dismissal provided for in this rule,
except improper venue, may be pleaded as an affirmative defense, and a preliminary hearing may be had thereon as if a
motion to dismiss had been filed. 22 (Emphasis supplied.)
Certainly, the incorporation of the word "may" in the provision is clearly indicative of the optional character of the
preliminary hearing. The word denotes discretion and cannot be construed as having a mandatory effect. 23
Subsequently, the electivity of the proceeding was firmed up beyond cavil by the 1997 Rules of Civil Procedure with the
inclusion of the phrase "in the discretion of the Court", apart from the retention of the word "may" in Section 6, 24 in Rule
16 thereof. 05SEcdasia
Just as no blame of abuse of discretion can be laid on the lower court's doorstep for not hearing petitioners'
affirmative defense, it cannot likewise be faulted for recognizing the legal standing of the respondents as heirs to bring the
suit.
Pending the filing of administration proceedings, the heirs without doubt have legal personality to bring suit in
behalf of the estate of the decedent in accordance with the provision of Article 777 of the New Civil Code "that (t)he rights
to succession are transmitted from the moment of the death of the decedent." The provision in turn is the foundation of the

principle that the property, rights and obligations to the extent and value of the inheritance of a person are transmitted
through his death to another or others by his will or by operation of law. 25 2005iatdc
Even if administration proceedings have already been commenced, the heirs may still bring the suit if an
administrator has not yet been appointed. This is the proper modality despite the total lack of advertence to the heirs in
the rules on party representation, namely Section 3, Rule 3 26 and Section 2, Rule 87 27 of the Rules of Court. In fact, in
the case of Gochan v. Young, 28 this Court recognized the legal standing of the heirs to represent the rights and
properties of the decedent under administration pending the appointment of an administrator. Thus:
The above-quoted rules, 29 while permitting an executor or administrator to represent or to bring suits on behalf of
the deceased, do not prohibit the heirs from representing the deceased. These rules are easily applicable to cases in
which an administrator has already been appointed. But no rule categorically addresses the situation in which special
proceedings for the settlement of an estate have already been instituted, yet no administrator has been appointed. In such
instances, the heirs cannot be expected to wait for the appointment of an administrator; then wait further to see if the
administrator appointed would care enough to file a suit to protect the rights and the interests of the deceased; and in the
meantime do nothing while the rights and the properties of the decedent are violated or dissipated.
Even if there is an appointed administrator, jurisprudence recognizes two exceptions, viz (1) if the executor or
administrator is unwilling or refuses to bring suit; 30 and (2) when the administrator is alleged to have participated in the
act complained of 31 and he is made a party defendant. 32 Evidently, the necessity for the heirs to seek judicial relief to
recover property of the estate is as compelling when there is no appointed administrator, if not more, as where there is an
appointed administrator but he is either disinclined to bring suit or is one of the guilty parties himself.
All told, therefore, the rule that the heirs have no legal standing to sue for the recovery of property of the estate
during the pendency of administration proceedings has three exceptions, the third being when there is no appointed
administrator such as in this case. cdasia2005
As the appellate court did not commit an error of law in upholding the order of the lower court, recourse to this
Court is not warranted. IaAHCE
WHEREFORE, the petition for review is DENIED. The assailed decision and resolution of the Court of Appeals
are hereby AFFIRMED. No costs. 2005SE
SO ORDERED.

FIRST DIVISION

[G.R. No. 156879. January 20, 2004.]

FLORDELIZA CALPATURA FLORA, DOMINADOR CALPATURA and TOMAS CALPATURA, JR., Heirs of TOMAS
CALPATURA, SR., petitioners, vs. ROBERTO, ERLINDA, DANIEL, GLORIA, PATRICIO, JR. and EDNA, all surnamed
PRADO and NARCISA PRADO, respondents. YNARES-SANTIAGO, J p:
The property under litigation is the northern half portion of a residential land consisting of 552.20 square meters,
more or less, situated at 19th Avenue, Murphy, Quezon City and covered by Transfer Certificate of Title No. 71344 issued
on August 15, 1963 by the Register of Deeds of Quezon City in the name of Narcisa Prado and her children by her first
husband, Patricio Prado, Sr., namely, Roberto, Erlinda, Daniel, Gloria,, Patricio, Jr. and Edna, respondents herein.
CHDAEc
The pertinent facts are as follows:
On December 19, 1959, Patricio Prado, Sr. died. Narcisa subsequently married Bonifacio Calpatura. In order to
support her minor children with her first husband, Narcisa and her brother-in-law, Tomas Calpatura, Sr., executed on April
26, 1968 an Agreement of Purchase and Sale whereby the former agreed to sell to the latter the northern half portion of
the property for the sum of P10,500.00. 1 On July 28, 1973, Narcisa executed a Deed of Absolute Sale in favor of Tomas
over the said property. 2
In 1976, Tomas' daughter, Flordeliza Calpatura Flora, built a two-storey duplex with firewall 3 on the northern half
portion of the property. Respondents, who occupied the southern half portion of the land, did not object to the
construction. Flordeliza Flora and her husband Wilfredo declared the property for taxation purposes 4 and paid the
corresponding taxes thereon. 5 Likewise, Maximo Calpatura, the son of Tomas' cousin, built a small house on the northern
portion of the property. Stud2005
On April 8, 1991, respondents filed a complaint for declaration of nullity of sale and delivery of possession of the
northern half portion of the subject property against petitioners Flordeliza Calpatura Flora, Dominador Calpatura and
Tomas Calpatura, Jr. before the Regional Trial Court of Quezon City, Branch 100, docketed as Civil Case No. Q-91-8404.
6 Respondents alleged that the transaction embodied in the Agreement to Purchase and Sale between Narcisa and
Tomas was one of mortgage and not of sale; that Narcisa's children tried to redeem the mortgaged property but they
learned that the blank document which their mother had signed was transformed into a Deed of Absolute Sale; that
Narcisa could not have sold the northern half portion of the property considering that she was prohibited from selling the
same within a period of 25 years from its acquisition, pursuant to the condition annotated at the back of the title; 7 that
Narcisa, as natural guardian of her children, had no authority to sell the northern half portion of the property which she
and her children co-owned; and that only P5,000.00 out of the consideration of P10,500.00 was paid by Tomas.
In their answer, petitioners countered that Narcisa owned 9/14 of the property, consisting of as her share in the
conjugal partnership with her first husband and 1/7 as her share in the estate of her deceased husband; that the
consideration of the sale in the amount of P10,500 00 had been fully paid as of April 1, 1968; that Narcisa sold her
conjugal share in order to support her minor children; that Narcisa's claim was barred by laches and prescription; and that
the Philippine Homesite and Housing Corporation, not the respondents, was the real party in interest to question the sale
within the prohibited period.
On April 2, 1997, the court a quo 8 dismissed the complaint. It found that the sale was valid; that the Agreement to
Purchase and Sale and the Deed of Absolute Sale were duly executed; that the sum of P10,500.00 as selling price for the
subject property was fully paid there being no demand for the payment of the remaining balance; that the introduction of
improvements thereon by the petitioners was without objection from the respondents; and that Roberto and Erlinda failed
to contest the transaction within four years after the discovery of the alleged fraud and reaching the majority age in
violation of Article 1391 of the Civil Code. 9 2005Stud
Petitioners appealed the decision to the Court of Appeals, where it was docketed as CA-G.R. CV No. 56843. On
October 3, 2002, a decision 10 was rendered by the Court of Appeals declaring that respondents were co-owners of the
subject property, thus the sale was valid only insofar as Narcisa's 1/7 undivided share thereon was concerned. The
dispositive portion of the said decision reads:
WHEREFORE, the appealed Decision is AFFIRMED, with the MODIFICATION that the sale in dispute is declared
valid only with respect to the one-seventh (1/7) share of plaintiff-appellant NARCISA H. PRADO in the subject property,
which is equivalent to 78.8857 square meters. In all other respects, the same decision stands. No pronouncement as to
costs.
SO ORDERED. 11
Petitioner filed a motion for reconsideration which was denied in a Resolution dated January 14, 2003. 12 Hence
this petition for review on the following assigned errors:
I
THE HONORABLE COURT OF APPEALS COMMITTED A GRAVE ABUSE OF DISCRETION IN MODIFYING
THE DECISION RENDERED BY THE REGIONAL TRIAL COURT WITHOUT TAKING INTO CONSIDERATION THAT,
ASIDE FROM THE DECLARATION OF THE VALIDITY OF THE SALE, THE PETITIONERS HEREIN HAVE TAKEN
ACTUAL POSSESSION OF THE SAID ONE-HALF () TO THE EXCLUSION OF THE RESPONDENTS AND
INTRODUCED IMPROVEMENTS THEREON. SEcdtai
II
THE HONORABLE COURT OF APPEALS COMMITTED A GRAVE ABUSE OF DISCRETION IN MODIFYING
THE DECISION RENDERED BY THE REGIONAL TRIAL COURT WITHOUT TAKING INTO CONSIDERATION THE
CLEAR AND UNEQUIVOCAL STATEMENT IN THE SALE THAT THE SAME PERTAINS TO THE CONJUGAL SHARE
OF RESPONDENT NARCISA PRADO AND THE OTHER RESPONDENTS HAD NO FINANCIAL CAPACITY TO
ACQUIRE THE SAID PROPERTY SINCE THEY WERE MINORS THEN AT THE ISSUANCE OF THE SAID TCT NO.
71344 ON AUGUST 15, 1963.
III
THE HONORABLE COURT OF APPEALS COMMITTED A GRAVE ABUSE OF DISCRETION IN NOT
DECLARING THE HEREIN RESPONDENTS GUILTY OF LACHES IN FILING THE INSTANT CASE ONLY ON APRIL 8,
1991, THAT IS 18 YEARS AFTER THE SAID SALE WITH THE PETITIONERS TAKING ACTUAL POSSESSION OF SAID
PORTION OF THE PROPERTY.
IV
THAT THE DECISION OF THE HON. COURT OF APPEALS WILL UNDULY ENRICH THE RESPONDENTS AT
THE EXPENSE OF THE HEREIN PETITIONERS. 13

At the outset, it must be stressed that only questions of law may be raised in petitions for review before this Court
under Rule 45 of the Rules of Court. 14 It was thus error for petitioners to ascribe to the Court of Appeals grave abuse of
discretion. This procedural lapse notwithstanding, in the interest of justice, this Court shall treat the issues as cases of
reversible error. 15 2005iatdc
The issues for resolution are: (1) Is the subject property conjugal or paraphernal? (2) Is the transaction a sale or a
mortgage? (3) Assuming that the transaction is a sale, what was the area of the land subject of the sale?
Article 160 of the Civil Code, which was in effect at the time the sale was entered into, provides that all property of
the marriage is presumed to belong to the conjugal partnership unless it is proved that it pertains exclusively to the
husband or to the wife. Proof of acquisition during the marriage is a condition sine qua non in order for the presumption in
favor of conjugal ownership to operate. 16
In the instant case, while Narcisa testified during cross-examination that she bought the subject property from
People's Homesite Housing Corporation with her own funds, 17 she, however admitted in the Agreement of Purchase and
Sale and the Deed of Absolute Sale that the property was her conjugal share with her first husband, Patricio, Sr. 18 A
verbal assertion that she bought the land with her own funds is inadmissible to qualify the terms of a written agreement
under the parole evidence rule. 19 The so-called parole evidence rule forbids any addition to or contradiction of the terms
of a written instrument by testimony or other evidence purporting to show that, at or before the execution of the parties'
written agreement, other or different terms were agreed upon by the parties, varying the purport of the written contract.
Whatever is not found in the writing is understood to have been waived and abandoned. 20 cdasia2005
Anent the second issue, the Deed of Absolute Sale executed by Narcisa in favor of Tomas is contained in a
notarized 21 document. In Spouses Alfarero, et al. v. Spouses Sevilla, et al., 22 it was held that a public document
executed and attested through the intervention of a notary public is evidence of the facts in a clear, unequivocal manner
therein expressed. Otherwise stated, public or notarial documents, or those instruments duly acknowledged or proved and
certified as provided by law, may be presented in evidence without further proof, the certificate of acknowledgment being
prima facie evidence of the execution of the instrument or document involved. In order to contradict the presumption of
regularity of a public document, evidence must be clear, convincing, and more than merely preponderant.
It is well-settled that in civil cases, the party that alleges a fact has the burden of proving it. 23 Except for the bare
allegation that the transaction was one of mortgage and not of sale, respondents failed to adduce evidence in support
thereof. Respondents also failed to controvert the presumption that private transactions have been fair and regular. 24
Furthermore, Narcisa, in fact did not deny that she executed an Affidavit allowing spouses Wilfredo and Flordeliza
Flora to construct a firewall between the two-storey duplex and her house sometime in 1976. The duplex was made of
strong materials, the roofing being galvanized sheets. While the deed of sale between Tomas and Narcisa was never
registered nor annotated on the title, respondents had knowledge of the possession of petitioners of the northern half
portion of the property. Obviously, respondents recognized the ownership of Tomas, petitioners' predecessor-in-interest.
2005SE
Respondents belatedly claimed that only P5,000.00 out of the P10,500.00 consideration was paid. Both the
Agreement of Purchase and Sale and the Deed of Absolute Sale state that said consideration was paid in full. Moreover,
the presumption is that there was sufficient consideration for a written contract. 25
The property being conjugal, upon the death of Patricio Prado, Sr., one-half of the subject property was
automatically reserved to the surviving spouse, Narcisa, as her share in the conjugal partnership. Patricio's rights to the
other half, in turn, were transmitted upon his death to his heirs, which includes his widow Narcisa, who is entitled to the
same share as that of each of the legitimate children. Thus, as a result of the death of Patricio, a regime of co-ownership
arose between Narcisa and the other heir in relation to the property. The remaining one-half was transmitted to his heirs
by intestate succession. By the law on intestate succession, his six children and Narcisa Prado inherited the same at oneseventh (1/7) each pro indiviso. 26 Inasmuch as Narcisa inherited one-seventh (1/7) of her husband's conjugal share in
the said property and is the owner of one-half () thereof as her conjugal share, she owns a total of 9/14 of the subject
property. Hence, Narcisa could validly convey her total undivided share in the entire property to Tomas. Narcisa and her
children are deemed co-owners of the subject property.
Neither can the respondents invoke the proscription of encumbering the property within 25 years from acquisition.
In Sarmiento, et al. v. Salud, et al., 27 it was held that: 05SEcdasia
. . . The condition that the appellees Sarmiento spouses could not resell the property except to the People's
Homesite and Housing Corporation (PHHC for short) within the next 25 years after appellees' purchasing the lot is
manifestly a condition in favor of the PHHC, and not one in favor of the Sarmiento spouses. The condition conferred no
actionable right on appellees herein, since it operated as a restriction upon their jus disponendi of the property they
bought, and thus limited their right of ownership. It follows that on the assumption that the mortgage to appellee Salud and
the foreclosure sale violated the condition in the Sarmiento contract; only the PHHC was entitled to invoke the condition
aforementioned, and not the Sarmientos. The validity or invalidity of the sheriff's foreclosure sale to appellant Salud thus
depended exclusively on the PHHC; the latter could attack the sale as violative of its right of exclusive reacquisition; but it
(PHHC) also could waive the condition and treat the sale as good, in which event, the sale can not be assailed for breach
of the condition aforestated.
Finally, no particular portion of the property could be identified as yet and delineated as the object of the sale
considering that the property had not yet been partitioned in accordance with the Rules of Court. 28 While Narcisa could
validly sell one half of the subject property, her share being 9/14 of the same, she could not have particularly conveyed the
northern portion thereof before the partition, the terms of which was still to be determined by the parties before the trial
court.
WHEREFORE, the Decision of the Court of Appeals on October 3, 2002, as well as the Resolution dated January
14, 2003 is PARTLY AFFIRMED subject to the following MODIFICATIONS: cdStud05
1)
Narcisa Prado is entitled to 9/14 of the residential land consisting of 552.20 square meters, more or less,
situated at 19th Avenue, Murphy, Quezon City and covered by Transfer Certificate of Title No. 71344;
2)
the sale of the undivided one half portion thereof by Narcisa Prado in favor of Tomas Calpatura, Sr. is
valid. 05Studcd
Furthermore, the case is REMANDED to the court of origin, only for the purpose of determining the specific
portion being conveyed in favor of Tomas Calpatura, Sr. pursuant to the partition that will be agreed upon by the
respondents. HEacAS
SO ORDERED.

THIRD DIVISION
[G.R. Nos. 154391-92. September 30, 2004.]
Spouses ISMAEL and TERESITA MACASAET, petitioners, vs. Spouses VICENTE and ROSARIO MACASAET,
respondents.
DECISION
PANGANIBAN, J p:
The present case involves a dispute between parents and children. The children were invited by the parents to
occupy the latter's two lots, out of parental love and a desire to foster family solidarity. Unfortunately, an unresolved
conflict terminated this situation. Out of pique, the parents asked them to vacate the premises. Thus, the children lost their
right to remain on the property. They have the right, however, to be indemnified for the useful improvements that they
constructed thereon in good faith and with the consent of the parents. In short, Article 448 of the Civil Code applies.
DEICaA
The Case
Before us is a Petition for Review 1 under Rule 45 of the Rules of Court, assailing the March 22, 2002 Decision 2
and the June 26, 2002 Resolution 3 of the Court of Appeals (CA) in CA-GR SP Nos. 56205 & 56467. The challenged
Decision disposed as follows:
"WHEREFORE, the assailed Decision is AFFIRMED with the following MODIFICATIONS:
'1.
Vicente and Rosario should reimburse Ismael and Teresita one-half of the value of the useful
improvements introduced in the premises prior to demand, which is equivalent to P475,000.00. In case the former refuse
to reimburse the said amount, the latter may remove the improvements, even though the land may suffer damage thereby.
They shall not, however, cause any more impairment upon the property leased than is necessary.
'2.
The award of attorney's fees is DELETED.
'3.
The records of these consolidated cases are REMANDED to the Court of origin for further proceedings to
determine the option to be taken by Vicente and Rosario and to implement the same with dispatch." 4
The assailed Resolution denied petitioners' Motion for Reconsideration. aAIcEH
The Facts
Petitioners Ismael and Teresita 5 Macasaet and Respondents Vicente and Rosario Macasaet are first-degree
relatives. Ismael is the son of respondents, and Teresita is his wife. 6
On December 10, 1997, the parents filed with the Municipal Trial Court in Cities (MTCC) of Lipa City an ejectment
suit against the children. 7 Respondents alleged that they were the owners of two (2) parcels of land covered by Transfer
Certificate of Title (TCT) Nos. T-78521 and T-103141, situated at Banay-banay, Lipa City; that by way of a verbal lease
agreement, Ismael and Teresita occupied these lots in March 1992 and used them as their residence and the situs of their
construction business; and that despite repeated demands, petitioners failed to pay the agreed rental of P500 per week. 8
Ismael and Teresita denied the existence of any verbal lease agreement. They claimed that respondents had
invited them to construct their residence and business on the subject lots in order that they could all live near one other,
employ Marivic (the sister of Ismael), and help in resolving the problems of the family. 9 They added that it was the policy
of respondents to allot the land they owned as an advance grant of inheritance in favor of their children. Thus, they
contended that the lot covered by TCT No. T-103141 had been allotted to Ismael as advance inheritance. On the other
hand, the lot covered by TCT No. T-78521 was allegedly given to petitioners as payment for construction materials used in
the renovation of respondents' house. 10
The MTCC 11 ruled in favor of respondents and ordered petitioners to vacate the premises. It opined that Ismael
and Teresita had occupied the lots, not by virtue of a verbal lease agreement, but by tolerance of Vicente and Rosario. 12
As their stay was by mere tolerance, petitioners were necessarily bound by an implied promise to vacate the lots upon
demand. 13 The MTCC dismissed their contention that one lot had been allotted as an advance inheritance, on the
ground that successional rights were inchoate. Moreover, it disbelieved petitioners' allegation that the other parcel had
been given as payment for construction materials. 14
On appeal, the regional trial court 15 (RTC) upheld the findings of the MTCC. However, the RTC allowed
respondents to appropriate the building and other improvements introduced by petitioners, after payment of the indemnity
provided for by Article 448 in relation to Articles 546 and 548 of the Civil Code. 16 It added that respondents could oblige
petitioners to purchase the land, unless its value was considerably more than the building. In the latter situation,
petitioners should pay rent if respondents would not choose to appropriate the building. 17
Upon denial of their individual Motions for Reconsideration, the parties filed with the CA separate Petitions for
Review, which were later consolidated. 18
Ruling of the Court of Appeals
The CA sustained the finding of the two lower courts that Ismael and Teresita had been occupying the subject lots
only by the tolerance of Vicente and Rosario. 19 Thus, possession of the subject lots by petitioners became illegal upon
their receipt of respondents' letter to vacate it. 20
Citing Calubayan v. Pascual, 21 the CA further ruled that petitioners' status was analogous to that of a lessee or a
tenant whose term of lease had expired, but whose occupancy continued by tolerance of the owner. 22 Consequently, in
ascertaining the right of petitioners to be reimbursed for the improvements they had introduced on respondents'
properties, 23 the appellate court applied the Civil Code's provisions on lease. The CA modified the RTC Decision by
declaring that Article 448 of the Civil Code was inapplicable. The CA opined that under Article 1678 of the same Code,
Ismael and Teresita had the right to be reimbursed for one half of the value of the improvements made. 24 2005Stud
Not satisfied with the CA's ruling, petitioners brought this recourse to this Court. 25
The Issues
Petitioners raise the following issues for our consideration:
"1.a)
Whether or not Section 17[,] Rule 70 of the Rules of Court on Judgment should apply in the rendition of
the decision in this case;
b)
Whether or not the Complaint should have been dismissed;
c)
Whether or not damages including attorney's fees should have been awarded to herein petitioners;
"2.a)
Whether or not the rule on appearance of parties during the Pretrial should apply on appearance of
parties during Preliminary Conference in an unlawful detainer suit;
b)
Whether or not the case of Philippine Pryce Assurance Corporation vs. Court of Appeals (230 SCRA 164)
is applicable to appearance of parties in an unlawful detainer suit;

"3.
Whether or not Article 1678 of the Civil Code should apply to the case on the matters of improvements, or
is it Article 447 of the Civil Code in relation to the Article 453 and 454 thereof that should apply, if ever to apply the Civil
Code;
"4.
Whether or not the [D]ecision of the Court of Appeals is supported by evidence, appropriate laws, rules
and jurisprudence;
"5.
Whether or not Assisting Judge Norberto Mercado of the MTCC Lipa City should be held accountable in
rendering the MTCC [D]ecision;
"6.
Whether or not Atty. Glenn Mendoza and Atty. Andrew Linatoc of the same [l]aw office should be held
accountable for pursuing the [e]jectment case[.]"26
The Court's Ruling
The Petition is partly meritorious. SEHACI
First Issue:
Ejectment
Who is entitled to the physical or material possession of the premises? At the outset, we stress that this is the
main issue in ejectment proceedings. 27 In the present case, petitioners failed to justify their right to retain possession of
the subject lots, which respondents own. Since possession is one of the attributes of ownership, 28 respondents clearly
are entitled to physical or material possession.
Allegations of the Complaint
Petitioners allege that they cannot be ejected from the lots, because respondents based their Complaint regarding
the nonpayment of rentals on a verbal lease agreement, which the latter failed to prove. 29 Petitioners contend that the
lower courts erred in using another ground (tolerance of possession) to eject them.
In actions for unlawful detainer, possession that was originally lawful becomes unlawful upon the expiration or
termination of the defendant's right to possess, arising from an express or implied contract. 30 In other words, the
plaintiff's cause of action comes from the expiration or termination of the defendant's right to continue possession. 31 The
case resulting therefrom must be filed within one year from the date of the last demand.
To show a cause of action in an unlawful detainer, an allegation that the defendant is illegally withholding
possession from the plaintiff is sufficient. The complaint may lie even if it does not employ the terminology of the law,
provided the said pleading is couched in a language adequately stating that the withholding of possession or the refusal to
vacate has become unlawful. 32 It is equally settled that the jurisdiction of the court, as well as the nature of the action, is
determined from the averments of the complaint. 33
In the present case, the Complaint alleged that despite demands, petitioners "refused to pay the accrued rentals
and [to] vacate the leased premises." 34 It prayed that judgment be rendered "[o]rdering [petitioners] and all those
claiming rights under them to vacate the properties . . . and remove the structures . . . constructed thereon." 35 Effectively
then, respondents averred that petitioners' original lawful occupation of the subject lots had become unlawful. CSDcTH
The MTCC found sufficient cause to eject petitioners. While it disbelieved the existence of a verbal lease
agreement, it nevertheless concluded that petitioners' occupation of the subject lots was by mere tolerance of
respondents. Basing its conclusion on the fact that the parties were close relatives, the MTCC ruled thus:
". . . [T]he parties herein are first degree relatives. Because of this relationship, this Court takes judicial notice of
the love, care, concern and protection imbued upon the parents towards their [children], i.e., in the instant case, the love,
care, concern and protection of the [respondents] to the [petitioners]. With this in mind, this Court is inclined to believe the
position of the [petitioners] that there was no such verbal lease agreement between the parties herein that took place in
1992. . . .
"From the allegations of the [petitioners], this Court is convinced that their stay and occupancy of the subject
premises was by mere tolerance of the [respondents], and not by virtue of a verbal lease agreement between them." 36
Having found a cause of action for unlawful detainer, the MTCC (as well as the RTC and the CA) did not err in
ordering the ejectment of petitioners as prayed for by respondents. There was no violation of Section 17 of Rule 70 37 of
the Rules of Court. As earlier explained, unlawful detainer was sufficiently alleged in the Complaint and duly proven during
the trial. Significantly, the issue of whether there was enough ground to eject petitioners was raised during the preliminary
conference. 38
Not Merely Tolerated Possession
Petitioners dispute the lower courts' finding that they occupied the subject lots on the basis of mere tolerance.
They argue that their occupation was not under such condition, since respondents had invited, offered and persuaded
them to use those properties. 39
This Court has consistently held that those who occupy the land of another at the latter's tolerance or permission,
without any contract between them, are necessarily bound by an implied promise that the occupants will vacate the
property upon demand. 40 A summary action for ejectment is the proper remedy to enforce this implied obligation. 41 The
unlawful deprivation or withholding of possession is to be counted from the date of the demand to vacate. 42
Toleration is defined as "the act or practice of permitting or enduring something not wholly approved of." 43
Sarona v. Villegas 44 described what tolerated acts means, in this language:
"Professor Arturo M. Tolentino states that acts merely tolerated are 'those which by reason of neighborliness or
familiarity, the owner of property allows his neighbor or another person to do on the property; they are generally those
particular services or benefits which one's property can give to another without material injury or prejudice to the owner,
who permits them out of friendship or courtesy.' . . . And, Tolentino continues, even though 'this is continued for a long
time, no right will be acquired by prescription." . . . Further expounding on the concept, Tolentino writes: 'There is tacit
consent of the possessor to the acts which are merely tolerated. Thus, not every case of knowledge and silence on the
part of the possessor can be considered mere tolerance. By virtue of tolerance that is considered as an authorization,
permission or license, acts of possession are realized or performed. The question reduces itself to the existence or nonexistence of the permission." 45
We hold that the facts of the present case rule out the finding of possession by mere tolerance. Petitioners were
able to establish that respondents had invited them to occupy the subject lots in order that they could all live near one
other and help in resolving family problems. 46 By occupying those lots, petitioners demonstrated their acceptance of the
invitation. Hence, there was a meeting of minds, and an agreement regarding possession of the lots impliedly arose
between the parties. AcSHCD
The occupancy of the subject lots by petitioners was not merely "something not wholly approved of" by
respondents. Neither did it arise from what Tolentino refers to as "neighborliness or familiarity." In point of fact, their

possession was upon the invitation of and with the complete approval of respondents, who desired that their children
would occupy the premises. It arose from familial love and a desire for family solidarity, which are basic Filipino traits.
Right to Use the Lots Terminated
That Ismael and Teresita had a right to occupy the lots is therefore clear. The issue is the duration of possession.
In the absence of a stipulation on this point, Article 1197 of the Civil Code allows the courts to fix the duration or the
period.
"Article 1197. If the obligation does not fix a period, but from its nature and the circumstances it can be inferred
that a period was intended, the courts may fix the duration thereof.
"The courts shall also fix the duration of the period when it depends upon the will of the debtor.
"In every case the courts shall determine such period as may under the circumstances have been probably
contemplated by the parties. Once fixed by the courts, the period cannot be changed by them."
Article 1197, however, applies to a situation in which the parties intended a period. Such qualification cannot be
inferred from the facts of the present case.
To repeat, when Vicente and Rosario invited their children to use the lots, they did so out of parental love and a
desire for solidarity expected from Filipino parents. No period was intended by the parties. Their mere failure to fix the
duration of their agreement does not necessarily justify or authorize the courts to do so. 47
Based on respondents' reasons for gratuitously allowing petitioners to use the lots, it can be safely concluded that
the agreement subsisted as long as the parents and the children mutually benefited from the arrangement. Effectively,
there is a resolutory condition in such an agreement. 48 Thus, when a change in the condition existing between the
parties occurs like a change of ownership, necessity, death of either party or unresolved conflict or animosity the
agreement may be deemed terminated. Having been based on parental love, the agreement would end upon the
dissipation of the affection. ICTacD
When persistent conflict and animosity overtook the love and solidarity between the parents and the children, the
purpose of the agreement ceased. 49 Thus, petitioners no longer had any cause for continued possession of the lots.
Their right to use the properties became untenable. It ceased upon their receipt of the notice to vacate. And because they
refused to heed the demand, ejectment was the proper remedy against them. Their possession, which was originally
lawful, became unlawful when the reason therefor love and solidarity ceased to exist between them.
No Right to Retain Possession
Petitioners have not given this Court adequate reasons to reverse the lower courts' dismissal of their contention
that Lots T-78521 and T-103141, respectively, were allegedly allotted to them as part of their inheritance and given in
consideration for past debts.
The right of petitioners to inherit from their parents is merely inchoate and is vested only upon the latters' demise.
Indisputably, rights of succession are transmitted only from the moment of death of the decedent. 50 Assuming that there
was an "allotment" of inheritance, ownership nonetheless remained with respondents. Moreover, an intention to confer title
to certain persons in the future is not inconsistent with the owners' taking back possession in the meantime for any reason
deemed sufficient. 51 Other than their self-serving testimonies and their affidavits, petitioners offered no credible evidence
to support their outlandish claim of inheritance "allocation."
We also agree with the lower courts that petitioners failed to prove the allegation that, through a dation in
payment, Lot T-78521 had been transferred to the latter as payment for respondents' debts. 52 The evidence presented
by petitioners related only to the alleged indebtedness of the parents arising from the latter's purported purchases and
advances. 53 There was no sufficient proof that respondents had entered into a contract of dation to settle the alleged
debt. Petitioners even stated that there was a disagreement in the accounting of the purported debt, 54 a fact that
disproves a meeting of the minds with the parents. DCaEAS
Petitioners also admitted that a portion of the alleged debt is the subject matter of a collection case against
respondents (Civil Case No. 0594-96). 55 Thus, the former's allegation that the indebtedness has been paid through a
dation cannot be given credence, inconsistent as it is with their action to recover the same debt.
Despite their protestations, petitioners recognized the right of the parents to recover the premises when they
admitted in their Position Paper filed with the MTCC that respondents had a title to the lots.
"The [respondents] want to get their property because the title is theirs, the [petitioners] do not object but what is
due the [petitioners] including the reparation for the tarnish of their dignity and honor must be given the [petitioners] for the
benefits of their children before the premises will be turned over." 56
As a rule, the right of ownership carries with it the right of possession.
Second Issue:
Appearance at the Preliminary Conference
Section 8 of Rule 70 of the Rules of Court requires the appearance of the plaintiff and the defendant during the
preliminary conference. On the basis of this provision, petitioners claim that the MTCC should have dismissed the case
upon the failure of respondents to attend the conference. However, petitioners do not dispute that an attorney-in-fact with
a written authorization from respondents appeared during the preliminary conference. 57 The issue then is whether the
rules on ejectment allow a representative to substitute for a party's personal appearance.
Unless inconsistent with Rule 70, the provisions of Rule 18 on pretrial applies to the preliminary conference. 58
Under Section 4 of this Rule, the nonappearance of a party may be excused by the showing of a valid cause; or by the
appearance of a representative, who has been fully authorized in writing to enter into an amicable settlement, to submit to
alternative modes of dispute resolution, and to enter into stipulations or admissions of facts and of documents. 59
Section 4 of Rule 18 may supplement Section 8 of Rule 70. Thus, the spirit behind the exception to personal
appearance under the rules on pretrial is applicable to the preliminary conference. If there are valid reasons or if a
representative has a "special authority," a party's appearance may be waived. As petitioners are challenging only the
applicability of the rules on pretrial to the rule on preliminary conference, the written authorization from respondents can
indeed be readily considered as a "special authorization."
Third Issue:
Rights of a Builder in Good Faith
As applied to the present case, accession refers to the right of the owner to everything that is incorporated or
attached to the property. 60 Accession industrial building, planting and sowing on an immovable is governed by
Articles 445 to 456 of the Civil Code. DTESIA
Articles 447 and 1678 of the
Civil Code Inapplicable

To buttress their claim of reimbursement for the improvements introduced on the property, petitioners cite Article
447. 61 They allege that the CA erred in applying Article 1678, since they had no lease agreement with respondents.
We clarify. Article 447 is not applicable, because it relates to the rules that apply when the owner of the property
uses the materials of another. It does not refer to the instance when a possessor builds on the property of another, which
is the factual milieu here.
In view of the unique factual setting of the instant case, the contention of petitioners regarding the inapplicability of
Article 1678 deserves attention. The CA applied the provisions on lease, because it found their possession by mere
tolerance comparable with that of a lessee, per the pronouncement in Calubayan v. Pascual, 62 from which we quote:
". . . It has been held that a person who occupies the land of another at the latter's tolerance or permission,
without any contract between them, is necessarily bound by an implied promise that he will vacate upon demand, failing
which a summary action for ejectment is the proper remedy against them. The status of defendant is analogous to that of
a lessee or tenant whose term of lease has expired but whose occupancy continued by tolerance of the owner. In such a
case, the unlawful deprivation or withholding of possession is to be counted from the date of the demand to vacate." 63
(Emphasis in the original.)
As explained earlier, Ismael and Teresita's possession of the two lots was not by mere tolerance, a circumstance
that negates the applicability of Calubayan. TcHDIA
Article 448 Applicable
On the other hand, when a person builds in good faith on the land of another, the applicable provision is Article
448, which reads: 64
"Article 448.
The owner of the land on which anything has been built, sown or planted in good faith, shall have
the right to appropriate as his own the works, sowing or planting, after payment of the indemnity provided for in Articles
546 and 548, or to oblige the one who built or planted to pay the price of the land, and the one who sowed, the proper
rent. However, the builder or planter cannot be obliged to buy the land if its value is considerably more than that of the
building or trees. In such case, he shall pay reasonable rent, if the owner of the land does not choose to appropriate the
building or trees after proper indemnity. The parties shall agree upon the terms of the lease and in case of disagreement,
the court shall fix the terms thereof."
This Court has ruled that this provision covers only cases in which the builders, sowers or planters believe
themselves to be owners of the land or, at least, to have a claim of title thereto. 65 It does not apply when the interest is
merely that of a holder, such as a mere tenant, agent or usufructuary. 66 From these pronouncements, good faith is
identified by the belief that the land is owned; or that by some title one has the right to build, plant, or sow thereon.
67
However, in some special cases, this Court has used Article 448 by recognizing good faith beyond this limited
definition. Thus, in Del Campo v. Abesia, 68 this provision was applied to one whose house despite having been built at
the time he was still co-owner overlapped with the land of another. 69 This article was also applied to cases wherein a
builder had constructed improvements with the consent of the owner. The Court ruled that the law deemed the builder to
be in good faith. 70 In Sarmiento v. Agana, 71 the builders were found to be in good faith despite their reliance on the
consent of another, whom they had mistakenly believed to be the owner of the land. 72
Based on the aforecited special cases, Article 448 applies to the present factual milieu. The established facts of
this case show that respondents fully consented to the improvements introduced by petitioners. In fact, because the
children occupied the lots upon their invitation, the parents certainly knew and approved of the construction of the
improvements introduced thereon. 73 Thus, petitioners may be deemed to have been in good faith when they built the
structures on those lots. DcICEa
The instant case is factually similar to Javier v. Javier. 74 In that case, this Court deemed the son to be in good
faith for building the improvement (the house) with the knowledge and consent of his father, to whom belonged the land
upon which it was built. Thus, Article 448 75 was applied.
Rule on Useful Expenses
The structures built by petitioners were "useful" improvements, because they augmented the value or income of
the bare lots. 76 Thus, the indemnity to be paid by respondents under Article 448 is provided for by Article 546, which we
quote:
"Art. 546.
Necessary expenses shall be refunded to every possessor; but only the possessor in good faith
may retain the thing until he has been reimbursed therefor.
"Useful expenses shall be refunded only to the possessor in good faith with the same right of retention, the person
who has defeated him in the possession having the option of refunding the amount of the expenses or of paying the
increase in value which the thing may have acquired by reason thereof."
Consequently, respondents have the right to appropriate as their own the building and other improvements
on the subject lots, but only after (1) refunding the expenses of petitioners or (2) paying the increase in value acquired by
the properties by reason thereof. They have the option to oblige petitioners to pay the price of the land, unless its value is
considerably more than that of the structures in which case, petitioners shall pay reasonable rent.
In accordance with Depra v. Dumlao, 77 this case must be remanded to the trial court to determine matters
necessary for the proper application of Article 448 in relation to Article 546. Such matters include the option that
respondents would take and the amount of indemnity that they would pay, should they decide to appropriate the
improvements on the lots. We disagree with the CA's computation of useful expenses, which were based only on
petitioners' bare allegations in their Answer. 78
Ruling on Improvement Justified
While, ordinarily, the jurisdiction of the MTCC on ejectment proceedings is limited to the issue of physical or
material possession of the property in question, this Court finds it necessary to abbreviate the issue on the improvements
in relation to Article 448. First, the determination of the parties' right to those improvements is intimately connected with
the MTCC proceedings in the light of the ejectment of petitioners. Second, there is no dispute that while they constructed
the improvements, respondents owned the land. Third, both parties raised no objection when the RTC and the CA ruled
accordingly on this matter. THcEaS
Equitable considerations compel us to settle this point immediately, pro hoc vice, to avoid needless delay. Both
parties have already been heard on this issue; to dillydally or equivocate would not serve the cause of substantial justice.
Other Issues Raised
Given the foregoing rulings, it is no longer necessary to address petitioners' allegation that the MTCC judge and
respondents' lawyers should be respectively held personally accountable for the Decision and for filing the case. 79 The

insinuation of petitioners that the lawyers manipulated the issuance of a false barangay certification is unavailing. 80 Their
contention that respondents did not attend the barangay conciliation proceedings was based solely on hearsay, which has
little or no probative value. 81
WHEREFORE, the assailed Decision and Resolution of the Court of Appeals are AFFIRMED with the following
MODIFICATIONS:
1.
The portion requiring Spouses Vicente and Rosario Macasaet to reimburse one half of the value of the
useful improvements, amounting to P475,000, and the right of Spouses Ismael and Rosita Macasaet to remove those
improvements (if the former refuses to reimburse) is DELETED.
2.
The case is REMANDED to the court of origin for further proceedings to determine the facts essential to
the proper application of Articles 448 and 546 of the Civil Code, specifically to the following matters:
a.
Spouses Vicente and Rosario Macasaet's option to appropriate as their own the improvements on
the lots, after paying the indemnity, as provided under Article 546 in relation to Article 448 of the Civil Code; or in requiring
Spouses Ismael and Rosita Macasaet to pay for the value of the lots, unless it is considerably more than that of the
improvements, in which case petitioners shall pay reasonable rent based upon the terms provided under the Civil Code
SEcdtai
b.
The value of the useful expenses incurred by Spouses Ismael and Rosita Macasaet in the construction of
the improvements on the lots
c.
The increase in value acquired by the lots by reason of the useful improvements
d.
Spouses Vicente and Rosario Macasaet's choice of type of indemnity to be paid (whether b or c)
e.
Whether the value of the lots is considerably more than that of the improvements built thereon
No pronouncement as to costs. aTEACS
SO ORDERED.

SECOND DIVISION
[G.R. No. 149351. March 17, 2004.]
SPEED DISTRIBUTING CORP., LITA MARCELO, IRENEO MARCELO and PEDRO AQUINO, petitioners, vs.
COURT OF APPEALS and RUFINA LIM, respondents.
DECISION
CALLEJO, SR., J p:
This is a petition for review of the Decision 1 of the Court of Appeals in CA-G.R. No. 52214 (CV) reversing the
November 21, 1995 Order 2 of the Regional Trial Court of Quezon City, Branch 222, dismissing the complaint in Civil
Case No. Q-95-24588, and its August 8, 2001 Resolution denying the Motion for Reconsideration of the aforesaid
decision.
The Antecedents
On September 20, 1953, Pastor Y. Lim married private respondent Rufina Luy Lim. 3 During the early part of their
marriage, Pastor organized some family corporations using their conjugal funds. Among these corporations was Skyline
International Corporation (Skyline, for brevity) which was engaged in the importation and sale of Hankook Brand Korean
Tires and the acquisition of real estate. The couple were incorporators and major stockholders of the corporation and were
also employed therein.
Pastor and the private respondent did not have a child. They decided to "adopt" Leonard Lim and petitioner Lita
Lim Marcelo, who were children of their distant poor relatives in Zamboanga City. There was, however, no formal court
adoption. Sometime thereafter, marital problems arose, as a result of which the private respondent stopped working at
Skyline. As the domestic problems remained unresolved, Pastor and the private respondent jointly filed on August 13,
1968 a Petition before the Juvenile and Domestic Relations Court of Quezon City, for voluntary dissolution of conjugal
properties. As their differences worsened, the private respondent filed on January 27, 1971 a petition for legal separation
against Pastor on the ground of infidelity before the then Juvenile and Domestic Relations Court of Quezon City. The
petition was amended into one for Support with Alimony and the case was docketed as Civil Case No. QE-0030.
cDCaTS
On February 17, 1972, the court rendered a decision, awarding P3,000 monthly support to the private respondent
and the children, the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered:
1.
Ordering defendant to pay plaintiff monthly support of P3,000.00 effective as of February, 1971;
2.
Ordering defendant to pay plaintiff attorney's fees in the sum of P2,000.00, plus the cost of this suit. 4
On June 24, 1975, the private respondent filed a motion for execution. The court issued an order granting the
motion and the sheriff levied on the properties of Skyline. The latter filed, on December 19, 1975, a third-party claim,
alleging that the properties levied were its personal properties and not those of Pastor, who was only one of its
stockholders. The private respondent filed a motion to quash Skyline's claim, which the court granted.
Skyline filed a petition for certiorari with prayer for temporary restraining order before the Court of Appeals for the
nullification of the order of the trial court quashing the third-party claim. The case was docketed as CA-G.R. No. 05312
(SP). The appellate court issued a temporary restraining order on April 27, 1976. On June 23, 1976, the Court of Appeals
rendered a decision dismissing the petition, thus, lifting the restraining order. 5 The appellate court ruled as follows:
While it is recognized as "lawful to obtain a corporation charter, even with a single substantial stockholder, to
engage in a specific activity, and such activity may co-exist with other private activities of the stockholder" (Liddel & Co.,
Inc. vs. Collector of Internal Revenue, L-9687, June 30, 1961, 2 SCRA 632), the corporation's distinct personality will be
disregarded when it is so "controlled and its affairs so conducted as to make it merely an instrumentality, agency or
conduit of another" (NAMARCO vs. Associated Finance Company, supra).cdasia2005
It is not disputed that petitioner Skyline International, Inc. was a conjugal enterprise (p. 2, Decision) before its
incorporation in December 1970 (p. 10, id.), when it was still a proprietorship. Petitioner Skyline International, Inc. is still
engaged in the sale of automotive parts and dealership of Firestone Rubber and Tires which business it was already
doing when it was still a proprietorship. Respondent Court found that the only assets of petitioner corporation are the
conjugal properties. Thus, respondent Court concludes that "it is safe to assume that Skyline International Corporation is
another name for Mr. and Mrs. Pastor Y. Lim in person." In fact, Pastor Y. Lim admitted that the other incorporators are
their former employees and their respective shares are nominal (Decision, pp. 14-15).
The above facts are more than enough justification for respondent Court to pierce the veil of corporate fiction.
Consequently, we find the questioned orders to be in order. 6
Skyline, then, filed a petition for review before this Court, but the petition was dismissed in a Resolution dated
August 6, 1976. 7
On August 21, 1987, the Speed Distributing Corporation (Speed, for brevity), was registered with the Securities
and Exchange Commission, with Pastor Lim as one of the incorporators. He owned ten shares, valued at P100.00 per
share. The following were the names of the incorporators, the number of shares respectively subscribed to by them and
the amount paid up:
Shares Subscribed
Paid
Lita T. Lim
11,200 P1,120,000.00 P280,000.00
Leonard L. Lim 1,000 100,000.00
25,000.00
Lina S. Lim
150
15,000.00
3,750.00
Larry S. Lim
140
14,000.00
3,500.00
Pastor Y. Lim 10
1,000.00
250.00
====== =========
========
12,500 P1,250,000.00 P312,500.00 8
Petitioner Lita Lim-Marcelo was elected treasurer of the corporation.
On June 21, 1991, the Leslim Corporation (Leslim, for brevity), was registered with the Securities and Exchange
Commission with a capital stock of P12,000,000.00, divided into 120,000 shares at par value of P100.00 per share. Pastor
Lim subscribed to 95,700 shares valued at P9,570,000.00. The incorporators, the number of shares they subscribed to
and the amounts paid for were indicated in the articles of incorporation as follows:
Name No. of Share
Amount Subscribed
Teresa T. Lim 24,000 P2,400,000.00
Leonard L. Lim 100
10,000.00
Larry S. Lim
100
10,000.00

Lina L. Lim
100
10,000.00
Pastor Y. Lim 95,700 9,570,000.00
====== ===========
120,000
P12,000,000.00
xxx
xxx
xxx
The following persons have paid on the shares of the capital stock for which they have subscribed the amount set
after their names respectively:
Name Amount Paid
Teresa T. Lim P600,000.00
Leonard L. Lim 2,500.00
Larry S. Lim
2,500.00
Lina L. Lim
2,500.00
Pastor Y. Lim P2,392,500.00
============
P3,000,000.00 9
Under the articles of incorporation, Pastor Lim was the treasurer-in-trust of the corporation. 10 The Vice-President
and Treasurer of the corporation was petitioner Lita Lim-Marcelo, now married to petitioner Ireneo Marcelo.
On August 26, 1994, Leslim Corporation executed a deed of absolute sale in favor of Speed, represented by its
Vice-President, petitioner Ireneo Marcelo, over the parcel of lot located at Diliman, Quezon City, covered by TCT No.
36617 for the price of P3,900,000.00. 11 Petitioner Lita Lim-Marcelo, the Vice-President of Leslim 12 signed the deed for
and in behalf of the corporation. She was authorized by the Board of Directors in a Resolution August 19, 1994 to sign the
said deed and to receive the purchase price for and in behalf of Leslim. The said Resolution was certified by corporate
secretary Pedro Aquino on August 22, 1994. 13 Consequently, TCT No. 36617 which was in the name of Leslim, was
cancelled and a new one, TCT No. T-116716, was issued to and in the name of Speed. 14
On June 11, 1994, Pastor Lim died intestate and was survived by his wife, the private respondent. On March 17,
1995, the private respondent, through her nephew and attorney-in-fact George Luy, filed a petition for the administration of
the estate of her deceased husband before the Regional Trial Court of Quezon City, docketed as Special Proceedings No.
Q-95-23334. 15 The case was raffled to Branch 93. The private respondent filed a motion praying for the annotation of a
notice of lis pendens at the dorsal portion of all titles over the properties in the name of Pastor. Included in the said
properties were those registered in the name of other corporations of which Pastor was a stockholder, including that
parcel of land covered by TCT No. T-116717 registered under the name of Speed. The court granted the motion. The
affected corporations, including Speed, filed motions to cancel the notices of lis pendens and motions for exclusion of
certain properties from Pastor's estate. On June 8, 1995, the Court granted the motions and ordered the exclusion of
certain properties from the estate of Pastor and the cancellation of the notices of lis pendens on properties registered in
the name of the said corporations, including that covered by TCT No. T-116716 under the name of Speed. aDcTHE
On June 27, 1995, the private respondent filed a verified amended petition in SP No. Q-95-23334 alleging, among
others, that during his lifetime, Pastor substantially owned the following business entities: Skyline Sales Corporation,
Speed Distributing, Inc., and Leslim Corporation:
5.
That the following real properties, although registered in the name of the above entities, were actually
acquired by Pastor Y. Lim during his marriage with petitioner, to wit:
CORPORATION
TITLE LOCATION
b.
Leslim Corp.
TCT No. 36617 Quezon City
but now illegally transferred to and registered in the name of Speed Distributing, Inc. under TCT No. 116716. 16
On July 4, 1995, the probate court issued an Order setting aside its June 8, 1995 Order and directed the Register
of Deeds to reinstate the notice of lis pendens on TCT No. T-116716. The court denied the motion for the reconsideration
of the said order.
Speed filed a petition for certiorari with the Court of Appeals for the nullification of the July 4, 1995 and September
12, 1995 Orders of the trial court, docketed as CA-G.R. No. 38617 (SP).
Meanwhile, on August 1, 1995, the private respondent filed a complaint against Speed, and the petitioners with
the RTC of Quezon City, for the nullification of the Deed of Absolute Sale executed by Leslim in favor of Speed over the
property covered by TCT No. T-36617, and the cancellation of TCT No. T-11676, with damages before the RTC of Quezon
City. The case was raffled to Branch 222, and was docketed as Q-95-24588. The private respondent alleged, inter alia,
that:
xxx
xxx
xxx
6.
Plaintiff is the surviving spouse of the late Pastor Y. Lim who died intestate on June 11, 1994, but leaving
several properties, real and personal, situated in Quezon City, Makati City, Rizal Province, Las Pias, Valenzuela, Manila,
Cavite, Masbate and other parts of the country . . .
7.
During the existence of the marriage of plaintiff and Pastor Y. Lim, the latter formed, among others, Leslim
Corporation, and he actually owned the same as in fact he had in his name 95,700 out of the 120,000 shares of the
authorized capital stock. The remaining shares of stocks were listed in the name of some persons who were actually his
dummies, and were made to appear as stockholders of Leslim Corporation only for purposes of registration with the
Securities and Exchange Commission . . .
8.
Leslim Corporation, in turn, is a registered owner of a certain parcel of land located in Diliman, Quezon
City, as evidenced by TCT No. 36617, issued by defendant Register of Deeds, copy of which is hereto attached as Annex
"C."
9.
Plaintiff initiated an intestate proceedings on the estate of her deceased husband in order to lay claim on
her conjugal share thereon. She then started to verify the various TCTs of the real property in the name of her deceased
husband, including those in the name of Leslim Corporation, and she discovered that TCT No. 36617 had already been
canceled and in lieu thereof, TCT No. 116716 was issued by defendant Register of Deeds in the name of defendant
Corporation . . . 2005SE
10.
Upon further verification, plaintiff discovered that the basis of the cancellation of TCT No. 36617 in favor
of TCT No. 116716 is a Deed of Sale signed and executed by defendant Lita Marcelo who misrepresented herself as Vice
President of Leslim Corporation and as such she was purportedly authorized to dispose of the property in question in
favor of defendant corporation, which latter corporation was allegedly represented in the transaction by her husband,
herein defendant Ireneo Marcelo who claimed himself as the Vice President of defendant corporation . . .

11.
To give a semblance of legality to the feigned transaction of sale, defendant Pedro Aquino,
misrepresenting himself as the corporate secretary of Leslim Corporation, executed a simulated/falsified secretary's
certificate, wherein he stated that in an alleged special meeting of the Board of Directors of Leslim Corporation held on
August 19, 1994 in its office at 1006 Quezon Avenue, Quezon City, defendant Lita Marcelo was allegedly authorized by
the Board to enter into the transaction in question . . .
12.
The transfer of the property from Leslim to defendant corporation is imaginary, the deed of sale and the
secretary's certificate are simulated, hence, null and void, as shown below:
13.
First of all, there was no such special meeting of the board of directors of Leslim Corporation on August
19, 1994, contrary to the allegation in the secretary's certificate. No notices to that effect were ever sent to Pastor Lim, a
director and owner of 79.75 per cent of the capital stock of Leslim Corporation. Secondly, there was never a meeting of
the stockholders wherein more than two-thirds of the stocks were present in order to approve the sale of all or
substantially all of the assets consisting of real properties of Leslim Corporation. Indeed, no such meeting could have
been held because Pastor Lim, who owned practically two-thirds of the total capital stock, had already died on June 11,
1994. The last meeting of stockholders of Leslim Corporation was held in January, 1994. Since then up to the present, no
other stockholder's meeting, special or otherwise, was ever held by Leslim Corporation.
14.
Thirdly, the place of the alleged special stockholders meeting could not have occurred in the place where
it was purportedly held, namely, 1006 Quezon Avenue, Quezon City. This place is the address of Accurate Distributing,
Inc., which had been under the control of the group of Estrelita Cabarles since August 1994 up to the present. On the
other hand, defendants Lita Marcelo, Ireneo Marcelo, and Pedro Aquino and their cohorts are the adversaries of Estrelita
Cabarles in several cases, civil and criminal, pending before various courts in Metro Manila and suburbs. The control and
possession by the group of Cabarles of the premises ineluctably shows that no meeting was ever held thereon by their
adversaries. Fourthly, there was never any payment made to Leslim Corporation respecting the alleged purchase price.
15.
As a consequence of the above, defendant Lita Marcelo could not have been the Vice President of Leslim
Corporation at the time the simulated deed of sale in question was executed, contrary to her claim thereon. Besides,
defendant Lita Marcelo has never been a stockholder, much less a director of Leslim Corporation. Hence, it follows that
the subject deed of absolute sale and the secretary's certificate are both simulated, and TCT No. 116716 of no force and
effect, necessitating as it does its cancellation. The imaginary transaction of sale was clearly resorted to by defendants
after the August 19, 1994 special stockholders' meeting of Accurate Distributing Inc., where in the ground of Estrelita
Cabarles were elected as Board of Directors and corporate officers and in order to deprive plaintiff of her conjugal share
and the other heirs of Pastor Y. Lim of their shares in his estate. In fact, all the real property registered in the name of
Leslim Corporation and in Nellmart Corporation wherein Pastor Lim is also the majority stockholder had been transferred
by defendants and their cohorts to themselves or to entities controlled by them, all at practically the same time. Thus:
a.
TCT No. 36617 Deed of Sale dated August 22, 1994 from Leslim to defendant Corporation. Amount
P3,400,000.00.
b.
TCT No. 66001 Deed of Sale dated August 26, 1994 from Leslim to Auto Truck TBA. Amount
P10,500,000.00.
c.
TCT No. 101730 Deed of Sale dated August 26, 1994 from Leslim to Skyline Sales Corporation.
Amount P15,500,000.00.
d.
TCT No. T-48028 in the name of Nellmart but illegally transferred to defendant corporation under TCT No.
116718.
e.
TCT No. 236236 in the name of Nellmart but illegally transferred to Alliance Marketing, Inc., under TCT
No. 285400.
f.
TCT No. 236237 in the name of Nellmart but illegally transferred to Alliance Marketing, Inc. under TCT
No. 285399.
16.
The same scheme was resorted to by defendants and their cohorts in divesting other corporations of all
real property, where Pastor Lim is the stockholder. Thus, the motives of defendants in conspiracy with each other and with
several other persons and entities are one and the same, namely: to monopolize the control, possession, enjoyment and
ownership of all the estate of Pastor Lim, thereby depriving plaintiff of her conjugal share as well as her own share in her
husband's own estate.
17.
By reason of these acts of defendants, plaintiff was constrained to hire the services of counsel for a fee of
P50,000.00 and appearance fee of P1,500.00 per hearing. She likewise suffered sleepless nights and wounded feelings,
which if converted into its monetary equivalent would be P100,000.00, more or less.
18.
In order to prevent defendants from repeating the unlawful acts, they should be condemned by pay
exemplary damages in the amount of P100,000.00. 17
The private respondent prayed that, after due proceedings, judgment be rendered in her favor, thus:
WHEREFORE, premises considered, it is respectfully prayed of this Honorable Court that after notice and
hearing, judgment be rendered:
a.
declaring the secretary's certificate and the deed of sale under question null and void;
b.
cancelling TCT No. 116716 issued in the name of defendant Speed Distributing Corporation for being
without basis in fact and in law;
c.
ordering defendants to pay jointly and severally the amount of P100,000.00 exemplary damages;
d.
ordering defendants to play (sic) plaintiff jointly and severally the amount of P50,000.00 attorney's fees
and P1,000.00 appearance fee per hearing.
e.
Ordering defendants to pay the cost of suit. 18
In their answer with compulsory counterclaim, the petitioners specifically denied the material allegations of the
complaint, and by way of special and affirmative defenses, alleged that the private respondent (the plaintiff therein), was
not privy to the deed of sale executed by Leslim and Speed. As such, she was not the real party-in-interest and had no
cause of action against the defendants. Pursuant to Presidential Decree No. 902-A, the SEC, not the RTC, had jurisdiction
over the complaint, as it was evident that the complaint involved an intra-corporate controversy. 19
In her reply, the private respondent alleged that even if she was not privy to the deed of sale over the subject
property, she was entitled to its income, and her right accrued at the time of Pastor's death on June 11, 1994.
On September 4, 1995, the RTC issued an Order in Special Proceedings No. 95-2334 granting the petition and
appointed the private respondent as the Special Administrator with Miguel Lim, with Atty. Donald Lee as special
administrator. 20

The court held a hearing on the special and affirmative defenses of the defendants (the petitioners herein) in Civil
Case No. 95-24588. On November 25, 1995, the RTC issued an order dismissing the complaint, ruling that the private
respondent was not a real party-in-interest. According to the court, she had no cause of action against the petitioners as
she was not privy to the contract of sale between Leslim and Speed. Neither was she a stockholder of the defendant
corporation; as such, she could not sue for the corporation. According to the court, the private respondent could not file
the complaint in behalf of her deceased husband Pastor as she was unable to show that she was the authorized
representative of his estate; even if she was so authorized, her claim was limited to the shares owned by Pastor, which
could not extend to the properties of Leslim. The court also ruled that the action involved intra-corporate controversies
over which the SEC had original and exclusive jurisdiction. SHDAEC
Aggrieved, the private respondent filed a motion for reconsideration of the order which was denied on February 9,
1996. 21 Dissatisfied, she appealed the order to the Court of Appeals, 22 docketed as CA-G.R. CV No. 52214. She
ascribed the following errors to the court a quo:
I
THE LOWER COURT ERRED IN RULING THAT THE PLAINTIFF-APPELLANT IS NOT A REAL PARTY-ININTEREST TO FILE THE "COMPLAINT" BEFORE THE COURT A QUO.
II
THE LOWER COURT ERRED IN RULING THAT IT HAD NO JURISDICTION OVER THE "COMPLAINT" IN
CIVIL CASE NO. Q-95-24588.
III
THE LOWER COURT ERRED IN DISMISSING THE PLAINTIFF-APPELLANT'S "COMPLAINANT" IN CIVIL
CASE NO. Q-95-24588. 23
On April 18, 1996, the Court of Appeals rendered judgment in CA-G.R. SP No. 38617 nullifying the assailed
orders. The CA ruled that the private respondent failed to prove that Pastor Lim, not Speed, owned the property. It also
ruled that the finding of the probate court that the property belonged to Pastor Lim was only provisional in nature. The
private respondent then filed a petition for review on certiorari with this Court, docketed as G.R. No. 124715. On January
24, 2000, this Court rendered a Decision dismissing the petition. 05SEcdasia
On September 15, 2000, the CA rendered a decision in CA-G.R. CV No. 52214 setting aside the assailed orders
and ordering the RTC to hear Civil Case No. Q-95-24588, thus:
WHEREFORE, premises considered, the Regional Trial Court, National Capital Judicial Region, Quezon City,
Branch 222 is hereby ORDERED to try Civil Case No. Q-95-24588 without costs to plaintiff-appellant. 24
The CA ruled that, as gleaned from the pleadings of the parties, the action involved intra-corporate controversies
as defined in Section 5 of Presidential Decree (PD) No. 902-A; as such, the RTC had no jurisdiction over the action.
However, in light of Rep. Act No. 8799 which transferred to courts of general jurisdiction or the appropriate RTC cases
over which the SEC had jurisdiction, the CA ordered the remand of the case to the RTC, for the determination, among
others, of the resolution of the issue of whether or not the private respondent was the real party-in-interest. The Court of
Appeals stated, thus:
However, viewed in the light of Republic Act No. 8799, otherwise known as the Securities Regulation Code,
approved on July 19, 2000 which has effectively divested the Securities and Exchange Commission of its quasi-judicial
functions and transferred them to the Regional Trial Court, We rule that the latter may take cognizance of the instant case
so as not to roundabout the judicial process, without prejudiced (sic) to its being ventilated as to whether or not appellant
The private respondent Lim is a real party in interest to be determined during the trial on the merits before the appropriate
court who has now the jurisdiction over the case at bar. 25
The motion for reconsideration of the petitioners was denied by the CA, per its Resolution dated August 8, 2001.
In their petition at bar, the petitioners argue that
THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT THE TRIAL COURT HAS JURISDICTION
OVER THE SUBJECT CASE BY VIRTUE OF THE EFFECTIVITY OF RA 8799 KNOWN AS SECURITIES REGULATION
CODE. 26
The petitioners contend that the RTC had no jurisdiction over the private respondent's complaint because the
case involved intra-corporate controversies. Since Rep. Act No. 8799 took effect only on August 8, 2000, while the private
respondent's appeal in the CA was pending, it should not be given retroactive effect. Furthermore, Section 5.2 of RA 8799
proscribes the transfer of cases to the RTC; as such, the CA should have dismissed the private respondent's appeal
without prejudice to her right to refile her complaint in the RTC. The petitioners argue that the CA cannot order the case
remanded to the RTC for the sake of convenience.
For her part, the private respondent asserts that the complaint does not involve intra-corporate controversies and
the RTC had jurisdiction over the action and the issues raised by the parties in their pleadings. The private respondent,
likewise, opines that there is nothing wrong with the CA's ruling directing the RTC to hear the case to avoid any
consequent delay.
The sole issue in this case is whether or not the CA erred in remanding the case to the RTC and directing it to
decide and hear the complaint on its merits, in view of Rep. Act No. 8799 which took effect on August 8, 2000, during the
pendency of the case before it, effectively transferring jurisdiction over cases involving intra-corporate controversies from
the SEC to the RTC.
The Private Respondent's
Action in the RTC Does
Not Involve an IntraCorporate Dispute.
Jurisdiction over the subject matter is conferred by law. 27 The nature of an action, as well as which court or body
has jurisdiction over it, is determined based on the allegations contained in the complaint of the plaintiff, irrespective of
whether or not plaintiff is entitled to recover upon all or some of the claims asserted therein. 28 It cannot depend on the
defenses set forth in the answer, in a motion to dismiss, or in a motion for reconsideration by the defendant. 29
Section 5 of P.D. No. 902-A provides that the SEC shall have original and exclusive jurisdiction over complaints, to
hear and decide cases involving the following:
(a)
Devices or schemes employed by or any acts of the board of directors, business associates, its officers or
partners, amounting to fraud and misrepresentation which may be detrimental to the interest of the public and/or
stockholders, partners, members of associations registered with the Commission;

(b)
Controversies arising out of intra-corporate or partnership relations, between and among stockholders,
members, or associates; between any or all of them and the corporation, partnership or association and the State insofar
as it concerns their individual franchise or right as such entity;
(c)
Controversies in the election or appointment of directors, trustees, officers or managers of such
corporations, partnership or associations;
(d)
Petitioners of corporations, partnerships or associations to be declared in the state of suspension of
payment in cases where the corporation, partnership or association possesses sufficient property to cover all its debts but
foresees the impossibility of meeting them when they fall due or in cases where the corporation, partnership or
association has no sufficient assets to cover its liabilities but is under the management of a rehabilitation receiver or
management committee created pursuant to this Decree. 30
However, Section 5.2 31 of Rep. Act No. 8799, transferred the erstwhile exclusive and original jurisdiction of the
SEC over actions involving intra-corporate controversies to the courts of general jurisdiction, or the appropriate RTC. All
intra-corporate cases pending in the SEC were to be transferred to the appropriate RTC. Congress thereby recognized
the expertise and competence of the RTC to take cognizance of and resolve cases involving intra-corporate controversies.
In compliance with the law, the Court issued, on November 21, 2000 a Resolution designating certain branches of the
RTC in the National Capital Region to try and decide cases enumerated in Section 5 of P.D. No. 902-A. For Quezon City
cases, the Court designated Branches 46 and 93 of the RTC. Branch 222 of the Quezon City RTC, which dismissed the
complaint of the private respondent, was not so designated by the Court. On March 13, 2001, the Court approved the
Interim Rules of Procedure for Intra-Corporate Controversies, which took effect on April 1, 2001.
To determine whether a case involves an intra-corporate controversy, and is to be heard and decided by the
Branches of the RTC specifically designated by the Court to try and decide such cases, two elements must concur: (a) the
status or relationship of the parties; and (2) the nature of the question that is the subject of their controversy. 32
The first element requires that the controversy must arise out of intra-corporate or partnership relations between
any or all of the parties and the corporation, partnership or association of which they are stockholders, members or
associates; between any or all of them and the corporation, partnership or association of which they are stockholders,
members or associates, respectively; and between such corporation, partnership or association and the State insofar as it
concerns their individual franchises. The second element requires that the dispute among the parties be intrinsically
connected with the regulation of the corporation. 33 If the nature of the controversy involves matters that are purely civil in
character, necessarily, the case does not involve an intra-corporate controversy. The determination of whether a contract
is simulated or not is an issue that could be resolved by applying pertinent provisions of the Civil Code. 34
In the present recourse, it is clear that the private respondent's complaint in the RTC is not an intra-corporate
case. For one thing, the private respondent has never been a stockholder of Leslim, or of Speed for that matter. The
complaint is one for the nullification of the deed of absolute sale executed by Leslim in favor of Speed over the property
covered by TCT No. T-36617 in the name of Leslim, the cancellation of TCT No. T-116716 in the name of Speed, as well
as the Secretary's Certificate dated August 22, 1994. The private respondent alleged that since her deceased husband,
Pastor Lim, acquired the property during their marriage, the said property is conjugal in nature, although registered under
the name of Leslim under TCT No. T-36617. She asserted that the petitioners connived to deprive the estate of Pastor Lim
and his heirs of their possession and ownership over the said property using a falsified Secretary's Certificate stating that
the Board of Directors of Leslim had a meeting on August 19, 1995, when, in fact, no such meeting was held. Petitioner
Lita Lim was never a stockholder of Leslim or a member of its Board of Directors; her husband, petitioner Ireneo Marcelo
was the Vice-President of Speed; and, petitioner Pedro Aquino was Leslim's corporate secretary. The private respondent
further averred that the amount of P3,900,000.00, the purchase price of the property under the deed of absolute sale, was
not paid to Leslim, and that petitioners Spouses Marcelo and petitioner Pedro Aquino contrived the said deed to
consummate their devious scheme and chicanery. The private respondent concluded that the Deed of Absolute Sale was
simulated; hence, null and void.
We are convinced that on the basis of the material allegations of the complaint, the court a quo had jurisdiction
over the case.
The Private Respondent is a
Real Party-in-Interest as
Plaintiff .
Rule 3, Section 2 of the Rules of Court, as amended, provides as follows:
SEC. 2. Parties in interest. A real party in interest is the party who stands to be benefited or injured by the
judgment in the suit, or the party entitled to the avails of the suit. Unless otherwise authorized by law or these Rules, every
action must be prosecuted or defended in the name of the real party in interest.
The private respondent filed the complaint as one of the heirs of Pastor Lim, who died intestate on June 11, 1994.
She was, in fact, the surviving spouse of the deceased, a compulsory heir by operation of law. The general rule under the
law on succession is that successional rights are transmitted from the moment of death of the decedent and compulsory
heirs are called upon to succeed by operation of law to the inheritance without the need of further proceedings. Under
Article 776 of the New Civil Code, inheritance includes all the properties, rights and obligations of a party, not extinguished
by his death. 35 Although the private respondent was appointed by the probate court as a special administratrix of the
estate of Pastor Lim, she had the right, apart from her being a special administratrix, to file the complaint against the
petitioners for the nullification of the deed of absolute sale, and TCT Nos. T-36617 and T-116716. Indeed, in Emnace vs.
Court of Appeals, et al., 36 we held that:
On the third issue, petitioner asserts that the surviving spouse of Vicente Tabanao has no legal capacity to sue
since she was never appointed as administratrix or executrix of his estate. Petitioner's objection in this regard is
misplaced. The surviving spouse does not need to be appointed as executrix or administratrix of the estate before she can
file the action. She and her children are complainants in their own right as successors of Vicente Tabanao. From the very
moment of Vicente Tabanao's death, his rights insofar as the partnership was concerned were transmitted to his heirs, for
rights to the succession are transmitted from the moment of death of the decedent. TASCDI
Whatever claims and rights Vicente Tabanao had against the partnership and petitioner were transmitted to
respondents by operation of law, more particularly by succession, which is a mode of acquisition by virtue of which the
property, rights and obligations to the extent of the value of the inheritance of a person are transmitted. Moreover,
respondents became owners of their respective hereditary shares from the moment Vicente Tabanao died.
A prior settlement of the estate, or even the appointment of Salvacion Tabanao as executrix or administratrix, is
not necessary for any of the heirs to acquire legal capacity to sue. As successors who stepped into the shoes of their

decedent upon his death, they can commence any action originally pertaining to the decedent. From the moment of his
death, his rights as a partner and to demand fulfillment of petitioner's obligations as outlined in their dissolution agreement
were transmitted to respondents. They, therefore, had the capacity to sue and seek the court's intervention to compel
petitioner to fulfill his obligations. 37
All the Compulsory Heirs
of the Decedent and Leslim
Corporation are Indispensable
Parties.
In her complaint, the private respondent sought the nullification of the Deed of Absolute Sale executed by Leslim
Corporation in favor of Speed, as well as TCT No. T-36617 under its name. Thus, Leslim Corporation is an indispensable
party, and should be impleaded as a party-defendant conformably to Section 7, Rule 3 of the Rules of Court, as amended.
SEC. 7. Compulsory joinder of indispensable parties. Parties in interest without whom no final determination
can be had of an action shall be joined either as plaintiffs or defendants.
As Leslim Corporation was a party to the deed, its interests in the subject of the action and the outcome thereof is
such that the trial court could not proceed without its presence. All actuations of the trial court subsequent to the filing of
the complaint are null and void, not only as to Leslim Corporation, but also as to the present parties. 38 All the compulsory
heirs of the deceased must also be impleaded as plaintiffs, being indispensable parties. 39 Thus, the private respondent
needs to amend her complaint in the court a quo to include all indispensable parties; otherwise, her claim would be
dismissed.
IN LIGHT OF ALL THE FOREGOING, the petition is DISMISSED. The records are remanded to the Regional Trial
Court of Quezon City, Branch 222, for further proceedings on the merits of the case.
SO ORDERED.

SECOND DIVISION
[G.R. No. L-60174. February 16, 1983.]
EDUARDO FELIPE, HERMOGENA V. FELIPE AND VICENTE V. FELIPE, petitioners, vs. HEIRS OF MAXIMO
ALDON, NAMELY: GIMENA ALMOSARA, SOFIA ALDON, SALVADOR ALDON, AND THE HONORABLE COURT OF
APPEALS, respondents.
Romulo D. San Juan for petitioner.
Gerundino Castillejo for private respondent.
DECISION
ABAD SANTOS, J p:
Maximo Aldon married Gimena Almosara in 1936. The spouses bought several pieces of land sometime between
1948 and 1950. In 1960-62, the lands were divided into three lots, 1370, 1371 and 1415 of the San Jacinto Public Land
Subdivision, San Jacinto, Masbate. LLjur
In 1951, Gimena Almosara sold the lots to the spouses Eduardo Felipe and Hermogena V. Felipe. The sale was
made without the consent of her husband, Maximo.
On April 26, 1976, the heirs of Maximo Aldon, namely his widow Gimena and their children Sofia and Salvador
Aldon, filed a complaint in the Court of First Instance of Masbate against the Felipes. The complaint which was docketed
as Civil Case No. 2372 alleged that the plaintiffs were the owners of Lots 1370, 1371 and 1415; that they had orally
mortgaged the same to the defendants; and an offer to redeem the mortgage had been refused so they filed the complaint
in order to recover the three parcels of land. 2005SE
The defendants asserted that they had acquired the lots from the plaintiffs by purchase and subsequent delivery
to them. The trial court sustained the claim of the defendants and rendered the following judgment:
"a.
declaring the defendants to be the lawful owners of the property subject of the present litigation;
b.
declaring the complaint in the present action to be without merit and is therefore hereby ordered
dismissed; 2005SE
c.
ordering the plaintiffs to pay to the defendants the amount of P2,000.00 as reasonable attorney's fees and
to pay the costs of the suit."
The plaintiffs appealed the decision to the Court of Appeals which rendered the following judgment:
"PREMISES CONSIDERED, the decision appealed from is hereby REVERSED and SET ASIDE, and a new one
is hereby RENDERED, ordering the defendants-appellees to surrender the lots in question as well as the plaintiffs'appellants' muniments of title thereof to said plaintiffs-appellants, to make an accounting of the produce derived from the
lands including expenses incurred since 1951, and to solidarily turn over to the plaintiffs-appellants the NET monetary
value of the profits, after deducting the sum of P1,800.00. No attorney's fees nor moral damages are awarded for lack of
any legal justification therefor. No costs."
The ratio of the judgment is stated in the following paragraphs of the decision penned by Justice Edgardo L.
Paras with the concurrence of Justices Venicio Escolin and Mariano A. Zosa: cdrep
"One of the principal issues in the case involves the nature of the aforementioned conveyance or transaction, with
appellants claiming the same to be an oral contract of mortgage or antichresis, the redemption of which could be done
anytime upon repayment of the P1,800.00 involved (incidentally the only thing written about the transaction is the
aforementioned receipt re the P1,800). Upon the other hand, appellees claim that the transaction was one of sale,
accordingly, redemption was improper. The appellees claim that plaintiffs never conveyed the property because of a loan
or mortgage or antichresis and that what really transpired was the execution of a contract of sale thru a private document
designated as a 'Deed of Purchase and Sale' (Exhibit 1), the execution having been made by Gimena Almosara in favor of
appellee Hermogena V. Felipe. 2005SE
"After a study of this case, we have come to the conclusion that the appellants are entitled to recover the
ownership of the lots in question. We so hold because although Exh. 1 concerning the sale made in 1951 of the disputed
lots is, in Our opinion, not a forgery the fact is that the sale made by Gimena Almosara is invalid, having been executed
without the needed consent of her husband, the lots being conjugal. Appellees' argument that this was an issue not raised
in the pleadings is baseless, considering the fact that the complaint alleges that the parcels 'were purchased by plaintiff
Gimena Almosara and her late husband Maximo Aldon' (the lots having been purchased during the existence of the
marriage, the same are presumed conjugal) and inferentially, by force of law, could not, be disposed of by a wife without
her husband's consent."
The defendants are now the appellants in this petition for review. They invoke several grounds in seeking the
reversal of the decision of the Court of Appeals. One of the grounds is factual in nature; petitioners claim that "respondent
Court of Appeals has found as a fact that the 'Deed of Purchase and Sale' executed by respondent Gimena Almosara is
not a forgery and therefore its authenticity and due execution is already beyond question." We cannot consider this
ground because as a rule only questions of law are reviewed in proceedings under Rule 45 of the Rules of Court subject
to well-defined exceptions not present in the instant case. 2005SE
The legal ground which deserves attention is the legal effect of a sale of lands belonging to the conjugal
partnership made by the wife without the consent of the husband. LexLib
It is useful at this point to re-state some elementary rules: The husband is the administrator of the conjugal
partnership. (Art. 165, Civil Code.) Subject to certain exceptions, the husband cannot alienate or encumber any real
property of the conjugal partnership without the wife's consent. (Art. 166, Idem.) And the wife cannot bind the conjugal
partnership without the husband's consent, except in cases provided by law. (Art. 172, Idem.).
In the instant case, Gimena, the wife, sold lands belonging to the conjugal partnership without the consent of the
husband and the sale is not covered by the phrase "except in cases provided by law." The Court of Appeals described the
sale as "invalid" a term which is imprecise when used in relation to contracts because the Civil Code uses specific
names in designating defective contracts, namely: rescissible (Arts. 1380 et seq.), voidable (Arts. 1390 et seq.),
unenforceable (Arts. 1403, et seq.), and void or inexistent (Arts. 1409 et seq.).
The sale made by Gimena is certainly a defective contract but of what category? The answer: it is a voidable
contract. cdphil
According to Art. 1390 of the Civil Code, among the voidable contracts are "[T]hose where one of the parties is
incapable of giving consent to the contract." (Par 1.) In the instant case Gimena had no capacity to give consent to the
contract of sale. The capacity to give consent belonged not even to the husband alone but to both spouses.

The view that the contract made by Gimena is a voidable contract is supported by the legal provision that
contracts entered by the husband without the consent of the wife when such consent is required, are annullable at her
instance during the marriage and within ten years from the transaction questioned. (Art. 173, Civil Code.).
Gimena's contract is not rescissible for in such contract all the essential elements are untainted but Gimena's
consent was tainted. Neither can the contract be classified as unenforceable because it does not fit any of those
described in Art. 1403 of the Civil Code. And finally, the contract cannot be void or inexistent because it is not one of those
mentioned in Art. 1409 of the Civil Code. By process of elimination, it must perforce be a voidable contract. 2005SE
The voidable contract of Gimena was subject to annulment by her husband only during the marriage because he
was the victim who had an interest in the contract. Gimena, who was the party responsible for the defect, could not ask for
its annulment. Their children could not likewise seek the annulment of the contract while the marriage subsisted because
they merely had an inchoate right to the lands sold.
The termination of the marriage and the dissolution of the conjugal partnership by the death of Maximo Aldon did
not improve the situation of Gimena. What she could not do during the marriage, she could not do thereafter. cdphil
The case of Sofia and Salvador Aldon is different. After the death of Maximo they acquired the right to question
the defective contract insofar as it deprived them of their hereditary rights in their father's share in the lands. The father's
share is one-half (1/2) of the lands and their share is two-thirds (2/3) thereof, one-third (1/3) pertaining to the widow.
The petitioners have been in possession of the lands since 1951. It was only in 1976 when the respondents filed
action to recover the lands. In the meantime, Maximo Aldon died.
Two questions come to mind, namely: (1) Have the petitioners acquired the lands by acquisitive prescription? (2)
Is the right of action of Sofia and Salvador Aldon barred by the statute of limitations? 2005SE
Anent the first question, We quote with approval the following statement of the Court of Appeals:
"We would like to state further that appellees [petitioners herein] could not have acquired ownership of the lots by
prescription in view of what we regard as their bad faith. This bad faith is revealed by testimony to the effect that
defendant-appellee Vicente V. Felipe (son of appellees Eduardo Felipe and Hermogena V. Felipe) attempted in December
1970 to have Gimena Almosara sign a ready-made document purporting to sell the disputed lots to the appellees. This
actuation clearly indicated that the appellees knew the lots did not still belong to them, otherwise, why were they
interested in a document of sale in their favor? Again why did Vicente V. Felipe tell Gimena that the purpose of the
document was to obtain Gimena's consent to the construction of an irrigation pump on the lots in question? The only
possible reason for purporting to obtain such consent is that the appellees knew the lots were not theirs. Why was there
an attempted improvement (the irrigation tank) only in 1970? Why was the declaration of property made only in 1974?
Why were no attempts made to obtain the husband's signature, despite the fact that Gimena and Hermogena were close
relatives? All these indicate the bad faith of the appellees. Now then, even if we were to consider appellees' possession in
bad faith as a possession in the concept of owners, this possession at the earliest started in 1951, hence the period for
extraordinary prescription (30 years) had not yet lapsed when the present action was instituted on April 26, 1976. 2005SE
As to the second question, the children's cause of action accrued from the death of their father in 1959 and they
had thirty (30) years to institute it (Art. 1141, Civil Code.) They filed action in 1976 which is well within the period. LLphil
WHEREFORE, the decision of the Court of Appeals is hereby modified. Judgment is entered awarding to Sofia
and Salvador Aldon their shares of the lands as stated in the body of this decision; and the petitioners as possessors in
bad faith shall make an accounting of the fruits corresponding to the share aforementioned from 1959 and solidarily pay
their value to Sofia and Salvador Aldon; costs against the petitioners. 2005SE
SO ORDERED.

SECOND DIVISION
[G.R. No. L-60101. August 31, 1983.]
EASTERN SHIPPING LINES, INC., petitioner, vs. JOSEPHINE LUCERO, NATIONAL SEAMEN BOARD,
NATIONAL LABOR RELATIONS COMMISSION, respondents.
Valera, Cainglet & Dala Law Office for petitioner.
Jose R. Millares for private respondent.
DECISION
ESCOLIN, J p:
Petition for review filed by the Eastern Shipping Lines, Inc. to set aside the decision of the National Labor
Relations Commission, which affirmed the judgment rendered by the National Seamen Board, the dispositive portion of
which reads as follows:
"WHEREFORE, respondent is hereby ordered to pay complainant her monthly allotments from March, 1980 up to
the amount of P54,562.00 within ten (10) days from receipt of this decision. Respondent is likewise further ordered to pay
complainant her future monthly allotment up to the arrival of the M/V EASTERN MINICON in the port of Manila or after
four (4) years when the presumptive death established by law takes effect."
The material facts that gave rise to this petition are as follows: On October 31, 1979, Capt. Julio J. Lucero, Jr. was
appointed by petitioner Eastern Shipping Lines, Inc., Company for short, as master/captain to its vessel M/V Eastern
Minicon, plying the Hongkong/Manila route, with the salary of P5,560.00 exclusive of ship board allowances and other
benefits. Under the contract, his employment was good for one (1) round trip only, i.e., the contract would automatically
terminate upon arrival of the vessel at the Port of Manila, unless renewed. It was further agreed that part of the captain's
salary, while abroad, should be paid to Mrs. Josephine Lucero, his wife, in Manila. LibLex
On February 16, 1980, while the vessel was enroute from Hongkong to Manila where it was expected to arrive on
February 18, 1980, Capt. Lucero sent three (3) messages to the Company's Manila office:
First Message: 1
"February 16, 1980 0700 GMT Via Intercom
EMINICON
Urgent
Eastship Manila
REGRET TO INFORM YOU ENCOUNTERED BOISTEROUS WEATHER WITH STRONG NORTHEASTERLY
WINDS WITH GAIL FORCE CAUSING THE VESSEL ROLLING AND PITCHING VIOLENTLY VESSEL NOW INCLINING
15 TO 20 DEGREES PORT FEARING MIGHT JETTISON CARGO ON DECK IF EVERYTHING COME TO WORSE
SITUATION HOWEVER TRYING UTMOST BEST TO FACILITATE EVERYTHING IN ORDER STOP NO FIX POSITIONS
FROM NOON 15th UP TO 0600 HRS TO DATE NEED ASSISTANCE APPROXIMATE DR POSITIONS AT 0600 HRS
10TH WITHIN THE VICINITY LATITUDE 20-02, ON LONGTITUDE 110-02, OE COURSE 120 DEGREES REGARDS . . .
LUCERO"
Second Message: 2
"February 16/80 1530 GMT VIA INTERCOM
EMICON
EASTSHIP MANILA
RYC NOTED ACCORDINGLY SINCE WASTE PAPER CARGO ON PORT SIDE AND HAD BEEN WASH OUT
VESSEL AGAIN LISTING ON STARBOARD SIDE REGRET WE HAVE TO JETTISON STARBOARD SIDE WASTE
PAPER CARGO IN ORDER TO BALANCE THE VESSEL NOW ALMOST BACK TO NORMAL POSITION HOWEVER
VESSEL STILL LABORING VIOLENTLY REGARDS.
LUCERO"
Third Message: 3
"FEBRUARY 16/80
2150 HRS
PHILIPPINE COAST GUARD
NEED IMMEDIATE ASSISTANCE POSITION 19-35 N 116-40 E SEAWATER ENTERING INSIDE HATCH
VESSEL INCLINING 15 TO 20 DEGREES PORT IF POSSIBLE SEND IMMEDIATE ASSISTANCE VESSEL IN DANGER
PREPARING TO ABANDON ANYTIME
MASTER"
Acting on these radio messages, the Company, respondent below, took the following steps:
"RESPONDENT informed of the grave situation, immediately reported the matter to the Philippine Coast Guard
for search and rescue operation and the same was coordinated with the U.S. Air Force based at Clark Air Base.
Respondent also released radio messages to all vessels passing the Hongkong/Manila route requesting them to be very
cautious and vigilant for possible survivors and to scan the area whether there are signs of debris from the ill fated vessel
"EASTERN MINICON" which has foundered. In the meantime, two (2) vessels of the respondent were also dispatched to
the area last reported by the Master for search and rescue operation, but the collective efforts of all parties concerned
yielded negative results." (p. 79, Rollo)
Subsequently, the Lloyds of London, insurer of the M/V Eastern Minicon, through its surveyors, confirmed the loss
of the vessel. Thereafter, the Company paid the corresponding death benefits to the heirs of the crew members, except
respondent Josephine Lucero, who refused to accept the same. LLjur
On July 16, 1980, Mrs. Lucero filed a complaint with the National Seamen Board, Board for short, for payment of
her accrued monthly allotment of P3,183.00, which the Company had stopped since March 1980 and for continued
payment of said allotments until the M/V Minicon shall have returned to the port of Manila. She contended that the
contract of employment entered into by her husband with the Company was on a voyage-to-voyage basis, and that the
same was to terminate only upon the vessel's arrival in Manila.
Upon the other hand, the Company maintained that Mrs. Lucero was no longer entitled to such allotments
because: [a] the Lloyds of London had already confirmed the total loss of the vessel and had in fact settled the Company's
insurance claim and [b] the Company, with the approval of the Board, had likewise paid the corresponding death benefits
to the heirs of the other seamen. The Company further invoked the provisions of Article 643 of the Code of Commerce, to
wit:
"Art. 643.
If the vessel and her cargo should be totally lost, by reason of capture or wreck, all rights shall be
extinguished, both as regards the crew to demand any wages whatsoever, and as regards the ship agent to recover the
advances made.

. . ."
On May 19, 1981, the Board rendered the aforecited judgment in favor of Mrs. Josephine Lucero and against
petitioner Company. The Board held that the presumption of death could not be applied because the four-year period
provided for by Article 391(1) of the Civil Code had not yet expired; and that the payment of death benefits to the heirs of
the other crew members was based upon a voluntary agreement entered into by and between the heirs and the Company,
and did not bind respondent Mrs. Lucero who was not a party thereto.
On appeal, the respondent National Labor Relations Commission affirmed the said decision. It held that:
"Within the context of the foregoing circumstances, the only recourse is to presume the vessel totally lost and its
crew members dead. But in this connection, the question that comes to the fore is: When will the presumption arise?
Article 391 of the Civil Code provides the answer, to wit:
Art, 391.
The following shall be presumed dead for all purposes, including the division of the estate among
the heirs:
(1)
A person on board a vessel lost during a sea voyage, or an aeroplane which is missing, who has not been
heard of for four years since the loss of the vessel or aeroplane; . . .
"By the aforequoted law, it is quite clear that the person to be presumed dead should first "not been heard of for
four years since the loss of the vessel" before he can be presumed dead for all purposes. Applied to Capt. LUCERO, it is
evidently premature to presume him dead as four years has not yet expired. Thus, even in Judge Advocate General vs.
Gonzales, et al., (CA) 48 O.G. 5329, the very case cited by the respondent herein, the court said in the case of the
missing soldier that although nothing was heard of him since 7 May 1942, the fact of his death is not presumed until seven
years after 1942.
"Since Capt. LUCERO cannot yet be presumed dead as demonstrated hereinabove, it logically follows that as of
now, he is presumed alive. It is of no moment to Us that the vessel was conceded by the Lloyds of London to have been
totally lost which, in the first place, was admittedly merely based on presumption as even the whereabouts of the vessel
remains unknown. Similarly, even the agreement, which formed the basis of the Decision of the NSB ordering payment of
death benefits to the heirs of some of the crew must have been predicated upon a presumption of death of the
crewmembers concerned. Such circumstances do not suffice to establish the actual death of Capt. LUCERO.
xxx
xxx
xxx
"Indeed, by the terms of the appointment of Capt. LUCERO, his engagement terminates upon the return of the
vessel at the Port of Manila. He is considered to be still working entitling his spouse to allotment until the vessel returns or
until it is officially declared totally lost, or until the presumption of his death becomes effective in which case the burden of
proving that he is alive is shifted to his wife for purposes of continuing her allotment."
We are unable to agree with the reasoning and conclusion of the respondent NLRC.
It is undisputed that on February 16, 1980, the Company received three (3) radio messages from Capt. Lucero on
board the M/V Eastern Minicon, the last of which, received at 9:50 p.m. of that day, was a call for immediate assistance in
view of the existing "danger": "sea water was entering the hatch"; the vessel "was listing 50 to 60 degrees port," and they
were "preparing to abandon the ship any time.' After this message, nothing more has been heard from the vessel or its
crew until the present time. LibLex
There is thus enough evidence to show the circumstances attending the loss and disappearance of the M/V
Eastern Minicon and its crew. The foregoing facts, quite logically, are sufficient to lead Us to a moral certainty that the
vessel had sunk and that the persons aboard had perished with it. Upon this premise, the rule on presumption of death
under Article 391(1) of the Civil Code must yield to the rule of preponderance of evidence. As this Court said in Joaquin
vs. Navarro 4 "Where there are facts, known or knowable, from which a rational conclusion can be made, the
presumption does not step in, and the rule of preponderance of evidence controls."
Of similar import is the following pronouncement from American Jurisprudence: 5
"Loss of Vessel. Where a vessel sets out on a voyage and neither the vessel nor those who went in her are
afterward heard of, the presumption arises, after the utmost limit of time for her to have completed the voyage and for
news of her arrival at any commercial port of the world to have been received, that the vessel has been lost and that all on
board have perished. The presumption of death in such cases does not rest on the fact alone that the person in question
has been absent and unheard from for a specific length of time, but also on the fact that the vessel has not been heard
from. The question, moreover, is not whether it is impossible that the person may be alive, but whether the circumstances
do not present so strong a probability of his death that a court should act thereon. The presumption of death from absence
of tidings of the vessel on which the absentee sailed is strengthened by proof of a storm to which the vessel probably was
exposed. The presumption is even stronger where it appears affirmatively that the vessel was lost at sea, that nothing has
been heard of a particular person who sailed thereon, and that a sufficient time has elapsed to permit the receipt of news
of any possible survivors of the disaster."
In People vs. Ansang 6 where, in open sea, the appellant aboard a vinta ignited three home-made bombs and
threw them at the boat occupied by the victims, and the said boat was later washed ashore and the passengers thereof
were never heard or seen again by anybody, this Court convicted the appellant of multiple murder, holding that the victims
were dead. LLpr
Similarly, in People vs. Sasota, 7 the claim of the appellants therein that there was no conclusive evidence of
death of the victim because his body was never found was overruled by this Court in this wise:
"In a case of murder or homicide, it is not necessary to recover the body or to show where it can be found. There
are cases like death at sea, where the finding or recovery of the body is impossible. It is enough that the death and the
criminal agency be proven. There are even cases where said death and the intervention of the criminal agency that
caused it may be presumed or established by circumstantial evidence.
"Moreover, it may be remembered that in several treason cases decided by this Court, where besides the act of
treason the accused is held responsible for the death of persons he had arrested or tortured and later taken away, where
the victims were never later seen or heard from, it has been presumed that they were killed or otherwise criminally
disposed of or liquidated by the accused, this, for the purpose of fixing the penalty."
If in the foregoing criminal cases, where the proof required for conviction must be beyond reasonable doubt, the
rule of presumption was not applied and the fact of death was deemed established, with more reason is this Court justified
in entering a finding of death. Indeed, We cannot permit Article 391 to override, or be substituted for, the facts established
in this case which logically indicate to a moral certainty that Capt. Lucero died shortly after he had sent his last radio
message at 9:50 p.m. on February 16, 1980.

In view of the conclusion arrived at above, We deem it unnecessary to discuss the other issued raised in this
case, they being mere adjuncts to the principal issue already disposed of.
WHEREFORE, the decision of the NLRC subject of this petition is hereby set aside, and the complaint of
respondent Josephine Lucero dismissed. However, Mrs. Lucero is entitled to death benefits. No costs.
SO ORDERED.

FIRST DIVISION
[G.R. No. 126334. November 23, 2001.]

EMILIO EMNACE, petitioner, vs. COURT OF APPEALS, ESTATE OF VICENTE TABANAO, SHERWIN
TABANAO, VICENTE WILLIAM TABANAO, JANETTE TABANAO DEPOSOY, VICENTA MAY TABANAO VARELA,
ROSELA TABANAO and VINCENT TABANAO, respondents.
DECISION
YNARES-SANTIAGO, J p:
Petitioner Emilio Emnace, Vicente Tabanao and Jacinto Divinagracia were partners in a business concern known
as Ma. Nelma Fishing Industry. Sometime in January of 1986, they decided to dissolve their partnership and executed an
agreement of partition and distribution of the partnership properties among them, consequent to Jacinto Divinagracia's
withdrawal from the partnership. 1 Among the assets to be distributed were five (5) fishing boats, six (6) vehicles, two (2)
parcels of land located at Sto. Nio and Talisay, Negros Occidental, and cash deposits in the local branches of the Bank of
the Philippine Islands and Prudential Bank. EScAHT
Throughout the existence of the partnership, and even after Vicente Tabanao's untimely demise in 1994, petitioner
failed to submit to Tabanao's heirs any statement of assets and liabilities of the partnership, and to render an accounting
of the partnership's finances. Petitioner also reneged on his promise to turn over to Tabanao's heirs the deceased's 1/3
share in the total assets of the partnership, amounting to P30,000,000.00, or the sum of P10,000,000.00, despite formal
demand for payment thereof. 2
Consequently, Tabanao's heirs, respondents herein, filed against petitioner an action for accounting, payment of
shares, division of assets and damages. 3 In their complaint, respondents prayed as follows:
1.
Defendant be ordered to render the proper accounting of all the assets and liabilities of the partnership at
bar; and
2.
After due notice and hearing defendant be ordered to pay/remit/deliver/surrender/yield to the plaintiffs the
following:
A.
No less than One Third (1/3) of the assets, properties, dividends, cash, land(s), fishing vessels, trucks,
motor vehicles, and other forms and substance of treasures which belong and/or should belong, had accrued and/or must
accrue to the partnership;
B.
No less than Two Hundred Thousand Pesos (P200,000.00) as moral damages;
C.
Attorney's fees equivalent to Thirty Percent (30%) of the entire share/amount/award which the Honorable
Court may resolve the plaintiffs as entitled to plus P1,000.00 for every appearance in court. 4
Petitioner filed a motion to dismiss the complaint on the grounds of improper venue, lack of jurisdiction over the
nature of the action or suit, and lack of capacity of the estate of Tabanao to sue. 5 On August 30, 1994, the trial court
denied the motion to dismiss. It held that venue was properly laid because, while realties were involved, the action was
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 a right 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 from the moment of
the death of the decedent. 6
The following day, respondents filed an amended complaint, 7 incorporating the additional prayer that petitioner
be ordered to "sell all (the partnership's) assets and thereafter pay/remit/deliver/surrender/yield to the plaintiffs" their
corresponding share in the proceeds thereof. In due time, petitioner filed a manifestation and motion to dismiss, 8 arguing
that the trial court did not acquire jurisdiction over the case due to the plaintiffs' failure to pay the proper docket fees.
Further, in a supplement to his motion to dismiss, 9 petitioner also raised prescription as an additional ground warranting
the outright dismissal of the complaint.
On June 15, 1995, the trial court issued an Order, 10 denying the motion to dismiss inasmuch as the grounds
raised therein were basically the same as the earlier motion to dismiss which has been denied. Anent the issue of
prescription, the trial court ruled that prescription begins to run only upon the dissolution of the partnership when the final
accounting is done. Hence, prescription has not set in the absence of a final accounting. Moreover, an action based on a
written contract prescribes in ten years from the time the right of action accrues.
Petitioner filed a petition for certiorari before the Court of Appeals, 11 raising the following issues:
I.
Whether or not respondent Judge acted without jurisdiction or with grave abuse of discretion in taking
cognizance of a case despite the failure to pay the required docket fee;
II.
Whether or not respondent Judge acted without jurisdiction or with grave abuse of discretion in insisting to
try the case which involve (sic) a parcel of land situated outside of its territorial jurisdiction;
III.
Whether or not respondent Judge acted without jurisdiction or with grave abuse of discretion in allowing
the estate of the deceased to appear as party plaintiff, when there is no intestate case and filed by one who was never
appointed by the court as administratrix of the estates; and
IV.
Whether or not respondent Judge acted without jurisdiction or with grave abuse of discretion in not
dismissing the case on the ground of prescription.
On August 8, 1996, the Court of Appeals rendered the assailed decision, 12 dismissing the petition for certiorari,
upon a finding that no grave abuse of discretion amounting to lack or excess of jurisdiction was committed by the trial
court in issuing the questioned orders denying petitioner's motions to dismiss.
Not satisfied, petitioner filed the instant petition for review, raising the same issues resolved by the Court of
Appeals, namely:
I.
Failure to pay the proper docket fee;
II.
Parcel of land subject of the case pending before the trial court is outside the said court's territorial
jurisdiction;
III.
Lack of capacity to sue on the part of plaintiff heirs of Vicente Tabanao; and
IV.
Prescription of the plaintiff heirs' cause of action.
It can be readily seen that respondents' primary and ultimate objective in instituting the action below was to
recover the decedent's 1/3 share in the partnership's assets. While they ask for an accounting of the partnership's assets
and finances, what they are actually asking is for the trial court to compel petitioner to pay and turn over their share, or the
equivalent value thereof, from the proceeds of the sale of the partnership assets. They also assert that until and unless a
proper accounting is done, the exact value of the partnership's assets, as well as their corresponding share therein,

cannot be ascertained. Consequently, they feel justified in not having paid the commensurate docket fee as required by
the Rules of Court.
We do not agree. The trial court does not have to employ guesswork in ascertaining the estimated value of the
partnership's assets, for respondents themselves voluntarily pegged the worth thereof at Thirty Million Pesos
(P30,000,000.00). Hence, this case is one which is really not beyond pecuniary estimation, but rather partakes of the
nature of a simple collection case where the value of the subject assets or amount demanded is pecuniarily determinable.
13 While it is true that the exact value of the partnership's total assets cannot be shown with certainty at the time of filing,
respondents can and must ascertain, through informed and practical estimation, the amount they expect to collect from
the partnership, particularly from petitioner, in order to determine the proper amount of docket and other fees. 14 It is thus
imperative for respondents to pay the corresponding docket fees in order that the trial court may acquire jurisdiction over
the action. 15
Nevertheless, unlike in the case of Manchester Development Corp. v. Court of Appeals, 16 where there was
clearly an effort to defraud the government in avoiding to pay the correct docket fees, we see no attempt to cheat the
courts on the part of respondents. In fact, the lower courts have noted their expressed desire to remit to the court "any
payable balance or lien on whatever award which the Honorable Court may grant them in this case should there be any
deficiency in the payment of the docket fees to be computed by the Clerk of Court." 17 There is evident willingness to pay,
and the fact that the docket fee paid so far is inadequate is not an indication that they are trying to avoid paying the
required amount, but may simply be due to an inability to pay at the time of filing. This consideration may have moved the
trial court and the Court of Appeals to declare that the unpaid docket fees shall be considered a lien on the judgment
award.
Petitioner, however, argues that the trial court and the Court of Appeals erred in condoning the non-payment of
the proper legal fees and in allowing the same to become a lien on the monetary or property judgment that may be
rendered in favor of respondents. There is merit in petitioner's assertion. The third paragraph of Section 16, Rule 141 of
the Rules of Court states that:
The legal fees shall be a lien on the monetary or property judgment in favor of the pauper-litigant.
Respondents cannot invoke the above provision in their favor because it specifically applies to pauper-litigants.
Nowhere in the records does it appear that respondents are litigating as paupers, and as such are exempted from the
payment of court fees. 18
The rule applicable to the case at bar is Section 5(a) of Rule 141 of the Rules of Court, which defines the two
kinds of claims as: (1) those which are immediately ascertainable; and (2) those which cannot be immediately ascertained
as to the exact amount. This second class of claims, where the exact amount still has to be finally determined be the
courts based on evidence presented, falls squarely under the third paragraph of said Section 5(a), which provides:
In case the value of the property or estate or the sum claimed is less or more in accordance with the appraisal of
the court, the difference of fee shall be refunded or paid as the case may be. (Emphasis ours)
In Pilipinas Shell Petroleum Corporation v. Court of Appeals, 19 this Court pronounced that the above-quoted
provision "clearly contemplates an initial payment of the filing fees corresponding to the estimated amount of the claim
subject to adjustment as to what later may be proved." 20 Moreover, we reiterated therein the principle that the payment
of filing fees cannot be made contingent or dependent on the result of the case. Thus, an initial payment of the docket
fees based on an estimated amount must be paid simultaneous with the filing of the complaint. Otherwise, the court would
stand to lose the filing fees should the judgment later turn out to be adverse to any claim of the respondent heirs.
The matter of payment of docket fees is not a mere triviality. These fees are necessary to defray court expenses
in the handling of cases. Consequently, in order to avoid tremendous losses to the judiciary, and to the government as
well, the payment of docket fees cannot be made dependent on the outcome of the case, except when the claimant is a
pauper-litigant.
Applied to the instant case, respondents have a specific claim 1/3 of the value of all the partnership assets
but they did not allege a specific amount. They did, however, estimate the partnership's total assets to be worth Thirty
Million Pesos (P30,000,000.00), in a letter 21 addressed to petitioner. Respondents cannot now say that they are unable
to make an estimate, for the said letter and the admissions therein form part of the records of this case. They cannot avoid
paying the initial docket fees by conveniently omitting the said amount in their amended complaint. This estimate can be
made the basis for the initial docket fees that respondents should pay. Even if it were later established that the amount
proved was less or more than the amount alleged or estimated, Rule 141, Section 5(a) of the Rules of Court specifically
provides that the court may refund the excess or exact additional fees should the initial payment be insufficient. It is clear
that it is only the difference between the amount finally awarded and the fees paid upon filing of this complaint that is
subject to adjustment and which may be subjected to a lien.
In the oft-quoted case of Sun Insurance Office, Ltd. v. Hon. Maximiano Asuncion, 22 this Court held that when the
specific claim "has been left for the determination by the court, the additional filing fee therefor shall constitute a lien on
the judgment and it shall be the responsibility of the Clerk of Court or his duly authorized deputy to enforce said lien and
assess and collect the additional fee." Clearly, the rules and jurisprudence contemplate the initial payment of filing and
docket fees based on the estimated claims of the plaintiff, and it is only when there is a deficiency that a lien may be
constituted on the judgment award until such additional fee is collected.
Based on the foregoing, the trial court erred in not dismissing the complaint outright despite their failure to pay the
proper docket fees. Nevertheless, as in other procedural rules, it may be liberally construed in certain cases if only to
secure a just and speedy disposition of an action. While the rule is that the payment of the docket fee in the proper
amount should be adhered to, there are certain exceptions which must be strictly construed. 23
In recent rulings, this Court has relaxed the strict adherence to the Manchester doctrine, allowing the plaintiff to
pay the proper docket fees within a reasonable time before the expiration of the applicable prescriptive or reglementary
period. 24
In the recent case of National Steel Corp. v. Court of Appeals, 25 this Court held that:
The court acquires jurisdiction over the action if the filing of the initiatory pleading is accompanied by the payment
of the requisite fees, or, if the fees are not paid at the time of the filing of the pleading, as of the time of full payment of the
fees within such reasonable time as the court may grant, unless, of course, prescription has set in the meantime.
It does not follow, however, that the trial court should have dismissed the complaint for failure of private
respondent to pay the correct amount of docket fees. Although the payment of the proper docket fees is a jurisdictional
requirement, the trial court may allow the plaintiff in an action to pay the same within a reasonable time before the
expiration of the applicable prescriptive or reglementary period. If the plaintiff fails to comply within this requirement, the

defendant should timely raise the issue of jurisdiction or else he would be considered in estoppel. In the latter case, the
balance between the appropriate docket fees and the amount actually paid by the plaintiff will be considered a lien or any
award he may obtain in his favor. (Emphasis ours)
Accordingly, the trial court in the case at bar should determine the proper docket fee based on the estimated
amount that respondents seek to collect from petitioner, and direct them to pay the same within a reasonable time,
provided the applicable prescriptive or reglementary period has not yet expired. Failure to comply therewith, and upon
motion by petitioner, the immediate dismissal of the complaint shall issue on jurisdictional grounds.
On the matter of improper venue, we find no error on the part of the trial court and the Court of Appeals in holding
that the case below is a personal action which, under the Rules, may be commenced and tried where the defendant
resides or may be found, or where the plaintiffs reside, at the election of the latter. 26
Petitioner, however, insists that venue was improperly laid since the action is a real action involving a parcel of
land that is located outside the territorial jurisdiction of the court a quo. This contention is not well-taken. The records
indubitably show that respondents are asking that the assets of the partnership be accounted for, sold and distributed
according to the agreement of the partners. The fact that two of the assets of the partnership are parcels of land does not
materially change the nature of the action. It is an action in personam because it is an action against a person, namely,
petitioner, on the basis of his personal liability. It is not an action in rem where the action is against the thing itself instead
of against the person. 27 Furthermore, there is no showing that the parcels of land involved in this case are being
disputed. In fact, it is only incidental that part of the assets of the partnership under liquidation happen to be parcels of
land.
The time-tested case of Claridades v. Mercader, et al., 28 settled this issue thus:
The fact that plaintiff prays for the sale of the assets of the partnership, including the fishpond in question, did not
change the nature or character of the action, such sale being merely a necessary incident of the liquidation of the
partnership, which should precede and/or is part of its process of dissolution.
The action filed by respondents not only seeks redress against petitioner. It also seeks the enforcement of, and
petitioner's compliance with, the contract that the partners executed to formalize the partnership's dissolution, as well as to
implement the liquidation and partition of the partnership's assets. Clearly, it is a personal action that, in effect, claims a
debt from petitioner and seeks the performance of a personal duty on his part. 29 In fine, respondents' complaint seeking
the liquidation and partition of the assets of the partnership with damages is a personal action which may be filed in the
proper court where any of the parties reside. 30 Besides, venue has nothing to do with jurisdiction for venue touches more
upon the substance or merits of the case. 31 As it is, venue in this case was properly laid and the trial court correctly ruled
so.
On the third issue, petitioner asserts that the surviving spouse of Vicente Tabanao has no legal capacity to sue
since she was never appointed as administratrix or executrix of his estate. Petitioner's objection in this regard is
misplaced. The surviving spouse does not need to be appointed as executrix or administratrix of the estate before she can
file the action. She and her children are complainants in their own right as successors of Vicente Tabanao. From the very
moment of Vicente Tabanao's death, his rights insofar as the partnership was concerned were transmitted to his heirs, for
rights to the succession are transmitted from the moment of death of the decedent. 32
Whatever claims and rights Vicente Tabanao had against the partnership and petitioner were transmitted to
respondents by operation of law, more particularly by succession, which is a mode of acquisition by virtue of which the
property, rights and obligations to the extent of the value of the inheritance of a person are transmitted. 33 Moreover,
respondents became owners of their respective hereditary shares from the moment Vicente Tabanao died. 34
A prior settlement of the estate, or even the appointment of Salvacion Tabanao as executrix or administratrix, is
not necessary for any of the heirs to acquire legal capacity to sue. As successors who stepped into the shoes of their
decedent upon his death, they can commence any action originally pertaining to the decedent. 35 From the moment of his
death, his rights as a partner and to demand fulfillment of petitioner's obligations as outlined in their dissolution agreement
were transmitted 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. HAaECD
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.
SO ORDERED.

SECOND DIVISION

[G.R. No. L-50261. May 31, 1982.]

IN THE MATTER OF GUARDIANSHIP OF THE MINORS CECILIA, REBECCA, FLORIDA, RAPHAEL,
RODOLFO, LUISITO, TEODORO, and all surnamed LAVIDES, ALBERTO C. LAVIDES, petitioner, vs. CITY COURT OF
LUCENA, Branch I, respondent.
Tierra Paril Law Office for petitioners.
Acting solicitor General Vicente V. Mendoza, Assistant Solicitor General Octavio R. Ramirez and Trial Attorney
Luis F. Simon for respondent.
DECISION
DE CASTRO, J p:
This is a petition for review on certiorari of the two (2) orders of respondent City Court of Lucena, Branch I, one
dated December 5, 1978 dismissing petitioner's petition for guardianship for lack of jurisdiction and the other, dated
December 27, 1978 denying petitioner's motion for reconsideration of the order of December 5, 1978.
There is no dispute as to the following facts:
Upon the death of his wife, petitioner Alberto Lavides instituted on April 5, 1971 before respondent City Court a
guardianship proceeding (Special Proceeding No. 0609) with respect to the person and property of their seven (7) minor
children named Cecilia, Rebecca, Florida, Raphael, Rodolfo, Luisito and Teodoro, all surnamed Lavides. Said petition
alleged that the estate left by the deceased wife of herein petitioner, mother of the above-named minors, has a total value
of thirty-five thousand pesos (P35,000.00) or an amount of P5,000.00 pertaining to each minor. Although there had been
no previous settlement of the estate of the deceased, petitioner was appointed and qualified as judicial guardian on May
10, 1971. prLL
On June 23, 1971, respondent City Court, then presided by Honorable Judge Filemon Juntereal, upon motion,
authorized petitioner to settle the estate extrajudicially and to sell a portion thereof consisting of shares of stocks.
Pursuant to said authority, petitioner extrajudicially settled the estate, and on August 28, 1971, sold the said shares of
stocks for the sum of P64,512.00.
On November 22, 1978, petitioner filed a motion for confirmation and approval of a Deed of Exchange Agreement
dated November 18, 1978. While this latter motion was still pending consideration, the respondent court, now presided by
Honorable Judge Jose J. Parentela, Jr., reviewed the records of the case and finding that the undivided estate left by the
deceased was worth at least P35,000.00, dismissed the case in an Order dated December 5, 1978, for lack of jurisdiction,
revoked the appointment of petitioner as guardian and annulled all proceedings taken prior to the issuance of the said
order of December 5, 1978.
Petitioner filed a motion for reconsideration of said order which was denied by respondent city court in its order
dated December 27, 1978. Hence, this instant petition, petitioner raising the following issues, namely:
a.
Whether or not respondent city court's jurisdiction over a petition for general guardianship is based on the
total value of the estate or on the value of the individual share of the minors in the estate of their deceased mother; and
b.
Whether or not the promulgation of the Revised Rules of Court which was made effective on January 1,
1964 overruled the doctrine laid down by this Honorable Tribunal in the case of "Delgado vs. Gamboa," G. R. No. L14326, February 28, 1962, 4 SCRA 505.
It appears that respondent city court dismissed the petition for guardianship on ground of lack of jurisdiction 1)
because a perusal of the records of the case shows that the undivided estate left by the deceased is worth P35,000.00
which is clearly outside its jurisdiction, pursuant to Section 1, Rule 92 of the Revised Rules of Court, and 2) because of
this Court's ruling in the case of Delgado vs. Gamboa, supra, to the effect that the concurrent jurisdiction of the Justice of
the Peace Courts with the Court of First Instance over the guardianship of the person and properties of the minors and
incompetents cannot be exercised when the estate has a value in excess of the jurisdictional amount for the former
courts.
Petitioner, on the other hand, contends that in the case of petition for guardianship of more than one minor, the
individual share of each minor which is then the estate of said minors determines the jurisdiction of the court pursuant to
Section 1, Rule 92 of the Revised Rules of Court; that inasmuch as there are seven (7) minor children sought to be placed
under guardianship and that the total value of the estate is P35,000.00, then by simple mathematical computation, the
value of the property of each minor is P5,000.00, already a determined estate, which is well within the jurisdiction of the
respondent city court; that the case of Delgado vs. Gamboa, promulgated in 1962, invoked by respondent city court in
dismissing his petition has been overruled and abandoned by the promulgation of the Revised Rules of Court, which took
effect in 1964. cdrep
Section 1, Rule 92 of the Revised Rules of Court granting concurrent jurisdiction to the municipal and city courts
with the Court of First Instance in the appointment of guardians, provides:
"Section 1.
Where to institute proceedings. Guardianship of the person or estate of a minor or incompetent
may be instituted in the Court of First Instance of the province, or in the justice of the peace court of the municipality, or in
the municipal court of the chartered city where the minor or incompetent person resides, and if he resides in a foreign
country, in the Court of First Instance of the province wherein his property or part thereof is situated; provided, however,
that where the value of the property of such minor or incompetent exceeds the jurisdiction of the justice of the peace or
municipal court, the proceedings shall be instituted in the Court of First Instance.
"In the City of Manila the proceedings shall be instituted in the Juvenile and Domestic Relations Court."
The above section, in clear terms, grants concurrent jurisdiction between municipal and city court and Courts of
First Instance in the appointment of guardians either with respect to the person or property of the minor or incompetent,
except that where the value of the property of such minor or incompetent exceeds the jurisdiction of the municipal or city
courts, the guardianship proceedings shall be instituted in the Court of First Instance. It is clear, therefore, that the value of
the property of the minor or incompetent sought to be placed in guardianship determines which court has jurisdiction. And
that property referred to is the individual estate of the minor so much so that when there are more than one minor or
incompetent sought to be placed under guardianship, what determines which court has jurisdiction is the value of the
individual property of each minor or incompetent.
In the case at bar, it appears that respondent city court dismissed the petition for guardianship on ground of lack
of jurisdiction because a perusal of the record of the case shows that the undivided estate left by the deceased mother is
worth P35,000.00 which amount is clearly outside its jurisdiction. This reasoning must be rejected for it overlooks the fact
that the petition for guardianship filed by herein petitioner before the respondent city court clearly alleged that the
individual estate or share of each of the seven minor children sought to be placed under guardianship is P5,000.00, which

amount is well within the jurisdiction of the respondent city court (Section 88, Judiciary Act of 1948, as amended by R.A.
No. 3828). That the respondent city court has jurisdiction over the case cannot be denied, for the rule is well-settled that
jurisdiction of the court over the subject matter is determined by the allegations of the complaint and/or petition. 1 That
each of the seven (7) minor children became owner of a one-seventh (1/7) share or an amount of P5,000 from the estate
left by the deceased mother valued at P35,000.00 upon the death of the latter cannot also be denied, for Article 777 of the
New Civil Code expressly provides that "the rights to the succession are transmitted from the moment of death of the
decedent," and from then on, the heir becomes the absolute owner of the decedent's property, subject to the rights and
obligations of the decedent and he cannot be deprived of such right except by methods provided for by law. 2
Respondent city court, however, would also base its dismissal of the case in the light of this Court's ruling in the
case of Delgado vs. Gamboa, supra, to the effect that the concurrence of jurisdiction between Courts of First Instance and
inferior courts over guardianship of the minors or incompetents cannot be exercised when the estate has a value in
excess of the jurisdictional amount for the latter courts. The respondent Court, however, overlooked one vital fact. A more
careful examination of the facts of said case, decided in 1962, reveals that it involved guardianship proceeding over the
person and property of three (3) minor children of decedent and an undivided estate valued at P7,000.00. That would
make a share of P2,333.33 for each minor child, which amount is also in excess of the jurisdictional amount for inferior
courts. 3 In the case at bar, there are seven (7) minor children to share in an undivided estate valued at P35,000.00 or a
share of P5,000.00 for each minor, which amount is well within the jurisdiction of the respondent city court, 4 which,
therefore, cannot validly invoke the case of Delgado vs. Gamboa to support its dismissal of the petition for guardianship.
For what is decisive is not the total value of the estate of the decedent, but the value of the individual share of each of the
minor heirs for whom a guardian is sought to be appointed individually not collectively. llcd
But petitioner would contend, as raised in the second issue of this petition, that the doctrine laid down by this
Court in the aforecited case of Delgado vs. Gamboa, has been overruled by the promulgation of the Revised Rules of
Court, particularly Section 1 of Rule 92. He argued that the case of Delgado vs. Gamboa, promulgated on February 28,
1962, was decided when Section 1, Rule 93 of the former Rules of Court was still effective, which rule commands that
guardianship shall be originally cognizable by the Court of First Instance; that when the Revised Rules of Court took effect
on January 1, 1964, the institution of guardianship proceedings is now governed by Section 1 of Rule 92 which states that
guardianship proceedings may be instituted in the Courts of First Instance or in the municipal courts.
A perusal of the case of Delgado vs. Gamboa, decided when Section 1 of former Rule 93, as amended by R.A.
No. 643, was still effective, shows that it merely restated and confirmed the doctrine laid down in the case of Morales vs.
Marquez, G. R. No. L-7463, May 27, 1955, which in effect, expounded the grant of concurrent jurisdiction between inferior
courts and Court of First Instance, as provided for by R.A. No. 643. And a comparison of the provisions of Section 1 of
former Rule 93, as amended, and Section 1 of the present Rule 92 shows that the latter rule restates the former rule.
Under the former rule, municipal or city courts have concurrent jurisdiction with the Court of First Instance in cases where
the value of the property of such minor or incompetent falls within the jurisdiction of the former courts. Likewise, under the
present rule, concurrent jurisdiction was also granted except that "where the value of the property of such minor or
incompetent exceeds the jurisdiction of the inferior courts, the proceedings shall, be instituted in the Court of First
Instance." The criterion, therefore, in determining in which court the guardianship proceeding shall be instituted under the
provision of both the former Rule 93 and the present Rule 92 remains the same. Hence, it cannot be accurately stated
that the Delgado ruling has been abandoned. In any case, the Delgado doctrine, as already demonstrated, does not
militate against petitioner's contention that the City has jurisdiction over the instant guardianship case.
Lastly, there is still one aspect of this case which must not be overlooked. It is not disputed that the respondent
City Court has entertained and granted petitioner's petition for guardianship in its Order as early as May 10, 1971 and has
exercised its jurisdiction by granting authority to petitioner to settle the estate extrajudicially and to sell a portion thereof
consisting of shares of stock; that after the lapse of seven (7) years or on November 22, 1978, respondent City Court
dismissed the case for lack of jurisdiction, revoked the appointment of petitioner as guardian and annulled all proceedings
taken. Would it serve the interest of justice to dismiss the case at this stage and let a new petition for guardianship be filed
in another court? To draw a tenuous jurisdictional line is to undermine stability in litigations. The time to be lost, effort
wasted, anxiety augmented, additional expenses incurred these are considerations which weigh heavily if this situation
is allowed to happen. As aptly stated by the petitioner "To let the respondent court reverse its stand now will pave a
pattern of judicial instability which, to reason and logic, is definitely not healthy administration of justice and not inducive of
court's veneration." 5
IN VIEW OF THE FOREGOING, the Order of respondent City Court of December 5, 1978 dismissing the petition
and the Order of December 27, 1978 denying petitioner's motion for reconsideration thereof are hereby set aside and the
case is remanded to it for further proceedings. No costs.
SO ORDERED.

FIRST DIVISION

[G.R. No. L-41715. June 18, 1976.]

ROSALIO BONILLA (a minor) SALVACION BONILLA (a minor) and PONCIANO BONILLA (their father) who
represents the minors, petitioners, vs. LEON BARCENA, MAXIMA ARIAS BALLENA, ESPERANZA BARCENA, MANUEL
BARCENA, AGUSTINA NERI, widow of JULIAN TAMAYO and HON. LEOPOLDO GIRONELLA of the Court First Instance
of Abra, respondents.
Federico Paredes for petitioners.
Demetrio V. Pre for private respondents.
DECISION
MARTIN, J p:
This is a petition for review 1 of the Order of the Court of First Instance of Abra in Civil Case No. 856, entitled
Fortunata Barcena vs. Leon Barcena, et al., denying the motions for reconsideration of its order dismissing the complaint
in the aforementioned case. cdll
On March 31, 1975 Fortunata Barcena, mother of minors Rosalio Bonilla and Salvacion Bonilla and wife of
Ponciano Bonilla, instituted a civil action in the Court of First Instance of Abra, to quiet title over certain parcels of land
located in Abra.
On May 9, 1975, defendants filed a written motion to dismiss the complaint, but before the hearing of the motion
to dismiss, the counsel for the plaintiff moved to amend the complaint in order to include certain allegations therein. The
motion to amend the complaint was granted and on July 17, 1975, plaintiffs filed their amended complaint.
On August 4, 1975, the defendants filed another motion to dismiss the complaint on the ground that Fortunata
Barcena is dead and, therefore, has no legal capacity to sue. Said motion to dismiss was heard on August 14, 1975. In
said hearing, counsel for the plaintiff confirmed the death of Fortunata Barcena and asked for substitution by her minor
children and her husband, the petitioners herein; but the court after the hearing immediately dismissed the case on the
ground that a dead person cannot be a real party in interest and has no legal personality to sue. LLjur
On August 19, 1975, counsel for the plaintiff received a copy of the order dismissing the complaint and on August
23, 1975, he moved to set aside the order of the dismissal pursuant to Sections 16 and 17 of Rule 3 of the Rules of Court.
2
On August 28, 1975, the court denied the motion for reconsideration filed by counsel for the plaintiff for lack of
merit. On September 1, 1975, counsel for deceased plaintiff filed a written manifestation praying that the minors Rosalio
Bonilla and Salvacion Bonilla be allowed to substitute their deceased mother, but the court denied the counsel's prayer for
lack of merit. From the order, counsel for the deceased plaintiff filed a second motion for reconsideration of the order
dismissing the complaint claiming that the same is in violation of Sections 16 and 17 of Rule 3 of the Rules of Court but
the same was denied.
Hence, this petition for review.
The Court reverses the respondent Court and sets aside its order dismissing the complaint in Civil Case No. 856
and its orders denying the motion for reconsideration of said order of dismissal. While it is true that a person who is dead
cannot sue in court, yet he can be substituted by his heirs in pursuing the case up to its completion. The records of this
case show that the death of Fortunata Barcena took place on July 9, 1975 while the complaint was filed on March 31,
1975. This means that when the complaint was filed on March 31, 1975, Fortunata Barcena was still alive, and therefore,
the court had acquired jurisdiction 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 his attorney to inform the court promptly
of such death . . . and to give the name and residence of his executor, administrator, guardian or other legal
representatives." This duty was complied with by the counsel for the deceased plaintiff when he manifested before the
respondent Court that Fortunata Barcena died on July 9, 1975 and asked for the proper substitution of parties in the case.
The respondent Court, however, instead of allowing the substitution, dismissed the complaint on the ground that a dead
person has no legal personality to sue. This is a grave error. Article 777 of the Civil Code provides "that the rights to the
succession are transmitted from the moment of the death of the decedent." From the moment of the death of the
decedent, the heirs become the absolute owners of his property, subject to the rights and obligations of the decedent, and
they cannot be deprived of their rights thereto except by the methods provided for by law. 3 The moment of death is the
determining factor when the heirs acquire a definite right to the inheritance whether such right be pure or contingent. 4
The right of the heirs to the property of the deceased vests in them even before judicial declaration of their being heirs in
the testate or intestate proceedings. 5 When Fortunata Barcena, therefore, died her claim or right to the parcels of land in
litigation in Civil Case No. 856, was not extinguished by her death but was transmitted to her heirs upon her death. Her
heirs have thus acquired interest in the properties in litigation and became parties in interest in the case. There is,
therefore, no reason for the respondent Court to allow their substitution as parties in interest for the deceased plaintiff.
Under Section 17, Rule 3 of the Rules of Court "after a party dies and the claim is not thereby extinguished, the
court shall order, upon proper notice, the legal representative of the deceased to appear and be substituted for the
deceased, within such time as may be granted . . ." The question as to whether an action survives or not depends on the
nature of the action and the damage sued for. 6 In the causes of action which survive the wrong complained affects
primarily and principally property and property rights, the injuries to the person being merely incidental, while in the
causes of action which do not survive the injury complained of is to the person, the property and rights of property affected
being incidental. 7 Following the foregoing criterion the claim of the deceased plaintiff which is an action to quiet title over
the parcels of land in litigation affects primarily and principally property and property rights and therefore is one that
survives even after her death. It is, therefore, the duty of the respondent Court to order the legal representative of the
deceased plaintiff to appear and to be substituted for her. But what the respondent Court did, upon being informed by the
counsel for the deceased plaintiff that the latter was dead, was to dismiss the complaint. This should not have been done
for under the same Section 17, Rule 3 of the Rules of Court, it is even the duty of the court, if the legal representative fails
to appear, to order the opposing party to procure the appointment of a legal representative of the deceased. In the instant
case the respondent Court did not have to bother ordering the opposing party to procure the appointment of a legal
representative of the deceased because her counsel has not only asked that the minor children be substituted for her but
also suggested that their uncle be appointed as guardian ad litem for them because their father is busy in Manila earning
a living for the family. But the respondent Court refused the request for substitution on the ground that the children were
still minors and cannot sue in court. This is another grave error because the respondent Court ought to have known that
under the same Section 17, Rule 3 of the Rules of Court, the court is 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 the respondent Court that the

uncle of the minors be appointed to act as guardian ad litem for them. Unquestionably, the respondent Court has gravely
abused its discretion in not complying with the clear provision of the Rules of Court dismissing the complaint of the plaintiff
in Civil Case No. 856 and refusing the substitution of parties in the case. prLL
IN VIEW OF THE FOREGOING, the order of the respondent Court dismissing the complaint in Civil Case No. 856
of the Court of First Instance of Abra and the motions for reconsideration of the order of dismissal of said complaint are
set aside and the respondent Court is hereby directed to allow the substitution of the minor children, who are the
petitioners therein for the deceased plaintiff and to appoint a qualified person as guardian ad litem for them. Without
pronouncement as to costs.
SO ORDERED."

THIRD DIVISION

[G.R. No. L-41171. July 23, 1987.]

INTESTATE ESTATE OF THE LATE VITO BORROMEO, PATROCINIO BORROMEO-HERRERA, petitioner, vs.
FORTUNATO BORROMEO and HON. FRANCISCO P. BURGOS, Judge of the Court of First Instance of Cebu, Branch II,
respondents.
[G.R. No. L-55000. July 23, 1987.]
IN THE MATTER OF THE ESTATE OF VITO BORROMEO, DECEASED, PILAR N. BORROMEO, MARIA B.
PUTONG, FEDERICO V. BORROMEO, JOSE BORROMEO, CONSUELO B. MORALES, AND CANUTO V. BORROMEO,
JR., heirs-appellants, vs. FORTUNATO BORROMEO, claimant-appellee.
[G.R. No. L-62895. July 23, 1987.]
JOSE CUENCO BORROMEO, petitioner, vs. HONORABLE COURT OF APPEALS, HON. FRANCISCO P.
BURGOS, As presiding Judge of the (now) Regional Trial Court, Branch XV, Region VII, RICARDO V. REYES, as
Administrator of the Estate of Vito Borromeo in Sp. Proc. No. 916-R, NUMERIANO G. ESTENZO and DOMINGO L.
ANTIGUA, respondents.
[G.R. No. L-63818. July 23, 1987.]
DOMINGO ANTIGUA AND RICARDO V. REYES, as Administrator of the Intestate Estate of VITO BORROMEO,
Sp. Proc. No. 916-R, Regional Trial Court of Cebu, joined by HON. JUDGE FRANCISCO P. BURGOS, as Presiding
Judge of Branch XV of the Regional Trial Court of Cebu, as a formal party, and ATTYS. FRANCIS M. ZOSA, GAUDIOSO
RUIZ and NUMERIANO ESTENZO, petitioners, vs. HONORABLE INTERMEDIATE APPELLATE COURT, JOSE
CUENCO BORROMEO, and PETRA O. BORROMEO, respondents.
[G.R. No. L-65995. July 23, 1987.]
PETRA BORROMEO, VITALIANA BORROMEO, AMELINDA BORROMEO, and JOSE CUENCO BORROMEO,
petitioners, vs. HONORABLE FRANCISCO P. BURGOS, Presiding Judge of Branch XV, Regional Trial Court of Cebu;
RICARDO V. REYES, Administrator of the Estate of VITO BORROMEO in Sp. Proc. No. 916-R; and DOMINGO L.
ANTIGUA, respondents.
DECISION
GUTIERREZ, JR., J p:
These cases before us all stem from SP. PROC. NO, 916-R of the then Court of First Instance of Cebu.
G.R. No. 41171
Vito Borromeo, a widower and permanent resident of Cebu City, died on March 13, 1952, in Paraaque, Rizal at
the age of 88 years, without forced heirs but leaving extensive properties in the province of Cebu.
On April 19, 1952, Jose Junquera filed with the Court of First Instance of Cebu a petition for the probate of a one
page document as the last will and testament left by the said deceased, devising all his properties to Tomas, Fortunato
and Amelia, all surnamed Borromeo, in equal and undivided shares, and designating Junquera as executor thereof. The
case was docketed as Special Proceedings No. 916-R. The document, drafted in Spanish, was allegedly signed and
thumbmarked by the deceased in the presence of Cornelio Gandionco, Eusebio Cabiluna, and Felixberto Leonardo who
acted as witnesses.
Oppositions to the probate of the will were filed. On May 28, 1960, after due trial, the probate court held that the
document presented as the will of the deceased was a forgery. cdphil
On appeal to this Court, the decision of the probate court disallowing the probate of the will was affirmed in
Testate Estate of Vito Borromeo, Jose H. Junquera, et al. v. Crispin Borromeo, et al. (19 SCRA 656).
The testate proceedings was converted into an intestate proceedings. Several parties came before the court filing
claims or petitions alleging themselves as heirs of the intestate estate of Vito Borromeo.
The following petitions or claims were filed:
1.
On August 29, 1967, the heirs of Jose Ma. Borromeo and Cosme Borromeo filed a petition for declaration
of heirs and determination of heirship. There was no opposition filed against said petition.
2.
On November 26, 1967, Vitaliana Borromeo also filed a petition for declaration as heir. The heirs of Jose
Ma. Borromeo and Cosme Borromeo filed an opposition to this petition.
3.
On December 13, 1967, Jose Barcenilla, Jr., Anecita Ocampo de Castro, Ramon Ocampo, Lourdes
Ocampo, Elena Ocampo, Isagani Morre, Rosario Morre, Aurora Morre, Lila Morre, Lamberto Morre, and Patricia Morre,
filed a petition for declaration of heirs and determination of shares. The petition was opposed by the heirs of Jose and
Cosme Borromeo.
4.
On December 2, 1968, Maria Borromeo Atega, Luz Borromeo, Hermenegilda Borromeo Nonnenkamp,
Rosario Borromeo, and Fe Borromeo Queroz filed a claim. Jose Cuenco Borromeo, Crispin Borromeo, Vitaliana Borromeo
and the heirs of Carlos Borromeo represented by Jose Talam filed oppositions to this claim.
When the aforementioned petitions and claims were heard jointly, the following facts were established:
1.
Maximo Borromeo and Hermenegilda Galan, husband and wife (the latter having predeceased the
former), were survived by their eight (8) children, namely,.
Jose Ma. Borromeo
Cosme Borromeo
Pantaleon Borromeo
Vito Borromeo
Paulo Borromeo
Anecita Borromeo
Quirino Borromeo and
Julian Borromeo
2.
Vito Borromeo died a widower on March 13, 1952, without any issue, and all his brothers and sisters
predeceased him.
3.
Vito's brother Pantaleon Borromeo died leaving the following children:
a.
Ismaela Borromeo, who died on Oct. 16, 1939
b.
Teofilo Borromeo, who died on Aug. 1, 1955, or 3 years after the death of Vito Borromeo. He was married
to Remedios Cuenco Borromeo, who died on March 28, 1968. He had an only son - Atty. Jose Cuenco Borromeo one of
the petitioners herein.
c.
Crispin Borromeo, who is still alive.
4.
Aniceta Borromeo, sister of Vito Borromeo, died ahead of him and left an only daughter, Aurora B.
Ocampo, who died on Jan. 30, 1950 leaving the following children:

a.
Aniceta Ocampo Castro
b.
Ramon Ocampo
c.
Lourdes Ocampo
d.
Elena Ocampo, all living, and
e.
Antonieta Ocampo Barcenilla (deceased), survived by claimant Jose Barcenilla, Jr.
5.
Cosme Borromeo, another brother of Vito Borromeo, died before the war and left the following children:
a.
Marcial Borromeo
b.
Carlos Borromeo, who died on Jan. 18, 1965, survived by his wife, Remedios Alfonso, and his only
daughter, Amelinda Borromeo Talam.
c.
Asuncion Borromeo
d.
Florentina Borromeo, who died in 1948.
e.
Amilio Borromeo, who died in 1944.
f.
Carmen Borromeo, who died in 1925.
The last three died leaving no issue.
6.
Jose Ma. Borromeo, another brother of Vito Borromeo, died before the war and left the following children:
a.
Exequiel Borromeo, who died on December 29, 1949
b.
Canuto Borromeo, who died on Dec. 31, 1959, leaving the following children:
aa.
Federico Borromeo
bb.
Marisol Borromeo (Maria B. Putong, Rec. p. 85)
cc.
Canuto Borromeo, Jr.
dd.
Jose Borromeo
ee.
Consuelo Borromeo
ff.
Pilar Borromeo
gg.
Salud Borromeo
hh.
Patrocinio Borromeo Herrera.
c.
Maximo Borromeo, who died in July, 1948
d.
Matilde Borromeo, who died on Aug. 6, 1946
e.
Andres Borromeo, who died on Jan. 3, 1923, but survived by his children:
aa.
Maria Borromeo Atega
bb.
Luz Borromeo
cc.
Hermenegilda Borromeo Nonnenkamp
dd.
Rosario Borromeo
ee.
Fe Borromeo Queroz.
On April 10, 1969, the trial court, invoking Art. 972 of the Civil Code, issued an order declaring the following, to the
exclusion of all others, as the intestate heirs of the deceased Vito Borromeo:
1.
Jose Cuenco Borromeo
2.
Judge Crispin Borromeo
3.
Vitaliana Borromeo
4.
Patrocinio Borromeo Herrera
5.
Salud Borromeo
6.
Asuncion Borromeo
7.
Marcial Borromeo
8.
Amelinda Borromeo de Talam, and
9.
The heirs of Canuto Borromeo
The court also ordered that the assets of the intestate estate of Vito Borromeo shall be divided into 4/9 and 5/9
groups and distributed in equal and equitable shares among the 9 abovenamed declared intestate heirs. LexLib
On April 21 and 30, 1969, the declared heirs, with the exception of Patrocinio B. Herrera, signed an agreement of
partition of the properties of the deceased Vito Borromeo which was approved by the trial court, in its order of August 15,
1969. In this same order, the trial court ordered the administrator, Atty. Jesus Gaboya, Jr., to partition the properties of the
deceased in the way and manner they are divided and partitioned in the said Agreement of Partition and further ordered
that 40% of the market value of the 4/9 and 5/9 of the estate shall be segregated. All attorney's fees shall be taken and
paid from this segregated portion.
On August 25, 1972, respondent Fortunato Borromeo, who had earlier claimed as heir under the forged will, filed
a motion before the trial court praying that he be declared as one of the heirs of the deceased Vito Borromeo, alleging that
he is an illegitimate son of the deceased and that in the declaration of heirs made by the trial court, he was omitted, in
disregard of the law making him a forced heir entitled to receive a legitime like all other forced heirs. As an acknowledged
illegitimate child, he stated that he was entitled to a legitime equal in every case to four-fifths of the legitime of an
acknowledged natural child.
Finding that the motion of Fortunato Borromeo was already barred by the order of the court dated April 12, 1969
declaring the persons named therein as the legal heirs of the deceased Vito Borromeo, the court dismissed the motion on
June 25, 1973.
Fortunato Borromeo filed a motion for reconsideration. In the memorandum he submitted to support his motion for
reconsideration, Fortunato changed the basis for his claim to a portion of the estate. He asserted and incorporated a
Waiver of Hereditary Rights dated July 31, 1967, supposedly signed by Pilar N. Borromeo, Maria B. Putong. Jose
Borromeo, Canuto V. Borromeo, Jr., Salud Borromeo, Patrocinio Borromeo-Herrera, Marcial Borromeo, Asuncion
Borromeo, Federico V. Borromeo, Consuelo B. Morales, Remedios Alfonso and Amelinda B. Talam. In the waiver, five of
the nine heirs relinquished to Fortunato their shares in the disputed estate. The motion was opposed on the ground that
the trial court, acting as a probate court, had no jurisdiction to take cognizance of the claim; that respondent Fortunato
Borromeo is estopped from asserting the waiver agreement; that the waiver agreement is void as it was executed before
the declaration of heirs; that the same is void having been executed before the distribution of the estate and before the
acceptance of the inheritance; and that it is void ab initio and inexistent for lack of subject matter.
On December 24, 1974, after due hearing, the trial court concluding that the five declared heirs who signed the
waiver agreement assigning their hereditary rights to Fortunato Borromeo had lost the same rights, declared the latter as
entitled to 5/9 of the estate of Vito Borromeo.
A motion for reconsideration of this order was denied on July 7, 1975.

In the present petition, the petitioner seeks to annul and set aside the trial court's order dated December 24, 1974,
declaring respondent Fortunato Borromeo entitled to 5/9 of the estate of Vito Borromeo and the July 7, 1975 order,
denying the motion for reconsideration.
The petitioner argues that the trial court had no jurisdiction to take cognizance of the claim of respondent
Fortunato Borromeo because it is not a money claim against the decedent but a claim for properties, real and personal,
which constitute all of the shares of the heirs in the decedent's estate, heirs who allegedly waived their rights in his favor.
The claim of the private respondent under the waiver agreement, according to the petitioner, may be likened to that of a
creditor of the heirs which is improper. He alleges that the claim of the private respondent under the waiver agreement
was filed beyond the time allowed for filing of claims as it was filed only sometime in 1973, after there had been a
declaration of heirs (April 10, 1969), an agreement of partition (April 30, 1969), the approval of the agreement of partition
and an order directing the administrator to partition the estate (August 15, 1969), when in a mere memorandum, the
existence of the waiver agreement was brought out.
It is further argued by the petitioner that the document entitled "Waiver of Hereditary Rights" executed on July 31,
1967, aside from having been cancelled and revoked on June 29, 1968, by Tomas L. Borromeo, Fortunato Borromeo and
Amelia Borromeo, is without force and effect because there can be no effective waiver of hereditary rights before there
has been a valid acceptance of the inheritance the heirs intend to transfer. Pursuant to Article 1043 of the Civil Code, to
make acceptance or repudiation of inheritance valid, the person must be certain of the death of the one from whom he is
to inherit and of his right to the inheritance. Since the petitioner and her co-heirs were not certain of their right to the
inheritance until they were declared heirs, their rights were, therefore, uncertain. This view, according to the petitioner, is
also supported by Article 1057 of the same Code which directs heirs, devisees, and legatees to signify their acceptance or
repudiation within thirty days after the court has issued an order for the distribution of the estate. LibLex
Respondent Fortunato Borromeo on the other hand, contends that under Article 1043 of the Civil Code there is no
need for a person to be first declared as heir before he can accept or repudiate an inheritance. What is required is that he
must first be certain of the death of the person from whom he is to inherit and that he must be certain of his right to the
inheritance. He points out that at the time of the signing of the waiver document on July 31, 1967, the signatories to the
waiver document were certain that Vito Borromeo was already dead as well as of their rights to the inheritance as shown
in the waiver document itself.
With respect to the issue of jurisdiction of the trial court to pass upon the validity of the waiver of hereditary rights,
respondent Borromeo asserts that since the waiver or renunciation of hereditary rights took place after the court assumed
jurisdiction over the properties of the estate it partakes of the nature of a partition of the properties of the estate needing
approval of the court because it was executed in the course of the proceedings. He further maintains that the probate
court loses jurisdiction of the estate only after the payment of all the debts of the estate and the remaining estate is
distributed to those entitled to the same.
The prevailing jurisprudence on waiver of hereditary rights is that "the properties included in an existing
inheritance cannot be considered as belonging to third persons with respect to the heirs, who by fiction of law 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 established in article 657 and applied by article
661 of the Civil Code. according to which the heirs succeed the deceased by the mere fact of death. More or less, time
may elapse from the moment of the death of the deceased until the heirs enter into possession of the hereditary property,
but the acceptance in any event retroacts to the moment of the death, in accordance with article 989 of the Civil Code.
The right is vested, although conditioned upon the adjudication of the corresponding hereditary portion." (Osorio v. Osorio
and Ynchausti Steamship Co., 41 Phil., 531). The heirs, therefore, could waive their hereditary rights in 1967 even if the
order to partition the estate was issued only in 1969.
In this case, however, the purported "Waiver of Hereditary Rights" cannot be considered to be effective. For a
waiver to exist, three elements are essential: (1) the existence of a right; (2) the knowledge of the existence thereof; and
(3) an intention to relinquish such right. (People v. Salvador, (CA) 53 O.G. No. 22, p. 8116, 8120). The intention to waive a
right or advantage must be shown clearly and convincingly, and when the only proof of intention rests in what a party
does, his act should be so manifestly consistent with, and indicative of an intent to, voluntarily relinquish the particular
right or advantage that no other reasonable explanation of his conduct is possible (67 C.J., 311). (Fernandez v. Sebido, et
al., 70 Phil., 151, 159).
The circumstances of this case show that the signatories to the waiver document did not have the clear and
convincing intention to relinquish their rights. Thus: (1) On October 27, 1967, Fortunato, Tomas, and Amelia Borromeo
filed a pleading entitled "Compliance" wherein they submitted a proposal for the amicable settlement of the case. In that
Compliance, they proposed to concede to all the eight (8) intestate heirs of Vito Borromeo all properties, personal and
real, including all cash and sums of money in the hands of the Special Administrator, as of October 31, 1967, not
contested or claimed by them in any action then pending in the Court of First Instance of Cebu. In turn, the heirs would
waive and concede to them all the 14 contested lots. In this document, the respondent recognizes and concedes that the
petitioner, like the other signatories to the waiver document, is an heir of the deceased Vito Borromeo, entitled to share in
the estate. This shows that the "Waiver of Hereditary Rights" was never meant to be what the respondent now purports it
to be. Had the intent been otherwise, there would not be any reason for Fortunato, Tomas, and Amelia Borromeo to
mention the heirs in the offer to settle the case amicably, and offer to concede to them parts of the estate of the deceased;
(2) On April 21 and 30, 1969, the majority of the declared heirs executed an Agreement on how the estate they inherited
shall be distributed. This Agreement of Partition was approved by the trial court on August 15, 1969; (3) On June 29, 1968,
the petitioner, among others, signed a document entitled Deed of Assignment" purporting to transfer and assign in favor of
the respondent and Tomas and Amelia Borromeo all her (Patrocinio B. Herrera's) rights, interests, and participation as an
intestate heir in the estate of the deceased Vito Borromeo. The stated consideration for said assignment was
P100,000.00; (4) On the same date, June 29, 1968, the respondent Tomas, and Amelia Borromeo (assignees in the
aforementioned deed of assignment) in turn executed a "Deed of Reconveyance" in favor of the heirs-assignors named in
the same deed of assignment. The stated consideration was P50,000.00; (5) A Cancellation of Deed of Assignment and
Deed of Reconveyance was signed by Tomas Borromeo and Amelia Borromeo on October 15, 1968, while Fortunato
Borromeo signed this document on March 24, 1969. LibLex
With respect to the issue of jurisdiction, we hold that the trial court had jurisdiction to pass upon the validity of the
waiver agreement. It must be noted that in Special Proceedings No. 916-R the lower court disallowed the probate of the
will and declared it as fake. Upon appeal, this Court affirmed the decision of the lower court on March 30, 1967, in G.R.
No. L-18498. Subsequently, several parties came before the lower court filing claims or petitions alleging themselves as

heirs of the intestate estate of Vito Borromeo. We see no impediment to the trial court in exercising jurisdiction and trying
the said claims or petitions. Moreover, the jurisdiction of the trial court extends to matters incidental and collateral to the
exercise of its recognized powers in handling the settlement of the estate.
In view of the foregoing, the questioned order of the trial court dated December 24, 1974, is hereby SET ASIDE.
G.R. No. 55000
This case was originally an appeal to the Court of Appeals from an order of the Court of First Instance of Cebu,
Branch II, dated December 24, 1974, declaring the waiver document earlier discussed in G.R. No. 41171 valid. The
appellate court certified this case to this Court as the questions raised are all of law.
The appellants not only assail the validity of the waiver agreement but they also question the jurisdiction of the
lower court to hear and decide the action filed by claimant Fortunato Borromeo.
The appellants argue that when the waiver of hereditary right was executed on July 31, 1967, Pilar Borromeo and
her children did not yet possess or own any hereditary right in the intestate estate of the deceased Vito Borromeo
because said hereditary right was only acquired and owned by them on April 10, 1969, when the estate was ordered
distributed.
They further argue that in contemplation of law, there is no such contract of waiver of hereditary right in the
present case because there was no object, which is hereditary right, that could be the subject matter of said waiver, and,
therefore, said waiver of hereditary right was not only null and void ab initio but was inexistent.
With respect to the issue of jurisdiction, the appellants contend that without any formal pleading filed by the
lawyers of Fortunato Borromeo for the approval of the waiver agreement and without notice to the parties concerned, two
things which are necessary so that the lower court would be vested with authority and jurisdiction to hear and decide the
validity of said waiver agreement, nevertheless, the lower court set the hearing on September 25, 1973 and without
asking for the requisite pleading. This resulted in the issuance of the appealed order of December 24, 1974, which
approved the validity of the waiver agreement. The appellants contend that this constitutes an error in the exercise of
jurisdiction.
The appellee on the other hand, maintains that by waiving their hereditary rights in favor of Fortunato Borromeo,
the signatories to the waiver document tacitly and irrevocably accepted the inheritance and by virtue of the same act, they
lost their rights because the rights from that moment on became vested in Fortunato Borromeo.
It is also argued by the appellee that under Article 1043 of the Civil Code there is no need for a person to be
declared as heir first before he can accept or repudiate an inheritance. What is required is that he is certain of the death of
the person from whom he is to inherit, and of his right to the inheritance. At the time of the signing of the waiver document
on July 31, 1967, the signatories to the waiver document were certain that Vito Borromeo was already dead and they were
also certain of their right to the inheritance as shown by the waiver document itself.
On the allegation of the appellants that the lower court did not acquire jurisdiction over the claim because of the
alleged lack of a pleading invoking its jurisdiction to decide the claim, the appellee asserts that on August 23, 1973, the
lower court issued an order specifically calling on all oppositors to the waiver document to submit their comments within
ten days from notice and setting the same for hearing on September 25, 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 probate court can decide the
question.
The issues in this case are similar to the issues raised in G.R. No. 41171. The appellants in this case, who are all
declared heirs of the late Vito Borromeo are contesting the validity of the trial court's order dated December 24, 1974,
declaring Fortunato Borromeo entitled to 5/9 of the estate of Vito Borromeo under the waiver agreement. cdphil
As stated in G.R. No. 41171, the supposed waiver of hereditary rights can not be validated. The essential
elements of a waiver, especially the clear and convincing intention to relinquish hereditary rights, are not found in this
case.
The October 27, 1967 proposal for an amicable settlement conceding to all the eight (8) intestate heirs various
properties in consideration for the heirs giving to the respondent and to Tomas, and Amelia Borromeo the fourteen (14)
contested lots was filed inspite of the fact that on July 31, 1967, some of the heirs had allegedly already waived or sold
their hereditary rights to the respondent.
The agreement on how the estate is to be distributed, the June 29, 1968 deed of assignment, the deed of
reconveyance, and the subsequent cancellation of the deed of assignment and deed of reconveyance all argue against
the purported waiver of hereditary rights.
Concerning the issue of jurisdiction, we have already stated in G.R. No. 41171 that the trial court acquired
jurisdiction to pass upon the validity of the waiver agreement because the trial court's jurisdiction extends to matters
incidental and collateral to the exercise of its recognized powers in handling the settlement of the estate.
The questioned order is, therefore, SET ASIDE.
G.R. No. 62895
A motion dated April 28, 1972, was filed by Atty. Raul M. Sesbreno, representative of some of the heirsdistributees, praying for the immediate closure of Special Proceeding No. 916-R. A similar motion dated May 29, 1979
was filed by Atty. Jose Amadora. Both motions were grounded on the fact that there was nothing more to be done after the
payment of all the obligations of the estate since the order of partition and distribution had long become final.
Alleging that respondent Judge Francisco P. Burgos failed or refused to resolve the aforesaid motions, petitioner
Jose Cuenco Borromeo filed a petition for mandamus before the Court of Appeals to compel the respondent judge to
terminate and close Special Proceedings No. 916-R.
Finding that the inaction of the respondent judge was due to pending motions to compel the petitioner, as coadministrator, to submit an inventory of the real properties of the estate and an accounting of the cash in his hands,
pending claims for attorney's fees, and that mandamus will not lie to compel the performance of a discretionary function,
the appellate court denied the petition on May 14, 1982. The petitioner's motion for reconsideration was likewise denied
for lack of merit. Hence, this petition.
The petitioner's stand is that the inaction of the respondent judge on the motion filed on April 28, 1972 for the
closure of the administration proceeding cannot be justified by the filing of the motion for inventory and accounting
because the latter motion was filed only on March 2, 1979. He claimed that under the then Constitution, it is the duty of
the respondent judge to decide or resolve a case or matter within three months from the date of its submission.

The respondents contend that the motion to close the administration had already been resolved when the
respondent judge cancelled all settings of all incidents previously set in his court in an order dated June 4, 1979, pursuant
to the resolution and restraining order issued by the Court of Appeals enjoining him to maintain status quo on the case.
As stated in G.R. No. 41171, on April 21 and 30, 1969, the declared heirs, with the exception of Patrocinio B.
Herrera, signed an agreement of partition of the properties of the deceased Vito Borromeo which was approved by the
trial court, in its order dated August 15, 1969. In this same order, the trial court ordered the administrator, Atty. Jesus
Gaboya, Jr., to partition the properties of the deceased in the way and manner they are divided and partitioned in the said
Agreement of Partition and further ordered that 40% of the market value of the 4/9 and 5/9 of the estate shall be
segregated and reserved for attorney's fees. LLphil
According to the manifestation of Judge Francisco Burgos dated July 5, 1982, (p. 197, Rollo, G.R. No. 41171) his
court has not finally distributed to the nine (9) declared heirs the properties due to the following circumstances:
1.
The court's determination of the market value of the estate in order to segregate the 40% reserved for
attorney's fees;
2.
The order of December 24, 1974, declaring Fortunato Borromeo as beneficiary of the 5/9 of the estate
because of the waiver agreement signed by the heirs representing the 5/9 group which is still pending resolution by this
Court (G.R. No. 41171);
3.
The refusal of administrator Jose Cuenco Borromeo to render his accounting; and
4.
The claim of Tarcela Villegas for 1/2 of the estate causing annotations of notices of lis pendens on the
different titles of the properties of the estate.
Since there are still real properties of the estate that were not yet distributed to some of the declared heirs,
particularly the 5/9 group of heirs due to the pending resolution of the waiver agreement, this Court in its resolution of
June 15, 1983, required the judge of the Court of First Instance of Cebu, Branch II, to expedite the determination of
Special Proceedings No. 916-R and ordered the co-administrator Jose Cuenco Borromeo to submit an inventory of real
properties of the estate and to render an accounting of cash and bank deposits realized from rents of several properties.
The matter of attorney's fees shall be discussed in G.R. No. 65995.
Considering the pronouncements stated in:
1.
G.R. No. 41171 & G.R. No. 55000, setting aside the Order of the trial court dated December 24, 1974;
2.
G.R. No. 63818, denying the petition for review seeking to modify the decision of the Intermediate
Appellate Court insofar as it disqualifies and inhibits Judge Francisco P. Burgos from further hearing the Intestate Estate
of Vito Borromeo and ordering the remand of the case to the Executive Judge of the Regional Trial Court of Cebu for reraffling; and
3.
G.R. No. 65995, granting the petition to restrain the respondents from further acting on any and all
incidents in Special Proceedings No. 916-R because of the affirmation of the decision of the Intermediate Appellate Court
in G.R. No. 63818."
the trial court may now terminate and close Special Proceedings No. 916-R, subject to the submission of an
inventory of the real properties of the estate and an accounting of the cash and bank deposits by the petitioner, as coadministrator of the estate, if he has not yet done so, as required by this Court in its Resolution dated June 15, 1983. This
must be effected with all deliberate speed.
G.R. No. 63818
On June 9, 1979, respondents Jose Cuenco Borromeo and Petra O. Borromeo filed a motion for inhibition in the
Court of First Instance of Cebu, Branch II, presided over by Judge Francisco P. Burgos to inhibit the judge from further
acting in Special Proceedings No. 916-R. The movants alleged, among others, the following:
xxx
xxx
xxx
"6.
To keep the agitation to sell moving, Atty. Antigua filed a motion for the production of the certificates of title
and to deposit the same with the Branch Clerk of Court, presumably for the ready inspection of interested buyers. Said
motion was granted by the Hon. Court in its order of October 2, 1978 which, however, became the subject of various
motions for reconsideration from heirs-distributees who contended that as owners they cannot be deprived of their titles
for the flimsy reasons advanced by Atty. Antigua. In view of the motions for reconsideration, Atty. Antigua ultimately
withdraw his motions for production of titles.
"7.
The incident concerning the production of titles triggered another incident involving Atty. Raul H. Sesbreno
who was then the counsel of herein movants Petra O. Borromeo and Amelinda B. Talam. In connection with said incident,
Atty. Sesbreno filed a pleading which the Hon. Presiding Judge considered direct contempt because, among others, Atty.
Sesbreno insinuated that the Hon. Presiding Judge stands to receive `fat commission' from the sale of the entire property.
Indeed, Atty. Sesbreno was seriously in danger of being declared in contempt of court with the dim prospect of suspension
from the practice of his profession. But obviously to extricate himself from the prospect of contempt and suspension, Atty.
Sesbreno chose rapproachment and ultimately joined forces with Atty. Antigua, et al., who, together, continued to harass
administrator Jose Cuenco Borromeo.
xxx
xxx
xxx
"9.
The herein movants are informed and so they allege, that a brother of the Hon. Presiding Judge is
married to a sister of Atty. Domingo L. Antigua.
"10.
There is now a clear tug of war between Atty. Antigua, et al. who are agitating for the sale of the entire
estate or to buy out the individual heirs, on the one hand, and the herein movants, on the other, who are not willing to sell
their distributive shares under the terms and conditions presently proposed. In this tug of war, a pattern of harassment has
become apparent against the herein movants, especially Jose Cuenco Borromeo. Among the harassments employed by
Atty. Antigua et al. are the pending motions for the removal of administrator Jose Cuenco Borromeo, the subpoena duces
tecum issued to the bank which seeks to invade into the privacy of the personal account of Jose Cuenco Borromeo, and
the other matters mentioned in paragraph 8 hereof. More harassment motions are expected until the herein movants shall
finally yield to the proposed sale. In such a situation, the herein movants beg for an entirely independent and impartial
judge to pass upon the merits of said incidents.
"11.
Should the Hon. Presiding Judge continue to sit and take cognizance of this proceeding, including the
incidents above-mentioned, he is liable to be misunderstood as being biased in favor of Atty. Antigua, et al. and prejudiced
against the herein movants. Incidents which may create this impression need not be enumerated herein. (pp. 39-41,
Rollo).

The motion for inhibition was denied by Judge Francisco P. Burgos. Their motion for reconsideration having been
denied, the private respondents filed a petition for certiorari and/or prohibition with preliminary injunction before the
Intermediate Appellate Court.
In the appellate court, the private respondents alleged, among others, the following:
xxx
xxx
xxx
"16.
With all due respect, petitioners regret the necessity of having to state herein that respondent Hon.
Francisco P. Burgos has shown undue interest in pursing the sale initiated by Atty. Domingo L. Antigua, et al. Significantly,
a brother of respondent Hon. Francisco P. Burgos is married to a sister of Atty. Domingo L. Antigua.
"17.
Evidently, the proposed sale of the entire properties of the estate cannot be legally done without the
conformity of the heirs-distributees because the certificates of title are already registered in their names. Hence, in pursuit
of the agitation to sell, respondent Hon. Francisco P. Burgos urged the heirs-distributees to sell the entire property based
on the rationale that proceeds thereof deposited in the bank will earn interest more than the present income of the so
called estate. Most of the heirs-distributees, however, have been timid to say their piece. Only the 4/9 group of heirs led
by petitioner Jose Cuenco Borromeo have had the courage to stand up and refuse the proposal to sell clearly favored by
respondent Hon. Francisco P. Burgos.
xxx
xxx
xxx
"20.
Petitioners will refrain from discussing herein the merits of the shotgun motion of Atty. Domingo L. Antigua
as well as other incidents now pending in the court below which smack of harassment against the herein petitioners. For,
regardless of the merits of said incidents, petitioners respectfully contend that it is highly improper for respondent Hon.
Francisco P. Burgos to continue to preside over Sp. Proc. No. 916-R by reason of the following circumstances:
"(a)
He has shown undue interest in the sale of the properties as initiated by Atty. Domingo L. Antigua whose
sister is married to a brother of respondent.
"(b)
The proposed sale cannot be legally done without the conformity of the heirs-distributees, and petitioners
have openly refused the sale, to the great disappointment of respondent.
"(c)
The shotgun motion of Atty. Antigua and similar incidents are clearly intended to harass and embarrass
administrator Jose Cuenco Borromeo in order to pressure him into acceding to the proposed sale.
"(d)
Respondent has shown bias and prejudice against petitioners by failing to resolve the claim for attorney's
fees filed by Jose Cuenco Borromeo and the late Crispin Borromeo. Similar claims by the other lawyers were resolved by
respondent after petitioners refused the proposed sale." (pp. 41-43, Rollo).
On March 1, 1983, the appellate court rendered its decision granting the petition for certiorari and/or prohibition
and disqualifying Judge Francisco P. Burgos from taking further cognizance of Special Proceedings No. 916-R. The court
also ordered the transmission of the records of the case to the Executive Judge of the Regional Trial Court of Region VII
for re-raffling.
A motion for reconsideration of the decision was denied by the appellate court on April 11, 1983. Hence, the
present petition for review seeking to modify the decision of the Intermediate Appellate Court insofar as it disqualifies and
inhibits Judge Francisco P. Burgos from further hearing the case of Intestate Estate of Vito Borromeo and orders the
remand of the case to the Executive Judge of the Regional Trial Court of Cebu for re-raffling. LLphil
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 judiciary. However, we decide
the petition on its merits for the guidance of the judge to whom this case will be reassigned and others concerned.
The petitioners deny that respondent Jose Cuenco Borromeo has been harassed. They contend that Judge
Burgos has never shown unusual interest in the proposed sale of the entire estate for P6,700,000.00 in favor of the
buyers of Atty. Antigua. They claim that this disinterest is shown by the judge's order of March 2, 1979 assessing the
property of the estate at P15,000,000.00. They add that he only ordered the administrator to sell so much of the properties
of the estate to pay the attorney's fees of the lawyers-claimants. To them, the inhibition of Judge Burgos would have been
unreasonable because his orders against the failure of Jose Cuenco Borromeo, as administrator, to give an accounting
and inventory of the estate were all affirmed by the appellate court. They claim that the respondent court should also have
taken judicial notice of the resolution of this Court directing the said judge to "expedite the settlement and adjudication of
the case" in G.R. No. 54232. And finally, they state that the disqualification of Judge Burgos would delay further the
closing of the administration proceeding as he is the only judge who is conversant with the 47 volumes of the records of
the case.
Respondent Jose Cuenco Borromeo, to show that he had been harassed, countered that Judge Burgos appointed
Ricardo V. Reyes as co-administrator of the estate on October 11, 1972, yet Borromeo was singled out to make an
accounting of what he was supposed to have received as rentals for the land upon which the Juliana Trade Center is
erected, from January, 1977 to February, 1982, inclusive, without mentioning the withholding tax for the Bureau of Internal
Revenue. In order to bolster the agitation to sell as proposed by Domingo L. Antigua, Judge Burgos invited Antonio
Barredo, Jr., to a series of conferences from February 26 to 28, 1979. During the conferences, Atty. Antonio Barredo, Jr.,
offered to buy the shares of the heirs-distributees presumably to cover up the projected sale initiated by Atty. Antigua.
On March 2, 1979, or two days after the conferences, a motion was filed by petitioner Domingo L. Antigua praying
that Jose Cuenco Borromeo be required to file an inventory when he has already filed one to account for cash, a report on
which the administrators had already rendered: and to appear and be examined under oath in a proceeding conducted by
Judge Burgos. It was also prayed that subpoena duces tecum be issued for the appearance of the Manager of the
Consolidated Bank and Trust Co., bringing all the bank records in the name of Jose Cuenco Borromeo jointly with his wife
as well as the appearance of heirs-distributees Amelinda Borromeo Talam and another heir distributee Vitaliana
Borromeo. Simultaneously with the filing of the motion of Domingo Antigua, Atty. Raul H. Sesbreno filed a request for the
issuance of subpoena duces tecum to the Manager of Consolidated Bank and Trust Co., Inc.; Register of Deeds of Cebu
City; Register of Deeds for the Province of Cebu and another subpoena duces tecum to Atty. Jose Cuenco Borromeo.
On the same date, the Branch Clerk of Court issued a subpoena duces tecum to the Manager of the bank, the
Register of Deeds for the City of Cebu, the Register of Deeds for the Province of Cebu, and to Jose Cuenco Borromeo.
On the following day, March 3, 1979, Atty. Gaudioso V. Villagonzalo in behalf of the heirs of Marcial Borromeo who
had a common cause with Atty. Barredo, Jr., joined petitioner Domingo L. Antigua by filing a motion for relief of the
administrator.
On March 5, 1979, Atty. Villagonzalo filed a request for the issuance of a subpoena duces tecum to private
respondent Jose Cuenco Borromeo to bring and produce all the owners' copies of the titles in the court presided over by
Judge Burgos.

Consequently, the Branch Clerk of Court issued a subpoena duces tecum commanding Atty. Jose Cuenco
Borromeo to bring and produce the titles in court.
All the above-incidents were set for hearing on June 7, 1979 but on May 14, 1979, before the date of the hearing,
Judge Burgos issued an order denying the private respondents' motion for reconsideration and the motion to quash the
subpoena.
It was further argued by the private respondents that if Judge Francisco P. Burgos is not inhibited or disqualified
from trying Sp. Proc. No. 916-R, there would be a miscarriage of justice because for the past twelve years, he had not
done anything towards the closure of the estate proceedings except to sell the properties of the heirs-distributees as
initiated by petitioner Domingo L. Antigua at 6.7 million pesos while the Intestate Court had already evaluated it at 15
million pesos. cdrep
The allegations of the private respondents in their motion for inhibition, more specifically the insistence of the trial
judge to sell the entire estate at P6,700,000.00, where 4/9 group of heirs objected, cannot easily be ignored. Suspicion of
partiality on the part of a trial judge must be avoided at all costs. In the case of Bautista v. Rebueno (81 SCRA 535), this
Court stated:
". . . The Judge must maintain and preserve the trust and faith of the parties litigants. He must hold himself above
reproach and suspicion. At the very first sign of lack of faith and trust to his actions, whether well grounded or not, the
Judge has no other alternative but inhibit himself from the case. A judge may not be legally prohibited from sitting in a
litigation, but when circumstances appear that will induce doubt to his honest actuations and probity in favor of either
party, or incite such state of mind, he should conduct a careful self-examination. He should exercise his discretion in a
way that the people's faith in the Courts of Justice is not impaired. The better course for the Judge under such
circumstances is to disqualify himself. That way, he avoids being misunderstood, his reputation for probity and objectivity
is preserved. What is more important, the ideal of impartial administration of justice is lived up to."
In this case, the fervent distrust of the private respondents is based on sound reasons. As earlier stated, however,
the petition for review seeking to modify the decision of the Intermediate Appellate Court insofar as it disqualifies and
inhibits Judge Francisco P. Burgos from further hearing the Intestate Estate of Vito Borromeo case and ordering the
remand of the case to the Executive Judge of the Regional Trial Court for re-raffling should be DENIED for the decision is
not only valid but the issue itself has become moot and academic.
G.R. No. 65995
The petitioners seek to restrain the respondents from further acting on any and all incidents in Special
Proceedings No. 916-R during the pendency of this petition and G.R. No. 63818. They also pray that all acts of the
respondents related to the said special proceedings after March 1, 1983 when the respondent Judge was disqualified by
the appellate court be declared null and void and without force and effect whatsoever.
The petitioners state that the respondent Judge has set for hearing all incidents in Special Proceedings No. 916R, including the reversion from the heirs-distributees to the estate, of the distributed properties already titled in their
names as early as 1970, notwithstanding the pending inhibition case elevated before this Court which is docketed as G.R.
No. 63818.
The petitioners further argue that the present status of Special Proceeding No. 916-R requires only the appraisal
of the attorney's fees of the lawyers-claimants who were individually hired by their respective heirs-clients, so their
attorney's fees should be legally charged against 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. 916-R 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 dated December 24, 1974, declaring the respondent
entitled to 5/9 of the estate of the late Vito Borromeo and the order dated July 7, 1975, denying the petitioner's motion for
reconsideration of the aforementioned order are hereby SET ASIDE for being NULL and VOID;
(2)
In G.R. No. 55000, the order of the trial court declaring the waiver document valid is hereby SET ASIDE;
(3)
In G.R. No. 63818, the petition is hereby DENIED. The issue in the decision of the Intermediate Appellate
Court disqualifying and ordering the inhibition of Judge Francisco P. Burgos from further hearing Special Proceedings No.
916-R is declared moot and academic. The judge who has taken over the sala of retired Judge Francisco P. Burgos shall
immediately conduct hearings with a view to terminating the proceedings. In the event that the successor-judge is likewise
disqualified, the order of the Intermediate Appellate Court directing the Executive Judge of the Regional Trial Court of
Cebu to re-raffle the case shall be implemented;
(4)
In G.R. No. 65995, the petition is hereby GRANTED. The issue seeking to restrain Judge Francisco P.
Burgos from further acting in G.R. No. 63818 is MOOT and ACADEMIC;
(5)
In G.R. No. 62895, the trial court is hereby ordered to speedily terminate the close Special Proceedings
No. 916-R, subject to the submission of an inventory of the real properties of the estate and an accounting of the cash and
bank deposits by the petitioner-administrator of the estate as required by this Court in its Resolution dated June 15, 1983;
and
(6)
The portion of the Order of August 15, 1969, segregating 40% of the market value of the estate from
which attorney's fees shall be taken and paid should be, as it is hereby DELETED. The lawyers should collect from the
heirs-distributees who individually hired them, attorney's fees according to the nature of the services rendered but in
amounts which should not exceed more than 20% of the market value of the property the latter acquired from the estate
as beneficiaries.
SO ORDERED.

THIRD DIVISION
[G.R. No. 126707. February 25, 1999.]

BLANQUITA E. DELA MERCED, LUISITO E. DELA MERCED, BLANQUITA M. MACATANGAY, MA. OLIVIA M.
PAREDES, TERESITA P. RUPISAN, RUBEN M. ADRIANO, HERMINIO M. ADRIANO, JOSELITO M. ADRIANO,
ROGELIO M. ADRIANO, WILFREDO M. ADRIANO, VICTOR M. ADRIANO, CORAZON A. ONGOCO, JASMIN A.
MENDOZA and CONSTANTINO M. ADRIANO, petitioners, vs. JOSELITO P. DELA MERCED, respondent.
DECISION
PURISIMA, J p:
This is a Petition for Review on Certiorari of the Decision of the Court of Appeals, dated October 17, 1996, in CAG.R. CV No. 41283, which reversed the decision, dated June 10, 1992, of the Regional Trial Court, Branch 67, Pasig City,
in Civil Case No. 59705.
The facts of the case are, as follows:
On March 23, 1987, Evarista M. dela Merced died intestate, without issue. She left five (5) parcels of land situated
in Orambo, Pasig City.
At the time of her death, Evarista was survived by three sets of heirs, viz: (1) Francisco M. dela Merced, her
legitimate brother; (2) Teresita P. Rupisan, her niece who is the only daughter of Rosa de la Merced-Platon (a sister who
died in 1943); and (3) the legitimate children of Eugenia dela Merced-Adriano (another sister of Evarista who died in
1965), namely: Herminio, Ruben, Joselito, Rogelio, Wilfredo, Victor and Constantino, all surnamed Adriano, Corazon
Adriano-Ongoco and Jasmin Adriano-Mendoza.
Almost a year later or on March 19, 1988, to be precise, Francisco (Evarista's brother) died. He was survived by
his wife Blanquita Errea dela Merced and their three legitimate children, namely, Luisito E. dela Merced, Blanquita M.
Macatangay and Ma. Olivia M. Paredes.
On April 20, 1989, the three sets of heirs of the decedent, Evarista M. dela Merced, referring to (1) the
abovenamed heirs of Francisco; (2) Teresita P. Rupisan and (3) the nine [9] legitimate children of Eugenia, executed an
extrajudicial settlement, entitled "Extrajudicial Settlement of the Estate of the Deceased Evarista M. dela Merced"
adjudicating the properties of Evarista to them, each set with a share of one-third (1/3) pro-indiviso.
On July 26 ,1990, private respondent Joselito P. Dela Merced, illegitimate son of the late Francisco de la Merced,
filed a "Petition for Annulment of the Extrajudicial Settlement of the Estate of the Deceased Evarista M. Dela Merced with
Prayer for a Temporary Restraining Order", alleging that he was fraudulently omitted from the said settlement made by
petitioners, who were fully aware of his relation to the late Francisco. Claiming successional rights, private respondent
Joselito prayed that he be included as one of the beneficiaries, to share in the one-third (1/3) pro-indiviso share in the
estate of the deceased Evarista, corresponding to the heirs of Francisco.
On August 3, 1990, the trial court issued the temporary restraining order prayed for by private respondent Joselito,
enjoining the sale of any of the real properties of the deceased Evarista.
After trial, however, or on June 10, 1992, to be definite, the trial court dismissed the petition, lifted the temporary
restraining order earlier issued, and cancelled the notice of lis pendens on the certificates of title covering the real
properties of the deceased Evarista.
In dismissing the petition, the trial court stated:
"The factual setting of the instant motion after considering the circumstances of the entire case and the other
evidentiary facts and documents presented by the herein parties points only to one issue which goes into the very
skeleton of the controversy, to wit: "Whether or not the plaintiff may participate in the intestate estate of the late Evarista
M. Dela Merced in his capacity as representative of his alleged father, Francisco Dela Merced, brother of the deceased,
whose succession is under consideration.
xxx
xxx
xxx
It is to be noted that Francisco Dela Merced, alleged father of the herein plaintiff, is a legitimate child, not an
illegitimate. Plaintiff, on the other hand, is admittedly an illegitimate child of the late Francisco Dela Merced. Hence, as
such, he cannot represent his alleged father in the succession of the latter in the intestate estate of the late Evarista Dela
Merced, because of the barrier in Art. 992 of the New Civil Code which states that:
'An illegitimate child has no right to inherit ab intestato from the legitimate children and relatives of his father or
mother, nor shall such children or relatives inherit in the same manner from the illegitimate child.'
The application of Art. 992 cannot be ignored in the instant case, it is clearly worded in such a way that there can
be no room for any doubts and ambiguities. This provision of the law imposes a barrier between the illegitimate and the
legitimate family. . ." (Rollo, p. 87-88)
Not satisfied with the dismissal of his petition, the private respondent appealed to the Court of Appeals.
In its Decision of October 17, 1996, the Court of Appeals reversed the decision of the trial court of origin and
ordered the petitioners to execute an amendatory agreement which shall form part of the original settlement, so as to
include private respondent Joselito as a co-heir to the estate of Francisco, which estate includes one-third (1/3) pro
indiviso of the latter's inheritance from the deceased Evarista.
The relevant and dispositive part of the Decision of the Court of Appeals, reads:
"xxx
xxx
xxx
It is a basic principle embodied in Article 777, New Civil Code that the rights to the succession are transmitted
from the moment of the death of the decedent, so that Francisco dela Merced inherited 1/3 of his sister's estate at the
moment of the latter's death. Said 1/3 of Evarista's estate formed part of Francisco's estate which was subsequently
transmitted upon his death on March 23, 1987 to his legal heirs, among whom is appellant as his illegitimate child.
Appellant became entitled to his share in Francisco's estate from the time of the latter's death in 1987. The extrajudicial
settlement therefore is void insofar as it deprives plaintiff-appellant of his share in the estate of Francisco M. dela Merced.
As a consequence, the cancellation of the notice of lis pendens is not in order because the property is directly affected.
Appellant has the right to demand a partition of his father's estate which includes 1/3 of the property inherited from
Evarista dela Merced.
"WHEREFORE, premises considered, the appealed decision is hereby REVERSED and SET ASIDE. Defendantsappellees are hereby ordered to execute an amendatory agreement/settlement to include herein plaintiff-appellant Joselito
dela Merced as co-heir to the estate of Francisco dela Merced which includes 1/3 of the estate subject of the questioned
Deed of Extrajudicial Settlement of the Estate of Evarista M. dela Merced dated April 20, 1989. The amendatory
agreement/settlement shall form part of the original Extrajudicial Settlement. With costs against defendants-appellees.
SO ORDERED." (Rollo, p. 41)

In the Petition under consideration, petitioners insist that being an illegitimate child, private respondent Joselito is
barred from inheriting from Evarista because of the provision of Article 992 of the New Civil Code, which lays down an
impassable barrier between the legitimate and illegitimate families.
The Petition is devoid of merit.
Article 992 of the New Civil Code is not applicable because involved here is not a situation where an illegitimate
child would inherit ab intestato from a legitimate sister of his father, which is prohibited by the aforesaid provision of law.
Rather, it is a scenario where an illegitimate child inherits from his father, the latter's share in or portion of, what the latter
already inherited from the deceased sister, Evarista.
As opined by the Court of Appeals, the law in point in the present case is Article 777 of the New Civil Code, which
provides that the rights to succession are transmitted from the moment of death of the decedent.
Since Evarista died ahead of her brother Francisco, the latter inherited a portion of the estate of the former as one
of her heirs. Subsequently, when Francisco died, his heirs, namely: his spouse, legitimate children, and the private
respondent, Joselito, an illegitimate child, inherited his (Francisco's) share in the estate of Evarista. It bears stressing that
Joselito does not claim to be an heir of Evarista by right of representation but participates in his own right, as an heir of
the late Francisco, in the latter's share (or portion thereof) in the estate of Evarista.
Petitioners argue that if Joselito desires to assert successional rights to the intestate estate of his father, the
proper forum should be in the settlement of his own father's intestate estate, as this Court held in the case of Gutierrez vs.
Macandog (150 SCRA 422 [1987])
Petitioners' reliance on the case of Gutierrez vs. Macandog (supra) is misplaced. The said case involved a claim
for support filed by one Elpedia Gutierrez against the estate of the decedent, Agustin Gutierrez, Sr., when she was not
even an heir to the estate in question, at the time, and the decedent had no obligation whatsoever to give her support.
Thus, this Court ruled that Elpedia should have asked for support pendente lite before the Juvenile and Domestic
Relations Court in which court her husband (one of the legal heirs of the decedent) had instituted a case for legal
separation against her on the ground of an attempt against his life. When Mauricio (her husband) died, she should have
commenced an action for the settlement of the estate of her husband, in which case she could receive whatever
allowance the intestate court would grant her.
The present case, however, relates to the rightful and undisputed right of an heir to the share of his late father in
the estate of the decedent Evarista, ownership of which had been transmitted to his father upon the death of Evarista.
There is no legal obstacle for private respondent Joselito, admittedly the son of the late Francisco, to inherit in his own
right as an heir to his father's estate, which estate includes a one-third (1/3) undivided share in the estate of Evarista.
WHEREFORE, for lack of merit, the Petition is hereby DENIED and the Appealed Decision of the Court of
Appeals AFFIRMED in toto.
SO ORDERED.

SECOND DIVISION

[G.R. No. L-28394. November 26, 1970.]

PEDRO GAYON, plaintiff-appellant, vs. SILVESTRE GAYON and GENOVEVA DE GAYON, defendants-appellees.
German M. Lopez for plaintiff-appellant.
Pedro R. Davila for defendants-appellees.
DECISION
CONCEPCION, C.J p:
Appeal, taken by plaintiff Pedro Gayon, from an order of the Court of First Instance of Iloilo dismissing his
complaint in Civil Case. No. 7334 thereof.
The records show that on July 31, 1967, Pedro Gayon filed said complaint against the spouses Silvestre Gayon
and Genoveva de Gayon, alleging substantially that, on October 1, 1952, said spouses executed a deed copy of which
was attached to the complaint, as Annex "A" whereby they sold to Pedro Gelera, for the sum of P500.00, a parcel of
unregistered land therein described, and located in the barrio of Cabubugan, municipality of Guimbal, province of Iloilo,
including the improvements thereon, subject to redemption within five (5) years or not later than October 1, 1957; that said
right of redemption had not been exercised by Silvestre Gayon, Genoveva de Gayon, or any of their heirs or successors,
despite the expiration of the period therefor; that said Pedro Gelera and his wife Estelita Damaso had, by virtue of a deed
of sale copy of which was attached to the complaint, as Annex "B" dated March 21, 1961, sold the aforementioned
land to plaintiff Pedro Gayon for the sum of P614.00; that plaintiff had, since 1961, introduced thereon improvements
worth P1,000; that he had, moreover, fully paid the taxes on said property up to 1967; and that Articles 1606 and 1616 of
our Civil Code require a judicial decree for the consolidation of the title in and to a land acquired through a conditional
sale, and, accordingly, praying that an order be issued in plaintiff's favor for the consolidation of ownership in and to the
aforementioned property.
In her answer to the complaint, Mrs. Gayon alleged that her husband, Silvestre Gayon, died on January 6, 1954,
long before the institution of this case; that Annex "A" to the complaint is fictitious, for the signature thereon purporting to
be her signature is not hers; that neither she nor her deceased husband had ever executed "any document of whatever
nature in plaintiff's favor"; that the complaint is malicious and had embarrassed her and her children; that the heirs of
Silvestre Gayon had to "employ the services of counsel for a fee of P500.00 and incurred expenses of at least P200.00";
and that being a brother of the deceased Silvestre Gayon, plaintiff "did not exert efforts for the amicable settlement of the
case" before filing his complaint. She prayed, therefore, that the same be dismissed and that plaintiff be sentenced to pay
damages.
Soon later, she filed a motion to dismiss, reproducing substantially the averments made in her answer and
stressing that, in view of the death of Silvestre Gayon, there is a "necessity of amending the complaint to suit the genuine
facts on record." Presently, or on September 16, 1967, the lower court issued the order appealed from, reading:
"Considering the motion to dismiss and it appearing from Exhibit 'A' annexed to the complaint that Silvestre
Gayon is the absolute owner of the land in question, and considering the fact that Silvestre Gayon is now dead and his
wife Genoveva de Gayon has nothing to do with the land subject of plaintiff's complaint, as prayed for, this case is hereby
dismissed, without pronouncement as to costs." 1
A reconsideration of this order having been denied, plaintiff interposed the present appeal, which is well taken.
Said order is manifestly erroneous and must be set aside. To begin with, it is not true that Mrs. Gayon "has
nothing to do with the land subject of plaintiff's complaint." As the widow of Silvestre Gayon, she is one of his compulsory
heirs 2 and has, accordingly, an interest in the property in question. Moreover, her own motion to dismiss indicated merely
"a necessity of amending the complaint," to the end that the other successors in interest of Silvestre Gayon, instead of the
latter, be made parties in this case. In her opposition to the aforesaid motion for reconsideration of the plaintiff, Mrs.
Gayon alleged, inter alia, that the "heirs cannot represent the dead defendant, unless there is a declaration of heirship."
Inasmuch, however, as succession takes place, by operation of law, "from the moment of the death of the decedent" 3 and
"(t)he inheritance includes all the property, rights and obligations of a person which are not extinguished by his death," 4 it
follows that if his heirs were included as defendants in this case, they would be sued, not as "representatives" of the
decedent, but as owners of an aliquot interest in the property in question, even if the precise extent of their interest may
still be undetermined and they have derived it from the decent. Hence, they may be sued without a previous declaration of
heirship, provided there is no pending special proceeding for the settlement of the estate of the decedent. 5
As regards plaintiff's failure to seek a compromise, as an alleged obstacle to the present case, Art. 222 of our Civil
Code provides:
"No suit shall be filed or maintained between members of the same family unless it should appear that earnest
efforts toward a compromise have been made, but that the same have failed, subject to the limitations in article 2035."
It is noteworthy that the impediment arising from this provision applies to suits "filed or maintained between
members of the same family." This phrase, "members of the same family," should, however, be construed in the light of
Art. 217 of the same Code, pursuant to which:
"Family relations shall include those:
(1)
Between husband and wife;
(2)
Between parent and child;
(3)
Among other ascendants and their descendants;
(4)
Among brothers and sisters."
Mrs. Gayon is plaintiff's sister-in-law, whereas her children are his nephews and/or nieces. Inasmuch as none of
them is included in the enumeration contained in said Art. 217 which should be construed strictly, it being an exception
to the general rule and Silvestre Gayon must necessarily be excluded as party in the case at bar, it follows that the
same does not come within the purview of Art. 222, and plaintiff's failure to seek a compromise before filing the complaint
does not bar the same. LLphil
WHEREFORE, the order appealed from is hereby set aside and the case remanded to the lower court for the
inclusion, as defendant or defendants therein, of the administrator or executor of the estate of Silvestre Gayon, if any, in
lieu of the decedent, or, in the absence of such administrator or executor, of the heirs of the deceased Silvestre Gayon,
and for further proceedings, not inconsistent with this decision, with the costs of this instance against defendant-appellee,
Genoveva de Gayon. It is so ordered.
THIRD DIVISION
[G.R. No. L-55076. September 21, 1987.]

MATILDE S. PALICTE, petitioner, vs. HON. JOSE O. RAMOLETE as Presiding Judge of Court of First Instance of
Cebu, Branch III, and MARCELO SOTTO, Administrator, respondents.
DECISION
GUTIERREZ, JR., J p:
This is a petition for review on certiorari of the order of the then Court of First Instance of Cebu declaring the deed
of redemption executed for the petitioner null and void and denying the petitioner's motion that the Registrar of Deeds of
the City of Cebu be directed to transfer the Owner's Duplicate Certificates of Title to Lot Nos. 1049, 1051, and 1052 from
Filemon Sotto to her and to issue a new Owner's Duplicate Certificate of Title to Lot 2179-C in her name. LexLib
On July 5, 1979, a sale at public auction was held pursuant to a writ of execution issued on February 5, 1979 by
the respondent judge and to a court order dated June 4, 1979 in the case of Pilar Teves, et al. v. Marcelo Sotto,
Administrator, Civil Case No. R-10027, for the satisfaction of judgment in the amount of P725,270.00.
The following properties belonging to the late Don Filemon Sotto and administered by respondent Marcelo Sotto
were levied upon:
"1.
Parcel of land on Lot No. 1049, covered by TCT No. 27640 of the Banilad Friar Lands Estate, Cebu City;
2.
Parcel of land on Lot No. 1052, covered by TCT No. 27642 of the Banilad Friar Lands Estate, Cebu City;
3.
Parcel of land on Lot No. 1051, covered by TCT No. 27641 of the Banilad Friad Lands Estate, Cebu City;
4.
Parcel of land on Lot No. 5253 of the Cebu Cadastre, Cebu City, covered by TCT No. 27639;
5.
Parcel of land situated at Mantalongon, Dalaguete, Cebu, covered by TD No. 010661, with an area of .76708; (sic)
6.
Parcel of land on Lot No. 4839 of the Opon Cadastre, at Barrio Sa-ac, Mactan Island, with an area of
Forty Four Thousand Six Hundred Forty Four (44,644) square meters more or less;
7.
Residential House of strong materials, situated on a Government lot at Lahug, Cebu City;
8.
Residential House of strong materials, situated at Central, Cebu City." (Rollo, p. 40)
Seven of the above-described properties were awarded to Pilar Teves, who done bid for them for the amount of
P217,300.00.
The residential house situated on a government lot at Lahug, Cebu City, was awarded to lone bidder Asuncion
Villarante for the amount of P10,000.00.
Within the period for redemption, petitioner Matilde S. Palicte, as one of the heirs of the late Don Filemon Sotto,
redeemed from purchaser Pilar Teves, four (4) lots for the sum of P60,000.00.
A deed of redemption dated July 29, 1980, executed by Deputy Provincial Sheriff Felipe V. Belandres and
approved by the Clerk of Court, Esperanza Garcia as Ex-Officio Sheriff, was issued for these lots:
"1.
A parcel of land or Lot No. 2179-C-PDI-25027 Cebu Cadastre, Cebu City, bid at P20,000.00;
2.
A parcel of land or Lot No. 1052, covered by TCT No. 27642, of the Banilad Friar Lands Estate, Cebu
City, bid at P15,000.00;
3.
A parcel of land or Lot No. 1051, covered by TCT No. 27641, of the Banilad Friar Lands Estate, Cebu
City, at P5,000.00;
4.
A parcel of land or Lot No. 1049, covered by TCT No. 27640, of the Banilad Friar Lands Estate, Cebu
City, at P20,000.00." (Rollo, p. 42)
On July 24, 1980, petitioner Palicte filed a motion with respondent Judge Ramolete for the transfer to her name of
the titles to the four (4) parcels of land covered by the deed of redemption.
This motion was opposed by the plaintiffs in Civil Case No. R- 10027, entitled "Pilar Teves, et al. v. Marcelo Sotto,
administrator" on several grounds, principal among which, is that movant, Palicte, is not one of those authorized to
redeem under the provisions of the Rules of Court. prcd
A hearing on the said motion, with both parties adducing evidence was held.
The lower court held that although Palicte is one of the declared heirs in Spl. Proc. No. 2706-R, she does not
qualify as a successor- in-interest who may redeem the real properties sold. It ruled that the deed of redemption is null
and void. The motion of Palicte was denied.
Hence, the present petition.
The petitioner raises the following assignment of errors:
A
"RESPONDENT JUDGE ERRED IN RULING THAT THE JUDGMENT DEBTOR ENTITLED TO REDEEM
UNDER SECTION 29(a), RULE 39 OF THE REVISED RULES OF COURT REAL PROPERTY SOLD ON EXECUTION
AGAINST THE ESTATE OF THE DECEDENT IS ONLY THE ADMINISTRATOR OF THE ESTATE, OR HIS
SUCCESSOR-IN-INTEREST.
B
"RESPONDENT JUDGE ERRED IN RULING THAT PETITIONER, WHO IS A DECLARED HEIR OF THE
DECEDENT, IS NOT THE JUDGMENT DEBTOR NOR DOES SHE QUALIFY AS A SUCCESSOR-IN-INTEREST OF THE
ADMINISTRATOR OF THE ESTATE ENTITLED TO RIGHT OF REDEMPTION UNDER SECTION 29(a), RULE 39 OF
THE RULES OF COURT.
C
"RESPONDENT JUDGE ERRED IN RULING THAT ALTHOUGH PETITIONER IS A DECLARED HEIR OF THE
DECEDENT, HER RIGHT TO THE ESTATE, LIKE THAT OF REDEMPTION OF CERTAIN ESTATE PROPERTY, COULD
ONLY ARISE AFTER DISTRIBUTION OF THE ESTATE AS THERE IS STILL JUDGMENT DEBT CHARGEABLE
AGAINST THE ESTATE.
D
RESPONDENT JUDGE ERRED IN RULING THAT PETITIONER'S REDEMPTION OF FOUR (4) PARCELS OF
LAND OF THE ESTATE OF THE DECEDENT SOLD ON EXECUTION OF JUDGMENT AGAINST THE ESTATE IS NULL
AND VOID AND INEFFECTIVE." (Rollo, pp. 17-18)
These assigned errors center on whether or not petitioner Palicte may validly exercise the right of redemption
under Sec. 29, Rule 39 of the Rules of Court.
We answer in the affirmative. Sec. 29 of Rule 39 provides:
"SEC. 29.
Who may redeem real property so sold. Real property sold as provided in the last preceding
section, or any part thereof sold separately, may be redeemed in the manner hereinafter provided, by the following
persons:
"(a)
The judgment debtor, or his successor in interest in the whole or any part of the property; "

(b)
A creditor having a lien by attachment, judgment or mortgage on the property sold, or on some part
thereof, subsequent to the judgment under which the property was sold. Such redeeming creditor is termed a
redemptioner."
Under Subsection (a), property sold subject to redemption may be redeemed by the judgment debtor or his
successor-in-interest in the whole or any part of the property. Does Matilde Palicte fall within the term "successor-ininterest"?
Magno v. Viola and Sotto (61 Phil. 80, 84-85) states that:
"The rule is that the term 'successor-in-interest' includes one to whom the debtor has transferred his statutory
right of redemption (Big Sespe Oil Co. v. Cochran, 276 Fed., 216, 223); one to whom the debtor has conveyed his interest
in the property for the purpose of redemption (Southern California Lumber Co. v. McDowell, 105 Cal., 99; 38 Pac., 627;
Simpson v. Castle, 52 Cal., 644; Schumacher v. Langford, 20 Cal. App., 61; 127 Pac., 1057); one who succeeds to the
interest of the debtor by operation of law (XI McKinney's California Jurisprudence, 99); one or more joint debtors who
were joint owners of the property sold (Emerson v. Yosemite Gold Min. etc. Co., 149 Cal., 50; 85 Pac., 122); the wife as
regards her husband's homestead by reason of the fact that some portion of her husband' title passes to her (Hefner v.
Urton, 71 Cal., 479; 12 Pac., 486). This court has held that a surety can not redeem the property of the principal sold on
execution because the surety, by paying the debt of the principal, stands in the place of the creditor, not of the debtor, and
consequently is not a successor in interest in the property. (G. Urruitia & Co. v. Moreno and Reyes, 28 Phil., 260, 268)."
(Emphasis supplied).
In the case at bar, petitioner Palicte is the daughter of the late Don Filemon Sotto whose estate was levied upon
on execution to satisfy the money judgment against it. She is one of the declared heirs in Special Proceeding No. 2706-R.
As a legitimate heir, she qualifies as a successor-in-interest.
Art. 777 of the Civil Code states that:
"The rights to the succession are transmitted from the moment of the death of the decedent."
At the moment of the decedent's death, the heirs start to own the property, subject to the decedent's liabilities. In
fact, they may dispose of the same even while the property is under administration. (Barretto v. Tuason, 59 Phil. 845;
Jakosalem v. Rafols, 73 Phil. 628). If the heirs may dispose of their shares in the decedent's property even while it is
under administration with more reason should the heirs be allowed to redeem redeemable properties despite the
presence of an administrator. prcd
The respondents contend that the petitioner must positively prove that the three other co-heirs, the administrator,
and the intestate court had expressly agreed to the redemption of the disputed parcels of land. We see no need for such
prior approval. While it may have been desirable, it is not indispensable under the circumstances of this case. What is
important is that all of them acquiesced in the act of redeeming property for the estate. The petitioner contends that the
administrator and the three other heirs agreed to the redemption. There is, however, no clear proof of such approval. What
is beyond dispute from the records is that they did not disapprove nor reprobate the acts of the petitioner. There is likewise
nothing in the records to indicate that the redemption was not beneficial to the estate of Don Filemon Sotto.
It may be true that the interest of a specific heir is not yet fixed and determinate pending the order of distribution
but, nonetheless, the heir's interest in the preservation of the estate and the recovery of its properties is greater than
anybody else's, definitely more than the administrator's who merely holds it for the creditors, the heirs, and the legatees.
The petitioner cites precedents where persons with inchoate or contingent interest were allowed to exercise the
right of redemption as "successors-in-interest," e.g. Director of Lands v. Lagniton (103 Phil. 889, 892) where a son
redeemed the property of his parents sold on execution and Rosete v. Provincial Sheriff of Zambales (95 Phil. 560, 564),
where a wife by virtue of what the Court called "inchoate right of dower or contingent interest" redeemed a homestead as
successor-in-interest of her husband.
In fact, the Court was explicit in Lagniton that:
". . . The right of a son, with respect to the property of a father or mother, is also an inchoate or contingent interest,
because upon the death of the father or the mother or both, he will have a right to inherit said conjugal property. If any
holder of an inchoate interest is a successor in interest with right to redeem a property sold on execution, then the son is
such a successor in interest, as he has an inchoate right to the property of his father."
The lower court, therefore, erred in considering the person of the administrator as the judgment debtor and as the
only "successor- in-interest." The estate of the deceased is the judgment debtor and the heirs who will eventually acquire
that estate should not be prohibited from doing their share in its preservation.
Although petitioner Palicte validly redeemed the properties, her motion to transfer the titles of the four (4) parcels
of land covered by the Deed of Redemption from registration in the name of Filemon Sotto to her name cannot prosper at
this time.
Otherwise, to allow such transfer of title would amount to a distribution of the estate.
As held in the case of Philippine Commercial and Industrial Bank v. Escolin (56 SCRA 267, 345-346):
"Indeed, the law on the matter is specific, categorical and unequivocal. Section 1 of Rule 90 provides:
"SECTION 1. When order for distribution of residue made. When the debts, funeral charges, and expenses
of administration, the allowance to the widow, and inheritance tax, if any, chargeable to the estate in accordance with law,
have been paid, the court, on the application of the executor or administrator, or of a person interested in the estate, and
after hearing upon notice, shall assign the residue of the estate to the persons entitled to the same, naming them and the
proportions, or parts, to which each is entitled, and such persons may demand and recover their respective shares from
the executor or administrator, or any other person having the same in his possession. If there is a controversy before the
court as to who are the lawful heirs of the deceased person or as to the distributive shares to which each person is
entitled under the law, the controversy shall be heard and decided as in ordinary cases.
"No distribution shall be allowed until the payment of the obligations above mentioned has been made or provided
for, unless the distributees, or any of them, give a bond, in a sum to be fixed by the court, conditioned for the payment of
said obligations within such time as the court directs.
"These provisions cannot mean anything less than that in order that a proceeding for the settlement of the estate
of a deceased may be deemed ready for final closure, (1) there should have been issued already an order of distribution
or assignment of the estate of the decedent among or to those entitled thereto by will or by law, but (2) such order shall
not be issued until after it is shown that the 'debts, funeral expenses, expenses of administration, allowances, taxes, etc.,
chargeable to the estate' have been paid, which is but logical and proper, (3) besides, such an order is usually issued
upon proper and specific application for the purpose of the interested party or parties, and not of the court."

The other heirs are, therefore, given a six months period to join as co-redemptioners in the redemption made by
the petitioner before the motion to transfer titles to the latter's name may be granted.
WHEREFORE, the petition is hereby GRANTED. The respondent court's orders declaring the deed of redemption
null and void and denying the motion to transfer title over the redeemed properties to Matilde Palicte are REVERSED and
SET ASIDE, subject to the right of the other heirs to join in the redemption as stated above.
SO ORDERED.

FIRST DIVISION
[G.R. No. 89783. February 19, 1992.]

MARIANO B. LOCSIN, JULIAN J. LOCSIN, JOSE B. LOCSIN, AUREA B. LOCSIN, MATILDE L. CORDERO,
SALVADOR B. LOCSIN and MANUEL V. DEL ROSARIO, petitioners, vs. THE HON. COURT OF APPEALS, JOSE
JAUCIAN, FLORENTINO JAUCIAN, MERCEDES JAUCIAN ARBOLEDA, HEIRS OF JOSEFINA J. BORJA, HEIRS OF
EDUARDO JAUCIAN and HEIRS OF VICENTE JAUCIAN, respondents.
Aytona Law Office and Syquia Law Offices for petitioners.
Mabella, Sangil & Associates for private respondents.
DECISION
NARVASA, J p:
Reversal of the decision of the Court of Appeals in CA-G.R. No. CV-11186 affirming with modification the
judgment of the Regional Trial Court of Albay in favor of the plaintiffs in Civil Case NO. 7152 entitled "Jose Jaucian, et al.
v. Mariano B. Locsin, et al.," an action for recovery of real property with damages is sought in these proceedings
initiated by petition for review on certiorari in accordance with Rule 45 of the Rules of Court. prcd
The petition was initially denied due course and dismissed by this Court. It was however reinstated upon a second
motion for reconsideration filed by the petitioners, and the respondents were required to comment thereon. The petition
was thereafter given due course and the parties were directed to submit their memorandums. These, together with the
evidence, having been carefully considered, the Court now decides the case.
First, the facts as the Court sees them in light of the evidence on record:
The late Getulio Locsin had three children named Mariano, Julian and Magdalena, all surnamed Locsin. He
owned extensive residential and agricultural properties in the provinces of Albay and Sorsogon. After his death, his estate
was divided among his three (3) children as follows:
(a)
the coconut lands of some 700 hectares in Bual, Pilar, Sorsogon, were adjudicated to his daughter,
Magdalena Locsin;
(b)
106 hectares of coconut lands were given to Julian Locsin, father of the petitioners Julian, Mariano, Jose,
Salvador, Matilde, and Aurea, all surnamed Locsin;
(c)
more than forty (40) hectares of coconut lands in Bogtong, eighteen (18) hectares of riceland in Daraga,
and the residential lots in Daraga, Albay and in Legazpi City went to his son Mariano, which Mariano brought into his
marriage to Catalina Jaucian in 1908. Catalina, for her part, brought into the marriage untitled properties which she had
inherited from her parents, Balbino Jaucian and Simona Anson. These were augmented by other properties acquired by
the spouses in the course of their union, 1 which however was not blessed with children.
Eventually, the properties of Mariano and Catalina were brought under the Torrens System. Those that Mariano
inherited from his father, 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, Doa Catalina was appointed executrix of his estate. Her lawyer in the probate proceedings was Attorney
Lorayes. In the inventory of her husband's estate 5 which she submitted to the probate court for approval, 6 Catalina
declared that "all items mentioned from Nos. 1 to 33 are the private properties of the deceased and form part of his capital
at the time of the marriage with the surviving spouse, while items Nos. 34 to 42 are conjugal." 7
Among her own and Don Mariano's relatives, Doa Catalina was closest to her nephew, Attorney Salvador
Lorayes, her nieces, Elena Jaucian, Maria Lorayes-Cornelio and Maria Olbes-Velasco, and the husbands of the last two:
Hostilio Cornelio and Fernando 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 any of them, she unfailingly consulted her lawyer-nephew, Attorney
Salvador Lorayes. It was Atty. Lorayes who prepared the legal documents and, more often than not, the witnesses to the
transactions were her nieces Elena Jaucian, Maria Lorayes-Cornelio, Maria Olbes-Velasco, or their husbands. Her niece,
Elena Jaucian, was her life-long companion in her house. llcd
Don Mariano relied on Doa Catalina to carry out the terms of their compact, hence, nine (9) years after his death,
as if in obedience to his voice from the grave, and fully cognizant that she was also advancing in years, Doa Catalina
began transferring, by sale, donation or assignment, Don Mariano's, as well as her own, properties to their respective
nephews and nieces. She made the following sales and donations of properties which she had received from her
husband's estate, to his Locsin nephews and nieces:
EXHIBIT
DATE PARTICULARS AREA/ PRICE WITNESSES
SQ.M.
23
Jan. 26, 1957 Deed of Absolute Sale 962
P481
in favor of Mariano
Locsin
1-JRL Apr. 7, 1966
Deed of Sale 430,203
P20,000
in favor of Jose
R. Locsin
1-JJL Mar. 22, 1967 Deed of Sale 5,000 P1,000 Hostilio Cornelio
in favor of
(Lot 2020)
Helen M. Jaucian
Julian Locsin
1
Nov. 29, 1974 Deed of Donation
26,509
in favor of Aurea
Locsin, Matilde L.
Cordero and Salvador
Locsin
2
Feb. 4, 1975
Deed of Donation
34,045
in favor of Aurea
Locsin, Matilde L.
Cordero and Salvador

Locsin
Sept. 9, 1975 Deed of Donation
(Lot 2059)
in favor of Aurea
Locsin, Matilde L.
Cordero and
Salvador Locsin
4
July 15, 1974 Deed of Absolute
1,424
Hostilio Cornelio
Sale in favor of
Fernando Velasco
Aurea B. Locsin
5
July 15, 1974 Deed of Absolute
1,456 P5,720 Hostilo Cornelio
Sale in favor of
Aurea B. Locsin.
6
July 15, 1974 Deed of Absolute
1,237 P5720 -dittoSale in favor of
Aurea B. Locsin.
7
July 15, 1974 Deed of Absolute
1,104 P4,050 -dittoSale in favor of
Aurea B. Locsin.
15
Nov. 26, 1974 Deed of Sale in 261
P4930 -dittofavor of Aurea
Locsin.
16
Oct. 17, 1975 Deed of Sale in 533
P2,000 Delfina Anson
of Aurea Locsin
M. Acabado
17
Nov. 26, 1975 Deed of Sale in 373
P1,000 Leonor Satuito
favor of Aurea
Mariano B. Locsin
Locsin.
19
Sept. 1, 1975 Conditional
1,130 P3,000 -dittoDonation in favor
of Mariano Locsin.
1-MVRJ
Dec. 29, 1972 Deed of1,510.66
P1,000 Delfina Anson
Reconveyance (Lot 2155)
Antonio Illegible
in favor of Manuel
V. del Rosario
whose maternal
grandfather was
Getulio Locsin.
2-MVRJ
June 30, 1973 Deed of319.34 P500 Antonio Illegible
Reconveyance (Lot 2155)
in favor of Salvador
Nical Manuel V.
del Rosario but
the rentals from
bigger portion of Lot
2155 leased to Filoil
Refinery were
assigned to Maria
Jaucian Lorayes
Cornelio
Of her own properties, Doa Catalina conveyed the following to her own nephews and nieces and others:
EXHIBIT
DATE PARTICULARS AREA/SQ.M. PRICE
2-JJL July 16, 1964 Deed of Sale in 5,000 P1,000
favor Vicente (lot 2020)
Jaucian (6,825 sqm. when
resurveyed)
24
Feb. 12, 1973 Deed of Absolute
100
P1,000
Sale in favor of
Francisco Maquiniana
26
July 15, 1973 Deed of Absolute
130
P1,300
Sale in favor of
Francisco Maquiniana
27
May 3, 1973
Deed of Absolute
100
P1,000
Sale in favor of
Ireneo Mamia
28
May 3, 1973
Deed of Absolute
75
P750
Sale in favor of
Zenaida Buiza.
29
May 3, 1973
Deed of Absolute
150
P1,500
Sale in favor of
Felisa Morjella.
30
Apr. 3, 1973
Deed of Absolute
31
P1,000
Sale in favor of
Inocentes Moticinos.
31
Feb. 12, 1973 Deed of Absolute
150
P1,500
Sale in favor of
Casimiro Mondevil
3

32

Mar. 1, 1973
Deed of Absolute
112
P1,000
Sale in favor of
Juan Saballa.
25
Dec. 28, 1973 Deed of Absolute
250
P2,500
Sale in favor of
Rogelio Marticio
Doa Catalina died on July 6, 1977.
Four years before her death, she had made a will on October 22, 1973 affirming and ratifying the transfers she
had made during her lifetime in favor of her husband's, and her own, relatives. After the reading of her will, all the relatives
agreed that there was no need to submit it to the court for probate because the properties devised to them under the will
had already been conveyed to them by the deceased when she was still alive, except some legacies which the executor
of her will or estate, Attorney Salvador Lorayes, proceeded to distribute.
In 1989, or six (6) years after Doa Catalina's demise, some of her Jaucian nephews and nieces who had already
received their legacies and hereditary shares from her estate, filed action in the Regional Trial Court of Legaspi City
(Branch VIII, Civil Case No. 7152) to recover the properties which she had conveyed to the Locsins during her lifetime,
alleging that the conveyances were in officious, without consideration, and intended solely to circumvent the laws on
succession. Those who were closest to Doa Catalina did not join the action.
After the trial, judgment was rendered on July 8, 1985 in favor of the plaintiffs (Jaucian), and against the Locsin
defendants, the dispositive part of which reads: cdll
"WHEREFORE, this Court renders judgment for the plaintiffs and against the defendants:
"(1)
declaring the plaintiffs, except the heirs of Josefina J. Borja and Eduardo Jaucian, who withdrew, the
rightful heirs and entitled to the entire estate, in equal portions, of Catalina Jaucian Vda. de Locsin, being the nearest
collateral heirs by right of representation of Juan and Gregorio, both surnamed Jaucian, and full-blood brothers of
Catalina;
"(2)
declaring the deeds of sale, donations, reconveyance and exchange and all other instruments conveying
any part of the estate of Catalina J. Vda. de Locsin including, but not limited to those in the inventory of known properties
(Annex B of the complaint) as null and void ab-initio;
"(3).
ordering the Register of Deeds of Albay and/or Legaspi City to cancel all certificates of title and other
transfers of the real properties, subject of this case, in the name of defendants, and derivatives therefrom, and issue new
ones to the plaintiffs;
"(4)
ordering the defendant's, jointly and severally, to reconvey ownership and possession of all such
properties to the plaintiffs, together with all muniments of title properly endorsed and delivered, and all the fruits and
incomes received by the defendants from the estate of Catalina, with legal interest from the filing of this action; and where
reconveyance and delivery cannot be effected for reasons that might have intervened and prevent the same, defendants
shall pay for the value of such properties, fruits and incomes received by them, also with legal interest from the filing of
this case;
"(5)
ordering each of the defendants to pay the plaintiffs the amount of P30,000.00 as exemplary damages;
and the further sum of P20,000.00 each as moral damages; and
"(6) ordering the defendants to pay the plaintiffs attorney's fees and litigation expenses, in the amount of
P30,000.00 without prejudice to any contract between plaintiffs and counsel.
"Costs against the defendants." 9
The Locsins appealed to the Court of Appeals (CA-G.R. No. CV-11186) which rendered its now appealed
judgment on March 14, 1989, affirming the trial court's decision.
The petition has merit and should be granted.
The trial court and the Court of Appeals erred in declaring the private respondents, nephews and nieces of Doa
Catalina J. Vda. de Locsin, entitled to inherit the properties which she had already disposed of more than ten (10) years
before her death. For those properties did not form part of her hereditary estate, i.e., "the property and transmissible rights
and obligations existing at the time of (the decedent's) death and those which have accrued thereto since the opening of
the succession." 10 The rights to a person's succession are transmitted from the moment of his death, and do not vest
in his heirs until such time. 11 Property which Doa Catalina had transferred or conveyed to other persons during her
lifetime no longer formed part of her estate at the time of her death to which her heirs may lay claim. Had she died
intestate, only the property that remained in her estate at the time of her death devolved to her legal heirs; and even if
those transfers were, one and all, treated as donations, the right arising under certain circumstances to impugn and
compel the reduction or revocation of a decedent's gifts inter vivos does not inure to the respondents since neither they
nor the donees are compulsory (or forced) heirs. 12
There is thus no basis for assuming an intention on the part of Doa Catalina, in transferring the properties she
had received from her late husband to his nephews and nieces, an intent to circumvent the law in violation of the private
respondents' rights to her succession. Said respondents are not her compulsory heirs, and it is not pretended that she had
any such, hence there were no legitimes that could conceivably be impaired by any transfer of her property during her
lifetime. All that the respondents had was an expectancy that in nowise restricted her freedom to dispose of even her
entire estate subject only to the limitation set forth in Art. 750, Civil Code which, even if it were breached, the respondents
may not invoke: cdrep
"Art 750.
The donation may comprehend all the present property of the donor, or part thereof, provided he
reserves, in, full ownership or in usufruct, sufficient means for the support of himself, and of all relatives who, at the time of
the acceptance of the donation, are by law entitled to be supported by the donor. Without such reservation, the donation
shall be reduced on petition of any person affected. (634a).
The lower court capitalized on the fact that Doa Catalina was already 90 years old when she died on July 6,
1977. It insinuated that because of her advanced years she may have been imposed upon, or unduly influenced and
morally pressured by her husband's nephews and nieces (the petitioners) to transfer to them the properties which she had
inherited from Don Mariano's estate. The records do not support that conjecture.
For as early as 1957, or twenty-eight (28) years before her death, Doa Catalina had already begun transferring
to her Locsin nephews and nieces the properties which she received from Don Mariano. She sold a 962-sq.m. lot on
January 26, 1957 to his nephew and namesake Mariano Locsin II. 13 On April 7, 1966, or 19 years before she passed
away, she also sold a 43-hectare land to another Locsin nephew, Jose R. Locsin. 14 The next year, or on March 22,
1967, she sold a 5,000-sq.m. portion of Lot 2020 to Julian Locsin. 15

On March 27, 1967, Lot 2020 16 was partitioned by and among Doa Catalina, Julian Locsin, Vicente Jaucian
and Agapito Lorete. 17 At least Vicente Jaucian, among the other respondents in this case, is estopped from assailing
the genuineness and due execution of the sale of portions of Lot 2020 to himself, Julian Locsin, and Agapito Lorete, and
the partition agreement that he (Vicente) concluded with the other co-owners of Lot 2020.
Among Doa Catalina's last transactions before she died in 1977 were the sales of property which she made in
favor of Aurea Locsin and Mariano Locsin in 1975. 18
There is not the slightest suggestion in the record that Doa Catalina was mentally incompetent when she made
those dispositions. Indeed, how can any such suggestion be made in light of the fact that even as she was transferring
properties to the Locsins, she was also contemporaneously disposing of her other properties in favor of the Jaucians?
She sold to her nephew, Vicente Jaucian, on July 16, 1964 (21 years before her death) one-half (or 5,000 sq.m.) of Lot
2020. Three years later, or on March 22, 1967, she sold another 5,000 sq.m. of the same lot to Jualian Locsin. 19
From 1972 to 1973 she made several other transfers of her properties to her relatives and other persons, namely:
Francisco Maquiniana, Ireneo Mamia, Zenaida Buiza, Feliza Morjella, Inocentes Motocinos, Casimiro Mondevil, Juan
Saballa and Rogelio Marticio. 20 None of those transactions was impugned by the private respondents.
In 1975, or two years before her death, Doa Catalina sold some lots not only to Don Mariano's niece, Aurea
Locsin, and his nephew, Mariano Locsin II,
21 but also to her niece, Mercedes Jaucian Arboleda.
22 If she was
competent to make that conveyance to Mercedes, how can there be any doubt that she was equally competent to transfer
her other pieces of property to Aurea and Mariano II?
The trial court's belief that Don Mariano Locsin bequeathed his entire estate to his wife, from a "consciousness of
its real origin" which carries the implication that said estate consisted of properties which his wife had inherited from her
parents, flies in the teeth of Doa Catalina's admission in her inventory of that estate, that "items 1 to 33 are the private
properties of the deceased (Don Mariano) and forms (sic) part of his capital at the time of the marriage with the surviving
spouse, while items 34 to 42 are conjugal properties, acquired during the mirriage." She would have known better than
anyone else whether the listing included any of her paraphernal property so it is safe to assume that none was in fact
included. The inventory was signed by her under oath, and was approved by the probate court in Special Proceedings No.
138 of the Court of First Instance of Albay. It was prepared with the assistance of her own nephew and counsel, Atty.
Salvador Lorayes, who surely would not have prepared a false inventory that would have been prejudicial to his aunt's
interest and to his own, since he stood to inherit from her eventually. LibLex
This Court finds no reason to disbelieve Attorney Lorayes' testimony that before Don Mariano died, he and his
wife (Doa Catalina), being childless, had agreed that their respective properties should eventually revert to their
respective lineal relatives. As the trusted legal adviser of the spouses and a full-blood nephew of Doa Catalina, he would
not have spun a tale out of thin air that would also prejudice his own interest.
Little significance, it seems, has been attached to the fact that among Doa Catalina's nephews and nieces, those
closest to her: (a) her lawyer-nephew Attorney Salvador Lorayes; (b) her niece and companion Elena Jaucian; (c) her
nieces Maria Olbes-Velasco and Maria Lorayes-Cornelio and their respective husbands, Fernando Velasco and Hostilio
Cornelio, did not join the suit to annul and undo the dispositions of property which she made in favor of the Locsins,
although it would have been to their advantage to do so. Their desistance persuasively demonstrates that Doa Catalina
acted as a completely free agent when she made the conveyances in favor of the petitioners. In fact, considering their
closeness to Doa Catalina it would have been well-nigh impossible for the petitioners to employ "fraud, undue pressure,
and subtle manipulations" on her to make her sell or donate her properties to them. Doa Catalina's niece, Elena Jaucian,
daughter of her brother, Eduardo Jaucian, lived with her in her house. Her nephew-in-law, Hostilio Cornelio, was the
custodian of the titles of her properties. The sales and donations which she signed in favor of the petitioners were
prepared by her trusted legal adviser and nephew, Attorney Salvador Lorayes. The (1) deed of donation dated November
29, 1974
23 in favor of Aurea Locsin, (2) another deed of donation dated February 4, 1975
24 in favor of Matilde
Cordero, and (3) still another deed dated September 9, 1975
25 in favor of Salvador Lorayes, were all witnessed by
Hostillo Cornelio (who is married to Doa Catalina's niece, Maria Lorayes) and Fernando Velasco who is married to her
another niece, Maria Olbes.
26 The sales which she made in favor of Aurea Locsin on July 15, 1974
27 were
witnessed by Hostillo Cornelio and Elena Jaucian. Given those circumstances, said transactions could not have been
anything but free and voluntary acts on her part.
Apart from the foregoing considerations, the trial court and the Court of Appeals erred in not dismissing this action
for annulment and reconveyance on the ground of prescription. Commenced decades after the transactions had been
consummated, and six (6) years after Doa Catalina's death, it prescribed four (4) years after the subject transactions
were recorded in the Registry of Property, 28 whether considered an action based on fraud, or one to redress an injury
to the rights of the plaintiffs. The private respondents may not feign ignorance of said transactions because the
registration of the deeds was constructive notice thereof to them and the whole world. 29
WHEREFORE, the petition for review is granted. The decision dated March 14, 1989 of the Court of Appeals in
CA-G.R. CV No. 11186 is REVERSED and SET ASIDE. The private respondents' complaint for annulment of contracts
and reconveyance of properties in Civil Case No. 7152 of the Regional Trial Court, Branch VIII of Legazpi City, is
DISMISSED, with costs against the private respondents, plaintiffs therein.
SO ORDERED.

THIRD DIVISION
[G.R. No. 61584. November 25, 1992.]

DONATO S. PAULMITAN, JULIANA P. FANESA and RODOLFO FANESA, petitioners, vs. COURT OF APPEALS,
ALICIO PAULMITAN, ELENA PAULMITAN, ABELINO PAULMITAN, ANITA PAULMITAN, BAKING PAULMITAN, ADELINA
PAULMITAN and ANITO PAULMITAN, respondents.
DECISION
ROMERO, J p:
This is a petition for review on certiorari seeking the reversal of the decision 1 of the Court of Appeals, dated July
14, 1982 in CA-G.R. No. 62255-R entitled "Alicio Paulmitan, et al. v. Donato Sagario Paulmitan, et al." which affirmed the
decision 2 of the then Court of First Instance (now RTC) of Negros Occidental, 12th Judicial District, Branch IV, Bacolod
City, in Civil Case No. 11770.
The antecedent facts are as follows:
Agatona Sagario Paulmitan, who died sometime in 1953, 3 left the two following parcels of land located in the
Province of Negros Occidental: (1) Lot No. 757 with an area of 1,946 square meters covered by Original Certificate of Title
(OCT) No. RO-8376; and (2) Lot No. 1091 with an area of 69,080 square meters and covered by OCT No. RO-11653.
From her marriage with Ciriaco Paulmitan, who is also now deceased, Agatona begot two legitimate children, namely:
Pascual Paulmitan, who also died in 1953, 4 apparently shortly after his mother passed away, and Donato Paulmitan, who
is one of the petitioners. Petitioner Juliana P. Fanesa is Donato's daughter while the third petitioner, Rodolfo Fanesa, is
Juliana's husband. Pascual Paulmitan, the other son of Agatona Sagario, is survived by the respondents, who are his
children, namely: Alicio, Elena, Abelino, Adelina, Anita, Baking and Anito, all surnamed Paulmitan.
Until 1963, the estate of Agatona Sagario Paulmitan remained unsettled and the titles to the two lots mentioned
above remained in the name of Agatona. However, on August 11, 1963, petitioner Donato Paulmitan executed an Affidavit
of Declaration of Heirship, extrajudicially adjudicating unto himself Lot No. 757 based on the claim that he is the only
surviving heir of Agatona Sagario. The affidavit was filed with the Register of Deeds of Negros Occidental who, on August
20, 1963, cancelled OCT No. RO-8376 in the name of Agatona Sagario and issued Transfer Certificate of Title (TCT) No.
35979 in Donato's name.
As regards Lot No. 1091, Donato executed on May 28, 1974 a Deed of Sale over the same in favor of petitioner
Juliana P. Fanesa, his daughter. 5
In the meantime, sometime in 1952, for non-payment of taxes, Lot No. 1091 was forfeited and sold at a public
auction, with the Provincial Government of Negros Occidental being the buyer. A Certificate of Sale over the land was
executed by the Provincial Treasurer in favor of the Provincial Board of Negros Occidental. 6
On May 29, 1974, Juliana P. Fanesa redeemed the property from the Provincial Government of Negros
Occidental for the amount of P2,959.09. 7
On learning of these transactions, respondents children of the Late Pascual Paulmitan filed on January 18, 1975
with the Court of First Instance of Negros Occidental a Complaint against petitioners to partition the properties plus
damages. Cdpr
Petitioners set up the defense of prescription with respect to Lot No. 757 as an affirmative defense, contending
that the Complaint was filed more than eleven years after the issuance of a transfer certificate of title to Donato Paulmitan
over the land as a consequence of the registration with the Register of Deeds, of Donato's affidavit extrajudicially
adjudicating unto himself Lot No. 757. As regards Lot No. 1091, petitioner Juliana P. Fanesa claimed in her Answer to the
Complaint that she acquired exclusive ownership thereof not only by means of a deed of sale executed in her favor by her
father, petitioner Donato Paulmitan, but also by way of redemption from the Provincial Government of Negros Occidental.
Acting on the petitioners' affirmative defense of prescription with respect to Lot No. 757, the trial court issued an
order dated April 22, 1976 dismissing the complaint as to the said property upon finding merit in petitioners' affirmative
defense. This order, which is not the object of the present petition, has become final after respondents' failure to appeal
therefrom.
Trial proceeded with respect to Lot No. 1091. In a decision dated May 20, 1977, the trial court decided in favor of
respondents as to Lot No. 1091. According to the trial court, the respondents, as descendants of Agatona Sagario
Paulmitan were entitled to one-half (1/2) of Lot No. 1091, pro indiviso. The sale by petitioner Donato Paulmitan to his
daughter, petitioner Juliana P. Fanesa, did not prejudice their rights. And the repurchase by Juliana P. Fanesa of the land
from the Provincial Government of Negros Occidental did not vest in Juliana exclusive ownership over the entire land but
only gave her the right to be reimbursed for the amount paid to redeem the property. The trial court ordered the partition of
the land and directed petitioners Donato Paulmitan and Juliana P. Fanesa to pay private respondents certain amounts
representing the latter's share in the fruits of the land. On the other hand, respondents were directed to pay P1,479.55 to
Juliana P. Fanesa as their share in the redemption price paid by Fanesa to the Provincial Government of Negros
Occidental. The dispositive portion of the trial court's decision reads:
"WHEREFORE, judgment is hereby rendered on the second cause of action pleaded in the complaint as follows:
"1.
The deed of sale (Exh. 'F') dated May 28, 1974 is valid insofar as the one-half undivided portion of Lot
1091 is concerned as to vest ownership over said half portion in favor of defendant Juliana Fanesa and her husband
Rodolfo Fanesa, while the remaining half shall belong to plaintiffs, pro-indiviso;
"2.
Lot 1091, Cadastral Survey of Pontevedra, Province of Negros Occidental, now covered by TCT No. RO11653 (N.A.), is ordered partitioned. The parties must proceed to an actual partition by property instrument of partition,
submitting the corresponding subdivision within sixty (60) days from finality of this decision, and should they fail to agree,
commissioners of partition may be appointed by the Court;
"3.
Pending the physical partition, the Register of Deeds of Negros Occidental is ordered to cancel Original
Certificate of Title No. RO-11653 (N.A.) covering Lot 1091, Pontevedra Cadastre, and to issue in lieu thereof a new
certificate of title in the name of plaintiffs and defendants, one half portion each, pro-indiviso, as indicated in paragraph 1
above;
"4.
Plaintiffs are ordered to pay, jointly and severally, defendant Juliana Fanesa the amount of P1,479.55 with
interest at the legal rate from May 28, 1974 until paid;
"5.
Defendants Donato Sagario Paulmitan and Juliana Paulmitan Fanesa are ordered to account to plaintiffs
and to pay them, jointly and severally, the value of the produce from Lot 1091 representing plaintiffs' share in the amount
of P5,000.00 per year from 1966 up to the time of actual partition of the property, and to pay them the sum of P2,000.00
as attorney's fees as well as the costs of the suit."
xxx
xxx
xxx
On appeal, the Court of Appeals affirmed the trial court's decision. Hence this petition.

To determine the rights and obligations of the parties to the land in question, it is well to review, initially, the
relatives who survived the decedent Agatona Sagario Paulmitan. When Agatona died in 1953, she was survived by two
(2) sons, Donato and Pascual. A few months later in the same year, Pascual died, leaving seven children, the private
respondents. On the other hand, Donato's sole offspring was petitioner Juliana P. Fanesa.
At the time of the relevant transactions over the properties of decedent Agatona Sagario Paulmitan, her son
Pascual had died, survived by respondents, his children. It is, thus, tempting to apply the principles pertaining to the right
of representation as regards respondents. It must, however, be borne in mind that Pascual did not predecease his mother
8 thus precluding the operation of the provisions in the Civil Code on the right of representation 9 with respect to his
children, the respondents. When Agatona Sagario Paulmitan died intestate in 1952, her two (2) sons Donato and Pascual
were still alive. Since it is well-settled by virtue of Article 777 of the Civil Code that "[t]he rights to the succession are
transmitted from the moment of the death of the decedent," 10 the right of ownership, not only of Donato but also of
Pascual, over their respective shares in the inheritance was automatically and by operation of law vested in them in 1953
when their mother died intestate. At that stage, the children of Donato and Pascual did not yet have any right over the
inheritance since "[i]n every inheritance the relative nearest in degree excludes the more distant ones." 11 Donato and
Pascual excluded their children as to the right to inherit from Agatona Sagario Paulmitan, their mother. cdll
From the time of the death of Agatona Sagario Paulmitan to the subsequent passing away of her son Pascual in
1953, the estate remained unpartitioned. Article 1078 of the Civil Code provides: "Where there are two or more heirs, the
whole estate of the decedent is, before its partition, owned in common by such heirs, subject to the payment of debts of
the deceased." 12 Donato and Pascual Paulmitan were, therefore, co-owners of the estate left by their mother as no
partition was ever made.
When Pascual Paulmitan died intestate in 1953, his children, the respondents, succeeded him in the coownership of the disputed property. Pascual Paulmitan's right of ownership over an undivided portion of the property
passed on to his children, who, from the time of Pascual's death, became co-owners with their uncle Donato over the
disputed decedent estate.
Petitioner Juliana P. Fanesa claims ownership over Lot No. 1091 by virtue of two transactions, namely: (a) the
sale made in her favor by her father Donato Paulmitan; and (b) her redemption of the land from the Provincial
Government of Negros Occidental after it was forfeited for non-payment of taxes.
When Donato Paulmitan sold on May 28, 1974 Lot No. 1091 to his daughter Juliana P. Fanesa, he was only a coowner with respondents and as such, he could only sell that portion which may be allotted to him upon termination of the
co-ownership. 13 The sale did not prejudice the rights of respondents to one half (1/2) undivided share of the land which
they inherited from their father. It did not vest ownership in the entire land with the buyer but transferred only the seller's
pro indiviso share in the property 14 and consequently made the buyer a co-owner of the land until it is partitioned. In
Bailon-Casilao v. Court of Appeals, 15 the Court, through Justice Irene R. Cortes, outlined the effects of a sale by one coowner without the content of all the co-owners, thus:
"The rights of a co-owner of a certain property are clearly specified in Article 493 of the Civil Code. Thus:
ARTICLE 493. Each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining
thereto, and he may therefore alienate, assign or mortgage it and even substitute another person in its enjoyment, except
when personal rights are involved. But the effect of the alienation or mortgage, with respect to the co owners, shall be
limited to the portion which may be allotted to him in the division upon the termination of the co-ownership. [Emphasis
supplied.].
As early as 1923, this Court has ruled that even if a co-owner sells the whole property as his, the sale will affect
only his own share but not those of the other co-owners who did not consent to the sale [Punsalan v. Boon Liat, 44 Phil.
320 (1923)]. This is because under the aforementioned codal provision, the sale or other disposition affects only his
undivided share and the transferee gets only what would correspond to his grantor in the partition of the thing owned in
common. [Ramirez v. Bautista, 14 Phil. 528 (1909)]. Consequently, by virtue of the sales made by Rosalia and Gaudencio
Bailon which are valid with respect to their proportionate shares, and the subsequent transfers which culminated in the
sale to private respondent Celestino Afable, the said Afable thereby became a co-owner of the disputed parcel of land as
correctly held by the lower court since the sales produced the effect of substituting the buyers in the enjoyment thereof
[Mainit v. Bandoy, 14 Phil. 730 (1910)].
From the foregoing, it may be deduced that since a co-owner is entitled to sell his undivided share, a sale of the
entire property by one co-owner without the consent of the other co-owners is not null and void. However, only the rights
of the co-owner-seller are transferred, thereby making the buyer a co-owner of the property."
Applying this principle to the case at bar, the sale by petitioner Donato Paulmitan of the land to his daughter,
petitioner Juliana P. Fanesa, did not give to the latter ownership over the entire land but merely transferred to her the one
half (1/2) undivided share of her father, thug making her the co-owner of the land in question with the respondents, her
first cousins.
Petitioner Juliana P. Fanesa also claims ownership of the entire property by virtue of the fact that when the
Provincial Government of Negros Occidental bought the land after it was forfeited for non-payment of taxes, she
redeemed it.
The contention is without merit.
The redemption of the land made by Fanesa did not terminate the co-ownership nor give her title to the entire land
subject of the co-ownership. Speaking on the same issue raised by petitioners, the Court, in Adille v. Court of Appeals, 16
resolved the same with the following pronouncements:
"The petition raises a purely legal issue: May a co-owner acquire exclusive ownership over the property held in
common?
Essentially, it is the petitioners' contention that the property subject of dispute devolved upon him upon the failure
of his co-heirs to join him in its redemption within the period required by law. He relies on the provisions of Article 1515 of
the old Civil Code, Article 1613 of the present Code, giving the vendee a retro the right to demand redemption of the entire
property.
There is no merit in this petition.
The right of repurchase may be exercised by a co-owner with respect to his share alone (CIVIL CODE, art. 1612;
CIVIL CODE (1889), art. 1514.). While the records show that petitioner redeemed the property in its entirety, shouldering
the expenses therefor, that did not make him the owner of all of it. In other words, it did not put to end the existing state of
co-ownership (Supra, art. 489). There is no doubt that redemption of property entails a necessary expense. Under the
Civil Code:

ARTICLE 488. Each co-owner shall have a right to compel the other co-owners to contribute to the expenses of
preservation of the thing or right owned in common and to the taxes. Any one of the latter may exempt himself from this
obligation by renouncing so much of his undivided interest as may be equivalent to his share of the expenses and taxes.
No such waiver shall be made if it is prejudicial to the co-ownership.
The result is that the property remains to be in a condition of co-ownership. While a vendee a retro, under Article
1613 of the Code, "may not be compelled to consent to a partial redemption," the redemption by one co-heir or co-owner
of the property in its totality does not vest in him ownership over it. Failure on the part of all the co-owners to redeem it
entitles the vendee a retro to retain the property and consolidate title thereto in his name (Supra, art. 1607). But the
provision does not give to the redeeming co-owner the right to the entire property. It does not provide for a mode of
terminating a co-ownership."
Although petitioner Fanesa did not acquire ownership over the entire lot by virtue of the redemption she made,
nevertheless, she did acquire the right to be reimbursed for half of the redemption price she paid to the Provincial
Government of Negros Occidental on behalf of her co-owners. Until reimbursed, Fanesa holds a lien upon the subject
property for the amount due her. 17
Finally, petitioners dispute the order of the trial court, which the Court of Appeals affirmed, for them to pay private
respondents P5,000.00 per year from 1966 until the partition of the estate which represents the share of private
respondents in the fruits of the land. According to petitioners, the land is being leased for P2,000.00 per year only. This
assigned error, however, raises a factual question. The settled rule is that only questions of law may be raised in a petition
for review. As a general rule, findings of fact made by the trial court and the Court of Appeals are final and conclusive and
cannot be reviewed on appeal. 18
WHEREFORE, the petition is DENIED and the decision of the Court of Appeals AFFIRMED.
SO ORDERED.

THIRD DIVISION
[G.R. No. 98709. May 13, 1993.]

MAGDALENA LLENARES, petitioner, vs. HON. COURT OF APPEALS and APOLINAR ZABELLA, respondents.
Florante P. Pamfilo for petitioner.
Renato A. Martinez for private respondent.
DECISION
DAVIDE, JR., J p:
Petitioner availed of this recourse under Rule 45 of the Revised Rules of Court to obtain a reversal of the Decision
of the Seventh Division of the Court of Appeals in CA-G.R. CV No. 09853, promulgated on 24 April 24, 1991, 1 and the
reinstatement of the 4 April 1986 Decision of Branch 57 of the Regional Trial Court (RTC), Lucena City, in a case 2
involving the recovery of the possession and quieting of title over a parcel of land. The dispositive portion of the trial
court's decision reads as follows:
"'WHEREFORE, judgment is hereby rendered for the plaintiff who is declared the true and absolute owner of the
land covered by TCT No. 28170 (Registry of Deeds, Lucena City) particularly described in par. 2 of plaintiff's complaint
and it is hereby ordered
1.
That the defendant or any person acting in his behalf surrender and transfer possession of the land in
question (covered by TCT No. 28170 to the plaintiff;
2.
That the defendant render an accounting of the fruits he received from the aforementioned property from
August 1976 until possession is transferred to the plaintiff, said accounting to be approved by the court;
3.
That in keeping with the findings of this court, the Register of Deeds, Lucena City, should, as he is hereby
ordered cancel Entry No. 35285 in TCT No. 28170, said entry being an annotation of the adverse claim of defendant
Apolinar Zabella inscribed on Feb. 17, 1977;
4.
That the defendant pay to plaintiff the amount of P2,500.00 as attorney's fees and P1,000.00 as expenses
of litigation.'" 3
Petitioner filed the aforementioned complaint on 12 July 1977 after she had been allegedly dispossessed of the
property in question by private respondent Apolinar Zabella in 1976, and after the latter had caused to be annotated in
Transfer Certificate of Title (TCT) No. 28170 an affidavit of adverse claim on 17 February 1977. She prayed therein that,
inter alia, she be restored to the possession of the said property and that the adverse claim be cancelled. 4
As disclosed by the pleadings and the challenged decision, the antecedent facts are as follows: cdphil
Juan Zabella and Anastacio Llenares were co-owners, in equal shares, of a parcel of land situated in barrio
Silangang Mayao of the then Municipality, now City, of Lucena. In the cadastral survey of the said municipality, the lot was
designated as Cadastral Lot No. 4804-D. This designation was later changed to Lot No. 5015.
On 21 December 1929, Anastacio Llenares sold his one-half (1/2) share in the lot to Ariston Zabella, private
respondent's father. Subsequently, after due proceedings, the cadastral court awarded Lot No. 5015 to Juan Zabella and
Anastacio Llenares in equal shares. Decree No. 54398 was issued to both of them and on the basis thereof, Original
Certificate of Title (OCT) No. 43073 was issued in their names on 28 July 1937.
Anastacio Llenares passed away on 27 March 1931 leaving the petitioner, his only child, as his sole heir. On the
other hand, Juan Zabella died on 27 June 1952 and was survived by his sister Rosario Zabella and niece Irene Catapat.
On 5 February 1960, Rosario and Irene adjudicated to themselves Juan Zabella's one-half (1/2) share in the lot. This
adjudication was annotated in OCT No. 43073. Rosario died on 5 June 1962 leaving, as her only heirs, her children
Godofredo, Noemi, Natividad, Olimpio and Numeriana, all surnamed Zaracena.
On 22 June 1976, petitioner, as the sole heir of Anastacio Llenares, adjudicated to herself, by way of a Salaysay
ng Pagmamana ng Nag-iisang Tagapagmana (Exhibit "A"), the one-half (1/2) share in the property belonging to Anastacio
Llenares. This fact was likewise annotated in OCT No. 43073.
On 26 August 1976, however, OCT No. 43073 was cancelled and in its place, TCT No. T-27166 was issued for
the entire lot. On 16 February 1977, private respondent Zabella filed an adverse claim which was duly annotated in TCT
No. T-27166.
As a consequence of a Kasunduan ng Pagpasukat (Exhibit "I") executed by and between Irene Catapat and the
heirs of Rosario Zabella Zaracena, Lot No. 5015 was subdivided into Lot Nos. 5015-A, 5015-B and 5015-C. Lot No. 5015A, which comprises one-half (1/2) of Lot No. 5015 corresponding to Anastacio's share, was allotted to the petitioner. TCT
No. T-27166 was thereafter cancelled and separate Transfer Certificates of Title were issued for each of the subdivided
lots. TCT No. 28170 was issued in the petitioner's name for Lot No. 5015-A.
As regards the issue of possession, the petitioner's evidence discloses that since she was only four (4) years old
when her father died, her cousin Rosario Zabella administered the land in question until 1959 when she (petitioner) placed
Rufo Orig as tenant therein. The latter worked as such, delivering to the petitioner her share of the harvest until 1976,
when he stopped doing so as he was ordered by the private respondent not to give the petitioner her share anymore.
Private respondent allegedly claimed ownership over the property. Petitioner further proved that she had been paying the
land taxes on the property until the filing of the case.
On the other hand, according to his own version, private respondent and his siblings took possession of that
portion of the land sold by Anastacio Llenares after Ariston Zabella's death on 21 March 1930. He then converted the
same into riceland. It was irrigated in 1955 and he has been paying the irrigation charges thereon since 1960. Moreover,
he and his co-heirs have been in possession of the property without interference by any party until "the present." 5
The trial court limited the issues to the following: whether the private respondent had acquired absolute ownership
of the land in question by prescription and whether the plaintiff's (petitioner) action is barred by laches. 6 In finding for the
petitioner, the lower court made the following disquisitions: llcd
"'It is beyond cavil that the land in question (then part of a big parcel) has been registered and titled in the name of
plaintiff's father Anastacio Llenares since July 28, 1937 even as it is now registered in the name of plaintiff who made an
affidavit of self-adjudication on June 22, 1976 being the only of Anastacio Llenares. Anastacio Llenares became the
registered owner by virtue of a cadastral proceedings, a proceedings in rem that is binding and conclusive against the
whole world. No evidence of irregularity or fraud in the issuance of the title has been adduced, and even if there is intrinsic
fraud, the period of one year within which to ventilate this infirmity has long expired. It is a postulate in law that `no title to
registered land in derogation to that of the registered owner shall be acquired by prescription or adverse possession.
Prescription is unavailing not only against the registered owner but also against his hereditary successors because the
latter merely step into the shoes of the decedent by operation of law and are merely the continuation of the personality of
their predecessor in interest.' (Barcelona vs. Barcelona, 100 Phil. 251). On this score alone, defendant's claim of
prescription should fail. The court also notes, in passing, that defendant's evidence does not convincingly establish that he
possessed the property publicly, exclusively and peacefully in the concept of owner. For one thing, he has not even paid

any realty tax on the property as the property is not declared for taxation purposes in his name. The court is neither
impressed with the credibility of defendant's witnesses. For example, the witness Sergio Dalida testified that in 1918 the
land in litigation was in the possession of Ariston Zabella (T.S.N. 8-21-84 p. 8). There seems to be no truth to this because
the property was bought by Ariston Zabella only in the year 1929. And then, there was that other witness Cosme Ranillo
who unequivocally admitted during cross-examination that he was coached by the defendant (vide: t.s.n. 11-20-84 p. 2426).
'As regards the Deed of Sale of the property in litigation in favor of Ariston Zabella (Exh. "1") which is apparently
the cornerstone of defendant's claim over the property the court concurs with the submission of the defendant that after
final judgment has been rendered in the cadastral proceedings, all rights or claims prior thereto are deemed barred by the
principle of res judicata. Hence after the finality of the judgment in the cadastral case, the Deed of Sale has lost its efficacy
being functus officio.
'With respect to the defense of laches so emphatically and exhaustively discussed by defendant's counsel in his
brief we find this to be devoid of merit because of the following cogent reasons, viz:
'Firstly, the defense of laches was never interposed or pleaded in the answer filed by the defendant. Not even in
our most gratuitous moment can we see a nuance of this defense being asserted in the answer: It is a rule of procedure
that defenses and objections not pleaded either in a motion to dismiss or in the answer are deemed waived. (Sec. 2 Rule
9 of the Rules of Court).
'Secondly, the evidence shows that plaintiff has not been sleeping on her rights. According to her she was
dispossessed of the land in 1976. It is admitted by the defendant that in 1977, plaintiff lodged a complaint against the
defendant regarding the land in question with the Presidential Action Committee, On Land Problems (PACLAP) as (sic)
Camp Wilhelm, Lucena City. And then the instant action was filed in court on July 12, 1977.
'On the contrary it is the defendant and/or his predecessor in interest who have been sleeping on their rights, if
any. They did not assert their right of ownership over the land in question arising from the Deed of Sale during the
cadastral proceedings in the year 1937 or thereabout (sic). Except for filing an adverse claim on February 17, 1977,
defendant has not taken any step to have the title of the property and its tax declaration transferred to his name.
'Thirdly, as adverted to, a title once registered cannot be defeated even by adverse, open and notorious
possession. In the same vein, laches, too, may not be considered a valid defense for claiming ownership of registered
land. Where prescription would not lie, neither would laches be available (De La Cruz vs. De La Cruz, CA-G.R. No. 4700R, Aug. 14, 1950; Adove vs. Lopez, CA-G.R. No. 18060-R, Aug. 30, 1957).'" 7
From this adverse decision, the private respondent appealed to the respondent Court of Appeals, which docketed
the case as CA-G.R. CV No. 09853. He asked the respondent Court to reverse the RTC because the latter erred: (a) in
not considering the unsullied testimonial and documentary evidence for the appellant; (b) in appreciating the plaintiffappellee's flimsy and insufficient testimonial evidence; (c) in not declaring that prescription and laches were raised by the
defendant; (d) in declaring that the failure to present to the cadastral court the deed of absolute sale bars the defendant
(private respondent) from proving his ownership over the land in suit; and (e) in rendering judgment in favor of the
petitioner. 8
In its Decision, the respondent Court upheld the private respondent's position and decreed as follows:
"WHEREFORE, the appealed decision is reversed and another one entered
1)
declaring defendant-appellant the true and lawful owner of the 12,501 square meters of land described in
and covered by Transfer Certificate of Title No. T-28170 of the Registry of Deeds of Lucena City;
2)
ordering the plaintiff-appellee to execute to the defendant-appellant the proper deed of conveyance
transferring full ownership of Transfer Certificate of Title No. T-28170 to the said defendant-appellant;
3)
ordering the Register of Deeds of Lucena City to cancel said Transfer Certificate of Title No. T-28170 and
to issue thereafter a new one in the name of defendant-appellant, in the event the plaintiff-appellee shall fail or refuse to
execute the conveyance;
4)
ordering the plaintiff-appellee to pay attorney's fees of P10,000.00.
Costs against the plaintiff-appellee." 9
In resolving the appeal against the petitioner, the respondent Court stressed the fact that although OCT No.
43073 was issued in 1937, it was only on 26 August 1976 that the petitioner initially moved "to change the registered
ownership" of the property with the issuance of TCT No. 27166. At that time, petitioner was already forty-nine (49) years
old. In short, the respondent Court observed that she allowed twenty-eight (28) years to pass - from the time she attained
the age of majority before taking any affirmative action to protect her rights over the property. It thus concluded that
"suspicion then is not altogether unjustified that the inaction was because the appellee knew of the sale by her father to
Juan Zabella (sic)," and that such knowledge is notice "that appellee had no right over half of the land." 10
Anent the petitioner's contention that the private respondent is not only guilty of laches but that prescription had
already set in against him, the respondent Court ruled that the former's evidence speaks otherwise because after TCT No.
T-27166 was issued on 26 August 1976, the private respondent promptly filed his adverse claim, thereby making of record
his interest in the land. Thus, neither prescription nor laches applies against him. 11
Public respondent also overturned the trial court's finding that the petitioner was in possession of the property until
she was dispossessed in 1976 by the private respondent principally because it was only in the third quarter of 1977 that
she (petitioner) declared the questioned property in her name, and had paid land taxes thereon only for the same third
quarter of 1977. The other tax payments were not in her name, but in the names of Godofredo Zaracena and Juan
Zabella. The respondent Court opined that "[N]ormally, one who claims possession in ownership will declare the property
in his name and will pay taxes on it," 12 and concluded that the petitioner's claimed possession "is not possession in law
that deserves protection and recognition." 13 On the other hand, it gave credit to the private respondent's version chiefly
because he has been paying irrigation charges since 1960.
Aggrieved thereby, the petitioner took this recourse, and raises the following issues: prLL
"1.
Whether or not the alleged sale of a property by virtue of an instrument which was not filed or registered
under Act 3344 and was not submitted before the Cadastral Court during the hearing thereof may deprived (sic) an
adjudicated-declared owner the (sic) enjoyment of possession and the improvements thereof.
2.
Whether or not a party in (sic) whose title was vested by virtue of a rendition of judgment and issuance of
the decree of registration in a judicial proceeding in rem which as such, binds the whole world and who ever claim (sic)
thereafter on the said land are (sic) deemed barred under the principle of res judicata.
3.
Whether (sic) or not a property covered by Torence (sic) Title can be acquired by prescription or adverse
possession." 14

After the private respondent filed his Comment, We gave due course to the petition and directed both parties to
submit their respective Memoranda, which they complied with.
The petition is impressed with merit.
1.
In the first place, the public respondent's factual findings on the issue of possession on the basis of
which it rejected the findings of fact and conclusions of the trial court are conjectural and speculative. Hence, We
cannot be bound by such findings under the rule that findings of fact of the Court of Appeals are conclusive on this Court.
15 The trial court gave credence to the petitioner's account that she had legally possessed the property in respondent's
"evidence does not convincingly establish that he possessed the property publicly, exclusively and peacefully in the
concept of owner." 16 The reasons for this pronouncement have already been given. Clearly, these matters are inexorably
anchored on the witnesses' credibility. It is a settled judicial precept that the issue of the credibility of witnesses is primarily
addressed to the trial court since it is in a better position to decide such a question, having seen and heard the witnesses
and having observed their deportment and manner of testifying during the trial. 17 Moreover, its findings on such
credibility carry great weight and respect, and will be sustained by the appellate court unless certain facts of substance
and value have been overlooked which, if considered, might affect the result of the case. 18 That the petitioner neither
declared the property in her name nor paid the taxes thereon until 1977 is not, contrary to the public respondent's
conclusion, fatal to her cause. Until 27 June 1976, the property remained covered by OCT No. 43073 in the names of
Juan Zabella and Anastacio Llenares. The private respondent's alleged claim was not annotated thereon. There is, as
well, no evidence to show that the private respondent had earlier made any extrajudicial or judicial demands to enforce his
claim on the property based on the so-called deed of sale which Anastacio had executed on 21 December 1929 in favor of
Ariston Zabella, the private respondent's predecessor-in-interest. Since the petitioner is Anastacio Llenares's sole heir, the
continued existence of OCT No. 43073 fully protected her rights; and her failure to declare for taxation purposes the onehalf (1/2) portion of the land pertaining to Anastacio did not, therefore, prejudice her because the payments of the real
estate taxes by others such as Godofredo Zaracena and Juan Zabella, as found by the public respondent per Exhibits
"C", "C-1" and "C-2" 19 for and in behalf of the registered owners benefited the registered owners themselves and
their successors-in-interest. On the other hand, the private respondent neither had the property declared in his name for
taxation purposes nor paid the real estate taxes thereon. All that he paid, and this was only beginning in 1960, were the
irrigation charges. And yet, the respondent Court resolved the issue in his favor. This palpable inconsistency on the part of
the Court of Appeals defies all logic.
Furthermore, the respondent Court's conclusion that the petitioner made no move to have the property declared in
her name or pay the real estate taxes thereon before 1976 because she knew all along about the 1929 sale executed by
her father to Ariston Zabella, is plain speculation and, as characterized by the public respondent, a mere "suspicion," thus:
". . . The suspicion then is not altogether unjustified that the inaction was because the appellee knew of the sale
by her father to Juan (sic) Zabella. . . ." 20
Such a suspicion has no basis at all. The parties do not dispute the fact that at the time of Anastacio Llenares'
death on 27 March 1931, the petitioner was only four (4) years old. The deed of sale was executed by Anastacio Llenares
on 21 December 1929, when the petitioner was only two (2) years old. Being at that time very much below the age of
reason, the petitioner could not have been expected to be aware of the existence of the said deed of sale, much less
understand its contents. The evidence failed to show that the private respondent informed the petitioner of such a sale at
any time before the former filed the adverse claim on 17 February 1977. cdrep
2.
Secondly, the respondent Court erroneously applied the rule on prescription against the petitioner and not
against the private respondent. The evidence conclusively established that at an appropriate cadastral proceedings, Lot
No. 5015 was awarded by the cadastral court to Juan Zabella and Anastacio Llenares in equal pro-indiviso shares; the
decision became final; and on 28 July 1937, OCT No. 43073 was issued in favor of Juan Zabella and Anastacio Llenares.
It was only on 17 February 1977, or after the lapse of over thirty-nine (39) years, that the private respondent, as a
successor-in-interest of Ariston Zabella, took the first legal step i.e., the filing of the affidavit of adverse claim to
protect and preserve his supposed right acquired under the deed of sale. Unfortunately, however, this move did not
produce any legal effect. An adverse claim under Section 110 of the Land Registration Act (Act No. 496), the governing
law at that time, referred to a claim of "any part or interest in registered land adverse to the registered owner, arising
subsequent to the date of the original registration." 21 In the instant case, the private respondent's "adverse claim" is one
based on a transaction which had occurred long before the rendition of the decision in the cadastral proceedings and the
issuance of OCT No. 43073. This seems to have escaped the attention of the public respondent which instead concluded
that it was the petitioner who did not take any legal action from 1937, when OCT No. 43073 was issued, until 26 August
1976, when TCT No. 27166 was issued following her execution on 22 June 1976 of the affidavit of "self-adjudication." This
conclusion has no basis. As has been earlier adverted to, the continued existence of OCT No. 43073 in Juan Zabella's
name protected the petitioner as the sole heir of Anastacio Llenares. There is no law which requires her, as a sole heir, to
execute an affidavit of adjudication and cause both the cancellation of the OCT and the issuance of a new one in her
name and in the names of the heirs of co-owner Juan Zabella in order to transfer the ownership of the property to her, or
protect her rights and interests therein. The transfer in her favor took place, ipso jure, upon the death of Anastacio
Llenares. 22
3.
Finally, the so-called deed of sale executed by Anastacio Llenares in 1929 had lost its efficacy after the
judgment in the cadastral proceedings adjudicating Lot No. 5015 to him and Juan Zabella became final. Ariston Zabella,
the vendee in the said sale, did not file any answer in the cadastral proceedings under the Cadastral Act (Act No. 2259, as
amended) 23 are judicial and in rem. As such, they bind the whole world. The final judgment rendered therein is deemed
to have settled the status of the land subject thereof; any claim over it not noted thereon by other parties is therefore
deemed barred under the principle of res judicata. 24 In a cadastral proceeding, the Government is actually the plaintiff
and all the claimants are defendants. 25 This is because the former, represented by the Solicitor General, institutes the
proceedings by a petition against the holder, claimants, possessors or occupants of such lands or any part thereof while
the latter, or those claiming interest in the entire land or any part of it, whether named in the notice or not, are required to
appear before the court and file an answer on or before the return day or within such further time as may be allowed by
the court. 26 All conflicting interests shall be adjudicated therein and the decree awarded in favor of the party entitled to
the land; when it has become final, the decree shall serve as the basis for an original certificate of title in favor of the said
party. This shall have the same effect as a certificate of title granted under the Land Registration Act. 27
A party fraudulently deprived of his property in a cadastral proceeding may nevertheless file, within one (1) year
from the entry of the decree, a petition for review. 28 After the lapse of the said period, if the property has not yet passed
on to an innocent purchaser for value, an action for reconveyance may still be filed by the aggrieved party. 29 In the

instant case, that action for reconveyance could have only been based on an implied trust defined in Article 1456 of the
Civil Code: cdrep
"ARTICLE 1456.
If property is acquired through mistake or fraud, the person obtaining it is, by force of law,
considered a trustee of an implied trust for the benefit of the person from whom the property comes."
It is now settled that an action for the reconveyance of property based on an implied or constructive trust
prescribes in ten (10) years. 30
WHEREFORE, judgment is hereby rendered GRANTING the instant petition, ANNULLING the challenged
decision of the public respondent Court of Appeals of 24 April 1991 in CA-G.R. CV No. 09853 and REINSTATING the
decision of the trial court subject of the appeal in the latter case.
Costs against the private respondent.
SO ORDERED.

SECOND DIVISION
[G.R. No. 77029. August 30, 1990.]

BIENVENIDO, ESTELITA, MACARIO, LUIS, ADELAIDE, ENRIQUITA and CLAUDIO, all surnamed, GEVERO,
petitioners, vs. INTERMEDIATE APPELLATE COURT and DEL MONTE DEVELOPMENT CORPORATION, respondents.
Carlito B. Somido for petitioners.
Benjamin N. Tabios for private respondent.
DECISION
PARAS, J p:
This is a petition for review on certiorari of the March 20, 1988 decision 1 of the then Intermediate Appellate Court
(now Court of Appeals) in AC-GR CV No. 69264, entitled Del Monte Development Corporation vs. Enrique Ababa, et al.,
etc. affirming the decision 2 of the then Court of First Instance (now Regional Trial Court) of Misamis Oriental declaring
the plaintiff corporation as the true and absolute 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 area of Seven Thousand Eight Hundred Seventy
Eight (7,878) square meters more or less. 2005Stud
As found by the Appellate Court, the facts are as follows:
"The parcel of land under litigation is Lot No. 2476 of the Subdivision Plan Psd-37365 containing an area of
20,119 square meters and situated at Gusa, Cagayan de Oro City. Said lot was acquired by purchase from the late Luis
Lancero on September 15, 1964 as per Deed of Absolute Sale executed in favor of plaintiff and by virtue of which Transfer
Certificate of Title No. 4320 was issued to plaintiff (DELCOR for brevity). Luis Lancero, in turn acquired the same parcel
from Ricardo Gevero on February 5, 1952 per deed of sale executed by Ricardo Gevero which was duly annotated as
entry No. 1128 at the back of Original Certificate of Title No. 7610 covering the mother lot identified as Lot No. 2476 in the
names of Teodorica Babangha 1/2 share and her children: Maria; Restituto, Elena, Ricardo, Eustaquio and Ursula, all
surnamed Gevero, 1/2 undivided share of the whole area containing 48,122 square meters.
"Teodorica Babangha died long before World War II and was survived by her six children aforementioned. The
heirs of Teodorica Babangha on October 17, 1966 executed an Extra-Judicial Settlement and Partition of the estate of
Teodorica Babangha, consisting of two lots, among them was lot 2476. By virtue of the extra-judicial settlement and
partition executed by the said heirs of Teodorica Babangha, Lot 2476-A to Lot 2476-I, inclusive, under subdivision plan
(LRC) Psd-80450 duly approved by the Land Registration Commission, Lot 2476-D, among others, was adjudicated to
Ricardo Gevero who was then alive at the time of extra-judicial settlement and partition in 1966. Plaintiff (private
respondent herein) filed an action with the CFI (now RTC) of Misamis Oriental to quiet title and/or annul the partition made
by the heirs of Teodorica Babangha insofar as the same prejudices the land which it acquired a portion of lot 2476.
"Plaintiff now seeks to quiet title and/or annul the partition made by the heirs of Teodorica Babangha insofar as the
same prejudices the land which it acquired, a portion of Lot 2476. Plaintiff proved that before purchasing Lot 2476-A it first
investigated and checked the title of Luis Lancero and found the same to be intact in the office of the Register of Deeds of
Cagayan de Oro City. The same with the subdivision plan (Exh. "B"), the corresponding technical description (Exh. "P")
and the Deed of Sale executed by Ricardo Gevero all of which were found to be unquestionable. By reason of all
these, plaintiff claims to have bought the land in good faith and for value, occupying the land since the sale and taking
over from Lancero's possession until May 1969, when the defendants Abadas forcibly entered the property." (Rollo, p. 23).
After trial the court a quo on July 18, 1977 rendered judgment, the dispositive portion of which reads as follows:
WHEREFORE, premises considered, judgment is hereby rendered declaring the plaintiff corporation as the true
and absolute owner of that portion of Lot No. 2476 of the Cagayan Cadastre, particularly Lot No. 2476-D of the
subdivision plan (LRC) Psd-80450, containing an area of SEVEN THOUSAND EIGHT HUNDRED SEVENTY EIGHT
(7,878) square meters, more or less. The other portions of Lot No. 2476 are hereby adjudicated as follows:
"Lot No. 2476 B to the heirs of Elena Gevero;
"Lot No. 2476 C to the heirs of Restituto Gevero;
"Lot No. 2476 E to the defendant spouses Enrique C. Torres and Francisca Aquino;
"Lot No. 2476 F to the defendant spouses Eduard Rumohr and Emilia Merida Rumohr;
"Lot Nos. 2476-H, 2476-I and 2476 G to defendant spouses Enrique Abada and Lilia Alvarez Abada.
"No adjudication can be made with respect to Lot No. 2476-A considering that the said lot is the subject of a civil
case between the Heirs of Maria Gevero on one hand and the spouses Daniel Borkingkito and Ursula Gevero on the other
hand, which case is now pending appeal before the Court of Appeals. No pronouncement as to costs.
"SO ORDERED." (Decision, Record on Appeal, p. 203; Rollo, pp. 21-22).
From said decision, defendant heirs of Ricardo Gevero (petitioners herein) appealed to the IAC (now Court of
Appeals) which subsequently, on March 20, 1986, affirmed the decision appealed from.
Petitioners, on March 31, 1986, filed a motion for reconsideration (Rollo, p. 28) but was denied on April 21, 1986.
Hence, the present petition. LLjur
This petition is devoid of merit.
Basically, the issues to be resolved in the instant case are: 1) whether or not the deed of sale executed by
Ricardo Gevero to Luis Lancero is valid; 2) in the affirmative, whether or not the 1/2 share of interest of Teodorica
Babangha in one of the litigated lots, lot no. 2476 under OCT No. 7610 is included in the deed of sale; and 3) whether or
not the private respondents' action is barred by laches.
Petitioners maintain that the deed of sale is entirely invalid citing alleged flaws thereto, such as that: 1) the
signature of Ricardo was forged without his knowledge of such fact; 2) Lancero had recognized the fatal defect of the
1952 deed of sale when he signed the document in 1968 entitled "Settlement to Avoid the Litigation"; 3) Ricardo's children
remained in the property notwithstanding the sale to Lancero; 4) the designated Lot No. is 2470 instead of the correct
number being Lot No. 2476; 5) the deed of sale included the share of Eustaquio Gevero without his authority; 6) T.C.T. No.
1183 of Lancero segregated the area of 20,119 square meters from the bigger area (OCT No. 7616) without the consent
of the other co-owners; 7) Lancero caused the 1952 Subdivision survey without the consent of the Geveros' to bring about
the segregation of the 20,119 square meters lot from the mother lot 2476 which brought about the issuance of his title T1183 and to DELCOR's title T4320, both of which were illegally issued; and 8) the area sold as per document is 20,649
square meters whereas the segregated area covered by TCT No. T-1183 of Lancero turned out to be 20,119 square
meters (Petitioners Memorandum, pp. 62-78).
As to petitioners' claim that the signature of Ricardo in the 1952 deed of sale in favor of Lancero was forged
without Ricardo's knowledge of 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 document. The 1952 deed was duly acknowledged by both parties before the
notary public, yet petitioners did not bother to rebut the legal presumption of the regularity of the notarized document (Dy
v. Sacay, 165 SCRA 473 [1988]); Nuguid v. C.A., G.R. No. 77423, March 13, 1989). In fact it has long been settled that a

public document executed and attested through the intervention of the notary public is evidence of the facts in clear,
unequivocal manner therein expressed. It has the presumption of regularity and to contradict all these, evidence must be
clear, convincing and more than merely preponderant (Rebuleda v. I.A.C., 155 SCRA 520-521 [1987]). Forgery cannot be
presumed, it must be proven (Siasat v. IAC, No. 67889, October 10, 1985). Likewise, petitioners allegation of absence of
consideration of the deed was not substantiated. Under Art. 1354 of the Civil Code, consideration is presumed unless the
contrary is proven.
As to petitioners' contention that Lancero had recognized the fatal defect of the 1952 deed when he signed the
document in 1968 entitled "Settlement to Avoid Litigation" (Rollo, p. 71), it is a basic rule of evidence that the right of a
party cannot be prejudiced by an act, declaration, or omission of another (Sec. 28. Rule 130, Rules of Court). This
particular rule is embodied in the maxim `res inter alias acta alteri ' non debet. 'Under Section 31, Rule 130, Rules of
Court "where one derives title to property from another, the act, declaration, or omission of the latter, while holding the
title, in relation to the property is evidence against the former." It is however stressed that the admission of the former
owner of a property must have been made while he was the owner thereof in order that such admission may be binding
upon the present owner (City of Manila v. Del Rosario, 5 Phil. 227 [1905]; Medel v. Avecilla, 15 Phil. 465 [1910]). Hence,
Lanceros' declaration or acts of executing the 1968 document have no binding effect on DELCOR, the ownership of the
land having passed to DELCOR in 1964. LLpr
Petitioners' claim that they remained in the property, notwithstanding the alleged sale by Ricardo to Lancero
(Rollo, p. 71) involves a question of fact already raised and passed upon by both the trial and appellate courts. Said the
Court of Appeals:
"Contrary to the allegations of the appellants, the trial court found that Luis Lancero had taken possession of the
land upon proper investigation by plaintiff the latter learned that it was indeed Luis Lancero who was the owner and
possessor of Lot 2476 D. . . ." (Decision, C.A., p. 6).
As a finding of fact, it is binding upon this Court (De Gola Sison v. Manalo, 8 SCRA 595 [1963]; Gaduco vs. C.A.,
14 SCRA 282 [1965]; Ramos v. Pepsi-Cola, 19 SCRA 289 [1967]; Tan v. C.A., 20 SCRA 54 [1967]; Ramirez Tel. Co. v.
Bank of America, 33 SCRA 737 [1970]; Lucero v. Loot, 25 SCRA 687 [1968]; Guerrero v. C.A., 142 SCRA 130 [1986]).
Suffice it to say that the other flaws claimed by the petitioners which allegedly invalidated the 1952 deed of sale
have not been raised before the trial court nor before the appellate court. It is settled jurisprudence that an issue which
was neither averred in the complaint nor raised during the trial in the court below cannot be raised for the first time on
appeal as it would be offensive to the basic rules of fair play, justice and due process. (Matienzo v. Servidad, 107 SCRA
276 [1981]; Dela Santa v. C.A., 140 SCRA 44 [1985]; Dihiansan v. C.A., 157 SCRA 434 [1987]; Anchuelo v. IAC, 147
SCRA 434 [1987]; Dulos Realty and Development Corporation v. C.A., 157 SCRA [1988]; Kamos v. IAC, G.R. No. 78282,
July 5, 1989).
Petitioners aver that the 1/2 share of interest of Teodorica (mother of Ricardo) in Lot 2476 under OCT No. 7610
was not included in the deed of sale as it was intended to limit solely to Ricardos' proportionate share out of the undivided
1/2 of the area pertaining to the six (6) brothers and sisters listed in the Title and that the Deed did not include the share of
Ricardo, as inheritance from Teodorica, because the Deed did not recite that she was deceased at the time it was
executed (Rollo, pp. 67-68).
The hereditary share in a decedents' estate is transmitted or vested immediately from the moment of the death of
the 'causante' or predecessor in interest (Civil Code of the Philippines, Art. 777), and there is no legal bar to a successor
(with requisite contracting capacity) disposing of his hereditary share immediately after such death, even if the actual
extent of such share is not determined until the subsequent liquidation of the estate (De Borja v. Vda. de Borja, 46 SCRA
577 [1972]).
Teodorica Babangha died long before World War II, hence, the rights to the succession were transmitted from the
moment of her death. It is therefore incorrect to state that it was only in 1966, the date of extrajudicial partition, when
Ricardo received his share in the lot as inheritance from his mother Teodorica. Thus, when Ricardo sold his share over lot
2476 that share which he inherited from Teodorica was also included unless expressly excluded in the deed of sale. Cdpr
Petitioners contend that Ricardo's share from Teodorica was excluded in the sale considering that a paragraph of
the aforementioned deed refers merely to the shares of Ricardo and Eustaquio (Rollo, p. 67-68).
It is well settled that laws and contracts shall be so construed as to harmonize and give effect to the different
provisions thereof (Reparations Commission v. Northern Lines, Inc., 34 SCRA 203 [1970]), to ascertain the meaning of the
provisions of a contract, its entirety must be taken into account (Ruiz v. Sheriff of Manila, 34 SCRA 83 [1970]). The
interpretation insisted upon by the petitioners, by citing only one paragraph of the deed of sale, would not only create
contradictions but also, render meaningless and set at naught the entire provisions thereof.
Petitioners claim that DELCOR's action is barred by laches considering that the petitioners have remained in the
actual, open, uninterrupted and adverse possession thereof until at present (Rollo, p. 17).
An instrument notarized by a notary public as in the case at bar is a public instrument (Eacnio v. Baens, 5 Phil.
742). The execution of a public instrument is equivalent to the delivery of the thing (Art. 1498, Ist Par., Civil Code) and is
deemed legal delivery. Hence, its execution was considered a sufficient delivery of the property (Buencamino v. Viceo, 13
Phil. 97; [1906]; Puato v. Mendoza, 64 Phil. 457 [1937]; Vda. de Sarmiento v. Lesaca, 108 Phil. 900 [1960]; Phil. Suburban
Development Corp. v. Auditor Gen., 63 SCRA 397 [1975]).
Besides, the property sold is a registered land. It is the act of registration that transfers the ownership of the land
sold. (GSIS v. C.A., G.R. No. 42278, January 20, 1989). If the property is a registered land, the purchaser in good faith
has a right to rely on the certificate of title and is under no duty to go behind it to look for flaws (Mallorca v. De Ocampo,
No. L-26852, March 25, 1970; Unchuan v. C.A., 161 SCRA 710 [1988]; Nuguid v. C.A., G.R. No. 77427, March 13, 1989).
SEcdtai
Under the established principles of land registration law, the person dealing with registered land may generally
rely on the correctness of its certificate of title and the law will in no way oblige him to go behind the certificate to
determine the condition of the property (Tiongco v. de la Merced, L-2446, July 25, 1974; Lopez vs. CA., G.R. No. 49739,
January 20, 1989; Davao Grains Inc. vs. IAC, 171 SCRA 612 [1989]). This notwithstanding, DELCOR did more than that.
It did not only rely on the certificate of title. The Court of Appeals found that it had first investigated and checked the title
(T.C.T. No. T-1183) in the name of Luis Lancero. It likewise inquired into the Subdivision Plan, the corresponding technical
description and the deed of sale executed by Ricardo Gevero in favor of Luis Lancero and found everything in order. It
even went to the premises and found Luis Lancero to be in possession of the land to the exclusion of any other person.
DELCOR had therefore acted in good faith in purchasing the land in question. llcd
Consequently, DELCOR's action is not barred by laches.

The main issues having been disposed of, discussion of the other issues appear unnecessary.
PREMISES CONSIDERED, the instant petition is hereby DISMISSED and the decision of the Court of Appeals is
hereby AFFIRMED.
SO ORDERED.

SECOND DIVISION
[G.R. No. 94918. September 2, 1992.]

DANILO I. SUAREZ, EUFROCINA SUAREZ-ANDRES, MARCELO I. SUAREZ, JR., EVELYN SUAREZ-DE LEON
and REGINIO I. SUAREZ, petitioners, vs. THE COURT OF APPEALS, VALENTE RAYMUNDO, VIOLETA RAYMUNDO,
MA. CONCEPCION VITO and VIRGINIA BANTA, respondents.
Villareal Law Offices for petitioners.
Nelson Loyola for private respondent.
DECISION
NOCON, J p:
The ultimate issue before Us is whether or not private respondents can validly acquire all the five (5) parcels of
land co-owned by petitioners and registered in the name of petitioner's deceased father. Marcelo Suarez, whose estate
has not been partitioned or liquidated, after the said properties were levied and publicly sold en masse to private
respondents to satisfy the personal judgment debt of Teofista Suarez, the surviving spouse of Marcelo Suarez, mother of
herein petitioners. LLphil
The undisputed facts of the case are as follows:
Herein petitioners are brothers and sisters. Their father died in 1955 and since then his estate consisting of
several valuable parcels of land in Pasig, Metro Manila has lot been liquidated or partitioned. In 1977, petitioners' widowed
mother and Rizal Realty Corporation lost in the consolidated cases for rescission of contract and for damages, and were
ordered by Branch 1 of the then Court of First Instance of Rizal (now Branch 151, RTC of Pasig) to pay, jointly and
severally, herein respondents the aggregate principal amount of about P70,000 as damages. 1
The judgment against petitioner's mother and Rizal Realty Corporation having become final and executory, five
(5) valuable parcel of land in Pasig, Metro Manila, (worth to be millions then) were levied and sold on execution on June
24, 1983 in favor of the private respondents as the highest bidder for the amount of P94,170.000. Private respondents
were then issued a certificate of sale which was subsequently registered or August 1, 1983.
On June 21, 1984 before the expiration of the redemption period, petitioners filed a reinvindicatory action 2
against private respondents and the Provincial Sheriff of Rizal, thereafter docketed as Civil Case No. 51203, for the
annulment of the auction sale and the recovery of the ownership of the levied pieces of property. Therein, they alleged,
among others, that being strangers to the case decided against their mother, they cannot be held liable therefor and that
the five (5) parcels of land, of which they are co-owners, can neither be levied nor sold on execution.
On July 31, 1984, the Provincial Sheriff of Rizal issued to private respondents a final deed of sale 3 over the
properties.
On October 22, 1984, Teofista Suarez joined by herein petitioners filed with Branch 151 a Motion for
Reconsideration 4 of the Order dated October 10, 1984, claiming that the parcels of land are co-owned by them and
further informing the Court the filing and pendency of an action to annul the auction sale (Civil Case No. 51203), which
motion however, was denied. LibLex
On February 25, 1985, a writ of preliminary injunction was issued enjoining private respondents from transferring
to third parties the levied parcels of land based on the finding that the auctioned lands are co-owned by petitioners.
On March 1, 1985, private respondent Valente Raymundo filed in Civil Case No. 51203 a Motion to Dismiss for
failure on the part of the petitioners to prosecute, however, such motion was later denied by Branch 155, Regional Trial
Court, Pasig.
On December 1985, Raymundo filed in Civil Case No. 51203 an Ex-Parte Motion to Dismiss complaint for failure
to prosecute. This was granted by Branch 155 through an Order dated May 29, 1986, notwithstanding petitioner's pending
motion for the issuance of alias summons to be served upon the other defendants in the said case. A motion for
reconsideration was filed but was later denied.
On October 10, 1984, RTC Branch 151 issued in Civil Case Nos. 21736-21739 an Order directing Teofista Suarez
and all persons claiming right under her to vacate the lots subject of the judicial sale; to desist from removing or alienating
improvements thereon; and to surrender to private respondents the owner's duplicate copy of the torrens title and other
pertinent documents.
Teofista Suarez then filed with the then Court of Appeals a petition for certiorari to annul the Orders of Branch 151
dated October 10, 1984 and October 14, 1986 issued in Civil Case Nos. 21736-21739.
On December 4, 1986 petitioners filed with Branch 155 a Motion for reconsideration of the Order 5 dated
September 24, 1986. In an Order dated June 10, 1987, 6 Branch 155 lifted its previous order of dismissal and directed
the issuance of alias summons. LLpr
Respondents then appealed to the Court of Appeals seeking to annul the orders dated February 25, 1985, 7 May
19, 1989 8 and February 26, 1990 9 issued in Civil Case No. 51203 and further ordering respondent Judge to dismiss
Civil Case No. 51203. The appellate court rendered its decision on July 27, 1990, 10 the dispositive portion of which
reads:
"WHEREFORE, the petition for certiorari is hereby granted and the questioned orders dated February 25, 1985,
May 19, 1989 and February 26, 1990 issued in Civil Case No. 51203 are hereby annulled, further respondent Judge is
ordered to dismiss Civil Case No. 51203." 11
Hence, this appeal.
Even without touching on the incidents and issues raised by both petitioner and private respondents and the
developments subsequent to the filing of the complaint, We cannot but notice the glaring error committed by the trial court.
It would be useless to discuss the procedural issue on the validity of the execution and the manner of publicly
selling en masse the subject properties for auction. To start with, only one-half of the 5 parcels of land should have been
the subject of the auction sale.
The law in point is Article 777 of the Civil Code, the law applicable at the time of the institution of the case.
"The rights to the succession are transmitted from the moment of the death of the decedent."
Article 888 further provides: prLL
"The legitime of the legitimate children and descendants consists of one-half of the hereditary estate of the father
and of the mother.
The latter may freely dispose of the remaining half, subject to the rights of illegitimate children and of the surviving
spouse as hereinafter provided."
Article 892 par. 2 likewise provides:
"If there are two or more legitimate children or descendants, the surviving spouse shall be entitled to a portion
equal to the legitime of each of the legitimate children or descendants."
Thus, from the foregoing, the legitime of the surviving spouse is equal to the legitime of each child.

The proprietary interest of petitioners in the levied and auctioned property is different from and adverse to that of
their mother. Petitioners became co-owners of the property not because of their mother but through their own right as
children of their deceased father. Therefore, petitioners are not barred in any way from instituting the action to annul the
auction sale to protect their own interest.
WHEREFORE, the decision of the Court of Appeals dated July 27, 1990 as well as its Resolution of August 28,
1990 are hereby REVERSED and set aside; and Civil Case No. 51203 is reinstated only to determine that portion which
belongs to petitioners and to annul the sale with regard to said portion. LLphil
SO ORDERED.

THIRD DIVISION
[G.R. No. 92436. July 26, 1991.]

MARIA VDA. DE REYES, EFREN REYES, ELVIRA REYES-TIMBOL, ERLINDA REYES-VALERIO, ERNESTO
REYES, ELIZABETH REYES, ALEX, RAFAEL II, EMELINA and EVELYN, all surnamed REYES, represented by their
mother, MARIA VDA. DE REYES, petitioners, vs. THE COURT OF APPEALS AND SPOUSES DALMACIO GARDIOLA
and ROSARIO MARTILLANO, respondents.
De Lara, De Lunas & Rosales for petitioners.
Santos, Pilapil & Associates for private respondents.
DECISION
DAVIDE, JR., J p:
Assailed before us in this appeal by certiorari under Rule 45 of the Rules of Court is the decision of the
respondent Court of Appeals in C.A.-G.R. CV No. 11934, promulgated on 20 October 1989, 1 reversing the decision of 1
October 1986 of Branch 21 (Imus, Cavite) of the Regional Trial Court of the Fourth Judicial Region in Civil Case No. RTCBCV-83-17 entitled Maria vda. de Reyes, et al. vs. Spouses Dalmacio Gardiola and Rosario Martillano and Spouses
Ricardo M. Gardiola and Emelita Gardiola, 2 and the resolution of 1 March 1990 denying the petitioner's motion for
reconsideration.
As culled from both decisions and the pleadings of the parties, the following facts have been preponderantly
established:
During his lifetime, one Gavino Reyes owned a parcel of land of approximately 70 hectares, more or less, located
at Sangayad, Ulong-Tubig, Carmona, Cavite. He sought to bring said land under the operation of the Torrens System of
registration of property. Unfortunately, he died in 1921 without the title having been issued to him. The application was
prosecuted by his son, Marcelo Reyes, who was the administrator of his property.
In 1936 the above property was surveyed and subdivided by Gavino's heirs (Exh. "6"). In the subdivision plan,
each resultant lot was earmarked, indicated for and assigned to a specific heir. It appears therein that two lots, one of
which is Lot No. 1-A-14 (Exh. "6-A"), were allotted to Rafael Reyes, Sr., one of Gavino's children. Per testimony of Juan
Poblete, the children thereafter secured tax declarations for their respective shares.
In 1941, or about twenty (20) years after the death of Gavino, the original certificate of title for the whole property
OCT No. 255 was issued. It was, however, kept by Juan Poblete, son-inlaw of Marcelo Reyes, who was by then
already deceased. The heirs of Gavino were not aware of this fact.
On 3 December 1943, Rafael Reyes, Sr. sold a parcel of land with an area of 23,431 square meters, more or less,
to private respondent Dalmacio Gardiola (Exh. "5"). According to the vendee, this parcel corresponds to Lot No.1 -A-14 of
the subdivision plan aforestated. The deed of sale, however, did not specifically mention Lot No. 1-A-14. The vendee
immediately took possession of the property and started paying the land taxes therein. Cdpr
In 1945 or thereabouts, Juan Poblete "revalidated" the original Certificate of Title. As reconstituted, the new title is
OCT (O-4358) RO-255 (Exhs. "4" to "4-A").
On 21 October 1967, when the heirs of Gavino Reyes executed a Deed of Extrajudicial Settlement of Estate (Exh.
"D") based on the aforestated subdivision plan (Exh. "6"), the lot that was intended for Rafael Reyes, Sr., who was already
deceased, was instead adjudicated to his only son and heir, Rafael Reyes, Jr. (the predecessor-in-interest of the
petitioners herein). Private respondent Rosario Martillano signed the deed in representation of her mother, Marta Reyes,
one of the children of Gavino Reyes.
As a result of the Extrajudicial Settlement, OCT RO-255 was cancelled and in lieu thereof, several transfer
certificates of title covering the subdivided lots were issued in the names of the respective adjudicatees. One of them is
TCT No. 27257 in the name of Rafael Reyes, Jr. covering Lot No. 1-A-14. The Transfer Certificates of Title were, however,
kept by one Candido Hebron. On 10 January 1969, some of the heirs of Gavino Reyes filed a case of Annulment of
Partition and Recovery of Possession before the Court of First Instance of Cavite City, which was docketed therein as Civil
Case No. 1267. One of the defendants in said case is herein private respondent Rosario Martillano. The case was
dismissed on 18 September 1969, but Candido Hebron was ordered by the trial court to deliver to the heirs concerned all
the transfer certificates of title in his possession. 3
After obtaining the Transfer Certificate of Title for Lot No. 1-A-14 from Hebron, pursuant to the aforesaid order in
Civil Case No. 1267, petitioners herein, as successors-in-interest of Rafael Reyes, Jr., filed on 14 March 1983 with the
Regional Trial Court the above-mentioned Civil Case No. RTC-BCV-83-17 against private respondents (defendants
therein) for recovery of possession or, in the alternative, for indemnification, accounting and damages. They allege therein
that after "having definitely discovered that they are the lawful owners of the property," (Lot No. 1-A-14), they, "including
Rafael Reyes, Jr., during his lifetime, made repeated demands to (sic) defendants to surrender the possession of and
vacate the parcel of land belonging to the former, but defendants refused to vacate and surrender the possession of the
said land to herein plaintiffs;" the last of the demands was allegedly made on 8 October 1982. They further allege that they
have been deprived by said defendants of the rightful possession and enjoyment of the property since September 1969
which coincides with the date of the order in Civil Case No. 1267. 4 In their answer, private respondents deny the material
averments in the complaint and assert that they are the owners of the lot in question, having bought the same from Rafael
Reyes, Sr.; that the issuance of TCT No. 27257 is null and void, for such sale was known to Rafael Reyes, Jr.; that they
have been in possession of the property and have been paying the land taxes thereon; and that petitioners are barred by
prescription and/or laches. 5
Petitioners amended their complaint on 21 March 1985 to implead as additional defendants the spouses Ricardo
M. Gardiola and Emelita Gardiola, on the basis of the following claims:
xxx
xxx
xxx
"9.
Meanwhile, during the presentation of the defendants spouses Dalmacio Gardiola and Rosario
Martillano's evidence the former testified that they mortgaged the subject land to the Rural Bank of Carmona Inc. For their
failure to redeem the mortgage the same was foreclosed by the bank.
10.
However, within the period of one (1 ) year from such foreclosure the questioned land was redeemed by
the original defendants' son in the person of Ricardo M. Gardiola, who was knowledgeable/aware of the pendency of the
above captioned case. The corresponding redemption was effected through a deed of conveyance, . . ." 6
The prayer of the amended complaint now contains the alternative relief for indemnification for the reasonable
value of the property "in the event restitution of the property is no longer possible." 7
In its decision of 1 October 1986, 8 the trial court concluded that petitioners' "title over the subject property is valid
and regular and thus they are entitled to its possession and enjoyment," and accordingly decided thus:

"WHEREFORE, the defendants or anyone acting for and in their behalf are hereby ordered to relinguish
possession or vacate the property in question which is covered by Transfer Certificate of Title No. T-27257 in favor of the
plaintiffs.
All other claims and/or counterclaims of the parties relative to this case are dismissed for lack of proper
substantiation."
The conclusion of the trial court is based on its finding that (a) there is no evidence that the heirs of Gavino Reyes
entered into any written agreement of partition in 1936 based on the subdivision plan; (b) there is no identity between Lot
No. 1-14-A and the land sold to private respondents by Rafael Reyes, Sr., or otherwise stated, the description of the latter
as indicated in the deed of sale (Exh. "5") does not tally with the description of the former; and (c) moreover:
"Granting, arguendo, that the sale made by Rafael Reyes, Sr. to the defendants covered the land in question
Lot No. 1-A-14 and that Transfer Certificate of Title No. T-27257 was obtained by means of fraud, the claim of the
defendants over the said property is already barred. Action for reconveyance prescribes in four (4) years from the
discovery thereof. If there was fraud, the defendant could have discovered the same in 1967 when the partition was made
in as much as defendant Rosario Martillano was a party to that partition. Let us grant further that the issuance of Transfer
Certificate of Title No. T-27257 to Rafael Reyes, Jr. created a constructive or implied trust in favor of the defendants,
again, the claim of the defendants is also barred. From 1967 to the filing of their answer (let us consider this as an action
for reconveyance) to this case sometime in July, 1983, a period of about sixteen (16) years had already elapsed.
Prescriptibility of an action for reconveyance based on implied or constructive trust is ten (10) years.
The trial court further held that the continued possession by private respondents, which it found to have started in
1943, did not ripen into ownership because at that time, the property was already registered, hence it cannot be acquired
by prescription or adverse possession. 9 Private respondents appealed the said decision to the Court of Appeals which
docketed the appeal as C.A.-G.R. CV No. 11934. In its decision of 20 October 1989, the respondent Court of Appeals
formulated the issues before it as follows:
"I
Whether or not the lower court erred in declaring that the property of the late Gavino Reyes consisting of 70
hectares was partitioned only in 1967 by his grandchildren after discovery of the existence of OCT No. 255 and that no
actual partition was made in 1936 by the decedent's children.
II
Whether or not the lower court erred in concluding that the parcel of land sold by the appellees' predecessor-ininterest, the late Rafael Reyes, Sr. to appellant Dalmacio Gardiola was not the same parcel of land under litigation." 10
and resolved such issues, thus:
"On the first issue, We believe that the lower court committed a reversible error when it declared that the landed
estate of the late Gavino Reyes was partitioned only in 1967 by the latter's grandchildren; and that no actual partition was
made in 1936 by the decedents' (sic) children. The evidence on record bears out the existence of a subdivision plan (Exh.
6) which was not controverted nor denied by the appellees. In like manner, the lower court itself recognized the fact that
the property of the late Gavino Reyes consisting of 70 hectares was surveyed and subdivided in 1936 as evidenced by
the said subdivision plan (Exh. 6). With the existence of a subdivision plan, and from the uncontroverted testimony of
appellants' witness, We can only infer that at least an oral partition, which under the law is valid and binding, was entered
into by the heirs of Gavino Reyes regarding his properties in 1936. As held in a long line of decisions, extrajudicial
partition can be done orally, and the same would be valid if freely entered into (Belen v. Belen, 49 O.G. 997, March 1953).
The reason for this is because a partition is not exactly a conveyance for the reason that it does not involve transfer of
property from one to the other but rather a confirmation by them of their ownership of the property. It must also be
remembered that when Gavino Reyes died on March 7, 1921, his property was admittedly not yet covered by a torrens
title, as it was only in 1941 when said properties were brought into the application of the torrens system. With this factual
milieu, it can also be concluded that his heirs have indeed settled, subdivided and partitioned Gavino Reyes' landed
estate without formal requirements of Rule 74 of the Rules of Court when a parcel of land is covered by a torrens title. As
told earlier, the Subdivision Plan (Exh. 6) undisputedly showed on its face that the 70 hectares of land belonging to the
late Gavino Reyes was subdivided and partitioned by his children in 1936. On this score, the partition of the said property
even without the formal requirements under the rule is valid as held in the case of Hernandez vs. Andal, 78 Phil. 176,
which states:
xxx
xxx
xxx
Moreover, in the Deed of Sale dated December 3, 1943 (Exh. 5) executed by Rafael Reyes, Sr. in favor of
appellant Dalmacio Gardiola, the land sold therein was described as 'na aking minana sa aking ama.' This alone would
confirm the contention of the appellants that there was already an actual partition (at least an oral partition) of the property
of Gavino Reyes in 1936. As aforestated, the presence of the Subdivision Plan (Exh. 6) is an (sic) evidence of such
partition which appellees failed to controvert not to mention the fact that the lower court itself recognized the existence of
said plan, in the same manner that it concluded that the property was already surveyed and actually subdivided in 1936
(page 3, pars. 3 and 4, Decision).
From the foregoing considerations it is evident that the Deed of Extrajudicial Settlement of Estate (Exh. D)
executed by the grandchildren of the late Gavino Reyes in 1967 is of no moment considering that the property subject of
the partition in the deed was already partitioned in 1936 by the children of Gavino Reyes. It is for this reason that the lots
supposedly inherited by the grandchildren named in the deed of 1967 were the same lots inherited and given to their
respective fathers or mothers in 1936 while the land was not yet covered by the torrens system. Hence, in the case of
Rafael Reyes, Sr., the land inherited by him was two (2) parcels of land known as Lots Nos. 1-A-3 and 1-A-14 described
in the Subdivision plan of 1936 (Exh. 6), which were the same parcels of land allegedly inherited by Rafael Reyes, Jr. from
Gavino Reyes in representation of his father, pursuant to the Deed of Extrajudicial Settlement of Estate for which TCT No.
27257 was issued.
Coming to the second issue, the lower court likewise erred when it concluded that the parcel of land sold by
appellee's predecessor-in-interest to appellant Dalmacio Gardiola was not the same parcel of land under litigation. It must
be pointed out that the identity of the parcel of land which the appellees sought to recover from the appellants was never
an issue in the lower court, because the litigants had already conceded that the parcel identified as Lot No. 1-A-14 in TCT
No. 27257 was the same parcel of land identified as Cadastral Lot No. 1228 and 1235 described in Tax Declaration No.
4766. Despite this admission, however, the lower court declared that 'as described in the deed of sale (Exh. 5), the land's
description does not tally with the description of Lot No. 1-A-14, the land in litigation.' As correctly pointed out by the
appellants however, the discrepancy in the description was due to the fact that the description of the land sold in the Deed

of Sale was expressed in layman's language whereas the description of Lot No. 1-A-14 in TCT No. 27257 was done in
technical terms. This was so because, when Rafael Reyes, Sr. sold the property in dispute to appellant Dalmaco Gardiola
on December 3, 1943, the only evidence of title to the land then available in so far as Rafael Reyes, Sr. was concerned
was Tax Declaration No. 4766, because at that time, neither he nor appellant Dalmacio Gardiola was aware of the
existence of OCT No. 255 as in fact TCT No. 27257 was issued only in 1967. Consequently, the land subject of the Deed
of Sale was described by the vendor in the manner as described in Tax Declaration No. 4766. However, the description of
the land appearing in the Deed of Sale (Exh. 5) was exactly the same land identified as Lot No. 1-A-14 in the Subdivision
Plan (Exh. 6) of 1936. Accordingly, the assumption of the lower court that 'if the land sold by Rafael Reyes, Sr. was the
one now in litigation, he could have easily indicated Lot No. 1-A-14' is bereft of merit under the foregoing circumstances.
Interestingly enough, the appellees never denied the identity of the subject lot during the hearing at the lower court. What
they were denying only was the sale made by Rafael Reyes, Sr. to appellant Dalmacio Gardiola which does not hold true
because of the document denominated as Deed of Sale (Exh. 5)." 11
It concluded that the trial court erred when it ordered the private respondents or anyone acting in their behalf to
relinquish the possession or vacate the property in question. It thus decreed:
"WHEREFORE, the appealed Judgment is ordered REVERSED and SET ASIDE and a new one is rendered
declaring appellants to be the lawful owners of the lot identified as Lot No. 1-A-14 in TCT No. 27257. No costs." 12
Their motion to reconsider the above decision having been denied by the Court of Appeals in its resolution of 1
March 1990, 13 petitioners filed the instant petition on 6 April 1990 after having obtained an extension of time within which
to file it.
The petition does not implead original new defendants Ricardo Gardiola and Emelita Gardiola.
As ground for their plea for the review of the decision of the Court of Appeals, petitioners allege that said court has
decided questions of substance in a way not in accord with law or applicable jurisprudence when it held that "the deed of
extrajudicial settlement of estate (Exh. "D") executed by the grandchildren of the late Gavino Reyes in 1967 is of no
moment considering that the property subject of the partition was already partitioned in 1938 by the children of Gavino
Reyes." In support thereof, they claim that (a) TCT No. 27257 covers two parcels of land; the lot described in paragraph 1
thereof is owned by petitioners and that ownership was confirmed by this Court in G.R. No. 79882, hence, the Court of
Appeals should have affirmed the decision of the trial court; (b) private respondent Rosario Martillano was a party to the
extrajudicial settlement of estate which was duly registered in the Registry of Deeds in 1967; said registration is the
operative act that gives validity to the transfer or creates a lien upon the land and also constituted constructive notice to
the whole world. The court cannot disregard the binding effect thereof. Finally, the pronouncement of the Court of Appeals
that private respondents are the lawful owners of the lot in question "militates against the indefeasible and incontrovertible
character of the torrens title," 14 and allows reconveyance which is not tenable since the action therefor had already
prescribed, as stated in the decision of the trial court.
In the resolution of 7 May 1990, We required respondents to comment on the petition. But even before it could do
so, petitioner, without obtaining prior leave of the Court, filed on 29 May 1990 a so-called Supplemental Arguments in
Support of The Petition For Review On Certiorari 15 wherein they assert, among others, that: (a) the findings of facts of
respondent Court are contrary to those of the trial court and appear to be contradicted by the evidence on record thus
calling for the review by this Court; 16 (b) it also committed misapprehension of the facts in this case and its findings are
based on speculation, conjecture and surmises; (c) private respondents' attack on petitioners' title is a collateral attack
which is not allowed; even if it is allowed, the same had already prescribed and is now barred. prcd
It was only on 15 June 1990 that private respondents filed their Comment. 17 We required petitioners to reply
thereto, which they complied with on 8 August 1990. 18 A rejoinder was filed by private respondents on 29 August 1990.
We gave due course to the petition on 19 September 1990 and required the parties to submit simultaneously their
respective memoranda which they complied with.
Attached as Annex "A" to private respondent's Memorandum, which was filed on 10 December 1990, is the
Resolution of this Court (Third Division) of 20 August 1990 in G.R. No. 92811 entitled Spouses Artemio Durumpili and
Angustia Reyes vs. The Court of Appeals and Spouses Dalmacio Gardiola and Rosario Martillano, which also involves the
property of Gavino Reyes, the partition thereof among his children in 1936, and the extrajudicial settlement in 1967.
In said resolution, this Court held:
". . . The partition made in 1936, although oral, was valid. The requirement in Article 1358 of the Civil Code that
acts which have for their object the creation, transmission, modification or extinguishment of real rights over immovable
property must appear in a public instrument is only for convenience and not for validity or enforceability as between the
parties themselves. [Thunga Hui vs. Que Bentec, 2 Phil. 561 (1903)] The subsequent execution by the heirs of the
Extrajudicial Partition in 1967 did not alter the oral partition as in fact the share pertaining to Augustia Reyes corresponded
to that previously assigned to her father. Considering that Angel Reyes sold this property to Basilio de Ocampo who, in
turn, sold the same to respondents, we agree with the Court of Appeals that the latter lawfully acquired the property and
are entitled to ownership and possession thereof."
In answer to the charge of private respondents that petitioners deliberately failed to cite this resolution, the latter,
in their reply-memorandum dated 15 March 1991 and filed three days thereafter, allege:
"Our failure to mention the aforementioned resolution before this Honorable Court is not deliberate nor with malice
aforethought. The reason is that to date, we have not yet received any resolution to our Motion For Leave of Court To
Refer Case To The Honorable Supreme Court En Banc. Moreover, we honestly feel that the resolution that will be issued
therein will not be applicable to the case before this Honorable Court's Second Division. It should be mentioned that in the
Durumpili case before the Third Division, the Court of Appeals relied on the alleged confirmation of the sale executed by
Angustia Reyes, while in the Reyes case before this Second Division, there was no sale that was executed by the
petitioners Reyes' predecessor-in-interest, Rafael Reyes, Jr."
The foregoing claim is not supported by the rollo of G.R. No. 92811, which reveals the following: (a) On 18
September 1990, petitioners therein, represented by De Lara, De Lunas and Rosales, who are the lawyers of petitioners
in the instant case, filed a motion for the reconsideration of the resolution of 20 August 1990. 19 b) This motion was
denied in the resolution of 1 October 1990. 20 c) On 17 November 1990, petitioners therein, through the same lawyers,
filed a Motion For Leave Of Court To Refer Case To The Honorable Supreme Court En Banc and/or Motion For
Reconsideration 21 wherein they specifically admit that said case and the instant petition have "identity and/or similarity of
the parties, the facts, the issues raised," even going to the extent of "graphically" illustrating where such similarities lie. 22
d) This motion was denied in the resolution of 28 November 1990. Copy thereof was furnished the attorneys for

petitioners. 23 e) Entry of judgment had already been made therein and a copy thereof was sent to petitioner's counsel
per Letter of Transmittal of the Deputy Clerk of Court and Chief of the Judicial Records Office dated 20 December 1990.
What comes out prominently from the disquisitions of the parties is this simple issue: whether or not respondent
Court of Appeals committed any reversible error in setting aside the decision of the trial court. LexLib
We find none. The reversal of the trial court's decision is inevitable and unavoidable because the legal and factual
conclusions made by the trial court are unfounded and clearly erroneous. The Court of Appeals was not bound to agree to
such conclusions. The trial court erred in holding that: (a) there was no partition among the children of Gavino Reyes in
1936 since there is no written evidence in support thereof; yet, it admits that there was a survey and subdivision of the
property and the adjudication of specific subdivision lots to each of the children of Gavino; (b) the land sold by Rafael
Reyes, Sr. to private respondents is not identical to Lot No. 1-A-14, the lot specified for and adjudicated to Rafael Reyes,
Jr. in the partition agreement; and (c) if the land sold by Rafael Reyes, Sr. to private respondent Dalmacio Gardiola is
indeed Lot No. 1-A-14 and that TCT No. T-27257 was obtained through fraud, the remedy open to the vendee was an
action for reconveyance, which should have been brought within four (4) years from the discovery thereof in 1967 when
the Extrajudicial Settlement was executed since private respondent Rosario Martillano, wife of Dalmacio, was a party
thereto.
The Court of Appeals correctly held that the partition made by the children of Gavino Reyes in 1936, although
oral, was valid and binding. There is no law that requires partition among heirs to be in writing to be valid. 24 In
Hernandez vs. Andal, supra, this Court, interpreting Section 1 of Rule 74 of the Rules of Court, held that the requirement
that a partition be put in a public document and registered has for its purpose the protection of creditors and at the same
time the protection of the heirs themselves against tardy claims. The object of registration is to serve as constructive
notice to others. It follows then that the intrinsic validity of partition not executed with the prescribed formalities does not
come into play when there are no creditors or the rights of creditors are not affected. Where no such rights are involved, it
is competent for the heirs of an estate to enter into an agreement for distribution in a manner and upon a plan different
from those provided by law. There is nothing in said section from which it can be inferred that a writing or other formality is
an essential requisite to the validity of the partition. Accordingly, an oral partition is valid.
Barcelona, et al. vs. Barcelona, et al., supra, provides the reason why oral partition is valid and why it is not
covered by the Statute of Frauds: partition among heirs or renunciation of an inheritance by some of them is not exactly a
conveyance of real property for the reason that it does not involve transfer of property from one to the other, but rather a
confirmation or ratification of title or right of property by the heir renouncing in favor of another heir accepting and
receiving the inheritance.
Additionally, the validity of such oral partition in 1936 has been expressly sustained by this Court in the Resolution
of 20 August 1990 in G.R. No. 92811. 25
But even if We are to assume arguendo that the oral partition executed in 1936 was not valid for some reason or
another, We would still arrive at the same conclusion for upon the death of Gavino Reyes in 1921, his heirs automatically
became co-owners of his 70-hectare parcel of land. The rights to the succession are transmitted from the moment of
death of the decedent. 26 The estate of the decedent would then be held in co-ownership by the heirs. The co-heir or coowner may validly dispose of his share or interest in the property subject to the condition that the portion disposed of is
eventually allotted to him in the division upon termination of the co-ownership. Article 493 of the Civil Code provides:
"Each co-owner shall have the full ownership of his part and the fruits and benefits pertaining thereto, and he may
even substitute another person in its enjoyment, except when personal rights are involved. But the effect of the alienation
or the mortgage, with respect to the co-owners, shall be limited to the portion which may be allotted to him in the division
upon the termination of the co-ownership."
In Ramirez vs. Bautista, 27 this Court held that every co-heir has the absolute ownership of his share in the
community property and may alienate, assign, or mortgage the same, except as to purely personal rights, but the effect of
any such transfer is limited to the portion which may be awarded to him upon the partition of the property. Cdpr
In the case at bar, the lot sold by Rafael Reyes, Sr. to private respondent Dalmacio Gardiola is his share in the
estate of his deceased father, Gavino Reyes. It is the same property which was eventually adjudicated to his son and heir,
Rafael Reyes, Jr., represented in turn by his heirs petitioners herein in the extrajudicial settlement of 1967.
In respect to the issue as to whether the property sold by Rafael Reyes, Sr. is identical to Lot No. 1-14-A, the trial
court based its conclusion that it is not, on his observation that the description of the former does not tally with that of the
latter, moreover, if Rafael did intend to sell Lot No. 1-14-A, he should have specifically stated it in the deed since at that
time, the property had already been partitioned and said lot was adjudicated to him. In addition to the contrary findings
and conclusion of the respondent Court on this issue to which We fully agree, it is to be stressed that Rafael had this
property declared for taxation purposes and the tax declaration issued was made the basis for the description of the
property in the deed of sale. Upon the execution of the deed of sale, vendee herein private respondent Dalmacio
Gardiola immediately took possession of the property. This is the very same property which is the subject matter of this
case and which petitioners seek to recover from the private respondents. The main evidence adduced for their claim of
ownership and possession over it is TCT No. T-27257, the certificate of title covering Lot No. 1-14-A. They therefore admit
and concede that the property claimed by private respondent, which was acquired by sale from Rafael Reyes, Sr., is none
other than Lot No. 1-14-A.
The participation of private respondent Rosario Gardiola in the Extrajudicial Settlement did not place private
respondents in estoppel to question the issuance of TCT No. T-27257. As correctly maintained by private respondents,
she signed it in representation of her deceased mother, Marta Reyes, a daughter and an heir of Gavino Reyes. She did
not sign for and in behalf of her husband, Dalmacio Gardiola, vendee of the share of Rafael Reyes, Sr.
The same did not operate to divest the vendee of the share of Rafael Reyes, Sr. in the estate of Gavino.
Petitioners, as mere successors-in-interest of Rafael Reyes, Jr., son of Rafael Reyes, Sr., can only acquire that which
Rafael, Jr. could transmit to them upon his death. The latter never became the owner of Lot No. 1-A-14 because it was
sold by his father in 1943. The issuance of TCT No.T-27257 in the name of Rafael Reyes, Jr., in so far as Lot No. 1-14-A
is concerned, was clearly erroneous because he never became its owner. An extrajudicial settlement does not create a
right in favor of an heir. As this Court stated in the Barcelona case, 28 it is but a confirmation or ratification of title or right
to property. Thus, since he never had any title or right to Lot No. 1-14-A, the mere execution of the settlement did not
improve his condition, and the subsequent registration of the deed did not create any right or vest any title over the
property in favor of the petitioners as heirs of Rafael Reyes, Jr. The latter cannot give them what he never had before.
Nemo dare potest quod non habet.

There is one more point that should be stressed here. Petitioners' immediate predecessor-in-interest, Rafael
Reyes, Jr., never took any action against private respondents from the time his father sold the lot to the latter. Neither did
petitioners bring any action to recover from private respondents the ownership and possession of the lot from the time
Rafael Reyes, Jr. died. As categorically admitted by petitioners in their complaint and amended complaint, it was only in or
about September 1969 when, after the delivery of TCT No. 27257 by Candido Hebron to them, that they definitely
discovered that they were the owners of the property in question. And yet, despite full knowledge that private respondents
were in actual physical possession of the property, it was only about thirteen and one-half (13 1/2) years later that they
decided to file an action for recovery of possession. As stated earlier, the original complaint was filed in the trial court on
14 March 1983. There was then absolutely no basis for the trial court to place the burden on private respondents to bring
an action for reconveyance within four (4) years from their discovery of the issuance of the transfer certificate of title in the
name of Rafael Reyes, Jr.
The instant petition then is without merit.
WHEREFORE, judgment is hereby rendered DENYING the petition with costs against petitioners.
SO ORDERED.

SECOND DIVISION
[G.R. No. L-46364. April 6, 1990.]
SULPICIA JIMENEZ and TORIBIO MATIAS, petitioners, vs. VICENTE FERNANDEZ alias HOSPICIO
FERNANDEZ and TEODORA GRADO, respondents.
Antonio E. Bengzon III for petitioners.
Agustin U. Cruz for private respondents.
DECISION
PARAS, J p:
Before Us is a petition for review on certiorari of the following Decision 1 and Resolution 2 of the Honorable
Court of Appeals: (1) Decision, dated March 1, 1977 in C.A.-G.R. No. 49178-R entitled "Sulpicia Jimenez, et al., v. Vicente
Fernandez, et al." affirming in toto the judgment of the Court of First Instance of Pangasinan, Third Judicial District in Civil
Case No. 14802-I between the same parties and (2) Resolution dated June 3, 1977 denying plaintiffs-appellants' motion
for reconsideration.
As gathered from the records, the factual background of this case is as follows: cdphil
The land in question is the Eastern portion with an area of Four Hundred Thirty Six (436) square meters of that
parcel of residential land situated in Barrio Dulig (now Magsaysay), Municipality of Labrador, Pangasinan actually covered
by Transfer Certificate of Title No. 82275 (Exhibit A) issued in the name of Sulpicia Jimenez.
The entire parcel of land with an area of 2,932 square meters, formerly belonged to Fermin Jimenez. Fermin
Jimenez has two (2) sons named Fortunato and Carlos Jimenez. This Fortunato Jimenez who predeceased his father has
only one child, the petitioner Sulpicia Jimenez. After the death of Fermin Jimenez, the entire parcel of land was registered
under Act 496 in the name of Carlos Jimenez and Sulpicia Jimenez (uncle and niece) in equal shares pro-indiviso. As a
result of the registration case Original Certificate of Title No. 50933 (Exhibit 8) was issued on February 28, 1933, in the
names of Carlos Jimenez and Sulpicia Jimenez, in equal shares pro-indiviso. 2005SE
Carlos Jimenez died on July 9, 1936 and his illegitimate daughter, Melecia Cayabyab, also known as Melecia
Jimenez, took possession of the eastern portion of the property consisting of 436 square meters.
On January 20, 1944, Melecia Jimenez sold said 436 square-meter-portion of the property to Edilberto Cagampan
and defendant Teodora Grado executed a contract entitled "Exchange of Real Properties" whereby the former transferred
said 436 square-meter-portion to the latter, who has been in occupation since.
On August 29, 1969, plaintiff Sulpicia Jimenez executed an affidavit adjudicating unto herself the other half of the
property appertaining to Carlos Jimenez, upon manifestation that she is the only heir of her deceased uncle.
Consequently Transfer Certificate of Title No. 82275 was issued on October 1, 1969 in petitioner's name alone over the
entire 2,932 square meter-property. LLjur
On April 1, 1970, Sulpicia Jimenez, joined by her husband, instituted the present action for the recovery of the
eastern portion of the property consisting of 436 square meters occupied by defendant Teodora Grado and her son.
After trial on the merits, the lower court rendered judgment, the dispositive portion of which reads:
"WHEREFORE, decision is hereby rendered dismissing the complaint and holding the defendant, Teodora Grado,
the absolute owner of the land in question; ordering the plaintiffs to pay to the defendant the amount of P500.00 as
damages, as attorney's fees, and to pay the costs of suit.
"SO ORDERED." (Rollo, p. 20)
Petitioner appealed the above judgment to the respondent Court of Appeals and on March 1, 1977, respondent
Court of Appeals rendered a decision affirming the same in toto. Said decision was rendered by a special division of five
(5) justices, with the Hon. Lourdes San Diego, dissenting.
Petitioners within the reglementary period granted by the Honorable Court of Appeals, filed therewith a motion for
reconsideration. But said motion for reconsideration was denied by the Court of Appeals in its resolution dated June 3,
1977.
In their appeal to the respondent Court of Appeals from the aforequoted decision of the trial court, herein
petitioner raised the following assignments of error to wit:
ASSIGNMENTS OF ERROR
I
THE LOWER COURT ERRED IN NOT DECLARING THAT MELECIA CAYABYAB, ALSO KNOWN AS MELECIA
JIMENEZ, IS NOT THE DAUGHTER OF CARLOS JIMENEZ.
II
THE LOWER COURT ERRED IN NOT DECLARING THAT MELECIA CAYABYAB, ALSO KNOWN AS MELECIA
JIMENEZ, HAS NO RIGHT TO SELL THE LAND IN QUESTION TO EDILBERTO CAGAMPAN.
III
THE LOWER COURT ERRED IN NOT DECLARING THAT EDILBERTO CAGAMPAN DID NOT BECOME THE
OWNER OF THE LAND IN QUESTION BY VIRTUE OF THE DEED OF SALE (EXH. "1") EXECUTED BY MELECIA
CAYABYAB, ALIAS MELECIA JIMENEZ, IN HIS FAVOR.
IV
THE LOWER COURT ERRED IN NOT DECLARING THAT TEODORA GRADO DID NOT BECOME THE
OWNER OF THE LAND IN QUESTION BY VIRTUE OF THE DEED OF EXCHANGE (EXH. "7") EXECUTED BY HER
AND EDILBERTO CAGAMPAN.
V
THE LOWER COURT ERRED IN NOT DECLARING THAT THE TITLE OF APPELLANT SULPICIA JIMENEZ
OVER THE LAND IN QUESTION CAN NOT BE DEFEATED BY THE ADVERSE OPEN AND NOTORIOUS
POSSESSION OF APPELLEE TEODORA GRADO.
VI
THE LOWER COURT ERRED IN DECLARING THAT THE APPELLEE TEODORA GRADO IS THE ABSOLUTE
OWNER OF THE LAND IN QUESTION IN THE LIGHT OF THE DECISION OF THE SUPREME COURT IN THE CASE
OF LOURDES ARCUINO, ET AL., V. RUFINA APARIS AND CASIANO PURAY, G.R. NO. L-23424, PROMULGATED
JANUARY 31, 1968, WHICH CASE IS NOT APPLICABLE TO THE CASE AT BAR.
VII
THE LOWER COURT ERRED IN DISMISSING THE COMPLAINT AND ORDERING THE APPELLANTS TO PAY
THE APPELLEES THE SUM OF P500.00 AS ATTORNEY'S FEES PLUS THE COSTS.
From the foregoing, this petition for review was filed.

We find merit in the petition.

From the start the respondent court erred in not declaring that Melecia Jimenez Cayabyab also known as Melecia
Jimenez, is not the daughter of Carlos Jimenez and therefore, had no right over the property in question. Respondents
failed to present concrete evidence to prove that Melecia Cayabyab was really the daughter of Carlos Jimenez.
Nonetheless, assuming for the sake of argument that Melecia Cayabyab was the illegitimate daughter of Carlos Jimenez
there can be no question that Melecia Cayabyab had no right to succeed to the estate of Carlos Jimenez and could not
have validly acquired, nor legally transferred to Edilberto Cagampan that portion of the property subject of this petition.
prLL
It is well-settled in this jurisdiction that the rights to the succession are transmitted from the moment of the death
of the decedent (Art. 777, Civil Code). Moreover, Art. 2263 of the Civil Code provides as follows:
"Rights to the inheritance of a person who died with or without a will, before the effectivity of this Code, shall be
governed by the Civil Code of 1889, by other previous laws, and by the Rules of Court . . ." (Rollo, p. 17)
Thus, since Carlos Jimenez, owner of one-half pro-indiviso portion of that parcel of land then covered by Original
Certificate of Title No. 50933, died on July 9, 1936 (Exhibit "F") way before the effectivity of the Civil Code of the
Philippines, the successional rights pertaining to his estate must be determined in accordance with the Civil Code of 1889.
Citing the case of Cid v. Burnaman (24 SCRA 434) wherein this Court categorically held that:
"To be an heir under the rules of Civil Code of 1889 (which was the law in force when Carlos Jimenez died and
which should be the governing law in so far as the right to inherit from his estate was concerned), a child must be either a
child legitimate, legitimated, or adopted, or else an acknowledged natural child for illegitimate not natural are
disqualified to inherit." (Civil Code of 1889, Art. 807, 935)
Even assuming that Melecia Cayabyab was born out of the common-law-relationship between her mother (Maria
Cayabyab) and Carlos Jimenez, she could not even be considered an acknowledged natural child because Carlos
Jimenez was then legally married to Susana Abalos and therefore not qualified to marry Maria Cayabyab and
consequently Melecia Cayabyab was an illegitimate spurious child and not entitled to any successional rights in so far as
the estate of Carlos Jimenez was concerned. prLL
Melecia Cayabyab in the absence of any voluntary conveyance to her by Carlos Jimenez or Sulpicia Jimenez of
the litigated portion of the land could not even legally transfer the parcel of land to Edilberto Cagampan who accordingly,
could not also legally transfer the same to herein private respondents.
Analyzing the case before Us in this manner, We can immediately discern another error in the decision of the
respondent court, which is that the said court sustained and made applicable to the case at bar the ruling in the case of
Arcuino, et al., v. Aparis and Puray, No. L-23424, January 31, 1968, 22 SCRA 407, wherein We held that:
". . . it is true that the lands registered under the Torren's System may not be acquired by prescription but plaintiffs
herein are not the registered owners. They merely claim to have acquired by succession, their alleged title or interest in lot
No. 335. At any rate plaintiffs herein are guilty of laches."
The respondent court relying on the Arcuino case, concluded that respondents had acquired the property under
litigation by prescription. We cannot agree with such conclusion, because there is one very marked and important
difference between the case at bar and that of the Arcuino case, and that is, that since 1933 petitioner Sulpicia Jimenez
was a title holder, the property then being registered in her and her uncle Carlos Jimenez' name. In the Arcuino case, this
Supreme Court held. "(I)t is true that lands registered under the Torren's System may not be acquired by prescription but
plaintiffs herein are not the registered owners." (Rollo, p. 38) Even in the said case the principle of imprescriptibility of
Torrens Titles was respected.
Melecia Cayabyab's possession or of her predecessors-in-interest would be unavailing against the petitioner
Sulpicia Jimenez who was the holder pro-indiviso with Carlos Jimenez of the Torrens Certificate of Title covering a tract of
land which includes the portion now in question, from February 28, 1933, when the Original Certificate of Title No. 50 933
(Exhibit 8) was issued. Cdpr
"No possession by any person of any portion of the land covered by said original certificate of titles, could defeat
the title of the registered owner of the land covered by the certificate of title." (Benin v. Tuason, L-26127, June 28, 1974,
57 SCRA 531)
Sulpicia's title over her one-half undivided property remained good and continued to be good when she
segregated it into a new title (T.C.T No. 82275, Exhibit "A") in 1969. Sulpicia's ownership over her one-half of the land and
which is the land in dispute was always covered by a Torrens title, and therefore, no amount of possession thereof by the
respondents, could ever defeat her proprietary rights thereon. It is apparent, that the right of plaintiff (now petitioner) to
institute this action to recover possession of the portion of the land in question based on the Torrens Title of Sulpicia
Jimenez, T.C.T. No. 82275 (Exhibit "A") is imprescriptible and not barred under the doctrine of laches. (J.M. Tuason & Co.
v. Macalindong, L-15398, December 29, 1962, Francisco v. Cruz, et al., 43 O.G. 5105) Rollo, p. 39)
The respondent Court of Appeals declared the petitioner Sulpicia Jimenez guilty of laches and citing the ruling in
the case of Heirs of Lacamen v. Heirs of Laruan (65 SCRA 605), held that, since petitioner Sulpicia Jimenez executed her
Affidavit of Self-Adjudication only in 1969, she lost the right to recover possession of the parcel of land subject of the
litigation. 05SEcdasia
In this instance, again We rule for the petitioner. There is no absolute rule as to what constitutes laches or
staleness of demand; each case is to be determined according to its particular circumstances. The question of laches is
addressed to the sound discretion of the court and since laches is an equitable doctrine, its application is controlled by
equitable considerations. It cannot be worked to defeat justice or to perpetrate fraud and injustice. It would be rank
injustice and patently inequitous to deprive the lawful heirs of their rightful inheritance. LibLex
Petitioner Sulpicia Jimenez is entitled to the relief prayed for, declaring her to be the sole and absolute owner of
the land in question with right to its possession and enjoyment. Since her uncle Carlos Jimenez died in 1936, his proindiviso share in the properties then owned in co-ownership with his niece Sulpicia descended by intestacy to Sulpicia
Jimenez alone because Carlos died without any issue or other heirs.
After all, the professed objective of Act No. 496, otherwise known as the Land Registration Act or the law which
established the Torrens System of Land Registration in the Philippines is that the stability of the landholding system in the
Philippines depends on the confidence of the people in the titles covering the properties. And to this end, this Court has
invariably upheld the indefeasibility of the Torrens Title and in, among others, J.M. Tuason and Co., Inc. v. Macalindong (6
SCRA 938), held that "the right of the appellee to file an action to recover possession based on its Torrens Title is
imprescriptible and not barred under the doctrine of laches."

WHEREFORE, the Petition for Review is hereby GRANTED. The Decision and Resolution dated March 1, 1977
and June 3, 1977 in CA G.R. No. L-49178-R are SET ASIDE.
SO ORDERED.

EN BANC
[G.R. No. L-21993. June 21, 1966.]
ANGELA RODRIGUEZ, MARIA RODRIGUEZ, ET AL., petitioners, vs. HON. JUAN DE BORJA, as Judge of the
Court of FIRST Instance of Bulacan, Branch III, ANATOLIA PANGILINAN and ADELAIDA JACALAN, respondents.
Lorenzo Sumulong for petitioners.
Torres & Torres for respondents.
DECISION
REYES, J.B.L., J p:
Petitioners Angela, Maria, Abelardo and Antonio, surnamed Rodriguez, petition this Court for a writ of certiorari
and prohibition to the Court of First Instance of Bulacan, for its refusal to grant their motion to dismiss its Special
Proceeding No. 1331, which said Court is alleged to have taken cognizance of without jurisdiction.
The facts and issues are succintly narrated in the order of the respondent court dated June 12, 1963 (Petition,
Annex O), in this wise:
"It is alleged in the motion to dismiss filed by Angela, Maria, Abelardo and Antonio Rodriguez, through counsel,
that this Court "has no jurisdiction to try the above-entitled case in view of the pendency of another action for the
settlement of the estate of the deceased Rev. Fr. Celestino Rodriguez in the Court of First Instance of Rizal, namely, Sp.
Proceedings No. 3907 entitled 'In the matter of the Intestate Estate of the deceased Rev. Fr. Celestino Rodriguez' which
was filed ahead of the instant case"
The records show that Fr. Celestino Rodriguez died on february 12, 1963 in the City of Manila; that on March 4,
1963, Anatolia Pangilinan and Adelaida Jacalan delivered to the Clerk of Court of Bulacan a purported last will and
testament of Fr. Rodriguez; that on March 8, 1963, Maria rodriguez and Angela Rodriguez, through counsel, filed a
petition for leave of court to allow them to examine the alleged will; that on Mach 11, 1963, before the Court could act on
the petition, the same was withdrawn; that on March 12, 1963, aforementioned petitioners filed before the Court of First
Instance of Rizal a petition for the settlement of the intestate estate of Fr. Rodriguez alleging, among other things, that Fr.
Rodriguez was a resident of Paraaque, Rizal, and died without leaving a will and praying That Maria Rodriguez be
appointed as Special Administratrix of the estate; and that on March 12, 1963 Apolonia Pangilinan and Adelaida Jacalan
filed a petition in this Court for the probate of the will delivered by them on March 4, 1963. It was stipulated by the parties
that Fr. Rodriguez was born in Paraaque, Rizal; that he was parish priest of the Catholic Church in Hagonoy, Bulacan,
from the year 1930 up to the time of his death in 1963; that he was buried in Paraaque, and that he left real properties in
Rizal, Cavite, Quezon City and Bulacan.
The movants contend that since the intestate proceedings in the Court of First Instance of Rizal was filed at 8:00
A.M. on March 12, 1963 while the petition for probate was filed in the Court of First Instance of Bulacan at 11:00 A.M. on
the same date, the latter Court has no jurisdiction to entertain the petition for probate citing as authority in support thereof
the case of Ongsingco Vda. de Borja vs. tan and De Borja, G. R. No. L-7792, July 27, 1955.
The petitioners Pagilinan and Jacalan, on the other hand, take the stand that the Court of First Instance of
Bulacan acquired jurisdiction over the case upon delivery by them of the will to the Clerk of Court on March 4, 1963, and
that the case in this Court therefore has precedence over the case filed in Rizal on March 12, 1963."
The Court of First Instance, as previously stated, denied the motion to dismiss on the ground that a difference of a
few hours did not entitle one proceeding to preference over the other; that, as early as March 7, movants were aware of
the existence of the purported will of the Father Rodriguez, deposited in the Court of Bulacan, since they filed a petition to
examine the same, and that movants clearly filed the intestate proceedings in Rizal "for no other purpose than to prevent
this Court (of Bulacan) from exercising jurisdiction over the probate proceedings". Reconsideration having been denied,
movants, now petitioners, came to this Court, relying principally on Rule 73, section 1, of the Rules of Court, and invoking
our ruling in Ongsingco vs. Tan and De Borja, L-7792, July 27, 1955.
"SECTION 1. Where estate of deceased persons settled. If the decedent is inhabitant of the Philippines at
the time of his death, whether a citizen or an alien, his will shall be proved, or letters of administration granted, and his
estate settled, in the Court of First Instance in the province in which he resides at the time of his death, and if he is an
inhabitant of a foreign country, the Court of First Instance of any province in which he had estate. The Court first taking
cognizance of the settlement of the state of the decedent, shall exercise jurisdiction to the exclusion of all other courts.
The jurisdiction assumed by a court, as far as it depends on the place of residence of the decedent, or of the location of
his estate, shall not be contested in a suit or proceeding, except in an appeal from that court, in the original case, or when
the want of jurisdiction appears on the record."
We find this recourse to be untenable. the jurisdiction of the Court of First Instance of Bulacan became vested
upon the delivery thereto of the will of the late Father Rodriguez on March 4, 1963, even if no petition for its allowance
was filed until later, because upon the will being deposited the Court could, motu proprio, have taken steps to fix the time
and place for proving the will, and issued the corresponding notices conformably to what is prescribed by section 3, Rule
76, of the Revised Rules of Court (Section 3, Rule 77, of the old Rules):
"SEC. 3.
Court to appoint time for proving will. Notice thereof to be published. When a will is delivered
to, or a petition for the allowance of a will is filed in, the Court having jurisdiction, such Court shall fix a time and place for
proving the will when all concerned may appear to contest the allowance thereof, and shall cause notice of such time and
place to be published three (3) weeks successively, previous to the time appointed, in a newspaper of general circulation
in the province.
But no newspaper publication shall be made where the petition for probate has been filed by the testator himself."
The use of the disjunctive in the words "when a will is delivered to or a petition for the allowance of a will is filed"
plainly indicates that the court may act upon the mere deposit therein of a decedent's statement, even if no petition for its
allowance is as yet filed. Where the petition for probate is made after the deposits of the will, the petition is deemed to
relate back to the time when the will was delivered. Since the testament of Fr. Rodriguez was submitted and delivered to
the Court of Bulacan on March 4, while petitioners initiated intestate proceedings in the Court of First Instance of Rizal on
March 12, eight days later, the precedence and exclusively jurisdiction of the Bulacan court is incontestable.
But, petitioners, object, section 3 of revised Rule 76 (old Rule 77) speaks of a will being delivered to the "Court
having jurisdiction", and in the case at bar the Bulacan court did not have it because the decedent was domiciled in Rizal
province. We can not disregard Fr. Rodriguez's 33 years of residence as parish priest in Hagonoy, Bulacan (1930-1963);
but even if we do so, and consider that he retained throughout some animus revertendi to the place of his birth in
Paraaque, Rizal, that detail would not imply that the Bulacan court lacked jurisdiction. As ruled in previous decisions, the

power to settle decedent's estates is conferred by law upon all courts of first instance, and the domicile of the testator only
affects the venue but not the jurisdiction of the Court (In re Kaw Singco, 74 Phil. 239; reyes vs. Diaz, 73 Phil. 484;
Bernabe vs. Vergara, 73 Phil. 676). Neither party denies that the late Fr. Rodriguez is deceased, or that he left personal
property in Hagonoy, province of Bulacan (t.s.n., p. 46, hearing of June 11, 1963, Annex "H", Petition, rec., p. 48). That is
sufficient in the case before us.
In the Kaw Singco case (ante) this court ruled that:
" . . . If we consider such question of residence as one affecting the jurisdiction of the trial court over the subjectmatter, the effect shall be that the whole proceedings including all decisions on the different incidents which have arisen in
court will have to be annulled and the same case will have to be commenced anew before another court of the same rank
in another province. That this is of mischievous effect in the prompt administration of justice is too obvious to require
comment. (Cf. Tanunchuan vs. Dy Buncio & Co., G. R. No. 48206, December 31, 1942). Furthermore section 600 of Act
No. 190, providing that the estate of a deceased person shall be settled in the province where he had last resided, could
not have been intended as defining the jurisdiction of the probate court over the subject- matter, because such legal
provision is contained in a law of procedure dealing merely with procedural matters, and, as we have said time and again,
procedure is one thing and jurisdiction over the subject-matter is another. (Attorney-General vs. Manila Railroad Company,
20 Phil. 523.) The law of jurisdiction Act No. 136, Section 56, No. 5 confers upon Courts of First Instance jurisdiction
over all probate cases independently of the place of residence of the deceased. 1 Since, however, there are many courts
of First Instance in the Philippines, the Law of Procedure, Act no. 190, section 600, fixes the venue or the place where
each case shall be brought. thus, the place of residence of the deceased is not an element of jurisdiction over the subjectmatter but merely of venue. And it is upon this ground that in the new Rules of Court the province where the estate of a
deceased person shall be settled is properly called "venue" (Rule 75, section 1.) Motion for reconsideration is denied."
The estate proceedings having been initiated in the Bulacan Court of First Instance ahead of any other, that court
is entitled to assume jurisdiction to the exclusion of all other courts, even if it were a case of wrong venue, by express
provisions of Rule 73 (old Rule 75) of the Rules of Court, since the same enjoins that:
"The Court first taking cognizance of the settlement of the estate of a decedent shall exercise jurisdiction to the
exclusion of all other courts." (Sec. 1)
This disposition presupposes that two or more courts have been asked to take cognizance of the settlement of the
estate. Of them only one could be of proper venue, yet the rule grants precedence to that Court whose jurisdiction is first
invoked, without taking venue into account.
There are two reasons that militate against the success of petitioners. One is that their commencing intestate
proceedings in Rizal, after they had learned of the delivery of the decedent's will to the Court of Bulacan, was in bad faith,
patently done with a view to divesting the latter court of the precedence awarded it by the Rules. Certainly the order of
priority established in Rule 73 (old Rule 75) was not designed to convert the settlement of decedent's estates into a race
between applicants, with the administration of the properties as the price for the fleetest.
The other reason is that, in our system of civil law, intestate succession is only subsidiary or subordinate to the
testate, since intestacy only takes place in the absence of a valid operative will. Says Article 960 of the Civil Code of the
Philippines:
"ART. 960.
Legal or intestate succession takes place:
(1)
If a person dies without a will, or with a void will, or one which has subsequently lost its validity;
(2)
When the will does not institute an heir to, or dispose of all the property belonging to the testator. In such
case, legal succession shall take place only with respect to the property of which the testator has not disposed;
(3)
If the suspensive condition attached to the institution of heir does not happen or is not fulfilled, or if the
heir dies before the testator, or repudiates the inheritance, there being no substitution, and no right of accretion takes
place;
(4)
When the heir instituted is incapable of succeeding, except in cases provided in this Code."
Therefore, as ruled in Castro, et al. vs. Martinez, 10 Phil. 307, "only after final decision as to the nullity of testate
succession could an intestate succession be instituted in the form of pre- established action". The institution of intestacy
proceedings in Rizal may not thus proceed while the probate of the purported will of Father Rodriguez is pending.
We rule that the Bulacan Court of First Instance was entitled to priority in the settlement of the estate in question,
and that in refusing to dismiss the probate proceedings, said Court did not commit any abuse of discretion. It is the
proceedings in the Rizal Court that should be discontinued.
WHEREFORE, the writ of certiorari applied for is denied. Costs against petitioners Rodriguez.

SECOND DIVISION

[G.R. No. L-39247. June 27, 1975.]

In the Matter of the Petition to Approve the Will of Leodegaria Julian. FELIX BALANAY, JR., petitioner, vs. HON.
ANTONIO M. MARTINEZ, Judge of the Court of First Instance of Davao Branch VI; AVELINA B. ANTONIO and DELIA B.
LANABAN, respondents.
Roberto M. Sarenas for petitioner.
Jose B. Guyo for private respondents.
DECISION
AQUINO, J p:
Felix Balanay, Jr. appealed by certiorari from the order of the Court of First Instance of Davao dated February 28,
'974, declaring illegal and void the will of his mother, Leodegaria Julian, converting the testate proceeding into an intestate
proceeding and ordering the issuance of the corresponding notice to creditors (Special Case No. '808). The antecedents
of the appeal are as follows:
Leodegaria Julian, a native of Sta. Maria, Ilocos Sur, died on February '2, '973 in Davao City at the age of sixtyseven. She was survived by her husband, Felix Balanay, Sr., and by their six legitimate children named Felix Balanay, Jr.,
Avelina B. Antonio, Beatriz B. Solamo, Carolina B. Manguiob, Delia B. Lanaban and Emilia B. Pabaonon. cdasia
Felix J. Balanay, Jr. filed in the lower court a petition dated February 27, '973 for the probate of his mother's
notarial will dated September 5, '970 which is written in English. In that will Leodegaria Julian declared (a) that she was
the owner of the "southern half" of nine conjugal lots (par. II); (b) that she was the absolute owner of two parcels of land
which she inherited from her father (par. III), and (c) that it was her desire that her properties should not be divided among
her heirs during her husband's lifetime and that their legitimes should be satisfied out of the fruits of her properties (Par.
IV).
Then, in paragraph V of the will she stated that after her husband's death (he was eighty-two years old in '973)
her paraphernal lands and all the conjugal lands (which she described as "my properties") should be divided and
distributed in the manner set forth in that part of her will. She devised and partitioned the conjugal lands as if they were all
owned by her. She disposed of in the will her husband's one-half share of the conjugal assets. *
Felix Balanay, Sr. and Avelina B. Antonio opposed the probate of the will on the grounds of lack of testamentary
capacity, undue influence, preterition of the husband and alleged improper partition of the conjugal estate. The oppositors
claimed that Felix Balanay, Jr. should collate certain properties which he had received from the testatrix.
Felix Balanay, Jr., in his reply to the opposition, attached thereto an affidavit of Felix Balanay, Sr. dated April '8,
'973 wherein he withdrew his opposition to the probate of the will and affirmed that he was interested in its probate. On the
same date Felix Balanay, Sr. signed an instrument captioned "Conformation (sic) of Division and Renunciation of
Hereditary Rights" wherein he manifested that out of respect for his wife's will he "waived and renounced" his hereditary
rights in her estate in favor of their six children. In that same instrument he confirmed the agreement, which he and his
wife had perfected before her death, that their conjugal properties would be partitioned in the manner indicated in her will.
Avelina B. Antonio, an oppositor, in her rejoinder contended that the affidavit and "conformation" of Felix Balanay,
Sr. were void. The lower court in its order of June '8, '973 "denied" the opposition and reset for hearing the probate of the
will. It gave effect to the affidavit and conformity of Felix Balanay, Sr. In an order dated August 28, '973 it appointed its
branch clerk of court as special administrator of the decedent's estate.
Mrs. Antonio moved for the reconsideration of the lower court's order of June '8, '973 on the grounds (a) that the
testatrix illegally claimed that she was the owner of the southern half of the conjugal lots and (b) that she could not
partition the conjugal estate by allocating portions of the nine lots to her children. Felix Balanay, Jr., through his counsel,
Hermenegildo Cabreros, opposed that motion. The lower court denied it in its order of October '5, '973.
In the meanwhile, another lawyer appeared in the case. David O. Montaa, Sr., claiming to be the lawyer of
petitioner Felix Balanay, Jr. (his counsel of record was Atty. Cabreros), filed a motion dated September 25, '973 for "leave
of court to withdraw probate of alleged will of Leodegaria Julian and requesting authority to proceed by intestate estate
proceeding." In that motion Montaa claimed to be the lawyer not only of the petitioner but also of Felix Balanay, Sr.,
Beatriz B. Solamo, Carolina B. Manguiob and Emilia B. Pabaonon.
Montaa in his motion assailed the provision of the will which partitioned the conjugal assets or allegedly effected
a compromise of future legitimes. He prayed that the probate of the will be withdrawn and that the proceeding be
converted into an intestate proceeding. In another motion of the same date he asked that the corresponding notice to
creditors be issued.
Avelina B. Antonio and Delia B. Lanaban, through Atty. Jose B. Guyo, in their comments dated October '5, '973
manifested their conformity with the motion for the issuance of a notice to creditors. They prayed that the will be declared
void for being contrary to law and that an intestacy be declared.
The lower court, acting on the motions of Atty. Montaa, assumed that the issuance of a notice to creditors was in
order since the parties had agreed on that point. It adopted the view of Attys. Montaa and Guyo that the will was void.
So, in its order of February 28, '974 it dismissed the petition for the probate, converted the testate proceeding into an
intestate proceeding, ordered the issuance of a notice to creditors and set the intestate proceeding for hearing on April '
and 2, '974. The lower court did not abrogate its prior orders of June '8 and October '5, '973. The notice to creditors was
issued on April ', '974 and published on May 2, 9 and '6 in the Davao Star in spite of petitioner's motion of April '7, '974 that
its publication be held in abeyance.
Felix Balanay, Jr., through a new counsel, Roberto M. Sarenas, in a verified motion dated April '5, '974, asked for
the reconsideration of the lower court's order of February 28, '974 on the ground that Atty. Montaa had no authority to
withdraw the petition for the allowance of the will. Attached to the motion was a copy of a letter dated March 27, '974
addressed to Atty. Montaa and signed by Felix Balanay, Jr., Beatriz V. Solamo, Carolina B. Manguiob and Emilia B.
Pabaonon, wherein they terminated Montana's services and informed him that his withdrawal of the petition for the
probate of the will was without their consent and was contrary to their repeated reminder to him that their mother's will was
"very sacred' to them.
Avelina B. Antonio and Delia B. Lanaban opposed the motion for reconsideration. The lower court denied the
motion in its order of June 29, '974. It clarified that it declared the will void on the basis of its own independent assessment
of its provisions and not because of Atty. Montaa's arguments.
The basic issue is whether the probate court erred in passing upon the intrinsic validity of the will, before ruling on
its allowance or formal validity, and in declaring it void.
We are of the opinion that in view of certain unusual provisions of the will, which are of dubious legality, and
because of the motion to withdraw the petition for probate (which the lower court assumed to have been filed with the

petitioner's authorization), the trial court acted correctly in passing upon the will's intrinsic validity even before its formal
validity had been established. The probate of a will might become an idle ceremony if on its face it appears to be
intrinsically void. Where practical considerations demand that the intrinsic validity of the will be passed upon, even before
it is probated, the court should meet the issue (Nuguid vs. Nuguid, 64 O.G. '527, '7 SCRA 449. Compare with Sumilang
vs. Ramagosa, L-23'35, December 26, '967, 2' SCRA '369; Cacho vs. Udan, L-'9996, April 30, '965, '3 SCRA 693).
But the probate court erred in declaring in its order of February 28, '974 that the will was void and in converting
the testate proceeding into an intestate proceeding notwithstanding the fact that in its order of June '8, '973 it gave effect
to the surviving husband's conformity to the will and to his renunciation of his hereditary rights which presumably included
his one-half share of the conjugal estate.
The rule is that "the invalidity of one of several dispositions contained in a will does not result in the invalidity of
the other dispositions, unless it is to be presumed that the testator would not have made such other dispositions if the first
invalid disposition had not been made" (Art. 792, Civil Code). "Where some of the provisions of a will are valid and others
invalid, the valid parts will be upheld if they can be separated from the invalid without defeating the intention of the testator
or interfering with the general testamentary scheme, or doing injustice to the beneficiaries" (95 C.J.S. 873).
The statement of the testatrix that she owned the "southern half" of the conjugal lands is contrary to law because,
although she was a coowner thereof, her share was inchoate and proindiviso (Art. '43, Civil Code; Madrigal and Paterno
vs. Rafferty and Concepcion, 38 Phil. 4'4). But that illegal declaration does not nullify the entire will. It may be disregarded.
The provision of the will that the properties of the testatrix should not be divided among her heirs during her
husband's lifetime but should be kept intact and that the legitimes should be paid in cash is contrary to article '080 of the
Civil Code which reads:
"ART. '080.
Should a person make a partition of his estate by an act inter vivos, or by will, such partition shall
be respected, insofar as it does not prejudice the legitime of the compulsory heirs.
"A parent who, in the interest of his or her family, desires to keep any agricultural, industrial, or manufacturing
enterprise intact, may avail himself of the right granted him in this article, by ordering that the legitime of the other children
to whom the property is not assigned, be paid in cash. ('056a)"
The testatrix in her will made a partition of the entire conjugal estate among her six children (her husband had
renounced his hereditary rights and his one-half conjugal share). She did not assign the whole estate to one or more
children as envisaged in article '080. Hence, she had no right to require that the legitimes be paid in cash. On the other
hand, her estate may remain undivided only for a period of twenty years. So, the provision that the estate should not be
divided during her husband's lifetime would at most be effective only for twenty years from the date of her death unless
there are compelling reasons for terminating the coownership (Art. '083, Civil Code).
Felix Balanay, Sr. could validly renounce his hereditary rights and his one-half share of the conjugal partnership
(Arts. '79['] and '04', Civil Code) but insofar as said renunciation partakes of a donation of his hereditary rights and his
one-half share in the conjugal estate (Art. '050['] Civil Code), it should be subject to the limitations prescribed in articles
750 and 752 of the Civil Code. A portion of the estate should be adjudicated to the widower for his support and
maintenance. Or at least his legitime should be respected.
Subject to the foregoing observations and the rules on collation, the will is intrinsically valid and the partition
therein may be given effect if it does not prejudice the creditors and impair the legitimes. The distribution and partition
would become effective upon the death of Felix Balanay, Sr. In the meantime, the net income should be equitably divided
among the children and the surviving spouse.
It should be stressed that by reason of the surviving husband's conformity to his wife's will and his renunciation of
his hereditary rights, his one-half conjugal share be a part of his deceased wife's estate. His conformity had the effect of
validating the partition made in paragraph V of the will without prejudice, of course, to the rights of the creditors and the
legitimes of the compulsory heirs.
Article 793 of the Civil Code provides that "property acquired after the making of a will shall only pass thereby, as
if the testator had possessed it at the time of making the will, should it expressly appear by the will that such was his
intention". Under article 930 of the Civil Code "the legacy or devise of a thing belonging to another person is void, if the
testator erroneously believed that the thing pertained to him. But if the thing bequeathed, though not belonging to the
testator when he made the will, afterwards becomes his, by whatever title, the disposition shall take effect."
In the instant case there is no doubt that the testatrix and her husband intended to partition the conjugal estate in
the manner set forth in paragraph V of her will. It is true that she could dispose of by will only her half of the conjugal
estate (Art. '70, Civil Code) but since the husband, after the dissolution of the conjugal partnership, had assented to her
testamentary partition of the conjugal estate, such partition has become valid, assuming that the will may be probated.
The instant case is different from the Nuguid case, supra, where the testatrix instituted as heir her sister and
preterited her parents. Her will was intrinsically void because it preterited her compulsory heirs in the direct line. Article
854 of the Civil Code provides that "the preterition or omission of one, some, or all of the compulsory heirs in the direct
line, whether living at the time of the execution of the will or born after the death of the testator, shall annul the institution
of heir; but the devises and legacies shall be valid insofar as they are not inofficious." Since the preterition of the parents
annulled the institution of the sister of the testatrix and there were no legacies and devises, total intestacy resulted (Art.
960[2], Civil Code).
In the instant case, the preterited heir was the surviving spouse. His preterition did not produce intestacy.
Moreover, he signified his conformity to his wife's will and renounced his hereditary rights.
It results that the lower court erred in not proceeding with the probate of the will as contemplated in its
uncancelled order of June '8, '97'3. Save in an extreme case where the will on its face is intrinsically void, it is the probate
court's duty to pass first upon the formal validity of the will. Generally, the probate of the will is mandatory (Art. 838, Civil
Code; Guevara vs. Guevara, 74 Phil. 479 and 98 Phil. 249; Fernandez vs. Dimagiba, L-23638, October '2, '967, 2' SCRA
428).
As aptly stated by Mr. Justice Barredo, "the very existence of a purported testament is in itself prima facie proof
that the supposed testator has willed that his estate should be distributed in the manner therein provided, and it is
incumbent upon the state that, if legally tenable, such desire be given effect independent of the attitude of the parties
affected thereby" (Resolution, Vda. de Precilla vs. Narciso, L-27200, August '8, '972, 46 SCRA 538, 565).
To give effect to the intention and wishes of the testatrix is the first and principal law in the matter of testaments
(Dizon-Rivera vs. Dizon, L-2456', June 30, '970, 33 SCRA 554, 56'). Testacy is preferable to intestacy. An interpretation
that will render a testamentary disposition operative takes precedence over a construction that will nullify a provision of
the will (Arts. 788 and 79', Civil Code).

Testacy is favored. Doubts are resolved in favor of testacy especially where the will evinces an intention on the
part of the testator to dispose of practically his whole estate. So compelling is the principle that intestacy should be
avoided and that the wishes of the testator should prevail that sometimes the language of the will can be varied for the
purpose of giving it effect (Austria vs. Reyes, L-23079, February 27, '970, 3' SCRA 754, 762).
As far as is legally possible, the expressed desire of the testator must be followed and the dispositions of the
properties in his will should be upheld (Estorque vs. Estorque, L-'9573, June 30, '970, 33 SCRA 540, 546).
The law has a tender regard for the wishes of the testator as expressed in his will because any disposition therein
is better than that which the law can make (Castro vs. Bustos, L-259'3, February 28, '969, 27 SCRA 327, 34').
Two other errors of the lower court may be noticed. It erred in issuing a notice to creditors although no executor or
regular administrator has been appointed. The record reveals that it appointed a special administrator. A notice to creditors
is not in order if only a special administrator has been appointed. Section ', Rule 86 of the Rules of Court, in providing that
"immediately after granting letters of testamentary or of administration, the court shall issue a notice requiring all persons
having money claims against the decedent to file them in the office of the clerk of said court" clearly contemplates the
appointment of an executor or regular administrator and not that of a special administrator.
It is the executor or regular administrator who is supposed to oppose the claims against the estate and to pay
such claims when duly allowed (Sec. '0, Rule 86 and sec. ', Rule 88, Rules of Court).
We also take this occasion to point out that the probate court's appointment of its branch clerk of court as special
administrator (p. 30, Rollo) is not a salutary practice because it might engender the suspicion that the probate Judge and
his clerk of court are in cahoots in milking the decedent's estate. Should the branch clerk of court commit any abuse or
devastavit in the course of his administration, the probate Judge might find it difficult to hold him to a strict accountability. A
court employee should devote his official time to his official duties and should not have as a sideline the administration of
a decedent's estate.
WHEREFORE, the lower court's orders of February 28, and June 29, '974 are set aside and its order of June '8,
'973, setting for hearing the petition for probate, is affirmed. The lower court is directed to conduct further proceedings in
Special Case No. '808 in consonance with this opinion. Costs, against the private respondents.
SO ORDERED.
Fernando (Chairman), Barredo, Antonio and Concepcion, Jr., JJ., concur.
*
The pertinent provisions of the will are as follows:
"II.
That I am the absolute owner of the southern half of the following conjugal properties
which I acquired during my married life with my husband, Felix Balanay, Sr., namely: (Here follows an enumeration of nine
lots).
"III.
I am the absolute owner of the following paraphernal properties which I inherited from my
deceased father, Cecilio Julian, namely: (Here follows a description of two lots).
"IV.
It is my desire and I direct that in the interest of my family, my properties shall not be
divided among my heirs during the lifetime of my husband, Felix Balanay, Sr. but should be kept intact. The respective
legitimes of my husband and my children should be paid in cash out of the proceeds of sale of the produce and rents
derived from said properties.
"V.
After the death of my hushand, Felix Balanay, Sr., my propertics shall be divided and
distributed in the manner as follows:" (Here follows a partition of the nine conjugal lots and the two paraphernal lots. The
testatrix divided among her six children not only her two paraphernal lots, one of which she devided to Emilia Pabaonon
and the other lot to Felix Balanay, Jr., but also the nine conjugal lots. She did not restrict the partition to her one-half
conjugal share but included her husband's one-half share.)