G.R. Nos.

208828-29 August 13, 2014

RICARDO C. SILVERIO, SR., Petitioner,

vs.
RICARDO S. SILVERIO, JR., CITRINE HOLDINGS, INC., MONICA P. OCAMPO and ZEE2
RESOURCES, INC.,Respondents.

DECISION

VILLARAMA, JR., J.:

Before the Court is a petition for review under Rule 45 of the 1997 Rules of Civil Procedure, as
amended, to reverse and set aside the Decision1 dated March 8, 2013 of the Court of Appeals (CA)
insofar as CA-G.R. SP Nos. 121173 and 122024 are concerned, and Resolution2 dated July 4, 2013
denying petitioner's Motion for Partial Reconsideration. The CA nullified the preliminary injunction
issued by the Regional Trial Court (RTC) of Makati City ("intestate court"), Branch 57 in Sp. Proc.
No. M-2629 and reversed said court's Order dated August 18, 2011 declaring the sales and
derivative titles over two properties subject of intestate proceedings as null and void.

The factual and procedural antecedents of the case, as summarized by the CA, are as follows: The
late Beatriz S. Silverio died without leaving a will on October 7, 1987. She was survived by her legal
heirs, namely: Ricardo C. Silverio, Sr. (husband), Edmundo S. Silverio (son), Edgardo S. Silverio
(son), Ricardo S. Silverio, Jr. (son), Nelia S.Silverio-Dee (daughter), and Ligaya S. Silverio
(daughter). Subsequently, an intestate proceeding (SP PROC. NO. M-2629) for the settlement of her
estate was filed by SILVERIO, SR.

In the course of the proceedings, the parties filed different petitions and appeal challenging several
orders ofthe intestate court that went all the way up to the Supreme Court. To better understand the
myriad of factual and procedural antecedents leading to the instant consolidated case, this court will
resolve the petitions in seriatim.

The Petitions

CA-G.R. SP No. 121172

The first petition of the three consolidated petitions is CA-G.R. SP No. 121172 wherein petitioner,
RICARDO S. SILVERIO JR. ("SILVERIO JR.") assails the Order ofthe intestate court dated 16 June
2011 reinstating RICARDO SILVERIO SR. ("SILVERIO SR.") as administrator to the estate of the
late Beatriz Silverio.

The administrator first appointed by the Court was EDGARDO SILVERIO ("EDGARDO"), but by
virtue of a Joint Manifestation dated 3 November 1999 filed by the heirs of BEATRIZ D. SILVERIO,
the motion to withdraw as administrator filed by EDGARDO was approved by the intestate court and
in his stead, SILVERIO SR. was appointed as the new administrator. Thereafter, an active exchange
of pleadings to remove and appoint a new administrator ensued between SILVERIO SR. and
SILVERIO JR. The flip-flopping appointment of administrator is summarized below:

In an Order dated 3 January 2005, SILVERIO SR. was removed as administrator and in his stead,
SILVERIO, JR. was designated as the new administrator. A motion for reconsideration was
separately filed by SILVERIO SR. and Nelia Silverio-Dee ("SILVERIO-DEE") and on 31 May 2005,
the intestate court issued an Omnibus Order affirming among others, the Order of 3 January 2005.
Inthe same Order, the intestate court also granted the motion of SILVERIO JR. to take his oath as
administrator effective upon receipt of the order and expunged the inventory report filed by
SILVERIO SR.

On 12 December 2005 the intestate court acting on the motion filed by SILVERIO SR. recalled the
Order granting letters of administration to SILVERIO JR. and reinstated SILVERIO SR. as
administrator. Then again, the intestate court acting on the motion for partial consideration to the
Order dated 12 December 2005 filed by SILVERIO JR. issued an Omnibus Order dated 31 October
2006 upholding the grant of Letters of Administration to SILVERIO JR. and removed SILVERIO SR.,
ad administrator for gross violation of his duties and functions under Section 1, Rule 81 of the Rules
of Court.

SILVERIO SR. moved for reconsideration of the above Order whereas SILVERIO-DEE on the other
hand, filed a Petition for Certiorari before the Court of Appeals docketed as CA-G.R. SP No. 97196.
On 28 August 2008, the Court of Appeals (Seventh Division) rendered a decision reinstating
SILVERIO, SR. as administrator, the decretal portion of the Order reads:

"WHEREFORE, the petition is GRANTED. The portions of the Omnibus Order upholding the grant of
letters of administration to and the taking of an oath of administration by Ricardo Silverio, Jr., as well
as the removal of Ricardo Silverio, Sr. as administrator to the Estate of Beatriz Silverio, are declared
NULL and VOID. The writ of preliminary injunction earlier issued is MADE PERMANENT in regard to
the said portions. Respondent RTC is ORDERED to reinstate Ricardo Silverio, Sr. as administrator
to the Estate of Beatriz Silverio. Costs against the Private Respondents.

SO ORDERED."

SILVERIO JR. filed a Petition for review on Certioraribefore the Supreme Court docketed as G.R.
No. 185619 challenging the 28 Augsut 2008 decision of the Court of Appeals. On 11 February 2009,
the Supreme Court issued a resolution denying the petition for failure to sufficiently show any
reversible error inthe assailed judgment to warrant the exercise by the Court of discretionary
appellate jurisdiction. Acting on SILVERIO JR.s motion for reconsideration, the Supreme Court on
11 February 2011, denied the motion with finality. An entry of judgment was made on 29 March
2011.

On 25 April 2011 SILVERIO SR. filed before the intestate court, an urgent motion to be reinstated as
administrator of the estate. Acting on the motion, the intestate court issued the now challenged
Order dated 16 June 2011, the pertinent portion of the Order reads:

xxxx

"WHEREFORE, upon posting of a bond in the sum of TEN MILLION PESOS, the same to be
approved by this Court, Mr. Ricardo C. Silverio, Sr. is hereby ordered reinstated as the Administrator
to the estate of the late Beatriz Silverio and to immediately take his oath as such, and exercise his
duties and functions as are incumbent under the law upon the said position. xxx."

xxxx

CA-G.R. SP No. 121173

xxxx
On 15 March 2011, heirs SILVERIO JR., EDMUNDO and LIGAYA represented by her legal guardian
moved for the disqualification and/or inhibition of JUDGE GUANLAO, JR. based on the following
grounds: (1) Absence of the written consent of all parties in interest allowing JUDGE GUANLAO, JR.
to continue hearing the case considering that he appeared once as counsel in the intestate
proceedings; (2) JUDGE GUANLAO, JR. has shown bias and partiality in favor of SILVERIO SR. by
allowing the latter to pursue several motions and even issued a TRO in violation of the rules against
forum shopping; (3) Heir LIGAYAs Petition for Support and Release of Funds for Medical Support
has not been resolved; and (4) It is in the best interest of all the heirs that the proceedings be
presided and decided by the cold neutrality of an impartial judge.

On 23 March 2011, JUDGE GUANLAO, JR. issued an order denying the Motion for Disqualification
and/or Inhibition. The movants filed a motion for reconsideration but the same was denied in an
order dated 14 June 2011. Hence, the instant petition.

xxxx

CA-G.R. SP NO. 122024

xxxx

The intestate court in its Omnibus Order dated 31 October 2006, ordered among others, the sale of
certain properties belonging to the estate. The portion of the order which is pertinent to the present
petition reads:

"WHEREFORE, above premises considered, this Court for the foregoing reasons resolves to grant
the following:

(1) xxx

(2) xxx

(3) Allowing the sale of the properties located at (1) No. 82 Cambridge Circle, Forbes Park,
Makati City, covered by T.C.T. No. 137155 issued by Register of Deeds of Makati City; (2)
No. 3 Intsia Road, Forbes Park, Makati City covered by T.C.T. No. 4137154 issued by the
Register of Deeds of Makati City; and (3) No. 19 Taurus St., Bel-Air Subd. Makati City
covered by TCT No. 137156 issued by the Register of Deeds of Makati City to partially settle
the intestate estate of the late Beatriz S. Silverio, and authorizing the Administrator to
undertake the proper procedure or transferring the titles involved to the name of the estate;
and

(4) To apply the proceeds of the sale mentioned in Number 3 above to the payment of taxes,
interests, penalties and other charges, if any, and todistribute the residue among the heirs
Ricardo C. Silverio, Sr., Ricardo S. Silverio, Jr., Ligaya S. Silverio represented by Legal
Guardian Nestor S. Dela Merced II, Edmundo S. Silverio and Nelia S. SilverioDee in
accordance with the law on intestacy.

SO ORDERED."

By virtue of the aforesaid Order, SILVERIO, JR. on 16 October 2007 executed a Deed of Absolute
Salein favor of CITRINE HOLDINGS, Inc. ("CITRINE") over the property located at No. 3 Intsia
Road, Forbes Park, Makati City. CITRINE became the registered owner thereof on 06 September
2010 as evidenced by TCT No. 006-201000063.

A Deed of Absolute Sale was likewise executed in favor of Monica P. Ocampo (notarized on
September 16, 2010) for the lot located at No. 82 Cambridge Circle, Forbes Park, Makati City. On 23
December 2010, TCT No. 006-2011000050 was issued toMonica P. Ocampo. The latter
subsequently sold said property to ZEE2 Resources, Inc. (ZEE2) and TCT No. 006-2011000190 was
issued on 11 February 2011 under its name.

In the interim, or on 12 December 2006 SILVERIO-DEE filed a petition for certioraribefore the Court
of Appeals docketed as CA-G.R. SP No. 97196 with prayer for injunctive relief. As prayed for, the
Court of Appeals issued a Temporary Restraining Order (TRO) on 5 February 2007. On 4 July 2007,
the Court issueda Writ of Preliminary Injunction conditioned upon the posting of the bond in the
amount of two million pesos (Php2,000,000.00). SILVERIO-DEE posted the required bond on
February 5, 2007 but in an order dated 3 January 2008, the Court ruled that the bond posted by
SILVERIO-DEE failed to comply with A.M. No. 04-7-02-SC. The Court, however, did not reverse the
ruling granting the injunction but instead ordered SILVERIO-DEE to comply with A.M. No. 04-7-02-
SC. The Court also increased the bond from two million to ten million. On 29 February 2008, the
Court issued a Resolution approving the ten million bond and issued the Writ of Preliminary
Injunction. Eventually, on 28 August 2008 the Court of Appeals (Seventh Division) issued a decision
reinstating SILVERIO SR. as administrator and declaring the Writ of Preliminary Injunction
permanent in regard to the appointment of administrator.

On 04 February 2011 SILVERIO SR. filed an Urgent Application for the Issuance of Temporary
Restraining Order/Preliminary Prohibitory Injunction (With Motion For the Issuance of Subpoena Ad
Testificandum and Subpoena Duces Tecum) praying among others, that a TRO be issued
restraining and/or preventing SILVERIO, JR., MONICA OCAMPO, CITRINE HOLDINGS, INC. and
their successors-in-interest from committing any act that would affect the titles to the three
properties.

On 14 February 2011, SILVERIO SR. filed an Urgent Omnibus Motion (a) To Declare as Null and
Void the Deed of Absolute Sale dated 16 September 2010; (b) To cancel the Transfer Certificate of
Title No. 006-2011000050; and (c) To reinstate the Transfer Certificate of Title No. 2236121 in the
name of Ricardo C. SilverioSr. and the Intestate Estate of the late Beatriz S. Silverio.

On 28 February 2011 the Intestate Court issued an Order granting a Temporary Restraining Order
enjoining SILVERIO JR., their agent or anybody acting in their behalf from committing any act that
would affect the titles to the properties and enjoining the Register of Deeds of Makati City from
accepting, admitting, approving, registering, annotating or in any way giving due course to whatever
deeds, instruments or any other documents involving voluntary or involuntary dealings which may
have the effect of transferring, conveying, encumbering, ceding, waiving, alienating, or disposing in
favor of any individual or any entity of the subject properties. Subpoena ad testificandumand duces
tecumwas also issued by the intestate court requiring SILVERIO, JR., MONICA OCAMPO and
ALEXANDRA GARCIA of CITRINE to testify and bring with them any books and documents under
their control to shed light on the circumstances surrounding the transaction involving the properties
in question.

On 9 March 2011, SILVERIO Sr. filed a Supplement to the Urgent Omnibus Motion dated 14
February 2011. On 18 August 2011, the intestate court rendered the now assailed Order the decretal
portion of the Order is quoted hereunder:

"WHEREFORE, this Court hereby orders that:

 1. The Deed of Absolute Sale dated 16 September 2010 as VOID:

2. The Transfer Certificate of Title No. 006-2011000050 in the name of defendant MONICA
OCAMPO or any of her successors-in-interestincluding all derivative titles, as NULL AND
VOID;

3. The Transfer Certificate of Title TCT No. 006-2011000190 in the name of ZEE2
RESOURCES, INC. or any of its successors-in-interest including all derivative titles, as
NULL AND VOID;

4. (T)he Register of Deeds of Makati City to CANCEL Transfer Certificate of Title No. 006-
2011000050, Transfer Certificate of Title No. 006-2011000190 and all of its derivative titles;
and 5. Reinstating the Transfer Certificate of Title No. 2236121 in the name of RICARDO C.
SILVERIO, SR. AND THE INTESTATE ESTATE OF THE LATE BEATRIZ SILVERIO, and
AS TO THE INTSIA PROPERTY:

1. The Register of Deeds ofMakati City to CANCEL Transfer Certificate ofTitle No.
006-2010000063, in the name of CITRINE HOLDINGS, INC. and all of its derivative
titles; and

2. The reinstatement of Transfer Certificate of Title No. 223612 in the name of

RICARDO C. SILVERIO, SR. and the INTESTATE ESTATE OF THE LATE
BEATRIZ SILVERIO.

SO ORDERED."

x x x x3

The consolidated petitions for certiorari filed by respondent Ricardo S. Silverio, Jr. ("Silverio, Jr.")
before the CA questioned the following issuances of the intestate court: CA-G.R. SP No. 121172
Order dated June 16, 2011 reinstating Silverio, Sr. as Administrator; CA-G.R. SP No. 121173 (1)
Order dated March 23,2011 granting Silverio, Sr.s application for preliminary injunction enjoining
Silverio, Jr. or anyone acting on their behalf from committing any act that would affect the titles to the
subject properties and enjoining the Register of Deeds of Makati City from accepting, admitting,
approving, registering, annotating or in any way giving due course to whatever deeds, instruments or
any other documents involving the Cambridge and Intsia properties, (2) Order dated March 23, 2011
which denied Silverio, Jr.s motion or disqualification and/or inhibition of Judge Guanlao, Jr., and (3)
Order dated June 14, 2011 denying the motion for reconsideration of the March 23, 2011 Order
(granting application for preliminary injunction); and in CA-G.R. SP No. 122024 Order dated
August 18, 2011 declaring the Deed of Absolute Sale, TCT and all derivative titles over the
Cambridge and Intsiaproperties as null and void.

On March 8, 2013, the CA rendered its Decision, the falloof which reads:

WHEREFORE, based on the foregoing premises, the Court hereby disposes and orders the
following:

1. The petition in CA G.R. SP No. 121172is DENIEDfor lack of merit. Accordingly, the 16
June 2011 Order of the Regional Trial Court of Makati City, Branch 57 reinstating MR.
RICARDO C. SILVERIO, SR. as Administrator is AFFIRMED.
 2. The petition in CA GR. S.P. No. 121173is partly DENIEDfor lack of merit insofar as it
questions the 23 March 2011 Order denying RICARDO SILVERIO, JRs Motion for
Disqualification and/or Inhibition of Judge Honorio E. Guanlao, Jr. The petition is partly
GRANTEDin that the Preliminary Injunction issued by the Regional Trial Court of Makati City,
Branch 57 is herebydeclared NULL and VOID for being issued with grave abuse of
discretion.

3. The petition in CA G.R.-S.P. No. 122024is GRANTED. Accordingly, the 18 August 2011
Order declaring the Deed of Absolute Sale, Transfer Certificate of Title and all derivative
titles over the Cambridge and Intsia Property null and void is hereby REVERSEDand SET
ASIDE.

SO ORDERED.4

Ricardo C. Silverio, Sr. (petitioner) filed a Motion for Partial Reconsideration5 "insofar as its ruling in
CA-G.R. SP No. 122024" praying that the August 18, 2011 Order of the intestate court be affirmed.
By Resolution dated July 4, 2013, the CA denied his motion for partial reconsideration.

Hence, this petition contending thatthe CA committed a reversible error in upholding the validity of
the Intsia and Cambridgeproperties upon the ground that the intestate court cannotannul the sales
as it has a limited jurisdiction only and which does not includeresolving issues of ownership. It is
asserted that the CA should nothave stopped there and looked into the nature of the properties sold,
which formed part of the conjugal partnership of Ricardo Silverio, Sr. and Beatriz S. Silverio.

Petitioner seeks the reinstatement of the order of the intestate court annulling the sales of the
Cambridge and Intsia properties. In the alternative, should the said sales be upheld, petitioner prays
that this Court (1) declare the sales to be valid only to the extent of 50% net remainder share of the
late Beatriz less the corresponding shares therefrom of petitioner and the other legal compulsory
heirs, and (2) order respondent Silverio, Jr. to account for the proceeds of sales for distribution of the
residue among the legal/compulsory heirs.

In their Comment, respondents Silverio, Jr., Monica Ocampo and Citrine Holdings, Inc. argued that
the intestate court should not have ruled on the validity of the sale of the subject properties to third
parties after it itself had authorized their disposal in partial settlementof the estate, especially so
when separate actions assailing the new titles issued to said third parties were already instituted by
petitioner.

As to the issue of alleged lack ofprior consent of petitioner to the aforesaid sales as the surviving
spouses with a 50% conjugal share in the subject properties, respondents point out that such is
belied by the October 31, 2006 Order of the intestate court, which clearly showed that counsels of all
the heirs were present at the hearing of June 16, 2006 and no objection was made by them to the
sale of the properties and the partial settlement of the Estate of Beatriz S. Silverio, together with the
transfer of titles of these properties in the name of the Estate as prayed for in petitioners
Manifestation and Motion dated April 19, 2006. Petitioner had not challenged or appealed the said
order authorizing the sale of the subject properties. Thus, it is too late in the day for petitioner to
raise this factual issue before this Court, not to mention that it cannot be ventilated in the present
appeal by certiorari as thisCourt is not a trier of facts.

Respondent ZEE2 Resources Corporation filed its Comment contending that the intestate court
improperly nullified the titles despite the fact that the present registered owners, who are
indispensable parties, were not impleaded. Indeed, a Torrens title cannot be collaterally attacked
and may be cancelled only in a direct proceeding brought for the purpose. Respondent points out
that petitioner himself recognized thata direct action is required to annul a Torrens title ashe initially
instituted two civil complaints before the RTC of Makati City seeking to annul, among others, the
TCTs issued to respondent Ocampo for the Cambridge property. After failing to secure restraining
orders in these two civil cases, petitioner filed in the intestate court his Urgent OmnibusMotion dated
February 14, 2011 to annul the said titles, including that of ZEE2. In any case, respondent maintains
that it is a buyer of good faith and for value, of which the intestate court never made a determination
nor did the aforesaid Urgent Omnibus Motion and Supplement to the Omnibus Motion dated March
4, 2011 contain allegations indicating that respondent ZEE2 was not a buyer in good faith and for
value.

According to respondent ZEE2, petitioners act of filing a separate complaint with application for a
temporary restraining order (TRO) and preliminary injunction on January 31, 2011 in another court
(Civil Case Nos. 11-084 of the RTC of Makati City, Branch 143) constitutes willful and deliberate
forum shopping asthe former also prayedsimilar primary reliefs and setting up the alleged nullity of
the subject deeds of absolute sale as those raised in the Urgent Omnibus Motion and Supplement to
the Urgent Omnibus Motion filed in the intestate court.

At the outset, we emphasize that the probate court having jurisdiction over properties under
administration has the authority not only to approve any disposition or conveyance, but also to annul
an unauthorized sale by the prospective heirs or administrator. Thus we held in Lee v. Regional Trial
Court of Quezon City, Branch 856:

Juliana Ortaez and Jose Ortaez sold specific properties of the estate, without court approval. It is
well-settled that court approval is necessary for the validity of any disposition of the decedents
estate. In the early case of Godoy vs. Orellano, we laid down the rule that the sale of the property of
the estate by an administrator without the order of the probate court is void and passes no title to the
purchaser. And in the case of Dillena vs. Court of Appeals, we ruled that: x x x x

It being settled that property under administration needs the approval of the probate court before it
can be disposed of, any unauthorized disposition does not bind the estate and is null and void.
Asearly as 1921 in the case of Godoy vs. Orellano(42 Phil 347), We laid down the rule that a sale by
an administrator of property of the deceased, which is not authorized by the probate court is null and
void and title does not pass to the purchaser.

There is hardly any doubt that the probate court can declare null and void the disposition of the
property under administration, made by private respondent, the same having been effected without
authority from said court. It is the probate court that has the power to authorize and/or approve the
sale (Section 4 and 7, Rule 89), hence, a fortiori, it is said court that can declare it null and void for
as long as the proceedings had not been closed or terminated. To uphold petitioners contention that
the probate court cannot annul the unauthorized sale, would render meaningless the power
pertaining to the said court. (Bonga vs. Soler, 2 SCRA 755). (italics ours) Our jurisprudence is
therefore clear that (1) any disposition of estate property by an administrator or prospective heir
pending final adjudication requires court approval and (2) any unauthorized disposition of estate
property can be annulled by the probate court, there being no need for a separate action to annul the
unauthorized disposition. (Emphasis supplied.)

In this case, the sale of the subject properties was executed by respondent Silverio, Jr. with prior
approval of the intestate court under its Omnibus Order dated October 31, 2006. Subsequently,
however, the sale was annulled by the said court on motion by petitioner.

In reversing the intestate courts order annulling the sale of the subject properties, the CA noted that
said ruling is anchored on the fact that the deeds of sale were executed at the time when the TRO
and writ of preliminary injunction issued in CA-G.R. SP No. 97196 was still in effect. It then
concluded that the eventual decision in the latter case making the writ of preliminary injunction
permanent only with respect to the appointment of petitioner as administrator and not to the grant of
authority to sell mooted the issue of whether the sale was executed at the time when the TRO and
writ of preliminary injunction were in effect.

The CAs ruling on this issue is hereunder quoted:

The more crucial question that needs to be addressed is: Whether the authority to sell the properties
in question granted under the October 31, 2006 Omnibus Order, was nullified by the decision of the
Court of Appeals in CA-G.R. SP No. 97196. A look at the dispositive portion of the decision in CA-
G.R. SP No. 97196 would lead us to reasonably conclude that the grant of authority to sell is still
good and valid. The fallo of the decision reads:

"WHEREFORE, the petition is GRANTED. The portions of the Omnibus Order upholding the grant of
letters of administration to and the taking of an oath of administration by Ricardo Silverio, Jr., as well
as the removal of Ricardo Silverio, Sr. as administrator to the Estate of Beatriz Silverio, are declared
NULL and VOID. The writ of preliminary injunction earlier issued is made permanent in regard to the
said portions. Respondent RTC is ORDERED to reinstate Ricardo Silverio, Sr. as administrator of
the Estate of Beatriz Silverio. Costs against the Private Respondents.

SO ORDERED."

The October 31, 2006 Omnibus Order of the testate [sic] court in so far as it authorizes the saleof
the three properties in question was not declared by the Court of Appeals, Seventh Division as null
and void.It is axiomatic that it is the dispositive portion of the decision that finally invests rights upon
the parties, sets conditions for the exercise of those rights, and imposes the corresponding duties or
obligations.

From all the foregoing, We declare that it was grave abuse of discretion on the part of the intestate
court when it ordered the sale of the Cambridge Property and Intsia Property as NULL and VOID
citing as justification the decision of the Court of Appeals, Seventh Division in CAG.R. SP No.
97196. To reiterate, the injunction order which was made permanent by the Court of Appeals
(Seventh Division) was declared to be limited only to the portion ofthe Omnibus Order that upheld
the grant of letters of administrationby SILVERIO, JR. and the removal of SILVERIO, SR. as
administrator and nothing else.

Anent the preliminary injunction issued by the intestate court in its Order dated 23 March 2011 and
challenged by SILVERIO JR. in CA-G.R. SP No. 121173, we find that it was issued with grave abuse
of discretion as it was directed against acts which were already [fait]accompli. The preliminary
injunction sought to: 1) restrain SILVERIO JR., their agents, or anybody acting in their behalf or any
person from committing any act that would affect the titles to the subject properties belonging to the
Intestate Estate of the late Beatriz Silverio and (2) enjoining the Register of Deeds of Makati City
from accepting, admitting, approving, registering, annotating or in any giving due course to whatever
deeds, instruments or any other documents involving voluntary or involuntary dealings which may
have the effect of transferring, conveying, encumbering, ceding, waiving, alienating or disposing in
favor of any individual or any entity the above-enumerated properties belonging to the Intestate
Estate of the late Beatriz Silverio. However, the records show that when the preliminary injunction
was issued on 23 March 2011 new titles over the disputed properties were already issued to
CITRINE HOLDINGS, INC. and ZEE2 RESOURCES INC.7 (Emphasis supplied.)

We affirm the CA.

It bears to stress that the October 31, 2006 Omnibus Order was issued by the intestate court acting
upon pending motions filed by petitioner and respondent Silverio, Jr., father and son, respectively,
who are the central figures in the now decade-old controversy over the Intestate Estate of the late
Beatriz S. Silverio. The intestate court flip-flopped in appointing as administrator of the estate
petitioner and respondent Silverio, Jr., their personal conflicts becoming more evident to the
intestate court as the proceedings suffered delays. At the hearing of the urgent motion filed by
Edmundo Silverio to sell the subject properties and partially settle the estate, the much awaited
opportunity came when the heirs represented by their respective counsels interposed no objection to
the same.

While it is true that petitioner was eventually reinstated as Administrator pursuant to the August 28,
2008 decision in CA-G.R. SP No. 97196 (petition for certiorari filed by Nelia Silverio-Dee), weagree
with the CA that the permanent injunction issued under the said decision, as explicitly stated in its
fallo, pertained only to the portions of the October 31, 2006 Omnibus Order upholding the grant of
letters of administration to and taking of an oath of administration by respondent Silverio, Jr., as
otherwise the CA would have expressly set aside as well the directive in the same Omnibus Order
allowing the sale of the subject properties. Moreover, the CA Decision attained finality only on
February 11, 2011 when this Court denied with finality respondent Silverio, Jr.s motion for
reconsideration of the February 11, 2009 Resolution denyinghis petition for review (G.R. No.
185619). 1wphi 1

The CA therefore did not err in reversing the August 18, 2011 Order of the intestate court annulling
the sale of the subject properties grounded solely on the injunction issued in CA-G.R. SP No. 97196.
Respondents Ocampo, Citrine and ZEE2 should not be prejudiced by the flip-flopping appointment
of Administrator by the intestate court, having relied in good faith that the sale was authorized and
with prior approval of the intestate court under its Omnibus Order dated October 31, 2006 which
remained valid and subsisting insofar as it allowed the aforesaid sale.

WHEREFORE, the petition is DENIED. The Decision dated March 8, 2013 and Resolution dated
July 4, 2013 of the Court of Appeals in CAG.R. SP Nos. 121173 and 122024 are AFFIRMED.

With costs against the petitioner.

SO ORDERED.
G.R. No. 133743 February 6, 2007

EDGAR SAN LUIS, Petitioner,

vs.
FELICIDAD SAN LUIS, Respondent.

x ---------------------------------------------------- x

G.R. No. 134029 February 6, 2007

RODOLFO SAN LUIS, Petitioner,

vs.
FELICIDAD SAGALONGOS alias FELICIDAD SAN LUIS, Respondent.

DECISION

YNARES-SANTIAGO, J.:

Before us are consolidated petitions for review assailing the February 4, 1998 Decision 1 of the Court
of Appeals in CA-G.R. CV No. 52647, which reversed and set aside the September 12, 1995 2 and
January 31, 1996 3Resolutions of the Regional Trial Court of Makati City, Branch 134 in SP. Proc.
No. M-3708; and its May 15, 1998 Resolution 4 denying petitioners motion for reconsideration.

The instant case involves the settlement of the estate of Felicisimo T. San Luis (Felicisimo), who
was the former governor of the Province of Laguna. During his lifetime, Felicisimo contracted three
marriages. His first marriage was with Virginia Sulit on March 17, 1942 out of which were born six
children, namely: Rodolfo, Mila, Edgar, Linda, Emilita and Manuel. On August 11, 1963, Virginia
predeceased Felicisimo.

Five years later, on May 1, 1968, Felicisimo married Merry Lee Corwin, with whom he had a son,
Tobias. However, on October 15, 1971, Merry Lee, an American citizen, filed a Complaint for
Divorce 5 before the Family Court of the First Circuit, State of Hawaii, United States of America
(U.S.A.), which issued a Decree Granting Absolute Divorce and Awarding Child Custody on
December 14, 1973. 6

On June 20, 1974, Felicisimo married respondent Felicidad San Luis, then surnamed Sagalongos,
before Rev. Fr. William Meyer, Minister of the United Presbyterian at Wilshire Boulevard, Los
Angeles, California, U.S.A. 7 He had no children with respondent but lived with her for 18 years from
the time of their marriage up to his death on December 18, 1992.

Thereafter, respondent sought the dissolution of their conjugal partnership assets and the settlement
of Felicisimos estate. On December 17, 1993, she filed a petition for letters of
administration 8 before the Regional Trial Court of Makati City, docketed as SP. Proc. No. M-3708
which was raffled to Branch 146 thereof.

Respondent alleged that she is the widow of Felicisimo; that, at the time of his death, the decedent
was residing at 100 San Juanico Street, New Alabang Village, Alabang, Metro Manila; that the
decedents surviving heirs are respondent as legal spouse, his six children by his first marriage, and
son by his second marriage; that the decedent left real properties, both conjugal and exclusive,
valued at 30,304,178.00 more or less; that the decedent does not have any unpaid debts.
Respondent prayed that the conjugal partnership assets be liquidated and that letters of
administration be issued to her.

On February 4, 1994, petitioner Rodolfo San Luis, one of the children of Felicisimo by his first
marriage, filed a motion to dismiss 9 on the grounds of improper venue and failure to state a cause of
action. Rodolfo claimed that the petition for letters of administration should have been filed in the
Province of Laguna because this was Felicisimos place of residence prior to his death. He further
claimed that respondent has no legal personality to file the petition because she was only a mistress
of Felicisimo since the latter, at the time of his death, was still legally married to Merry Lee.

On February 15, 1994, Linda invoked the same grounds and joined her brother Rodolfo in seeking
the dismissal 10of the petition. On February 28, 1994, the trial court issued an Order 11 denying the
two motions to dismiss.

Unaware of the denial of the motions to dismiss, respondent filed on March 5, 1994 her
opposition 12 thereto. She submitted documentary evidence showing that while Felicisimo exercised
the powers of his public office in Laguna, he regularly went home to their house in New Alabang
Village, Alabang, Metro Manila which they bought sometime in 1982. Further, she presented the
decree of absolute divorce issued by the Family Court of the First Circuit, State of Hawaii to prove
that the marriage of Felicisimo to Merry Lee had already been dissolved. Thus, she claimed that
Felicisimo had the legal capacity to marry her by virtue of paragraph 2, 13 Article 26 of the Family
Code and the doctrine laid down in Van Dorn v. Romillo, Jr. 14

Thereafter, Linda, Rodolfo and herein petitioner Edgar San Luis, separately filed motions for
reconsideration from the Order denying their motions to dismiss. 15 They asserted that paragraph 2,
Article 26 of the Family Code cannot be given retroactive effect to validate respondents bigamous
marriage with Felicisimo because this would impair vested rights in derogation of Article 256 16 of the
Family Code.

On April 21, 1994, Mila, another daughter of Felicisimo from his first marriage, filed a motion to
disqualify Acting Presiding Judge Anthony E. Santos from hearing the case.

On October 24, 1994, the trial court issued an Order 17 denying the motions for reconsideration. It
ruled that respondent, as widow of the decedent, possessed the legal standing to file the petition and
that venue was properly laid. Meanwhile, the motion for disqualification was deemed moot and
academic 18 because then Acting Presiding Judge Santos was substituted by Judge Salvador S.
Tensuan pending the resolution of said motion.

Mila filed a motion for inhibition 19 against Judge Tensuan on November 16, 1994. On even date,
Edgar also filed a motion for reconsideration 20 from the Order denying their motion for
reconsideration arguing that it does not state the facts and law on which it was based.

On November 25, 1994, Judge Tensuan issued an Order 21 granting the motion for inhibition. The
case was re-raffled to Branch 134 presided by Judge Paul T. Arcangel.

On April 24, 1995, 22 the trial court required the parties to submit their respective position papers on
the twin issues of venue and legal capacity of respondent to file the petition. On May 5, 1995, Edgar
manifested 23 that he is adopting the arguments and evidence set forth in his previous motion for
reconsideration as his position paper. Respondent and Rodolfo filed their position papers on June
14, 24 and June 20, 25 1995, respectively.
On September 12, 1995, the trial court dismissed the petition for letters of administration. It held that,
at the time of his death, Felicisimo was the duly elected governor and a resident of the Province of
Laguna. Hence, the petition should have been filed in Sta. Cruz, Laguna and not in Makati City. It
also ruled that respondent was without legal capacity to file the petition for letters of administration
because her marriage with Felicisimo was bigamous, thus, void ab initio. It found that the decree of
absolute divorce dissolving Felicisimos marriage to Merry Lee was not valid in the Philippines and
did not bind Felicisimo who was a Filipino citizen. It also ruled that paragraph 2, Article 26 of the
Family Code cannot be retroactively applied because it would impair the vested rights of Felicisimos
legitimate children.

Respondent moved for reconsideration 26 and for the disqualification 27 of Judge Arcangel but said
motions were denied. 28

Respondent appealed to the Court of Appeals which reversed and set aside the orders of the trial
court in its assailed Decision dated February 4, 1998, the dispositive portion of which states:

WHEREFORE, the Orders dated September 12, 1995 and January 31, 1996 are hereby
REVERSED and SET ASIDE; the Orders dated February 28 and October 24, 1994 are
REINSTATED; and the records of the case is REMANDED to the trial court for further
proceedings. 29

The appellante court ruled that under Section 1, Rule 73 of the Rules of Court, the term "place of
residence" of the decedent, for purposes of fixing the venue of the settlement of his estate, refers to
the personal, actual or physical habitation, or actual residence or place of abode of a person as
distinguished from legal residence or domicile. It noted that although Felicisimo discharged his
functions as governor in Laguna, he actually resided in Alabang, Muntinlupa. Thus, the petition for
letters of administration was properly filed in Makati City.

The Court of Appeals also held that Felicisimo had legal capacity to marry respondent by virtue of
paragraph 2, Article 26 of the Family Code and the rulings in Van Dorn v. Romillo, Jr. 30 and Pilapil v.
Ibay-Somera. 31 It found that the marriage between Felicisimo and Merry Lee was validly dissolved
by virtue of the decree of absolute divorce issued by the Family Court of the First Circuit, State of
Hawaii. As a result, under paragraph 2, Article 26, Felicisimo was capacitated to contract a
subsequent marriage with respondent. Thus

With the well-known rule express mandate of paragraph 2, Article 26, of the Family Code of the
Philippines, the doctrines in Van Dorn, Pilapil, and the reason and philosophy behind the enactment
of E.O. No. 227, there is no justiciable reason to sustain the individual view sweeping
statement of Judge Arc[h]angel, that "Article 26, par. 2 of the Family Code, contravenes the basic
policy of our state against divorce in any form whatsoever." Indeed, courts cannot deny what the law
grants. All that the courts should do is to give force and effect to the express mandate of the law.
The foreign divorce having been obtained by the Foreigner on December 14, 1992, 32 the Filipino
divorcee, "shall x x x have capacity to remarry under Philippine laws". For this reason, the marriage
between the deceased and petitioner should not be denominated as "a bigamous marriage.

Therefore, under Article 130 of the Family Code, the petitioner as the surviving spouse can institute
the judicial proceeding for the settlement of the estate of the deceased. x x x 33

Edgar, Linda, and Rodolfo filed separate motions for reconsideration 34 which were denied by the
Court of Appeals.
On July 2, 1998, Edgar appealed to this Court via the instant petition for review on
certiorari. 35 Rodolfo later filed a manifestation and motion to adopt the said petition which was
granted. 36

In the instant consolidated petitions, Edgar and Rodolfo insist that the venue of the subject petition
for letters of administration was improperly laid because at the time of his death, Felicisimo was a
resident of Sta. Cruz, Laguna. They contend that pursuant to our rulings in Nuval v. Guray 37 and
Romualdez v. RTC, Br. 7, Tacloban City, 38"residence" is synonymous with "domicile" which denotes
a fixed permanent residence to which when absent, one intends to return. They claim that a person
can only have one domicile at any given time. Since Felicisimo never changed his domicile, the
petition for letters of administration should have been filed in Sta. Cruz, Laguna.

Petitioners also contend that respondents marriage to Felicisimo was void and bigamous because it
was performed during the subsistence of the latters marriage to Merry Lee. They argue that
paragraph 2, Article 26 cannot be retroactively applied because it would impair vested rights and
ratify the void bigamous marriage. As such, respondent cannot be considered the surviving wife of
Felicisimo; hence, she has no legal capacity to file the petition for letters of administration.

The issues for resolution: (1) whether venue was properly laid, and (2) whether respondent has legal
capacity to file the subject petition for letters of administration.

The petition lacks merit.

Under Section 1, 39 Rule 73 of the Rules of Court, the petition for letters of administration of the
estate of Felicisimo should be filed in the Regional Trial Court of the province "in which he resides at
the time of his death." In the case of Garcia Fule v. Court of Appeals, 40 we laid down the doctrinal
rule for determining the residence as contradistinguished from domicile of the decedent for
purposes of fixing the venue of the settlement of his estate:

[T]he term "resides" connotes ex vi termini "actual residence" as distinguished from "legal residence
or domicile." This term "resides," like the terms "residing" and "residence," is elastic and should be
interpreted in the light of the object or purpose of the statute or rule in which it is employed. In the
application of venue statutes and rules Section 1, Rule 73 of the Revised Rules of Court is of such
nature residence rather than domicile is the significant factor. Even where the statute uses the
word "domicile" still it is construed as meaning residence and not domicile in the technical sense.
Some cases make a distinction between the terms "residence" and "domicile" but as generally used
in statutes fixing venue, the terms are synonymous, and convey the same meaning as the term
"inhabitant." In other words, "resides" should be viewed or understood in its popular sense, meaning,
the personal, actual or physical habitation of a person, actual residence or place of abode. It signifies
physical presence in a place and actual stay thereat. In this popular sense, the term means merely
residence, that is, personal residence, not legal residence or domicile. Residence simply requires
bodily presence as an inhabitant in a given place, while domicile requires bodily presence in that
place and also an intention to make it ones domicile. No particular length of time of residence is
required though; however, the residence must be more than temporary. 41 (Emphasis supplied)

It is incorrect for petitioners to argue that "residence," for purposes of fixing the venue of the
settlement of the estate of Felicisimo, is synonymous with "domicile." The rulings in Nuval and
Romualdez are inapplicable to the instant case because they involve election cases. Needless to
say, there is a distinction between "residence" for purposes of election laws and "residence" for
purposes of fixing the venue of actions. In election cases, "residence" and "domicile" are treated as
synonymous terms, that is, the fixed permanent residence to which when absent, one has the
intention of returning. 42 However, for purposes of fixing venue under the Rules of Court, the
"residence" of a person is his personal, actual or physical habitation, or actual residence or place of
abode, which may not necessarily be his legal residence or domicile provided he resides therein with
continuity and consistency. 43 Hence, it is possible that a person may have his residence in one
place and domicile in another.

In the instant case, while petitioners established that Felicisimo was domiciled in Sta. Cruz, Laguna,
respondent proved that he also maintained a residence in Alabang, Muntinlupa from 1982 up to the
time of his death. Respondent submitted in evidence the Deed of Absolute Sale 44 dated January 5,
1983 showing that the deceased purchased the aforesaid property. She also presented billing
statements 45 from the Philippine Heart Center and Chinese General Hospital for the period August
to December 1992 indicating the address of Felicisimo at "100 San Juanico, Ayala Alabang,
Muntinlupa." Respondent also presented proof of membership of the deceased in the Ayala Alabang
Village Association 46 and Ayala Country Club, Inc., 47 letter-envelopes 48 from 1988 to 1990 sent by
the deceaseds children to him at his Alabang address, and the deceaseds calling cards 49 stating
that his home/city address is at "100 San Juanico, Ayala Alabang Village, Muntinlupa" while his
office/provincial address is in "Provincial Capitol, Sta. Cruz, Laguna."

From the foregoing, we find that Felicisimo was a resident of Alabang, Muntinlupa for purposes of
fixing the venue of the settlement of his estate. Consequently, the subject petition for letters of
administration was validly filed in the Regional Trial Court 50 which has territorial jurisdiction over
Alabang, Muntinlupa. The subject petition was filed on December 17, 1993. At that time, Muntinlupa
was still a municipality and the branches of the Regional Trial Court of the National Capital Judicial
Region which had territorial jurisdiction over Muntinlupa were then seated in Makati City as per
Supreme Court Administrative Order No. 3. 51 Thus, the subject petition was validly filed before the
Regional Trial Court of Makati City.

Anent the issue of respondent Felicidads legal personality to file the petition for letters of
administration, we must first resolve the issue of whether a Filipino who is divorced by his alien
spouse abroad may validly remarry under the Civil Code, considering that Felicidads marriage to
Felicisimo was solemnized on June 20, 1974, or before the Family Code took effect on August 3,
1988. In resolving this issue, we need not retroactively apply the provisions of the Family Code,
particularly Art. 26, par. (2) considering that there is sufficient jurisprudential basis allowing us to rule
in the affirmative.

The case of Van Dorn v. Romillo, Jr. 52 involved a marriage between a foreigner and his Filipino wife,
which marriage was subsequently dissolved through a divorce obtained abroad by the latter.
Claiming that the divorce was not valid under Philippine law, the alien spouse alleged that his
interest in the properties from their conjugal partnership should be protected. The Court, however,
recognized the validity of the divorce and held that the alien spouse had no interest in the properties
acquired by the Filipino wife after the divorce. Thus:

In this case, the divorce in Nevada released private respondent from the marriage from the
standards of American law, under which divorce dissolves the marriage. As stated by the Federal
Supreme Court of the United States in Atherton vs. Atherton, 45 L. Ed. 794, 799:

"The purpose and effect of a decree of divorce from the bond of matrimony by a competent
jurisdiction are to change the existing status or domestic relation of husband and wife, and to free
them both from the bond. The marriage tie, when thus severed as to one party, ceases to bind
either. A husband without a wife, or a wife without a husband, is unknown to the law. When the law
provides, in the nature of a penalty, that the guilty party shall not marry again, that party, as well as
the other, is still absolutely freed from the bond of the former marriage."
Thus, pursuant to his national law, private respondent is no longer the husband of petitioner. He
would have no standing to sue in the case below as petitioners husband entitled to exercise control
over conjugal assets. As he is bound by the Decision of his own countrys Court, which validly
exercised jurisdiction over him, and whose decision he does not repudiate, he is estopped by his
own representation before said Court from asserting his right over the alleged conjugal property. 53

As to the effect of the divorce on the Filipino wife, the Court ruled that she should no longer be
considered married to the alien spouse. Further, she should not be required to perform her marital
duties and obligations. It held:

To maintain, as private respondent does, that, under our laws, petitioner has to be
considered still marriedto private respondent and still subject to a wife's obligations under
Article 109, et. seq. of the Civil Code cannot be just. Petitioner should not be obliged to live
together with, observe respect and fidelity, and render support to private respondent. The latter
should not continue to be one of her heirs with possible rights to conjugal property. She should not
be discriminated against in her own country if the ends of justice are to be
served.54 (Emphasis added)

This principle was thereafter applied in Pilapil v. Ibay-Somera 55 where the Court recognized the
validity of a divorce obtained abroad. In the said case, it was held that the alien spouse is not a
proper party in filing the adultery suit against his Filipino wife. The Court stated that "the severance
of the marital bond had the effect of dissociating the former spouses from each other, hence the
actuations of one would not affect or cast obloquy on the other." 56

Likewise, in Quita v. Court of Appeals, 57 the Court stated that where a Filipino is divorced by his
naturalized foreign spouse, the ruling in Van Dorn applies. 58 Although decided on December 22,
1998, the divorce in the said case was obtained in 1954 when the Civil Code provisions were still in
effect.

The significance of the Van Dorn case to the development of limited recognition of divorce in the
Philippines cannot be denied. The ruling has long been interpreted as severing marital ties between
parties in a mixed marriage and capacitating the Filipino spouse to remarry as a necessary
consequence of upholding the validity of a divorce obtained abroad by the alien spouse. In his
treatise, Dr. Arturo M. Tolentino cited Van Dorn stating that "if the foreigner obtains a valid foreign
divorce, the Filipino spouse shall have capacity to remarry under Philippine law." 59In Garcia v.
Recio, 60 the Court likewise cited the aforementioned case in relation to Article 26. 61

In the recent case of Republic v. Orbecido III, 62 the historical background and legislative intent
behind paragraph 2, Article 26 of the Family Code were discussed, to wit:

Brief Historical Background

On July 6, 1987, then President Corazon Aquino signed into law Executive Order No. 209, otherwise
known as the "Family Code," which took effect on August 3, 1988. Article 26 thereof states:

All marriages solemnized outside the Philippines in accordance with the laws in force in the country
where they were solemnized, and valid there as such, shall also be valid in this country, except
those prohibited under Articles 35, 37, and 38.

On July 17, 1987, shortly after the signing of the original Family Code, Executive Order No. 227 was
likewise signed into law, amending Articles 26, 36, and 39 of the Family Code. A second paragraph
was added to Article 26. As so amended, it now provides:
ART. 26. All marriages solemnized outside the Philippines in accordance with the laws in force in the
country where they were solemnized, and valid there as such, shall also be valid in this country,
except those prohibited under Articles 35(1), (4), (5) and (6), 36, 37 and 38.

Where a marriage between a Filipino citizen and a foreigner is validly celebrated and a divorce is
thereafter validly obtained abroad by the alien spouse capacitating him or her to remarry, the Filipino
spouse shall have capacity to remarry under Philippine law. (Emphasis supplied)

xxxx
Legislative Intent

Records of the proceedings of the Family Code deliberations showed that the intent of Paragraph 2
of Article 26, according to Judge Alicia Sempio-Diy, a member of the Civil Code Revision
Committee, is to avoid the absurd situation where the Filipino spouse remains married to the alien
spouse who, after obtaining a divorce, is no longer married to the Filipino spouse.

Interestingly, Paragraph 2 of Article 26 traces its origin to the 1985 case of Van Dorn v.
Romillo, Jr. The Van Dorn case involved a marriage between a Filipino citizen and a foreigner.
The Court held therein that a divorce decree validly obtained by the alien spouse is valid in
the Philippines, and consequently, the Filipino spouse is capacitated to remarry under
Philippine law. 63 (Emphasis added)

As such, the Van Dorn case is sufficient basis in resolving a situation where a divorce is validly
obtained abroad by the alien spouse. With the enactment of the Family Code and paragraph 2,
Article 26 thereof, our lawmakers codified the law already established through judicial precedent. 1aw phi 1.net

Indeed, when the object of a marriage is defeated by rendering its continuance intolerable to one of
the parties and productive of no possible good to the community, relief in some way should be
obtainable. 64 Marriage, being a mutual and shared commitment between two parties, cannot
possibly be productive of any good to the society where one is considered released from the marital
bond while the other remains bound to it. Such is the state of affairs where the alien spouse obtains
a valid divorce abroad against the Filipino spouse, as in this case.

Petitioners cite Articles 15 65 and 17 66 of the Civil Code in stating that the divorce is void under
Philippine law insofar as Filipinos are concerned. However, in light of this Courts rulings in the cases
discussed above, the Filipino spouse should not be discriminated against in his own country if the
ends of justice are to be served. 67 In Alonzo v. Intermediate Appellate Court, 68 the Court stated:

But as has also been aptly observed, we test a law by its results; and likewise, we may add, by its
purposes. It is a cardinal rule that, in seeking the meaning of the law, the first concern of the judge
should be to discover in its provisions the intent of the lawmaker. Unquestionably, the law should
never be interpreted in such a way as to cause injustice as this is never within the legislative intent.
An indispensable part of that intent, in fact, for we presume the good motives of the legislature, is
to render justice.

Thus, we interpret and apply the law not independently of but in consonance with justice. Law and
justice are inseparable, and we must keep them so. To be sure, there are some laws that, while
generally valid, may seem arbitrary when applied in a particular case because of its peculiar
circumstances. In such a situation, we are not bound, because only of our nature and functions, to
apply them just the same, in slavish obedience to their language. What we do instead is find a
balance between the word and the will, that justice may be done even as the law is obeyed.
As judges, we are not automatons. We do not and must not unfeelingly apply the law as it is worded,
yielding like robots to the literal command without regard to its cause and consequence. "Courts are
apt to err by sticking too closely to the words of a law," so we are warned, by Justice Holmes again,
"where these words import a policy that goes beyond them."

xxxx

More than twenty centuries ago, Justinian defined justice "as the constant and perpetual wish to
render every one his due." That wish continues to motivate this Court when it assesses the facts and
the law in every case brought to it for decision. Justice is always an essential ingredient of its
decisions. Thus when the facts warrants, we interpret the law in a way that will render justice,
presuming that it was the intention of the lawmaker, to begin with, that the law be dispensed with
justice. 69

Applying the above doctrine in the instant case, the divorce decree allegedly obtained by Merry Lee
which absolutely allowed Felicisimo to remarry, would have vested Felicidad with the legal
personality to file the present petition as Felicisimos surviving spouse. However, the records show
that there is insufficient evidence to prove the validity of the divorce obtained by Merry Lee as well
as the marriage of respondent and Felicisimo under the laws of the U.S.A. In Garcia v. Recio, 70 the
Court laid down the specific guidelines for pleading and proving foreign law and divorce judgments.
It held that presentation solely of the divorce decree is insufficient and that proof of its authenticity
and due execution must be presented. Under Sections 24 and 25 of Rule 132, a writing or document
may be proven as a public or official record of a foreign country by either (1) an official publication or
(2) a copy thereof attested by the officer having legal custody of the document. If the record is not
kept in the Philippines, such copy must be (a) accompanied by a certificate issued by the proper
diplomatic or consular officer in the Philippine foreign service stationed in the foreign country in
which the record is kept and (b) authenticated by the seal of his office. 71

With regard to respondents marriage to Felicisimo allegedly solemnized in California, U.S.A., she
submitted photocopies of the Marriage Certificate and the annotated text 72 of the Family Law Act of
California which purportedly show that their marriage was done in accordance with the said law. As
stated in Garcia, however, the Court cannot take judicial notice of foreign laws as they must be
alleged and proved. 73

Therefore, this case should be remanded to the trial court for further reception of evidence on the
divorce decree obtained by Merry Lee and the marriage of respondent and Felicisimo.

Even assuming that Felicisimo was not capacitated to marry respondent in 1974, nevertheless, we
find that the latter has the legal personality to file the subject petition for letters of administration, as
she may be considered the co-owner of Felicisimo as regards the properties that were acquired
through their joint efforts during their cohabitation.

Section 6, 74 Rule 78 of the Rules of Court states that letters of administration may be granted to the
surviving spouse of the decedent. However, Section 2, Rule 79 thereof also provides in part:

SEC. 2. Contents of petition for letters of administration. A petition for letters of administration must
be filed by an interested person and must show, as far as known to the petitioner: x x x.

An "interested person" has been defined as one who would be benefited by the estate, such as an
heir, or one who has a claim against the estate, such as a creditor. The interest must be material
and direct, and not merely indirect or contingent. 75
In the instant case, respondent would qualify as an interested person who has a direct interest in the
estate of Felicisimo by virtue of their cohabitation, the existence of which was not denied by
petitioners. If she proves the validity of the divorce and Felicisimos capacity to remarry, but fails to
prove that her marriage with him was validly performed under the laws of the U.S.A., then she may
be considered as a co-owner under Article 144 76 of the Civil Code. This provision governs the
property relations between parties who live together as husband and wife without the benefit of
marriage, or their marriage is void from the beginning. It provides that the property acquired by either
or both of them through their work or industry or their wages and salaries shall be governed by the
rules on co-ownership. In a co-ownership, it is not necessary that the property be acquired through
their joint labor, efforts and industry. Any property acquired during the union is prima facie presumed
to have been obtained through their joint efforts. Hence, the portions belonging to the co-owners
shall be presumed equal, unless the contrary is proven. 77

Meanwhile, if respondent fails to prove the validity of both the divorce and the marriage, the
applicable provision would be Article 148 of the Family Code which has filled the hiatus in Article 144
of the Civil Code by expressly regulating the property relations of couples living together as husband
and wife but are incapacitated to marry. 78 In Saguid v. Court of Appeals, 79 we held that even if the
cohabitation or the acquisition of property occurred before the Family Code took effect, Article 148
governs. 80 The Court described the property regime under this provision as follows:

The regime of limited co-ownership of property governing the union of parties who are not legally
capacitated to marry each other, but who nonetheless live together as husband and wife, applies to
properties acquired during said cohabitation in proportion to their respective contributions. Co-
ownership will only be up to the extent of the proven actual contribution of money, property or
industry. Absent proof of the extent thereof, their contributions and corresponding shares shall be
presumed to be equal.

xxxx

In the cases of Agapay v. Palang, and Tumlos v. Fernandez, which involved the issue of co-
ownership of properties acquired by the parties to a bigamous marriage and an adulterous
relationship, respectively, we ruled that proof of actual contribution in the acquisition of the property
is essential. x x x

As in other civil cases, the burden of proof rests upon the party who, as determined by the pleadings
or the nature of the case, asserts an affirmative issue. Contentions must be proved by competent
evidence and reliance must be had on the strength of the partys own evidence and not upon the
weakness of the opponents defense. x x x 81

In view of the foregoing, we find that respondents legal capacity to file the subject petition for letters
of administration may arise from her status as the surviving wife of Felicisimo or as his co-owner
under Article 144 of the Civil Code or Article 148 of the Family Code.

WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals reinstating and
affirming the February 28, 1994 Order of the Regional Trial Court which denied petitioners motion to
dismiss and its October 24, 1994 Order which dismissed petitioners motion for reconsideration is
AFFIRMED. Let this case be REMANDED to the trial court for further proceedings.

SO ORDERED.
EDUARDO G. AGTARAP,
Petitioner, G.R. No. 177099

- versus -

SEBASTIAN AGTARAP,
JOSEPH AGTARAP, TERESA
AGTARAP, WALTER DE SANTOS, and
ABELARDO DAGORO,
Respondents.

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

SEBASTIAN G. AGTARAP,
Petitioner, G.R. No. 177192

Present:

- versus - CARPIO, J.,

Chairperson,
NACHURA,
PERALTA,
ABAD, and
EDUARDO G. AGTARAP, JOSEPH MENDOZA, JJ.
AGTARAP, TERESA AGTARAP,
WALTER DE SANTOS, and Promulgated:
ABELARDO DAGORO,
Respondents. June 8, 2011

x------------------------------------------------------------------------------------x

DECISION

NACHURA, J.:
Before us are the consolidated petitions for review on certiorari of petitioners
Sebastian G. Agtarap (Sebastian)[1] and Eduardo G. Agtarap (Eduardo),[2] assailing
the Decision dated November 21, 2006[3] and the Resolution dated March 27,
2007[4] of the Court of Appeals (CA) in CA-G.R. CV No. 73916.

The antecedent facts and proceedings

On September 15, 1994, Eduardo filed with the Regional Trial Court (RTC),
Branch 114, Pasay City, a verified petition for the judicial settlement of the estate
of his deceased father Joaquin Agtarap (Joaquin). It was docketed as Special
Proceedings No. 94-4055.

The petition alleged that Joaquin died intestate on November 21, 1964
in Pasay City without any known debts or obligations. During his lifetime, Joaquin
contracted two marriages, first with Lucia Garcia (Lucia),[5]and second with
Caridad Garcia (Caridad). Lucia died on April 24, 1924. Joaquin and Lucia had
three childrenJesus (died without issue), Milagros, and Jose (survived by three
children, namely, Gloria,[6] Joseph, and Teresa[7]). Joaquin married Caridad on
February 9, 1926. They also had three childrenEduardo, Sebastian, and Mercedes
(survived by her daughter Cecile). At the time of his death, Joaquin left two parcels
of land with improvements in Pasay City, covered by Transfer Certificates of Title
(TCT) Nos. 873-(38254) and 874-(38255). Joseph, a grandson of Joaquin, had
been leasing and improving the said realties and had been appropriating for
himself P26,000.00 per month since April 1994.

Eduardo further alleged that there was an imperative need to appoint him as
special administrator to take possession and charge of the estate assets and their
civil fruits, pending the appointment of a regular administrator. In addition, he
prayed that an order be issued (a) confirming and declaring the named compulsory
heirs of Joaquin who would be entitled to participate in the estate; (b) apportioning
and allocating unto the named heirs their aliquot shares in the estate in accordance
with law; and (c) entitling the distributees the right to receive and enter into
possession those parts of the estate individually awarded to them.

On September 26, 1994, the RTC issued an order setting the petition for
initial hearing and directing Eduardo to cause its publication.
 On December 28, 1994, Sebastian filed his comment, generally admitting
the allegations in the petition, and conceding to the appointment of Eduardo as
special administrator.

Joseph, Gloria, and Teresa filed their answer/opposition. They alleged that
the two subject lots belong to the conjugal partnership of Joaquin with Lucia, and
that, upon Lucias death in April 1924, they became the pro indiviso owners of the
subject properties. They said that their residence was built with the exclusive
money of their late father Jose, and the expenses of the extensions to the house
were shouldered by Gloria and Teresa, while the restaurant (Manongs Restaurant)
was built with the exclusive money of Joseph and his business partner. They
opposed the appointment of Eduardo as administrator on the following grounds:
(1) he is not physically and mentally fit to do so; (2) his interest in the lots is
minimal; and (3) he does not possess the desire to earn. They claimed that the best
interests of the estate dictate that Joseph be appointed as special or regular
administrator.

On February 16, 1995, the RTC issued a resolution appointing Eduardo as

regular administrator of Joaquins estate. Consequently, it issued him letters of
administration.

On September 16, 1995, Abelardo Dagoro filed an answer in intervention,

alleging that Mercedes is survived not only by her daughter Cecile, but also by him
as her husband. He also averred that there is a need to appoint a special
administrator to the estate, but claimed that Eduardo is not the person best
qualified for the task.

After the parties were given the opportunity to be heard and to submit their
respective proposed projects of partition, the RTC, on October 23, 2000, issued an
Order of Partition,[8] with the following disposition

In the light of the filing by the heirs of their respective proposed

projects of partition and the payment of inheritance taxes due the estate
as early as 1965, and there being no claim in Court against the estate of
the deceased, the estate of JOAQUIN AGTARAP is now consequently
ripe for distribution among the heirs minus the surviving spouse Caridad
Garcia who died on August 25, 1999.

Considering that the bulk of the estate property were acquired

during the existence of the second marriage as shown by TCT No.
(38254) and TCT No. (38255) which showed on its face that decedent
was married to Caridad Garcia, which fact oppositors failed to contradict
by evidence other than their negative allegations, the greater part of the
estate is perforce accounted by the second marriage and the compulsory
heirs thereunder.

The Administrator, Eduardo Agtarap rendered a true and just

accounting of his administration from his date of assumption up to the
year ending December 31, 1996 per Financial and Accounting Report
dated June 2, 1997 which was approved by the Court. The accounting
report included the income earned and received for the period and the
expenses incurred in the administration, sustenance and allowance of the
widow. In accordance with said Financial and Accounting Report which
was duly approved by this Court in its Resolution dated July 28, 1998
the deceased JOAQUIN AGTARAP left real properties consisting of the
following:

I LAND:

Two lots and two buildings with one garage quarter located at #3030
Agtarap St., Pasay City, covered by Transfer Certificate of Title Nos.
38254 and 38255 and registered with the Registry of Deeds of Pasay
City, Metro Manila, described as follows:

TCT NO. LOT NO. AREA/SQ.M. ZONAL VALUE AMOUNT

38254 745-B-1 1,335 sq. m. P5,000.00 P6,675,000.00
38255 745-B-2 1,331 sq. m. P5,000.00 P6,655,000.00
TOTAL-------------------------------------------------------------
P13,330,000.00

II BUILDINGS AND IMPROVEMENTS:

BUILDING I (Lot # 745-B-1) ------------------------------ P350,000.00

BUILDING II (Lot # 745-B-2) ----------------------------- 320,000.00
Building Improvements -------------------------------------- 97,500.00
Restaurant ------------------------------------------------------ 80,000.00
TOTAL --------------------------------------------------------- P847,500.00

TOTAL NET WORTH -----------------------------------------

P14,177,500.00

WHEREFORE, the net assets of the estate of the late JOAQUIN

AGTARAP with a total value of P14,177,500.00, together with whatever
interest from bank deposits and all other incomes or increments thereof
accruing after the Accounting Report of December 31, 1996, after
deducting therefrom the compensation of the administrator and other
expenses allowed by the Court, are hereby ordered distributed as
follows:

TOTAL ESTATE P14,177,500.00

CARIDAD AGTARAP of the estate as her conjugal
share P7,088,750.00, the other half of P7,088,750.00 to be divided
among the compulsory heirs as follows:

1) JOSE (deceased) - P1,181,548.30

2) MILAGROS (deceased) - P1,181,548.30
3) MERCEDES (deceased) - P1,181,548.30
4) SEBASTIAN - P1,181,548.30
5) EDUARDO - P1,181,548.30
6) CARIDAD - P1,181,548.30

The share of Milagros Agtarap as compulsory heir in the amount

of P1,181,548.30 and who died in 1996 will go to Teresa Agtarap and
Joseph Agtarap, Walter de Santos and half brothers Eduardo and
Sebastian Agtarap in equal proportions.

TERESA AGTARAP - P236,291.66

JOSEPH AGTARAP - P236,291.66
WALTER DE SANTOS - P236,291.66
SEBASTIAN AGTARAP - P236,291.66
EDUARDO AGTARAP - P236,291.66

Jose Agtarap died in 1967. His compulsory heirs are as follows:

COMPULSORY HEIRS:
1) GLORIA (deceased) represented by Walter de Santos
- P295,364.57
 2) JOSEPH AGTARAP - P295,364.57
3) TERESA AGTARAP - P295,364.57
4) PRISCILLA AGTARAP - P295,364.57

Hence, Priscilla Agtarap will inherit P295,364.57.

Adding their share from Milagros Agtarap, the following heirs of the
first marriage stand to receive the total amount of:

HEIRS OF THE FIRST MARRIAGE:

1) JOSEPH AGTARAP - P236,291.66 share from Milagros Agtarap

P295,364.57 as compulsory heir of
P531,656.23 Jose Agtarap

2) TERESA AGTARAP - P236,291.66 share from Milagros Agtarap

P295,364.57 as compulsory heir of
P531,656.23 Jose Agtarap

3) WALTER DE SANTOS - P236,291.66 share from Milagros Agtarap

P295,364.57 as compulsory heir of
P531,656.23 Jose Agtarap

HEIRS OF THE SECOND MARRIAGE:

a) CARIDAD AGTARAP - died on August 25, 1999

P7,088,750.00 - as conjugal share
P1,181,458.30 - as compulsory heir
Total of P8,270,208.30

b) SEBASTIAN AGTARAP - P1,181,458.38 as compulsory heir

P 236,291.66 share from Milagros

c) EDUARDO AGTARAP - P1,181,458.38 as compulsory heir

P 236,291.66 share from Milagros

d) MERCEDES - as represented by Abelardo Dagoro as the

surviving spouse of a compulsory heir
P1,181,458.38
 REMAINING HEIRS OF CARIDAD AGTARAP:

1) SEBASTIAN AGTARAP
2) EDUARDO AGTARAP
MERCEDES AGTARAP (Predeceased Caridad Agtarap)

In sum, Sebastian Agtarap and Eduardo Agtarap stand to inherit:

SEBASTIAN P4,135,104.10 share from Caridad Garcia

P1,181,458.30 as compulsory heir
P 236,291.66 share from Milagros
P5,522,854.06

EDUARDO P4,135,104.10 share from Caridad Garcia

P1,181,458.30 as compulsory heir
P 236,291.66 share from Milagros
P5,522,854.06

SO ORDERED.[9]

Eduardo, Sebastian, and oppositors Joseph and Teresa filed their respective
motions for reconsideration.

On August 27, 2001, the RTC issued a resolution[10] denying the motions for
reconsideration of Eduardo and Sebastian, and granting that of Joseph and
Teresa. It also declared that the real estate properties belonged to the conjugal
partnership of Joaquin and Lucia. It also directed the modification of the October
23, 2000 Order of Partition to reflect the correct sharing of the heirs. However,
before the RTC could issue a new order of partition, Eduardo and Sebastian both
appealed to the CA.

On November 21, 2006, the CA rendered its Decision, the dispositive

portion of which reads

WHEREFORE, premises considered, the instant appeals

are DISMISSED for lack of merit. The assailed Resolution dated
August 27, 2001 is AFFIRMED and pursuant thereto, the subject
properties (Lot No. 745-B-1 [TCT No. 38254] and Lot No. 745-B-2
[TCT No. 38255]) and the estate of the late Joaquin Agtarap are hereby
partitioned as follows:

The two (2) properties, together with their improvements,

embraced by TCT No. 38254 and TCT No. 38255, respectively, are first
to be distributed among the following:

Lucia Mendietta - of the property. But since she is deceased, her

share shall be inherited by Joaquin,
Jesus, Milagros and Jose in equal
shares.

Joaquin Agtarap - of the property and of the other half of the

property which pertains to Lucia
Mendiettas share.

Jesus Agtarap - of Lucia Mendiettas share. But since he is already

deceased (and died without issue), his
inheritance shall, in turn, be acquired
by Joaquin Agtarap.

Milagros Agtarap - of Lucia Mendiettas share. But since she died

in 1996 without issue, 5/8 of her
inheritance shall be inherited by Gloria
(represented by her husband Walter de
Santos and her daughter Samantha),
Joseph Agtarap and Teresa Agtarap, (in
representation of Milagros brother Jose
Agtarap) and 1/8 each shall be inherited
by Mercedes (represented by her
husband Abelardo Dagoro and her
daughter Cecile), Sebastian Eduardo,
all surnamed Agtarap.

Jose Agtarap - of Lucia Mendiettas share. But since he died in

1967, his inheritance shall be acquired
by his wife Priscilla, and children
Gloria (represented by her husband
Walter de Santos and her daughter
Samantha), Joseph Agtarap and Teresa
in equal shares.
Then, Joaquin Agtaraps estate, comprising three-fourths (3/4) of the
subject properties and its improvements, shall be distributed as follows:

Caridad Garcia - 1/6 of the estate. But since she died in 1999, her
share shall be inherited by her children
namely Mercedes Agtarap (represented
by her husband Abelardo Dagoro and
her daughter Cecilia), Sebastian
Agtarap and Eduardo Agtarap in their
own right, dividing the inheritance in
equal shares.

Milagros Agtarap - 1/6 of the estate. But since she died in 1996
without issue, 5/8 of her inheritance
shall be inherited by Gloria
(represented by her husband Walter de
Santos and her daughter Samantha),
Joseph Agtarap and Teresa Agtarap, (in
representation of Milagros brother Jose
Agtarap) and 1/8 each shall be inherited
by Mercedes (represented by her
husband Abelardo Dagoro and her
daughter Cecile), Sebastian and
Eduardo, all surnamed Agtarap.

Jose Agtarap - 1/6 of the estate. But since he died in 1967, his
inheritance shall be acquired by his
wife Priscilla, and children Gloria
(represented by her husband Walter de
Santos and her daughter Samantha),
Joseph Agtarap and Teresa Agtarap in
equal shares.

Mercedes Agtarap - 1/6 of the estate. But since she died in 1984,
her inheritance shall be acquired by her
husband Abelardo Dagoro and her
daughter Cecile in equal shares.

Sebastian Agtarap - 1/6 of the estate.

 Eduardo Agtarap - 1/6 of the estate.

SO ORDERED.[11]

Aggrieved, Sebastian and Eduardo filed their respective motions for

reconsideration.

In its Resolution dated March 27, 2007, the CA denied both motions. Hence,
these petitions ascribing to the appellate court the following errors:

G.R. No. 177192

1. The Court of Appeals erred in not considering the

aforementioned important facts[12] which alter its Decision;

2. The Court of Appeals erred in not considering the necessity of

hearing the issue of legitimacy of respondents as heirs;

3. The Court of Appeals erred in allowing violation of the law and

in not applying the doctrines of collateral attack, estoppel, and res
judicata.[13]

G.R. No. 177099

THE COURT OF APPEALS (FORMER TWELFTH DIVISION) DID

NOT ACQUIRE JURISDICTION OVER THE ESTATE OF
MILAGROS G. AGTARAP AND ERRED IN DISTRIBUTING HER
INHERITANCE FROM THE ESTATE OF JOAQUIN AGTARAP
NOTWITHSTANDING THE EXISTENCE OF HER LAST WILL
AND TESTAMENT IN VIOLATION OF THE DOCTRINE OF
PRECEDENCE OF TESTATE PROCEEDINGS OVER INTESTATE
PROCEEDINGS.

II.

THE COURT OF APPEALS (FORMER TWELFTH DIVISION)

ERRED IN DISMISSING THE DECISION APPEALED FROM FOR
LACK OF MERIT AND IN AFFIRMING THE ASSAILED
RESOLUTION DATED AUGUST 27, 2001 OF THE LOWER
COURT HOLDING THAT THE PARCELS OF LAND COVERED BY
 TCT NO. 38254 AND TCT (NO.) 38255 OF THE REGISTRY OF
DEEDS FOR THE CITY OF PASAY BELONG TO THE CONJUGAL
PARTNERSHIP OF JOAQUIN AGTARAP MARRIED TO LUCIA
GARCIA MENDIETTA NOTWITHSTANDING THEIR
REGISTRATION UNDER THEIR EXISTING CERTIFICATES OF
TITLE AS REGISTERED IN THE NAME OF JOAQUIN
AGTARAP, CASADO CON CARIDAD GARCIA. UNDER EXISTING
JURISPRUDENCE, THE PROBATE COURT HAS NO POWER TO
DETERMINE THE OWNERSHIP OF THE PROPERTY DESCRIBED
IN THESE CERTIFICATES OF TITLE WHICH SHOULD BE
RESOLVED IN AN APPROPRIATE SEPARATE ACTION FOR A
TORRENS TITLE UNDER THE LAW IS ENDOWED WITH
INCONTESTABILITY UNTIL IT HAS BEEN SET ASIDE IN THE
MANNER INDICATED IN THE LAW ITSELF.[14]

As regards his first and second assignments of error, Sebastian contends that
Joseph and Teresa failed to establish by competent evidence that they are the
legitimate heirs of their father Jose, and thus of their grandfather Joaquin. He
draws attention to the certificate of title (TCT No. 8026) they submitted, stating
that the wife of their father Jose is Presentacion Garcia, while they claim that their
mother is Priscilla. He avers that the marriage contracts proffered by Joseph and
Teresa do not qualify as the best evidence of Joses marriage with Priscilla,
inasmuch as they were not authenticated and formally offered in evidence.
Sebastian also asseverates that he actually questioned the legitimacy of Joseph and
Teresa as heirs of Joaquin in his motion to exclude them as heirs, and in his reply
to their opposition to the said motion. He further claims that the failure of Abelardo
Dagoro and Walter de Santos to oppose his motion to exclude them as heirs had
the effect of admitting the allegations therein. He points out that his motion was
denied by the RTC without a hearing.

With respect to his third assigned error, Sebastian maintains that the
certificates of title of real estate properties subject of the controversy are in the
name of Joaquin Agtarap, married to Caridad Garcia, and as such are conclusive
proof of their ownership thereof, and thus, they are not subject to collateral attack,
but should be threshed out in a separate proceeding for that purpose. He likewise
argues that estoppel applies against the children of the first marriage, since none of
them registered any objection to the issuance of the TCTs in the name of Caridad
and Joaquin only. He avers that the estate must have already been settled in light of
the payment of the estate and inheritance tax by Milagros, Joseph, and Teresa,
resulting to the issuance of TCT No. 8925 in Milagros name and of TCT No. 8026
in the names of Milagros and Jose. He also alleges that res judicata is applicable as
the court order directing the deletion of the name of Lucia, and replacing it with
the name of Caridad, in the TCTs had long become final and executory.

In his own petition, with respect to his first assignment of error, Eduardo
alleges that the CA erroneously settled, together with the settlement of the estate of
Joaquin, the estates of Lucia, Jesus, Jose, Mercedes, Gloria, and Milagros, in
contravention of the principle of settling only one estate in one proceeding. He
particularly questions the distribution of the estate of Milagros in the intestate
proceedings despite the fact that a proceeding was conducted in another court for
the probate of the will of Milagros, bequeathing all to Eduardo whatever share that
she would receive from Joaquins estate. He states that this violated the rule on
precedence of testate over intestate proceedings.

Anent his second assignment of error, Eduardo contends that the CA gravely
erred when it affirmed that the bulk of the realties subject of this case belong to the
first marriage of Joaquin to Lucia, notwithstanding that the certificates of title were
registered in the name of Joaquin Agtarap casado con (married to) Caridad
Garcia. According to him, the RTC, acting as an intestate court with limited
jurisdiction, was not vested with the power and authority to determine questions of
ownership, which properly belongs to another court with general jurisdiction.

The Courts Ruling

As to Sebastians and Eduardos common issue on the ownership of the subject real
properties, we hold that the RTC, as an intestate court, had jurisdiction to resolve
the same.

The general rule is that the jurisdiction of the trial court, either as a probate or an
intestate court, relates only to matters having to do with the probate of the will
and/or settlement of the estate of deceased persons, but does not extend to the
determination of questions of ownership that arise during the proceedings. [15] The
patent rationale for this rule is that such court merely exercises special and limited
jurisdiction.[16] As held in several cases,[17] a probate court or one in charge of
estate proceedings, whether testate or intestate, cannot adjudicate or determine title
to properties claimed to be a part of the estate and which are claimed to belong to
outside parties, not by virtue of any right of inheritance from the deceased but by
title adverse to that of the deceased and his estate. All that the said court could do
as regards said properties is to determine whether or not they should be included in
the inventory of properties to be administered by the administrator. If there is no
dispute, there poses no problem, but if there is, then the parties, the administrator,
and the opposing parties have to resort to an ordinary action before a court
exercising general jurisdiction for a final determination of the conflicting claims of
title.

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

and convenience.
First, the probate court may provisionally pass upon in an intestate or a
testate proceeding the question of inclusion in, or exclusion from, the inventory of
a piece of property without prejudice to the final determination of ownership in a
separate action.[18] Second, if the interested parties are all heirs to the estate, or the
question is one of collation or advancement, or the parties consent to the
assumption of jurisdiction by the probate court and the rights of third parties are
not impaired, then the probate court is competent to resolve issues on
ownership.[19] Verily, its jurisdiction extends to matters incidental or collateral to
the settlement and distribution of the estate, such as the determination of the status
of each heir and whether the property in the inventory is conjugal or exclusive
property of the deceased spouse.[20]

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

It should be remembered that when Eduardo filed his verified petition for
judicial settlement of Joaquins estate, he alleged that the subject properties were
owned by Joaquin and Caridad since the TCTs state that the lots were registered in
the name of Joaquin Agtarap, married to Caridad Garcia. He also admitted in his
petition that Joaquin, prior to contracting marriage with Caridad, contracted a first
marriage with Lucia. Oppositors to the petition, Joseph and Teresa, however, were
able to present proof before the RTC that TCT Nos. 38254 and 38255 were derived
from a mother title, TCT No. 5239, dated March 17, 1920, in the name
of FRANCISCO VICTOR BARNES Y JOAQUIN AGTARAP, el primero casado con
Emilia Muscat, y el Segundo con Lucia Garcia Mendietta (FRANCISCO VICTOR
BARNES y JOAQUIN AGTARAP, the first married to Emilia Muscat, and the
second married to Lucia Garcia Mendietta).[21] When TCT No. 5239 was divided
between Francisco Barnes and Joaquin Agtarap, TCT No. 10864, in the name of
Joaquin Agtarap, married to Lucia Garcia Mendietta, was issued for a parcel of
land, identified as Lot No. 745 of the Cadastral Survey of Pasay, Cadastral Case
No. 23, G.L.R.O. Cadastral Record No. 1368, consisting of 8,872 square
meters. This same lot was covered by TCT No. 5577 (32184)[22] issued on April
23, 1937, also in the name of Joaquin Agtarap, married to Lucia Garcia Mendietta.

The findings of the RTC and the CA show that Lucia died on April 24, 1924,
and subsequently, on February 9, 1926, Joaquin married Caridad. It is worthy to
note that TCT No. 5577 (32184) contained an annotation, which reads

Ap-4966 NOTA: Se ha enmendado el presente certificado de titulo, tal

como aparece, tanchando las palabras con Lucia Garcia Mendiet[t]a y
poniendo en su lugar, entre lineas y en tinta encarnada, las palabras en
segundas nupcias con Caridad Garcia, en complimiento de un orden de
fecha 28 de abril de 1937, dictada por el Hon. Sixto de la Costa, juez del
Juzgado de Primera Instancia de Rizal, en el expediente cadastal No. 23,
G.L.R.O. Cad. Record No. 1368; copia de cual orden has sido presentada
con el No. 4966 del Libro Diario, Tomo 6.0 y, archivada en el Legajo T-
No. 32184.

Pasig, Rizal, a 29 abril de 1937.[23]

Thus, per the order dated April 28, 1937 of Hon. Sixto de la Costa, presiding judge
of the Court of First Instance of Rizal, the phrase con Lucia Garcia
Mendiet[t]a was crossed out and replaced by en segundas nuptias con Caridad
Garcia, referring to the second marriage of Joaquin to Caridad. It cannot be
gainsaid, therefore, that prior to the replacement of Caridads name in TCT No.
32184, Lucia, upon her demise, already left, as her estate, one-half (1/2) conjugal
share in TCT No. 32184. Lucias share in the property covered by the said TCT was
carried over to the properties covered by the certificates of title derivative of TCT
No. 32184, now TCT Nos. 38254 and 38255. And as found by both the RTC and
the CA, Lucia was survived by her compulsory heirs Joaquin, Jesus, Milagros, and
Jose.

Section 2, Rule 73 of the Rules of Court provides that when the marriage is
dissolved by the death of the husband or the wife, the community property shall be
inventoried, administered, and liquidated, and the debts thereof paid; in the testate
or intestate proceedings of the deceased spouse, and if both spouses have died, the
conjugal partnership shall be liquidated in the testate or intestate proceedings of
either. Thus, the RTC had jurisdiction to determine whether the properties are
conjugal as it had to liquidate the conjugal partnership to determine the estate of
the decedent. In fact, should Joseph and Teresa institute a settlement proceeding
for the intestate estate of Lucia, the same should be consolidated with the
settlement proceedings of Joaquin, being Lucias spouse.[24] Accordingly, the CA
correctly distributed the estate of Lucia, with respect to the properties covered by
TCT Nos. 38254 and 38255 subject of this case, to her compulsory heirs.

Therefore, in light of the foregoing evidence, as correctly found by the RTC and
the CA, the claim of Sebastian and Eduardo that TCT Nos. 38254 and 38255
conclusively show that the owners of the properties covered therein were Joaquin
and Caridad by virtue of the registration in the name of Joaquin Agtarap casado
con (married to) Caridad Garcia, deserves scant consideration. This cannot be said
to be a collateral attack on the said TCTs. Indeed, simple possession of a certificate
of title is not necessarily conclusive of a holders true ownership of property. [25] A
certificate of title under the Torrens system aims to protect dominion; it cannot be
used as an instrument for the deprivation of ownership. [26] Thus, the fact that the
properties were registered in the name of Joaquin Agtarap, married to Caridad
Garcia, is not sufficient proof that the properties were acquired during the spouses
coverture.[27] The phrase married to Caridad Garcia in the TCTs is merely
descriptive of the civil status of Joaquin as the registered owner, and does not
necessarily prove that the realties are their conjugal properties.[28]
Neither can Sebastians claim that Joaquins estate could have already been settled
in 1965 after the payment of the inheritance tax be upheld. Payment of the
inheritance tax, per se, does not settle the estate of a deceased person. As provided
in Section 1, Rule 90 of the Rules of Court
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 share 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.

Thus, an estate is settled and distributed among the heirs only after the payment of
the debts of the estate, funeral charges, expenses of administration, allowance to
the widow, and inheritance tax. The records of these cases do not show that these
were complied with in 1965.

As regards the issue raised by Sebastian on the legitimacy of Joseph and Teresa,
suffice it to say that both the RTC and the CA found them to be the legitimate
children of Jose. The RTC found that Sebastian did not present clear and
convincing evidence to support his averments in his motion to exclude them as
heirs of Joaquin, aside from his negative allegations. The RTC also noted the fact
of Joseph and Teresa being the children of Jose was never questioned by Sebastian
and Eduardo, and the latter two even admitted this in their petitions, as well as in
the stipulation of facts in the August 21, 1995 hearing. [29] Furthermore, the CA
affirmed this finding of fact in its November 21, 2006 Decision.[30]

Also, Sebastians insistence that Abelardo Dagoro and Walter de Santos are not
heirs to the estate of Joaquin cannot be sustained. Per its October 23, 2000 Order of
Partition, the RTC found that Gloria Agtarap de Santos died on May 4, 1995, and
was later substituted in the proceedings below by her husband Walter de
Santos. Gloria begot a daughter with Walter de Santos, Georgina Samantha de
Santos. The RTC likewise noted that, on September 16, 1995, Abelardo Dagoro
filed a motion for leave of court to intervene, alleging that he is the surviving
spouse of Mercedes Agtarap and the father of Cecilia Agtarap Dagoro, and his
answer in intervention.The RTC later granted the motion, thereby admitting his
answer on October 18, 1995.[31] The CA also noted that, during the hearing of the
motion to intervene on October 18, 1995, Sebastian and Eduardo did not interpose
any objection when the intervention was submitted to the RTC for resolution.[32]

Indeed, this Court is not a trier of facts, and there appears no compelling
reason to hold that both courts erred in ruling that Joseph, Teresa, Walter de
Santos, and Abelardo Dagoro rightfully participated in the estate of Joaquin. It was
incumbent upon Sebastian to present competent evidence to refute his and
Eduardos admissions that Joseph and Teresa were heirs of Jose, and thus rightful
heirs of Joaquin, and to timely object to the participation of Walter de Santos and
Abelardo Dagoro. Unfortunately, Sebastian failed to do so. Nevertheless, Walter
de Santos and Abelardo Dagoro had the right to participate in the estate in
representation of the Joaquins compulsory heirs, Gloria and Mercedes,
respectively.[33]

This Court also differs from Eduardos asseveration that the CA erred in
settling, together with Joaquins estate, the respective estates of Lucia, Jesus, Jose,
Mercedes, and Gloria. A perusal of the November 21, 2006 CA Decision would
readily show that the disposition of the properties related only to the settlement of
the estate of Joaquin. Pursuant to Section 1, Rule 90 of the Rules of Court, as cited
above, the RTC was specifically granted jurisdiction to determine who are the
lawful heirs of Joaquin, as well as their respective shares after the payment of the
obligations of the estate, as enumerated in the said provision. The inclusion of
Lucia, Jesus, Jose, Mercedes, and Gloria in the distribution of the shares was
merely a necessary consequence of the settlement of Joaquins estate, they being his
legal heirs.

However, we agree with Eduardos position that the CA erred in distributing

Joaquins estate pertinent to the share allotted in favor of Milagros. Eduardo was
able to show that a separate proceeding was instituted for the probate of the will
allegedly executed by Milagros before the RTC, Branch 108, Pasay City.[34] While
there has been no showing that the alleged will of Milagros, bequeathing all of her
share from Joaquins estate in favor of Eduardo, has already been probated and
approved, prudence dictates that this Court refrain from distributing Milagros share
in Joaquins estate.

It is also worthy to mention that Sebastian died on January 15, 2010, per his
Certificate of Death.[35] He is survived by his wife Teresita B. Agtarap (Teresita)
and his children Joaquin Julian B. Agtarap (Joaquin Julian) and Ana Ma. Agtarap
Panlilio (Ana Ma.).

Henceforth, in light of the foregoing, the assailed November 21, 2006 Decision and
the March 27, 2007 Resolution of the CA should be affirmed with modifications
such that the share of Milagros shall not yet be distributed until after the final
determination of the probate of her purported will, and that Sebastian shall be
represented by his compulsory heirs.

WHEREFORE, the petition in G.R. No. 177192 is DENIED for lack of merit,
while the petition in G.R. No. 177099 is PARTIALLY GRANTED, such that the
Decision dated November 21, 2006 and the Resolution dated March 27, 2007 of
the Court of Appeals are AFFIRMED with the
following MODIFICATIONS: that the share awarded in favor of Milagros
Agtarap shall not be distributed until the final determination of the probate of her
will, and that petitioner Sebastian G. Agtarap, in view of his demise on January 15,
2010, shall be represented by his wife Teresita B. Agtarap and his children Joaquin
Julian B. Agtarap and Ana Ma. Agtarap Panlilio.

These cases are hereby remanded to the Regional Trial Court, Branch
114, Pasay City, for further proceedings in the settlement of the estate of Joaquin
Agtarap. No pronouncement as to costs.
SO ORDERED.
 [G.R. No. 146006. February 23, 2004]

JOSE C. LEE AND ALMA AGGABAO, in their capacities as President

and Corporate Secretary, respectively, of Philippines Internationl
Life Insurance Company, and FILIPINO LOAN ASSISTANCE
GROUP, petitioners, vs. REGIONAL TRIAL COURT OF QUEZON
CITY BRANCH 85 presided by JUDGE PEDRO M. AREOLA,
BRANCH CLERK OF COURT JANICE Y. ANTERO, DEPUTY
SHERIFFS ADENAUER G. RIVERA and PEDRO L. BORJA, all of
the Regional Trial Court of Quezon City Branch 85, MA. DIVINA
ENDERES claiming to be Special Administratrix, and other
persons/ public officers acting for and in their
behalf, respondents.

DECISION
CORONA, J.:

This is a petition for review under Rule 45 of the Rules of Court seeking to
reverse and set aside the decision of the Court of Appeals, First Division,
[1]

dated July 26, 2000, in CA G.R. 59736, which dismissed the petition for
certiorari filed by petitioners Jose C. Lee and Alma Aggabao (in their
capacities as president and secretary, respectively, of Philippine International
Life Insurance Company) and Filipino Loan Assistance Group.
The antecedent facts follow.
Dr. Juvencio P. Ortaez incorporated the Philippine International Life
Insurance Company, Inc. on July 6, 1956. At the time of the companys
incorporation, Dr. Ortaez owned ninety percent (90%) of the subscribed
capital stock.
On July 21, 1980, Dr. Ortaez died. He left behind a wife (Juliana Salgado
Ortaez), three legitimate children (Rafael, Jose and Antonio Ortaez) and five
illegitimate children by Ligaya Novicio (herein private respondent Ma. Divina
Ortaez-Enderes and her siblings Jose, Romeo, Enrico Manuel and Cesar, all
surnamed Ortaez). [2]

On September 24, 1980, Rafael Ortaez filed before the Court of First
Instance of Rizal, Quezon City Branch (now Regional Trial Court of Quezon
City) a petition for letters of administration of the intestate estate of Dr. Ortaez,
docketed as SP Proc. Q-30884 (which petition to date remains pending at
Branch 85 thereof).
 Private respondent Ma. Divina Ortaez-Enderes and her siblings filed an
opposition to the petition for letters of administration and, in a subsequent
urgent motion, prayed that the intestate court appoint a special administrator.
On March 10, 1982, Judge Ernani Cruz Pao, then presiding judge of
Branch 85, appointed Rafael and Jose Ortaez joint special administrators of
their fathers estate. Hearings continued for the appointment of a regular
administrator (up to now no regular administrator has been appointed).
As ordered by the intestate court, special administrators Rafael and Jose
Ortaez submitted an inventory of the estate of their father which included,
among other properties, 2,029 shares of stock in Philippine International Life
[3]

Insurance Company (hereafter Philinterlife), representing 50.725% of the

companys outstanding capital stock.
On April 15, 1989, the decedents wife, Juliana S. Ortaez, claiming that she
owned 1,014 Philinterlife shares of stock as her conjugal share in the estate,
[4]

sold said shares with right to repurchase in favor of herein petitioner Filipino
Loan Assistance Group (FLAG), represented by its president, herein petitioner
Jose C. Lee. Juliana Ortaez failed to repurchase the shares of stock within the
stipulated period, thus ownership thereof was consolidated by petitioner FLAG
in its name.
On October 30, 1991, Special Administrator Jose Ortaez, acting in his
personal capacity and claiming that he owned the remaining
1,011 Philinterlife shares of stocks as his inheritance share in the estate, sold
[5]

said shares with right to repurchase also in favor of herein petitioner FLAG,
represented by its president, herein petitioner Jose C. Lee. After one year,
petitioner FLAG consolidated in its name the ownership of the Philinterlife
shares of stock when Jose Ortaez failed to repurchase the same.
It appears that several years before (but already during the pendency of
the intestate proceedings at the Regional Trial Court of Quezon City, Branch
85), Juliana Ortaez and her two children, Special Administrators Rafael and
Jose Ortaez, entered into a memorandum of agreement dated March 4, 1982
for the extrajudicial settlement of the estate of Dr. Juvencio Ortaez,
partitioning the estate (including the Philinterlife shares of stock) among
themselves. This was the basis of the number of shares separately sold by
Juliana Ortaez on April 15, 1989 (1,014 shares) and by Jose Ortaez on
October 30, 1991 (1,011 shares) in favor of herein petitioner FLAG.
On July 12, 1995, herein private respondent Ma. Divina OrtaezEnderes
and her siblings (hereafter referred to as private respondents Enderes et al.)
filed a motion for appointment of special administrator of Philinterlife shares of
stock. This move was opposed by Special Administrator Jose Ortaez.
On November 8, 1995, the intestate court granted the motion of private
respondents Enderes et al. and appointed private respondent Enderes special
administratrix of the Philinterlife shares of stock.
On December 20, 1995, Special Administratrix Enderes filed an urgent
motion to declare void ab initio the memorandum of agreement dated March
4, 1982. On January 9, 1996, she filed a motion to declare the partial nullity of
the extrajudicial settlement of the decedents estate. These motions were
opposed by Special Administrator Jose Ortaez.
On March 22, 1996, Special Administratrix Enderes filed an urgent motion
to declare void ab initio the deeds of sale of Philinterlife shares of stock, which
move was again opposed by Special Administrator Jose Ortaez.
On February 4, 1997, Jose Ortaez filed an omnibus motion for (1) the
approval of the deeds of sale of the Philinterlife shares of stock and (2) the
release of Ma. Divina Ortaez-Enderes as special administratrix of the
Philinterlife shares of stock on the ground that there were no longer any
shares of stock for her to administer.
On August 11, 1997, the intestate court denied the omnibus motion of
Special Administrator Jose Ortaez for the approval of the deeds of sale for the
reason that:

Under the Godoy case, supra, it was held in substance that a sale of a property of the
estate without an Order of the probate court is void and passes no title to the
purchaser. Since the sales in question were entered into by Juliana S. Ortaez and Jose
S. Ortaez in their personal capacity without prior approval of the Court, the same is
not binding upon the Estate.

WHEREFORE, the OMNIBUS MOTION for the approval of the sale of Philinterlife
shares of stock and release of Ma. Divina Ortaez-Enderes as Special Administratrix is
hereby denied. [6]

On August 29, 1997, the intestate court issued another order granting the
motion of Special Administratrix Enderes for the annulment of the March 4,
1982 memorandum of agreement or extrajudicial partition of estate. The court
reasoned that:

In consonance with the Order of this Court dated August 11, 1997 DENYING the
approval of the sale of Philinterlife shares of stocks and release of Ma. Divina Ortaez-
Enderes as Special Administratrix, the Urgent Motion to Declare Void Ab
Initio Memorandum of Agreement dated December 19, 1995. . . is hereby impliedly
partially resolved insofar as the transfer/waiver/renunciation of the Philinterlife shares
of stock are concerned, in particular, No. 5, 9(c), 10(b) and 11(d)(ii) of the
Memorandum of Agreement.

WHEREFORE, this Court hereby declares the Memorandum of Agreement dated

March 4, 1982 executed by Juliana S. Ortaez, Rafael S. Ortaez and Jose S. Ortaez as
partially void ab initio insofar as the transfer/waiver/renunciation of the Philinterlife
shares of stocks are concerned. [7]

Aggrieved by the above-stated orders of the intestate court, Jose Ortaez

filed, on December 22, 1997, a petition for certiorari in the Court of Appeals.
The appellate court denied his petition, however, ruling that there was no legal
justification whatsoever for the extrajudicial partition of the estate by Jose
Ortaez, his brother Rafael Ortaez and mother Juliana Ortaez during the
pendency of the settlement of the estate of Dr. Ortaez, without the requisite
approval of the intestate court, when it was clear that there were other heirs to
the estate who stood to be prejudiced thereby. Consequently, the sale made
by Jose Ortaez and his mother Juliana Ortaez to FLAG of the shares of stock
they invalidly appropriated for themselves, without approval of the intestate
court, was void. [8]

Special Administrator Jose Ortaez filed a motion for reconsideration of the

Court of Appeals decision but it was denied. He elevated the case to the
Supreme Court via petition for review under Rule 45 which the Supreme Court
dismissed on October 5, 1998, on a technicality. His motion for
reconsideration was denied with finality on January 13, 1999. On February 23,
1999, the resolution of the Supreme Court dismissing the petition of Special
Administrator Jose Ortaez became final and was subsequently recorded in the
book of entries of judgments.
Meanwhile, herein petitioners Jose Lee and Alma Aggabao, with the rest
of the FLAG-controlled board of directors, increased the authorized capital
stock of Philinterlife, diluting in the process the 50.725% controlling interest of
the decedent, Dr. Juvencio Ortaez, in the insurance company. This became [9]

the subject of a separate action at the Securities and Exchange Commission

filed by private respondent-Special Administratrix Enderes against petitioner
Jose Lee and other members of the FLAG-controlled board of Philinterlife on
November 7, 1994. Thereafter, various cases were filed by Jose Lee as
president of Philinterlife and Juliana Ortaez and her sons against private
respondent-Special Administratrix Enderes in the SEC and civil
courts. Somehow, all these cases were connected to the core dispute on the
[10]
legality of the sale of decedent Dr. Ortaezs Philinterlife shares of stock to
petitioner FLAG, represented by its president, herein petitioner Jose Lee who
later became the president of Philinterlife after the controversial sale.
On May 2, 2000, private respondent-Special Administratrix Enderes and
her siblings filed a motion for execution of the Orders of the intestate court
dated August 11 and August 29, 1997 because the orders of the intestate
court nullifying the sale (upheld by the Court of Appeals and the Supreme
Court) had long became final. Respondent-Special Administratrix Enderes
served a copy of the motion to petitioners Jose Lee and Alma Aggabao as
president and secretary, respectively, of Philinterlife, but petitioners ignored
[11]

the same.
On July 6, 2000, the intestate court granted the motion for execution, the
dispositive portion of which read:

WHEREFORE, premises considered, let a writ of execution issue as follows:

1. Confirming the nullity of the sale of the 2,029 Philinterlife shares in the name of
the Estate of Dr. Juvencio Ortaez to Filipino Loan Assistance Group (FLAG);
2. Commanding the President and the Corporate Secretary of Philinterlife to
reinstate in the stock and transfer book of Philinterlife the 2,029 Philinterlife
shares of stock in the name of the Estate of Dr. Juvencio P. Ortaez as the
owner thereof without prejudice to other claims for violation of pre-emptive
rights pertaining to the said 2,029 Philinterlife shares;
3. Directing the President and the Corporate Secretary of Philinterlife to issue stock
certificates of Philinterlife for 2,029 shares in the name of the Estate of Dr.
Juvencio P. Ortaez as the owner thereof without prejudice to other claims for
violations of pre-emptive rights pertaining to the said 2,029 Philinterlife
shares and,
4. Confirming that only the Special Administratrix, Ma. Divina Ortaez-Enderes, has
the power to exercise all the rights appurtenant to the said shares, including
the right to vote and to receive dividends.
5. Directing Philinterlife and/or any other person or persons claiming to represent it
or otherwise, to acknowledge and allow the said Special Administratrix to
exercise all the aforesaid rights on the said shares and to refrain from
resorting to any action which may tend directly or indirectly to impede,
obstruct or bar the free exercise thereof under pain of contempt.
6. The President, Corporate Secretary, any responsible officer/s of Philinterlife, or
any other person or persons claiming to represent it or otherwise, are hereby
directed to comply with this order within three (3) days from receipt hereof
under pain of contempt.
7. The Deputy Sheriffs Adenauer Rivera and Pedro Borja are hereby directed to
implement the writ of execution with dispatch to forestall any and/or further
damage to the Estate.
SO ORDERED. [12]

In the several occasions that the sheriff went to the office of petitioners to
execute the writ of execution, he was barred by the security guard upon
petitioners instructions. Thus, private respondent-Special Administratrix
Enderes filed a motion to cite herein petitioners Jose Lee and Alma Aggabao
(president and secretary, respectively, of Philinterlife) in contempt. [13]

Petitioners Lee and Aggabao subsequently filed before the Court of

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

We are constrained to DISMISS OUTRIGHT the present petition for certiorari and
prohibition with prayer for a temporary restraining order and/or writ of preliminary
injunction in the light of the following considerations:

1. The assailed Order dated August 11, 1997 of the respondent judge had long
become final and executory;
2. The certification on non-forum shopping is signed by only one (1) of the three (3)
petitioners in violation of the Rules; and
3. Except for the assailed orders and writ of execution, deed of sale with right to
repurchase, deed of sale of shares of stocks and omnibus motion, the
petition is not accompanied by such pleadings, documents and other
material portions of the record as would support the allegations therein in
violation of the second paragraph, Rule 65 of the 1997 Rules of Civil
Procedure, as amended.

Petition is DISMISSED.

SO ORDERED. [14]

The motion for reconsideration filed by petitioners Lee and Aggabao of the
above decision was denied by the Court of Appeals on October 30, 2000:

This resolves the urgent motion for reconsideration filed by the petitioners of our
resolution of July 26, 2000 dismissing outrightly the above-entitled petition for the
reason, among others, that the assailed Order dated August 11, 1997 of the respondent
Judge had long become final and executory.
Dura lex, sed lex.

WHEREFORE, the urgent motion for reconsideration is hereby DENIED, for lack of
merit.

SO ORDERED. [15]

On December 4, 2000, petitioners elevated the case to the Supreme Court

through a petition for review under Rule 45 but on December 13, 2000, we
denied the petition because there was no showing that the Court of Appeals in
CA G.R. SP No. 59736 committed any reversible error to warrant the exercise
by the Supreme Court of its discretionary appellate jurisdiction.
[16]

However, upon motion for reconsideration filed by petitioners Lee and

Aggabao, the Supreme Court granted the motion and reinstated their petition
on September 5, 2001. The parties were then required to submit their
respective memoranda.
Meanwhile, private respondent-Special Administratrix Enderes, on July 19,
2000, filed a motion to direct the branch clerk of court in lieu of herein
petitioners Lee and Aggabao to reinstate the name of Dr. Ortaez in the stock
and transfer book of Philinterlife and issue the corresponding stock certificate
pursuant to Section 10, Rule 39 of the Rules of Court which provides that the
court may direct the act to be done at the cost of the disobedient party by
some other person appointed by the court and the act when so done shall
have the effect as if done by the party. Petitioners Lee and Aggabao opposed
the motion on the ground that the intestate court should refrain from acting on
the motion because the issues raised therein were directly related to the
issues raised by them in their petition for certiorari at the Court of Appeals
docketed as CA-G.R. SP No. 59736. On October 30, 2000, the intestate court
granted the motion, ruling that there was no prohibition for the intestate court
to execute its orders inasmuch as the appellate court did not issue any TRO
or writ of preliminary injunction.
On December 3, 2000, petitioners Lee and Aggabao filed a petition for
certiorari in the Court of Appeals, docketed as CA-G.R. SP No. 62461,
questioning this time the October 30, 2000 order of the intestate court
directing the branch clerk of court to issue the stock certificates. They also
questioned in the Court of Appeals the order of the intestate court nullifying
the sale made in their favor by Juliana Ortaez and Jose Ortaez. On November
20, 2002, the Court of Appeals denied their petition and upheld the power of
the intestate court to execute its order. Petitioners Lee and Aggabao then filed
motion for reconsideration which at present is still pending resolution by the
Court of Appeals.
Petitioners Jose Lee and Alma Aggabao (president and secretary,
respectively, of Philinterlife) and FLAG now raise the following errors for our
consideration:

THE COURT OF APPEALS COMMITTED GRAVE REVERSIBLE ERROR:

A. IN FAILING TO RECONSIDER ITS PREVIOUS RESOLUTION

DENYING THE PETITION DESPITE THE FACT THAT THE
APPELLATE COURTS MISTAKE IN APPREHENDING THE
FACTS HAD BECOME PATENT AND EVIDENT FROM THE
MOTION FOR RECONSIDERATION AND THE COMMENT OF
RESPONDENT ENDERES WHICH HAD ADMITTED THE
FACTUAL ALLEGATIONS OF PETITIONERS IN THE PETITION
AS WELL AS IN THE MOTION FOR RECONSIDERATION.
MOREOVER, THE RESOLUTION OF THE APPELLATE COURT
DENYING THE MOTION FOR RECONSIDERATION WAS
CONTAINED IN ONLY ONE PAGE WITHOUT EVEN TOUCHING
ON THE SUBSTANTIVE MERITS OF THE EXHAUSTIVE
DISCUSSION OF FACTS AND SUPPORTING LAW IN THE
MOTION FOR RECONSIDERATION IN VIOLATION OF THE
RULE ON ADMINISTRATIVE DUE PROCESS;

B. IN FAILING TO SET ASIDE THE VOID ORDERS OF THE

INTESTATE COURT ON THE ERRONEOUS GROUND THAT
THE ORDERS WERE FINAL AND EXECUTORY WITH REGARD
TO PETITIONERS EVEN AS THE LATTER WERE NEVER
NOTIFIED OF THE PROCEEDINGS OR ORDER CANCELING ITS
OWNERSHIP;

C. IN NOT FINDING THAT THE INTESTATE COURT COMMITTED

GRAVE ABUSE OF DISCRETION AMOUNTING TO EXCESS OF
JURISDICTION (1) WHEN IT ISSUED THE OMNIBUS ORDER
NULLIFYING THE OWNERSHIP OF PETITIONER FLAG OVER
SHARES OF STOCK WHICH WERE ALLEGED TO BE PART OF
THE ESTATE AND (2) WHEN IT ISSUED A VOID WRIT OF
EXECUTION AGAINST PETITIONER FLAG AS PRESENT
OWNER TO IMPLEMENT MERELY PROVISIONAL ORDERS,
THEREBY VIOLATING FLAGS CONSTITUTIONAL RIGHT
 AGAINST DEPRIVATION OF PROPERTY WITHOUT DUE
PROCESS;

D. IN FAILING TO DECLARE NULL AND VOID THE ORDERS OF

THE INTESTATE COURT WHICH NULLIFIED THE SALE OF
SHARES OF STOCK BETWEEN THE LEGITIMATE HEIR JOSE S.
ORTAEZ AND PETITIONER FLAG BECAUSE OF SETTLED
LAW AND JURISPRUDENCE, I.E., THAT AN HEIR HAS THE
RIGHT TO DISPOSE OF THE DECEDENTS PROPERTY EVEN IF
THE SAME IS UNDER ADMINISTRATION PURSUANT TO
CIVIL CODE PROVISION THAT POSSESSION OF HEREDITARY
PROPERTY IS TRANSMITTED TO THE HEIR THE MOMENT OF
DEATH OF THE DECEDENT (ACEDEBO VS. ABESAMIS, 217
SCRA 194);

E. IN DISREGARDING THE FINAL DECISION OF THE SUPREME

COURT IN G.R. NO. 128525 DATED DECEMBER 17, 1999
INVOLVING SUBSTANTIALLY THE SAME PARTIES, TO WIT,
PETITIONERS JOSE C. LEE AND ALMA AGGABAO WERE
RESPONDENTS IN THAT CASE WHILE RESPONDENT MA.
DIVINA ENDERES WAS THE PETITIONER THEREIN. THAT
DECISION, WHICH CAN BE CONSIDERED LAW OF THE CASE,
RULED THAT PETITIONERS CANNOT BE ENJOINED BY
RESPONDENT ENDERES FROM EXERCISING THEIR POWER
AS DIRECTORS AND OFFICERS OF PHILINTERLIFE AND
THAT THE INTESTATE COURT IN CHARGE OF THE
INTESTATE PROCEEDINGS CANNOT ADJUDICATE TITLE TO
PROPERTIES CLAIMED TO BE PART OF THE ESTATE AND
WHICH ARE EQUALLY CLAIMED BY PETITIONER FLAG. [17]

The petition has no merit.

Petitioners Jose Lee and Alma Aggabao, representing Philinterlife and
FLAG, assail before us not only the validity of the writ of execution issued by
the intestate court dated July 7, 2000 but also the validity of the August 11,
1997 order of the intestate court nullifying the sale of the 2,029 Philinterlife
shares of stock made by Juliana Ortaez and Jose Ortaez, in their personal
capacities and without court approval, in favor of petitioner FLAG.
We cannot allow petitioners to reopen the issue of nullity of the sale of the
Philinterlife shares of stock in their favor because this was already settled a
long time ago by the Court of Appeals in its decision dated June 23, 1998 in
CA-G.R. SP No. 46342. This decision was effectively upheld by us in our
resolution dated October 9, 1998 in G.R. No. 135177 dismissing the petition
for review on a technicality and thereafter denying the motion for
reconsideration on January 13, 1999 on the ground that there was no
compelling reason to reconsider said denial. Our decision became final on
[18]

February 23, 1999 and was accordingly entered in the book of entry of
judgments. For all intents and purposes therefore, the nullity of the sale of the
Philinterlife shares of stock made by Juliana Ortaez and Jose Ortaez in favor
of petitioner FLAG is already a closed case. To reopen said issue would set a
bad precedent, opening the door wide open for dissatisfied parties to relitigate
unfavorable decisions no end. This is completely inimical to the orderly and
efficient administration of justice.
The said decision of the Court of Appeals in CA-G.R. SP No. 46342
affirming the nullity of the sale made by Jose Ortaez and his mother Juliana
Ortaez of the Philinterlife shares of stock read:

Petitioners asseverations relative to said [memorandum] agreement were scuttled

during the hearing before this Court thus:

JUSTICE AQUINO:
Counsel for petitioner, when the Memorandum of Agreement was executed,
did the children of Juliana Salgado know already that there was a claim for share
in the inheritance of the children of Novicio?
ATTY. CALIMAG:
Your Honor please, at that time, Your Honor, it is already known to them.
JUSTICE AQUINO:
What can be your legal justification for extrajudicial settlement of a property
subject of intestate proceedings when there is an adverse claim of another set of
heirs, alleged heirs? What would be the legal justification for extra-judicially settling
a property under administration without the approval of the intestate court?
ATTY. CALIMAG:
Well, Your Honor please, in that extra-judicial settlement there is an approval
of the honorable court as to the propertys partition x x x. There were as mentioned
by the respondents counsel, Your Honor.
ATTY. BUYCO:
No
JUSTICE AQUINO:
The point is, there can be no adjudication of a property under intestate
proceedings without the approval of the court. That is basic unless you can
present justification on that. In fact, there are two steps: first, you ask leave and
then execute the document and then ask for approval of the document executed.
 Now, is there any legal justification to exclude this particular transaction from those
steps?
ATTY. CALIMAG:
None, Your Honor.
ATTY BUYCO:
With that admission that there is no legal justification, Your Honor, we rest
the case for the private respondent. How can the lower court be accused of
abusing its discretion? (pages 33-35, TSN of January 29, 1998).

Thus, We find merit in the following postulation by private respondent:

What we have here is a situation where some of the heirs of the decedent without
securing court approval have appropriated as their own personal property the
properties of [the] Estate, to the exclusion and the extreme prejudice of the other
claimant/heirs. In other words, these heirs, without court approval, have distributed
the asset of the estate among themselves and proceeded to dispose the same to third
parties even in the absence of an order of distribution by the Estate Court. As admitted
by petitioners counsel, there was absolutely no legal justification for this action by the
heirs. There being no legal justification, petitioner has no basis for demanding that
public respondent [the intestate court] approve the sale of the Philinterlife shares of
the Estate by Juliana and Jose Ortaez in favor of the Filipino Loan Assistance Group.

It is an undisputed fact that the parties to the Memorandum of Agreement dated

March 4, 1982 (see Annex 7 of the Comment). . . are not the only heirs claiming an
interest in the estate left by Dr. Juvencio P. Ortaez. The records of this case. . . clearly
show that as early as March 3, 1981 an Opposition to the Application for Issuance of
Letters of Administration was filed by the acknowledged natural children of Dr.
Juvencio P. Ortaez with Ligaya Novicio. . . This claim by the acknowledged natural
children of Dr. Juvencio P. Ortaez is admittedly known to the parties to the
Memorandum of Agreement before they executed the same. This much was admitted
by petitioners counsel during the oral argument. xxx

Given the foregoing facts, and the applicable jurisprudence, public respondent can
never be faulted for not approving. . . the subsequent sale by the petitioner [Jose
Ortaez] and his mother [Juliana Ortaez] of the Philinterlife shares belonging to the
Estate of Dr. Juvencio P. Ortaez. (pages 3-4 of Private Respondents Memorandum;
pages 243-244 of the Rollo)

Amidst the foregoing, We found no grave abuse of discretion amounting to excess or

want of jurisdiction committed by respondent judge. [19]
 From the above decision, it is clear that Juliana Ortaez, and her three
sons, Jose, Rafael and Antonio, all surnamed Ortaez, invalidly entered into a
memorandum of agreement extrajudicially partitioning the intestate estate
among themselves, despite their knowledge that there were other heirs or
claimants to the estate and before final settlement of the estate by the
intestate court. Since the appropriation of the estate properties by Juliana
Ortaez and her children (Jose, Rafael and Antonio Ortaez) was invalid, the
subsequent sale thereof by Juliana and Jose to a third party (FLAG), without
court approval, was likewise void.
An heir can sell his right, interest, or participation in the property under
administration under Art. 533 of the Civil Code which provides that possession
of hereditary property is deemed transmitted to the heir without interruption
from the moment of death of the decedent. However, an heir can only
[20]

alienate such portion of the estate that may be allotted to him in the division of
the estate by the probate or intestate court after final adjudication, that is, after
all debtors shall have been paid or the devisees or legatees shall have been
given their shares. This means that an heir may only sell his ideal or
[21]

undivided share in the estate, not any specific property therein. In the present
case, Juliana Ortaez and Jose Ortaez sold specific properties of the estate
(1,014 and 1,011 shares of stock in Philinterlife) in favor of petitioner FLAG.
This they could not lawfully do pending the final adjudication of the estate by
the intestate court because of the undue prejudice it would cause the other
claimants to the estate, as what happened in the present case.
Juliana Ortaez and Jose Ortaez sold specific properties of the estate,
without court approval. It is well-settled that court approval is necessary for
the validity of any disposition of the decedents estate. In the early case
of Godoy vs. Orellano, we laid down the rule that the sale of the property of
[22]

the estate by an administrator without the order of the probate court is void
and passes no title to the purchaser. And in the case of Dillena vs. Court of
Appeals, we ruled that:
[23]

[I]t must be emphasized that the questioned properties (fishpond) were included in the
inventory of properties of the estate submitted by then Administratrix Fausta Carreon
Herrera on November 14, 1974. Private respondent was appointed as administratrix of
the estate on March 3, 1976 in lieu of Fausta Carreon Herrera. On November 1, 1978,
the questioned deed of sale of the fishponds was executed between petitioner and
private respondent without notice and approval of the probate court. Even after the
sale, administratrix Aurora Carreon still included the three fishponds as among the
real properties of the estate in her inventory submitted on August 13, 1981. In fact, as
stated by the Court of Appeals, petitioner, at the time of the sale of the fishponds in
question, knew that the same were part of the estate under administration.

xxxxxxxxx

The subject properties therefore are under the jurisdiction of the probate court which
according to our settled jurisprudence has the authority to approve any disposition
regarding properties under administration. . . More emphatic is the declaration We
made in Estate of Olave vs. Reyes (123 SCRA 767) where We stated that when the
estate of the deceased person is already the subject of a testate or intestate proceeding,
the administrator cannot enter into any transaction involving it without prior approval
of the probate court.

Only recently, in Manotok Realty, Inc. vs. Court of Appeals (149 SCRA 174), We
held that the sale of an immovable property belonging to the estate of a decedent, in a
special proceedings, needs court approval. . . This pronouncement finds support in the
previous case of Dolores Vda. De Gil vs. Agustin Cancio (14 SCRA 797) wherein We
emphasized that it is within the jurisdiction of a probate court to approve the sale of
properties of a deceased person by his prospective heirs before final adjudication. x x
x

It being settled that property under administration needs the approval of the probate
court before it can be disposed of, any unauthorized disposition does not bind the
estate and is null and void. As early as 1921 in the case of Godoy vs. Orellano (42
Phil 347), We laid down the rule that a sale by an administrator of property of the
deceased, which is not authorized by the probate court is null and void and title does
not pass to the purchaser.

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

Our jurisprudence is therefore clear that (1) any disposition of estate

property by an administrator or prospective heir pending final adjudication
requires court approval and (2) any unauthorized disposition of estate
property can be annulled by the probate court, there being no need for a
separate action to annul the unauthorized disposition.
 The question now is: can the intestate or probate court execute its order
nullifying the invalid sale?
We see no reason why it cannot. The intestate court has the power to
execute its order with regard to the nullity of an unauthorized sale of estate
property, otherwise its power to annul the unauthorized or fraudulent
disposition of estate property would be meaningless. In other words,
enforcement is a necessary adjunct of the intestate or probate courts power to
annul unauthorized or fraudulent transactions to prevent the dissipation of
estate property before final adjudication.
Moreover, in this case, the order of the intestate court nullifying the sale
was affirmed by the appellate courts (the Court of Appeals in CA-G.R. SP No.
46342 dated June 23, 1998 and subsequently by the Supreme Court in G.R.
No. 135177 dated October 9, 1998). The finality of the decision of the
Supreme Court was entered in the book of entry of judgments on February 23,
1999. Considering the finality of the order of the intestate court nullifying the
sale, as affirmed by the appellate courts, it was correct for private respondent-
Special Administratrix Enderes to thereafter move for a writ of execution and
for the intestate court to grant it.
Petitioners Jose Lee, Alma Aggabao and FLAG, however, contend that
the probate court could not issue a writ of execution with regard to its order
nullifying the sale because said order was merely provisional:

The only authority given by law is for respondent judge to determine provisionally
whether said shares are included or excluded in the inventory In ordering the
execution of the orders, respondent judge acted in excess of his jurisdiction and
grossly violated settled law and jurisprudence, i.e., that the determination by a
probate or intestate court of whether a property is included or excluded in the
inventory of the estate being provisional in nature, cannot be the subject of
execution. (emphasis ours)
[24]

Petitioners argument is misplaced. There is no question, based on the

facts of this case, that the Philinterlife shares of stock were part of the estate
of Dr. Juvencio Ortaez from the very start as in fact these shares were
included in the inventory of the properties of the estate submitted by Rafael
Ortaez after he and his brother, Jose Ortaez, were appointed special
administrators by the intestate court. [25]

The controversy here actually started when, during the pendency of the
settlement of the estate of Dr. Ortaez, his wife Juliana Ortaez sold the 1,014
Philinterlife shares of stock in favor petitioner FLAG without the approval of
the intestate court. Her son Jose Ortaez later sold the remaining 1,011
Philinterlife shares also in favor of FLAG without the approval of the intestate
court.
We are not dealing here with the issue of inclusion or exclusion of
properties in the inventory of the estate because there is no question that,
from the very start, the Philinterlife shares of stock were owned by the
decedent, Dr. Juvencio Ortaez. Rather, we are concerned here with the
effect of the sale made by the decedents heirs, Juliana Ortaez and Jose
Ortaez, without the required approval of the intestate court. This being
so, the contention of petitioners that the determination of the intestate court
was merely provisional and should have been threshed out in a separate
proceeding is incorrect.
The petitioners Jose Lee and Alma Aggabao next contend that the writ of
execution should not be executed against them because they were not
notified, nor they were aware, of the proceedings nullifying the sale of the
shares of stock.
We are not persuaded. The title of the purchaser like herein petitioner
FLAG can be struck down by the intestate court after a clear showing of the
nullity of the alienation. This is the logical consequence of our ruling
in Godoy and in several subsequent cases. The sale of any property of the
[26]

estate by an administrator or prospective heir without order of the

probate or intestate court is void and passes no title to the
purchaser. Thus, in Juan Lao et al. vs. Hon. Melencio Geneto, G.R. No.
56451, June 19, 1985, we ordered the probate court to cancel the transfer
certificate of title issued to the vendees at the instance of the administrator
after finding that the sale of real property under probate proceedings was
made without the prior approval of the court. The dispositive portion of our
decision read:

IN VIEW OF THE FOREGOING CONSIDERATIONS, the assailed Order dated

February 18, 1981 of the respondent Judge approving the questioned Amicable
Settlement is declared NULL and VOID and hereby SET ASIDE. Consequently, the
sale in favor of Sotero Dioniosio III and by the latter to William Go is likewise
declared NULL and VOID. The Transfer Certificate of Title issued to the latter is
hereby ordered cancelled.

It goes without saying that the increase in Philinterlifes authorized capital

stock, approved on the vote of petitioners non-existent shareholdings and
obviously calculated to make it difficult for Dr. Ortaezs estate to reassume its
controlling interest in Philinterlife, was likewise void ab initio.
Petitioners next argue that they were denied due process.
 We do not think so.
The facts show that petitioners, for reasons known only to them, did not
appeal the decision of the intestate court nullifying the sale of shares of stock
in their favor. Only the vendor, Jose Ortaez, appealed the case. A careful
review of the records shows that petitioners had actual knowledge of the
estate settlement proceedings and that they knew private respondent Enderes
was questioning therein the sale to them of the Philinterlife shares of stock.
It must be noted that private respondent-Special Administratrix Enderes
filed before the intestate court (RTC of Quezon City, Branch 85) a Motion to
Declare Void Ab Initio Deeds of Sale of Philinterlife Shares of Stock on March
22, 1996. But as early as 1994, petitioners already knew of the pending
settlement proceedings and that the shares they bought were under the
administration by the intestate court because private respondent Ma. Divina
Ortaez-Enderes and her mother Ligaya Novicio had filed a case against them
at the Securities and Exchange Commission on November 7, 1994, docketed
as SEC No. 11-94-4909, for annulment of transfer of shares of stock,
annulment of sale of corporate properties, annulment of subscriptions on
increased capital stocks, accounting, inspection of corporate books and
records and damages with prayer for a writ of preliminary injunction and/or
temporary restraining order. In said case, Enderes and her mother
[27]

questioned the sale of the aforesaid shares of stock to petitioners. The SEC
hearing officer in fact, in his resolution dated March 24, 1995, deferred to the
jurisdiction of the intestate court to rule on the validity of the sale of shares of
stock sold to petitioners by Jose Ortaez and Juliana Ortaez:

Petitioners also averred that. . . the Philinterlife shares of Dr. Juvencio Ortaez who
died, in 1980, are part of his estate which is presently the subject matter of an intestate
proceeding of the RTC of Quezon City, Branch 85. Although, private respondents
[Jose Lee et al.] presented the documents of partition whereby the foregoing share of
stocks were allegedly partitioned and conveyed to Jose S. Ortaez who allegedly
assigned the same to the other private respondents, approval of the Court was not
presented. Thus, the assignments to the private respondents [Jose Lee et al.] of the
subject shares of stocks are void.

xxxxxxxxx

With respect to the alleged extrajudicial partition of the shares of stock owned by the
late Dr. Juvencio Ortaez, we rule that the matter properly belongs to the jurisdiction of
the regular court where the intestate proceedings are currently pending. [28]
 With this resolution of the SEC hearing officer dated as early as March 24,
1995 recognizing the jurisdiction of the intestate court to determine the validity
of the extrajudicial partition of the estate of Dr. Ortaez and the subsequent
sale by the heirs of the decedent of the Philinterlife shares of stock to
petitioners, how can petitioners claim that they were not aware of the intestate
proceedings?
Futhermore, when the resolution of the SEC hearing officer reached the
Supreme Court in 1996 (docketed as G.R. 128525), herein petitioners who
were respondents therein filed their answer which contained statements
showing that they knew of the pending intestate proceedings:

[T]he subject matter of the complaint is not within the jurisdiction of the SEC but with
the Regional Trial Court; Ligaya Novicio and children represented themselves to be
the common law wife and illegitimate children of the late Ortaez; that on March 4,
1982, the surviving spouse Juliana Ortaez, on her behalf and for her minor son
Antonio, executed a Memorandum of Agreement with her other sons Rafael and Jose,
both surnamed Ortaez, dividing the estate of the deceased composed of his one-half
(1/2) share in the conjugal properties; that in the said Memorandum of Agreement,
Jose S. Ortaez acquired as his share of the estate the 1,329 shares of stock in
Philinterlife; that on March 4, 1982, Juliana and Rafael assigned their respective
shares of stock in Philinterlife to Jose; that contrary to the contentions of petitioners,
private respondents Jose Lee, Carlos Lee, Benjamin Lee and Alma Aggabao became
stockholders of Philinterlife on March 23, 1983 when Jose S. Ortaez, the principal
stockholder at that time, executed a deed of sale of his shares of stock to private
respondents; and that the right of petitioners to question the Memorandum of
Agreement and the acquisition of shares of stock of private respondent is barred by
prescription.[29]

Also, private respondent-Special Administratrix Enderes offered additional

proof of actual knowledge of the settlement proceedings by petitioners which
petitioners never denied: (1) that petitioners were represented by Atty.
Ricardo Calimag previously hired by the mother of private respondent
Enderes to initiate cases against petitioners Jose Lee and Alma Aggaboa for
the nullification of the sale of the shares of stock but said counsel made a
conflicting turn-around and appeared instead as counsel of petitioners, and (2)
that the deeds of sale executed between petitioners and the heirs of the
decedent (vendors Juliana Ortaez and Jose Ortaez) were acknowledged
before Atty. Ramon Carpio who, during the pendency of the settlement
proceedings, filed a motion for the approval of the sale of Philinterlife shares
of stock to the Knights of Columbus Fraternal Association, Inc. (which motion
was, however, later abandoned). All this sufficiently proves that petitioners,
[30]

through their counsels, knew of the pending settlement proceedings.

Finally, petitioners filed several criminal cases such as libel (Criminal Case
No. 97-7179-81), grave coercion (Criminal Case No. 84624) and robbery
(Criminal Case No. Q-96-67919) against private respondents mother Ligaya
Novicio who was a director of Philinterlife, all of which criminal cases were
[31]

related to the questionable sale to petitioners of the Philinterlife shares of

stock.
Considering these circumstances, we cannot accept petitioners claim of
denial of due process. The essence of due process is the reasonable
opportunity to be heard. Where the opportunity to be heard has been
accorded, there is no denial of due process. In this case, petitioners knew of
[32]

the pending instestate proceedings for the settlement of Dr. Juvencio Ortaezs
estate but for reasons they alone knew, they never intervened. When the
court declared the nullity of the sale, they did not bother to appeal. And when
they were notified of the motion for execution of the Orders of the intestate
court, they ignored the same. Clearly, petitioners alone should bear the
blame.
Petitioners next contend that we are bound by our ruling in G.R. No.
128525 entitled Ma. Divina Ortaez-Enderes vs. Court of Appeals, dated
December 17, 1999, where we allegedly ruled that the intestate court may not
pass upon the title to a certain property for the purpose of determining
whether the same should or should not be included in the inventory but such
determination is not conclusive and is subject to final decision in a separate
action regarding ownership which may be constituted by the parties.
We are not unaware of our decision in G.R. No. 128525. The issue therein
was whether the Court of Appeals erred in affirming the resolution of the SEC
that Enderes et al. were not entitled to the issuance of the writ of preliminary
injunction. We ruled that the Court of Appeals was correct in affirming the
resolution of the SEC denying the issuance of the writ of preliminary injunction
because injunction is not designed to protect contingent rights. Said case
did notrule on the issue of the validity of the sale of shares of stock belonging
to the decedents estate without court approval nor of the validity of the writ of
execution issued by the intestate court. G.R. No. 128525 clearly involved a
different issue and it does not therefore apply to the present case.
Petitioners and all parties claiming rights under them are hereby warned
not to further delay the execution of the Orders of the intestate court dated
August 11 and August 29, 1997.
 WHEREFORE, the petition is hereby DENIED. The decision of the Court
of Appeals in CA-G.R. S.P. No. 59736 dated July 26, 2000, dismissing
petitioners petition for certiorari and affirming the July 6, 2000 order of the trial
court which ordered the execution of its (trial courts) August 11 and 29, 1997
orders, is hereby AFFIRMED.
SO ORDERED.
 [G.R. No. 118671. January 29, 1996]

THE ESTATE OF HILARIO M. RUIZ, EDMOND RUIZ,

Executor, petitioner, vs. THE COURT OF APPEALS (Former
Special Sixth Division), MARIA PILAR RUIZ-MONTES, MARIA
CATHRYN RUIZ, CANDICE ALBERTINE RUIZ, MARIA ANGELINE
RUIZ and THE PRESIDING JUDGE OF THE REGIONAL TRIAL
COURT OF PASIG, BRANCH 156, respondents.

DECISION
PUNO, J.:

This petition for review on certiorari seeks to annul and set aside the
decision dated November 10, 1994 and the resolution dated January 5,
1995 of the Court of Appeals in CA-G.R. SP No. 33045.
The facts show that on June 27, 1987, Hilario M. Ruiz1 executed a
holographic will naming as his heirs his only son, Edmond Ruiz, his adopted
daughter, private respondent Maria Pilar Ruiz Montes, and his three
granddaughters, private respondents Maria Cathryn, Candice Albertine and
Maria Angeline, all children of Edmond Ruiz. The testator bequeathed to his
heirs substantial cash, personal and real properties and named Edmond Ruiz
executor of his estate.2
On April 12, 1988, Hilario Ruiz died. Immediately thereafter, the cash
component of his estate was distributed among Edmond Ruiz and private
respondents in accordance with the decedents will. For unbeknown
reasons, Edmond, the named executor, did not take any action for the probate
of his fathers holographic will.
On June 29, 1992, four years after the testators death, it was private
respondent Maria Pilar Ruiz Montes who filed before the Regional Trial Court,
Branch 156, Pasig, a petition for the probate and approval of Hilario Ruizs will
and for the issuance of letters testamentary to Edmond
Ruiz. Surprisingly, Edmond opposed the petition on the ground that the will
3

was executed under undue influence.

On November 2, 1992, one of the properties of the estate - the house and
lot at No. 2 Oliva Street, Valle Verde IV, Pasig which the testator bequeathed
to Maria Cathryn, Candice Albertine and Maria Angeline4 - was leased out by
Edmond Ruiz to third persons.
 On January 19, 1993, the probate court ordered Edmond to deposit with
the Branch Clerk of Court the rental deposit and payments totalling
P540,000.00 representing the one-year lease of the Valle Verde property. In
compliance, on January 25, 1993, Edmond turned over the amount
of P348,583.56, representing the balance of the rent after deducting
P191,416.14 for repair and maintenance expenses on the estate.5
In March 1993, Edmond moved for the release of P50,000.00 to pay the
real estate taxes on the real properties of the estate. The probate court
approved the release of P7,722.006
On May 14, 1993, Edmond withdrew his opposition to the probate of the
will. Consequently, the probate court, on May 18, 1993, admitted the will to
probate and ordered the issuance of letters testamentary
to Edmond conditioned upon the filing of a bond in the amount of
P50,000.00. The letters testamentary were issued on June 23, 1993.
On July 28, 1993, petitioner Testate Estate of Hilario Ruiz as executor,
filed an Ex-Parte Motion for Release of Funds. It prayed for the release of the
rent payments deposited with the Branch Clerk of Court. Respondent Montes
opposed the motion and concurrently filed a Motion for Release of Funds to
Certain Heirs and Motion for Issuance of Certificate of Allowance of Probate
Will. Montes prayed for the release of the said rent payments to Maria
Cathryn, Candice Albertine and Maria Angeline and for the distribution of the
testators properties, specifically the Valle Verde property and the Blue
Ridge apartments, in accordance with the provisions of the holographic will.
On August 26, 1993, the probate court denied petitioners motion for
release of funds but granted respondent Montes motion in view of petitioners
lack of opposition. It thus ordered the release of the rent payments to the
decedents three granddaughters. It further ordered the delivery of the titleds to
and possession of the properties bequeathed to the three granddaughters and
respondent Montes upon the filing of a bond of P50,000.00.
Petitioner moved for reconsideration alleging that he actually filed his
opposition to respondent Montes motion for release of rent payments which
opposition the court failed to consider. Petitioner likewise reiterated his
previous motion for release of funds.
On November 23, 1993, petitioner, through counsel, manifested that he
was withdrawing his motion for release of funds in view of the fact that the
lease contract over Valle Verde property had been renewed for another year.7
Despite petitioners manifestation, the probate court, on December 22,
1993, ordered the release of the funds to Edmond but only such amount as
may be necessary to cover the espenses of administration and allowanceas
for support of the testators three granddaughters subject to collation and
deductible from their share in the inheritance. The court, however, held in
abeyance the release of the titles to respondent Montes and the three
granddaughters until the lapse of six months from the date of firast publication
of the notice to creditors.8 The Court stated thus:
xxx xxx xxx

After consideration of the arguments set forth thereon by the parties, the court
resolves to allow Administrator Edmond M. Ruiz to take possession of the rental
payments deposited with the Clerk of Court, Pasig Regional Trial Court, but only such
amount as may be necessary to cover the expenses of administration and allowances
for support of Maria Cathryn Veronique, Candice Albertine and Maria Angeli, which
are subject to collation and deductible from the share in the inheritance of said heirs
and insofar as they exceed the fruits or rents pertaining to them.

As to the release of the titles bequeathed to petitioner Maria Pilar Ruiz-Montes and
the above-named heirs, the same is hereby reconsidered and held in abeyance until
the lapse of six (6) months from the date of first publication of Notice to Creditors.

WHEREFORE, Administrator Edmond M. Ruiz is hereby ordered to submit an

accounting of the expenses necessary for administration including provisions for the
support Of Maria Cathryn Veronique Ruiz, Candice Albertine Ruiz and Maria Angeli
Ruiz before the amount required can be withdrawn and cause the publication of
the notice to creditors with reasonable dispatch.9

Petitioner assailed this order before the Court of Appeals. Finding no grave abuse of
discretion on the part of respondent judge, the appellate court dismissed the petition
and sustained the probate courts order in a decision dated November 10, 199410 and a
resolution dated January 5, 1995.11

Hence, this petition.

Petitioner claims that:

THE PUBLIC RESPONDENT COURT OF APPEALS COMMITTED GRAVE

ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF
JURISDICTION IN AFFIRMING AND CONFIRMING THE ORDER OF
RESPONDENT REGIONAL TRIAL COURT OF PASIG, BRANCH 156, DATED
DECEMBER 22, 1993, WHICH WHEN GIVEN DUE COURSE AND IS
EFFECTED WOULD: (1) DISALLOW THE EXECUTOR/ADMINISTRATOR OF
THE ESTATE OF THE LATE HILARIO M. RUIZ TO TAKE POSSESSION OF
ALL THE REAL AND PERSONAL PROPERTIES OF THE ESTATE; (2) GRANT
SUPPORT, DURING THE PENDENCY OF THE SETTLEMENT OF AN ESTATE,
TO CERTAIN PERSONS NOT ENTITLED THERETO; AND (3) PREMATURELY
PARTITION AND DISTRIBUTE THE ESTATE PURSUANT TO THE
PROVISIONS OF THE HOLOGRAPHIC WILL EVEN BEFORE ITS INTRINSIC
VALIDITY HAS BEEN DETERMINED, AND DESPITE THE EXISTENCE OF
UNPAID DEBTS AND OBLIGATIONS OF THE ESTATE.12

The issue for resolution is whether the probate court, after admitting the
will to probate but before payment of the estates debts and obligations, has
the authority: (1) to grant an allowance from the funds of the estate for the
support of the testators grandchildren; (2) to order the release of the titles to
certain heirs; and (3) to grant possession of all properties of the estate to the
executor of the will.
On the matter of allowance, Section 3 of Rule 83 of the Revised Rules of
Court provides:

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

Petitioner alleges that this provision only gives the widow and the minor or
incapacitated children of the deceased the right to receive allowances for
support during the settlement of estate proceedings. He contends that the
testators three granddaughters do not qualify for an allowance because they
are not incapacitated and are no longer minors but of legal age, married and
gainfully employed. In addition, the provision expressly states children of the
deceased which excludes the latters grandchildren.
It is settled that allowances for support under Section 3 of Rule 83 should
not be limited to the minor or incapacitated children of the deceased. Article
18813 of the Civil Code of the Philippines, the substantive law in force at the
time of the testators death, provides that during the liquidation of the conjugal
partnership, the deceaseds legitimate spouse and children, regardless of their
age, civil status or gainful employment, are entitled to provisional support from
the funds of the estate.14 The law is rooted on the fact that the right and duty to
support, especially the right to education, subsist even beyond the age of
majority.15
Be that as it may, grandchildren are not entitled to provisional support from
the funds of the decedents estate. The law clearly limits the allowance to
widow and children and does not extend it to the deceaseds grandchildren,
regardless of their minority or incapacity.16 It was error, therefore, for the
appellate court to sustain the probate courts order granting an allowance to
the grandchildren of the testator pending settlement of his estate.
Respondent courts also erred when they ordered the release of the titles
of the bequeathed properties to private respondents six months after the date
of first publication of notice to creditors. An order releasing titles to properties
of the estate amounts to an advance distribution of the estate which is allowed
only under the following conditions:

Sec. 2. Advance distribution in special proceedings. - Nothwithstanding a pending

controversy or appeal in proceedings to settle the estate of a decedent, the court may,
in its discretion and upon such terms as it may deem proper and just, permit that such
part of the estate as may not be affected by the controversy or appeal be distributed
among the heirs or legatees, upon compliance with the conditions set forth in Rule 90
of these Rules.17

And Rule 90 provides that:

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

No distribution shall be allowed until the payment of the obligations above-

mentioned has been made or provided for, unless the distributees, or any of
them, give a bond, in a sum to be fixed by the court, conditioned for the payment
of said obligations within such time as the court directs.18

In settlement of estate proceedings, the distribution of the estate properties

can only be made: (1) after all the debts, funeral charges, expenses of
administration, allowance to the widow, and estate tax have been paid; or (2)
before payment of said obligations only if the distributees or any of them gives
a bond in a sum fixed by the court conditioned upon the payment of said
obligations within such time as the court directs, or when provision is made to
meet those obligations.19
In the case at bar, the probate court ordered the release of the titles to the
Valle Verde property and the Blue Ridge apartments to the private
respondents after the lapse of six months from the date of first publication of
the notice to creditors. The questioned order speaks of notice to creditors, not
payment of debts and obligations. Hilario Ruiz allegedly left no debts when he
died but the taxes on his estate had not hitherto been paid, much less
ascertained. The estate tax is one of those obligations that must be paid
before distribution of the estate. If not yet paid, the rule requires that the
distributees post a bond or make such provisions as to meet the said tax
obligation in proportion to their respective shares in the inheritance.20 Notably,
at the time the order was issued the properties of the estate had not yet been
inventoried and appraised.
It was also too early in the day for the probate court to order the release of
the titles six months after admitting the will to probate. The probate of a will is
conclusive as to its due execution and extrinsic validity21 and settles only the
question of whether the testator, being of sound mind, freely executed it in
accordance with the formalities prescribed by law.22 Questions as to the
intrinsic validity and efficacy of the provisions of the will, the legality of any
devise or legacy may be raised even after the will has been authenticated.23
The intrinsic validity of Hilarios holographic will was controverted by
petitioner before the probate court in his Reply to Montes Opposition to his
motion for release of funds24 and his motion for reconsideration of the August
26, 1993order of the said court.25 Therein, petitioner assailed the distributive
shares of the devisees and legatees inasmuch as his fathers will included the
estate of his mother and allegedly impaired his legitime as an intestate heir of
his mother. The Rules provide that if there is a controversy as to who are the
lawful heirs of the decedent and their distributive shares in his estate, the
probate court shall proceed to hear and decide the same as in ordinary
cases.26
Still and all, petitioner cannot correctly claim that the assailed order
deprived him of his right to take possession of all the real and personal
properties of the estate. The right of an executor or administrator to the
possession and management of the real and personal properties of the
deceased is not absolute and can only be exercised so long as it is necessary
for the payment of the debts and expenses of administration,27 Section 3 of
Rule 84 of the Revised Rules of Court explicitly provides:
Sec. 3. Executor or administrator to retain whole estate to pay debts, and to
administer estate not willed. - An executor or administrator shall have the right to the
possession and management of the real as well as the personal estate of the
deceased so long as it is necessary for the payment of the debts and expenses for
administration.28

When petitioner moved for further release of the funds deposited with the
clerk of court, he had been previously granted by the probate court certain
amounts for repair and maintenance expenses on the properties of the estate,
and payment of the real estate taxes thereon. But petitioner moved again for
the release of additional funds for the same reasons he previously cited. It
was correct for the probate court to require him to submit an accounting of
thenecessary expenses for administration before releasing any further money
in his favor.
It was relevantly noted by the probate court that petitioner had deposited
with it only a portion of the one-year rental income from the Valle Verde
property. Petitioner did not deposit its succeeding rents after renewal of the
lease.29Neither did he render an accounting of such funds.
Petitioner must be reminded that his right of ownership over the properties
of his father is merely inchoate as long as the estate has not been fully settled
and partitioned.30 As executor, he is a mere trustee of his fathers estate. The
funds of the estate in his hands are trust funds and he is held to the duties
and responsibilities of a trustee of the highest order.31 He cannot unilaterally
assign to himself and possess all his parents properties and the fruits thereof
without first submitting an inventory and appraisal of all real and personal
properties of the deceased, rendering a true account of his administration, the
expenses of administration, the amount of the obligations and estate tax, all of
which are subject to a determination by the court as to their veracity, propriety
and justness.32
IN VIEW WHEREOF, the decision and resolution of the Court of Appeals
in CA-G.R. SP No. 33045 affirming the order dated December 22, 1993 of the
Regional Trial Court, Branch 156, Pasig in SP Proc. No. 10259 are affirmed
with the modification that those portions of the order granting an allowance to
the testators grandchildren and ordering the release of the titles to the private
respondents upon notice to creditors are annulled and set aside.
Respondent judge is ordered to proceed with dispatch in the proceedings
below.
SO ORDERED.
 [G.R. No. 149926. February 23, 2005]

UNION BANK OF THE PHILIPPINES, petitioner, vs. EDMUND

SANTIBAEZ and FLORENCE SANTIBAEZ ARIOLA, respondents.

DECISION
CALLEJO, SR., J.:

Before us is a petition for review on certiorari under Rule 45 of the Revised

Rules of Court which seeks the reversal of the Decision [1] of the Court of
Appeals dated May 30, 2001 in CA-G.R. CV No. 48831 affirming the
dismissal[2]of the petitioners complaint in Civil Case No. 18909 by the
Regional Trial Court (RTC) of Makati City, Branch 63.
The antecedent facts are as follows:
On May 31, 1980, the First Countryside Credit Corporation (FCCC) and
Efraim M. Santibaez entered into a loan agreement[3] in the amount
of P128,000.00. The amount was intended for the payment of the purchase
price of one (1) unit Ford 6600 Agricultural All-Purpose Diesel Tractor. In view
thereof, Efraim and his son, Edmund, executed a promissory note in favor of
the FCCC, the principal sum payable in five equal annual amortizations
of P43,745.96 due on May 31, 1981 and every May 31st thereafter up to May
31, 1985.
On December 13, 1980, the FCCC and Efraim entered into another loan
agreement,[4] this time in the amount of P123,156.00. It was intended to pay
the balance of the purchase price of another unit of Ford 6600 Agricultural All-
Purpose Diesel Tractor, with accessories, and one (1) unit Howard Rotamotor
Model AR 60K. Again, Efraim and his son, Edmund, executed a promissory
note for the said amount in favor of the FCCC. Aside from such promissory
note, they also signed a Continuing Guaranty Agreement[5] for the loan dated
December 13, 1980.
Sometime in February 1981, Efraim died, leaving a holographic
will.[6] Subsequently in March 1981, testate proceedings commenced before
the RTC of Iloilo City, Branch 7, docketed as Special Proceedings No. 2706.
On April 9, 1981, Edmund, as one of the heirs, was appointed as the special
administrator of the estate of the decedent.[7] During the pendency of the
testate proceedings, the surviving heirs, Edmund and his sister Florence
Santibaez Ariola, executed a Joint Agreement[8] dated July 22, 1981, wherein
they agreed to divide between themselves and take possession of the three
(3) tractors; that is, two (2) tractors for Edmund and one (1) tractor for
Florence. Each of them was to assume the indebtedness of their late father to
FCCC, corresponding to the tractor respectively taken by them.
On August 20, 1981, a Deed of Assignment with Assumption of
Liabilities[9] was executed by and between FCCC and Union Savings and
Mortgage Bank, wherein the FCCC as the assignor, among others, assigned
all its assets and liabilities to Union Savings and Mortgage Bank.
Demand letters[10] for the settlement of his account were sent by petitioner
Union Bank of the Philippines (UBP) to Edmund, but the latter failed to heed
the same and refused to pay. Thus, on February 5, 1988, the petitioner filed a
Complaint[11] for sum of money against the heirs of Efraim Santibaez, Edmund
and Florence, before the RTC of Makati City, Branch 150, docketed as Civil
Case No. 18909. Summonses were issued against both, but the one intended
for Edmund was not served since he was in the United States and there was
no information on his address or the date of his return to the
Philippines.[12] Accordingly, the complaint was narrowed down to respondent
Florence S. Ariola.
On December 7, 1988, respondent Florence S. Ariola filed her
Answer[13] and alleged that the loan documents did not bind her since she was
not a party thereto. Considering that the joint agreement signed by her and
her brother Edmund was not approved by the probate court, it was null and
void; hence, she was not liable to the petitioner under the joint agreement.
On January 29, 1990, the case was unloaded and re-raffled to the RTC of
Makati City, Branch 63.[14] Consequently, trial on the merits ensued and a
decision was subsequently rendered by the court dismissing the complaint for
lack of merit. The decretal portion of the RTC decision reads:

WHEREFORE, judgment is hereby rendered DISMISSING the complaint for lack of

merit.[15]

The trial court found that the claim of the petitioner should have been filed
with the probate court before which the testate estate of the late Efraim
Santibaez was pending, as the sum of money being claimed was an obligation
incurred by the said decedent. The trial court also found that the Joint
Agreement apparently executed by his heirs, Edmund and Florence, on July
22, 1981, was, in effect, a partition of the estate of the decedent. However, the
said agreement was void, considering that it had not been approved by the
probate court, and that there can be no valid partition until after the will has
been probated. The trial court further declared that petitioner failed to prove
that it was the now defunct Union Savings and Mortgage Bank to which the
FCCC had assigned its assets and liabilities. The court also agreed to the
contention of respondent Florence S. Ariola that the list of assets and liabilities
of the FCCC assigned to Union Savings and Mortgage Bank did not clearly
refer to the decedents account. Ruling that the joint agreement executed by
the heirs was null and void, the trial court held that the petitioners cause of
action against respondent Florence S. Ariola must necessarily fail.
The petitioner appealed from the RTC decision and elevated its case to
the Court of Appeals (CA), assigning the following as errors of the trial court:
1. THE COURT A QUO ERRED IN FINDING THAT THE JOINT AGREEMENT
(EXHIBIT A) SHOULD BE APPROVED BY THE PROBATE COURT.
2. THE COURT A QUO ERRED IN FINDING THAT THERE CAN BE NO VALID
PARTITION AMONG THE HEIRS UNTIL AFTER THE WILL HAS BEEN
PROBATED.
3. THE COURT A QUO ERRED IN NOT FINDING THAT THE DEFENDANT HAD
WAIVED HER RIGHT TO HAVE THE CLAIM RE-LITIGATED IN THE ESTATE
PROCEEDING.[16]
The petitioner asserted before the CA that the obligation of the deceased
had passed to his legitimate children and heirs, in this case, Edmund and
Florence; the unconditional signing of the joint agreement marked as Exhibit A
estopped respondent Florence S. Ariola, and that she cannot deny her liability
under the said document; as the agreement had been signed by both heirs in
their personal capacity, it was no longer necessary to present the same before
the probate court for approval; the property partitioned in the agreement was
not one of those enumerated in the holographic will made by the deceased;
and the active participation of the heirs, particularly respondent Florence S.
Ariola, in the present ordinary civil action was tantamount to a waiver to re-
litigate the claim in the estate proceedings.
On the other hand, respondent Florence S. Ariola maintained that the
money claim of the petitioner should have been presented before the probate
court.[17]
The appellate court found that the appeal was not meritorious and held
that the petitioner should have filed its claim with the probate court as
provided under Sections 1 and 5, Rule 86 of the Rules of Court. It further held
that the partition made in the agreement was null and void, since no valid
partition may be had until after the will has been probated. According to the
CA, page 2, paragraph (e) of the holographic will covered the subject
properties (tractors) in generic terms when the deceased referred to them as
all other properties. Moreover, the active participation of respondent Florence
S. Ariola in the case did not amount to a waiver. Thus, the CA affirmed the
RTC decision, viz.:

WHEREFORE, premises considered, the appealed Decision of the Regional Trial

Court of Makati City, Branch 63, is hereby AFFIRMED in toto.

SO ORDERED.[18]

In the present recourse, the petitioner ascribes the following errors to the
CA:
I.

THE HONORABLE COURT OF APPEALS ERRED IN FINDING THAT THE

JOINT AGREEMENT SHOULD BE APPROVED BY THE PROBATE COURT.

II.

THE COURT OF APPEALS ERRED IN FINDING THAT THERE CAN BE NO

VALID PARTITION AMONG THE HEIRS OF THE LATE EFRAIM SANTIBAEZ
UNTIL AFTER THE WILL HAS BEEN PROBATED.

III.

THE COURT OF APPEALS ERRED IN NOT FINDING THAT THE

RESPONDENT HAD WAIVED HER RIGHT TO HAVE THE CLAIM RE-
LITIGATED IN THE ESTATE PROCEEDING.

IV.

RESPONDENTS CAN, IN FACT, BE HELD JOINTLY AND SEVERALLY

LIABLE WITH THE PRINCIPAL DEBTOR THE LATE EFRAIM SANTIBAEZ
ON THE STRENGTH OF THE CONTINUING GUARANTY AGREEMENT
EXECUTED IN FAVOR OF PETITIONER-APPELLANT UNION BANK.

V.

THE PROMISSORY NOTES DATED MAY 31, 1980 IN THE SUM

OF P128,000.00 AND DECEMBER 13, 1980 IN THE AMOUNT OF P123,000.00
CATEGORICALLY ESTABLISHED THE FACT THAT THE RESPONDENTS
BOUND THEMSELVES JOINTLY AND SEVERALLY LIABLE WITH THE
LATE DEBTOR EFRAIM SANTIBAEZ IN FAVOR OF PETITIONER UNION
BANK.[19]
 The petitioner claims that the obligations of the deceased were transmitted
to the heirs as provided in Article 774 of the Civil Code; there was thus no
need for the probate court to approve the joint agreement where the heirs
partitioned the tractors owned by the deceased and assumed the obligations
related thereto. Since respondent Florence S. Ariola signed the joint
agreement without any condition, she is now estopped from asserting any
position contrary thereto. The petitioner also points out that the holographic
will of the deceased did not include nor mention any of the tractors subject of
the complaint, and, as such was beyond the ambit of the said will. The active
participation and resistance of respondent Florence S. Ariola in the ordinary
civil action against the petitioners claim amounts to a waiver of the right to
have the claim presented in the probate proceedings, and to allow any one of
the heirs who executed the joint agreement to escape liability to pay the value
of the tractors under consideration would be equivalent to allowing the said
heirs to enrich themselves to the damage and prejudice of the petitioner.
The petitioner, likewise, avers that the decisions of both the trial and
appellate courts failed to consider the fact that respondent Florence S. Ariola
and her brother Edmund executed loan documents, all establishing
the vinculum jurisor the legal bond between the late Efraim Santibaez and his
heirs to be in the nature of a solidary obligation. Furthermore, the Promissory
Notes dated May 31, 1980 and December 13, 1980 executed by the late
Efraim Santibaez, together with his heirs, Edmund and respondent Florence,
made the obligation solidary as far as the said heirs are concerned. The
petitioner also proffers that, considering the express provisions of the
continuing guaranty agreement and the promissory notes executed by the
named respondents, the latter must be held liable jointly and severally liable
thereon. Thus, there was no need for the petitioner to file its money claim
before the probate court. Finally, the petitioner stresses that both surviving
heirs are being sued in their respective personal capacities, not as heirs of the
deceased.
In her comment to the petition, respondent Florence S. Ariola maintains
that the petitioner is trying to recover a sum of money from the deceased
Efraim Santibaez; thus the claim should have been filed with the probate
court. She points out that at the time of the execution of the joint agreement
there was already an existing probate proceedings of which the petitioner
knew about. However, to avoid a claim in the probate court which might delay
payment of the obligation, the petitioner opted to require them to execute the
said agreement.
According to the respondent, the trial court and the CA did not err in
declaring that the agreement was null and void. She asserts that even if the
agreement was voluntarily executed by her and her brother Edmund, it should
still have been subjected to the approval of the court as it may prejudice the
estate, the heirs or third parties. Furthermore, she had not waived any rights,
as she even stated in her answer in the court a quo that the claim should be
filed with the probate court. Thus, the petitioner could not invoke or claim that
she is in estoppel.
Respondent Florence S. Ariola further asserts that she had not signed any
continuing guaranty agreement, nor was there any document presented as
evidence to show that she had caused herself to be bound by the obligation of
her late father.
The petition is bereft of merit.
The Court is posed to resolve the following issues: a) whether or not the
partition in the Agreement executed by the heirs is valid; b) whether or not the
heirs assumption of the indebtedness of the deceased is valid; and c) whether
the petitioner can hold the heirs liable on the obligation of the deceased.
At the outset, well-settled is the rule that a probate court has the
jurisdiction to determine all the properties of the deceased, to determine
whether they should or should not be included in the inventory or list of
properties to be administered.[20] The said court is primarily concerned with the
administration, liquidation and distribution of the estate.[21]
In our jurisdiction, the rule is that there can be no valid partition among the
heirs until after the will has been probated:

In testate succession, there can be no valid partition among the heirs until after the
will has been probated. The law enjoins the probate of a will and the public requires it,
because unless a will is probated and notice thereof given to the whole world, the right
of a person to dispose of his property by will may be rendered nugatory. The
authentication of a will decides no other question than such as touch upon the capacity
of the testator and the compliance with those requirements or solemnities which the
law prescribes for the validity of a will.[22]

This, of course, presupposes that the properties to be partitioned are the

same properties embraced in the will.[23] In the present case, the deceased,
Efraim Santibaez, left a holographic will[24] which contained, inter alia, the
provision which reads as follows:

(e) All other properties, real or personal, which I own and may be discovered later
after my demise, shall be distributed in the proportion indicated in the immediately
preceding paragraph in favor of Edmund and Florence, my children.
 We agree with the appellate court that the above-quoted is an all-
encompassing provision embracing all the properties left by the decedent
which might have escaped his mind at that time he was making his will, and
other properties he may acquire thereafter. Included therein are the three (3)
subject tractors. This being so, any partition involving the said tractors among
the heirs is not valid. The joint agreement[25] executed by Edmund and
Florence, partitioning the tractors among themselves, is invalid, specially so
since at the time of its execution, there was already a pending proceeding for
the probate of their late fathers holographic will covering the said tractors.
It must be stressed that the probate proceeding had already acquired
jurisdiction over all the properties of the deceased, including the three (3)
tractors. To dispose of them in any way without the probate courts approval is
tantamount to divesting it with jurisdiction which the Court cannot
allow.[26] Every act intended to put an end to indivision among co-heirs and
legatees or devisees is deemed to be a partition, although it should purport to
be a sale, an exchange, a compromise, or any other transaction.[27] Thus, in
executing any joint agreement which appears to be in the nature of an extra-
judicial partition, as in the case at bar, court approval is imperative, and the
heirs cannot just divest the court of its jurisdiction over that part of the estate.
Moreover, it is within the jurisdiction of the probate court to determine the
identity of the heirs of the decedent.[28] In the instant case, there is no showing
that the signatories in the joint agreement were the only heirs of the decedent.
When it was executed, the probate of the will was still pending before the
court and the latter had yet to determine who the heirs of the decedent were.
Thus, for Edmund and respondent Florence S. Ariola to adjudicate unto
themselves the three (3) tractors was a premature act, and prejudicial to the
other possible heirs and creditors who may have a valid claim against the
estate of the deceased.
The question that now comes to fore is whether the heirs assumption of
the indebtedness of the decedent is binding. We rule in the negative. Perusing
the joint agreement, it provides that the heirs as parties thereto have agreed
to divide between themselves and take possession and use the above-
described chattel and each of them to assume the indebtedness
corresponding to the chattel taken as herein after stated which is in favor of
First Countryside Credit Corp.[29] The assumption of liability was conditioned
upon the happening of an event, that is, that each heir shall take possession
and use of their respective share under the agreement. It was made
dependent on the validity of the partition, and that they were to assume the
indebtedness corresponding to the chattel that they were each to receive. The
partition being invalid as earlier discussed, the heirs in effect did not receive
any such tractor. It follows then that the assumption of liability cannot be given
any force and effect.
The Court notes that the loan was contracted by the decedent. The
petitioner, purportedly a creditor of the late Efraim Santibaez, should have
thus filed its money claim with the probate court in accordance with Section 5,
Rule 86 of the Revised Rules of Court, which provides:

Section 5. Claims which must be filed under the notice. If not filed barred; exceptions.
All claims for money against the decedent, arising from contract, express or implied,
whether the same be due, not due, or contingent, all claims for funeral expenses for
the last sickness of the decedent, and judgment for money against the decedent, must
be filed within the time limited in the notice; otherwise they are barred forever, except
that they may be set forth as counterclaims in any action that the executor or
administrator may bring against the claimants. Where an executor or administrator
commences an action, or prosecutes an action already commenced by the deceased in
his lifetime, the debtor may set forth by answer the claims he has against the decedent,
instead of presenting them independently to the court as herein provided, and mutual
claims may be set off against each other in such action; and if final judgment is
rendered in favor of the defendant, the amount so determined shall be considered the
true balance against the estate, as though the claim had been presented directly before
the court in the administration proceedings. Claims not yet due, or contingent, may be
approved at their present value.

The filing of a money claim against the decedents estate in the probate
court is mandatory.[30] As we held in the vintage case of Py Eng Chong v.
Herrera:[31]

This requirement is for the purpose of protecting the estate of the deceased by
informing the executor or administrator of the claims against it, thus enabling him to
examine each claim and to determine whether it is a proper one which should be
allowed. The plain and obvious design of the rule is the speedy settlement of the
affairs of the deceased and the early delivery of the property to the distributees,
legatees, or heirs. `The law strictly requires the prompt presentation and disposition of
the claims against the decedent's estate in order to settle the affairs of the estate as
soon as possible, pay off its debts and distribute the residue.[32]

Perusing the records of the case, nothing therein could hold private
respondent Florence S. Ariola accountable for any liability incurred by her late
father. The documentary evidence presented, particularly the promissory
notes and the continuing guaranty agreement, were executed and signed only
by the late Efraim Santibaez and his son Edmund. As the petitioner failed to
file its money claim with the probate court, at most, it may only go after
Edmund as co-maker of the decedent under the said promissory notes and
continuing guaranty, of course, subject to any defenses Edmund may have as
against the petitioner. As the court had not acquired jurisdiction over the
person of Edmund, we find it unnecessary to delve into the matter further.
We agree with the finding of the trial court that the petitioner had not
sufficiently shown that it is the successor-in-interest of the Union Savings and
Mortgage Bank to which the FCCC assigned its assets and liabilities.[33] The
petitioner in its complaint alleged that by virtue of the Deed of Assignment
dated August 20, 1981 executed by and between First Countryside Credit
Corporation and Union Bank of the Philippines[34] However, the documentary
evidence[35] clearly reflects that the parties in the deed of assignment with
assumption of liabilities were the FCCC, and the Union Savings and Mortgage
Bank, with the conformity of Bancom Philippine Holdings, Inc. Nowhere can
the petitioners participation therein as a party be found. Furthermore, no
documentary or testimonial evidence was presented during trial to show that
Union Savings and Mortgage Bank is now, in fact, petitioner Union Bank of
the Philippines. As the trial court declared in its decision:

[T]he court also finds merit to the contention of defendant that plaintiff failed to prove
or did not present evidence to prove that Union Savings and Mortgage Bank is now
the Union Bank of the Philippines. Judicial notice does not apply here. The power to
take judicial notice is to [be] exercised by the courts with caution; care must be taken
that the requisite notoriety exists; and every reasonable doubt upon the subject should
be promptly resolved in the negative. (Republic vs. Court of Appeals, 107 SCRA
504).[36]

This being the case, the petitioners personality to file the complaint is
wanting. Consequently, it failed to establish its cause of action. Thus, the trial
court did not err in dismissing the complaint, and the CA in affirming the same.
IN LIGHT OF ALL THE FOREGOING, the petition is hereby DENIED. The
assailed Court of Appeals Decision is AFFIRMED. No costs.
SO ORDERED.
G.R. No. 189121 July 31, 2013

AMELIA GARCIA-QUIAZON, JENNETH QUIAZON and MARIA JENNIFER

QUIAZON, Petitioners,
vs.
MA. LOURDES BELEN, for and in behalf of MARIA LOURDES ELISE QUIAZON, Respondent.

DECISION

PEREZ, J.:

This is a Petition for Review on Certiorari filed pursuant to Rule 45 of the Revised Rules of Court,
primarily assailing the 28 November 2008 Decision rendered by the Ninth Division of the Court of
Appeals in CA-G.R. CV No. 88589,1the decretal portion of which states:

WHEREFORE, premises considered, the appeal is hereby DENIED. The assailed Decision dated
March 11, 2005, and the Order dated March 24, 2006 of the Regional Trial Court, Branch 275, Las
Pias City are AFFIRMED in toto.2

The Facts

This case started as a Petition for Letters of Administration of the Estate of Eliseo Quiazon (Eliseo),
filed by herein respondents who are Eliseos common-law wife and daughter. The petition was
opposed by herein petitioners Amelia Garcia-Quaizon (Amelia) to whom Eliseo was married. Amelia
was joined by her children, Jenneth Quiazon (Jenneth) and Maria Jennifer Quiazon (Jennifer).

Eliseo died intestate on 12 December 1992.

On 12 September 1994, Maria Lourdes Elise Quiazon (Elise), represented by her mother, Ma.
Lourdes Belen (Lourdes), filed a Petition for Letters of Administration before the Regional Trial Court
(RTC) of Las Pias City.3 In her Petition docketed as SP Proc. No. M-3957, Elise claims that she is
the natural child of Eliseo having been conceived and born at the time when her parents were both
capacitated to marry each other. Insisting on the legal capacity of Eliseo and Lourdes to marry, Elise
impugned the validity of Eliseos marriage to Amelia by claiming that it was bigamous for having
been contracted during the subsistence of the latters marriage with one Filipito Sandico (Filipito). To
prove her filiation to the decedent, Elise, among others, attached to the Petition for Letters of
Administration her Certificate of Live Birth4 signed by Eliseo as her father. In the same petition, it was
alleged that Eliseo left real properties worth 2,040,000.00 and personal properties worth
2,100,000.00. In order to preserve the estate of Eliseo and to prevent the dissipation of its value,
Elise sought her appointment as administratrix of her late fathers estate.

Claiming that the venue of the petition was improperly laid, Amelia, together with her children,
Jenneth and Jennifer, opposed the issuance of the letters of administration by filing an
Opposition/Motion to Dismiss.5 The petitioners asserted that as shown by his Death
Certificate, 6 Eliseo was a resident of Capas, Tarlac and not of Las Pias City, at the time of his
death. Pursuant to Section 1, Rule 73 of the Revised Rules of Court,7 the petition for settlement of
decedents estate should have been filed in Capas, Tarlac and not in Las Pias City. In addition to
their claim of improper venue, the petitioners averred that there are no factual and legal bases for
Elise to be appointed administratix of Eliseos estate.
In a Decision8 dated 11 March 2005, the RTC directed the issuance of Letters of Administration to
Elise upon posting the necessary bond. The lower court ruled that the venue of the petition was
properly laid in Las Pias City, thereby discrediting the position taken by the petitioners that Eliseos
last residence was in Capas, Tarlac, as hearsay. The dispositive of the RTC decision reads:

Having attained legal age at this time and there being no showing of any disqualification or
incompetence to serve as administrator, let letters of administration over the estate of the decedent
Eliseo Quiazon, therefore, be issued to petitioner, Ma. Lourdes Elise Quiazon, after the approval by
this Court of a bond in the amount of 100,000.00 to be posted by her.9

On appeal, the decision of the trial court was affirmed in toto in the 28 November 2008
Decision10 rendered by the Court of Appeals in CA-G.R.CV No. 88589. In validating the findings of
the RTC, the Court of Appeals held that Elise was able to prove that Eliseo and Lourdes lived
together as husband and wife by establishing a common residence at No. 26 Everlasting Road,
Phase 5, Pilar Village, Las Pias City, from 1975 up to the time of Eliseos death in 1992. For
purposes of fixing the venue of the settlement of Eliseos estate, the Court of Appeals upheld the
conclusion reached by the RTC that the decedent was a resident of Las Pias City. The petitioners
Motion for Reconsideration was denied by the Court of Appeals in its Resolution11 dated 7 August
2009.

The Issues

The petitioners now urge Us to reverse the assailed Court of Appeals Decision and Resolution on
the following grounds:

I. THE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THAT ELISEO QUIAZON

WAS A RESIDENT OF LAS PIAS AND THEREFORE, THE PETITION FOR LETTERS OF
ADMINISTRATION WAS PROPERLY FILED WITH THE RTC OF LAS PIAS;

II. THE COURT OF APPEALS GRAVELY ERRED IN DECLARING THAT AMELIA GARCIA-
QUIAZON WAS NOT LEGALLY MARRIED TO ELISEO QUIAZON DUE TO PREEXISTING
MARRIAGE; AND

III. THE COURT OF APPEALS OVERLOOKED THE FACT THAT ELISE QUIAZON HAS
NOT SHOWN ANY INTEREST IN THE PETITION FOR LETTERS OF ADMINISTRATION.12

The Courts Ruling

We find the petition bereft of merit.

Under Section 1, Rule 73 of the Rules of Court, the petition for letters of administration of the estate
of a decedent should be filed in the RTC of the province where the decedent resides at the time of
his death:

Sec. 1. Where estate of deceased persons settled. If the decedent is an 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 now Regional Trial Court
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 now Regional Trial Court of any province in which he had estate.
The court first taking cognizance of the settlement of the estate of a decedent, shall exercise
jurisdiction to the exclusion of all other courts. The jurisdiction assumed by a court, so 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. (Emphasis supplied).

The term "resides" connotes ex vi termini "actual residence" as distinguished from "legal residence
or domicile." This term "resides," like the terms "residing" and "residence," is elastic and should be
interpreted in the light of the object or purpose of the statute or rule in which it is employed. In the
application of venue statutes and rules Section 1, Rule 73 of the Revised Rules of Court is of such
nature residence rather than domicile is the significant factor.13 Even where the statute uses word
"domicile" still it is construed as meaning residence and not domicile in the technical sense.14 Some
cases make a distinction between the terms "residence" and "domicile" but as generally used in
statutes fixing venue, the terms are synonymous, and convey the same meaning as the term
"inhabitant."15 In other words, "resides" should be viewed or understood in its popular sense,
meaning, the personal, actual or physical habitation of a person, actual residence or place of
abode.16 It signifies physical presence in a place and actual stay thereat.17 Venue for ordinary civil
actions and that for special proceedings have one and the same meaning.18 As thus defined,
"residence," in the context of venue provisions, means nothing more than a persons actual
residence or place of abode, provided he resides therein with continuity and consistency.19

Viewed in light of the foregoing principles, the Court of Appeals cannot be faulted for affirming the
ruling of the RTC that the venue for the settlement of the estate of Eliseo was properly laid in Las
Pias City. It is evident from the records that during his lifetime, Eliseo resided at No. 26 Everlasting
Road, Phase 5, Pilar Village, Las Pias City. For this reason, the venue for the settlement of his
estate may be laid in the said city.

In opposing the issuance of letters of administration, the petitioners harp on the entry in Eliseos
Death Certificate that he is a resident of Capas, Tarlac where they insist his estate should be settled.
While the recitals in death certificates can be considered proofs of a decedents residence at the
time of his death, the contents thereof, however, is not binding on the courts. Both the RTC and the
Court of Appeals found that Eliseo had been living with Lourdes, deporting themselves as husband
and wife, from 1972 up to the time of his death in 1995. This finding is consistent with the fact that in
1985, Eliseo filed an action for judicial partition of properties against Amelia before the RTC of
Quezon City, Branch 106, on the ground that their marriage is void for being bigamous.20 That Eliseo
went to the extent of taking his marital feud with Amelia before the courts of law renders untenable
petitioners position that Eliseo spent the final days of his life in Tarlac with Amelia and her children.
It disproves rather than supports petitioners submission that the lower courts findings arose from an
erroneous appreciation of the evidence on record. Factual findings of the trial court, when affirmed
by the appellate court, must be held to be conclusive and binding upon this Court.21

Likewise unmeritorious is petitioners contention that the Court of Appeals erred in declaring
Amelias marriage to Eliseo as void ab initio. In a void marriage, it was though no marriage has taken
place, thus, it cannot be the source of rights. Any interested party may attack the marriage directly or
collaterally. A void marriage can be questioned even beyond the lifetime of the parties to the
marriage.22 It must be pointed out that at the time of the celebration of the marriage of Eliseo and
Amelia, the law in effect was the Civil Code, and not the Family Code, making the ruling in Nial v.
Bayadog23 applicable four-square to the case at hand. In Nial, the Court, in no uncertain terms,
allowed therein petitioners to file a petition for the declaration of nullity of their fathers marriage to
therein respondent after the death of their father, by contradistinguishing void from voidable
marriages, to wit:

Consequently, void marriages can be questioned even after the death of either party but voidable
marriages can be assailed only during the lifetime of the parties and not after death of either, in
which case the parties and their offspring will be left as if the marriage had been perfectly valid. That
is why the action or defense for nullity is imprescriptible, unlike voidable marriages where the action
prescribes. Only the parties to a voidable marriage can assail it but any proper interested party may
attack a void marriage.24

It was emphasized in Nial that in a void marriage, no marriage has taken place and it cannot be the
source of rights, such that any interested party may attack the marriage directly or collaterally
without prescription, which may be filed even beyond the lifetime of the parties to the marriage.25

Relevant to the foregoing, there is no doubt that Elise, whose successional rights would be
prejudiced by her fathers marriage to Amelia, may impugn the existence of such marriage even after
the death of her father. The said marriage may be questioned directly by filing an action attacking
the validity thereof, or collaterally by raising it as an issue in a proceeding for the settlement of the
estate of the deceased spouse, such as in the case at bar. Ineluctably, Elise, as a compulsory
heir,26 has a cause of action for the declaration of the absolute nullity of the void marriage of Eliseo
and Amelia, and the death of either party to the said marriage does not extinguish such cause of
action.

Having established the right of Elise to impugn Eliseos marriage to Amelia, we now proceed to
determine whether or not the decedents marriage to Amelia is void for being bigamous.

Contrary to the position taken by the petitioners, the existence of a previous marriage between
Amelia and Filipito was sufficiently established by no less than the Certificate of Marriage issued by
the Diocese of Tarlac and signed by the officiating priest of the Parish of San Nicolas de Tolentino in
Capas, Tarlac. The said marriage certificate is a competent evidence of marriage and the
certification from the National Archive that no information relative to the said marriage exists does
not diminish the probative value of the entries therein. We take judicial notice of the fact that the first
marriage was celebrated more than 50 years ago, thus, the possibility that a record of marriage can
no longer be found in the National Archive, given the interval of time, is not completely remote.
Consequently, in the absence of any showing that such marriage had been dissolved at the time
Amelia and Eliseos marriage was solemnized, the inescapable conclusion is that the latter marriage
is bigamous and, therefore, void ab initio.27

Neither are we inclined to lend credence to the petitioners contention that Elise has not shown any
interest in the Petition for Letters of Administration.

Section 6, Rule 78 of the Revised Rules of Court lays down the preferred persons who are entitled to
the issuance of letters of administration, thus:

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

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

(b) If such surviving husband or wife, as the case may be, or next of kin, or the person
selected by them, be incompetent or unwilling, or if the husband or widow, or next of kin,
neglects for thirty (30) days after the death of the person to apply for administration or to
request that administration be granted to some other person, it may be granted to one or
more of the principal creditors, if competent and willing to serve;
 (c) If there is no such creditor competent and willing to serve, it may be granted to such other
person as the court may select.

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

Sec. 2. Contents of petition for letters of administration. A petition for letters of administration
must be filed by an interested person and must show, so far as known to the petitioner:

(a) The jurisdictional facts;

(b) The names, ages, and residences of the heirs, and the names and residences of the
creditors, of the decedent;

(c) The probable value and character of the property of the estate;

(d) The name of the person for whom letters of administration are prayed.

But no defect in the petition shall render void the issuance of letters of administration.

An "interested party," in estate proceedings, is one who would be benefited in the estate, such as an
heir, or one who has a claim against the estate, such as a creditor. Also, in estate proceedings, the
phrase "next of kin" refers to those whose relationship with the decedent Is such that they are
entitled to share in the estate as distributees.28

In the instant case, Elise, as a compulsory heir who stands to be benefited by the distribution of
Eliseos estate, is deemed to be an interested party. With the overwhelming evidence on record
produced by Elise to prove her filiation to Eliseo, the petitioners pounding on her lack of interest in
the administration of the decedents estate, is just a desperate attempt to sway this Court to reverse
the findings of the Court of Appeals. Certainly, the right of Elise to be appointed administratix of the
estate of Eliseo is on good grounds. It is founded on her right as a compulsory heir, who, under the
law, is entitled to her legitimate after the debts of the estate are satisfied.29 Having a vested right in
the distribution of Eliseos estate as one of his natural children, Elise can rightfully be considered as
an interested party within the purview of the law.

WHEREFORE, premises considered, the petition is DENIED for lack of merit. Accordingly, the Court
of Appeals assailed 28 November 2008 Decision and 7 August 2009 Resolution, arc AFFIRMED in
toto.

SO ORDERED.
ERLINDA PILAPIL and HEIRS G.R. No. 150175
OF DONATA ORTIZ BRIONES,
namely: ESTELA, ERIBERTO
AND VIRGILIO SANTOS, ANA
SANTOS CULTURA, ELVIRA
SANTOS INOCENTES, Present:
ERNESTO MENDOZA,
RIZALINA SANTOS, ADOLFO YNARES-SANTIAGO, J.,
MENDOZA and PACITA Chairperson,
MENDOZA, AUSTRIA-MARTINEZ,*
Petitioners, CALLEJO, SR., and
CHICO-NAZARIO, JJ.

- versus-

HEIRS OF MAXIMINO R.
BRIONES, namely: SILVERIO S.
BRIONES, PETRA BRIONES,
BONIFACIO CABAHUG, JR.,
ANITA TRASMONTE, CIRILITA
FORTUNA, CRESENCIA Promulgated:
BRIONES, FUGURACION
MEDALLE and MERCEDES
LAGBAS, February 5, 2007
Respondents.
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

RESOLUTION

CHICO-NAZARIO, J.:

On 10 March 2006, this Court promulgated its Decision[1] in the above-

entitled case, ruling in favor of the petitioners. The dispositive portion[2] reads as
follows:
 IN VIEW OF THE FOREGOING, the assailed Decision of the Court
of Appeals in CA-GR CV No. 55194, dated 31 August 2001, affirming the
Decision of the Cebu City RTC in Civil Case No. CEB-5794, dated 28
September 1986, is hereby REVERSED and SET ASIDE; and the
Complaint for partition, annulment, and recovery of possession filed by the
heirs of Maximino in Civil Case No. CEB-5794 is hereby DISMISSED.

On 10 May 2006, a Motion for Reconsideration[3] of the foregoing Decision was

filed by Atty. Celso C. Reales of the Reales Law Office on behalf of the
respondents, heirs of Maximino R. Briones. On 19 May 2006,
petitioners Erlinda Pilapil and the other co-heirs of Donata Ortiz Vda. de Briones,
through counsel, filed an Opposition to Respondents Motion for
Reconsideration,[4] to which the respondents filed a Rejoinder[5] on 23 May
2006. Thereafter, Atty. Amador F. Brioso, Jr. of the Canto Brioso Arnedo Law
Office entered his appearance as collaborating counsel for the
respondents.[6] Atty. Brioso then filed on 11 June 2006 and 16 June 2006,
respectively, a Reply[7] and Supplemental Reply[8] to the petitioners Opposition to
respondents Motion for Reconsideration. Finally, petitioners filed a Rejoinder[9] to
the respondents Reply and Supplemental Reply on 5 July 2006.

The facts of the case, as recounted in the Decision,[10] are as follows

Petitioners are the heirs of the late Donata Ortiz-Briones (Donata),

consisting of her surviving sister, Rizalina Ortiz-
Aguila (Rizalina); Rizalinas daughter, Erlinda Pilapil (Erlinda); and the
other nephews and nieces of Donata, in representation of her two other
sisters who had also passed away. Respondents, on the other hand, are the
heirs of the late Maximino Briones (Maximino), composed of his nephews
and nieces, and grandnephews and grandnieces, in representation of the
deceased siblings of Maximino.

xxxx

Maximino was married to Donata but their union did not produce
any children. When Maximino died on 1 May 1952, Donata instituted
intestate proceedings to settle her husbands estate with the Cebu City Court
of First Instance (CFI), 14th Judicial District, designated as Special
Proceedings No. 928-R. On 8 July 1952, the CFI issued Letters of
Administration appointing Donata as
the administratrix of Maximinos estate. She submitted an Inventory
of Maximinos properties, which included, among other things, the
following parcels of land x x x.

xxxx

The CFI would subsequently issue an Order, dated 2 October 1952,

awarding ownership of the aforementioned real properties to Donata. On 27
June 1960, Donata had the said CFI Order recorded in the Primary Entry
Book of the Register of Deeds, and by virtue thereof, received new TCTs,
covering the said properties, now in her name.

Donata died on 1 November 1977. Erlinda, one of Donatas nieces,

instituted with the RTC a petition for the administration of the intestate
estate of Donata. Erlinda and her husband, Gregorio, were appointed by the
RTC as administrators of Donatas intestate estate. Controversy arose
among Donatas heirs when Erlinda claimed exclusive ownership of three
parcels of land, covered by TCTs No. 21542, 21545, and 58684, based on
two Deeds of Donation, both dated 15 September 1977, allegedly executed
in her favor by her aunt Donata. The other heirs
of Donata opposed Erlindas claim. This Court, however, was no longer
informed of the subsequent development in the intestate proceedings of the
estate of Donata; and as far as this Petition is concerned, all the heirs
of Donata, including Erlinda, appear to be on the same side.

On 21 January 1985, Silverio Briones (Silverio), a nephew

of Maximino, filed a Petition with the RTC for Letters of Administration
for the intestate estate of Maximino, which was initially granted by the
RTC. The RTC also issued an Order, dated 5 December 1985,
allowing Silverio to collect rentals from Maximinos properties. But then,
Gregorio filed with the RTC a Motion to Set Aside the Order, dated 5
December 1985, claiming that the said properties were already under his
and his wifes administration as part of the intestate estate
of Donata. Silverios Letters of Administration for the intestate estate
of Maximino was subsequently set aside by the RTC.

On 3 March 1987, the heirs of Maximino filed a Complaint with the

RTC against the heirs of Donata for the partition, annulment, and recovery
of possession of real property, docketed as Civil Case No. CEB-5794. They
later filed an Amended Complaint, on 11 December 1992. They alleged
that Donata, as administratrix of the estate of Maximino, through fraud and
misrepresentation, in breach of trust, and without the knowledge of the
 other heirs, succeeded in registering in her name the real properties
belonging to the intestate estate of Maximino.

xxxx

After trial in due course, the RTC rendered its Decision, dated 8
April 1986, in favor of the heirs of Maximino x x x.

xxxx

x x x[T]he RTC declared that the heirs of Maximino were entitled to of the
real properties covered by TCTs No. 21542, 21543, 21544, 21545, 21546,
and 58684. It also ordered Erlinda to reconvey to the heirs of Maximino the
said properties and to render an accounting of the fruits thereof.

The heirs of Donata appealed the RTC Decision, dated 8 April

1986, to the Court of Appeals. The Court of Appeals, in its Decision,
promulgated on 31 August 2001, affirmed the RTC Decision, x x x.

xxxx

Unsatisfied with the afore-quoted Decision of the Court of Appeals,

the heirs of Donata filed the present Petition, x x x.

In its Decision, dated 10 March 2006, this Court found the Petition
meritorious and, reversing the Decisions of the Court of Appeals and the Regional
Trial Court (RTC), dismissed the Complaint for partition, annulment, and recovery
of possession of real property filed by the heirs of Maximino in Civil Case No.
CEB-5794. This Court summed up its findings,[11] thus
In summary, the heirs of Maximino failed to prove by clear and
convincing evidence that Donata managed, through fraud, to have the real
properties, belonging to the intestate estate of Maximino, registered in her
name.In the absence of fraud, no implied trust was established
between Donata and the heirs of Maximino under Article 1456 of the New
Civil Code. Donata was able to register the real properties in her name, not
through fraud or mistake, but pursuant to an Order, dated 2 October 1952,
issued by the CFI in Special Proceedings No. 928-R. The CFI Order,
presumed to be fairly and regularly issued, declared Donata as the sole,
absolute, and exclusive heir of Maximino; hence, making Donata the
 singular owner of the entire estate of Maximino, including the real
properties, and not merely a co-owner with the other heirs of her deceased
husband. There being no basis for the Complaint of the heirs
of Maximino in Civil Case No. CEB-5794, the same should have been
dismissed.

Respondents move for the reconsideration of the Decision of this Court

raising still the arguments that Donata committed fraud in securing the Court of
First Instance Order, dated 2 October 1952, which declared her as the sole heir of
her deceased husband Maximino and authorized her to have Maximinos properties
registered exclusively in her name; that respondents right to succession to the
disputed properties was transmitted or vested from the moment
of Maximinos death and which they could no longer be deprived of;
that Donata merely possessed and held the properties in trust for her co-
heirs/owners; and that, by virtue of this Courts ruling
in Quion v. Claridad[12] and Sevilla, et al. v. De Los Angeles,[13] respondents action
to recover title to and possession of their shares in Maximinos estate, held in trust
for their benefit by Donata, and eventually, by petitioners as the latters successors-
in-interest, is imprescriptible. Respondents also advance a fresh contention that the
CFI Order, dated 2 October 1952, being based on the fraudulent misrepresentation
of Donata that she was Maximinos sole heir, was a void order, which produced no
legal effect. Lastly, respondents asseverate that, by relying on certain procedural
presumptions in its Decision, dated 10 March 2006, this Court has sacrificed their
substantive right to succession, thus, making justice subservient to the dictates of
mere procedural fiats.[14]

While this Court is persuaded to reexamine and clarify some points in its
previous Decision in this case, it does not find any new evidence or argument that
would adequately justify a change in its previous position.

On the finding of fraud

As this Court declared in its Decision, the existence of any trust relations between
petitioners and respondents shall be examined in the light of Article 1456 of the
New Civil Code, which provides that, [i]f property is acquired through mistake or
fraud, the person obtaining it is, by force of law, considered a trustee of an implied
trust for the benefit of the person from whom the property comes. Hence, the
foremost question to be answered is still whether an implied trust under Article
1456 of the New Civil Code had been sufficiently established in the present case.

In the Decision, this Court ruled in the negative, since there was insufficient
evidence to establish that Donata committed fraud. It should be remembered
that Donata was able to secure certificates of title to the disputed properties by
virtue of the CFI Order in Special Proceedings No. 928-R (the proceedings she
instituted to settle Maximinos intestate estate), which declared her
as Maximinos sole heir. In the absence of proof to the contrary, the Court accorded
to Special Proceedings No. 928-R the presumptions of regularity and
validity. Reproduced below are the relevant portions[15] of the Decision

At the onset, it should be emphasized that Donata was able to secure

the TCTs covering the real properties belonging to the estate
of Maximino by virtue of a CFI Order, dated 2 October 1952. It is
undisputed that the said CFI Order was issued by the CFI in Special
Proceedings No. 928-R, instituted by Donata herself, to settle the intestate
estate of Maximino. The petitioners, heirs of Donata, were unable to
present a copy of the CFI Order, but this is not surprising considering that it
was issued 35 years prior to the filing by the heirs of Maximino of their
Complaint in Civil Case No. CEB-5794 on 3 March 1987. The existence of
such CFI Order, nonetheless, cannot be denied. It was recorded in the
Primary Entry Book of the Register of Deeds on 27 June 1960, at 1:10 p.m.,
as Entry No. 1714. It was annotated on the TCTs covering the real
properties as having declared Donata the sole, absolute, and exclusive heir
of Maximino. The non-presentation of the actual CFI Order was not fatal to
the cause of the heirs of Donata considering that its authenticity and
contents were never questioned. The allegation of fraud by the heirs
of Maximino did not pertain to the CFI Order, but to the manner or
procedure by which it was issued in favor of Donata. Moreover, the non-
presentation of the CFI Order, contrary to the declaration by the RTC, does
not amount to a willful suppression of evidence that would give rise to the
presumption that it would be adverse to the heirs of Donata if produced.
x x x.

xxxx

The CFI Order, dated 2 October 1952, issued in Special Proceedings

No. 928-R, effectively settled the intestate estate of Maximino by
declaring Donata as the sole, absolute, and exclusive heir of her deceased
husband.The issuance by the CFI of the said Order, as well as its conduct of
the entire Special Proceedings No. 928-R, enjoy the presumption of validity
pursuant to the Section 3(m) and (n) of Rule 131 of the Revised Rules of
Court, reproduced below

SEC. 3. Disputable presumptions. The following

presumptions are satisfactory if uncontradicted, but may be
contradicted and overcome by other evidence:

xxxx

(m) That official duty has been regularly performed;

(n) That a court, or judge acting as such, whether in

the Philippines or elsewhere, was acting in the lawful exercise of
jurisdiction.
By reason of the foregoing provisions, this Court must presume, in
the absence of any clear and convincing proof to the contrary, that the CFI
in Special Proceedings No. 928-R had jurisdiction of the subject matter and
the parties, and to have rendered a judgment valid in every respect; and it
could not give credence to the following statements made by the Court of
Appeals in its Decision.

xxxx

There was totally no evidentiary basis for the foregoing

pronouncements. First of all, the Petition filed by Donata for Letters of
Administration in Special Proceedings No. 928-R before the CFI was not
even referred to nor presented during the course of the trial of Civil Case
No. CEB-5794 before the RTC. How then could the Court of Appeals make
a finding that Donata willfully excluded from the said Petition the names,
ages, and residences of the other heirs of Maximino? Second, there was
also no evidence showing that the CFI actually failed to send notices of
Special Proceedings No. 928-R to the heirs of Maximino or that it did not
require presentation of proof of service of such notices. It should be
 remembered that there stands a presumption that the CFI Judge had
regularly performed his duties in Special Proceedings No. 928-R, which
included sending out of notices and requiring the presentation of proof of
service of such notices; and, the heirs of Maximino did not propound
sufficient evidence to debunk such presumption. They only made a general
denial of knowledge of Special Proceedings No. 928-R, at least until
1985. There was no testimony or document presented in which the heirs
of Maximino categorically denied receipt of notice from the CFI of
the pendency of Special Proceedings No. 928-R. The only evidence on
record in reference to the absence of notice of such proceedings was the
testimony of Aurelia Briones (Aurelia), one of the heirs of Maximino,
x x x.

xxxx

Aurelias testimony deserves scant credit considering that she was not
testifying on matters within her personal knowledge. The phrase I dont
think is a clear indication that she is merely voicing out her opinion on how
she believed her uncles and aunts would have acted had they received
notice of Special Proceedings No. 928-R.

It is worth noting that, in its foregoing ratiocination, the Court was

proceeding from an evaluation of the evidence on record, which did not include an
actual copy of the CFI Order in Special Proceedings No. 928-R.Respondents only
submitted a certified true copy thereof on 15 June 2006, annexed to their
Supplemental Reply to petitioners opposition to their motion for reconsideration of
this Courts Decision. Respondents did not offer any explanation as to why they
belatedly produced a copy of the said Order, but merely claimed to have been
fortunate enough to obtain a copy thereof from the Register of Deeds of Cebu.[16]

Respondents should be taken to task for springing new evidence so late into
the proceedings of this case. Parties should present all their available evidence at
the courts below so as to give the opposing party the opportunity to scrutinize and
challenge such evidence during the course of the trial. However, given that the
existence of the CFI Order in Special Proceedings No. 928-R was never in issue
and was, in fact, admitted by the petitioners; that the copy submitted is a certified
true copy of the said Order; and that the said Order may provide new information
vital to a just resolution of the present case, this Court is compelled to consider the
same as part of the evidence on record.

The CFI Order[17] in question reads in full as

ORDER
This is with reference to the Motion of the Administratrix,
dated January 5, 1960, that she be declared the sole heir of her deceased
husband, Maximino Suico Briones, the latter having died without any
legitimate ascendant nor descendant, nor any legitimate brother or
sister, nephews or nieces.

At the hearing of this incident today, nobody appeared to resist the

motion, and based on the uncontradicted testimony of Donata G. Ortiz
that she was the nearest surviving relative of the
deceased Maximino Suico Briones at the time of the latters death, and
pursuant to the pertinent provisions of the new Civil Code of the
Philippines, the Court hereby declares the aforesaid Donata G. Ortiz the
sole, absolute and exclusive heir of the estate of the
deceased Maximino SuicoBriones, and she is hereby entitled to inherit
all the residue of this estate after paying all the obligations thereof,
which properties are those contained in the Inventory, dated October 2,
1952.

Cebu City, January 15, 1960.

From the contents of the afore-quoted Order, this Court is able to deduce
that the CFI Order was in fact issued on 15 January 1960 and not 2 October 1952,
as earlier stated in the Decision. It was the inventory of properties, submitted
by Donata as administratrix of Maximinos intestate estate, which was dated 2
October 1952.[18] Other than such observation, this Court finds nothing in the CFI
Order which could change its original position in the Decision under consideration.

While it is true that since the CFI was not informed that Maximino still had
surviving siblings and so the court was not able to order that these siblings be
given personal notices of the intestate proceedings, it should be borne in mind that
the settlement of estate, whether testate or intestate, is a proceeding in rem,[19] and
that the publication in the newspapers of the filing of the application and of the
date set for the hearing of the same, in the manner prescribed by law, is a notice to
the whole world of the existence of the proceedings and of the hearing on the date
and time indicated in the publication. The publication requirement of the notice in
newspapers is precisely for the purpose of informing all interested parties in the
estate of the deceased of the existence of the settlement proceedings, most
especially those who were not named as heirs or creditors in the petition,
regardless of whether such omission was voluntarily or involuntarily made.

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

In relying on the presumptions of the regular performance of official duty

and lawful exercise of jurisdiction by the CFI in rendering the questioned Order,
dated 15 January 1960, this Court is not, as counsel for respondents allege,
sacrificing the substantive right of respondents to their share in the inheritance in
favor of mere procedural fiats. There is a rationale for the establishment of rules of
procedure, as amply explained by this Court in De Dios v. Court of Appeals[20]

Procedural rules are designed to insure the orderly and expeditious

administration of justice by providing for a practical system by which the
parties to a litigation may be accorded a full and fair opportunity to present
their respective positions and refute each other's submissions under the
prescribed requirements, conditions and limitations. Adjective law is not
the counterfoil of substantive law. In fact, there is a symbiotic relationship
between them. By complying faithfully with the Rules of Court, the bench
and the bar are better able to discuss, analyze and understand substantive
rights and duties and consequently to more effectively protect and enforce
them. The other alternative is judicial anarchy.
Thus, compliance with the procedural rules is the general rule, and abandonment
thereof should only be done in the most exceptional circumstances. The
presumptions relied upon by this Court in the instant case are disputable
presumptions, which are satisfactory, unless contradicted or overcome by
evidence. This Court finds that the evidence presented by respondents failed to
overcome the given presumptions.
Although Donata may have alleged before the CFI that she was her
husbands sole heir, it was not established that she did so knowingly, maliciously
and in bad faith, so as for this Court to conclude that she indeed committed
fraud. This Court again brings to the fore the delay by which respondents filed the
present case, when the principal actors involved,
particularly, Donata and Maximinos siblings, have already passed away and their
lips forever sealed as to what truly transpired between them. On the other hand,
Special Proceedings No. 928-R took place when all these principal actors were still
alive and each would have been capable to act to protect his or her own right
to Maximinos estate. Letters of Administration of Maximinos estate were issued in
favor of Donata as early as 8 July 1952, and the CFI Order in question was issued
only on 15 January 1960.The intestate proceedings for the settlement
of Maximinos estate were thus pending for almost eight years, and it is the burden
of the respondents to establish that their parents or
grandparents, Maximinos surviving siblings, had absolutely no knowledge of the
said proceedings all these years. As established in Ramos v. Ramos,[21] the
degree of proof to establish fraud in a case where the principal actors to the
transaction have already passed away is proof beyond reasonable doubt, to wit

"x x x But length of time necessarily obscures all human evidence;

and as it thus removes from the parties all the immediate means to verify
the nature of the original transactions, it operates by way of presumption,
in favor of innocence, and against imputation of fraud. It would be
unreasonable, after a great length of time, to require exact proof of all the
minute circumstances of any transaction, or to expect a satisfactory
explanation of every difficulty, real or apparent, with which it may be
encumbered. The most that can fairly be expected, in such cases, if the
parties are living, from the frailty of memory, and human infirmity, is, that
 the material facts can be given with certainty to a common intent; and, if
the parties are dead, and the cases rest in confidence, and
in parol agreements, the most that we can hope is to arrive at probable
conjectures, and to substitute general presumptions of law, for exact
knowledge. Fraud, or breach of trust, ought not lightly to be imputed to
the living; for, the legal presumption is the other way; as to the dead, who
are not here to answer for themselves, it would be the height of injustice
and cruelty, to disturb their ashes, and violate the sanctity of the grave,
unless the evidence of fraud be clear, beyond a reasonable
doubt (Prevost vs. Gratz, 6 Wheat. [U.S.], 481, 498).
Moreover, even if Donatas allegation that she was Maximinos sole heir does
constitute fraud, it is insufficient to justify abandonment of the CFI Order, dated 15
January 1960,[ 2 2] considering the nature of intestate proceedings as
being in rem and the disputable presumptions of the regular performance of official
duty and lawful exercise of jurisdiction by the CFI in rendering the questioned
Order, dated 15 January 1960, in Special Proceedings No. 928-R.

On prescription of the right to recover based on implied trust

Assuming, for the sake of argument, that Donatas misrepresentation

constitutes fraud that would impose upon her the implied trust provided in Article
1456 of the Civil Code, this Court still cannot sustain respondents contention that
their right to recover their shares in Maximinos estate is imprescriptible. It is
already settled in jurisprudence that an implied trust, as opposed to an express
trust, is subject to prescription and laches.

The case of Ramos v. Ramos[23] already provides an elucidating discourse on

the matter, to wit

"Trusts are either express or implied. Express trusts are created by

the intention of the trustor or of the parties. Implied trusts come into being
by operation of law" (Art. 1441, Civil Code). "No express trusts concerning
an immovable or any interest therein may be proven by oral evidence. An
implied trust may be proven by oral evidence" (Ibid; Arts. 1443 and 1457).

"No particular words are required for the creation of an express trust,
it being sufficient that a trust is clearly intended" (Ibid; Art.
1444; Tuason de Perez vs. Caluag, 96 Phil. 981; Julio vs. Dalandan, L-
19012, October 30, 1967, 21 SCRA 543, 546). "Express trusts are those
which are created by the direct and positive acts of the parties, by some
writing or deed, or will, or by words either expressly or impliedly evincing
an intention to create a trust" (89 C.J. S. 122).

"Implied trusts are those which, without being expressed, are

deducible from the nature of the transaction as matters of intent, or which
are superinduced on the transaction by operation of law as matters of
equity, independently of the particular intention of the parties" (89 C.J.S.
724). They are ordinarily subdivided into resulting and constructive trusts
(89 C.J.S. 722).

"A resulting trust is broadly defined as a trust which is raised or

created by the act or construction of law, but in its more restricted sense it
is a trust raised by implication of law and presumed always to have been
contemplated by the parties, the intention as to which is to be found in the
nature of their transaction, but not expressed in the deed or instrument of
conveyance" (89 C.J.S. 725). Examples of resulting trusts are found in
Article 1448 to 1455 of the Civil Code. See Padilla vs. Court of Appeals,
L-31569, September 28, 1973, 53 SCRA 168, 179).

On the other hand, a constructive trust is a trust "raised by

construction of law, or arising by operation of law." In a more restricted
sense and as contradistinguished from a resulting trust, a constructive trust
is "a trust not created by any words, either expressly or impliedly evincing a
direct intention to create a trust, but by the construction of equity in order to
satisfy the demands of justice. It does not arise by agreement or intention
but by operation of law." (89 C.J.S. 726-727). "If a person obtains legal title
to property by fraud or concealment, courts of equity will impress upon the
title a so-called constructive trust in favor of the defrauded party." A
constructive trust is not a trust in the technical sense (Gayondato vs.
Treasurer of the P.I., 49 Phil. 244; See Art. 1456, Civil Code).

There is a rule that a trustee cannot acquire by prescription the

ownership of property entrusted to him (Palma vs. Cristobal, 77 Phil. 712),
or that an action to compel a trustee to convey property registered in his
name in trust for the benefit of the cestui qui trust does not prescribe
(Manalang vs. Canlas, 94 Phil. 776; Cristobal vs. Gomez, 50 Phil. 810), or
that the defense of prescription cannot be set up in an action to recover
property held by a person in trust for the benefit of another (Sevilla vs.
De los Angeles, 97 Phil. 875), or that property held in trust can be
recovered by the beneficiary regardless of the lapse of time (Marabilles vs.
Quito, 100 Phil. 64; Bancairenvs. Diones, 98 Phil. 122, 126; Juan
vs. Zuiga, 62 O.G. 1351; 4 SCRA 1221; Jacinto vs. Jacinto, L-17957, May
31, 1962. See Tamayo vs. Callejo, 147 Phil. 31, 37).

That rule applies squarely to express trusts. The basis of the rule is
that the possession of a trustee is not adverse. Not being adverse, he does
not acquire by prescription the property held in trust. Thus, Section 38 of
Act 190 provides that the law of prescription does not apply "in the case of
a continuing and subsisting trust" (Diaz vs. Gorricho and Aguado, 103 Phil.
261, 266; Laguna vs. Levantino, 71 Phil. 566; Sumira vs. Vistan, 74 Phil.
138; Golfeo vs. Court of Appeals, 63 O.G. 4895, 12 SCRA
199; Caladiao vs. Santos, 63 O.G. 1956, 10 SCRA 691).

The rule of imprescriptibility of the action to recover property held

in trust may possibly apply to resulting trusts as long as the trustee has not
repudiated the trust (Heirs of Candelaria vs. Romero, 109 Phil. 500, 502-
3; Martinez vs. Grao, 42 Phil. 35; Buencamino vs. Matias, 63 O. G. 11033,
16 SCRA 849).

The rule of imprescriptibility was misapplied to constructive

trusts (Geronimo and Isidoro vs. Nava and Aquino, 105 Phil. 145, 153.
Compare with Cuison vs. Fernandez and Bengzon, 105 Phil. 135,
139; De Pasion vs. De Pasion, 112 Phil. 403, 407).

Acquisitive prescription may bar the action of the beneficiary against

the trustee in an express trust for the recovery of the property held in trust
where (a) the trustee has performed unequivocal acts of repudiation
amounting to an ouster of the cestui qui trust; (b) such positive acts of
repudiation have been made known to the cestui qui trust and (c) the
evidence thereon is clear and conclusive (Laguna vs. Levantino,
supra; Salinas vs. Tuason, 55 Phil. 729. Compare with the rule regarding
co-owners found in the last paragraph of Article 494, Civil
Code; Casaas vs. Rosello, 50 Phil. 97; Gerona vs. De Guzman, L-19060,
May 29, 1964, 11 SCRA 153, 157).

With respect to constructive trusts, the rule is different.

The prescriptibility of an action for reconveyance based on constructive
trust is now settled (Alzona vs. Capunitan, L-10228, February 28, 1962, 4
SCRA 450; Gerona vs. De Guzman, supra; Claridad vs. Henares, 97 Phil.
973; Gonzales vs. Jimenez, L-19073, January 30, 1965, 13 SCRA
80; Boaga vs. Soler, 112 Phil. 651; J. M. Tuason & Co., vs. Magdangal, L-
15539, January 30, 1962, 4 SCRA 84). Prescription may supervene in an
implied trust (Bueno vs. Reyes, L-22587, April 28, 1969, 27 SCRA
 1179; Fabian vs. Fabian, L-20449, January 29, 1968; Jacinto vs. Jacinto,
L-17957, May 31, 1962, 5 SCRA 371).

And whether the trust is resulting or constructive, its enforcement

may be barred by laches (90 C.J.S. 887-889; 54 Am Jur. 449-450; Diaz
vs. Gorricho and Aguado, supra; Compare with Mejia vs. Gampona, 100
Phil. 277). [Emphases supplied.]

A present reading of the Quion[24] and Sevilla[25] cases, invoked by

respondents, must be made in conjunction with and guided accordingly by the
principles established in the afore-quoted case. Thus, while respondents right to
inheritance was transferred or vested upon them at the time of Maximinos death,
their enforcement of said right by appropriate legal action may be barred by the
prescription of the action.

Prescription of the action for reconveyance of the disputed properties based

on implied trust is governed by Article 1144 of the New Civil Code, which reads

ART. 1144. The following actions must be brought within ten years
from the time the right of action accrues:

(1) Upon a written contract;

(2) Upon an obligation created by law;

(3) Upon a judgment.

Since an implied trust is an obligation created by law (specifically, in this case, by

Article 1456 of the New Civil Code), then respondents had 10 years within which
to bring an action for reconveyance of their shares in Maximinos properties. The
next question now is when should the ten-year prescriptive period be reckoned
from. The general rule is that an action for reconveyance of real property based on
implied trust prescribes ten years from registration and/or issuance of the title to
the property,[26] not only because registration under the Torrens system is a
constructive notice of title,[27] but also because by registering the disputed
properties exclusively in her name, Donata had already unequivocally repudiated
any other claim to the same.
 By virtue of the CFI Order, dated 15 January 1960, in Special Proceedings
No. 928-R, Donata was able to register and secure certificates of title over the
disputed properties in her name on 27 June 1960. The respondents filed with the
RTC their Complaint for partition, annulment, and recovery of possession of the
disputed real properties, docketed as Civil Case No. CEB-5794, only on 3 March
1987, almost 27 years after the registration of the said properties in the name
of Donata. Therefore, respondents action for recovery of possession of the disputed
properties had clearly prescribed.

Moreover, even though respondents Complaint before the RTC in Civil Case
No. CEB-5794 also prays for partition of the disputed properties, it does not make
their action to enforce their right to the said properties imprescriptible. While as a
general rule, the action for partition among co-owners does not prescribe so long as
the co-ownership is expressly or impliedly recognized, as provided for in Article
494, of the New Civil Code, it bears to emphasize that Donata had never
recognized respondents as co-owners or co-heirs, either expressly or
impliedly.[28] Her assertion before the CFI in Special Proceedings No. 928-R that
she was Maximinos sole heir necessarily excludes recognition of some other co-
owner or co-heir to the inherited properties; Consequently, the rule on non-
prescription of action for partition of property owned in common does not apply to
the case at bar.

On laches as bar to recovery

Other than prescription of action, respondents right to recover possession of

the disputed properties, based on implied trust, is also barred by laches. The
defense of laches, which is a question of inequity in permitting a claim to be
enforced, applies independently of prescription, which is a question of
time. Prescription is statutory; laches is equitable.[29]

Laches is defined as the failure to assert a right for an unreasonable and

unexplained length of time, warranting a presumption that the party entitled to
assert it has either abandoned or declined to assert it. This equitable defense is
based upon grounds of public policy, which requires the discouragement of stale
claims for the peace of society.[30]
 This Court has already thoroughly discussed in its Decision the basis for
barring respondents action for recovery of the disputed properties because
of laches. This Court pointed out therein[31] that
In further support of their contention of fraud by Donata, the heirs
of Maximino even emphasized that Donata lived along the same street as
some of the siblings of Maximino and, yet, she failed to inform them of the
CFI Order, dated [15 January 1960], in Special Proceedings No. 928-R, and
the issuance in her name of new TCTs covering the real properties which
belonged to the estate of Maximino. This Court, however, appreciates such
information differently. It actually works against the heirs
of Maximino. Since they only lived nearby, Maximinos siblings had ample
opportunity to inquire or discuss with Donata the status of the estate of their
deceased brother. Some of the real properties, which belonged to the estate
of Maximino, were also located within the same area as their residences
in Cebu City, and Maximinos siblings could have regularly observed the
actions and behavior of Donata with regard to the said real properties. It is
uncontested that from the time of Maximinos death on 1 May
1952, Donata had possession of the real properties. She managed the real
properties and even collected rental fees on some of them until her own
death on 1 November 1977. After Donatas death, Erlinda took possession
of the real properties, and continued to manage the same and collect the
rental fees thereon. Donataand, subsequently, Erlinda, were so obviously
exercising rights of ownership over the real properties, in exclusion of all
others, which must have already put the heirs of Maximino on guard if they
truly believed that they still had rights thereto.

The heirs of Maximino knew he died on 1 May 1952. They even

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

Considering the circumstances in the afore-quoted paragraphs, as well as

respondents conduct before this Court, particularly the belated submission of
evidence and argument of new issues, respondents are consistently displaying a
penchant for delayed action, without any proffered reason or justification for such
delay.

It is well established that the law serves those who are vigilant and diligent
and not those who sleep when the law requires them to act. The law does not
encourage laches, indifference, negligence or ignorance. On the contrary, for a
party to deserve the considerations of the courts, he must show that he is not guilty
of any of the aforesaid failings.[32]

On void judgment or order

Respondents presented only in their Reply and Supplemental Reply to the

petitioners Opposition to their Motion for Reconsideration the argument that the
CFI Order, dated 15 January 1960, in Special Proceedings No. 928-R is void and,
thus, it cannot have any legal effect. Consequently, the registration of the disputed
properties in the name of Donata pursuant to such Order was likewise void.

This Court is unconvinced.

In the jurisprudence referred to by the respondents,[33] an order or judgment

is considered void when rendered by the court without or in excess of its
jurisdiction or in violation of a mandatory duty, circumstances which are not
present in the case at bar.

Distinction must be made between a void judgment and a voidable one, thus

"* * * A voidable judgment is one which, though not a mere nullity,

is liable to be made void when a person who has a right to proceed in the
matter takes the proper steps to have its invalidity declared. It always
contains some defect which may become fatal. It carries within it the means
of its own overthrow. But unless and until it is duly annulled, it is attended
with all the ordinary consequences of a legal judgment. The party against
whom it is given may escape its effect as a bar or an obligation, but only by
a proper application to have it vacated or reversed. Until that is done, it will
be efficacious as a claim, an estoppel, or a source of title. If no proceedings
are ever taken against it, it will continue throughout its life to all intents a
 valid sentence. If emanating from a court of general jurisdiction, it will be
sustained by the ordinary presumptions of regularity, and it is not open to
impeachment in any collateral action. * * *"

But it is otherwise when the judgment is void. "A void judgment is

in legal effect no judgment. By it no rights are divested. From it no rights
can be obtained. Being worthless in itself, all proceedings founded upon it
are equally worthless. It neither binds nor bars any one. All acts performed
under it and all claims flowing out of it are void. The parties attempting to
enforce it may be responsible as trespassers. The purchaser at a sale by
virtue of its authority finds himself without title and without redress."
(Freeman on Judgments, sec. 117, citing Campbell vs. McCahan, 41 Ill.,
45; Roberts vs. Stowers, 7 Bush, 295, Huls vs. Buntin, 47 Ill.,
396; Sherrell vs. Goodrum, 3 Humph., 418; Andrews vs. State, 2 Sneed,
549; Hollingsworth vs. Bagley, 35 Tex., 345; Morton vs. Root, 2 Dill., 312;
Commercial Bank of Manchester vs. Martin, 9 Smedes & M., 613;
Hargis vs. Morse, 7 Kan., 259. See also Cornell vs. Barnes, 7 Hill, 35;
Dawson and Another vs. Wells, 3 Ind., 399; Meyer vs. Mintonye, 106 Ill.,
414; Olson vs. Nunnally, 47 Kan., 391; White vs. Foote L. & M. Co., 29 W.
Va., 385.)

It is not always easy to draw the line of demarcation between a void

judgment and a voidable one, but all authorities agree that jurisdiction over
the subject-matter is essential to the validity of a judgment and that want of
such jurisdiction renders it void and a mere nullity. In the eye of the law it
is non-existent. (Fisher vs. Harnden, 1 Paine, 55; Towns vs. Springer, 9 Ga.,
130; Mobley vs. Mobley, 9 Ga., 247; Beverly and McBride vs. Burke, 9
Ga., 440; Central Bank of Georgia vs. Gibson, 11 Ga., 453; Johnson vs.
Johnson, 30 Ill., 215; St. Louis and Sandoval Coal and Mining Co. vs.
Sandoval Coal and Mining Co., 111 Ill., 32; Swiggart vs. Harber, 4 Scam.,
364; Miller vs. Snyder, 6 Ind., 1; Seely vs. Reid, 3 Greene [Iowa], 374.)[34]

The fraud and misrepresentation fostered by Donata on the CFI in Special

Proceedings No. 928-R did not deprive the trial court of jurisdiction over the
subject-matter of the case, namely, the intestate estate of Maximino. Donatas fraud
and misrepresentation may have rendered the CFI Order, dated 15 January
1960, voidable, but not void on its face. Hence, the said Order, which already
became final and executory, can only be set aside by direct action to annul and
enjoin its enforcement.[35] It cannot be the subject of a collateral attack as is being
done in this case. Note that respondents Complaint before the RTC in Civil Case
No. CEB-5794 was one for partition, annulment, and recovery of possession of the
disputed properties. The annulment sought in the Complaint was not that of the
CFI Order, dated 15 January 1960, but of the certificates of title over the properties
issued in Donatas name. So until and unless respondents bring a direct action to
nullify the CFI Order, dated 15 January 1960, in Special Proceedings No. 928-R,
and attain a favorable judgment therein, the assailed Order remains valid and
binding.

Nonetheless, this Court also points out that an action to annul an order or
judgment based on fraud must be brought within four years from the discovery of
the fraud.[36] If it is conceded that the respondents came to know
of Donatas fraudulent acts only in 1985, during the course of the RTC proceedings
which they instituted for the settlement of Maximinos estate, then their right to file
an action to annul the CFI Order, dated 15 January 1960, in Special Proceedings
No. 928-R (earlier instituted by Donata for the settlement of Maximinos estate),
has likewise prescribed by present time.

In view of the foregoing, the Motion for Reconsideration is DENIED.

SO ORDERED.
A.M. No. P-01-1448 June 25, 2013
(Formerly OCA IPI No. 99-664-P)

RODOLFO C. SABIDONG, Complainant,

vs.
NICOLASITO S. SOLAS (Clerk of Court IV), Respondent.

DECISION

VILLARAMA, JR., J.:

The present administrative case stemmed from a sworn letter-complaint1 dated May 29, 1999 filed
before this Court by Rodolfo C. Sabidong (complainant) charging respondent Nicolasito S. Solas,
Clerk of Court IV, Municipal Trial Court in Cities (MTCC), Iloilo City with grave and serious
misconduct, dishonesty, oppression and abuse of authority.

The Facts

Trinidad Sabidong, complainants mother, is one of the longtime occupants of a parcel of land,
designated as Lot 11 (Lot 1280-D-4-11 of consolidation-subdivision plan [LRC] Pcs-483) originally
registered in the name of C. N. Hodges and situated at Barangay San Vicente, Jaro, Iloilo City.2 The
Sabidongs are in possession of one-half portion of Lot 11 of the said Estate (Hodges Estate), as the
other half-portion was occupied by Priscila Saplagio. Lot 11 was the subject of an ejectment suit filed
by the Hodges Estate, docketed as Civil Case No. 14706 of the MTCC Iloilo City, Branch 4 ("Rosita
R. Natividad in her capacity as Administratrix of C.N. Hodges Estate, plaintiff vs. Priscila Saplagio,
defendant"). On May 31, 1983, a decision was rendered in said case ordering the defendant to
immediately vacate the portion of Lot 11 leased to her and to pay the plaintiff rentals due, attorneys
fees, expenses and costs.3 At the time, respondent was the Clerk of Court III of MTCC, Branch 3,
Iloilo City.

Sometime in October 1984, respondent submitted an Offer to Purchase on installment Lots 11 and
12. In a letter dated January 7, 1986, the Administratrix of the Hodges Estate rejected respondents
offer in view of an application to purchase already filed by the actual occupant of Lot 12, "in line with
the policy of the Probate Court to give priority to the actual occupants in awarding approval of
Offers". While the check for initial down payment tendered by respondent was returned to him, he
was nevertheless informed that he may file an offer to purchase Lot 11 and that if he could put up a
sufficient down payment, the Estate could immediately endorse it for approval of the Probate Court
so that the property can be awarded to him "should the occupant fail to avail of the priority given to
them."4

The following day, January 8, 1986, respondent again submitted an Offer to Purchase Lot 11 with an
area of 234 square meters for the amount of 35,100. Under the Order dated November 18, 1986
issued by the probate court (Regional Trial Court of Iloilo, Branch 27) in Special Proceedings No.
1672 ("Testate Estate of the Late Charles Newton Hodges, Rosita R. Natividad, Administratrix"),
respondents Offer to Purchase Lot 11 was approved upon the courts observation that the
occupants of the subject lots "have not manifested their desire to purchase the lots they are
occupying up to this date and considering time restraint and considering further, that the sales in
favor of the x x x offerors are most beneficial to the estate x x x". On January 21, 1987, the probate
court issued another Order granting respondents motion for issuance of a writ of possession in his
favor. The writ of possession over Lot 11 was eventually issued on June 27, 1989.5
On November 21, 1994, a Deed of Sale With Mortgage covering Lot 11 was executed between
respondent and the Hodges Estate represented by its Administratrix, Mrs. Ruth R. Diocares. Lot 11
was thereby conveyed to respondent on installment for the total purchase price of 50,000.

Consequently, Transfer Certificate of Title (TCT) No. T-11836 in the name of C. N. Hodges was
cancelled and a new certificate of title, TCT No. T-107519 in the name of respondent was issued on
December 5, 1994. Lot 11 was later subdivided into two lots, Lots 11-A and 11-B for which the
corresponding titles (TCT Nos. T-116467 and T-116468), also in the name of respondent, were
issued on February 28, 1997.6

On motion of Ernesto Pe Benito, Administrator of the Hodges Estate, a writ of demolition was issued
on March 3, 1998 by the probate court in favor of respondent and against all adverse occupants of
Lot 11.7

On June 14, 1999, this Court received the sworn letter-complaint asserting that as court employee
respondent cannot buy property in litigation (consequently he is not a buyer in good faith), commit
deception, dishonesty, oppression and grave abuse of authority. Complainant specifically alleged the
following:

3. Complainant and his siblings, are possessors and occupants of a parcel of land situated at
Brgy. San Vicente, Jaro, Iloilo City, then identified as Lot No. 1280-D-4-11, later consolidated
and subdivided and became known as Lot 11, then registered and titled in the name of
Charles Newton Hodges. The Sabidong family started occupying this lot in 1948 and paid
their monthly rentals until sometime in 1979 when the Estate of Hodges stopped accepting
rentals. x x x

4. Upon knowing sometime in 1987 that the property over which their house is standing, was
being offered for sale by the Estate, the mother of complainant, TRINIDAD CLAVERIO
SABIDONG (now deceased), took interest in buying said property, Lot 11;

5. TRINIDAD CLAVERIO SABIDONG, was then an ordinary housekeeper and a

laundrywoman, who never received any formal education, and did not even know how to
read and write. When Trinidad Claverio Sabidong, together with her children and the
complainant in this case, tried to negotiate with the Estate for the sale of the subject
property, they were informed that all papers for transaction must pass through the
respondent in this case, Nicolasito Solas. This is unusual, so they made inquiries and they
learned that, Nicolasito Solas was then the Clerk of Court 111, Branch 3, Municipal Trial
Court in Cities, Iloilo City and presently, the City Sheriff of Iloilo City;

6. The respondent Nicolasito Solas, then Clerk of Court III, MTCC, Iloilo City, has knowledge,
by reason of his position that in 1983 Hodges Estate was ejecting occupants of its land. x x x
Taking advantage of this inside information that the land subject of an ejectment case in the
Municipal Trial Court in Cities, Iloilo City, whom respondent is a Clerk of Court III, the
respondent surreptitiously offered to buy the said lot in litigation. x x x

7. Complainant nor any member of his family did not know that as early as 1984, the
respondent had offered to purchase the subject lot from the estate x x x. After receiving the
notice of denial of his offer to purchase, dated January 7, 1986, respondent made a second
offer to purchase the subject property the following day, January 8, 1986, knowing fully well
that the subject property was being occupied. x x x
8. Because of this denial, respondent met with the family of the complainant and negotiated
for the sale of the property and transfer of the title in favor of the latter. Respondent made the
complainant and his family believed that he is the representative of the estate and that he
needed a downpayment right away. All the while, the Sabidong family (who were carpenters,
laundrywomen, a janitor, persons who belong to the underprivileged) relied on the
representations of the respondent that he was authorized to facilitate the sale, with more
reason that respondent represented himself as the City Sheriff;

9. That between 1992-1993, a sister of the complainant who was fortunate to have worked
abroad, sent the amount of Ten Thousand (10,000.00) Pesos to complainants mother, to
be given to respondent Nicolasito Solas. x x x After receiving the money, respondent
assured the Sabidong family that they will not be ejected from the lot, he being the City
Sheriff will take care of everything, and taking advantage of the illiteracy of Trinidad Claverio
Sabidong, he did not issue any receipt;

10. True enough, they were not ejected instead it took the respondent some time to see
them again and demanded additional payment. In the meanwhile, the complainant waited for
the papers of the supposed sale and transfer of title, which respondent had promised after
receiving the downpayment of 10,000.00;

11. That sometime again in 1995, respondent again received from the mother of complainant
the amount of Two Thousand (2,000.00) Pesos, allegedly for the expenses of the
documentation of sale and transfer of title, and again respondent promised that the Sabidong
family will not be ejected;

12. To the prejudice and surprise of the complainant and his family, respondent was able to
secure an order for the approval of his offer to purchase x x x in Special Proceedings No.
1672 x x x;

13. Worse, respondent moved for the issuance of a Writ of Possession in his favor, which the
probate court acted favorably x x x. A writ of possession was issued on June 27, 1989 x x x;

14. x x x respondent took advantage of the trust and confidence which the Sabidong family
has shown, considering that respondent was an officer of the court and a City Sheriff at that.
The complainant and his family thought that respondent, being a City Sheriff, could help
them in the transfer of the title in their favor. Never had they ever imagined that while
respondent had been receiving from them hard-earned monies purportedly for the sale of the
subject property, respondent was also exercising acts of ownership adverse to the interest of
the complainant and his family;

15. Being an officer of the court and supposed to be an embodiment of fairness and justice,
respondent acted with malice, with grave abuse of confidence and deceit when he
represented that he can facilitate the sale and titling of the subject property in favor of the
complainant and his family;

16. That when several thousands of pesos were given to the respondent as payment for the
same and incidental expenses relative thereto, he was able to cause the transfer of the title
in his favor. x x x;

17. After the death of Trinidad Claverio Sabidong x x x the respondent received from the
complainant the amount of Five Thousand (5,000.00) Pesos x x x When a receipt was
demanded, respondent refused to issue one, and instead promised and assured the
complainant that they will not be ejected;

xxxx

19. The complainant again, through his sister-in-law, Socorro Sabidong, delivered and gave
to the respondent the amount of Three Thousand (3,000.00) Pesos as expenses for the
subdivision of the subject lot. The respondent facilitated the subdivision and after the same
was approved, the complainant did not know that two (2) titles were issued in the name of
the respondent. x x x;

20. Meanwhile, respondent prepared a Contract to Sell, for the complainant and his neighbor
Norberto Saplagio to affix their signatures, pursuant to their previous agreement for the
buyers to avail of a housing loan with the Home Development Mutual Fund (PAG-IBIG).
Complainant attended the seminar of the HDMF for seven (7) times, in his desire to
consummate the sale. However, when the complainant affixed his signature in the contract,
he was surprised that the owner of the subject property was the respondent. When
complainant raised a question about this, respondent assured complainant that everything
was alright and that sooner complainant will be the owner of the property. Complainant and
his family, all these years, had believed and continued to believe that the owner was the
estate of Hodges and that respondent was only the representative of the estate;

21. The Contract to Sell, appeared to have been notarized on June 3, 1996, however, no
copy thereof was given to the complainant by the respondent. Respondent then, took the
papers and documents required by the HDMF to be completed, from the complainant
allegedly for the purpose of personally filing the same with the HDMF. Complainant freely
and voluntarily delivered all pertinent documents to the respondent, thinking that respondent
was helping in the fast and easy release of the loan. While the said documents were in the
possession of the respondent, he never made any transaction with the HDMF, worse, when
complainant tried to secure a copy of the Contract to Sell, the copy given was not signed by
the Notary Public, x x x;

22. The complainant [was] shocked to learn that respondent had canceled the sale and that
respondent refused to return the documents required by the HDMF. Respondent claimed
that as Sheriff, he can cause the demolition of the house of the complainant and of his
family. Respondent threatened the complainant and he is capable of pursuing a demolition
order and serve the same with the assistance of the military. x x x;

23. After learning of the demolition order, complainant attempted to settle the matter with the
respondent, however, the same proved futile as respondent boasted that the property would
now cost at Four Thousand Five Hundred (4,500.00) Pesos;

24. The threats of demolition is imminent. Clearly, complainant and his family were duped by
the respondent and are helpless victims of an officer of the court who took advantage of their
good faith and trust. Complainant later was informed that the subject property was awarded
to the respondent as his Sheriffs Fees, considering that respondent executed the decisions
in ejectment cases filed by the Hodges estate against the adverse occupants of its vast
properties;

25. A civil case for the Annulment of Title of the respondent over the subject property is
pending before the Regional Trial Court of Iloilo, Branch 37 and a criminal complaint for
Estafa is also pending preliminary investigation before the Office of the City Prosecutor of
 Iloilo City, known as I.S. No. 1559-99, both filed [by] the complainant against the
respondent.8

Acting on the complaint, Court Administrator Alfredo L. Benipayo issued a 1st Indorsement9 dated
July 8, 1999, requiring respondent to file his comment on the Complaint dated May 29, 1999. On
October 21, 1999, respondent submitted his Comment.10

In a Resolution11 dated July 19, 1999, Public Prosecutor Constantino C. Tubilleja dismissed the
Estafa charge against respondent for insufficiency of evidence.

On November 29, 2000, Court Administrator Benipayo issued an Evaluation and

Recommendation12 finding respondent guilty of violating Article 149113 of the Civil Code. Said rule
prohibits the purchase by certain court officers of property and rights in litigation within their
jurisdiction. Court Administrator Benipayo recommended that:

1. this administrative complaint be treated as an administrative matter;

2. respondent Nicolasito S. Solas, Clerk of Court IV, OCC, MTCC, Iloilo City be
SUSPENDED for six (6) months, with warning that a repetition of the same offense in the
future will be dealt with more severely;

3. inasmuch as there are factual issues regarding the delivery of substantial amounts which
complainant alleged and which defendant denied, this issue should be investigated and the
Executive Judge of the Regional Trial Court of Iloilo City should be designated to hear the
evidence and to make a report and recommendation within sixty (60) days from receipt.14

In a Resolution15 dated January 22, 2001, this Court adopted the recommendation of the Court
Administrator to treat the present administrative action as a regular administrative matter and to
designate the Executive Judge of the RTC of Iloilo City to hear the evidence of the parties.

The Court, however, noted without action the Court Administrators recommendation to suspend
respondent for six months.

On March 13, 2001, Acting Court Administrator Zenaida N. Elepao forwarded the records of this
case to Executive Judge Tito G. Gustilo of the Iloilo City RTC.16 In a Resolution17 dated July 18,
2001, the Court referred this case to the Executive Judge of the RTC of Iloilo City for investigation,
report and recommendation within 60 days from notice. By Order18 dated August 30, 2001, Executive
Judge Gustilo set the case for reception of evidence.

On March 19, 2004, the RTC of Iloilo, Branch 37, dismissed the case for annulment of title, damages
and injunction against respondent for lack of merit.19

In a Resolution20 dated June 15, 2005, the Court resolved to reassign the instant administrative case
to Executive Judge Rene S. Hortillo for investigation, report and recommendation within 60 days
from notice. In a Letter21 dated September 15, 2005, Executive Judge Hortillo informed the Court that
per the records, the parties have presented their testimonial and documentary evidence before
retired Executive Judge Tito G. Gustilo.

On September 12, 2005, Executive Judge Hortillo required the parties to file their respective
memoranda within 60 days from notice, upon submission of which the case shall be deemed
submitted for resolution.22
In his Memorandum,23 respondent maintained that his purchase of the subject land is not covered by
the prohibition in paragraph 5, Article 1491 of the Civil Code. He pointed out that he bought Lot 11-A
a decade after the MTCC of Iloilo, Branch 3, had ordered the ejectment of Priscila Saplagio and
Trinidad Sabidong from the subject lot. He insisted that public trust was observed when complainant
was accorded his right of first refusal in the purchase of Lot 11-A, albeit the latter failed to avail said
right. Asserting that he is a buyer in good faith and for value, respondent cited the dismissal of the
cases for Estafa and annulment of title and damages which complainant filed against him.

On September 10, 2007, respondent compulsorily retired from service. Prior to this, he wrote then
Senior Deputy Court Administrator Zenaida N. Elepao, requesting for the release of his retirement
benefits pending resolution of the administrative cases against him.24 In a Memorandum25 dated
September 24, 2007, Senior Deputy Court Administrator Elepao made the following
recommendations:

a) The request of Nicolasito S. Solas, former Clerk of Court, MTCC, Iloilo City for partial
release of his retirement benefits be GRANTED; and

b) Atty. Lilian Barribal Co, Chief, Financial Management Office, Office of the Court
Administrator be DIRECTED to (1) WITHHOLD the amount of Two Hundred Thousand
Pesos (200,000.00) from the retirement benefits of Nicolasito S. Solas to answer for any
administrative liability that the Court may find against him in A.M. No. P-01-1448 (Formerly
Administrative Matter OCA IPI No. 99-664-P); OCA IPI No. 99-659-P; OCA IPI No. 99-670-P;
and OCA IPI No. 99-753-P; and (2) RELEASE the balance of his retirement benefits.26

Eventually, the case was assigned to Judge Roger B. Patricio, the new Executive Judge of the Iloilo
City RTC for investigation, report and recommendation.

On June 2, 2008, Judge Patricio submitted his final Report and Recommendation27 finding
respondent liable for grave misconduct and dishonesty under A.M. No. 03-06-13-SC or the Code of
Conduct for Court Personnel. Based on the evidence presented, Judge Patricio concluded that
respondent misappropriated the money which he received for the filing of complainants loan
application. Such money could not have been used for the partition of Lot No. 1280-D-4-11 since the
same was already subdivided into Lots 11-A and 11-B when respondent presented the Contract to
Sell to complainant. And despite respondents promise to keep complainant and his family in
peaceful possession of the subject property, respondent caused the issuance of a writ of demolition
against them. Thus, Judge Patricio recommended the forfeiture of respondents salary for six months
to be deducted from his retirement benefits.

In a Resolution28 dated September 29, 2008, the Court noted Judge Patricios Investigation Report
and referred the same to the Office of the Court Administrator (OCA) for evaluation, report and
recommendation.

Findings and Recommendation of the OCA

In a Memorandum29 dated January 16, 2009, then Court Administrator Jose P. Perez found
respondent liable for serious and grave misconduct and dishonesty and recommended the forfeiture
of respondents salary for six months, which shall be deducted from his retirement benefits.

The Court Administrator held that by his unilateral acts of extinguishing the contract to sell and
forfeiting the amounts he received from complainant and Saplagio without due notice, respondent
failed to act with justice and equity. He found respondents denial to be anchored merely on the fact
that he had not issued receipts which was belied by his admission that he had asked money for the
expenses of partitioning Lot 11 from complainant and Saplagio. Since their PAG-IBIG loan
applications did not materialize, complainant should have returned the amounts given to him by
complainant and Saplagio.

On February 11, 2009, the Court issued a Resolution30 requiring the parties to manifest whether they
are willing to submit the case for decision on the basis of the pleadings and records already filed with
the Court. However, the copy of the Resolution dated February 11, 2009 which was sent to
complainant was returned unserved with the postal carriers notation "RTS-Deceased." Meanwhile,
in a Compliance31 dated August 24, 2009, respondent expressed his willingness to submit the case
for decision and prayed for an early resolution of the case.

Our Ruling

Article 1491, paragraph 5 of the Civil Code prohibits court officers such as clerks of court from
acquiring property involved in litigation within the jurisdiction or territory of their courts. Said provision
reads:

Article 1491. The following persons cannot acquire by purchase, even at a public or judicial auction,
either in person or through the mediation of another:

xxxx

(5) Justices, judges, prosecuting attorneys, clerks of superior and inferior courts, and other officers
and employees connected with the administration of justice, the property and rights in litigation or
levied upon an execution before the court within whose jurisdiction or territory they exercise their
respective functions; this prohibition includes the act of acquiring by assignment and shall apply to
lawyers, with respect to the property and rights which may be the object of any litigation in which
they may take part by virtue of their profession.

x x x x (Emphasis supplied.)

The rationale advanced for the prohibition is that public policy disallows the transactions in view of
the fiduciary relationship involved, i.e., the relation of trust and confidence and the peculiar control
exercised by these persons.32"In so providing, the Code tends to prevent fraud, or more precisely,
tends not to give occasion for fraud, which is what can and must be done."33

For the prohibition to apply, the sale or assignment of the property must take place during the
pendency of the litigation involving the property.34 Where the property is acquired after the
termination of the case, no violation of paragraph 5, Article 1491 of the Civil Code attaches.35

In the case at bar, when respondent purchased Lot 11-A on November 21, 1994, the Decision in
Civil Case No. 14706 which was promulgated on May 31, 1983 had long become final. Be that as it
may, it can not be said that the property is no longer "in litigation" at that time considering that it was
part of the Hodges Estate then under settlement proceedings (Sp. Proc. No. 1672).

A thing is said to be in litigation not only if there is some contest or litigation over it in court, but also
from the moment that it becomes subject to the judicial action of the judge.36 A property forming part
of the estate under judicial settlement continues to be subject of litigation until the probate court
issues an order declaring the estate proceedings closed and terminated. The rule is that as long as
the order for the distribution of the estate has not been complied with, the probate proceedings
cannot be deemed closed and terminated.37 The probate court loses jurisdiction of an estate under
administration only after the payment of all the debts and the remaining estate delivered to the heirs
entitled to receive the same.38 Since there is no evidence to show that Sp. Proc. No. 1672 in the
RTC of Iloilo, Branch 27, had already been closed and terminated at the time of the execution of the
Deed of Sale With Mortgage dated November 21, 1994, Lot 11 is still deemed to be "in litigation"
subject to the operation of Article 1491 (5) of the Civil Code.

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

On the charges against the respondent, we find him liable for dishonesty and grave misconduct.

Misconduct is a transgression of some established and definite rule of action, more particularly,
unlawful behavior as well as gross negligence by a public officer. To warrant dismissal from service,
the misconduct must be grave, serious, important, weighty, momentous and not trifling. The
misconduct must imply wrongful intention and not a mere error of judgment. The misconduct must
also have a direct relation to and be connected with the performance of the public officers official
duties amounting either to maladministration or willful, intentional neglect, or failure to discharge the
duties of the office.39

Dishonesty is the "disposition to lie, cheat, deceive, defraud or betray; untrustworthiness; lack of
integrity; lack of honesty, probity, or integrity in principle; and lack of fairness and
straightforwardness."40

In this case, respondent deceived complainants family who were led to believe that he is the legal
representative of the Hodges Estate, or at least possessed of such power to intercede for
overstaying occupants of the estates properties like complainant. Boasting of his position as a court
officer, a City Sheriff at that, complainants family completely relied on his repeated assurance that
they will not be ejected from the premises. Upon learning that the lot they were occupying was for
sale and that they had to negotiate for it through respondent, complainants family readily gave the
amounts he demanded and, along with Saplagio, complied with the requirements for a loan
application with PAG-IBIG. All the while and unknown to complainants family, respondent was
actually working to acquire Lot 11 for himself.

Thus, while respondent was negotiating with the Hodges Estate for the sale of the property to him,
he collected as down payment 5,000 from complainants family in July 1986. Four months later, on
November 18, 1986, the probate court approved respondents offer to purchase Lot 11. The latter
received further down payment from complainant in the amount of 10,000 between 1992 and 1993,
or before the Deed of Sale with Mortgage41 dated November 21, 1994 could be executed in
respondents favor.

Thereafter, respondent demanded 3,000 from complainant supposedly for the subdivision of Lot 11
between the latter and the Saplagios. Yet, it was not until respondent obtained title over said lot that
the same was subdivided into Lots 11-A and 11-B. The records42 of the case show that the
Subdivision Plan dated April 25, 1996, duly approved by the Land Management Services (DENR)
subdividing Lot 11 into sublots 11-A and 11-B, was inscribed on February 28, 1997 two years after
TCT No. T-107519 covering Lot 11 was issued in respondents name on December 5, 1994.

Finally, in 1995, respondent received the amount of 2,000 to defray the expenses for
documentation and transfer of title in complainants name. In the latter instance, while it may be
argued that respondent already had the capacity to sell the subject property, the sum of all the
circumstances belie an honest intention on his part to convey Lot 11-A to complainant. We note the
inscription in TCT No. T-1183643 in the name of C.N. Hodges that respondent executed a Request
dated February 19, 1997 "for the issuance of separate titles in the name of the registered
owner."44 Soon after, TCT No. T-11646745 covering Lot 11-A and TCT No. T-11646846 covering Lot
11-B were issued in the name of respondent on February 28, 1997 only eight months after he
executed the Contract to Sell47 in favor of complainant on June 3, 1996.

Respondents bare denials were correctly disregarded by the Court Administrator in the light of his
own admission that he indeed asked money from both complainant and Saplagio. The evidence on
record clearly established that by misrepresenting himself as the estates representative and as a
court officer having the power to protect complainants family from eviction, respondent was able to
collect sums totaling 20,000 from complainants family. Even after the latter realized they were
duped since respondent was already the owner of Lot 11, they still offered to buy the property from
him. Respondent, however, changed his mind and no longer wanted to sell the property after nothing
happened to the loan applications of complainant and Saplagio. This subsequent unilateral
cancellation by respondent of the contract to sell with complainant may have been an afterthought,
and plainly unjustified, based merely on his own assumption that complainant could not make full
payment. But it did not negate the deception and fraudulent acts perpetrated against complainants
family who were forced into submission by the constant threat of eviction. Such acts constitute grave
misconduct for which respondent should be held answerable.

In Re: Complaint Filed by Paz De Vera Lazaro Against Edna Magallanes, Court Stenographer III,
RTC Br. 28 and Bonifacio G. Magallanes, Process Server, RTC Br. 30, Bayombong, Nueva
Vizcaya,48 the Court stressed that to preserve decency within the judiciary, court personnel must
comply with just contractual obligations, act fairly and adhere to high ethical standards. In that case,
we said that court employees are expected to be paragons of uprightness, fairness and honesty not
only in their official conduct but also in their personal dealings, including business and commercial
transactions to avoid becoming the courts albatross of infamy.49

More importantly, Section 4(c) of Republic Act No. 671350 or the Code of Conduct and Ethical
Standards for Public Officials and Employees mandates that public officials and employees shall
remain true to the people at all times. They must act with justness and sincerity and shall not
discriminate against anyone, especially the poor and the underprivileged. They shall at all times
1w phi 1

respect the rights of others, and shall refrain from doing acts contrary to law, good morals, good
customs, public policy, public order, public safety and public interest.

Under Section 52,51 Rule IV of the Uniform Rules on Administrative Cases in the Civil Service,
dishonesty and grave misconduct are classified as grave offenses with the corresponding penalty of
dismissal for the first offense. Section 58(a) states that the penalty of dismissal shall carry with it the
cancellation of eligibility, forfeiture of retirement benefits, and the perpetual disqualification for
reemployment in the government service.

Section 53 further provides that mitigating circumstances attendant to the commission of the offense
should be considered in the determination of the penalty to be imposed on the erring government
employee. However, no such mitigating circumstance had been shown. On the contrary, respondent
had been previously held administratively liable for irregularities in the performance of his duties as
Clerk of Court. In A.M. No. P-01-1484,52 this Court imposed on respondent a fine of 5,000 for acting
imprudently in notarizing documents and administering oath on matters alien to his official duties.
And in A.M. Nos. P-08-2567 (formerly OCA IPI No. 99-670-P) and P-08-2568 (formerly OCA IPI No.
99-753-P),53 respondent was found liable for simple misconduct and ordered to pay a fine equivalent
to his three (3) months salary to be deducted from his retirement benefits.
Since respondent had compulsorily retired from service on September 10, 2007, for this additional
administrative case he should be fined in an amount equivalent to his salary for six months which
shall likewise be deducted from his retirement benefits.

WHEREFORE, the Court finds respondent Nicolasito S. Solas, retired Clerk of Court IV, Municipal
Trial Court in Cities, Iloilo City, LIABLE FOR GRAVE MISCONDUCT AND DISHONESTY.
Respondent is FINED in an amount equivalent to his salary for six (6) months to be deducted from
his retirement benefits.

SO ORDERED.
 G.R. No. 156407, January 15, 2014

THELMA M. ARANAS, Petitioner, v. TERESITA V. MERCADO, FELIMON V. MERCADO, CARMENCITA M.

SUTHERLAND, RICHARD V. MERCADO, MA. TERESITA M. ANDERSON, AND FRANKLIN L.
MERCADO, Respondents.

DECISION

BERSAMIN, J.:

The probate court is authorized to determine the issue of ownership of properties for purposes of their
inclusion or exclusion from the inventory to be submitted by the administrator, but its determination shall
only be provisional unless the interested parties are all heirs of the decedent, or the question is one of
collation or advancement, or the parties consent to the assumption of jurisdiction by the probate court and
the rights of third parties are not impaired. Its jurisdiction extends to matters incidental or collateral to the
settlement and distribution of the estate, such as the determination of the status of each heir and whether
property included in the inventory is the conjugal or exclusive property of the deceased spouse.

Antecedents

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

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

On June 3, 1991, Thelma filed in the Regional Trial Court (RTC) in Cebu City a petition for the appointment
of Teresita as the administrator of Emigdios estate (Special Proceedings No. 3094CEB).1The RTC granted
the petition considering that there was no opposition. The letters of administration in favor of Teresita were
issued on September 7, 1992.

As the administrator, Teresita submitted an inventory of the estate of Emigdio on December 14, 1992 for
the consideration and approval by the RTC. She indicated in the inventory that at the time of his death,
Emigdio had left no real properties but only personal properties worth P6,675,435.25 in all, consisting of
cash of P32,141.20; furniture and fixtures worth P20,000.00; pieces of jewelry valued at P15,000.00;
44,806 shares of stock of Mervir Realty worth P6,585,585.80; and 30 shares of stock of Cebu Emerson
worth P22,708.25.2

Claiming that Emigdio had owned other properties that were excluded from the inventory, Thelma moved
that the RTC direct Teresita to amend the inventory, and to be examined regarding it. The RTC granted
Thelmas motion through the order of January 8, 1993.

On January 21, 1993, Teresita filed a compliance with the order of January 8, 1993,3 supporting her
inventory with copies of three certificates of stocks covering the 44,806 Mervir Realty shares of stock;4the
deed of assignment executed by Emigdio on January 10, 1991 involving real properties with the market
value of P4,440,651.10 in exchange for 44,407 Mervir Realty shares of stock with total par value of
P4,440,700.00;5 and the certificate of stock issued on January 30, 1979 for 300 shares of stock of Cebu
Emerson worth P30,000.00.6

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

On February 4, 1993, the RTC issued an order expressing the need for the parties to present evidence and
for Teresita to be examined to enable the court to resolve the motion for approval of the inventory.7 cralaw red

On April 19, 1993, Thelma opposed the approval of the inventory, and asked leave of court to examine
Teresita on the inventory.

With the parties agreeing to submit themselves to the jurisdiction of the court on the issue of what
properties should be included in or excluded from the inventory, the RTC set dates for the hearing on that
issue.8
cralawlaw lib rary

Ruling of the RTC

After a series of hearings that ran for almost eight years, the RTC issued on March 14, 2001 an order finding
and holding that the inventory submitted by Teresita had excluded properties that should be included, and
accordingly ruled:

WHEREFORE, in view of all the foregoing premises and considerations, the Court hereby denies the
administratrixs motion for approval of inventory. The Court hereby orders the said administratrix to redo
the inventory of properties which are supposed to constitute as the estate of the late Emigdio S. Mercado by
including therein the properties mentioned in the last five immediately preceding paragraphs hereof and
then submit the revised inventory within sixty (60) days from notice of this order.

The Court also directs the said administratrix to render an account of her administration of the estate of the
late Emigdio S. Mercado which had come to her possession. She must render such accounting within sixty
(60) days from notice hereof.

SO ORDERED.9 ChanRoblesVi rtualaw lib rary

On March 29, 2001, Teresita, joined by other heirs of Emigdio, timely sought the reconsideration of the
order of March 14, 2001 on the ground that one of the real properties affected, Lot No. 3353 located in
Badian, Cebu, had already been sold to Mervir Realty, and that the parcels of land covered by the deed of
assignment had already come into the possession of and registered in the name of Mervir Realty.10Thelma
opposed the motion.

On May 18, 2001, the RTC denied the motion for reconsideration,11 stating that there was no cogent reason
for the reconsideration, and that the movants agreement as heirs to submit to the RTC the issue of what
properties should be included or excluded from the inventory already estopped them from questioning its
jurisdiction to pass upon the issue.

Decision of the CA

Alleging that the RTC thereby acted with grave abuse of discretion in refusing to approve the inventory, and
in ordering her as administrator to include real properties that had been transferred to Mervir Realty,
Teresita, joined by her four children and her stepson Franklin, assailed the adverse orders of the RTC
promulgated on March 14, 2001 and May 18, 2001 by petition for certiorari, stating:

THE HONORABLE RESPONDENT JUDGE HAS COMMITTED GRAVE ABUSE OF JURISDICTION (sic)
AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN HOLDING THAT THE REAL PROPERTY WHICH WAS
SOLD BY THE LATE EMIGDIO S. MERCADO DURING HIS LIFETIME TO A PRIVATE CORPORATION (MERVIR
REALTY CORPORATION) BE INCLUDED IN THE INVENTORY OF THE ESTATE OF THE LATE EMIGDIO S.
MERCADO.

II

THE HONORABLE RESPONDENT JUDGE HAS COMMITTED GRAVE ABUSE OF JURISDICTION (sic)
AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN HOLDING THAT REAL PROPERTIES WHICH ARE IN
THE POSSESSION OF AND ALREADY REGISTERED IN THE NAME (OF) PRIVATE CORPORATION (MERVIR
REALTY CORPORATION) BE INCLUDED IN THE INVENTORY OF THE ESTATE OF THE LATE EMIGDIO S.
MERCADO.
 III

THE HONORABLE RESPONDENT JUDGE HAS COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO
LACK OR EXCESS OF JURISDICTION IN HOLDING THAT PETITIONERS ARE NOW ESTOPPED FROM
QUESTIONING ITS JURISDICTION IN PASSING UPON THE ISSUE OF WHAT PROPERTIES SHOULD BE
INCLUDED IN THE INVENTORY OF THE ESTATE OF THE LATE EMIGDIO MERCADO.12

On May 15, 2002, the CA partly granted the petition for certiorari, disposing as follows:13

WHEREFORE, FOREGOING PREMISES CONSIDERED, this petition is GRANTED partially. The assailed
Orders dated March 14, 2001 and May 18, 2001 are hereby reversed and set aside insofar as the inclusion
of parcels of land known as Lot No. 3353 located at Badian, Cebu with an area of 53,301 square meters
subject matter of the Deed of Absolute Sale dated November 9, 1989 and the various parcels of land subject
matter of the Deeds of Assignment dated February 17, 1989 and January 10, 1991 in the revised inventory
to be submitted by the administratrix is concerned and affirmed in all other respects.

SO ORDERED.

The CA opined that Teresita, et al. had properly filed the petition for certiorari because the order of the RTC
directing a new inventory of properties was interlocutory; that pursuant to Article 1477 of the Civil Code, to
the effect that the ownership of the thing sold shall be transferred to the vendee upon its actual and
constructive delivery, and to Article 1498 of the Civil Code, to the effect that the sale made through a
public instrument was equivalent to the delivery of the object of the sale, the sale by Emigdio and Teresita
had transferred the ownership of Lot No. 3353 to Mervir Realty because the deed of absolute sale executed
on November 9, 1989 had been notarized; that Emigdio had thereby ceased to have any more interest in Lot
3353; that Emigdio had assigned the parcels of land to Mervir Realty as early as February 17, 1989 for the
purpose of saving, as in avoiding taxes with the difference that in the Deed of Assignment dated January 10,
1991, additional seven (7) parcels of land were included; that as to the January 10, 1991 deed of
assignment, Mervir Realty had been even at the losing end considering that such parcels of land, subject
matter(s) of the Deed of Assignment dated February 12, 1989, were again given monetary consideration
through shares of stock; that even if the assignment had been based on the deed of assignment dated
January 10, 1991, the parcels of land could not be included in the inventory considering that there is
nothing wrong or objectionable about the estate planning scheme; that the RTC, as an intestate court, also
had no power to take cognizance of and determine the issue of title to property registered in the name of
third persons or corporation; that a property covered by the Torrens system should be afforded the
presumptive conclusiveness of title; that the RTC, by disregarding the presumption, had transgressed the
clear provisions of law and infringed settled jurisprudence on the matter; and that the RTC also gravely
abused its discretion in holding that Teresita, et al. were estopped from questioning its jurisdiction because
of their agreement to submit to the RTC the issue of which properties should be included in the inventory.

The CA further opined as follows:

In the instant case, public respondent court erred when it ruled that petitioners are estopped from
questioning its jurisdiction considering that they have already agreed to submit themselves to its jurisdiction
of determining what properties are to be included in or excluded from the inventory to be submitted by the
administratrix, because actually, a reading of petitioners Motion for Reconsideration dated March 26, 2001
filed before public respondent court clearly shows that petitioners are not questioning its jurisdiction but the
manner in which it was exercised for which they are not estopped, since that is their right, considering that
there is grave abuse of discretion amounting to lack or in excess of limited jurisdiction when it issued the
assailed Order dated March 14, 2001 denying the administratrixs motion for approval of the inventory of
properties which were already titled and in possession of a third person that is, Mervir Realty Corporation, a
private corporation, which under the law possessed a personality distinct and separate from its stockholders,
and in the absence of any cogency to shred the veil of corporate fiction, the presumption of conclusiveness
of said titles in favor of Mervir Realty Corporation should stand undisturbed.

Besides, public respondent court acting as a probate court had no authority to determine the applicability of
the doctrine of piercing the veil of corporate fiction and even if public respondent court was not merely
acting in a limited capacity as a probate court, private respondent nonetheless failed to adjudge competent
evidence that would have justified the court to impale the veil of corporate fiction because to disregard the
separate jurisdictional personality of a corporation, the wrongdoing must be clearly and convincingly
established since it cannot be presumed.14
On November 15, 2002, the CA denied the motion for reconsideration of Teresita, et al.15

Issue

Did the CA properly determine that the RTC committed grave abuse of discretion amounting to lack or
excess of jurisdiction in directing the inclusion of certain properties in the inventory notwithstanding that
such properties had been either transferred by sale or exchanged for corporate shares in Mervir Realty by
the decedent during his lifetime?

Ruling of the Court

The appeal is meritorious.

Was certiorari the proper recourse

to assail the questioned orders of the RTC?

The first issue to be resolved is procedural. Thelma contends that the resort to the special civil action
for certiorari to assail the orders of the RTC by Teresita and her corespondents was not proper.

Thelmas contention cannot be sustained.

The propriety of the special civil action for certiorari as a remedy depended on whether the assailed orders
of the RTC were final or interlocutory in nature. In PahilaGarrido v. Tortogo,16 the Court distinguished
between final and interlocutory orders as follows:

The distinction between a final order and an interlocutory order is well known. The first disposes of the
subject matter in its entirety or terminates a particular proceeding or action, leaving nothing more to be
done except to enforce by execution what the court has determined, but the latter does not completely
dispose of the case but leaves something else to be decided upon. An interlocutory order deals with
preliminary matters and the trial on the merits is yet to be held and the judgment rendered. The test to
ascertain whether or not an order or a judgment is interlocutory or final is: does the order or judgment
leave something to be done in the trial court with respect to the merits of the case? If it does, the order or
judgment is interlocutory; otherwise, it is final.

The order dated November 12, 2002, which granted the application for the writ of preliminary injunction,
was an interlocutory, not a final, order, and should not be the subject of an appeal. The reason for
disallowing an appeal from an interlocutory order is to avoid multiplicity of appeals in a single action, which
necessarily suspends the hearing and decision on the merits of the action during the pendency of the
appeals. Permitting multiple appeals will necessarily delay the trial on the merits of the case for a
considerable length of time, and will compel the adverse party to incur unnecessary expenses, for one of the
parties may interpose as many appeals as there are incidental questions raised by him and as there are
interlocutory orders rendered or issued by the lower court. An interlocutory order may be the subject of an
appeal, but only after a judgment has been rendered, with the ground for appealing the order being included
in the appeal of the judgment itself.

The remedy against an interlocutory order not subject of an appeal is an appropriate special civil action
under Rule 65, provided that the interlocutory order is rendered without or in excess of jurisdiction or with
grave abuse of discretion. Then is certiorari under Rule 65 allowed to be resorted to.

The assailed order of March 14, 2001 denying Teresitas motion for the approval of the inventory and the
order dated May 18, 2001 denying her motion for reconsideration were interlocutory. This is because the
inclusion of the properties in the inventory was not yet a final determination of their ownership. Hence, the
approval of the inventory and the concomitant determination of the ownership as basis for inclusion or
exclusion from the inventory were provisional and subject to revision at anytime during the course of the
administration proceedings.

In Valero Vda. De Rodriguez v. Court of Appeals,17 the Court, in affirming the decision of the CA to the effect
that the order of the intestate court excluding certain real properties from the inventory was interlocutory
and could be changed or modified at anytime during the course of the administration proceedings, held that
the order of exclusion was not a final but an interlocutory order in the sense that it did not settle once and
for all the title to the San Lorenzo Village lots. The Court observed there that:

The prevailing rule is that for the purpose of determining whether a certain property should or should not be
included in the inventory, the probate court may pass upon the title thereto but such determination
is not conclusive and is subject to the final decision in a separate action regarding ownership
which may be instituted by the parties (3 Morans Comments on the Rules of Court, 1970 Edition, pages
4489 and 473; Lachenal vs. Salas, L42257, June 14, 1976, 71 SCRA 262, 266).18 (Bold emphasis
supplied)

To the same effect was De Leon v. Court of Appeals,19 where the Court declared that a probate court,
whether in a testate or intestate proceeding, can only pass upon questions of title provisionally, and
reminded, citing Jimenez v. Court of Appeals, that the patent reason is the probate courts limited
jurisdiction and the principle that questions of title or ownership, which result in inclusion or exclusion from
the inventory of the property, can only be settled in a separate action. Indeed, in the cited case of Jimenez
v. Court of Appeals,20 the Court pointed out:

All that the said court could do as regards the said properties is determine whether they should or should
not be included in the inventory or list of properties to be administered by the administrator. If there is a
dispute as to the ownership, then the opposing parties and the administrator have to resort to an
ordinary action for a final determination of the conflicting claims of title because the probate
court cannot do so. (Bold emphasis supplied)

On the other hand, an appeal would not be the correct recourse for Teresita, et al. to take against the
assailed orders. The final judgment rule embodied in the first paragraph of Section 1, Rule 41, Rules of
Court,21 which also governs appeals in special proceedings, stipulates that only the judgments, final orders
(and resolutions) of a court of law that completely disposes of the case, or of a particular matter therein
when declared by these Rules to be appealable may be the subject of an appeal in due course. The same
rule states that an interlocutory order or resolution (interlocutory because it deals with preliminary matters,
or that the trial on the merits is yet to be held and the judgment rendered) is expressly made non
appealable.

Multiple appeals are permitted in special proceedings as a practical recognition of the possibility that
material issues may be finally determined at various stages of the special proceedings. Section 1, Rule 109
of the Rules of Court enumerates the specific instances in which multiple appeals may be resorted to in
special proceedings, viz:

Section 1. Orders or judgments from which appeals may be taken. An interested person may appeal in
special proceedings from an order or judgment rendered by a Court of First Instance or a Juvenile and
Domestic Relations Court, where such order or judgment:

(a) Allows or disallows a will;

(b) Determines who are the lawful heirs of a deceased person, or the distributive share of the estate to
which such person is entitled;

(c) Allows or disallows, in whole or in part, any claim against the estate of a deceased person, or any claim
presented on behalf of the estate in offset to a claim against it;

(d) Settles the account of an executor, administrator, trustee or guardian;

(e) Constitutes, in proceedings relating to the settlement of the estate of a deceased person, or the
administration of a trustee or guardian, a final determination in the lower court of the rights of the party
appealing, except that no appeal shall be allowed from the appointment of a special administrator; and

(f) Is the final order or judgment rendered in the case, and affects the substantial rights of the person
appealing, unless it be an order granting or denying a motion for a new trial or for reconsideration.
Clearly, the assailed orders of the RTC, being interlocutory, did not come under any of the instances in
which multiple appeals are permitted.

II
Did the RTC commit grave abuse of discretion
in directing the inclusion of the properties
in the estate of the decedent?

In its assailed decision, the CA concluded that the RTC committed grave abuse of discretion for including
properties in the inventory notwithstanding their having been transferred to Mervir Realty by Emigdio during
his lifetime, and for disregarding the registration of the properties in the name of Mervir Realty, a third
party, by applying the doctrine of piercing the veil of corporate fiction.

Was the CA correct in its conclusion?

The answer is in the negative. It is unavoidable to find that the CA, in reaching its conclusion, ignored the
law and the facts that had fully warranted the assailed orders of the RTC.

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

Section 1. Inventory and appraisal to be returned within three months. Within three (3) months after his
appointment every executor or administrator shall return to the court a true inventory and appraisal of
all the real and personal estate of the deceased which has come into his possession or
knowledge. In the appraisement of such estate, the court may order one or more of the inheritance tax
appraisers to give his or their assistance.

The usage of the word all in Section 1, supra, demands the inclusion of all the real and personal properties
of the decedent in the inventory.22 However, the word all is qualified by the phrase which has come into
his possession or knowledge, which signifies that the properties must be known to the administrator to
belong to the decedent or are in her possession as the administrator. Section 1 allows no exception, for the
phrase true inventory implies that no properties appearing to belong to the decedent can be excluded from
the inventory, regardless of their being in the possession of another person or entity.

The objective of the Rules of Court in requiring the inventory and appraisal of the estate of the decedent is
to aid the court in revising the accounts and determining the liabilities of the executor or the administrator,
and in making a final and equitable distribution (partition) of the estate and otherwise to facilitate the
administration of the estate.23 Hence, the RTC that presides over the administration of an estate is vested
with wide discretion on the question of what properties should be included in the inventory. According
to Peralta v. Peralta,24 the CA cannot impose its judgment in order to supplant that of the RTC on the issue
of which properties are to be included or excluded from the inventory in the absence of positive abuse of
discretion, for in the administration of the estates of deceased persons, the judges enjoy ample
discretionary powers and the appellate courts should not interfere with or attempt to replace the action
taken by them, unless it be shown that there has been a positive abuse of discretion.25 As long as the RTC
commits no patently grave abuse of discretion, its orders must be respected as part of the regular
performance of its judicial duty.

There is no dispute that the jurisdiction of the trial court as an intestate court is special and limited. The trial
court cannot adjudicate title to properties claimed to be a part of the estate but are claimed to belong to
third parties by title adverse to that of the decedent and the estate, not by virtue of any right of inheritance
from the decedent. All that the trial court can do regarding said properties is to determine whether or not
they should be included in the inventory of properties to be administered by the administrator. Such
determination is provisional and may be still revised. As the Court said in Agtarap v. Agtarap:26
The general rule is that the jurisdiction of the trial court, either as a probate court or an intestate court,
relates only to matters having to do with the probate of the will and/or settlement of the estate of deceased
persons, but does not extend to the determination of questions of ownership that arise during the
proceedings. The patent rationale for this rule is that such court merely exercises special and limited
jurisdiction. As held in several cases, a probate court or one in charge of estate proceedings, whether
testate or intestate, cannot adjudicate or determine title to properties claimed to be a part of the estate and
which are claimed to belong to outside parties, not by virtue of any right of inheritance from the deceased
but by title adverse to that of the deceased and his estate. All that the said court could do as regards said
properties is to determine whether or not they should be included in the inventory of properties to be
administered by the administrator. If there is no dispute, there poses no problem, but if there is, then the
parties, the administrator, and the opposing parties have to resort to an ordinary action before a court
exercising general jurisdiction for a final determination of the conflicting claims of title.

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

First, the probate court may provisionally pass upon in an intestate or a testate proceeding the
question of inclusion in, or exclusion from, the inventory of a piece of property without prejudice
to final determination of ownership in a separate action. Second, if the interested parties are all heirs
to the estate, or the question is one of collation or advancement, or the parties consent to the
assumption of jurisdiction by the probate court and the rights of third parties are not impaired,
then the probate court is competent to resolve issues on ownership. Verily, its jurisdiction extends to
matters incidental or collateral to the settlement and distribution of the estate, such as the determination of
the status of each heir and whether the property in the inventory is conjugal or exclusive property
of the deceased spouse.27 (Italics in the original; bold emphasis supplied)

It is clear to us that the RTC took pains to explain the factual bases for its directive for the inclusion of the
properties in question in its assailed order of March 14, 2001, viz:

In the first place, the administratrix of the estate admitted that Emigdio Mercado was one of the heirs of
Severina Mercado who, upon her death, left several properties as listed in the inventory of properties
submitted in Court in Special Proceedings No. 306R which are supposed to be divided among her heirs. The
administratrix admitted, while being examined in Court by the counsel for the petitioner, that she did not
include in the inventory submitted by her in this case the shares of Emigdio Mercado in the said estate of
Severina Mercado. Certainly, said properties constituting Emigdio Mercados share in the estate of Severina
Mercado should be included in the inventory of properties required to be submitted to the Court in this
particular case.

In the second place, the administratrix of the estate of Emigdio Mercado also admitted in Court that she did
not include in the inventory shares of stock of Mervir Realty Corporation which are in her name and which
were paid by her from money derived from the taxicab business which she and her husband had since 1955
as a conjugal undertaking. As these shares of stock partake of being conjugal in character, onehalf thereof
or of the value thereof should be included in the inventory of the estate of her husband.

In the third place, the administratrix of the estate of Emigdio Mercado admitted, too, in Court that she had a
bank account in her name at Union Bank which she opened when her husband was still alive. Again, the
money in said bank account partakes of being conjugal in character, and so, onehalf thereof should be
included in the inventory of the properties constituting as estate of her husband.

In the fourth place, it has been established during the hearing in this case that Lot No. 3353 of Pls657D
located in Badian, Cebu containing an area of 53,301 square meters as described in and covered by Transfer
Certificate of Title No. 3252 of the Registry of Deeds for the Province of Cebu is still registered in the name
of Emigdio S. Mercado until now. When it was the subject of Civil Case No. CEB12690 which was decided
on October 19, 1995, it was the estate of the late Emigdio Mercado which claimed to be the owner thereof.
Mervir Realty Corporation never intervened in the said case in order to be the owner thereof. This fact was
admitted by Richard Mercado himself when he testified in Court. x x x So the said property located in
Badian, Cebu should be included in the inventory in this case.

Fifthly and lastly, it appears that the assignment of several parcels of land by the late Emigdio S. Mercado to
Mervir Realty Corporation on January 10, 1991 by virtue of the Deed of Assignment signed by him on the
said day (Exhibit N for the petitioner and Exhibit 5 for the administratrix) was a transfer in contemplation of
death. It was made two days before he died on January 12, 1991. A transfer made in contemplation of
death is one prompted by the thought that the transferor has not long to live and made in place of a
testamentary disposition (1959 Prentice Hall, p. 3909). Section 78 of the National Internal Revenue Code of
1977 provides that the gross estate of the decedent shall be determined by including the value at the time
of his death of all property to the extent of any interest therein of which the decedent has at any time made
a transfer in contemplation of death. So, the inventory to be approved in this case should still include the
said properties of Emigdio Mercado which were transferred by him in contemplation of death. Besides, the
said properties actually appeared to be still registered in the name of Emigdio S. Mercado at least ten (10)
months after his death, as shown by the certification issued by the Cebu City Assessors Office on October
31, 1991 (Exhibit O).28

Thereby, the RTC strictly followed the directives of the Rules of Court and the jurisprudence relevant to the
procedure for preparing the inventory by the administrator. The aforequoted explanations indicated that the
directive to include the properties in question in the inventory rested on good and valid reasons, and thus
was far from whimsical, or arbitrary, or capricious.

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

Secondly, with Emigdio and Teresita having been married prior to the effectivity of the Family Code in
August 3, 1988, their property regime was the conjugal partnership of gains.29 For purposes of the
settlement of Emigdios estate, it was unavoidable for Teresita to include his shares in the conjugal
partnership of gains. The party asserting that specific property acquired during that property regime did not
pertain to the conjugal partnership of gains carried the burden of proof, and that party must prove the
exclusive ownership by one of them by clear, categorical, and convincing evidence.30 In the absence of or
pending the presentation of such proof, the conjugal partnership of Emigdio and Teresita must be
provisionally liquidated to establish who the real owners of the affected properties were,31 and which of the
properties should form part of the estate of Emigdio. The portions that pertained to the estate of Emigdio
must be included in the inventory.

Moreover, although the title over Lot 3353 was already registered in the name of Mervir Realty, the RTC
made findings that put that title in dispute. Civil Case No. CEB12692, a dispute that had involved the
ownership of Lot 3353, was resolved in favor of the estate of Emigdio, and Transfer Certificate of Title No.
3252 covering Lot 3353 was still in Emigdios name. Indeed, the RTC noted in the order of March 14, 2001,
or ten years after his death, that Lot 3353 had remained registered in the name of Emigdio.

Interestingly, Mervir Realty did not intervene at all in Civil Case No. CEB12692. Such lack of interest in Civil
Case No. CEB12692 was susceptible of various interpretations, including one to the effect that the heirs of
Emigdio could have already threshed out their differences with the assistance of the trial court. This
interpretation was probable considering that Mervir Realty, whose business was managed by respondent
Richard, was headed by Teresita herself as its President. In other words, Mervir Realty appeared to be a
family corporation.

Also, the fact that the deed of absolute sale executed by Emigdio in favor of Mervir Realty was a notarized
instrument did not sufficiently justify the exclusion from the inventory of the properties involved. A notarized
deed of sale only enjoyed the presumption of regularity in favor of its execution, but its notarization did
not per se guarantee the legal efficacy of the transaction under the deed, and what the contents purported
to be. The presumption of regularity could be rebutted by clear and convincing evidence to the
contrary.32 As the Court has observed in Suntay v. Court of Appeals:33

x x x. Though the notarization of the deed of sale in question vests in its favor the presumption of regularity,
it is not the intention nor the function of the notary public to validate and make binding an instrument
never, in the first place, intended to have any binding legal effect upon the parties thereto. The intention
of the parties still and always is the primary consideration in determining the true nature of a
contract.(Bold emphasis supplied)

It should likewise be pointed out that the exchange of shares of stock of Mervir Realty with the real
properties owned by Emigdio would still have to be inquired into. That Emigdio executed the deed of
assignment two days prior to his death was a circumstance that should put any interested party on his
guard regarding the exchange, considering that there was a finding about Emigdio having been sick of
cancer of the pancreas at the time.34 In this regard, whether the CA correctly characterized the exchange as
a form of an estate planning scheme remained to be validated by the facts to be established in court.
The fact that the properties were already covered by Torrens titles in the name of Mervir Realty could not be
a valid basis for immediately excluding them from the inventory in view of the circumstances admittedly
surrounding the execution of the deed of assignment. This is because:

The Torrens system is not a mode of acquiring titles to lands; it is merely a system of registration of titles to
lands. However, justice and equity demand that the titleholder should not be made to bear the unfavorable
effect of the mistake or negligence of the States agents, in the absence of proof of his complicity in a fraud
or of manifest damage to third persons. The real purpose of the Torrens system is to quiet title to land and
put a stop forever to any question as to the legality of the title, except claims that were noted in the
certificate at the time of registration or that may arise subsequent thereto. Otherwise, the integrity of the
Torrens system shall forever be sullied by the ineptitude and inefficiency of land registration officials, who
are ordinarily presumed to have regularly performed their duties.35

Assuming that only seven titled lots were the subject of the deed of assignment of January 10, 1991, such
lots should still be included in the inventory to enable the parties, by themselves, and with the assistance of
the RTC itself, to test and resolve the issue on the validity of the assignment. The limited jurisdiction of the
RTC as an intestate court might have constricted the determination of the rights to the properties arising
from that deed,36 but it does not prevent the RTC as intestate court from ordering the inclusion in the
inventory of the properties subject of that deed. This is because the RTC as intestate court, albeit vested
only with special and limited jurisdiction, was still deemed to have all the necessary powers to exercise
such jurisdiction to make it effective.37

Lastly, the inventory of the estate of Emigdio must be prepared and submitted for the important purpose of
resolving the difficult issues of collation and advancement to the heirs. Article 1061 of the Civil Coderequired
every compulsory heir and the surviving spouse, herein Teresita herself, to bring into the mass of the
estate any property or right which he (or she) may have received from the decedent, during the lifetime of
the latter, by way of donation, or any other gratuitous title, in order that it may be computed in the
determination of the legitime of each heir, and in the account of the partition. Section 2, Rule 90 of
the Rules of Court also provided that any advancement by the decedent on the legitime of an heir may be
heard and determined by the court having jurisdiction of the estate proceedings, and the final order of the
court thereon shall be binding on the person raising the questions and on the heir. Rule 90 thereby
expanded the special and limited jurisdiction of the RTC as an intestate court about the matters relating to
the inventory of the estate of the decedent by authorizing it to direct the inclusion of properties donated or
bestowed by gratuitous title to any compulsory heir by the decedent.38

The determination of which properties should be excluded from or included in the inventory of estate
properties was well within the authority and discretion of the RTC as an intestate court. In making its
determination, the RTC acted with circumspection, and proceeded under the guiding policy that it was best
to include all properties in the possession of the administrator or were known to the administrator to belong
to Emigdio rather than to exclude properties that could turn out in the end to be actually part of the estate.
As long as the RTC commits no patent grave abuse of discretion, its orders must be respected as part of the
regular performance of its judicial duty. Grave abuse of discretion means either that the judicial or quasi
judicial power was exercised in an arbitrary or despotic manner by reason of passion or personal hostility, or
that the respondent judge, tribunal or board evaded a positive duty, or virtually refused to perform the duty
enjoined or to act in contemplation of law, such as when such judge, tribunal or board exercising judicial or
quasijudicial powers acted in a capricious or whimsical manner as to be equivalent to lack of jurisdiction.39

In light of the foregoing, the CAs conclusion of grave abuse of discretion on the part of the RTC was
unwarranted and erroneous.

WHEREFORE, the Court GRANTS the petition for review on certiorari; REVERSES and SETS ASIDE the
decision promulgated on May 15, 2002; REINSTATES the orders issued on March 14, 2001 and May 18,
2001 by the Regional Trial Court in Cebu; DIRECTS the Regional Trial Court in Cebu to proceed with
dispatch in Special Proceedings No. 3094CEB entitled Intestate Estate of the late Emigdio Mercado, Thelma
Aranas, petitioner, and to resolve the case; and ORDERS the respondents to pay the costs of suit. ChanRoblesVi rtua lawlib rary

SO ORDERED.
 G.R. No. 187524, August 05, 2015

SPOUSES MARIA BUTIONG AND FRANCISCO VILLAFRIA, SUBSTITUTED BY DR. RUEL B.

VILLAFRIA, Petitioners, v. MA. GRACIA RIOZA PLAZO AND MA. FE RIOZA ALARAS, Respondents.

DECISION

PERALTA, J.:

Before the-Court is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to reverse
and set aside the Decision1 and Resolution,2 dated March 13, 2009 and April 23, 2009, respectively, of the
Court Appeals (CA) in CA-G.R. SP No. 107347, which affirmed the Judgment3 dated October 1, 2001 of the
Regional Trial Court (RTC) of Nasugbu, Batangas, Branch 14, in Civil Case No. 217.

The antecedent facts are as follows: Law lib raryofCRAlaw

On November 16, 1989, Pedro L. Rioza died intestate, leaving several heirs, including his children with his
first wife, respondents Ma. Gracia R. Plazo and Ma. Fe Alaras, as well as several properties including a resort
covered by Transfer Certificates of Title (TCT) No. 51354 and No. 51355, each with an area of 351 square
meters, and a family home, the land on which it stands is covered by TCT Nos. 40807 and 40808, both
located in Nasugbu, Batangas.4 redarclaw

In their Amended Complaint for Judicial Partition with Annulment of Title and Recovery of Possession5dated
September 15, 1993, respondents alleged that sometime in March 1991, they discovered that their co-heirs,
Pedro's second wife, Benita Tenorio and other children, had sold the subject properties to petitioners,
spouses Francisco Villafria and Maria Butiong, who are now deceased and substituted by their son, Dr. Ruel
B. Villafria, without their knowledge and consent. When confronted about the sale, Benita acknowledged the
same, showing respondents a document she believed evidenced receipt of her share in the sale, which,
however, did not refer to any sort of sale but to a previous loan obtained by Pedro and Benita from a
bank.6 The document actually evidenced receipt from Banco Silangan of the amount of P87,352.62 releasing
her and her late husband's indebtedness therefrom.7 Upon inquiry, the Register of Deeds of Nasugbu
informed respondents that he has no record of any transaction involving the subject properties, giving them
certified true copies of the titles to the same. When respondents went to the subject properties, they
discovered that 4 out of the 8 cottages in the resort had been demolished. They were not, however, able to
enter as the premises were padlocked.

Subsequently, respondents learned that on July 18, 1991, a notice of an extra-judicial settlement of estate
of their late father was published in a tabloid called Balita. Because of this, they caused the annotation of
their adverse claims over the subject properties before the Register of Deeds of Nasugbu and filed their
complaint praying, among others, for the annulment of all documents conveying the subject properties to
the petitioners and certificates of title issued pursuant thereto.8 reda rclaw

In their Answer,9 petitioners denied the allegations of the complaint on the ground of lack of personal
knowledge and good faith in acquiring the subject properties. In the course of his testimony during trial,
petitioner Francisco further contended that what they purchased was only the resort.10 He also presented an
Extra-Judicial Settlement with Renunciation, Repudiations and Waiver of Rights and Sale which provides,
among others, that respondents' co-heirs sold the family home to the spouses Rolando and Ma. Cecilia
Bondoc for P1 million as well as a Deed of Sale whereby Benita sold the resort to petitioners for
P650,000.00.11 redarclaw

On October 1, 2001, the trial court nullified the transfer of the subject properties to petitioners and spouses
Bondoc due to irregularities in the documents of conveyance offered by petitioners.as well as the
circumstances surrounding the execution of the same. Specifically, the Extra-Judicial Settlement was
notarized by a notary public who was not duly commissioned as such on the date it was executed.12 The
Deed of Sale was undated, the date of the acknowledgment therein was left blank, and the typewritten
name "Pedro Rioza, Husband" on the left side of the document was not signed.13 The trial court also
observed that both documents were never presented to the Office of the Register of Deeds for registration
and that the titles to the subject properties were still in the names of Pedro and his second wife Benita. In
addition, the supposed notaries and buyers of the subject properties were not even presented as witnesses
who supposedly witnessed the signing and execution of the documents of conveyance.14 On the basis
thereof, the trial court ruled in favor of respondents, in its Judgment, the pertinent portions of
its fallo provide: Lawl ibra ryofCRAlaw

WHEREFORE, foregoing premises considered, judgment is hereby rendered as follows: Lawlib raryofCR Alaw

xxxx

4. a) Declaring as a nullity the Extra-Judicial Settlement with Renunciation, Repudiation and Waiver of
Rights and Sale" (Exh. "1", Villafria) notarized on December 23, 1991 by Notary Public Antonio G. Malonzo
of Manila, Doc. No. 190, Page No. 20, Book No. IXII, Series of 1991.

b) Declaring as a nullity the Deed of Absolute Sale (Exh. "2", Villafria), purportedly executed by Benita T.
Rioza in favor of spouses Francisco Villafria and Maria Butiong, purportedly notarized by one Alfredo de
Guzman, marked Doc. No. 1136, Page No. 141, Book No. XXX, Series of 1991.

c) Ordering the forfeiture of any and all improvements introduced by defendants Francisco Villafria dnd
Maria Butiong in the properties covered by TCT No. 40807, 40808, 51354 and 51355 of the Register of
Deeds for Nasugbu, Batangas.

5. Ordering defendant Francisco Villafria and all persons, whose occupancy within the premises of the four
(4) parcels of land described in par. 4-c above is derived from the rights and interest of defendant Villafria,
to vacate its premises and to deliver possession thereof, and all improvements existing thereon to plaintiffs,
for and in behalf of the estate of decedent Pedro L. Rioza.

6. Declaring the plaintiffs and the defendants-heirs in the Amended Complaint to be the legitimate heirs of
decedent Pedro L. RifSoza, each in the capacity and degree established, as well as their direct successors-in-
interest, and ordering the defendant Registrar of Deeds to issue the corresponding titles in their names in
the proportion established by law, pro indiviso, in TCT Nos. 40807, 40808, 51354, 51355 and 40353 (after
restoration) within ten (10) days from finality of this Decision, upon payment of lawful fees, except TCT No.
40353, which shall be exempt from all expenses for its restoration.

With no costs.

SO ORDERED.15

On appeal, the CA affirmed the trial court's Judgment in its Decision16 dated October 31, 2006 in the
following wise: Lawl ib raryofCRAlaw

The person before whom the resort deed was acknowledged, Alfredo de Guzman, was not
commissioned as a notary public from 1989 to July 3, 1991, the date the certification was issued.
Such being the case, the resort deed is not a public document and the presumption of- regularity
accorded to public documents will not apply to the same. As laid down in Tigno, el al. v. Aquino, et
al.:
Lawlib raryofCR Alaw

The validity of a notarial certification necessarily derives from the authority of the notarial officer. If the
notary public does net have the capacity to notarize a document, but does so anyway, then the
document should be treated as unnotarized. The rule may strike as rather harsh, and perhaps may
prove to be prejudicial to parties in good faith relying on the proferred authority of the notary public or the
person pretending to be one. Still, to admit otherwise would render merely officious the elaborate process
devised by this Court in order that a lawyer may receive a notarial commission. Without such a rule, the
notarization of a document by a duly-appointed notary public will have the same legal effect as
one accomplished by a non-lawyer engaged in pretense.

The notarization of a document carries considerable legal effect. Notarization of a private document
converts such document into a public one, and renders it admissible in court without further
proof of its authenticity. Thus, notarization is not an empty routine; to the contrary, it engages public
interest in a substantial degree and the protection of that interest requires preventing those who are not
qualified or authorized to act as notaries public from imposing upon the public and the courts and
administrative offices generally.Parenthetically, the settlement/family home deed cannot be
considered a public document. This is because the following cast doubt on the document's
authenticity, to wit: LawlibraryofC RAl aw

1.) The date of its execution was not indicated;

2.) The amount of consideration was superimposed;
3.) It was not presented to the Registry of Deeds of Nasugbu, Batangas for annotation; and
4.) Not even the supposed notary public," Alfredo de Guzman, or the purported buyer, the
Spouses Rolando and Ma. Cecilia Bondoc, were presented as witnesses.

Concededly, the absence of notarization in the resort deed and/or the lacking details in the
settlement/family home deed did not necessarily invalidate the transactions evidenced by the said
documents. However, since the said deeds are private documents, perforce, their due execution
and authenticity becomes subject to the requirement of proof under the Rules on Evidence,
Section 20, Rule 132 of which provides: Lawlib raryofCRAlaw

Sec. 20. Proof of private document. - Before any private document offered as authentic is received in
evidence, its due execution aijd .authenticity must be proved either: Lawlib raryofCR Alaw

(a) By anyone who saw the document executed or written; or

(b) By evidence of the genuineness of the signature or handwriting of the maker.The Complaining Heirs
insist that the settlement/family home and the resort deed are void as their signatures thereon are forgeries
as opposed to the Villafrias who profess the deeds' enforceability. After the Complaining Heirs presented
proofs in support of their claim that their signatures were forged, the burden then fell upon the
Villafrias to disprove the same, or conversely, to prove the authenticity and due execution of the
said deeds. The Villafrias failed in this regard.

As aforestated, the Villafrias did not present as witnesses (a) the notary public who purportedly
notarized the questioned instrument, (b) the witnesses who appeared] in the instruments as
eyewitnesses to the signing, or (c) an expert to prove the authenticity and genuineness of all the
signatures appearing o,n the said instruments. Verily, the rule that, proper foundation must be
laid for the admission of documentary evidence; that is, the identity and authenticity of the
document must be reasonably established as a prerequisite to its admission, was prudently
observed by the lower court when it refused to admit the settlement/family home and the resort
deeds as their veracity are doubtful.17
Aggrieved, petitioners, substituted by their son Ruel Villafria, filed a Motion for Reconsideration dated
November 24, 2006 raising the trial court's lack of jurisdiction. It was alleged that when the Complaint for
Judicial Partition with Annulment of Title and Recovery of Possession was filed, there was yet no settlement
of Pedro's estate, determination as to the nature thereof, nor was there an identification of the number of
legitimate heirs. As such, the trial court ruled on the settlement of the intestate estate of Pedro in its
ordinary jurisdiction when the action filed was for Judicial Partition. Considering that the instant action is
really one for settlement of intestate estate, the trial court, sitting merely in its probate jurisdiction,
exceeded its jurisdiction when it ruled upon the issues of forgery and ownership. Thus, petitioner argued
that said ruling is void and has no effect for having been rendered without jurisdiction. The Motion for
Reconsideration was, however, denied by the appellate court on February 26, 2007.

On appeal, this Court denied on June 20, 2007, petitioner's Petition for Review on Certiorari for submitting a
verification of the petition, a certificate of non-forum shopping and an affidavit of service that failed to
comply with the 2004 Rules on Notarial Practice regarding competent evidence of affiant's identities.18 In its
Resolution19 dated September 26, 2007, this Court also denied petitioner's Motion for Reconsideration in the
absence of any compelling reason to warrant a modification of the previous denial. Thus, the June 20, 2007
Resolution became final and executory on October 31, 2007 as certified by the Entry of Judgment issued by
the Court.20
redarclaw

On January 16, 2008, the Court further denied petitioner's motion for leave to admit a second motion for
reconsideration of its September 26, 2007 Resolution, considering that the same is a prohibited pleading
under Section 2, Rule 52, in relation to Section 4, Rule 56 of the 1997 Rules of Civil Procedure, as amended.
Furthermore, petitioner's letter dated December 18, 2007 pleading the Court to take a second, look at his
petition for review on certiorari and that a decision thereon be rendered based purely on its merits was
noted without action.21redarclaw

Unsatisfied, petitioner wrote a letter dated March 24, 2008 addressed to then Chief Justice Reynato S. Puno
praying that a decision on the case be rendered based on the .merits and not on formal requirements "as he
stands to lose everything his parents had left him just because the verification against non-forum shopping
is formally defective." However, in view of the Entry of Judgment having been made on October 31, 2007,
the Court likewise noted said letter without action.22 reda rclaw

On November 27, 2008, the RTC issued an Order, issuing a Partial Writ of Execution of its October 1, 2001
Decision with respect to the portions disposing of petitioner's claims as affirmed by the CA.

The foregoing notwithstanding, petitioner filed, on February 11, 2009, a Petition for Annulment of Judgment
and Order before the CA assailing the October 1, 2001 Decision as well as the November 27, 2008 Order of
the RTC on the grounds of extrinsic fraud and lack of jurisdiction. In its Decision dated March 13, 2009,
however, the CA dismissed the petition and affirmed the rulings of the trial court in the following wise:
Lawl ibra ryofCRAlaw

Although the assailed Decision of the Court a quo has already become final and executory and in fact entry
of judgment was issued on 31 October 2007, supra, nevertheless, to put the issues to rest, We deem it
apropos to tackle the same.

The Petitioner argues that the assailed Decision and Order of the Court a quo, supra, should be annulled and
set aside on the grounds of extrinsic fraud and lack of jurisdiction.

We are not persuaded,

xxxx

Section 2 of the Rules as stated above provides that the annulment of a judgment may "be based only on
grounds of extrinsic fraud and lack of jurisdiction." In RP v. The Heirs of Sancho Magdato, the High Tribunal
stressed that:Lawlibra ryofCRAlaw

There is extrinsic fraud when "the unsuccessful party had been prevented from exhibiting fully
his case, by fraud or deception practiced on him by his opponent, as by keeping him away from
court, ... or where the defendant never had knowledge of the suit, being kept in ignorance by the
acts of the plaintiff; ..."Otherwise put, extrinsic or collateral fraud pertains to such fraud which prevents
the aggrieved party from having a trial or presenting his case to the court, or is used to procure the
judgment without fair submission of the controversy. This refers to acts intended to keep the unsuccessful
party away from the courts as when there is a false promise of compromise or when one is kept in ignorance
of the suit.

The pivotal issues before Us are: (1) whether there was a time during the proceedings below that
the Petitioners ever prevented from exhibiting fully their case, by fraud or deception, practiced
on them by Respondents, and (2) whether the Petitioners were kept away from the court or kept
in ignorance by the acts of the Respondent?

We find nothing of that sort. Instead, what We deduced as We carefully delved into the
evidentiary facts surrounding the instant case as well as the proceedings below as shown in the
36-page Decision of the Court a quo, is that the Petitioners were given ample time to rebut the
allegations of the Respondents and had in fact addressed every detail of Respondent's cause of
action against them. Thus, Petitioners' allegation of the Court a quo's lack of jurisdiction is
misplaced.

Our pronouncement on the matter finds support in the explicit ruling of the Supreme Court in Sps. Santos,
et al. v. Sps. Lumbao, thus: Lawli braryofCR Alaw

It is elementary that the active participation of a party in a case pending against him before a
court is tantamount to recognition of that court's jurisdiction and willingness to abide by the
resolution of the case which will bar said party from later on impugning the court's jurisdiction.In
fine, under the circumstances obtaining in this case the Petitioners are stopped from assailing the Court a
quo's lack of jurisdiction.

Too, We do not find merit in the Petitioners' second issue, supra.

As mentioned earlier, entry of judgment had already been made on the assailed Decision and Order as early
as 31 October 2007.

xxxx

It maybe that the doctrine of finality of judgments permits certain equitable remedies such as a
petition for annulment. But the rules are clear. The annulment by the Court of Appeals of
judgments or final orders and resolutions in civil actions of the Regional Trial Courts is resorted
to only where the ordinary remedies of new trial, appeal, petition for relief or other appropriate
remedies are no longer available through no fault of the petitioner, supra.
If Petitioners lost their chance to avail themselves of the appropriate remedies or appeal before
the Supreme Court, that is their own look out. The High Tribunal has emphatically pointed out
in Mercado, et al. v. Security Bank Corporation, thus: Lawlibra ryofCRAlaw

A principle almost repeated to satiety is that "an action for annulment of judgment cannot and is not a
substitute for the lost remedy of-appeal." A party must have first availed of appeal, a motion for new
trial or a petition for relief before an action for annulment can prosper. Its obvious rationale is to
prevent the party from benefiting from his inaction or negligence. Also, the action for annulment
of judgment must be based either on (a) extrinsic fraud or (b) lack of jurisdiction or denial of due
process. Having failed to avail of the remedies and there being a clear showing that neither of
the grounds was present, the petition must be dismissed. Only a disgruntled litigant would find
such legal disposition unacceptable.23When the appellate court denied Petitioner's Motion for
Reconsideration in its Resolution dated April 23, 2009, petitioner filed the instant Petition for Review
on Certiorari on June 10, 2009, invoking the following ground: Lawlib raryofCR Alaw

I.

THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN NOT RULING THAT THE REGIONAL TRIAL
COURT, BRANCH 14, NASUGBU, BATANGAS, ACTED WITHOUT JURISDICTION IN ENTERTAINING THE
SPECIAL PROCEEDING FOR THE SETTLEMENT OF ESTATE OF PEDRO RIOZA AND THE CIVIL ACTION FOR
ANNULMENT OF TITLE OF THE HEIRS AND THIRD PERSONS IN ONE PROCEEDING.24
Petitioner asserts that while the complaint filed by respondents was captioned as "Judicial Partition with
Annulment of Title and Recovery of Possession," the allegations therein show that the cause of action is
actually one for settlement of estate of decedent Pedro. Considering that settlement of estate is a special
proceeding cognizable by a probate court of limited jurisdiction while judicial partition with annulment of title
and recovery of possession are ordinary civil actions cognizable by a court of general jurisdiction, the trial
court exceeded its jurisdiction in entertaining the latter while it was sitting merely in its probate jurisdiction.
This is in view of the prohibition found in the Rules on the joinder of special civil actions and ordinary civil
actions.25 Thus, petitioner argued that the ruling of the trial court is void and has no effect for having been
rendered in without jurisdiction.

Petitioner also reiterates the arguments raised before the appellate court that since the finding of forgery
relates only to the signature of respondents and not to their co-heirs who assented to the conveyance, the
transaction should be considered valid as to them. Petitioner also denies the findings of the courts below
that his parents are builders in bad faith for they only took possession of the subject properties after the
execution of the transfer documents and after they paid the consideration on the sale.

The petition is bereft of merit.

Petitioner maintains that since respondents' complaint alleged the following causes of action, the same is
actually one for settlement of estate and not of judicial partition: Lawl ibra ryofCRAlaw

FIRST CAUSE OF ACTION

1. That Pedro L. Rioza, Filipino and resident of Nasugbu, Batangas at the time of his death, died intestate
on November 16, 1989. Copy of his death certificate is hereto attached as Annex "A";

2. That Plaintiffs together with the Defendants enumerated from paragraph 2-A to 2-J are the only
known heirs of the above-mentioned decedent. The plaintiffs and the Defendants Rolando, Rafael, Antonio,
Angelito, Lorna all surnamed Rioza, and Myrna R. Limon or Myrna R. Rogador, Epifanio Belo and Ma.
Theresa R. Demafelix are the decedent's legitimate children with his first wife, while Benita Tenorio Rifioza,
is the decedent's widow and Bernadette Rioza, the decedent's daughter with said widow. As such, said
parties are co-owners by virtue of an intestate inheritance from the decedent, of the properties
enumerated in the succeeding paragraph;

3. That the decedent left the following real properties all located in Nasugbu, Batangas: LawlibraryofCR Alaw

xxxx

16. That the estate of decedent Pedro L. Rioza has no known legal indebtedness;
17. That said estate remains undivided up to this date and it will be to the best interest of all heirs that
same be partitioned judicially.26

Petitioner is mistaken. It is true that some of respondents' causes of action pertaining to the properties left
behind by the decedent Pedro, his known heirs, and the nature and extent of their interests thereon, may
fall under an action for settlement of estate. However, a complete reading of the complaint would readily
show that, based on the nature of the suit, the allegations therein, and the reliefs prayed for, the action is
clearly one for judicial partition with annulment of title and recovery of possession.

Section 1, Rule 74 of the Rules of Court provides: Lawl ib raryofCRAlaw

RULE 74
Summary Settlement of Estate

Section 1. Extrajudicial settlement by agreement between heirs. If the decedent left no will and no
debts and the heirs are all of age, or the minors are represented by their judicial or legal representatives
duly authorized for the purpose, the parties may without securing letters of administration, divide the
estate among themselves as they see fit by means of a public instrument filed in the office of the register of
deeds, and should they disagree, they may do so in an ordinary action of partition. If there is only one
heir, he may adjudicate to himself the entire estate by means of an affidavit filled in the office of the register
of deeds. The parties to an extrajudicial settlement, whether by public instrument or by stipulation in a
pending action for partition, or the sole heir who adjudicates the entire estate to himself by means of an
affidavit shall file, simultaneously with and as a condition precedent to the filing of the public instrument, or
stipulation in the action for partition, or of the affidavit in the office of the register of deeds, a bond with the
said register of deeds, in an amount equivalent to the value of the personal property involved as certified to
under oath by the parties concerned and conditioned upon the payment of any just claim that may be filed
under section 4 of this rule. It shall be presumed that the decedent left no debts if no creditor files a petition
for letters of administration within two (2) years after the death of the decedent.

The fact of the extrajudicial settlement or administration shall be published in a newspaper of general
circulation in the manner provided in the next succeeding section; but no extrajudicial settlement shall be
binding upon any person who has not participated therein or had no notice thereof.27

In this relation, Section 1, Rule 69 of the Rules of Court provides: Lawlib raryofCR Alaw

Section 1. Complaint in action for partition of real estate. A person having the right to compel the
partition of real estate may do so as provided in this Rule, setting forth in his complaint the nature and
extent of his title and an adequate description of the real estate of which partition is demanded
and joining as defendants all other persons interested in the property.28

As can be gleaned from the foregoing provisions, the allegations of respondents in their complaint are but
customary, in fact, mandatory, to a complaint for partition of real estate. Particularly, the complaint alleged:
(1) that Pedro died intestate; (2) that respondents, together with their co-heirs, are all of legal age, with the
exception of one who is represented by a judicial representative duly authorized for the purpose; (3) that
the heirs enumerated are the only known heirs of Pedro; (4) that there is an account and description of all
real properties left by Pedro; (5) that Pedro's estate has no known indebtedness; and (6) that respondents,
as rightful heirs to the decedent's estate, pray for the partition of the same in accordance with the laws of
intestacy. It is clear, therefore, that based on the allegations of the complaint, the case is one for judicial
partition. That the complaint alleged causes of action identifying the heirs of the decedent, properties of the
estate, and their rights thereto, does not perforce make it an action for settlement of estate.

It must be recalled that the general rule is that when a person dies intestate, or, if testate, failed to name
an executor in his will or the executor so named is incompetent, or refuses the trust, or. fails to furnish the
bond required by the Rules of Court, then the decedent's estate shall be judicially administered and the
competent court shall appoint a qualified administrator in the order established in Section 6 of Rule 78 of the
Rules of Court.29 An exception to this rule, however, is found in the aforequoted Section 1 of Rule 74
wherein the heirs of a decedent, who left no will and no debts due from his estate, may divide the estate
either extrajudicially or in an ordinary action for partition without submitting the same for judicial
administration nor applying for the appointment of an administrator by the court.30 The reason is that where
the deceased dies without pending obligations, there is no necessity for the appointment of an administrator
to administer the estate for them and to deprive the real owners of their possession to which they are
immediately entitled.31 redarclaw

In this case, it was expressly alleged in the complaint, and was not disputed, that Pedro died without a will,
leaving his estate without any pending obligations. Thus, contrary to petitioner'.s contention, respondents
were under no legal obligation to submit me subject properties of the estate to a special proceeding for
settlement of intestate estate, and are, in fact, encouraged to have the same partitioned, judicially or
extrajudicially, by Pereira v. Court of Appeals:32
redarclaw

Section 1, Rule 74 of the Revised Rules of Court, however, does not preclude the heirs from instituting
administration proceedings, even if the estate has no" debts or obligations, if they do not desire to resort for
good reasons to an ordinary action for partition. While Section 1 allows the heirs to divide the estate among
themselves as they may see fit, or to resort to an ordinary action for partition, the said provision does not
compel them to do so if they have good reasons to take a different course of action. It should be noted that
recourse to an administration proceeding even if the estate has no debts is sanctioned only if the heirs have
good reasons for not resorting to an action for partition. Where' partition is possible, either in or out of
court, the estate should not be burdened with an administration proceeding without good and
compelling reasons.

Thus, it has been repeatedly held that when a person dies without leaving pending obligations to
be paid, his heirs, whether of age or not, are not bound to submit the property to a judicial
administration, which is always long and costly, or to apply for the appointment of an
administrator by the Court. It has been uniformly held that in such case the judicial
administration and the appointment of an administrator are superfluous and unnecessary
proceedings.33

Thus, respondents committed no error in filing an action for judicial partition instead of a special proceeding
for the settlement of estate as the same is expressly permitted by law. That the complaint contained
allegations inherent in an action for settlement of estate does not mean that there was a prohibited joinder
of causes of action for questions as to the estate's properties as well as a determination of the heirs, their
status as such, and the nature and extent of their titles to the estate, may also be properly ventilated in
partition proceedings alone.34 In fact, a complete inventory of the estate may likewise be done during the
partition proceedings, especially since the estate has no debts.35Indeed, where the more expeditious remedy
of partition is available to the heirs, then they may not be compelled to submit to administration
proceedings, dispensing of the risks of delay and of the properties being dissipated.36 redarclaw

Moreover, the fact that respondents' complaint al$o prayed for the annulment of title and recovery of
possession does not strip the trial court off of its jurisdiction to hear and decide the case. Asking for the
annulment of certain transfers of property could very well be achieved in an action for partition,37 as can be
seen in cases where courts determine the parties' rights arising from complaints asking not only for the
partition of estates but also for the annulment of titles and recovery of ownership and possession of
property.38 In fact, in Bagayas v. Bagayas,39 wherein a complaint for annulment of sale and partition was
dismissed by the trial court due to the impropriety of an action for annulment as it constituted a collateral
attack on the certificates of title of the respondents therein, this Court found the dismissal to be improper in
the following manner: Lawl ibra ryofCRAlaw

In Lacbayan v. Samoy, Jr. (Lacbayan) which is an action for partition premised on the existence
or non-existence of co-ownership between the parties, the Court categorically pronounced that a
resolution on the issue of ownership does not subject the Torrens title issued over the disputed
realties to a collateral attack. It must be borne in mind that what cannot be collaterally attacked
is the certificate of title and not the title itself. As pronounced in Lacbayan: LawlibraryofCR Alaw

There is no dispute that a Torrens certificate of title cannot be collaterally attacked, but that rule is not
material to the case at bar. What cannot be collaterally attacked is the certificate of title and not
the title itself. The certificate referred to is that document issued by the Register of Deeds known
as the TCT. In contrast, the title referred to by law means ownership which is, more often than
not, represented by that document. Petitioner apparently confuses title with the certificate of title. Title
as a concept of ownership should not be confused with the certificate of title as evidence of such ownership
although both are interchangeably used. (Emphases supplied)

Thus, the RTC erroneously dismissed petitioner's petition for annulment of sale on the ground
that it constituted a collateral attack since she was actually assailing Rogelio and Orlando's title
to the subject lands and not any Torrens certificate of title over the same.

Indeed, an action for partition does not preclude the settlement of the issue of ownership. In fact, the
determination as to the existence of the same is necessary in the resolution of an action for partition, as
held in Municipality of Bian v. Garcia:40 redarclaw

The first phase of a partition and/or accounting suit is taken up with the determination of
whether or not a co-ownership in fact exists, and a partition is proper (i.e., not otherwise legally
proscribed) and may be made by voluntary agreement of all the parties interested in the property. This
phase may end with a declaration that plaintiff is not entitled to have a partition either because a co-
ownership does not exist, or partition is legally prohibited. It may end, on the other hand, with an
adjudgment that a co-ownership does in truth exist, partition is proper in the premises and an accounting of
rents and profits received by the defendant from the real estate in question is in order, x x x

The second phase commences when it appears that "the parties are unable to agree upon the partition"
directed by the court. In that event[,] partition shall be done for the parties by the [c]ourt with the
assistance of not more than three (3) commissioners. This second stage may well also deal with the
rendition of the accounting itself and its approval by the [cjourt after the- parties have been accorded
opportunity to be heard thereon, and an award for the recovery by the party or parties thereto entitled of
their just share in the rents and profits of the real estate in question, x x x.41 redarc law

An action for partition, therefore, is premised on the existence or non-existence of co-ownership between
the parties.42 Unless and until the issue of co-ownership is definitively resolved, it would be premature to
effect a partition of an estate.43
reda rclaw

In view of the foregoing, petitioner's argument that the trial court acted without jurisdiction in entertaining -
the action of settlement of estate and annulment of title in a single proceeding is clearly erroneous for the
instant complaint is precisely one for judicial partition with annulment of title and recovery of possession,
filed within the confines of applicable law and jurisprudence. Under Section 144of Republic Act No. 7691 (RA
7691),45 amending Batas Pambansa Big. 129, the RTC shall exercise exclusive original jurisdiction over all
civil actions in which the subject of the litigation is incapable of pecuniary estimation. Since the action herein
was not merely for partition and recovery of ownership but also for annulment of title and documents, the
action is incapable of pecuniary estimation and thus cognizable by the RTC. Hence, considering that the trial
court clearly had jurisdiction in rendering its decision, the instant petition for annulment Sf judgment must
necessarily fail.

Note that even if the instant action was one for annulment of title alone, without the prayer for judicial
partition, the requirement of instituting a separate special proceeding for the determination of the status
and rights of the respondents as putative heirs may be dispensed with, in light of the fact that the parties
had voluntarily submitted the issue to the trial court and had already presented evidence regarding the issue
of heirship.46 In Portugal v. Portugal-Beltran,47 the Court explained:Law lib raryofCRAlaw

In the case at bar, respondent, believing rightly or wrongly that she was the sole heir to
Portugal's estate, executed on February 15, 1988 the questioned Affidavit of Adjudication under
the second sentence of Rule 74, Section 1 of the Revised Rules of Court. Said rule is an exception
to the general rule that when a person dies leaving a property, it should be judicially
administered and the competent court should appoint a qualified administrator, in the order
established in Sec. 6, Rule 78 in case the deceased left no will, or in case he did, he failed to name an
executor therein.

xxxx

It appearing, however, that in the present case the only property of the intestate estate of
Portugal is the Caloocan parcel of land, to still subject it, under the circumstances of the case, to
a special proceeding which could be long, hence, not expeditious, just to establish the status of
petitioners as heirs is not only impractical; it is burdensome to the estate with the costs and
expenses of an administration proceeding. And it is superfluous in light of the fact that the
parties to the civil case - subject of the present case, could and had already in fact presented
evidence before the trial court which assumed jurisdiction over the case upon the issues it
defined during pre-trial.
In fine, under the circumstances of the present case, there being no compelling reason to still subject
Portugal's estate to administration proceedings since a determination of petitioners' status as
heirs could be achieved in the civil case filed by petitioners, the trial court should proceed to
evaluate the evidence presented by the parties during the trial and render a decision thereon upon
the issues it defined during pre-trial, x x x.48

Thus, in view of the clarity of respondents' complaint and the causes of action alleged therein, as well as the
fact that the trial court, in arriving at its decision, gave petitioner more than ample opportunity to advance
his claims, petitioner cannot now be permitted to allege lack of jurisdiction just because the judgment
rendered was adverse to them. To repeat, the action filed herein is one for judicial partition and not for
settlement of intestate estate. Consequently, that respondents also prayed for the annulment of title and
recovery of possession in the same proceeding does not strip the court off of its jurisdiction for asking for
the annulment of certain transfers of property could very well be achieved in an action for partition.

As for petitioner's contention that the sale must be considered valid as to the heirs who assented to the
conveyance as well as their allegation of good faith, this Court does not find any Compelling reason to
deviate from the ruling of the appellate court. As sufficiently found by both courts below, the authenticity
and due execution of the documents on which petitioner's claims are based were inadequately proven. They
were undated, forged, and acknowledged before a notary public who was not commissioned as such on the
date they were executed. They were never presented to the Register of Deeds for registration. Neither were
the supposed notaries and buyers of the subject properties presented as witnesses.

While it may be argued that Benita, one of the co-heirs to the estate, actually acknowledged the sale of the
resort, the circumstances surrounding the same militate against the fact of its occurrence. Not only was the
Deed of Sale supposedly executed by Benita undated and unsigned by Pedro, but the document she
presented purportedly evidencing her receipt of her share in the sale, did not refer to any sort of sale but to
a previous loan obtained by Pedro and Benita from a bank.

Moreover, credence must be given on the appellate court's observations as to petitioners' actuations insofar
as the transactions alleged herein are concerned. First, they were seemingly uncertain as to the number
and/or identity of the properties bought by them.49 In their Answer, they gave the impression that" they
bought both the resort and the family home and yet, during trial, Francisco Villafria claimed they only
bought the resort. In fact, it was only then that they presented the subject Extra-Judicial Settlement and
Deed of Sale.50Second, they never presented any other document which would evidence their actual
payment of consideration to the selling heirs.51Third, in spite of the blatant legal infirmities of the subject
documents of conveyance, petitioners still took possession of the properties, demolished several cottages,
and introduced permanent improvements thereon.

In all, the Court agrees with the appellate court that petitioners failed to adequately substantiate, with
convincing, credible and independently verifiable proof, their claim that they had, in fact, purchased the
subject properties. The circumstances surrounding the purported transfers cast doubt on whether they
actually took place. In substantiating their claim, petitioners relied solely on the Extra-Judicial Settlement
and Deed of Sale, who utterly failed to prove their authenticity and due execution. They cannot, therefore,
be permitted to claim absolute ownership of the subject lands based on the same.

Neither can they be considered as innocent purchasers for value and builders in good faith. Good faith
consists in the belief of the builder that the land the latter is building on is one's own without knowledge of
any defect or flaw in one's title.52 However, in view of the manifest defects in the instruments conveying
their titles, petitioners should have been placed on guard. Yet, they still demolished several cottages and
constructed improvement on the properties. Thus, their claim of good faith cannot be given credence.

Indeed, a judgment which has acquired finality becomes immutable and unalterable, hence, may no longer
be modified in any respect except to correct clerical errors or mistakes, all the issues between the parties
being deemed resolved and. laid to rest.53 It is a fundamental principle in our judicial system and essential
to an effective and efficient administration of justice that, once a judgment has become final, the winning
party be, not through a mere subterfuge, deprived of the fruits of the verdict.54Exceptions to the
immutability of final judgment are allowed only under the most extraordinary of circumstances.55 Yet, when
petitioner is given more than ample opportunity to be heard, unbridled access to the appellate courts, as
well as unbiased judgments rendered after a consideration of evidence presented by the parties, as in the
case at hand, the Court shall refrain from reversing the rulings of the courts below in the absence of any
showing that the same were rendered with fraud or lack of jurisdiction.
WHEREFORE, premises considered, the instant petition is DENIED. The Decision and Resolution, dated
March 13, 2009 and April 23, 2009, respectively, of the Court Appeals in CA-G.R. SP No. 107347, which
affirmed the Judgment dated October 1, 2001 of the Regional Trial Court of Nasugbu, Batangas, Branch 14,
in Civil Case No. 217, insofar as it concerns the resort covered by Transfer Certificates of Title No. 51354
and No. 51355, and family home covered by TCT No. 40807 and 40808, are AFFIRMED.

SO ORDERED. cralawlawlibra ry