1

There is a marked distinction between an "action" and a "special

SPECPRO CASES (1st Batch)
1. G.R. No. 16680 September 13, 1920
BROADWELL HAGANS, petitioner,
vs.
ADOLPH WISLIZENUS, Judge of First Instance of Cebu, ET
AL., respondents.
Block, Johnston & Greenbaum for petitioner.
The respondent judge in his own behalf.
No appearance for the other respondents.
JOHNSON, J.:
This is an original petition, presented in the Supreme Court, for
writ of certiorari. The facts alleged in the petition are admitted by
a demurrer. The only question presented is, whether or not a
judge of the Court of First Instance, in "special proceedings," is
authorized under the law to appoint assessors for the purpose of
fixing the amount due to an administrator or executor for his
services and expenses in the care, management, and settlement
of the estate of a deceased person.
proceeding. "An action is a formal demand of one's legal rights in
a court of justice in the manner prescribed by the court or by the
law. It is the method of applying legal remedies according to
definite established rules. (People vs. County Judge, 13 How. Pr.
[N. Y.], 398.) The term "special proceeding" may be defined as an
application or proceeding to establish the status or right of a
party, or a particular fact. (Porter vs. Purdy, 29 N. Y., 106, 110;
Chapin vs. Thompson, 20 Cal., 681.) Usually, in special
proceedings, no formal pleadings are required, unless the statute
expressly so provides. The remedy in special proceedings is
generally granted upon an application or motion. Illustrations of
special proceedings, in contradistinction to actions, may be given:
Proceedings for the appointment of an administrator, guardians,
tutors; contest of wills; to perpetuate testimony; to change the
name of persons; application for admission to the bar, etc., etc.
(Bliss on Code Pleading, 3d ed., sec. 1.)
From all of the foregoing we are driven to the conclusion that in
proceedings like the present the judge of the Court of First
Instance is without authority to appoint assessors. Therefore, the
demurrer is hereby overruled and the prayer of the petition is
hereby granted, and it is hereby ordered and decreed that the
order of the respondent judge appointing the assessors described
in the petition be and the same is hereby annulled and set aside;
and, without any finding as to costs, it is so ordered.

The respondent judge, in support of his demurrer, argues that the

provision of Act No. 190 permit him to appoint assessors in
"special proceedings," The petitioner contends that no authority
in law exists for the appointment of assessors in such
proceedings.

The only provisions of law which authorize the appointment of

assessors are the following; (a) Section 57-62 of Act No. 190; (b)
sections 153-161 of Act No. 190; (c) section 44 (a) of Act No. 267;
(d) section 2477 of Act No. 2711; and (e) section 2 of Act No. 2369.

Said section 44 (a) of Act No. 267 and section 2477 of Act No. 2711
apply to the city of Manila only. Act No. 2369 provides for the
appointment of assessors in criminal cases only. Sections 57-62 of
Act No. 190 provide for the appointment of assessors in the court
of justice of the peace. Therefore, the only provisions of law
which could, by any possibility, permit the appointment of
assessors in "special proceedings" are sections 153-161 of Act No.
190.

Section 154 provides that "either party to an action may apply in

writing to the judge for assessors to sit in the trial. Upon the filing
of such application, the judge shall direct that assessors be
provided, . . . ."

Is a "special proceeding," like the present, an "action"? If it is,

then, the court is expressly authorized by said section 154 to
appoint assessors. But we find, upon an examination of section 1
of Act No. 190, which gives us an interpretation of the words used
in said Act, that a distinction is made between an "action" and a
"special proceeding." Said section 1 provides that an "action"
means an ordinary suit in a court of justice, while "every other
remedy furnished by law is a 'special proceeding."

In view of the interpretation given to the words "action" and

"special proceeding" by the Legislature itself, we are driven to the
conclusion that there is a distinction between an "action" and a
"special proceeding," and that when the Legislature used the
word "action" it did not mean "special proceeding."

2. G.R. No. 109373 March 20, 1995
PACIFIC BANKING CORPORATION EMPLOYEES
ORGANIZATION, PAULA S. PAUG, and its officers and
members, petitioners,
vs.
THE HONORABLE COURT OF APPEALS and VITALIANO N.
NAÑAGAS II, as Liquidator of Pacific Banking
Corporation, respondents.
G.R. No. 112991 March 20, 1995
THE PRESIDENT OF THE PHILIPPINE DEPOSIT INSURANCE
CORPORATION, as Liquidator of the Pacific Banking
Corporation , petitioner,
vs.
COURT OF APPEALS, HON. JUDGE REGINO T. VERIDIANO II,
DEPUTY SHERIFF RAMON ENRIQUEZ and ANG ENG JOO,
ANG KEONG LAN and E.J ANG INT'L. LTD., represented by
their Attorney-in-fact, GONZALO C. SY, respondents.
MENDOZA, J.:
These cases have been consolidated because the principal
question involved is the same: whether a petition for liquidation
under §29 of Rep. Act No. 265, otherwise known as the Central
Bank Act, is a special proceeding or an ordinary civil action. The
Fifth and the Fourteenth Divisions of the Court of Appeals
reached opposite results on this question and consequently
applied different periods for appealing.
The facts are as follows:
I.
Proceedings in the CB and the RTC
On July 5, 1985, the Pacific Banking Corporation (PaBC) was
placed under receivership by the Central Bank of the Philippines
pursuant to Resolution No. 699 of its Monetary Board. A few
months later, it was placed under liquidation1 and a Liquidator
was appointed.2
On April 7, 1986, the Central Bank filed with the Regional Trial
Court of Manila Branch 31, a petition entitled "Petition for
Assistance in the Liquidation of Pacific Banking
Corporation." 3 The petition was approved, after which creditors
filed their claims with the court.
On May 17, 1991, a new Liquidator, Vitaliano N.
Nañagas,4 President of the Philippine Deposit Insurance
Corporation (PDIC), was appointed by the Central Bank.
On March 13, 1989 the Pacific Banking Corporation Employees
Organization (Union for short), petitioner in G.R. No. 109373, filed
a complaint-in-intervention seeking payment of holiday pay, 13th
month pay differential, salary increase differential, Christmas
bonus, and cash equivalent of Sick Leave Benefit due its members
as employees of PaBC. In its order dated September 13, 1991, the
trial court ordered payment of the principal claims of the Union.5
The Liquidator received a copy of the order on September 16,
1991. On October 16, 1991, he filed a Motion for Reconsideration
and Clarification of the order. In his order of December 6, 1991,
2
the judge modified his September 13, 19916 but in effect denied
the Liquidator's motion for reconsideration. This order was
received by the Liquidator on December 9, 1991. The following
day, December 10, 1991, he filed a Notice of Appeal and a Motion
for Additional Time to Submit Record on Appeal. On December
23, 1991, another Notice of Appeal was filed by the Office of the
Solicitor General in behalf of Nañagas.
In his order of February 10, 1992, respondent judge disallowed the
Liquidator's Notice of Appeal on the ground that it was late, i.e.,
more than 15 days after receipt of the decision. The judge
declared his September 13, 1991 order and subsequent orders to
be final and executory and denied reconsideration. On March 27,
1992, he granted the Union's Motion for issuance of a writ of
Execution.
Ang Keong Lan and E.J. Ang Int'l., private respondents in G.R. No.
112991, likewise filed claims for the payment of investment in the
PaBC allegedly in the form of shares of stocks amounting to
US$2,531,632.18. The shares of stocks, consisting of 154,462
common shares, constituted 11% of the total subscribed capital
stock of the PaBC. They alleged that their claim constituted
foreign exchange capital investment entitled to preference in
payment under the Foreign Investments Law.
In his order dated September 11, 1992, respondent judge of the
RTC directed the Liquidator to pay private respondents the total
amount of their claim as preferred creditors.7
The Liquidator received the order on September 16, 1992. On
September 30, 1992 he moved for reconsideration, but his motion
was denied by the court on October 2, 1992. He received the
order denying his Motion for Reconsideration on October 5, 1992.
On October 14, 1992 he filed a Notice of Appeal from the orders
of September 16, 1992 and October 2, 1992. As in the case of the
Union, however, the judge ordered the Notice of Appeal stricken
off the record on the ground that it had been filed without
authority of the Central Bank and beyond 15 days. In his order of
October 28, 1992, the judge directed the execution of his
September 11, 1992 order granting the Stockholders/ Investors'
claim.
II.
Proceedings in the Court of Appeals
The Liquidator filed separate Petitions for Certiorari, Prohibition
and Mandamus in the Court of Appeals to set aside the orders of
the trial court denying his appeal from the orders granting the
claims of Union and of the Stockholders/Investors. The two
Divisions of the Court of Appeals, to which the cases were
separately raffled, rendered conflicting rulings.
In its decision of November 17, 1992 in CA-G.R. SP No. 27751 (now
G.R. No. 09373) the Fifth Division8 held in the case of the Union
that the proceeding before the trial court was a special
proceeding and, therefore, the period for appealing from any
decision or final order rendered therein is 30 days. Since the
notice of appeal of the Liquidator was filed on the 30th day of his
receipt of the decision granting the Union's claims, the appeal
was brought on time. The Fifth Division, therefore, set aside the
orders of the lower court and directed the latter to give due
course to the appeal of the Liquidator and set the Record on
Appeal he had filed for hearing.
On the other hand, on December 16, 1993, the Fourteenth
Division9 ruled in CA-G.R. SP No. 29351 (now G.R. No. 112991) in

the case of the Stockholders/Investors that a liquidation
proceeding is an ordinary action. Therefore, the period for
appealing from any decision or final order rendered therein is 15
days and that since the Liquidator's appeal notice was filed on the
23rd day of his receipt of the order appealed from, deducting the
period during which his motion for reconsideration was pending,
the notice of appeal was filed late. Accordingly, the Fourteenth
Division dismissed the Liquidator's petition.
III.
Present Proceedings
The Union and the Liquidator then separately filed petitions
before this Court.
In G.R. No. 109373 the Union contends that:
1. The Court of Appeals acted without
jurisdiction over the subject matter or nature of
the suit.
2. The Court of Appeals gravely erred in taking
cognizance of the petition for certiorari filed by
Nañagas who was without any legal authority to
file it.
3. The Court of Appeals erred in concluding that
the case is a special proceeding governed by
Rules 72 to 109 of the Revised Rules of Court.
4. The Court of Appeals erred seriously in
concluding that the notice of appeal filed by
Nañagas was filed on time.
5. The Court of Appeals erred seriously in
declaring that the second notice of appeal filed
on December 23, 1991 by the Solicitor General is
a superfluity.
On the other hand, in G.R. No. 112991 the Liquidator contends
that:
1. The Petition for Assistance in the Liquidation
of the Pacific Banking Corporation s a Special
Proceeding case and/or one which allows
multiple appeals, in which case the period of
appeal is 30 days and not 15 days from receipt of
the order/judgment appealed from.
2. Private respondents are not creditors of PaBC
but are plain stockholders whose right to
receive payment as such would accrue only after
all the creditors of the insolvent bank have been
paid.
3. The claim of private respondents in the
amount of US$22,531,632.18 is not in the nature
of foreign investment as it is understood in law.
4. The claim of private respondents has not
been clearly established and proved.
5. The issuance of a writ of execution against
the assets of PaBC was made with grave abuse
of discretion.
3
The petitions in these cases must be dismissed.
First. As stated in the beginning, the principal question in these
cases is whether a petition for liquidation under §29 of Rep. Act
No. 265 is in the nature of a special proceeding. If it is, then the
period of appeal is 30 days and the party appealing must, in
addition to a notice of appeal, file with the trial court a record on
appeal in order to perfect his appeal. Otherwise, if a liquidation
proceeding is an ordinary action, the period of appeal is 15 days
from notice of the decision or final order appealed from.
BP Blg. 129 provides:
§39. Appeals. — The period for appeal from final
orders, resolutions, awards, judgments, or
decisions of any court in all cases shall be fifteen
(15) days counted from the notice of the final
order, resolution, award, judgment or decision
appealed from: Provided, however, that
in habeas corpus cases the period for appeal
shall be forty-eight (48) hours from the notice of
the judgment appealed from.
No record on appeal shall be required to take an
appeal. In lieu thereof, the entire record shall be
transmitted with all the pages prominently
numbered consecutively, together with an index
of the contents thereof.
This section shall not apply in appeals in special
proceedings and in other cases wherein multiple
appeals are allowed under applicable provisions
of the Rules of Court.
The Interim Rules and Guidelines to implement BP Blg. 129
provides:
19. Period of Appeals. —
(a) All appeals, except
in habeas corpus cases and in
the cases referred to in
paragraph (b) hereof, must be
taken within fifteen (15) days
from notice of the judgment,
order, resolution or award
appealed from.
(b) In appeals in special
proceedings in accordance
with Rule 109 of the Rules of
Court and other cases wherein
multiple appeals are allowed,
the period of appeals shall be
thirty (30) days, a record on
appeal being required.
The Fourteenth Division of the Court of Appeals held that the
proceeding is an ordinary action similar to an action for
interpleader under Rule 63. 10 The Fourteenth Division stated:
The petition filed is akin to an interpleader
under Rule 63 of the Rules of Court where there
are conflicting claimants or several claims upon
the same subject matter, a person who claims
no interest thereon may file an action for
interpleader to compel the claimants to

"interplead" and litigate their several claims
among themselves. (Section I Rule 63).
An interpleader is in the category of a special
civil action under Rule 62 which, like an ordinary
action, may be appealed only within fifteen (15)
days from notice of the judgment or order
appealed from. Under Rule 62, the preceding
rules covering ordinary civil actions which are
not inconsistent with or may serve to
supplement the provisions of the rule relating to
such civil actions are applicable to special civil
actions. This embraces Rule 41 covering appeals
from the regional trial court to the Court of
Appeals.
xxx xxx xxx
Thus, under Section 1 Rule 2 of the Rules of
Court, an action is defined as "an ordinary suit in
a court of justice by which one party prosecutes
another for the enforcement or protection of a
right or the prevention or redress of a wrong."
On the other hand, Section 2 of the same Rule
states that "every other remedy including one to
establish the status or right of a party or a
particular fact shall be by special proceeding."
To our mind, from the aforequoted definitions
of an action and a special proceeding, the
petition for assistance of the court in the
liquidation of an asset of a bank is not "one to
establish the status or right of a party or a
particular fact." Contrary to the submission of
the petitioner, the petition is not intended to
establish the fact of insolvency of the bank. The
insolvency of the bank had already been
previously determined by the Central Bank in
accordance with Section 9 of the CB Act before
the petition was filed. All that needs to be done
is to liquidate the assets of the bank and thus
the assistance of the respondent court is sought
for that purpose.
It should be pointed out that this petition filed is
not among the cases categorized as a special
proceeding under Section 1, Rule 72 of the Rules
of Court, nor among the special proceedings
that may be appealed under Section 1, Rule 109
of the Rules.
We disagree with the foregoing view of the Fourteenth Division.
Rule 2 of the Rules of Court provide:
§1. Action defined. — Action means an ordinary
suit in a court of justice, by which the party
prosecutes another for the enforcement or
protection of a right, or the prevention or
redress of a wrong.
§2. Special Proceeding Distinguished. — Every
other remedy, including one to establish the
status or right of a party or a particular fact,
shall be by special proceeding.
Elucidating the crucial distinction between an ordinary action and
a special proceeding, Chief Justice Moran states:" 11
4
Action is the act by which one sues another in a
court of justice for the enforcement or
protection of a right, or the prevention or
redress of a wrong while special proceeding is
the act by which one seeks to establish the
status or right of a party, or a particular fact.
Hence, action is distinguished from special
proceeding in that the former is a formal
demand of a right by one against another, while
the latter is but a petition for a declaration of a
status, right or fact. Where a party litigant seeks
to recover property from another, his remedy is
to file an action. Where his purpose is to seek
the appointment of a guardian for an insane, his
remedy is a special proceeding to establish the
fact or status of insanity calling for an
appointment of guardianship.
Considering this distinction, a petition for liquidation of an
insolvent corporation should be classified a special proceeding
and not an ordinary action. Such petition does not seek the
enforcement or protection of a right nor the prevention or redress
of a wrong against a party. It does not pray for affirmative relief
for injury arising from a party's wrongful act or omission nor state
a cause of action that can be enforced against any person.
What it seeks is merely a declaration by the trial court of the
corporation's insolvency so that its creditors may be able to file
their claims in the settlement of the corporation's debts and
obligations. Put in another way, the petition only seeks a
declaration of the corporation's debts and obligations. Put in
another way, the petition only seeks a declaration of the
corporation's state of insolvency and the concomitant right of
creditors and the order of payment of their claims in the
disposition of the corporation's assets.
Contrary to the rulings of the Fourteenth Division, liquidation
proceedings do not resemble petitions for interpleader. For one,
an action for interpleader involves claims on a subject matter
against a person who has no interest therein. 12 This is not the
case in a liquidation proceeding where the Liquidator, as
representative of the corporation, takes charge of its assets and
liabilities for the benefit of the creditors.13 He is thus charged with
insuring that the assets of the corporation are paid only to rightful
claimants and in the order of payment provided by law.
Rather, a liquidation proceeding resembles the proceeding for the
settlement of state of deceased persons under Rules 73 to 91 of
the Rules of Court. The two have a common purpose: the
determination of all the assets and the payment of all the debts
and liabilities of the insolvent corporation or the estate. The
Liquidator and the administrator or executor are both charged
with the assets for the benefit of the claimants. In both instances,
the liability of the corporation and the estate is not disputed. The
court's concern is with the declaration of creditors and their rights
and the determination of their order of payment.
Furthermore, as in the settlement of estates, multiple appeals are
allowed in proceedings for liquidation of an insolvent corporation.
As the Fifth Division of the Court of Appeals, quoting the
Liquidator, correctly noted:
A liquidation proceeding is a single proceeding
which consists of a number of cases properly
classified as "claims." It is basically a two-phased
proceeding. The first phase is concerned with
the approval and disapproval of claims. Upon
the approval of the petition seeking the

assistance of the proper court in the liquidation
of a close entity, all money claims against the
bank are required to be filed with the liquidation
court. This phase may end with the declaration
by the liquidation court that the claim is not
proper or without basis. On the other hand, it
may also end with the liquidation court allowing
the claim. In the latter case, the claim shall be
classified whether it is ordinary or preferred, and
thereafter included Liquidator. In either case,
the order allowing or disallowing a particular
claim is final order, and may be appealed by the
party aggrieved thereby.
The second phase involves the approval by the
Court of the distribution plan prepared by the
duly appointed liquidator. The distribution plan
specifies in detail the total amount available for
distribution to creditors whose claim were
earlier allowed. The Order finally disposes of the
issue of how much property is available for
disposal. Moreover, it ushers in the final phase
of the liquidation proceeding — payment of all
allowed claims in accordance with the order of
legal priority and the approved distribution plan.
Verily, the import of the final character of an
Order of allowance or disallowance of a
particular claim cannot be overemphasized. It is
the operative fact that constitutes a liquidation
proceeding a "case where multiple appeals are
allowed by law." The issuance of an Order
which, by its nature, affects only the particular
claims involved, and which may assume finality
if no appeal is made therefrom, ipso
factocreates a situation where multiple appeals
are allowed.
A liquidation proceeding is commenced by the
filing of a single petition by the Solicitor General
with a court of competent jurisdiction entitled,
"Petition for Assistance in the Liquidation
of e.g., Pacific Banking Corporation. All claims
against the insolvent are required to be filed
with the liquidation court. Although the claims
are litigated in the same proceeding, the
treatment is individual. Each claim is heard
separately. And the Order issued relative to a
particular claim applies only to said claim,
leaving the other claims unaffected, as each
claim is considered separate and distinct from
the others. Obviously, in the event that an
appeal from an Order allowing or disallowing a
particular claim is made, only said claim is
affected, leaving the others to proceed with
their ordinary course. In such case, the original
records of the proceeding are not elevated to
the appellate court. They remain with the
liquidation court. In lieu of the original record, a
record of appeal is instead required to be
prepared and transmitted to the appellate
court.
Inevitably, multiple appeals are allowed in
liquidation proceedings. Consequently, a record
on appeal is necessary in each and every appeal
made. Hence, the period to appeal therefrom
5
should be thirty (30) days, a record on appeal
being required. (Record pp. 162-164).
In G.R. No. 112991 (the case of the Stockholders/Investors), the
Liquidator's notice of appeal was filed on time, having been filed
on the 23rd day of receipt of the order granting the claims of the
Stockholders/Investors. However, the Liquidator did not file a
record on appeal with the result that he failed to perfect his
appeal. As already stated a record on appeal is required under the
Interim Rules and Guidelines in special proceedings and for cases
where multiple appeals are allowed. The reason for this is that the
several claims are actually separate ones and a decision or final
order with respect to any claim can be appealed. Necessarily the
original record on appeal must remain in the trial court where
other claims may still be pending.
Because of the Liquidator's failure to perfect his appeal, the order
granting the claims of the Stockholders/Investors became final.
Consequently. the Fourteenth Division's decision dismissing the
Liquidator's Petition for Certiorari,Prohibition
and Mandamus must be affirmed albeit for a different reason.
On the other hand, in G.R. No. 109373 (case of the Labor Union),
we find that the Fifth Division correctly granted the Liquidator's
Petition for Certiorari. Prohibition and Mandamus. As already
noted, the Liquidator filed a notice of appeal and a motion for
extension to file a record on appeal on December 10, 1991, i.e.,
within 30 days of his receipt of the order granting the Union's
claim. Without waiting for the resolution of his motion for
extension, he filed on December 20, 1991 within the extension
sought a record on appeal. Respondent judge thus erred in
disallowing the notice on appeal and denying the Liquidator's
motion for extension to file a record on appeal.
The Fifth Division of the Court of Appeals correctly granted the
Liquidator's Petition for Certiorari, Prohibition and Mandamus and
its decision should, therefore, be affirmed.
Second. In G.R. No. 109373, The Union claims that under §29 of
Rep. Act No. 265, the court merely assists in adjudicating the
claims of creditors, preserves the assets of the institution,
and implements the liquidation plan approved by the Monetary
Board and that, therefore, as representative of the Monetary
Board, the Liquidator cannot question the order of the court or
appeal from it. It contends that since the Monetary Board had
previously admitted PaBC's liability to the laborers by in fact
setting aside the amount of P112,234,292.44 for the payment of
their claims, there was nothing else for the Liquidator to do
except to comply with the order of the court.
The Union's contention is untenable. In liquidation proceedings,
the function of the trial court is not limited to assisting in the
implementation of the orders of the Monetary Board. Under the
same section (§29) of the law invoked by the Union, the court has
authority to set aside the decision of the Monetary Board "if there
is a convincing proof that the action is plainly arbitrary and made
in bad faith." 14 As this Court held in Rural Bank of Buhi,
Inc. v. Court of Appeals: 15
There is no question, that the action of the
monetary Board in this regard may be subject to
judicial review. Thus, it has been held that the
Court's may interfere with the Central Bank's
exercise of discretion in determining whether or
not a distressed bank shall be supported or
liquidated. Discretion has its limits and has
never been held to include arbitrariness,
 6

discrimination or bad faith (Ramos v. Central

Bank of the Philippines, 41 SCRA 567 [1971]).

In truth, the Liquidator is the representative not only of the

Central Bank but also of the insolvent bank. Under §§28A-29 of
Rep. Act No. 265 he acts in behalf of the bank "personally or
through counsel as he may retain, in all actions or proceedings or
against the corporation" and he has authority "to do whatever
may be necessary for these purposes." This authority includes the
power to appeal from the decisions or final orders of the court
which he believes to be contrary to the interest of the bank.

Finally the Union contends that the notice of appeal and motion
for extension of time to file the record on appeal filed in behalf of
the Central Bank was not filed by the office of the Solicitor
General as counsel for the Central Bank. This contention has no
merit. On October 22, 1992, as Assistant Solicitor General Cecilio
O. Estoesta informed the trial court in March 27, 1992, the OSG
had previously authorized lawyers of the PDIC to prepare and sign
pleadings in the case. 16 Conformably thereto the Notice of
Appeal and the Motion for Additional Time to submit Record on
Appeal filed were jointly signed by Solicitor Reynaldo I. Saludares
in behalf of the OSG and by lawyers of the PDIC. 17

WHEREFORE, in G.R. No. 109373 and G.R. No 112991, the

decisions appealed from are AFFIRMED.

3. G.R. No. 26751 January 31, 1969
JOSE S. MATUTE, petitioner,
vs.
THE COURT OF APPEALS (Third Division) and MATIAS S.
MATUTE, respondents.
---------------------------
G.R. No. L-26085 January 31, 1969
JOSE S. MATUTE, in his personal capacity and as Judicial Co-
Administrator of the Estate of AMADEO MATUTE
OLAVE, petitioner,
vs.
HON. JUDGE VICENTE P. BULLECER, Judge of the Court of
First Instance of Davao, Branch IV, and MARIANO
NASSER, respondents.
---------------------------
G.R. No. L-26106 January 31, 1969
JOSE S. MATUTE AND LUIS S. MATUTE, as Intervenors in their
personal capacities in Civil Case No. 4252 of the Court of First
Instance of Davao, petitioners,
vs.
HON. VICENTE P. BULLECER, Judge of the Court of First
Instance of Davao, Branch IV; ATTY. PATERNO R. CANLAS,
DANIEL RIVERA, SR., PABLO V. DEL ROSARIO and NICANOR
D. VERGARA, as Defendants in Civil Case No. 4252, of the
Court of First Instance of Davao, respondents.
Antonio Enrile Inton for petitioners.
Paterno R. Canlas for and in his own behalf as respondent.
CASTRO, J.:
The present three petitions for certiorari with preliminary
injunction (L-26571, L-26085 and L-26106) were separately
interposed within the short span of five months by Jose S.
Matute, one of the fifteen heirs to the Amadeo Matute Olave
estate. Because these petitions are intertwined in several material
aspects and arose from a common environmental setting — the
intra-fraternal strife among the Matute heirs which has unduly
delayed for more than a decade the settlement of the Matute
estate — this Court has decided to embody in a single decision the
independently discussed resolutions of the issues raised in the
said petitions.
L-26751
Although the petition in L-26751 was filed the latest (October 27,
1966), we shall dispose of it first because our pronouncements
and observations in this case have direct and concrete relevance
to the other two.
The antecedent events trace their origin to August 20, 1965
when Carlos S. Matute, one of the Matute heirs and a full-blood
brother of both the petitioner and the herein respondent Matias
S. Matute, filed in special proceeding 25876 (settlement of the
Matute estate) a petition praying for the removal of Matias as co-
administrator and his (Carlos') appointment in such capacity.
Carlos alleged that "for a period of more than two years from the
date of his appointment (on May 29, 1963), said Matias S. Matute
has neglected to render a true, just and complete account of his
administration," and that he "is not only incompetent but also
7
negligent in his management of the estate under his charge
consisting of five haciendas on account of a criminal charge for
murder filed against him which is occupying most of his
time."1awphil.ñêt
The respondent Matias claims that he forthwith interposed an
opposition to the aforesaid petition, and the record discloses that
he later filed an amended opposition dated August 25, 1965
wherein he contended.
1. That the allegation ... that the herein co-administrator
for the two years of his administration, 1963 and 1964,
did not render any accounting is completely without
basis and false, because the records show that under
date of May 20,1964, he submitted to this Honorable
Court with copies furnished to all the parties concerned,
including Carlos S. Matute, his accounting for 1963, that
on Feb. 8, 1965, he filed his accounting for 1964, which
accounts for 1963 and 1964 have been approved by
majority of the heirs composing of 63% interests in the
estate as shown by the attached manifestation....
2. That his competence to act as administrator has been
established to the satisfaction of this Honorable Court as
evidenced by his appointment by a fixed,
final and executory order dated May 29, 1963; and Carlos
S. Matute is now estopped from denying his [Matias S.
Matute's] competence and qualification by reason of his
failure to object to the appointment of herein Judicial
Administrator at the time the application was made
therefor;
3. .... The records of the pertinent case in the Court of
First Instance ofDavao will easily discover that the
"criminal charge" supported by perjuredtestimony is
nothing but a trumped-up affair initiated by persons
intent onintimidating the herein Judicial Administrator
into betraying his sworn dutyto protect and safeguard
the interest of the Estate. The records of the saidcase will
also reveal that it has not occupied any time at all of the
herein Judicial Administrator, for aside from a single
hearing last December 1964 onhis application for bail ...
no hearing has been held on the said case up tothe
present.
Subsequently, Matias filed a memorandum dated September 12,
1965 in support of his foregoing opposition.
On September 21, 1965 the heirs of Agustina Matute Candelario,
Elena MatuteCandelario and Amadeo Matute Candelario and
their mother and legatee AnunciacionCandelario, moved for the
immediate appointment of Agustina Matute Candelario,Carlos S.
Matute and Jose S. Matute, herein petitioner, as joint co-
administratorsor anyone of them in place of Matias S. Matute,
whose removal they also soughttogether with the ouster of the
general administrator Carlos V. Matute, on thefollowing
additional grounds:
1. Despite the vast resources and income of the estate,
the present administrators have failed to pay even the
annual real property tax for the years 1964 and 1965;
2. The financial statements of both administrators were
not properly signed andauthenticated by a certified
public accountant, and do not contain the exactentries as
filed by former administrators containing the daily and
monthly entriesof receipts and disbursements;

3. Both administrators have deliberately failed to file
their inventories andstatements of accounts of time, and
did so only when ordered by the probatecourt;
4. Both administrators have made unauthorized
disbursements as shown by theirfinancial statements;
and
5. The probate court has discretion to remove the
administrator.
It appears that during the reception of evidence conducted on
December 29, 1965by the probate court (Branch IV of the Court of
First Instance of Manila withHonorable Emigdio Nietes as the
then presiding judge), Carlos S. Matute and theCandelario-
Matute heirs submitted respective lists of exhibits in support
oftheir motion to oust Matias. On January 8, 1966 Matias filed a
written objectionto the admission of the movants' exhibits on the
ground that the same were hearsay,self-serving, irrelevant and/or
mere photostatic copies of supposed originalswhich were never
properly identified nor shown in court. Four days later, or
onJanuary 12, 1966, the counsel for Matias filed with leave of
court a "Motion toDismiss and/or Demurrer to Evidence" which
avers that "there is no sufficientevidence on record to justify and
support the motions for the removal of theherein co-
administrator Matias S. Matute." In the same motion, said
counselreserved the right to introduce evidence in behalf of his
client should theforegoing motion be denied.
On January 31, 1966 the probate court issued an order, the
dispositive portionof which reads:
FOR ALL THE FOREGOING, the Court hereby removes
co-administrator, Matias S.Matute, as such co-
administrator of the estate and orders him to submit a
finalaccounting of his administration together with his
past administration accountswhich have not been
approved, and, in his stead appoints Jose S. Matute, a
brother by the same mother of Matias S. Matute, as co-
administrator, who ishereby required to put up a bond of
P15,000.00, and thereafter immediatelyqualify in his
commission and assume the responsibility of co-
administrator....
Forthwith, Matias interposed with the Court of Appeals a
petition for certiorari with preliminary mandatory injunction (CA-
G.R. 37039-R) dated February 1, 1966, praying that the aforesaid
order of January 31, 1966 be set aside as a nullityfor having
decreed his removal without due process and the appointment of
JoseS. Matute without the requisite hearing.
On March 4, 1966 the Court of Appeals gave due course to the
aforesaid petitionand resolved to grant a writ of preliminary
injunction against Jose S. Matuteand the Honorable Judge
Emigdio Nietes, respondents in CA-G.R. 37039-R, conditioned on
the filing of a P1,000 bond by the therein petitioner Matias, the
respondentherein. On March 22, 1966 Jose S. Matute moved for
the dismissal of the abovementionedpetition on the ground that
the Court of Appeals does not have jurisdiction totake cognizance
of the same since the value of the estate involved is more
thanP200,000. He further contended that the value of the
Amadeo Matute Olave estatefor purposes of jurisdiction had
already been resolved in CA-G.R. 35124-R wherethe Court of
Appeals refused to take jurisdiction over a petition
for certiorari contesting the appointment of Matias Matute as co-
administrator, on the groundthat the value of the Matute estate
was placed at P2,132,282.72 as evidenced by a "Compromise
8
Agreement" dated April 12, 1956 which was duly signed by all of
the heirs.
Despite repeated urgent motions filed by Jose S. Matute praying
that the Courtof Appeals resolve with dispatch the issue of
jurisdiction, the said appelatetribunal instead required then
respondent Jose S. Matute to answer, which he did.However, on
October 27, 1966 herein petitioner Jose S. Matute interposed
theinstant petition for certiorari with preliminary injunction
against the Court of Appeals and Matias Matute, challenging the
jurisdiction of the respondentCourt of Appeals upon two basic
contentions:
The Court of Appeals has no jurisdiction to entertain,
give due course, andmuch more to issue a writ of
preliminary injunction, against the petitioner, Jose S.
Matute, and respondent Judge Emigdio Nietes in CA-
G.R. No. 37039-R ... because the estate of Amadeo
Matute Olave is worth more than P200,000.00; and
The same Court of Appeals in CA-G.R. No. 35124-R, on
January 27, 1965, specialfourth division, has ruled that
the Court of Appeals has no jurisdiction on theestate of
Amadeo Matute Olave in the matter of the appointment
and removal ofits administrators.
The respondent Matias Matute does not controvert the
petitioner's claim that thevalue of the estate of their deceased
father exceeds P200,000. He maintains,however, that the
respondent Court of Appeals has jurisdiction over CA-G.R.37039-
R "because the subject matter involved is merely ... the right to
collectthe (monthly) rentals due the Estate in the sum of
P5,000.00" pursuant to acontract of lease which he executed in
favor of one Mariano Nasser coveringfive haciendas of the estate
under his separate administration.
The foregoing assertion does not merit credence. A searching
review of the record — from the initial petition filed by Carlos
Matute to oust the respondentas co-administrator up to the
latter's petition for certiorari filed with theCourt of Appeals
impugning the validity of the abovementioned order of
January31, 1966 which removed him as co-administrator and
appointed the petitioner inhis place — reveals no single pleading,
statement, contention, reference or eveninference which would
justify the respondent's pretension that the instantcontroversy is
a mere contest over the right to collect a P5,000 rental. In bold
contrast, the record vividly chronicles the controversy as a bitter
fight for co-administration: the removal of the respondent as co-
administrator and the appointment of anyone of the movants and
the herein petitioner as new co-administrator. Indeed, the
principal conflict gravitates over the right to co-administer the
vast Amadeo Matute Olave estate. This is the same issue
underlying the respondent'sabovementioned petition in CA-G.R.
37039-R. The respondent's prayer in said petition unmistakably
indicates that the dispute pertains to the right to co-administer in
general, not the mere authority to collect a P5,000 monthly
rental.The said prayer reads:
1. That an ex parte writ of preliminary mandatory
injunction be issued enjoiningand/or prohibiting the
respondent Judge from approving the administrator's
bondthat will be filed by respondent Jose S. Matute and
in issuing the letters ofadministration of the latter, and
from issuing Orders incidental and/or connectedwith the
exercise and performance of acts of administration of
said respondent Jose S. Matute; likewise enjoining and
prohibiting respondent Jose S. Matutehimself, and/or
through his counsels, agents and representatives from

takingphysical possession of the different haciendas
under the exclusive administrationand management of
herein petitioner and from performing and exercising
acts ofa duly and legally appointed administrator, upon
filing a bond in such amountthat this Honorable Tribunal
may fix;
2. That the Order of the respondent Judge dated
January 31, 1966, removing herein petitioner as co-
administrator of the Estate of Amadeo Matute Olave
andappointing respondent Jose S. Matute as co-
administrator without presentationof evidence, be
declared null and void and of no force and effect....
In fine, the pith of the controversy is the right to co-
administer the entire estate. In this regard, the ruling
in Fernandez, et al. vs. Maravilla 1 is determinative of the
jurisdictional issue posed here. In said case, this Courtruled that in
a contest for the administration of an estate, the amount
incontroversy is deemed to be the value of the whole estate,
which total valueshould be the proper basis of the jurisdictional
amount. Consequently the Courtproceeded to conclude that the
Court of Appeals does not have jurisdiction toissue writs
of certiorari and preliminary injunction prayed for in a petition
concerning a conflict over administration arising as an incident in
the mainprobate or settlement proceeding if in the first place the
principal case or proceeding falls outside its appelate jurisdiction
considering the total value of the subject estate. This Court in the
aforesaid Maravilla case elaborated thus:
The Court of Appeals, in the decision appealed from,
assumed jurisdiction overthe present case on the theory
that "the amount in controversy relative to
theappointment of Eliezar Lopez as special co-
administrator to protect the interestsof the respondents
(herein petitioners) is only P90,000.00 more or less,
i.e.,one fourth of the conjugal property" (of respondent
and the deceased DignaMaravilla) which, as per
inventory submitted by the respondent as special
administrator, is valued at P362,424.90. This theory is
untenable. Note that theproceedings had on the
appointment of Eliezar Lopez as special co-administrator
are merely incidental to the probate or testate proceedings
of the deceased Digna Maravilla.
That the Court of Appeals have no appelate jurisdiction
over the said testateproceedings cannot be doubted,
considering the properties therein involved arevalued at
P362,424.00, as per inventory of the special administrator.
... Not having appelate jurisdiction over the proceedings in
probate (CA-G.R.No. 27478-R), considering that the
amount involved therein is more than P200,000.00,the
Court of Appeals cannot also have original jurisdiction to
grant the writsof certiorari and prohibition prayed for by
respondent in the instant case, whichare merely incidental
thereto....
Note also that the present proceedings under review were
for the annulment ofthe appointment of Eliezar Lopez as
special co-administrator and to restrain theprobate court
from removing respondent as special administrator. It is
therefore,a contest for the administration of the estate
and, consequently, the amount orvalue of the assets of the
whole estate is the value in controversy. (4 C.J.S. 204.) It
9
appearing that the value of the estate in dispute is much
more than P200,000.00, the Court of Appeals clearly had
no original jurisdiction to issuethe writs in question.
(emphasis supplied)
Like in the aforecited Maravilla case, the instant intra-fraternal
controversy involves a contest over administration, an incident in
the settlement of the vast Matute estate. Considering that the
value of the said estate is more thanP200,000, and considering
further that as enunciated in the Maravilla case thetotal value of
the subject estate determines the jurisdictional amount
anentdisputes over administration arising as incidents in a
probate or settlementproceeding, like the case at bar, then it is
indubitable that the respondent Court of Appeals does not have
jurisdiction over CA-G.R. 37039-R nor the judicial authority to
grant the writs of certiorari and prohibition prayed fortherein.
Herein respondent insists, however, that even granting that the
actual controversy pertains to administration, such contested
administration does not encompassthe whole estate but is
limited to the collection of a P5,000 monthly rental,which sum
should be the basis of the jurisdictional amount, not the value
ofthe whole estate. In support of his thesis, the respondent
alleges that duringhis incumbency as co-administrator,
five haciendas in Davao belonging to theestate of his deceased
father were consigned to his separate administration; that in his
capacity as co-administrator he leased on February 10, 1965
said haciendas to one Mariano Nasser for P5,000 a month; that by
virtue of said leasecontract, the possession, management and
administration of the said properties were transferred to the
lessee until the expiration of the contract; that consequently, only
the collection of the monthly rental of P5,000 remains asthe
subject of the administration.
The foregoing contention of the respondent is patently
untenable.
1. The averment of the respondent that the controversy
centers on the collectionof the alleged P5,000 monthly
rental and that the contest over administrationis limited
thereto, does not find any support in the record.
2. The rule remains that the jurisdictional amount is
determined by the totalvalue of the estate, not by value
of the particular property or portion of the estate subject
to administration, since the question of administration is
merely incidental to the principal proceeding for the
settlement and distribution ofthe whole estate.
3. The respondent's impression that a co-administrator's
trust and responsibilityare circumscribed and delimited
by the size and value of the particular propertyor portion
of the estate subject to his separate administration, is
erroneous. Although a co-administrator is designated to
admininister a portion of theestate, he is no less an
administrator of the whole because his
judiciousmanagement of a mere parcel enhances the
value of the entire estate, while hisinefficient or corrupt
administration thereof necessarily diminishes the
valueof the whole estate. Moreover, when two or more
administrators are appointed toadminister separate
parts of a large estate they are not to discharge
theirfunctions in distant isolation but in close
cooperation so as to safeguard andpromote the general
interests of the entire estate. The teaching in Sison
vs.Teodoro 2 is of positive relevance. In the said case, the
probate court chargedagainst the entire estate the
compensation of an administrator who was assignedas

judicial administrator representing the interests of one of
the two heiresses.The other heiress whose interest was
represented by the executor opposed theaward on the
ground that the said administrator had not rendered
service to theestate but only to his wife, the heiress
whom he represented. On appeal, this Court upheld the
award and dismissed the opposition:
This argument erroneously assumes that because
Carlos Moran Sison was "judicial administrator
representing the interests of Priscilla F. Sison" he was
such administrator "solely for the purpose of protecting
Priscilla's interests," and not to protect those of the
estate. No words are needed to explain that in general,the
interest of the heir coincides with those of the estate — the
bigger theestate the better for the heir. Therefore to
protect the interest of heiressPriscilla usually meant to
favor the interest of the estate (sic).... Again, the argument
presumes that an administrator appointed by the Court for
thepurpose of giving representation to designated heirs, is
not deemed administratorof the estate. This assumption
has no legal foundation, because it is admitted practice,
where the estate is large, to appoint two or more
administrators ofsuch estate to have different interests
represented and satisfied, and furthermore,to have such
representatives work in harmony for the best interests of
such estate. (In re Drew's Estate, 236 N.W. 701, 2 C.J. p.
1183) (emphasis supplied)
Verily, therefore, the scope of a co-administrator's trust
encompasses the entireestate and is co-extensive in effect with
those of the other administrators; consequently, the value of the
entire estate should be the proper basis of the jurisdictional
amount irrespective of the value of the particular property
orassets of the estate which are the objects of a separate
administration pending the settlement proceedings.
In view of all the foregoing, we are of the consensus that the
respondent Courtof Appeals has no jurisdiction to take
cognizance of CA-G.R. 37039-R, and consequently was without
power to issue or grant the writs
of certiorariand prohibition prayed for in said case.
Notwithstanding that the herein petitioner delimited the issue,
as set forth inhis petition of certiorari, to one of jurisdiction of the
respondent Court of Appeals over CA-G.R. 37039-R, in subsequent
pleadings and manifestations, however, the parties therein
mutually expanded the issue to include the question of the
legality of the controverted order of January 31, 1966 in CA-G.R.
37039-R. As a matter of fact, the respondent, in a "Petition to
Resolve" dated July 18,1967, prayed "that a decision on the
merits in this case be now rendered." To this manifestation, the
petitioner replied "that he has no objection, as in fact, he also
prays that this case be decided at the earliest by the Highest
Tribunal."
Since the respondent Court of Appeals does not have jurisdiction
over CA-G.R. 37039-R, we are of the considered opinion that this
Court can forestall further delay in the already protracted
proceedings regarding the settlement of the Matute estate if it
now proceeds to resolve the issue of legality of the
abovementioned disputed order, rather than wait for the parties
to come anew on a separate petition in quest for a verdict on the
said issue. Moreover, both the petitioner and the respondent
private party have manifested and elaborated their respective
views on this issue and prayed and pressed for a decision thereon.
10
We shall now discuss separately the twin aspects of the
foregoing controverted order, namely, (1) the removal of the
respondent as co-administrator of the Matute estate, and (2) the
appointment of the petitioner as the new co-administrator.
The respondent contends that the disputed order removing him
as co-administrator is a patent nullity for the following reasons:
(1) He was removed in wanton disregard of due process
of law because the probatejudge arbitrarily deprived him
of his day in court;
(2) The evidence adduced by the movants is manifestly
insufficient, if not devoid of probative value, to warrant
his removal; and
(3) He was removed not on the grounds specifically
invoked by the movants but for causes discovered motu
propio by the probate judge in the records of
specialproceeding 25876 and without affording him the
opportunity to rebut the findingsof the said judge.
Upon the other hand, the petitioner advances the following
reasons in support of the order of removal:
(1) The probate judge accorded the respondent all the
opportunity to adduce hisevidence but the latter
resorted to dilatory tactics such as filing a "motion to
dismiss or demurrer to evidence";
(2) The evidences presented to sustain the removal of
the respondent are incontrovertible since aside from
being documentary, they are parts of the record of
special proceeding 25876; and
(3) The evidence on record conclusively supports the
findings of the probate judge.
The settled rule is that the removal of an administrator under
section 2 of Rule 82 lies within the discretion of the court
appointing him. As aptly expressed in one case, 3 "The sufficiency
of any ground for removal should thus be determined by the said
court, whose sensibilities are, in the first place, affected by any
act or omission on the part of the administrator not conformable
to or in disregard of the rules or the orders of the court."
Consequently, appellate tribunals are disinclined to interfere with
the action taken by a probate court in the matter of the removal
of an executor or administrator unless positive error or gross abuse
of discretion is shown. 4
In the case at bar, we are constrained, however to nullify the
disputed order of removal because it is indubitable that the
probate judge ousted the respondent from his trust without
affording him the full benefit of a day in court, thus denying him
his cardinal right to due process.
It appears that shortly after the reception of evidence for the
movants Carlos Matute and the Candelario-Matute heirs, the
respondent filed on January 8, 1966a verified objection to the
admission in evidence of the movants' exhibits on the ground that
the same were hearsay, self-serving, irrelevant and/or mere
photostatic copies of supposed originals which were never
properly identified nor produced in court. Four days later, or on
January 12, 1966, the respondent filed with leave of court a
"Motion to Dismiss and/or Demurrer to Evidence", the pertinent
and material portion of which reads:

... considering the specific objection to each exhibit
contained in said Objections to Admission of Movants'
Exhibits and considering further the ruling of this
Honorable Court in open court that pleadings filed in this
case are evidence only of the fact of their filing and not
of the truth of the statements contained therein and
considering still further the fact that no competent single
witness was presented by movants in support of their
respective contentions, we submit that there is no
sufficient evidence on record to justify and support the
motions for removal of the herein co-administrator Matias
S. Matute and in the light of the authorities hereinbelow
cited, the motions to remove Matias S. Matute must be
dismissed for insufficiency of evidence.
... However, in the remote possibility that this instant
motion be denied by this Honorable Court, the herein co-
administrator expressly reserves his right to present his
own evidence ... at least five (5) days from the receipt of
said denial.... (emphasis supplied)
Instead of resolving the foregoing motion, the probate judge
issued the controverted order removing the respondent as co-
administrator without giving him the opportunity to adduce his
own evidence despite his explicit reservation that he be afforded
the chance to introduce evidence in his behalf in the event of
denial of his motion to dismiss and/or demurrer to evidence. We
are of the view that the above actuation of the probate judge
constituted grave abuse of discretion which dooms his
improvident order as a nullity. In fact, even without the
respondent's reservation, it was the bounden duty of the probate
judge to schedule the presentation and reception of the
respondent's evidence before disposing of the case on the merits
because only the movants at that time had presented their
evidence. This duty is projected into bolder relief if we consider,
which we must, that the aforesaid motion is in form as well as in
substance a demurrer to evidence allowed by Rule 35, by virtue of
which the defendant does not lose his right to offer evidence in
the event that his motion is denied. Said Rule states:
After the plaintiff has completed the presentation of his
evidence, the defendant without waiving his right to offer
evidence in the event the motion is not granted, may move
for a dismissal on the ground that upon the facts and law
the plaintiff has shown no right to relief. (emphasis
supplied)
The application of the abovecited Rule in special proceedings,
like the case at bar, is authorized by section 2 of Rule 72 which
direct that in the "absence of special provisions, the rules
provided for in ordinary civil actions shall be, as far as practicable,
applicable in special proceedings."
But what is patently censurable is the actuation of the probate
judge in removing the respondent, not on the strength of the
evidence adduced by the movants (not a single exhibit or
document introduced by the movants was specifically cited in the
disputed order as a justification of the respondent's ouster), but
on the basis of his (judge's) findings, which he motu
propio gleaned from the records of special proceeding 25876,
without affording the respondent an opportunity to controvert
said findings or in the very least to explain why he should not be
removed on the basis thereof.
11
The probate judge did find, as essayed in his disputed order, that
the respondent "has shown indifference to his duties as such co-
administrator of the estate" as evidenced by:
(1) the disapproval of his 1964 account by the probate
court in an order dated January 5, 1966 due to his "non-
appearance and non-submission of evidence to sustain
his account on the date set for the presentation of the
same;"
(2) the considerable decrease in the income of the
properties under his charge, as reflected in said 1964
account, which circumstance "does not speak well of his
diligence and attention to the administration of said
properties;" and
(3) the failure of said 1964 account to disclose the
number of calves born during the accounting period,
"thereby indicating a palpable omission of fact which
directly reduced the value of the income or the increase
of the assets of the estate."
But, significantly, the movants did not specifically invoke the
aforesaid grounds in support of their petition to oust the
respondent. All of the said grounds, which in the mind of the
probate judge exposed the supposed indifference and
incompetence of the respondent in the discharge of his trust, are
based on alleged defects of the respondent's 1964 account. Under
these circumstances, it behooved the probate judge to inform the
respondent of his findings before ordering the latter's removal.
We concede that the probate judge enjoys a wide latitude of
discretion in the matter of the removal of executors and
administrators and he can cause their ouster at his own instance.
However, before they are deprived of their office they must be
given the full benefit of a day in court, an opportunity not
accorded to the respondent herein.
Without forgetting such patent denial of due process, which
rendered the order of removal a nullity, let us examine the merits
of the probate judge's motu propio findings to determine whether
they warrant the ouster of the respondent.
As proof of the respondent's "indifference" in the discharge of his
duties, the probate judge cited the court's order of January 5,
1966 disapproving the respondent's 1964 account for his failure to
personally appear on the date set for the submission of evidence
in support of the said account. It must be emphasized, however,
that the respondent, two days before the issuance of the
aforesaid order removing him as co-administrator, seasonably
moved for the reconsideration of the aforecited order of January
5, 1966 on the ground that his failure to personally attend the
scheduled hearing was due to illness on his part. Evidently, when
the probate court decreed the removal of the respondent, the
order disapproving his 1964 account, which was used as one of
the principal justifications for his removal as co-admininistrator,
was not yet final as it was still subject to possible reconsideration.
As a matter of fact, on February 19, 1966 the same probate
judge set aside the aforesaid order of January 5, 1966, thus:
Considering that it will be the benefit of all the parties
concerned if former co-administrator Matias S. Matute
will be allowed to substantiate the accounting which he
submitted to this Court but which was disapproved on
January 5, 1966 for his failure to personally appear at the
hearing held for the purpose of substantiating said
accounting, his motion for reconsideration filed on January
28, 1966 is hereby granted and the order dated January 5,

1966 disapproving the accounting submitted by Matias S.
Matute is set aside. (emphasis supplied)
With the order of January 5, 1966 thus revoked, the probate
judge's conclusion that the respondent was "indifferent" to his
duties as co-administrator as evidenced by the disapproval of his
1964 account loses its principal basis.
Again using the 1964 account of the respondent as basis of his
finding that the respondent was guilty of disinterest in the
discharge of his trust, the probate judge stressed that "a
verification of said accounting shows the income of the properties
under his (respondent's) charge were very much reduced which
does not speak well of his diligence and attention to the
administration of the said properties," and that said account
failed to report the number of "offspring of the cattle during the
period of accounting belonging to the estate, thereby indicating a
palpable omission of fact which directly reduced the value of the
income or increase of the assets of the estate." It is pertinent to
emphasize here that the said 1964 account is still pending
approval, hence it was premature to use alleged defects in said
account as grounds for the removal of the respondent. If it is now
ruled that the respondent is unfit to continue as co-administrator
because of the alleged infirmities in his account for 1964, the
respondent will be greatly prejudiced in the event that said
account is finally approved and the said defects are found to be
nonexistent or so trivial as not to affect the general validity and
veracity of the account. Assuming, however, that the probate
judge correctly observed that the said account reflects a big
reduction in the income of the haciendas under the separate
administration of the respondent, this fact alone does not justify
the conclusion that the latter did not exercise due care and zeal.
There is no proof that the decrease in income had been caused by
the respondent's willful negligence or dishonesty. Needless to
stress, varied factors, some beyond the control of an
administrator, may cause the diminution of an estate's income.
Anent the failure to report the number of calves born during the
accounting period, granting that the same is true, there is
however no evidence on record to prove that the said omission
was deliberate or designed to prejudice the estate. It could have
been either an honest mistake or mere inadvertence. In the
absence of competent proof to the contrary, good faith must be
presumed. The probate judge should have required the
respondent to explain the said omission instead of branding
outright said omission as "palpable."
In his excursion into the records of special proceeding 25876, the
probate judge also found a copy of a so-called "Compliance"
submitted by the respondent which reported "a very staggering
amount of over One Million Pesos supposedly given to the heirs"
as advances. The probate judge proceeded to observe that the
"record does not show that the said advances to the heirs were
authorized by the Court in the amounts made to appear in the
'Compliance.'" He added that a "verification of the record will
show that may be part of this amount supposedly paid by the co-
administrator to the heirs were authorized by the Court but a
greater volume of the same was obviously not authorized." On
account of this particular finding, the probate court concluded,
without equivocation, that the respondent had been acting
without previous authority from the probate court. Unfortunately
again, the respondent was not afforded the opportunity to
present his side and if possible to controvert the said finding or
correct the impressions of the judge. Hearing the respondent on
this point is imperative because, like the other grounds upon
which the probate judge anchored the order of removal, it was
not put in issue by the movants, neither was a copy of said
"Compliance" submitted in evidence. It bears emphasis that it
12
there were unauthorized payments of advances to some heirs or
simulated grants as the probate judge appears to theorize, then it
is most surprising why the prejudiced Matute heirs, litigation-
proned as they are, did not impugn the so-called "Compliance."
Furthermore, not one of the movants interested in the removal of
the respondent specifically charged the latter with unauthorized
or fictitious payments of advances. It should also be noted that
the said "Compliance" was submitted by the respondent in
response to the probate court's order for the submission of "a list
of the heirs who have personally received the advances from
the administration," not from the respondent alone. It stands to
reason, therefore, that the said "Compliance" could very well be
a cumulative list of all the advances given and received by the
Matute heirs from the several administrators of the Matute estate
since 1955. In the absence of concrete evidence that the said
"staggering amount" of over a million pesos advances was
disbursed by the respondent alone during his beleaguered term
which commenced only in 1963, we have no recourse but to
jettison the adverse conclusion of the probate judge. What the
probate judge should have done was to afford Matias the chance
to explain and substantiate the facts and the figures appearing in
the aforesaid "Compliance," which unfortunately does not form
part of the record before us. The respondent asserts that if only
the probate judge "took pains to examine fully the voluminous
records of the Matute estate, and as reflected in the very
'Compliance' submitted to the Court ... any disbursement given to
the heirs by all the administrators of the Estate were by virtue of
the several Orders of the Probate Court issued upon joint motion
of all the heirs for their monthly maintenance and support."
It likewise appears that the respondent was removed partly due
to his failure to pay the inheritance and estate taxes. In this
regard, it bears emphasis that the failure to pay the taxes due
from the estate is per se not a compelling reason for the removal
of an administrator, for "it may be true that the respondent
administrator failed to pay all the taxes due from the estate, but
said failure may be due to lack of funds, and not to a willful
omission." 5 In the case at bar there is no evidence that the non-
payment of taxes was willful. On the contrary, the respondent
alleged, and this was unchallenged by the movants, that while the
previous administrators left the taxes unpaid, he had paid the real
property taxes in Davao covering the years 1954 to 1966.
We now come to the second part of the controverted order —
the appointment of the petitioner as co-administrator vice the
respondent. Since the removal of Matias was done with
inordinate haste and without due process, aside from the fact
that the grounds upon which he was removed have no evidentiary
justification, the same is void, and, consequently, there is no
vacancy to which the petitioner could be appointed.
Even granting arguendo that the removal of Matias is free from
infirmity, this Court is not prepared to sustain the validity of the
appointment of the petitioner in place of the former. To start
with, the record does not disclose that any hearing was
conducted, much less that notices were sent to the other heirs
and interested parties, anent the petition for the appointment of
Jose S. Matute, among others, as co-administrator vice Matias S.
Matute. In this regard, it is pertinent to observe that any hearing
conducted by the probate court was confined solely to the
primary prayers of the separate petitions of Carlos S. Matute, and
the Candelario-Matute heirs seeking the ouster of Matias S.
Matute. The corollary prayers contained in the same petitions for
the appointment of Carlos S. Matute, Jose S. Matute and
Agustina Matute Candelario or anyone of them as co-
administrator were never even considered at any of the hearings.
The requirement of a hearing and the notification to all known
heirs and other interested parties as to the date thereof is

essential to the validity of the proceeding for the appointment of
and administrator "in order that no person may be deprived of his
right or property without due process of law." (Eusebio vs.
Valmores, 97 Phil. 163) Moreover, a hearing is necessary in order
to fully determine the suitability of the applicant to the trust, by
giving him the opportunity to prove his qualifications and
affording oppositors, if any, to contest the said application.
The provision of Rule 83 that if "there is no remaining executor or
administrator, administration may be granted to any suitable
person," cannot be used to justify the institution of Jose S. Matute
even without a hearing, because such institution has no factual
basis considering that there was a general administrator (Carlos
V. Matute) who remained in charge of the affairs of the Matute
estate after the removal of Matias S. Matute. The abovecited
provision evidently envisions a situation when after the removal
of the incumbent administrator no one is left to administer the
estate, thus empowering the probate court, as a matter of
necessity, to name a temporary administrator (or caretaker),
pending the appointment of a new administrator after due
hearing. Such circumstance does not obtain in the case at bar.
Upon the foregoing disquisition, we hold that the respondent
Court of Appeals was without jurisdiction over CA-G.R. 37039-R,
and that the controverted order of January 31, 1966 is a nullity
and must therefore be set aside in its entirety.
L-26085
L-26085 is a petition for certiorari with preliminary injunction
interposed on May 19, 1966 by the same petitioner Jose S.
Matute, praying that the controverted order of default dated April
16, 1966, judgment by default dated April 23, 1966 and order of
execution dated May 3, 1966, all issued by the Court of First
Instance of Davao, be set aside.
The sequence of events, like in L-26751, commenced with the
issuance by the probate court (Court of First Instance of Manila)
of the order of January 31, 1966 removing Matias S. Matute as co-
administrator and replacing him with Jose S. Matute. Armed with
the letters of co-administration awarded to him on February 3,
1966, Jose attempted to take possession of and exercise
administration over the five haciendas La Union, Sigaboy,
Monserrat, Colatinan and Pundaguitan, all belonging to the
Matute estate and situated in Governor Generoso, Davao. Said
five haciendas were previously assigned to the separate
administration of the deposed co-administrator, Matias S.
Matute.
Mariano Nasser, herein plaintiff-respondent, who was in actual
possession of the said haciendas, opposed the projected takeover
by the defendant-petitioner Jose S. Matute in the latter's capacity
as co-administrator. Subsequently, on February 15, 1966, Nasser
instituted civil case 4968 in the Court of First Instance of Davao, a
complain for injunction, alleging that the defendant-petitioner
was forcibly wresting possession of the said haciendaswith the aid
of hired goons, and praying that the said defendant-petitioner be
enjoined from taking physical possession, management and
administration of the aforesaid five haciendas. On February 16,
1966 the court a quoissued a writ of preliminary injunction ex
parte, prohibiting "Jose S. Matute and/or his counsels, agents,
representatives or employees from taking physical possession,
management and administration" of the abovementioned
properties.
On February 23, 1966, seven days after he received on February
16, 1966, the summons in civil case 4968, the defendant-
13
petitioner moved to dismiss the aforesaid complaint for
injunction and to dissolve the ex parte writ of injunction. Said
motion to dismiss was predicated mainly on the contention that
the court a quo did not have jurisdiction over the subject
haciendas considering that the same "are properties in custodia
legis under the jurisdiction of the Probate Court of Manila, in Sp.
Proc. No. 25876 since 1955 up to the present time," and
consequently the probate court has exclusive jurisdiction over all
cases, like the one at bar, involving possession and administration
of the aforesaid haciendas. In the same motion to dismiss, the
defendant-petitioner averred that the alleged contract of lease is
simulated and fictitious for which reason not even a copy of the
said contract was attached to the complaint, and that granting
that such a contract was actually executed, the same is invalid as
it was never approved by the probate court. On February 28, 1966
the defendant-petitioner was furnished a copy of the plaintiff-
respondent's opposition to the abovementioned motion to
dismiss and to lift the ex parte writ of injunction.
Failing to receive any notice of a court resolution on his client's
motion to dismiss during the period of about 1-½ months after
the filing of the said motion, the defendant-petitioner's counsel
on April 11, 1966 wrote the clerk of court of the court a quo,
requesting that any resolution or order of the trial court be mailed
to him by airmail at his expense, instead of by surface mail, in
order to minimize postal delay. Sometime between April 11 and
19, 1966, the said counsel also dispatched an emissary to Davao
to inquire about the status of civil case 4968. After personal
verification of the record, the said emissary reported to the
defendant-petitioner's counsel that the abovementioned motion
to dismiss had been denied by the court a quo in an order dated
March 31, 1966. It was also discovered from the record that the
plaintiff-respondent's counsel had been sent a copy of the order
of denial on the very day it was rendered (March 31, 1966) but the
record was silent as to the mailing of the corresponding copy for
the defendant-petitioner's counsel, which copy until then had not
been received by the latter. Forthwith, on April 19, 1966, although
he had not yet been furnished his copy of the said order of denial,
defendant-petitioner's counsel interposed the requisite answer
with counterclaim. Then on April 23, 1966 he filed a manifestation
calling the attention of the court a quo that as of the said date he
had not received a copy of the order denying his client's motion to
dismiss. It was only two days later, or on April 25, 1966, that the
said counsel claims, uncontroverted by the respondent Judge and
the plaintiff-respondent, that he received his copy of the
aforesaid order.
In a "Motion to Strike" dated April 26, 1966, the plaintiff-
respondent urged that the aforementioned answer with
counterclaim be stricken from the record on the grounds that
on April 16, 1966 the court a quo had declared defendant-
petitioner in default for failure to answer the complaint in civil
case 4928 and that subsequently, on April 23, 1966, a judgment by
default had been entered against the latter.
Immediately after receipt on May 5, 1966 of a copy of the said
"Motion to Strike," the defendant-petitioner filed his opposition,
asserting that it was legally impossible to declare him in default as
of April 16, 1966 for failure to file his responsive pleading,
considering that it was only after the said date, that is, on April
25, 1966, that he received, through his counsel, a copy of the
order denying his motion to dismiss. On the same day, May 5,
1966, the defendant-petitioner's counsel dispatched a rush
telegram to the clerk of court of the Court of First Instance of
Davao inquiring whether the trial court had really rendered the
order of default dated April 16, 1966 and the subsequent
judgment by default dated April 23, 1966, copies of which had not
been received by him. On the following day, May 6, 1966, the

defendant-petitioner filed an "Urgent Motion to Investigate the
Office of the Clerk of Court for Mailing Discrepancy."
The defendant-petitioner's counsel claims — and this is not
controverted by the respondent Judge and the plaintiff-
respondent — that it was only May 17, 1966 that he received a
copy of the judgment by default and at the same time a copy of
the order of execution dated May 3, 1966, and that a copy of the
order of default had never been furnished him.
Because of the impending execution of the judgment by default
with the following dispositive portion —
IN VIEW OF ALL THE FOREGOING CONSIDERATIONS,
judgment is hereby rendered in favor of the plaintiff and
against the defendant confirming the right of the
plaintiff to the possession of the premises leased in his
favor by the judicial administrator, Matias S. Matute and
the injunction against the defendant issued in this case is
hereby declared permanent and defendant is hereby
permanently enjoined from interfering in the peaceful
possession of the plaintiff over the haciendas La Union,
Sigaboy, Monserrrat, Golatinan and Pundaguitan of the
estate of Amadeo Matute Olave, all situated in Governor
Generoso, Davao and from doing any act of taking any
step against the peaceful possession of said properties
by the plaintiff. The defendant is likewise ordered to pay
the plaintiff the amount of P50,000.00 as attorney's fees
due and payable to plaintiff's counsel for filing this
action: P2,400.00 a month beginning February, 1966,
representing monthly salaries of security guards
employed by the plaintiff in the haciendas leased plus
P7,000.00 representing transportation hotel and
representation expenses incurred by the plaintiff for
plaintiff's counsel and another P700.00 representing the
yearly premiums on the injunction bond filed by plaintiff.
the defendant-petitioner interposed the instant petition
for certiorari with preliminary injunction to annul the order of
default, the judgment by default, and the order of execution, and
to restrain the execution of the aforesaid judgment pending the
resolution of the instant petition.
On May 23, 1966 this Court granted the writ of preliminary
injunction prayed for, conditioned on the petitioner's posting a
bond of P5,000, which he did on June 4, 1966.
We are of the consensus that the herein petition should be
granted.
Rule 11, section 1 of the Revised Rules of Court gives the
defendant a period of fifteen (15) days after service of summons
within which to file his answer and serve a copy thereof upon the
plaintiff, unless a different period is fixed by the court. However,
within the period of time for pleading, the defendant is entitled to
move for dismissal of the action on any of the ground
enumerated in Rule 16. If the motion to dismiss is denied or if
determination thereof is deferred, the movant shall file his
answer within the period prescribed by Rule 11, computed from the
time he received notice of the denial or deferment, unless the court
provides a different period (Rule 16, section 4). In other words,
the period for filing a responsive pleading commence to run all
over again from the time the defendant received notice of the
denial of his motion to dismiss. 6
Reverting to the case at bar, the defendant-petitioner was
served with summons in connection with civil case 4968 on
14
February 16, 1966, hence he had until March 3, 1966 to file his
responsive pleading. Instead of filing an answer,
he seasonably interposed a motion to dismiss on February 23,
1966. Although the aforesaid motion to dismiss was denied as
early as March 31, 1966, he received notice of the denial, through
his counsel of record, only on April 25, 1966, a fact not traversed
by either the respondent Judge or the plaintiff-respondent.
Consequently, the defendant-petitioner had fifteen (15) days
from April 25, 1966, or up to May 10, 1966, to file his answer.
The delay in the mailing of a copy of the order of denial to the
defendant-petitioner's counsel was confirmed by the court a
quo in a report rendered after an investigation of the office of the
clerk of court upon urgent motion of the defendant-petitioner.
The report reads in part:
From its investigation of the employee in charge of Civil
Cases, the Court found out that, indeed, there was a
delay in the mailing of the Order of this Court dated
March 31, 1966 to counsel for the defendant, Atty.
Antonio Enril Inton. This Court, however, is convinced of
the sincerity of the reasons given by the employee
concerned, and that is: that her failure to cause to be
mailed the copy intended for Atty. Antonio Enrile Inton
on the same date that she caused to be mailed the copy
for Atty. Paterno Canlas (plaintiff-respondent's counsel)
was purely a case of an honest mistake and inadvertene
on her part owing to the volume of her work; the
affidavit of the employee in charge of Civil Cases being
hereto attached.
The affidavit of the employee concerned mentioned in the
above-quoted portion of the report clearly admits the delay, thus:
That due to the fact that I am the only one handling
matters relative to Civil Cases and, because of the
volume of my work in the office, I must have
inadvertently misplaced the envelop containing a copy of
the Order intended for Atty. Antonio Enrile Inton, and
only discovered by (my) mistake on April 14, 1966, when I
went over some papers contained in the drawer of my
table;
That upon discovery of the said envelope containing the
copy of the order dated March 31, 1966, among the
papers in my table drawer, I forthwith sent the same to
the one in charge of mailing and who mailed the same
on April 16, 1966, by registered air mail special delivery,
as evidenced by Registry Receipt No. 26897 now
attached to the records of this case. (emphasis supplied)
It is unmistakable from the foregoing exposition that when the
defendant-petitioner was declared in default on April 16, 1966 the
time for filing his answer had not yet even commenced to run
anew because on the said date his counsel had not yet received
notice of the denial of the motion to dismiss. The order of denial
was received only on April 25, 1966, or definitely after April 16,
1966, the day when a copy of the said order was mailed to the
defendant-petitioner's counsel and when the defendant-
petitioner was declared in default.
No further elaboration is needed to show that the trial judge
acted in excess of jurisdiction when he declared the defendant-
petitioner in default. Consequently, the herein controverted order
of default is a patent nullity, an infirmity which likewise afflicts,
necessarily, the subsequent judgment by default and the order of
execution.

It is not amiss to say that, at the very least, the defendant-
petitioner's motion to dismiss should have been considered as an
answer, since it raised issues on the merits of the case, such as the
invalidity of the alleged contract of lease. Consequently, the
defendant petitioner should have been notified of the hearing,
and failure to give him an opportunity to appear in the court
below tainted the subsequent proceedings not only with
irregularity but also with illegality. It follows, therefore, that the
petitioner was incorrectly declared in default, and the holding of
the trial of the case on the merits in his absences, without due
notice to him, was a denial of due process. 7
In opposing the instant petition, the plaintiff-respondent
contends that the remedy of the defendant-petitioner is not a
petition for certiorari but an ordinary appeal pursuant to Rule 41,
section 2, paragraph 3 which reads:
A party who has been declared in default may likewise
appeal from the judgment rendered against him as
contrary to the evidence or to the law, even if no petition
for relief to set aside the order of default has been
presented by him in accordance with Rule 38.
We do not agree. The remedy provided for in the abovequoted
rule is properly, though not exclusively, available to a defendant
who has been validly declared in default. It does not preclude a
defendant who has been illegallydeclared in default from
pursuing a more speedy and efficacious remedy, like a petition
for certiorari to have the judgment by default set aside as a nullity.
It should be emphasized that a defendant who is properly
declared in default is differently situated from one who is
improvidently declared in default. The former irreparably loses his
right to participate in the trial, while the latter rentals such right
and may exercise the same after having the order of default and
the subsequent judgment be default annulled and the case
remanded to the court of origin. Moreover the former is limited to
the remedy set forth in section 2, paragraph 3 of Rule 41 by virtue
of which he can contest only the judgment by default on the
designated ground that it is contrary to the evidence or the law;
the latter, however, has the option to avail of the same remedy or
to forthwith interpose a petition for certiorari seeking the
nullification of the order of default even before the promulgation
of a judgment by default, or in the event that the latter has been
rendered, to have both court decrees — the other of default and
the judgment by default — declared void. The defendant-
petitioner's choice of the latter course of action is correct for he
controverts the judgment by default not on the ground that it is
not supported by evidence or it is contrary to law, but on the
ground that it is intrinsically void for having been rendered
pursuant to a patently invalid order of default.
Granting, however, that an appeal is open to the defendant-
petitioner, the same is no longer an adequate and speedy remedy
considering that the court a quo had already ordered the issuance
of a writ of execution and the carrying out of such writ loomed as a
great probability. This is in consonance with the doctrine
enunciated in Vda. de Saludes vs Pajarillo and Bautista 8 wherein
this Court held that an "appeal under the circumstances was not
adequate remedy there being an order of execution issued by the
municipal court." Hence, the rule that certioraridoes not lie when
there is an appeal is relaxed where, as in the instant case, the trial
court had already ordered the issuance of a writ of execution. 9
The plaintiff-respondent also argues that the instant petition
should be denied for failure of the defendant-petitioner to move
for a reconsideration of the challenged decrees so as to afford the
court a quo the chance to amend its errors. While as a matter of
15
policy a motion for reconsideration in the lower court has often
been considered a condition sine qua non for the granting of a writ
of certiorari, this rule does not apply "where the proceeding in
which the error occurred is a patent nullity," 10 or where "the
deprivation of petitioner's fundamental right to due process ...
taints the proceedings against him in the court below not only
with irregularly but with nullity," 11 or when special circumstances
warrant immediate and more direct action. 12 The fact that the
defendant-petitioner had been deprived of due process, taken
together with the circumstance that a writ of execution had
already been issued, perforce takes this case outside of the
purview of the rule requiring a previous motion for
reconsideration.
The nullity of the challenged orders relieves the defendant-
petitioner from paying the damages assessed against him by the
court a quo; however, it does not entitle him to pursue further his
claim of possession and administration over the abovementioned
five haciendas, considering that we have declared in L-26751 that
his appointment as co-administrator is void.
In view of the foregoing disquisition, the controverted order of
default, judgment by default and order of execution should be
annulled and set aside.
L-26106
L-26106 is another petition for certiorari with preliminary
injunction instituted on May 25, 1966 by Jose S. Matute (the same
petitioner in L-26751 and L-26085) and his brother Luis S.
Matute, 13 praying for the nullification of the following orders of
the Court of First Instance of Davao:
1. The order of February 15, 1966 dismissing with
prejudice civil case 4252, a complaint filed by Matias S.
Matute in behalf of the Matute estate for the annulment
of a compromise agreement and for the reconveyance of
certain properties, in which case Jose and Luis Matute
appeared as intervenors in alliance with the plaintiff
estate;
2. The order of March 29, 1966 declaring in default the
intervenors in civil case 4252 for failure to answer the
defendant Paterno Canlas' counterclaim, and adjudging
them to jointly and severally pay the sum of P100,000 in
damages to the said Canlas; and
3. The order of April 12, 1966 directing the issuance of a
writ of execution against the intervenors to enforce the
abovementioned judgment by default.
The factual milieu follows:
On February 5, 1966 Matias S. Matute, in his capacity as co-
administrator, instituted in the name of the Matute estate civil
case 4252 praying for, among others, (1) the annulment of the
compromise agreement dated November 26, 1962 entered into
between the co-administrator Julian V. Matute and Atty. Paterno
R. Canlas, one of the defendants-respondents herein, in full
settlement of the latter's claim for attorney's fees against the
decedent Amadeo Matute Olave; (2) the nullification of the
compromise judgment of December 5, 1962 approving the
aforesaid compromise agreement; (3) the voiding of the deed of
conveyance and assignment of rights dated December 20, 1962
by virtue of which the said Julian Matute transferred to Canlas
several parcels of land belonging to the Matute estate pursuant to
the compromise judgment; (4) the annulment of the deed of

conveyance covering the said parcels of land executed on
February 20, 1963 by Canlas in favor of Daniel Rivera, Sr., also one
of the defendants-respondents; (5) the nullification of the
unregistered deeds of mortgages, both date July 19, 1963, over
said properties executed by Rivera in favor of Pablo del Rosario
and Nicanor Vergara, also defendants-respondents herein; and
(6) the reconveyance of the said properties.
The aforesaid complaint was anchored on the grounds that (1)
the compromise agreement was entered into in fraud of the
Matute estate; (2) Julian Matute, as a mere co-administrator, had
no authority to enter into the said compromise agreement
without the consent of the then general administrator, Don
Celestino Alonzo; (3) the compromise agreement was approved
by the Court of First Instance of Manila (Branch X) without notice
to the heirs and the general administrator; and (4) the said
agreement had neither prior nor subsequent approval of the
probate court which has custody of the parcels of land involved in
the said agreement.
The defendant-respondent Canlas subsequently interposed a
motion to dismiss dated February 24, 1964 predicated on the
ground of res judicata, among others. Anent the issue of res
judicata, said motion to dismiss averred:
The records of Civil Case No. 14208, entitled "Rosario
Matute, et al. v. Amadeo Matute Olave", Court of First
Instance of Manila, Branch X, will show that on
December 5, 1962, the Honorable Judge Jose L. Moya,
Presiding Judge of Branch X, of the Court of First
Instance of Manila, rendered a Compromise Judgment ...
pursuant to a Compromise Agreement ... entered into
between defendant Paterno R. Canlas and the Estate of
Amadeo Matute Olave, duly represented by the General
Administrator of the Estate, the late Julian V. Matute and
his counsel of record in said Civil Case No. 14208, Atty.
Marcelo Rafols Javier involving the attorney's fees of
defendant Paterno R. Canlas in said Civil Case No. 14208,
secured with a charging lien on the properties involves
herein. Pursuant to said Compromise Judgment, the said
Julian V. Matute, as General Administrator of the Estate
of his deceased father, Amadeo Matute Olave,
transferred and conveyed the properties involved herein
which were ordered to be sold by the Probate Court of
Manila for only P144,000.00, in favor of defendant
Paterno R. Canlas as full payment of his attorney's fees in
Civil Case No. 14208 in the amount of P200,000.00
agreed upon in the Compromise Agreement. The said
Compromise Judgment of December 5, 1962 is
immediately final and not appeallable and has the effect
and authority of Res Judicata in this case filed by co-
administrator, Matias S. Matute, on behalf of the Estate,
without authority of his general administrator, Carlos V.
Matute, who filed a Motion to Dismiss the complaint in
this case
That the records of Civil Case No. 14208 will show that
after the Compromise Judgment was rendered on
December 5, 1962, a Petition for relief to set aside the
said Compromise Judgment was filed by two (2) of the
heirs and full-blooded sisters of plaintiff co-
administrator, Matias S. Matute, namely, Rosario and
Trinidad Suazo Matute on June 6, 1963, on grounds of (a)
fraud and (b) lack of the probate court's approval to the
Compromise Agreement, the very same grounds alleged
in the present Complaint of plaintiff Estate, a copy of the
16
Petition for Relief is hereto attached as Annex "C" of this
Motion to Dismiss. That on June 13, 1963, herein
defendant Paterno R. Canlas filed his Opposition to
petition for Relief, and, on June 26, 1963, a
Supplementary Opposition to Petition for Relief and
refuting all the above issues raised in the Petition for
Relief, copies of which are hereto attached as Annexes
"D" and "E". Rosario and Trinidad Suazo Matute filed
Reply and defendant Paterno R. Canlas filed his
Rejoinder on July 8, 1963 attaching therewith the letter-
conformity to the Compromise Judgment of co-
administrator, Matias S. Matute, copies of which are
hereto attached as Annexes "F" and "F-1" of this Motion
to Dismiss. That on July 13, 1963, Branch X of the Court
of First Instance of Manila, taking cognizance of Civil
Case No. 14208, rightfully denied the Petition for Relief
on all the grounds stated in our Opposition to the
Petition for Relief, Supplementary Opposition, etc., and
Rejoinder, a copy of which order is hereto attached as
Annex "G" of this Motion to Dismiss.
In other words, it is the basic contention of Canlas that both
the compromise judgment of December 5, 1962rendered by the
Court of First Instance of Manila (Branch X) 14 and the order of the
same court dated July 13, 1963denying the aforecited petition for
relief from judgment which sought the setting aside of the said
compromise judgment, bar by virtue of res judicata the
prosecution of the abovementioned civil case 4252 which seeks
anew the annulment of the said compromise judgment on
practically the same grounds invoked in the aforesaid petition for
relief, which grounds were justifiably denied by the competent
court.
It appears that on the same day Canlas filed his motion to
dismiss, the general administrator and heir, Carlos V. Matute,
filed his own motion to dismiss dated February 15, 1964, stating
among other things, that he had never authorized his co-
administrator, Matias Matute, to file civil case 4252 in the name
of the estate and that said complaint was filed without legal
authority and is prejudicial to the interests of the estate as it
would only entail unnecessary litigation expenses. He presented
his written conformity to the compromise judgment in his
capacity as the succeeding general administrator.
On February 27, 1964 the defendants-respondents Daniel Rivera,
Sr., Pablo del Rosario and Nicanor Vergara filed their own joint
motion to dismiss, alleging among other things that they were
innocent transferees and mortgages for value of the properties
subject matter of the complaint and adopted as their own the
motions to dismiss filed by Canlas and Carlos V. Matute.
On April 11, 1964 the Honorable Judge Vicente N. Cusi, Jr.,
executive judge of the Court of First Instance of Davao, issued an
order deferring to after the trial the final hearing and
determination of the motions to dismiss since the grounds
alleged therein "do not appear to be indubitable." From this
order, the defendants moved for a reconsideration which was
denied on January 16, 1965.
Meanwhile, on August 17, 1964 Jose and Luis Matute filed a
motion to intervene, asking that they be allowed to adopt the
complaint of the plaintiff-estate. Said motion was granted on
September 5, 1964.
After the aforesaid rejection of the defendants' motion for
reconsideration of the order denying their separate motions to
dismiss, Canlas filed on February 15, 1965 his answer ad cautelam,
traversing the material allegations of the complaint in civil case

4252 and interposing the grounds stated in his motion to dismiss
as affirmative defenses. He also filed a counterclaim for damages
in the amount of P100,000 jointly against Matias Matute, for filing
the "frivolous and unfounded" action in the name of the estate,
and Jose an Luis Matute, for intervening in the case. All there
were charged in their personal capacities. On the same date, the
other defendants, Rivera, del Rosario and Vergara, filed their own
answer ad cautelam, denying the essential averments of the
complaint having relevance to them and adopting the affirmative
defenses interposed by Canlas. Said defendants similarly
interposed a counterclaim of P50,000 for damages, directed
against the plaintiff-estate.
On March 1, 1965 Matias Matute, representing the plaintiff-
estate, filed the corresponding answers to the foregoing
counterclaims. The answer to Canlas' counterclaim specifically
denied.
that the above-entitled case is patently frivolous and
unfounded and was instituted in bad faith and calculated
to merely harass the defendant in order to satisfy the
personal revenge, hatred and vindictiveness of the co-
administrator Matias S. Matute, representing the
plaintiff estate, and intervenors Jose S. Matute and Luis
S. Matute, the truth being that the complaint in the
above-entitled case was instituted precisely to prevent
defendants from illegally and fraudulently transforming
and conveying themselves valuable properties of plaintiff
estate worth more than P500,000.00;
and disclaimed any
knowledge of any actual, moral and consequential
damage having been suffered by defendant Paterno R.
Canlas.
Meanwhile, upon motion of the counsels for the defendants,
Judge Cusi ordered on August 28, 1965 the reshuffle of civil case
4252 in accordance with section 7, Rule 22 of the Rules of Court.
Eventually, the case was transferred to the sala of Judge Vicente
P. Bullecer, the respondent judge herein.
On January 22, 1966 Canlas filed a "Motion to Resolve: I. Motion
to Dismiss; II. Supplementary and/or Second Motion to Dismiss."
On February 3, 1966 Jose Matute interposed an urgent ex
parte motion for substitution as representative of the plaintiff-
estate in place of Matias Matute, citing the order of January 31,
1966 of the probate court of Manila which appointed him as co-
administrator in place of Matias Matute.
Subsequently, Matias Matute filed in behalf of the plaintiff-
estate a motion to withdraw and/or dismiss with prejudice the
complaint in civil case 4252, which, it will be recalled, he himself
instituted in the name of the Matute estate. The following
grounds were advanced to justify the said motion:
That after a thorough study of the documents
presented by the parties in this case, the undersigned
Judicial Administrator realized that he has expressly
ratified and confirmed any and all contracts and
compromise for attorney's fees that his co-administrator
Julian V. Matute has already entered into with the
defendant Atty. Paterno R. Canlas in his capacity as co-
administrator of the said testacy;
17
That the causes of action of the above-entitled
complaint against the defendants were based and
predicated from the compromise agreement entered
into between
co-administrator Julian V. Matute and the defendant
Paterno R. Canlas on December 2, 1962 and which
compromise agreement was approved by Judge Jose
Moya, presiding Judge of Branch X of the Court of First
Instance of Manila, in Civil Case No. 14208 entitled
Rosario S. Matute, et al. vs. Amadeo Matute Olave, etc.,
in the Compromise Judgment dated December 5, 1962.
On February 15, 1966 the respondent Judge dismissed with
prejudice the aforesaid complaint. The order of dismissal reads:
The records show that this action was filed by Matias S.
Matute in his capacity as co-administrator of the Estate
of Amadeo Matute Olave appointed in Sp. Proc. No.
25876, Probate Court of Manila, to annul a compromise
judgment awarding attorney's fees to defendant Atty.
Paterno R. Canlas and rendered in Civil Case No. 14208,
Court of First Instance of Manila.
Pending incidents in this case, are the motion to dismiss
and supplementary motion to dismiss on the ground
of res judicata filed by the defendants and adopted by
the General Administrator of the Estate, Carlos V.
Matute, and the heirs Maria Luisa Matute, Conchita V.
Matute, Carlos S. Matute, Ramos S. Matute, Eduarda S.
Matute and Mrs. Cecilia Villanueva Matute.
It appears now that the co-administrator Matias S.
Matute who filed this action in the name of the Estate of
Don Amadeo Matute Olave filed a motion to withdraw
and/or dismiss dated January 8, 1966 and verified before
the acting Clerk of Court of Appeals stating that he is
withdrawing the complaint he filed in this case and prays
this Court to dismiss it with prejudice and further
ratifying and expressing conformity to the compromise
judgment subject matter of the complaint rendered in
the Civil Case 14208, Court of First Instance of Manila.
As prayed for in defendants' motion to dismiss and
supplementary action (motion) to dismiss, the action filed
in this case is hereby dismissed with prejudice without cost
to plaintiff . (emphasis supplied).
On March 12, 1966 the respondent Judge issued another order
declaring that "all the other incidents pending in this case are
hereby terminated and closed." (Emphasis supplied) Said order
reads:
Considering the order of this Court dated February 15,
1966 dismissing this case with prejudice on the ground
of res judicata in view of the final order of July 31, 1963
issued by the Court of First Instance of Manila, Branch X,
in Civil Case No. 14208, as alleged in the defendants'
motion to dismiss and supplementary motion to dismiss:
and considering further that the co-administrator Matias
S. Matute who filed the complaint in this case in the
name of the plaintiff Estate has withdrawn and/or prayed
for the dismissal of this case with prejudice, and
considering furthermore, that the said Order of this
Court of February 15, 1966 is now fixed and final, all the
other incidents pending in this case are hereby
terminated and closed.

However, on March 29, 1966 the respondent Judge promulgated
an order declaring in default both the intervenors and the plaintiff
estate, the former for failure to answer Canlas' counterclaim and
the latter for failure to respond to the other defendants' separate
counterclaim. The same decree included a judgment by default
condemning the intervenors to jointly and severally pay the sum
of P100,000 as damages to Canlas and likewise sentencing the
plaintiff estate to indemnify the other defendants Rivera, del
Rosario and Vergara in the sum of P50,000. Subsequently, on
April 12, 1966 the respondent Judge ordered the issuance of a
writ of execution to enforce the aforesaid judgment by default.
Hence, the interposition by the intervenors of the instant
petition for certiorari with preliminary injunction.
Anent the order of February 15, 1966 dismissing with prejudice
civil case 4252, the intervenors-petitioners (now Jose Matute
alone, as the other petitioner, Luis Matute, has already
withdrawn) contend that the said order is a nullity as it was
predicated on a void motion to dismiss and/or withdraw filed by
Matias Matute on February 14, 1966, two weeks after the latter
had been removed as co-administrator by the probate court in an
order dated January 31, 1966. It is further maintained that when
Matias Matute interposed the aforesaid motion to dismiss and/or
to withdraw, he had no more authority to represent the Matute
estate as a consequence of his ouster as co-administrator. The
foregoing argument is irredeemably foreclosed by our explicit
ruling in L-26751 setting aside the abovementioned order of
January 31, 1966 and declaring as void the removal of Matias
Matute and the appointment of the herein intervenor-petitioner
Jose S. Matute as the new co-administrator. Granting, therefore,
that the controverted order of dismissal was rendered on account
of Matias Matute's aforesaid motion which was filed in behalf of
the plaintiff estate, the validity of such dismissal order cannot be
challenged on the ground that the movant (Matias Matute) lacked
the capacity to represent the plaintiff estate considering that his
personality and authority as co-administrator remained
unimpaired because the order of January 31, 1966 is a nullity.
However, the intervenor-petitioner is of the mistaken impression
that the disputed order of dismissal was based on Matias Matute's
motion to dismiss and/or to withdraw. As correctly pointed out by
the defendants-respondents, the said order was anchored on
their own motion to dismiss and supplementary motion to
dismiss. Although both the motions of the co-administrator in
representation of the plaintiff estate and of the defendants,
either of which could justify the dismissal of the complaint in civil
case 4252, were prominently mentioned in the body of the said
controverted order, the unequivocal import of the dispositive
portion of said decree, however, is that the dismissal was
predicated on the defendants' motion to dismiss and
supplementary motion to dismiss, thus:
As prayed for in defendants' motion to dismiss and
supplementary action to dismiss, the action filed in this
case is hereby dismissed with prejudice without cost to
plaintiff. (emphasis supplied)
Moreover, both the order of March 12, 1966 declaring the
termination of all other incidents in civil case 4252 and the order
of April 11, 1966 denying the intervenors' motion for
reconsideration, categorically affirm that the disputed order of
dismissal was anchored on the defendants' motion to dismiss on
the ground of res judicata. The order of April 11, 1966 specifically
declares that the dismissal of civil case 4252 was based
... on the ground of res judicata invoked by the
defendants in their Motion to Dismiss and
18
Supplementary Motion to Dismiss for the reason that the
Compromise Judgment rendered in Civil Case No. 14208,
Court of First Instance of Manila, sought to be annulled in
this case, and the Order of July 31, 1963 denying the
Petition for Relief in Civil Case No. 14208 and settling all
the issues raised in the Complaint, have both the force
and effect of res judicata.
Undeniably, the aforesaid order of dismissal with prejudice
adjudicated civil case 4252 upon the merits. Since there is no
showing that the respondent Judge issued the said order with
grave abuse of discretion or without or in excess of jurisdiction, an
ordinary appeal, then, not a petition for certiorari, was the proper
remedy available to the intervenors Jose and Luis Matute who
claim to be aggrieved, by the dismissal. But having failed to
seasonably appeal from the aforesaid order of dismissal, the
herein intervenor-petitioner cannot avail of a petition
for certiorarias a substitute remedy 15 to challenge the said order,
which in the meantime had already become final.
The pretention of the intervenor-petitioner that his inability to
appeal on time was due to the failure of the court a quo to furnish
him a copy of the order of dismissal is a spurious, if not an utterly
perfidious, claim. To begin with, when the herein intervenor-
petitioner and his brother Luis filed their motion to intervene on
August 17, 1964, they were not represented by counsel, but they
failed to disclose their respective addresses or at least the address
of one of them, contrary to the requirement of section 5 of Rule 7
that a "party who is not represented by an attorney shall sign his
pleadings and state his address." (emphasis supplied)
Consequently, if the pertinent orders and notices were not sent to
the intervenors, it was because of their failure to disclose their
mailing addresses. At all events, since the intervenors virtually
allied with the plaintiff estate by adopting in toto the latter's
complaint without filing a separate complaint in intervention, it is
not without justification to rule, considering the particular
circumstances obtaining, that notice to the plaintiff estate should
be deemed sufficient notice to the intervenors. Moreover, it is of
record that both Attys. Wenceslao Laureta and Robert Porter,
who appeared on February 7, 1966 as counsels for the intervenor
Jose S. Matute in his capacity as alleged co-administrator by
virtue of the abovecited order of the probate court dated January
31, 1966, were duly furnished with copies of all orders of the
court a quosubsequent to their appearance. Anent the order of
dismissal dated February 15, 1966, the lower court reported, after
an investigation of the deputy clerk of court for alleged mailing
discrepancies upon motion of the intervenors, that copies of the
said order were "each mailed to and received by Attys. Wenceslao
Laureta and Robert E. Porter on March 18 and 3, 1966,
respectively, per registry return cards duly attached to the records
of this case." In other words, the intervenor-petitioner Jose S.
Matute was furnished, through counsel, a copy of the order of
dismissal at the earliest on March 3, 1966 when Atty. Porter
received a copy of the order. After a lapse of twenty-three (23)
daysfrom the receipt of the said copy, Attys. Laureta and Porter
filed on March 26, 1966 a motion for reconsideration of the order
of dismissal. Hence, when the said motion was filed, the
intervenor-petitioner had still seven (7) days to perfect an appeal.
Subsequently, on April 11, 1966, the court a quo denied the
aforesaid motion for reconsideration. Separate copies of said
denial were received by Atty. Laureta on April 16, 1966 and by
Atty. Porter on April 18, 1966, respectively, as per registry receipts
25870 and 25872 and delivery No. 69785 and the reply-telegram
dated July 2, 1966 from the Bureau of Posts addressed to the
respondent Judge. From April 16, 1966, the intervenor-petitioner
still had seven (7) days or up to April 23, 1966 to perfect an appeal.
However, it was only on April 25, 1966 that the requisite notice of
appeal and appeal bond were filed while the record on appeal was

filed much later, on May 26, 1966, clearly way beyond the
reglementary period.
The intervenor-petitioner contends, however, that it was only on
April 25, 1966 that he received notice of the dismissal of civil case
4252 and on the very same day he caused the filing of the
necessary notice of appeal and appeal bond. Conceding that the
foregoing assertion is correct, the intervenor-petitioner's
projected appeal was still out of time since the requisite record on
appeal was filed only on May 26, 1966, or thirty-one days from
April 25, 1966.
In passing, it is pertinent to note that the dismissal of the
complaint in civil case 4252m, after the issues were joined with
the filing of the responsive pleadings, upon the defendants'
motion to resolve a pending motion to dismiss, the resolution of
which had been previously deferred until after the trial by virtue
of an order of the same court under another judge, is a procedural
deviation from the standard sequence of trial in accordance with
which the court a quo, after the requisite answers were filed,
should have proceeded with the trial on the merits, and only
thereafter resolved the motion to dismiss as was the import of
the order of defendant. Nevertheless, it is relevant to emphasize,
on the other hand, that an order deferring the resolution of a
motion to dismiss, being an interlocutory order, may be altered or
revoked by the trial court during the pendency of the main action.
It is settled that an "interlocutory order or decree made in the
progress of a case is always under the control of the court until
the final decision of the suit, and may be modified or rescinded
upon sufficient grounds shown at any time before final
judgment...." 16 Of similar import is the ruling of this Court
declaring that "it is rudimentary that such (interlocutory) orders
are subject to change in the discretion of the court. 17 Moreover,
one of the inherent powers of the court is "To amend and control
its process and orders so as to make them conformable to law and
justice." 18 In the language of Chief Justice Moran, paraphrasing
the ruling in Veluz vs. Justice of the Peace of Sariaya, 19 "since
judges are human, susceptible to mistakes, and are bound to
administer justice in accordance with law, they are given the
inherent power of amending their orders or judgments so as to
make them conformable to law and justice, and they can do so
before they los their jurisdiction of the case that is before the time
to appeal has expired and no appeal has been perfected." 20 And
in the abovecited Veluz case, this Court held that "If the trial court
should discover or be convinced that it had committed an error in
its judgment, or had done an injustice, before the same has
become final, it may, upon its own motion or upon a motion of
the parties, correct such error in order to do justice between the
parties.... It would seem to be the very height of absurdity to
prohibit a trial judge from correcting an error, mistake, or
injustice which is called to his attention before he has lost control
of his judgment." Corollarily, it has also been held "that a judge of
first instance is not legally prevented from revoking the
interlocutory order of another judge in the very litigation
subsequently assigned to him for judicial action." 21
In view of the foregoing rulings, it is then enough to say that the
abovementioned order of deferment, issued by the Honorable
Judge Vicente Cusi, Jr., to whose sala civil case 4252 was originally
assigned, is interlocutory in nature, and as such, the court a quo,
through the now respondent Judge Vicente Bullecer, had the
power to set it aside, as it did by finally deciding the pending
motion to dismiss on the ground of res judicata. Moreover, as
previously stated, there is no evidence to show that the
respondent Judge, in issuing the order of dismissal, acted with
grave abuse of discretion or without or in excess of jurisdiction.
19
We now come to the challenged order of default and judgment
by default, both contained in the abovementioned order dated
March 29, 1966. Attacking the validity of the said order of default,
the intervenor-petitioner claims that the respondent Judge failed
to consider that Matias Matute, representing the plaintiff estate,
filed on time an answer dated March 1, 1965 traversing the
allegations of Canlas' counterclaim, which answer inured to the
benefit of not only Matias Matute but also to the intervenors who
were jointly impleaded as defendants in the said counterclaim.
The defendant-respondent Canlas, on the other hand, while not
denying receipt of the aforesaid answer to his counterclaim,
contends that the herein intervenor-petitioner's failure to
personally answer said counterclaim is fatal and that he could not
take refuge under the answer interposed by Matias Matute.
We are of the considered opinion that the herein disputed order
of default is illegal and void, and, consequently, the controverted
judgment by default and order of execution were improvidently
issued.
1. The counterclaim interposed by Canlas raised a common
cause of action for damages against Matias Matute, as the
representative of the plaintiff estate, and Jose and Luis Matute, as
intervenors in civil case 4252, all in their personal capacities. The
counterclaim reads:
That for instituting this patently frivolous and
unfounded action in bad faith calculated to merely
harass answering defendant Paterno R. Canlas in order
to satisfy the personal revenge, hatred and
vindictiveness of the co-administrator, Matias S. Matute,
representing the plaintiff Estate, and the intervenors Jose
S. Matute and Luis S. Matute, defendant Paterno R.
Canlas suffered actual, moral and consequential
damages in the total amount of P100,000.00, for which
plaintiff Matias S. Matute and intervenors Jose S. Matute
and Luis S. Matute should be held personally liable.
(emphasis supplied)
Having been this jointly charged to pay the abovestated
damages, the brothers Matias, Jose and Luis Matute could validly
file a common responsive pleading, as in effect they did when
Matias Matute filed an answer to the aforesaid counterclaim, the
receipt of which Canlas admits. It is significant to note that the
said answer does not only deny the charge against Matias Matute
but as well as negates the claim against the intervenors.
2. Moreover, having successfully prayed for the resolution of his
pending motion to dismiss, even after the issues had been joined
with the filing of his answer, the defendant-respondent Canlas is
deemed to have abandoned his counterclaim and voluntarily
reverted himself to the time when he initially interposed his
motion to dismiss prior to the filing of his answer with
counterclaim. Thus, when the complaint in civil case 4252 was
dismissed on the basis of Canlas' motion, the entire proceeding
was inevitably terminated and there was nothing more to adjudge.
In fact, the termination of all the pending incidents in civil case
4252 was subsequently decreed by the respondent Judge himself
in the orders of March 12, 1966 and April 11, 1966. Consequently,
the respondent Judge, to say the least, acted in excess of
jurisdiction when he issued, after having dismissed the principal
complaint, the herein controverted order of default and judgment
by default for then there was nothing left to be adjudicated. Said
decrees having been rendered in excess of
jurisdiction, certiorari will lie to have then annulled.
In view of the foregoing discussion, the finality of the order of
dismissal should be upheld, while the disputed order of default,
 20

judgment by default and order of execution should be declared

void and set aside.

The motion interposed on June 14, 1966 by the herein

intervenor-petitioner, in his alleged capacity as co-administrator,
in behalf of the Amadeo Matute Olave estate, praying that the
said estate be allowed to adopt the instant petition
for certiorari with preliminary injunction and be admitted as co-
petitioner, the resolution of which we had previously deferred,
should therefore be denied on the ground that the intervenor-
petitioner has no legal personality to represent the Matute estate
considering that his appointment as co-administrator has been
voided. Nevertheless, it is our considered view that the
declaration of total nullity of the abovementioned judgment by
default shall perforce bar the execution against the Matute estate
of that portion of the said void judgment which condemns it to
pay the sum of P50,000 in damages to the defendants-
respondents Rivera, del Rosario and Vergara.

ACCORDINGLY, (1) in L-26751 the petition for certiorari is hereby

granted; the respondent Court of Appeals is adjudged as without
jurisdiction over CA-G.R. 37039-R; the probate court's
controverted order of January 31, 1966 is hereby set aside in its
entirety, thereby maintaining the respondent Matias S. Matute in
his trust as co-administrator of the Amadeo Matute Olave estate;
(2) in L-26085 the petition for certiorari is hereby granted; the
order of default dated April 16, 1966, the judgment by default
dated April 23, 1966, and the order of execution dated May 3,
1966, all issued in excess of jurisdiction by the respondent Judge
of the Court of First Instance of Davao, are set aside; and (3) in L-
26106 the petition for certiorari is hereby denied in so far as it
seeks to nullify the final order of dismissal dated February 15,
1966; the order of default and judgment by default dated March
29, 1966 and the order of execution dated April 12, 1966, all
similarly issued in excess of jurisdiction by the same respondent
Judge are set aside. No pronouncement as to costs.

4. G.R. No. L-12053 May 30, 1958
ROBERTA DIAZ Y CRUZ, petitioner,
vs.
HON. JESUS Y. PEREZ, presiding Judge, 7th Branch, Court of
First Instance, Pasay City, ET AL.,respondents.
Carlos, Laurea and Associates for petitioner.
Tañada, Teehankee and Carreon for respondents.
BENGZON, J.:
Roberta Diaz y Cruz is an old woman, 83 years of age, residing in
Pasay City possessing real and personal properties roughly
estimated at half a million pesos.
On August 18, 1956, three of her nine legitimate children, and two
of her grandchildren by another daughter, joined in a Petition
addressed to the Rizal Court of First Instance, to declare her
incompetent to take care of herself and manage her properties
and to appoint a guardian of her person and her properties. The
allegations, too long to relate, set out a prima facie case of
incompetency1 (Special Proceeding 1483-P).
On November 7, 1956 while the above special proceeding was
pending hearing before respondent Judge Jesus Y. Perez, Roberta
Diaz y Cruz received from the Register of deeds of Rizal a letter
advising her that by reason of said proceedings, a notice of lis
pendens had been annotated on her Transfer Certificate of Title to
real property No. 32872 of that Province.
Wherefore, on November 29, 1956, she filed in the above-
mentioned proceedings a petition to cancel the lis pendens. In
view of the opposition of the adverse parties, the respondents
judge denied the petition. Her motion to reconsider having failed,
Roberta Diaz filed a notice of appeal, record on appeal, and
appeal bond.
But on January 22, 1957, the respondent judge disapproved the
record on appeal, holding the appealed orders to be interlocutory,
and therefore not appealable.
So on February 26, 1957, this petition
for mandamus and certiorari was filed in this Court. The first, to
compel approval of the record on appeal; the second, to annul the
order refusing cancellation of the notice of lis pendens.
We think mandamus does not lie. As the respondent judge said,
the order was interlocutory, which can not "be the subject of
appeal until final judgment is rendered." (Section 2, Rule 41.) It is
comparable with an order refusing to annul a preliminary
attachment2 or an order denying or granting a preliminary
injunction3 which have been held to be interlocutory4
As to the certiorari, petitioner may not seriously urge lack of
jurisdiction. In asking the Court to annul the lis pendensshe
admitted its jurisdiction to annul — and also to refuse annulment.
Was there abuse of discretion? The lis pendens had been
obviously annotated for the purpose of advising any one who
might wish to buy the realty, that there is in court a petition to
declare Roberta Diaz incompetent to dispose of her properties so
that such purchaser may make the necessary inquiries and take
steps to protect his interest, bearing in mind that if said Roberta
Diaz should be declared incompetent, his purchase will be or
might be affected adversely.5 It is a proper cautionary measure
which the courts should be slow to disturb, unless the petition for
21
guardianship was prima facie unconvincing, or was not made in
good faith, or as alleged by petitioner here, the pendency of
guardianship proceedings may not be considered as lis
pendens affecting the realties of the person allegedly
incompetent.
"The effect of filing a notice of lis pendens is to charge the
stranger with notice of the particular litigations referred to in the
notice; and if the notice is effective, a third party who acquires the
property affected by the lis pendens takes subject to the
eventually of the litigations."6
And its purpose is "to hold property within the jurisdiction and
control of the court pending determination of the controversy,
thereby preventing third persons from acquiring such interests
therein as would preclude giving effect to the judgment."7
In the light of the object and salutory effects of the notation, we
see no reason to declare it improper in this case, specially because
the allegations of the guardianship petition specified instances
wherein the incompetent disposed of her properties in favor of
persons allegedly taking undue advantage age and weak mental
and physical condition.
The argument is presented that sec. 79 Of Act No. 496 sec. 24 of
Rule 7 indicate the cases wherein lis pendensmay be annotated,
and that guardianship proceedings is not included therein. In the
first place sec. 79 is not an exclusive enumeration. In the second
place, these proceedings affect "the use" or possession of the real
estate within the meaning of above sections, even "the title", in
the sense that the proceedings will curtail or take away the right
of the owner to dispose of the same.
Anyway, it is to be doubted whether the above sections were
intended to be exclusive of other circumstances wherein equity
and general convenience would make lis pendens appropriate.
Indeed, cases have held it to be proper in receivership
proceedings8 involving realty, and in lunacy proceedings 1
situations closely akin to the instant litigation.
In this connection, it is insisted that both sections only apply to
"actions" which are different from "Special proceedings", like
guardianship. It is enough to point out that the Rules provided for
civil actions are generally applicable to special proceedings. (Rule
73, section 2.)
Lastly, we are advised that after hearing the petition the lower
court found in April 1957 that by reason of her advanced age and
weak mind, Roberta Diaz could not manage her properties — she
does not even remember them — and needed a guardian to help
administer her interests. This, in a way, vindicates the annotation
and the court's refusal to cancel it.
Clearly then no abuse was made of the court's discretion. Petition
denied, with costs.
 22

5. MICHAEL C. GUY, G.R. No. 163707

Petitioner, Emy, Jeanne, Cristina, George and Michael, all surnamed
Present: Guy. Private respondents prayed for the appointment of a regular
Pangani
ban, C.J. administrator for the orderly settlement of Sima Weis
(Chairperson),
- versus - Ynares-Santiago, estate. They likewise prayed that, in the meantime, petitioner
Austria-Martinez,
Michael C. Guy, son of the decedent, be appointed as Special
Call
ejo, Administrator of the estate. Attached to private respondents
Sr.,
and petition was a Certification Against Forum Shopping[6] signed by
Chic
their counsel, Atty. Sedfrey A. Ordoez.
o-
Nazario, JJ.
HON. COURT OF APPEALS,
HON. SIXTO MARELLA, JR., In his Comment/Opposition,[7] petitioner prayed for the dismissal
Presiding Judge, RTC, Branch 138,
of the petition. He asserted that his deceased father left no debts
Makati City and minors, KAREN
DANES WEI and KAMILLE DANES and that his estate can be settled without securing letters of
WEI, represented by their mother, Promulgated:
REMEDIOS OANES, administration pursuant to Section 1, Rule 74 of the Rules of
Respondents. September 15, 2006
Court. He further argued that private respondents should have
x -------------------------------------------------------------------------------
--------- x established their status as illegitimate children during the lifetime

DECISION of Sima Wei pursuant to Article 175 of the Family Code.

YNARES-SANTIAGO, J.:
The other heirs of Sima Wei filed a Joint Motion to

Dismiss[8] on the ground that the certification against forum

This petition for review on certiorari assails the January 22, 2004
shopping should have been signed by private respondents and
Decision[1] of the Court of Appeals in CA-G.R. SP No. 79742, which
not their counsel. They contended that Remedios should have
affirmed the Orders dated July 21, 2000[2] and July 17, 2003[3] of
executed the certification on behalf of her minor daughters as
the Regional Trial Court of Makati City, Branch 138 in SP Proc.
mandated by Section 5, Rule 7 of the Rules of Court.
Case No. 4549 denying petitioners motion to dismiss; and its May

25, 2004Resolution[4] denying petitioners motion for

In a Manifestation/Motion as Supplement to the Joint Motion to
reconsideration.
Dismiss,[9] petitioner and his co-heirs alleged that private

respondents claim had been paid, waived, abandoned or

The facts are as follows:
otherwise extinguished by reason of Remedios June 7, 1993

Release and Waiver of Claim stating that in exchange for the

On June 13, 1997, private respondent-minors Karen
financial and educational assistance received from petitioner,
Oanes Wei and Kamille Oanes Wei, represented by their mother
Remedios and her minor children discharge the estate of Sima
Remedios Oanes (Remedios), filed a petition for letters of
Wei from any and all liabilities.
administration[5] before the Regional Trial Court of Makati City,

Branch 138. The case was docketed as Sp. Proc. No. 4549 and
The Regional Trial Court denied the Joint Motion to Dismiss as
entitled Intestate Estate of Sima Wei (a.k.a. Rufino Guy Susim).
well as the Supplemental Motion to Dismiss. It ruled that while

the Release and Waiver of Claim was signed by Remedios, it had

Private respondents alleged that they are the duly acknowledged
not been established that she was the duly constituted guardian
illegitimate children of Sima Wei, who died intestate
of her minor daughters. Thus, no renunciation of right
in Makati City on October 29, 1992, leaving an estate valued at
occurred. Applying a liberal application of the rules, the trial court
P10,000,000.00 consisting of real and personal properties. His

known heirs are his surviving spouse Shirley Guy and children,
 23

also rejected petitioners objections on the certification against the Release and Waiver of Claim precludes private respondents

forum shopping. from claiming their successional rights; and 3) whether private

respondents are barred by prescription from proving their

Petitioner moved for reconsideration but was denied. He filiation.

filed a petition for certiorari before the Court of Appeals which

affirmed the orders of the Regional Trial Court in its assailed The petition lacks merit.

Decision dated January 22, 2004, the dispositive portion of which

states: Rule 7, Section 5 of the Rules of Court provides that the

certification of non-forum shopping should be executed by the

WHEREFORE, premises considered,
the present petition is hereby DENIED DUE plaintiff or the principal party. Failure to comply with the
COURSE and accordingly DISMISSED, for lack requirement shall be cause for dismissal of the case. However, a
of merit. Consequently, the assailed Orders
dated July 21, 2000 and July 17, 2003 are hereby liberal application of the rules is proper where the higher interest
both AFFIRMED. Respondent Judge is hereby
DIRECTED to resolve the controversy over the of justice would be served. In Sy Chin v. Court of Appeals,[11] we
illegitimate filiation of the private respondents
ruled that while a petition may have been flawed where the
(sic) minors [-] Karen Oanes Wei and Kamille
Oanes Wei who are claiming successional rights certificate of non-forum shopping was signed only by counsel and
in the intestate estate of the deceased Sima
Wei, a.k.a. Rufino Guy Susim. not by the party, this procedural lapse may be overlooked in the

interest of substantial justice.[12] So it is in the present controversy

SO ORDERED.[10]
where the merits[13] of the case and the absence of an intention to

violate the rules with impunity should be considered as

The Court of Appeals denied petitioners motion for
compelling reasons to temper the strict application of the rules.
reconsideration, hence, this petition.

As regards Remedios Release and Waiver of Claim, the

Petitioner argues that the Court of Appeals disregarded existing
same does not bar private respondents from claiming
rules on certification against forum shopping; that the Release
successional rights. To be valid and effective, a waiver must be
and Waiver of Claim executed by Remedios released and
couched in clear and unequivocal terms which leave no doubt as
discharged the Guy family and the estate of Sima Wei from any
to the intention of a party to give up a right or benefit which
claims or liabilities; and that private respondents do not have the
legally pertains to him. A waiver may not be attributed to a
legal personality to institute the petition for letters of
person when its terms do not explicitly and clearly evince an
administration as they failed to prove their filiation during the
intent to abandon a right.[14]
lifetime of Sima Wei in accordance with Article 175 of the Family

Code.
In this case, we find that there was no waiver of

hereditary rights. The Release and Waiver of Claim does not state
Private respondents contend that their counsels certification can
with clarity the purpose of its execution. It merely states that
be considered substantial compliance with the rules on
Remedios received P300,000.00 and an educational plan for her
certification of non-forum shopping, and that the petition raises
minor daughters by way of financial assistance and in full
no new issues to warrant the reversal of the decisions of the
settlement of any and all claims of whatsoever nature and kind x x
Regional Trial Court and the Court of Appeals.
x against the estate of the late Rufino Guy Susim.[15] Considering

that the document did not specifically mention private

The issues for resolution are: 1) whether private
respondents hereditary share in the estate of Sima Wei, it cannot
respondents petition should be dismissed for failure to comply
be construed as a waiver of successional rights.
with the rules on certification of non-forum shopping; 2) whether

Moreover, even assuming that Remedios truly waived
the hereditary rights of private respondents, such waiver will not
bar the latters claim. Article 1044 of the Civil Code, provides:
ART. 1044. Any person having the free disposal
of his property may accept or repudiate an
inheritance.
Any inheritance left to minors or
incapacitated persons may be accepted by
their parents or guardians. Parents or
guardians may repudiate the inheritance left
to their wards only by judicial authorization.
The right to accept an inheritance left
to the poor shall belong to the persons
designated by the testator to determine the
beneficiaries and distribute the property, or in
their default, to those mentioned in Article
1030. (Emphasis supplied)
Parents and guardians may not therefore repudiate the
inheritance of their wards without judicial approval. This is
because repudiation amounts to an alienation of
property[16]which must pass the courts scrutiny in order to protect
the interest of the ward. Not having been judicially authorized,
the Release and Waiver of Claim in the instant case is void and will
not bar private respondents from asserting their rights as heirs of
the deceased.
Furthermore, it must be emphasized that waiver is the
intentional relinquishment of a known right. Where one lacks
knowledge of a right, there is no basis upon which waiver of it can
rest. Ignorance of a material fact negates waiver, and waiver
cannot be established by a consent given under a mistake or
[17]
misapprehension of fact.
In the present case, private respondents could not have
possibly waived their successional rights because they are yet to
prove their status as acknowledged illegitimate children of the
deceased. Petitioner himself has consistently denied that private
respondents are his co-heirs. It would thus be inconsistent to rule
that they waived their hereditary rights when petitioner claims
that they do not have such right. Hence, petitioners invocation of
waiver on the part of private respondents must fail.
24
Anent the issue on private respondents filiation, we
agree with the Court of Appeals that a ruling on the same would
be premature considering that private respondents have yet to
present evidence. Before the Family Code took effect, the
governing law on actions for recognition of illegitimate children
was Article 285 of the Civil Code, to wit:
ART. 285. The action for the
recognition of natural children may be brought
only during the lifetime of the presumed
parents, except in the following cases:
(1) If the father or mother died during
the minority of the child, in which case the
latter may file the action before the expiration
of four years from the attainment of his
majority;
(2) If after the death of the father or of
the mother a document should appear of which
nothing had been heard and in which either or
both parents recognize the child.
In this case, the action must be
commenced within four years from the finding
of the document. (Emphasis supplied)
We ruled in Bernabe v. Alejo[18] that illegitimate children
who were still minors at the time the Family Code took effect and
whose putative parent died during their minority are given the
right to seek recognition for a period of up to four years from
attaining majority age. This vested right was not impaired or
taken away by the passage of the Family Code.[19]
On the other hand, Articles 172, 173 and 175 of the Family
Code, which superseded Article 285 of the Civil Code, provide:
ART. 172. The filiation of legitimate
children is established by any of the following:
(1) The record of birth appearing in the
civil register or a final judgment; or
(2) An admission of legitimate filiation
in a public document or a private handwritten
instrument and signed by the parent concerned.
In the absence of the foregoing
evidence, the legitimate filiation shall be proved
by:
(1) The open and continuous
possession of the status of a legitimate child; or
(2) Any other means allowed by the
Rules of Court and special laws.

ART. 173. The action to claim
legitimacy may be brought by the child during
his or her lifetime and shall be transmitted to
the heirs should the child die during minority or
in a state of insanity. In these cases, the heirs
shall have a period of five years within which to
institute the action.
The action already commenced by the
child shall survive notwithstanding the death of
either or both of the parties.
ART. 175. Illegitimate children may
establish their illegitimate filiation in the same
way and on the same, evidence as legitimate
children.
The action must be brought within the
same period specified in Article 173, except
when the action is based on the second
paragraph of Article 172, in which case the
action may be brought during the lifetime of the
alleged parent.
Under the Family Code, when filiation of an illegitimate
child is established by a record of birth appearing in the civil
register or a final judgment, or an admission of filiation in a public
document or a private handwritten instrument signed by the
parent concerned, the action for recognition may be brought by
the child during his or her lifetime. However, if the action is based
upon open and continuous possession of the status of an
illegitimate child, or any other means allowed by the rules or
special laws, it may only be brought during the lifetime of the
alleged parent.
It is clear therefore that the resolution of the issue of
prescription depends on the type of evidence to be adduced by
private respondents in proving their filiation. However, it would
be impossible to determine the same in this case as there has
been no reception of evidence yet. This Court is not a trier of
facts. Such matters may be resolved only by the Regional Trial
Court after a full-blown trial.
While the original action filed by private respondents
was a petition for letters of administration, the trial court is not
precluded from receiving evidence on private respondents
filiation. Its jurisdiction extends to matters incidental and
collateral to the exercise of its recognized powers in handling the
settlement of the estate, including the determination of the
status of each heir.[20] That the two causes of action, one to
25
compel recognition and the other to claim inheritance, may be
joined in one complaint is not new in our jurisprudence.[21] As held
in Briz v. Briz:[22]
The question whether a person in the
position of the present plaintiff can in any event
maintain a complex action to compel
recognition as a natural child and at the same
time to obtain ulterior relief in the character of
heir, is one which in the opinion of this court
must be answered in the affirmative, provided
always that the conditions justifying the joinder
of the two distinct causes of action are present
in the particular case. In other words, there is no
absolute necessity requiring that the action to
compel acknowledgment should have been
instituted and prosecuted to a successful
conclusion prior to the action in which that
same plaintiff seeks additional relief in the
character of heir. Certainly, there is nothing so
peculiar to the action to compel
acknowledgment as to require that a rule should
be here applied different from that generally
applicable in other cases. x x x
The conclusion above stated, though
not heretofore explicitly formulated by this
court, is undoubtedly to some extent supported
by our prior decisions. Thus, we have held in
numerous cases, and the doctrine must be
considered well settled, that a natural child
having a right to compel acknowledgment, but
who has not been in fact acknowledged, may
maintain partition proceedings for the division
of the inheritance against his coheirs (Siguiong
vs. Siguiong, 8 Phil., 5; Tiamson vs. Tiamson, 32
Phil., 62); and the same person may intervene in
proceedings for the distribution of the estate of
his deceased natural father, or mother
(Capistrano vs. Fabella, 8 Phil., 135; Conde vs.
Abaya, 13 Phil., 249; Ramirez vs. Gmur, 42 Phil.,
855). In neither of these situations has it been
thought necessary for the plaintiff to show a
prior decree compelling acknowledgment. The
obvious reason is that in partition suits and
distribution proceedings the other persons who
might take by inheritance are before the court;
and the declaration of heirship is appropriate to
such proceedings.
WHEREFORE, the instant petition is DENIED. The
Decision dated January 22, 2004 of the Court of Appeals in CA-
G.R. SP No. 79742 affirming the denial of petitioners motion to
dismiss; and its Resolution dated May 25, 2004 denying
petitioners motion for reconsideration, are AFFIRMED. Let the
records be REMANDED to
the Regional Trial Court of Makati City, Branch 138 for further
proceedings.

6. G.R. No. L-770 April 27, 1948
ANGEL T. LIMJOCO, petitioner,
vs.
INTESTATE ESTATE OF PEDRO O. FRAGRANTE,
deceased, respondent.
Angel Limjoco, Jr. and Delfin L. Gonzales for petitioner.
Bienvenido A. Tan for respondent.
HILADO, J.:
Under date of May 21, 1946, the Public Service Commission,
through Deputy Commissioner Fidel Ibañez, rendered its decision
in case No. 4572 of Pedro O. Fragante, as applicant for a
certificate of public convenience to install, maintain and operate
an ice plant in San Juan, Rizal, whereby said commission held that
the evidence therein showed that the public interest and
convenience will be promoted in a proper and suitable manner
"by authorizing the operation and maintenance of another ice
plant of two and one-half (2-½) tons in the municipality of San
Juan; that the original applicant Pedro O. Fragante was a Filipino
Citizen at the time of his death; and that his intestate estate is
financially capable of maintaining the proposed service". The
commission, therefore, overruled the opposition filed in the case
and ordered "that under the provisions of section 15 of
Commonwealth Act No. 146, as amended a certificate of public
convenience be issued to the Intestate Estate of the deceased
Pedro Fragante, authorizing said Intestate Estate through its
Special or Judicial Administrator, appointed by the proper court
of competent jurisdiction, to maintain and operate an ice plant
with a daily productive capacity of two and one-half (2-1/2) tons in
the Municipality of San Juan and to sell the ice produced from
said plant in the said Municipality of San Juan and in the
Municipality of Mandaluyong, Rizal, and in Quezon City", subject
to the conditions therein set forth in detail (petitioner's brief, pp.
33-34).
Petitioner makes four assignments of error in his brief as follows:
1. The decision of the Public Service Commission is not in
accordance with law.
2. The decision of the Public Service Commission is not
reasonably supported by evidence.
3. The Public Service Commission erred in not giving
petitioner and the Ice and Cold Storage Industries of the
Philippines, Inc., as existing operators, a reasonable
opportunity to meet the increased demand.
4. The decision of the Public Service Commission is an
unwarranted departure from its announced policy with
respect to the establishment and operation of ice plant.
(Pp. 1-2, petitioner's brief.)
In his argument petitioner contends that it was error on the part
of the commission to allow the substitution of the legal
representative of the estate of Pedro O. Fragante for the latter as
party applicant in the case then pending before the commission,
and in subsequently granting to said estate the certificate applied
for, which is said to be in contravention of law.
If Pedro O. Fragante had not died, there can be no question that
he would have had the right to prosecute his application before
26
the commission to its final conclusion. No one would have denied
him that right. As declared by the commission in its decision, he
had invested in the ice plant in question P 35,000, and from what
the commission said regarding his other properties and business,
he would certainly have been financially able to maintain and
operate said plant had he not died. His transportation business
alone was netting him about P1,440 a month. He was a Filipino
citizen and continued to be such till his demise. The commission
declared in its decision, in view of the evidence before it, that his
estate was financially able to maintain and operate the ice plant.
The aforesaid right of Pedro O. Fragante to prosecute said
application to its conclusion was one which by its nature did not
lapse through his death. Hence, it constitutes a part of the assets
of his estate, for which a right was property despite the possibility
that in the end the commission might have denied application,
although under the facts of the case, the commission granted the
application in view of the financial ability of the estate to maintain
and operate the ice plant. Petitioner, in his memorandum of
March 19, 1947, admits (page 3) that the certificate of public
convenience once granted "as a rule, should descend to his estate
as an asset". Such certificate would certainly be property, and the
right to acquire such a certificate, by complying with the
requisites of the law, belonged to the decedent in his lifetime, and
survived to his estate and judicial administrator after his death.
If Pedro O. Fragrante had in his lifetime secured an option to buy
a piece of land and during the life of the option he died, if the
option had been given him in the ordinary course of business and
not out of special consideration for his person, there would be no
doubt that said option and the right to exercise it would have
survived to his estate and legal representatives. In such a case
there would also be the possibility of failure to acquire the
property should he or his estate or legal representative fail to
comply with the conditions of the option. In the case at bar Pedro
O. Fragrante's undoubted right to apply for and acquire the
desired certificate of public convenience — the evidence
established that the public needed the ice plant — was under the
law conditioned only upon the requisite citizenship and economic
ability to maintain and operate the service. Of course, such right
to acquire or obtain such certificate of public convenience was
subject to failure to secure its objective through nonfulfillment of
the legal conditions, but the situation here is no different from
the legal standpoint from that of the option in the illustration just
given.
Rule 88, section 2, provides that the executor or administrator
may bring or defend actions, among other cases, for the
protection of the property or rights of the deceased which
survive, and it says that such actions may be brought or defended
"in the right of the deceased".
Rule 82, section 1, paragraph (a), mentions among the duties of
the executor or administrator, the making of an inventory of all
goods, chattels, rights, credits, and estate of the deceased which
shall come to his possession or knowledge, or to the possession of
any other person for him.
In his commentaries on the Rules of Court (Volume II, 2nd ed.,
pages 366, 367) the present chief Justice of this Court draws the
following conclusion from the decisions cited by him:
Therefore, unless otherwise expressly provided by law,
any action affecting the property or rights (emphasis
supplied) of a deceased person which may be brought by
or against him if he were alive, may likewise be instituted
and prosecuted by or against the administrator, unless
the action is for recovery of money, debt or interest

thereon, or unless, by its very nature, it cannot survive,
because death extinguishes the right . . . .
It is true that a proceeding upon the application for a certificate of
public convenience before the Public Service Commission is not
an "action". But the foregoing provisions and citations go to prove
that the decedent's rights which by their nature are not
extinguished by death go to make up a part and parcel of the
assets of his estate which, being placed under the control and
management of the executor or administrator, can not be
exercised but by him in representation of the estate for the
benefit of the creditors, devisees or legatees, if any, and the heirs
of the decedent. And if the right involved happens to consist in
the prosecution of an unfinished proceeding upon an application
for a certificate of public convenience of the deceased before the
Public Service Commission, it is but logical that the legal
representative be empowered and entitled in behalf of the estate
to make the right effective in that proceeding.
Manresa (Vol. III, 6th ed., p. 11) says that No. 10 of article 334 and
article 336 of the Civil Code, respectively, consider
as immovable and movable things rights which are not material.
The same eminent commentator says in the cited volume (p. 45)
that article 336 of the Civil Code has been deficiently drafted in
that it is not sufficiently expressive of all incorporeal rights which
are also property for juridical purposes.
Corpus Juris (Vol. 50, p. 737) states that in the broad sense of the
term, property includes, among other things, "an option", and
"the certificate of the railroad commission permitting the
operation of a bus line", and on page 748 of the same volume we
read:
However, these terms (real property, as estate or
interest) have also been declared to include every species
of title, inchoate or complete, and embrace rights which
lie in contract, whether executory or executed.
(Emphasis supplied.)
Another important question raised by petitioner is whether the
estate of Pedro O. Fragrante is a "person" within the meaning of
the Public Service Act.
Words and Phrases, First Series, (Vol. 6, p, 5325), states the
following doctrine in the jurisdiction of the State of Indiana:
As the estate of the decedent is in law regarded as a
person, a forgery committed after the death of the man
whose name purports to be signed to the instrument
may be prosecuted as with the intent to defraud the
estate. Billings vs. State, 107 Ind., 54, 55, 6 N. E. 914, 7 N.
E. 763, 57 Am. Rep. 77.
The Supreme Court of Indiana in the decision cited above had
before it a case of forgery committed after the death of one
Morgan for the purpose of defrauding his estate. The objection
was urged that the information did not aver that the forgery was
committed with the intent to defraud any person. The Court, per
Elliott, J., disposed of this objection as follows:
. . . The reason advanced in support of this proposition is
that the law does not regard the estate of a decedent as
a person. This intention (contention) cannot prevail. The
estate of the decedent is a person in legal
contemplation. "The word "person" says Mr. Abbot, "in
its legal signification, is a generic term, and includes
artificial as well as natural persons," 2 Abb. Dict. 271;
27
Douglas vs. Pacific, etc. Co., 4 Cal. 304; Planters', etc.,
Bank vs. Andrews, 8 Port. (Ala.) 404. It said in another
work that 'persons are of two kinds: natural and artificial.
A natural person is a human being. Artificial persons
include (1) a collection or succession of natural persons
forming a corporation; (2) a collection of property to
which the law attributes the capacity of having rights and
duties. The latter class of artificial persons is recognized
only to a limited extent in our law. "Examples are the
estate of a bankrupt or deceased person." 2 Rapalje & L.
Law Dict. 954. Our own cases inferentially recognize the
correctness of the definition given by the authors from
whom we have quoted, for they declare that it is
sufficient, in pleading a claim against a decedent's
estate, to designate the defendant as the estate of the
deceased person, naming him. Ginn vs. Collins, 43 Ind.
271. Unless we accept this definition as correct, there
would be a failure of justice in cases where, as here, the
forgery is committed after the death of a person whose
name is forged; and this is a result to be avoided if it can
be done consistent with principle. We perceive no
difficulty in avoiding such a result; for, to our minds, it
seems reasonable that the estate of a decedent should
be regarded as an artificial person. It is the creation of
law for the purpose of enabling a disposition of the
assets to be properly made, and, although natural
persons as heirs, devises, or creditors, have an interest in
the property, the artificial creature is a distinct legal
entity. The interest which natural persons have in it is not
complete until there has been a due administration; and
one who forges the name of the decedent to an
instrument purporting to be a promissory note must be
regarded as having intended to defraud the estate of the
decedent, and not the natural persons having diverse
interests in it, since ha cannot be presumed to have
known who those persons were, or what was the nature
of their respective interest. The fraudulent intent is
against the artificial person, — the estate — and not the
natural persons who have direct or contingent interest in
it. (107 Ind. 54, 55, 6 N.E. 914-915.)
In the instant case there would also be a failure of justice unless
the estate of Pedro O. Fragrante is considered a "person", for
quashing of the proceedings for no other reason than his death
would entail prejudicial results to his investment amounting to
P35,000.00 as found by the commission, not counting the
expenses and disbursements which the proceeding can be
presumed to have occasioned him during his lifetime, let alone
those defrayed by the estate thereafter. In this jurisdiction there
are ample precedents to show that the estate of a deceased
person is also considered as having legal personality independent
of their heirs. Among the most recent cases may be mentioned
that of "Estate of Mota vs. Concepcion, 56 Phil., 712, 717, wherein
the principal plaintiff was the estate of the deceased Lazaro
Mota, and this Court gave judgment in favor of said estate along
with the other plaintiffs in these words:
. . . the judgment appealed from must be affirmed so far
as it holds that defendants Concepcion and Whitaker are
indebted to he plaintiffs in the amount of P245,804.69 . .
..
Under the regime of the Civil Code and before the enactment of
the Code of Civil Procedure, the heirs of a deceased person were
considered in contemplation of law as the continuation of his
personality by virtue of the provision of article 661 of the first
Code that the heirs succeed to all the rights and obligations of the
decedent by the mere fact of his death. It was so held by this

Court in Barrios vs. Dolor, 2 Phil., 44, 46. However, after the
enactment of the Code of Civil Procedure, article 661 of the Civil
Code was abrogated, as held in Suiliong & Co. vs. Chio-Taysan, 12
Phil., 13, 22. In that case, as well as in many others decided by this
Court after the innovations introduced by the Code of Civil
Procedure in the matter of estates of deceased persons, it has
been the constant doctrine that it is the estate or the mass of
property, rights and assets left by the decedent, instead of the
heirs directly, that becomes vested and charged with his rights
and obligations which survive after his demise.
The heirs were formerly considered as the continuation of the
decedent's personality simply by legal fiction, for they might not
have been flesh and blood — the reason was one in the nature of a
legal exigency derived from the principle that the heirs succeeded
to the rights and obligations of the decedent. Under the present
legal system, such rights and obligations as survive after death
have to be exercised and fulfilled only by the estate of the
deceased. And if the same legal fiction were not indulged, there
would be no juridical basis for the estate, represented by the
executor or administrator, to exercise those rights and to fulfill
those obligations of the deceased. The reason and purpose for
indulging the fiction is identical and the same in both cases. This
is why according to the Supreme Court of Indiana in Billings vs.
State, supra, citing 2 Rapalje & L. Dictionary, 954, among the
artificial persons recognized by law figures "a collection of
property to which the law attributes the capacity of having rights
and duties", as for instance, the estate of a bankrupt or deceased
person.
Petitioner raises the decisive question of whether or not the
estate of Pedro O. Fragrante can be considered a "citizen of the
Philippines" within the meaning of section 16 of the Public Service
Act, as amended, particularly the proviso thereof expressly and
categorically limiting the power of the commission to issue
certificates of public convenience or certificates of public
convenience and necessity "only to citizens of the Philippines or
of the United States or to corporations, copartnerships,
associations, or joint-stock companies constituted and organized
under the laws of the Philippines", and the further proviso that
sixty per centum of the stock or paid-up capital of such entities
must belong entirely to citizens of the Philippines or of the United
States.
Within the Philosophy of the present legal system, the underlying
reason for the legal fiction by which, for certain purposes, the
estate of the deceased person is considered a "person" is the
avoidance of injustice or prejudice resulting from the impossibility
of exercising such legal rights and fulfilling such legal obligations
of the decedent as survived after his death unless the fiction is
indulged. Substantially the same reason is assigned to support
the same rule in the jurisdiction of the State of Indiana, as
announced in Billings vs. State, supra, when the Supreme Court of
said State said:
. . . It seems reasonable that the estate of a decedent
should be regarded as an artificial person. it is the
creation of law for the purpose of enabling a disposition
of the assets to be properly made . . . .
Within the framework and principles of the constitution itself, to
cite just one example, under the bill of rights it seems clear that
while the civil rights guaranteed therein in the majority of cases
relate to natural persons, the term "person" used in section 1 (1)
and (2) must be deemed to include artificial or juridical persons,
for otherwise these latter would be without the constitutional
guarantee against being deprived of property without due
process of law, or the immunity from unreasonable searches and
28
seizures. We take it that it was the intendment of the framers to
include artificial or juridical, no less than natural, persons in these
constitutional immunities and in others of similar nature. Among
these artificial or juridical persons figure estates of deceased
persons. Hence, we hold that within the framework of the
Constitution, the estate of Pedro O. Fragrante should be
considered an artificial or juridical person for the purposes of the
settlement and distribution of his estate which, of course, include
the exercise during the judicial administration thereof of those
rights and the fulfillment of those obligations of his which
survived after his death. One of those rights was the one involved
in his pending application before the Public Service Commission
in the instant case, consisting in the prosecution of said
application to its final conclusion. As stated above, an injustice
would ensue from the opposite course.
How about the point of citizenship? If by legal fiction his
personality is considered extended so that any debts or
obligations left by, and surviving, him may be paid, and any
surviving rights may be exercised for the benefit of his creditors
and heirs, respectively, we find no sound and cogent reason for
denying the application of the same fiction to his citizenship, and
for not considering it as likewise extended for the purposes of the
aforesaid unfinished proceeding before the Public Service
Commission. The outcome of said proceeding, if successful,
would in the end inure to the benefit of the same creditors and
the heirs. Even in that event petitioner could not allege any
prejudice in the legal sense, any more than he could have done if
Fragrante had lived longer and obtained the desired certificate.
The fiction of such extension of his citizenship is grounded upon
the same principle, and motivated by the same reason, as the
fiction of the extension of personality. The fiction is made
necessary to avoid the injustice of subjecting his estate, creditors
and heirs, solely by reason of his death to the loss of the
investment amounting to P35,000, which he has already made in
the ice plant, not counting the other expenses occasioned by the
instant proceeding, from the Public Service Commission of this
Court.
We can perceive no valid reason for holding that within the intent
of the constitution (Article IV), its provisions on Philippine
citizenship exclude the legal principle of extension above
adverted to. If for reasons already stated our law indulges the
fiction of extension of personality, if for such reasons the estate of
Pedro O. Fragrante should be considered an artificial or juridical
person herein, we can find no justification for refusing to declare a
like fiction as to the extension of his citizenship for the purposes
of this proceeding.
Pedro O. Fragrante was a Filipino citizen, and as such, if he had
lived, in view of the evidence of record, he would have obtained
from the commission the certificate for which he was applying.
The situation has suffered but one change, and that is, his death.
His estate was that of a Filipino citizen. And its economic ability to
appropriately and adequately operate and maintain the service of
an ice plant was the same that it received from the decedent
himself. In the absence of a contrary showing, which does not
exist here, his heirs may be assumed to be also Filipino citizens;
and if they are not, there is the simple expedient of revoking the
certificate or enjoining them from inheriting it.
Upon the whole, we are of the opinion that for the purposes of
the prosecution of said case No. 4572 of the Public Service
Commission to its final conclusion, both the personality and
citizenship of Pedro O. Fragrante must be deemed extended,
within the meaning and intent of the Public Service Act, as
amended, in harmony with the constitution: it is so adjudged and
decreed.
 29

Decision affirmed, without costs. So ordered. Subsequently, Rufina Luy Lim filed a verified amended
petition[9] which contained the following averments:

"3. The late Pastor Y. Lim personally owned

7. [G.R. No. 124715. January 24, 2000] during his lifetime the following business
entities, to wit:
RUFINA LUY LIM petitioner, vs. COURT OF APPEALS, AUTO
TRUCK TBA CORPORATION, SPEED DISTRIBUTING, INC., Business Entity Address:
ACTIVE DISTRIBUTORS, ALLIANCE MARKETING
CORPORATION, ACTION COMPANY, INC. respondents. XXXX

DECISION Alliance Marketing ,Inc. Block 3, Lot 6, Dacca

BUENA, J.: BF Homes,

May a corporation, in its universality, be the proper subject of and Paraaque,

be included in the inventory of the estate of a deceased person?
Metro Manila.
Petitioner disputes before us through the instant petition for
review on certiorari, the decision[1] of the Court of Appeals XXXX
promulgated on 18 April 1996, in CA-GR SP No. 38617, which
nullified and set aside the orders dated 04 July 1995 [2], 12 Speed Distributing Inc. 910 Barrio Niog,
September 1995[3] and 15 September 1995[4] of the Regional Trial
Court of Quezon City, Branch 93, sitting as a probate court. Aguinaldo Highway,

Petitioner Rufina Luy Lim is the surviving spouse of the late Bacoor, Cavite.
Pastor Y. Lim whose estate is the subject of probate proceedings
in Special Proceedings Q-95-23334, entitled, "In Re: Intestate
XXXX
Estate of Pastor Y. Lim Rufina Luy Lim, represented by George
Luy, Petitioner".
Auto Truck TBA Corp. 2251 Roosevelt Avenue,
Private respondents Auto Truck Corporation, Alliance Marketing
Quezon City.
Corporation, Speed Distributing, Inc., Active Distributing, Inc. and
Action Company are corporations formed, organized and existing
under Philippine laws and which owned real properties covered XXXX
under the Torrens system.
Active Distributors, Inc. Block 3, Lot 6, Dacca BF
On 11 June 1994, Pastor Y. Lim died intestate. Herein petitioner,
as surviving spouse and duly represented by her nephew George Homes, Paraaque,
Luy, filed on 17 March 1995, a joint petition[5] for the
administration of the estate of Pastor Y. Lim before the Regional Metro Manila.
Trial Court of Quezon City.
XXXX
Private respondent corporations, whose properties were included
in the inventory of the estate of Pastor Y. Lim, then filed a Action Company 100 20th Avenue
motion[6] for the lifting of lis pendens and motion[7] for exclusion
of certain properties from the estate of the decedent. Murphy, Quezon City

In an order[8] dated 08 June 1995, the Regional Trial Court of or

Quezon City, Branch 93, sitting as a probate court, granted the
private respondents twin motions, in this wise:
92-D Mc-Arthur Highway

"Wherefore, the Register of Deeds of Quezon

City is hereby ordered to lift, expunge or delete
the annotation of lis pendens on Transfer
Certificates of Title Nos. 116716, 116717, 116718,
116719 and 5182 and it is hereby further ordered
that the properties covered by the same titles as
well as those properties by (sic) Transfer
Certificate of Title Nos. 613494, 363123, 236236
and 263236 are excluded from these
proceedings.
SO ORDERED."
Valenzuela Bulacan.
"3.1 Although the above business entities dealt
and engaged in business with the public as
corporations, all their capital, assets and equity
were however, personally owned by the late
Pastor Y Lim. Hence the alleged stockholders
and officers appearing in the respective articles
of incorporation of the above business entities
were mere dummies of Pastor Y. Lim, and they
were listed therein only for purposes of
registration with the Securities and Exchange
Commission.

"4. Pastor Lim, likewise, had Time, Savings and
Current Deposits with the following banks: (a)
Metrobank, Grace Park, Caloocan City and
Quezon Avenue, Quezon City Branches and (b)
First Intestate Bank (formerly Producers Bank),
Rizal Commercial Banking Corporation and in
other banks whose identities are yet to be
determined.
"5. That the following real properties, although
registered in the name of the above entities,
were actually acquired by Pastor Y. Lim during
his marriage with petitioner, to wit:
Corporation Title Location
XXXX
k. Auto Truck TCT No. 617726 Sto. Domingo
TBA Corporation Cainta, Rizal
q. Alliance Marketing TCT No. 27896 Prance,
Metro Manila
Copies of the above-mentioned Transfer
Certificate of Title and/or Tax Declarations are
hereto attached as Annexes "C" to "W".
XXXX
"7. The aforementioned properties and/or real
interests left by the late Pastor Y. Lim, are all
conjugal in nature, having been acquired by him
during the existence of his marriage with
petitioner.
"8. There are other real and personal properties
owned by Pastor Y. Lim which petitioner could
not as yet identify. Petitioner, however will
submit to this Honorable Court the identities
thereof and the necessary documents covering
the same as soon as possible."
On 04 July 1995, the Regional Trial Court acting on petitioners
motion issued an order[10], thus:
"Wherefore, the order dated 08 June 1995 is
hereby set aside and the Registry of Deeds of
Quezon City is hereby directed to reinstate the
annotation of lis pendens in case said
annotation had already been deleted and/or
cancelled said TCT Nos. 116716, 116717, 116718,
116719 and 51282.
Further more (sic), said properties covered by
TCT Nos. 613494, 365123, 236256 and 236237 by
virtue of the petitioner are included in the
instant petition.
SO ORDERED."
On 04 September 1995, the probate court appointed Rufina Lim
as special administrator[11] and Miguel Lim and Lawyer Donald
30
Lee, as co-special administrators of the estate of Pastor Y. Lim,
after which letters of administration were accordingly issued.
In an order[12] dated 12 September 1995, the probate court denied
anew private respondents motion for exclusion, in this wise:
"The issue precisely raised by the petitioner in
her petition is whether the corporations are the
mere alter egos or instrumentalities of Pastor
Lim, Otherwise (sic) stated, the issue involves
the piercing of the corporate veil, a matter that
is clearly within the jurisdiction of this
Honorable Court and not the Securities and
Exchange Commission. Thus, in the case of
Cease vs. Court of Appeals, 93 SCRA 483, the
crucial issue decided by the regular court was
whether the corporation involved therein was
the mere extension of the decedent. After
finding in the affirmative, the Court ruled that
the assets of the corporation are also assets of
the estate.
A reading of P.D. 902, the law relied upon by
oppositors, shows that the SECs exclusive (sic)
applies only to intra-corporate controversy. It is
simply a suit to settle the intestate estate of a
deceased person who, during his lifetime,
acquired several properties and put up
corporations as his instrumentalities.
SO ORDERED."
On 15 September 1995, the probate court acting on an ex
parte motion filed by petitioner, issued an order[13] the dispositive
portion of which reads:
"Wherefore, the parties and the following banks
concerned herein under enumerated are hereby
ordered to comply strictly with this order and to
produce and submit to the special
administrators , through this Honorable Court
within (5) five days from receipt of this order
their respective records of the savings/current
accounts/time deposits and other deposits in
the names of Pastor Lim and/or corporations
above-mentioned, showing all the transactions
made or done concerning savings /current
accounts from January 1994 up to their receipt
of this court order.
XXX XXX XXX
SO ORDERED."
Private respondent filed a special civil action for certiorari[14], with
an urgent prayer for a restraining order or writ of preliminary
injunction, before the Court of Appeals questioning the orders of
the Regional Trial Court, sitting as a probate court.
On 18 April 1996, the Court of Appeals, finding in favor of herein
private respondents, rendered the assailed decision[15], the
decretal portion of which declares:
"Wherefore, premises considered, the instant
special civil action for certiorari is hereby
granted, The impugned orders issued by
respondent court on July 4,1995 and September

12, 1995 are hereby nullified and set aside. The
impugned order issued by respondent on
September 15, 1995 is nullified insofar as
petitioner corporations" bank accounts and
records are concerned.
SO ORDERED."
Through the expediency of Rule 45 of the Rules of Court, herein
petitioner Rufina Luy Lim now comes before us with a lone
assignment of error[16]:
"The respondent Court of Appeals erred in
reversing the orders of the lower court which
merely allowed the preliminary or provisional
inclusion of the private respondents as part of
the estate of the late deceased (sic) Pastor Y.
Lim with the respondent Court of Appeals
arrogating unto itself the power to repeal, to
disobey or to ignore the clear and explicit
provisions of Rules 81,83,84 and 87 of the Rules
of Court and thereby preventing the petitioner,
from performing her duty as special
administrator of the estate as expressly
provided in the said Rules."
Petitioners contentions tread on perilous grounds.
In the instant petition for review, petitioner prays that we affirm
the orders issued by the probate court which were subsequently
set aside by the Court of Appeals.
Yet, before we delve into the merits of the case, a review of the
rules on jurisdiction over probate proceedings is indeed in order.
The provisions of Republic Act 7691[17], which introduced
amendments to Batas Pambansa Blg. 129, are pertinent:
"Section 1. Section 19 of Batas Pambansa Blg.
129, otherwise known as the "Judiciary
Reorganization Act of 1980", is hereby amended
to read as follows:
Section 19. Jurisdiction in civil cases. Regional
Trial Courts shall exercise exclusive jurisdiction:
xxx xxx xxx
(4) In all matters of probate, both testate and
intestate, where the gross value of the estate
exceeds One Hundred Thousand Pesos
(P100,000) or, in probate matters in Metro
Manila, where such gross value exceeds Two
Hundred Thousand Pesos (P200,000);
xxx xxx xxx
Section 3. Section 33 of the same law is hereby
amended to read as follows:
Section 33. Jurisdiction of
Metropolitan Trial Courts,
Municipal Trial Courts and
Municipal Circuit Trial Courts
in Civil Cases.-Metropolitan
Trial Courts, Municipal Trial
31
Courts and Municipal Circuit
Trial Courts shall exercise:
1. Exclusive original
jurisdiction over civil actions
and probate proceedings,
testate and intestate,
including the grant of
provisional remedies in proper
cases, where the value of the
personal property, estate or
amount of the demand does
not exceed One Hundred
Thousand Pesos(P100,000) or,
in Metro Manila where such
personal property, estate or
amount of the demand does
not exceed Two Hundred
Thousand Pesos (P200,000),
exclusive of interest, damages
of whatever kind, attorneys
fees, litigation expenses and
costs, the amount of which
must be specifically alleged,
Provided, that interest,
damages of whatever kind,
attorneys, litigation expenses
and costs shall be included in
the determination of the filing
fees, Provided further, that
where there are several claims
or causes of actions between
the same or different parties,
embodied in the same
complaint, the amount of the
demand shall be the totality of
the claims in all the causes of
action, irrespective of whether
the causes of action arose out
of the same or different
transactions;
xxx xxx xxx"
Simply put, the determination of which court exercises
jurisdiction over matters of probate depends upon the gross value
of the estate of the decedent.
As to the power and authority of the probate court, petitioner
relies heavily on the principle that a probate court may pass upon
title to certain properties, albeit provisionally, for the purpose of
determining whether a certain property should or should not be
included in the inventory.
In a litany of cases, We defined the parameters by which the court
may extend its probing arms in the determination of the question
of title in probate proceedings.
This Court, in PASTOR, JR. vs. COURT OF APPEALS,[18] held:
"X X X As a rule, the question of ownership is an
extraneous matter which the probate court
cannot resolve with finality. Thus, for the
purpose of determining whether a certain
property should or should not be included in the
inventory of estate properties, the Probate
Court may pass upon the title thereto, but such

determination is provisional, not conclusive, and
is subject to the final decision in a separate
action to resolve title."
We reiterated the rule in PEREIRA vs. COURT OF APPEALS[19]:
"X X X The function of resolving whether or not
a certain property should be included in the
inventory or list of properties to be administered
by the administrator is one clearly within the
competence of the probate court. However, the
courts determination is only provisional in
character, not conclusive, and is subject to the
final decision in a separate action which may be
instituted by the parties."
Further, in MORALES vs. CFI OF CAVITE[20] citing CUIZON vs.
RAMOLETE[21], We made an exposition on the probate courts
limited jurisdiction:
"It is a well-settled rule that a probate court or
one in charge of proceedings whether testate or
intestate cannot adjudicate or determine title to
properties claimed to be a part of the estate and
which are equally claimed to belong to outside
parties. All that the said court could do as
regards said properties is to 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 no dispute, well
and good; but if there is, then the parties, the
administrator and the opposing parties have to
resort to an ordinary action for a final
determination of the conflicting claims of title
because the probate court cannot do so."
Again, in VALERA vs. INSERTO[22], We had occasion to elucidate,
through Mr. Justice Andres Narvasa[23]:
"Settled is the rule that a Court of First Instance
(now Regional Trial Court), acting as a probate
court, exercises but limited jurisdiction, and thus
has no power to take cognizance of and
determine the issue of title to property claimed
by a third person adversely to the decedent,
unless the claimant and all other parties having
legal interest in the property consent, expressly
or impliedly, to the submission of the question
to the probate court for adjudgment, or the
interests of third persons are not thereby
prejudiced, the reason for the exception being
that the question of whether or not a particular
matter should be resolved by the court in the
exercise of its general jurisdiction or of its
limited jurisdiction as a special court (e.g.
probate, land registration, etc.), is in reality not
a jurisdictional but in essence of procedural one,
involving a mode of practice which may be
waived. x x x
x x x. These considerations assume greater
cogency where, as here, the Torrens title is
not in the decedents name but in others, a
situation on which this Court has already had
occasion to rule x x x."(emphasis Ours)
32
Petitioner, in the present case, argues that the parcels of land
covered under the Torrens system and registered in the name of
private respondent corporations should be included in the
inventory of the estate of the decedent Pastor Y. Lim, alleging
that after all the determination by the probate court of whether
these properties should be included or not is merely provisional in
nature, thus, not conclusive and subject to a final determination
in a separate action brought for the purpose of adjudging once
and for all the issue of title.
Yet, under the peculiar circumstances, where the parcels of land
are registered in the name of private respondent corporations,
the jurisprudence pronounced in BOLISAY vs., ALCID[24] is of
great essence and finds applicability, thus:
"It does not matter that respondent-
administratrix has evidence purporting to
support her claim of ownership, for, on the
other hand, petitioners have a Torrens title in
their favor, which under the law is endowed
with incontestability until after it has been set
aside in the manner indicated in the law itself,
which, of course, does not include, bringing up
the matter as a mere incident in special
proceedings for the settlement of the estate of
deceased persons. x x x"
"x x x. In regard to such incident of inclusion or
exclusion, We hold that if a property covered by
Torrens title is involved, the presumptive
conclusiveness of such title should be given due
weight, and in the absence of strong compelling
evidence to the contrary, the holder thereof
should be considered as the owner of the
property in controversy until his title is nullified
or modified in an appropriate ordinary action,
particularly, when as in the case at bar,
possession of the property itself is in the
persons named in the title. x x x"
A perusal of the records would reveal that no strong compelling
evidence was ever presented by petitioner to bolster her bare
assertions as to the title of the deceased Pastor Y. Lim over the
properties. Even so, P.D. 1529, otherwise known as, " The
Property Registration Decree", proscribes collateral attack on
Torrens Title, hence:
"xxx xxx xxx
Section 48. Certificate not subject to collateral
attack.
- A certificate of title shall not be subject to
collateral attack. It cannot be altered, modified
or cancelled except in a direct proceeding in
accordance with law."
In CUIZON vs. RAMOLETE, where similarly as in the case at bar,
the property subject of the controversy was duly registered under
the Torrens system, We categorically stated:
"x x x Having been apprised of the fact that the
property in question was in the possession of
third parties and more important, covered by a
transfer certificate of title issued in the name of
such third parties, the respondent court should
have denied the motion of the respondent

administrator and excluded the property in
question from the inventory of the property of
the estate. It had no authority to deprive such
third persons of their possession and ownership
of the property. x x x"
Inasmuch as the real properties included in the inventory of the
estate of the late Pastor Y. Lim are in the possession of and
are registered in the name of private respondent corporations,
which under the law possess a personality separate and distinct
from their 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 private respondents should
stand undisturbed.
Accordingly, the probate court was remiss in denying private
respondents motion for exclusion. While it may be true that the
Regional Trial Court, acting in a restricted capacity and exercising
limited jurisdiction as a probate court, is competent to issue
orders involving inclusion or exclusion of certain properties in the
inventory of the estate of the decedent, and to adjudge, albeit,
provisionally the question of title over properties, it is no less true
that such authority conferred upon by law and reinforced by
jurisprudence, should be exercised judiciously, with due regard
and caution to the peculiar circumstances of each individual case.
Notwithstanding that the real properties were duly registered
under the Torrens system in the name of private respondents,
and as such were to be afforded the presumptive conclusiveness
of title, the probate court obviously opted to shut its eyes to this
gleamy fact and still proceeded to issue the impugned orders.
By its denial of the motion for exclusion, the probate court in
effect acted in utter disregard of the presumption of
conclusiveness of title in favor of private respondents. Certainly,
the probate court through such brazen act transgressed the clear
provisions of law and infringed settled jurisprudence on this
matter.
Moreover, petitioner urges that not only the properties of private
respondent corporations are properly part of the decedents
estate but also the private respondent corporations themselves.
To rivet such flimsy contention, petitioner cited that the late
Pastor Y. Lim during his lifetime, organized and wholly-owned
the five corporations, which are the private respondents in the
instant case.[25] Petitioner thus attached as Annexes "F"[26] and
"G"[27] of the petition for review affidavits executed by Teresa Lim
and Lani Wenceslao which among others, contained averments
that the incorporators of Uniwide Distributing, Inc. included on
the list had no actual participation in the organization and
incorporation of the said corporation. The affiants added that the
persons whose names appeared on the articles of incorporation of
Uniwide Distributing, Inc., as incorporators thereof, are mere
dummies since they have not actually contributed any amount to
the capital stock of the corporation and have been merely asked
by the late Pastor Y. Lim to affix their respective signatures
thereon.
It is settled that a corporation is clothed with personality separate
and distinct from that of the persons composing it. It may not
generally be held liable for that of the persons composing it. It
may not be held liable for the personal indebtedness of its
stockholders or those of the entities connected with it.[28]
Rudimentary is the rule that a corporation is invested by law with
a personality distinct and separate from its stockholders or
members. In the same vein, a corporation by legal fiction and
33
convenience is an entity shielded by a protective mantle and
imbued by law with a character alien to the persons comprising it.
Nonetheless, the shield is not at all times invincible. Thus,
in FIRST PHILIPPINE INTERNATIONAL BANK vs. COURT OF
APPEALS[29], We enunciated:
"x x x When the fiction is urged as a means of
perpetrating a fraud or an illegal act or as a
vehicle for the evasion of an existing obligation,
the circumvention of statutes, the achievement
or perfection of a monopoly or generally the
perpetration of knavery or crime, the veil with
which the law covers and isolates the
corporation from the members or stockholders
who compose it will be lifted to allow for its
consideration merely as an aggregation of
individuals. x x x"
Piercing the veil of corporate entity requires the court to see
through the protective shroud which exempts its stockholders
from liabilities that ordinarily, they could be subject to, or
distinguishes one corporation from a seemingly separate one,
were it not for the existing corporate fiction. [30]
The corporate mask may be lifted and the corporate veil may be
pierced when a corporation is just but the alter ego of a person or
of another corporation. Where badges of fraud exist, where public
convenience is defeated; where a wrong is sought to be justified
thereby, the corporate fiction or the notion of legal entity should
come to naught.[31]
Further, the test in determining the applicability of the doctrine of
piercing the veil of corporate fiction is as follows: 1) Control, not
mere majority or complete stock control, but complete
domination, not only of finances but of policy and business
practice in respect to the transaction attacked so that the
corporate entity as to this transaction had at the time no separate
mind, will or existence of its own; (2) Such control must have been
used by the defendant to commit fraud or wrong, to perpetuate
the violation of a statutory or other positive legal duty, or
dishonest and unjust act in contravention of plaintiffs legal right;
and (3) The aforesaid control and breach of duty must
proximately cause the injury or unjust loss complained of. The
absence of any of these elements prevent "piercing the corporate
veil".[32]
Mere ownership by a single stockholder or by another corporation
of all or nearly all of the capital stock of a corporation is not of
itself a sufficient reason for disregarding the fiction of separate
corporate personalities.[33]
Moreover, to disregard the separate juridical personality of a
corporation, the wrong-doing must be clearly and convincingly
established. It cannot be presumed.[34]
Granting arguendo that the Regional Trial Court in this case was
not merely acting in a limited capacity as a probate court,
petitioner nonetheless failed to adduce competent evidence that
would have justified the court to impale the veil of corporate
fiction. Truly, the reliance reposed by petitioner on the affidavits
executed by Teresa Lim and Lani Wenceslao is unavailing
considering that the aforementioned documents possess no
weighty probative value pursuant to the hearsay rule. Besides it is
imperative for us to stress that such affidavits are inadmissible in
evidence inasmuch as the affiants were not at all presented
during the course of the proceedings in the lower court. To put it
 34

differently, for this Court to uphold the admissibility of said

documents would be to relegate from Our duty to apply such
basic rule of evidence in a manner consistent with the law and
jurisprudence.

Our pronouncement in PEOPLE BANK AND TRUST COMPANY

vs. LEONIDAS[35] finds pertinence:

"Affidavits are classified as hearsay evidence

since they are not generally prepared by the
affiant but by another who uses his own
language in writing the affiants statements,
which may thus be either omitted or
misunderstood by the one writing them.
Moreover, the adverse party is deprived of the
opportunity to cross-examine the affiants. For
this reason, affidavits are generally rejected for
being hearsay, unless the affiant themselves are
placed on the witness stand to testify thereon."

As to the order[36] of the lower court, dated 15 September 1995,

the Court of Appeals correctly observed that the Regional Trial
Court, Branch 93 acted without jurisdiction in issuing said order;
The probate court had no authority to demand the production of
bank accounts in the name of the private respondent
corporations.

WHEREFORE, in view of the foregoing disquisitions, the instant

petition is hereby DISMISSED for lack of merit and the decision of
the Court of Appeals which nullified and set aside the orders
issued by the Regional Trial Court, Branch 93, acting as a probate
court, dated 04 July 1995 and 12 September 1995 is AFFIRMED.
 35

8. EMILIA FIGURACION-GERILLA, G.R. No. 154322

On August 23, 1955, Leandro executed a deed of
Petitioner,
quitclaim over his real properties in favor of his six children. When
-versus-
CAROLINA VDA. DE FIGURACION,* he died in 1958, he left behind two parcels of land: (1) Lot 2299 of
ELENA FIGURACION-ANCHETA,*
HILARIA A. FIGURACION, FELIPA the Cadastral Survey of Urdaneta consisting of 7,547 square
FIGURACION-MANUEL, QUINTIN
FIGURACION and meters with Transfer Certificate of Title (TCT) No. 4221-P in the
MARY FIGURACION-GINEZ, name of Leandro Figuracion, married to Carolina Adviento and (2)
Respondents. Promulgated:
Lot 705 of the Cadastral Survey of Urdaneta with an area of 2,900

August 22, sq. m. with TCT No. 4220-P also in the name
2006 of Leandro Figuracion, married to Carolina Adviento. Leandro had

inherited both lots from his deceased parents,[5] as evidenced by

x------------------------------------------------- Original Certificate of Title (OCT) Nos. 16731 and 16610,

- -x respectively, issued by the Register of Deeds of the Province

of Pangasinan.

DECISION
Leandro sold a portion of Lot 2299 to Lazaro Adviento,

as a result of which TCT No. 4221-P was cancelled and TCT No.

CORONA, J.: 101331 was issued to Lazaro Adviento, married

to Rosenda Sagueped as owner of the 162 sq. m.

and Leandro Figuracion, married to Carolina Adviento as owner of

In this petition for review on 7,385 sq. m. This lot continued to be in the name of Leandroin Tax

certiorari,[1] petitioner Emilia Figuracion-Gerilla challenges the Declaration No. 616 for the year 1985.

decision[2] and resolution[3] of the Court of Appeals (CA) affirming

the decision of the Regional Trial Court (RTC)

of Urdaneta City, Pangasinan, Branch 49, which dismissed her What gave rise to the complaint for partition, however,

complaint for partition. The properties involved are two parcels of was a dispute between petitioner and her sister, respondent

land which belonged to her late father, Leandro Figuracion. Mary, over the eastern half of Lot 707 of the Cadastral Survey

of Urdaneta with an area of 3,164 sq. m.

The facts of the case follow.[4]

Lot 707 belonged to Eulalio Adviento, as evidenced by

OCT No. 15867 issued on February 9, 1916. When Adviento died,

Spouses Leandro and respondent his two daughters, Agripina Adviento (his daughter by his first

Carolina Figuracion (now both deceased) had six children: wife) and respondent Carolina (his daughter by his second wife),

petitioner and respondents Elena Figuracion-Ancheta (now succeeded him to it. On November 28, 1961, Agripina executed a

deceased), HilariaFiguracion, Felipa Figuracion- quitclaim in favor of petitioner over the one-half eastern portion

Manuel, Quintin Figuracion and Mary Figuracion-Ginez. of Lot 707. Agripina died on July 28, 1963, single and without any

issue. Before her half-sisters death, however, respondent Carolina

adjudicated unto herself, via affidavit under Rule 74 of the Rules

of Court, the entire Lot 707 which she later sold to

respondents Felipa and Hilaria. The latter two immediately had

 36

OCT No. 15867 cancelled, on December 11, 1962. A new title, TCT settlement proceedings wherein the transfer of title of the

No. 42244, was then issued in the names of Felipa and Hilaria for properties should first be effected.

Lot 707.
On appeal, the CA upheld the dismissal of petitioners

action for partition for being premature. The CA reversed the

decision, however, with respect to the nullification of the self-

In February 1971, petitioner and her family went to the
adjudication and the deed of sale. Upholding the validity of the
United States where they stayed for ten years. Returning in
affidavit of self-adjudication and deed of sale as to Carolinas one-
1981,[6] she built a house made of strong materials on the eastern
half pro-indiviso share, it instead partitioned Lot 707. Dissatisfied,
half-portion of Lot 707. She continued paying her share of the
respondents elevated the CA decision to this Court in G.R. No.
realty taxes thereon.
151334, entitled Carolina vda. de Figuracion, et al.
It was sometime later that this dispute erupted. v. Emilia Figuracion-Gerilla.[9]

Petitioner sought the extrajudicial partition of all properties held

in common by her and respondents. On May 23, 1994, petitioner

filed a complaint in the RTC of Urdaneta City, Branch 49, for The issue for our consideration is whether or not there needs
partition, annulment of documents, reconveyance, quieting of
to be a prior settlement of Leandros intestate estate (that is,
title and damages against respondents, praying, among others,
an accounting of the income of Lots 2299 and 705, the
for: (1) the partition of Lots 2299 and 705; (2) the nullification of
payment of expenses, liabilities and taxes, plus compliance
the affidavit of self-adjudication executed by respondent Carolina

over Lot 707, the deed of absolute sale in favor of with other legal requirements, etc.) before the properties can

respondents Felipa and Hilaria, and TCT No. 42244; (3) a be partitioned or distributed.

declaration that petitioner was the owner of one-half of Lot 707

and (4) damages. The case was docketed as Civil Case No. U-
Respondents claim that: (1) the properties
5826.
constituting Leandros estate cannot be partitioned before his

estate is settled and (2) there should be an accounting before

anything else, considering that they (respondents) had to spend

On the other hand, respondents took the position
for the maintenance of the deceased Leandro Figuracion and his
that Leandros estate should first undergo settlement proceedings
wife in their final years, which support was supposed to come
before partition among the heirs could take place. And they
from the income of the properties. Among other things,
claimed that an accounting of expenses chargeable to the estate
respondents apparently wanted petitioner to share in the
was necessary for such settlement.
expenses incurred for the care of their parents during the ten

years she stayed in the United States, before she could get her

part of the estate while petitioner apparently wanted her gross

On June 26, 1997,[7] the RTC[8] rendered judgment
share, without first contributing to the expenses.
nullifying Carolinas affidavit of self-adjudication and deed of

absolute sale of Lot 707. It also declared Lots 2299 and 705 as

exclusive properties of Leandro Figuracion and therefore part of

In any event, there appears to be a complication with
his estate. The RTC, however, dismissed the complaint for
respect to the partition of Lot 705. The records refer to a case
partition, reconveyance and damages on the ground that it could
entitled Figuracion, et al. v. Alejo currently pending in the CA. The
not grant the reliefs prayed for by petitioner without any (prior)
records, however, give no clue or information regarding what

exactly this case is all about. Whatever the issues may be, suffice
 37

it to say that partition is premature when ownership of the lot is legal heirs, she does not dispute the finding of the CA that certain

still in dispute.[10] expenses including those related to her fathers final illness and

burial have not been properly settled.[14] Thus, the heirs

(petitioner and respondents) have to submit their fathers estate

Petitioner faces a different problem with respect to Lot to settlement because the determination of these expenses

2299. Section 1, Rule 69 of the Rules of Court provides: cannot be done in an action for partition.

SECTION 1. Complaint in action for partition of

In estate settlement proceedings, there is a proper
real estate. A person having the right to compel
the partition of real estate may do so as procedure for the accounting of all expenses for which the estate
provided in this Rule, setting forth in his
must answer. If it is any consolation at all to petitioner, the heirs
complaint the nature and extent of his title and
an adequate description of the real estate of or distributees of the properties may take possession thereof
which partition is demanded and joining as
even before the settlement of accounts, as long as they first file a
defendants all other persons interested in the
property. bond conditioned on the payment of the estates obligations. [15]

The right to an inheritance is transmitted immediately to WHEREFORE, the petition is hereby DENIED. The Court

the heirs by operation of law, at the moment of death of the of Appeals decision and resolution in CA-G.R. CV No. 58290

decedent. There is no doubt that, as one of the heirs are AFFIRMED in so far as the issue of the partition of Lots 2299

ofLeandro Figuracion, petitioner has a legal interest in Lot and 705 is concerned.

2299. But can she compel partition at this stage?

But with respect to Lot 707, we make no ruling on the

There are two ways by which partition can take place validity of Carolina vda. de Figuracions affidavit of self-

under Rule 69: by agreement under Section 2[11] and through adjudication and deed of sale in favor

commissioners when such agreement cannot be reached, under of Felipa and HilariaFiguracion in view of the fact

Sections 3 to 6.[12] that Carolina vda. de Figuracion, et al. v. Emilia Figuracion-

Gerilla (G.R. No. 151334) is still pending in this Division.

Neither method specifies a procedure for determining Costs against petitioner.

expenses chargeable to the decedents estate. While Section 8 of

Rule 69 provides that there shall be an accounting of the real

propertys income (rentals and profits) in the course of an action

for partition,[13] there is no provision for the accounting of

expenses for which property belonging to the decedents estate

may be answerable, such as funeral expenses, inheritance taxes

and similar expenses enumerated under Section 1, Rule 90 of the

Rules of Court.

In a situation where there remains an issue as to the

expenses chargeable to the estate, partition is inappropriate.

While petitioner points out that the estate is allegedly without

any debt and she and respondents are Leandro Figuracions only

9. G.R. No. L-81147 June 20, 1989
VICTORIA BRINGAS PEREIRA, petitioner,
vs.
THE HONORABLE COURT OF APPEALS and RITA PEREIRA
NAGAC, respondents.
Benjamin J. Quitoriano for petitioner.
Linzag-Arcilla & Associates Law Offices for private respondent.
GANCAYCO, J.:
Is a judicial administration proceeding necessary when the
decedent dies intestate without leaving any debts? May the
probate court appoint the surviving sister of the deceased as the
administratrix of the estate of the deceased instead of the
surviving spouse? These are the main questions which need to be
resolved in this case.
Andres de Guzman Pereira, an employee of the Philippine Air
Lines, passed away on January 3, 1983 at Bacoor, Cavite without a
will. He was survived by his legitimate spouse of ten months, the
herein petitioner Victoria Bringas Pereira, and his sister Rita
Pereira Nagac, the herein private respondent.
On March 1, 1983, private respondent instituted before Branch 19
of the Regional Trial Court of Bacoor, Cavite, Special Proceeding
No. RTC-BSP-83-4 for the issuance of letters of administration in
her favor pertaining to the estate of the deceased Andres de
Guzman Pereira. 1 In her verified petition, private respondent
alleged the following: that she and Victoria Bringas Pereira are
the only surviving heirs of the deceased; that the deceased left no
will; that there are no creditors of the deceased; that the
deceased left several properties, namely: death benefits from the
Philippine Air Lines (PAL), the PAL Employees Association
(PALEA), the PAL Employees Savings and Loan Association, Inc.
(PESALA) and the Social Security System (SSS), as well as savings
deposits with the Philippine National Bank (PNB) and the
Philippine Commercial and Industrial Bank (PCIB), and a 300
square meter lot located at Barangay Pamplona, Las Pinas, Rizal
and finally, that the spouse of the deceased (herein petitioner)
had been working in London as an auxiliary nurse and as such
one-half of her salary forms part of the estate of the deceased.
On March 23,1983, petitioner filed her opposition and motion to
dismiss the petition of private respondent 2 alleging that there
exists no estate of the deceased for purposes of administration
and praying in the alternative, that if an estate does exist, the
letters of administration relating to the said estate be issued in
her favor as the surviving spouse.
In its resolution dated March 28, 1985, the Regional Trial Court,
appointed private respondent Rita Pereira Nagac administratrix
of the intestate estate of Andres de Guzman Pereira upon a bond
posted by her in the amount of Pl,000.00. The trial court ordered
her to take custody of all the real and personal properties of the
deceased and to file an inventory thereof within three months
after receipt of the order. 3
Not satisfied with the resolution of the lower court, petitioner
brought the case to the Court of Appeals. The appellate court
affirmed the appointment of private respondent as administratrix
in its decision dated December 15, 1987. 4
38
Hence, this petition for review on certiorari where petitioner
raises the following issues: (1) Whether or not there exists an
estate of the deceased Andres de Guzman Pereira for purposes of
administration; (2) Whether or not a judicial administration
proceeding is necessary where there are no debts left by the
decedent; and, (3) Who has the better right to be appointed as
administratrix of the estate of the deceased, the surviving spouse
Victoria Bringas Pereira or the surviving sister Rita Pereira Nagac?
Anent the first issue, petitioner contends that there exists no
estate of the deceased for purposes of administration for the
following reasons: firstly, the death benefits from PAL, PALEA,
PESALA and the SSS belong exclusively to her, being the sole
beneficiary and in support of this claim she submitted letter-
replies from these institutions showing that she is the exclusive
beneficiary of said death benefits; secondly, the savings deposits
in the name of her deceased husband with the PNB and the PCIB
had been used to defray the funeral expenses as supported by
several receipts; and, finally, the only real property of the
deceased has been extrajudicially settled between the petitioner
and the private respondent as the only surviving heirs of the
deceased.
Private respondent, on the other hand, argues that it is not for
petitioner to decide what properties form part of the estate of the
deceased and to appropriate them for herself. She points out that
this function is vested in the court in charge of the intestate
proceedings.
Petitioner asks this Court to declare that the properties specified
do not belong to the estate of the deceased on the basis of her
bare allegations as aforestated and a handful of documents.
Inasmuch as this Court is not a trier of facts, We cannot order an
unqualified and final exclusion or non-exclusion of the property
involved from the estate of the deceased. 5
The resolution of this issue is better left to the probate court
before which the administration proceedings are pending. The
trial court is in the best position to receive evidence on the
discordant contentions of the parties as to the assets of the
decedent's estate, the valuations thereof and the rights of the
transferees of some of the assets, if any. 6 The function of
resolving whether or not a certain property should be included in
the inventory or list of properties to be administered by the
administrator is one clearly within the competence of the probate
court. However, the court's determination is only provisional in
character, not conclusive, and is subject to the final decision in a
separate action which may be instituted by the parties.7
Assuming, however, that there exist assets of the deceased
Andres de Guzman Pereira for purposes of administration, We
nonetheless find the administration proceedings instituted by
private respondent to be unnecessary as contended by petitioner
for the reasons herein below discussed.
The general rule is that when a person dies leaving property, the
same should be judicially administered and the competent court
should appoint a qualified administrator, in the order established
in Section 6, Rule 78, in case the deceased left no will, or in case
he had left one, should he fail to name an executor therein. 8 An
exception to this rule is established in Section 1 of Rule
74. 9 Under this exception, when all the heirs are of lawful age and
there are no debts due from the estate, they may agree in writing
to partition the property without instituting the judicial
administration or applying for the appointment of an
administrator.
 39

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. 10 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. 11
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 . 12
hands of petitioner who supposedly disposed of them
fraudulently. We are of the opinion that this is not a compelling
reason which will necessitate a judicial administration of the
estate of the deceased. To subject the estate of Andres de
Guzman Pereira, which does not appear to be substantial
especially since the only real property left has been extrajudicially
settled, to an administration proceeding for no useful purpose
would only unnecessarily expose it to the risk of being wasted or
squandered. In most instances of a similar nature, 16 the claims of
both parties as to the properties left by the deceased may be
properly ventilated in simple partition proceedings where the
creditors, should there be any, are protected in any event.
We, therefore, hold that the court below before which the
administration proceedings are pending was not justified in
issuing letters of administration, there being no good reason for
burdening the estate of the deceased Andres de Guzman Pereira
with the costs and expenses of an administration proceeding.
With the foregoing ruling, it is unnecessary for us to delve into the
issue of who, as between the surviving spouse Victoria Bringas
Pereira and the sister Rita Pereira Nagac, should be preferred to
be appointed as administratrix.

Now, what constitutes "good reason" to warrant a judicial
administration of the estate of a deceased when the heirs are all
of legal age and there are no creditors will depend on the
circumstances of each case.
In one case, 13 We said:
WHEREFORE, the letters of administration issued by the Regional
Trial Court of Bacoor to Rita Pereira Nagac are hereby revoked
and the administration proceeding dismissed without prejudice to
the right of private respondent to commence a new action for
partition of the property left by Andres de Guzman Pereira. No
costs.

Again the petitioner argues that only when the

heirs do not have any dispute as to the bulk of
the hereditary estate but only in the manner of
partition does section 1, Rule 74 of the Rules of
Court apply and that in this case the parties are
at loggerheads as to the corpus of the
hereditary estate because respondents
succeeded in sequestering some assets of the
intestate. The argument is unconvincing,
because, as the respondent judge has indicated,
questions as to what property belonged to the
deceased (and therefore to the heirs) may
properly be ventilated in the partition
proceedings, especially where such property is
in the hands of one heir.

In another case, We held that if the reason for seeking an

appointment as administrator is merely to avoid a multiplicity of
suits since the heir seeking such appointment wants to ask for the
annulment of certain transfers of property, that same objective
could be achieved in an action for partition and the trial court is
not justified in issuing letters of administration. 14 In still another
case, We did not find so powerful a reason the argument that the
appointment of the husband, a usufructuary forced heir of his
deceased wife, as judicial administrator is necessary in order for
him to have legal capacity to appear in the intestate proceedings
of his wife's deceased mother, since he may just adduce proof of
his being a forced heir in the intestate proceedings of the latter. 15

We see no reason not to apply this doctrine to the case at bar.

There are only two surviving heirs, a wife of ten months and a
sister, both of age. The parties admit that there are no debts of
the deceased to be paid. What is at once apparent is that these
two heirs are not in good terms. The only conceivable reason why
private respondent seeks appointment as administratrix is for her
to obtain possession of the alleged properties of the deceased for
her own purposes, since these properties are presently in the
 40

10. G.R. No. 109963 October 13, 1999 Cimafranca's one-fourth (1/4) share in the land, designated as Lot
769-A.
HEIRS OF JOAQUIN TEVES: RICARDO TEVES, ARCADIA
TEVES, TOMAS ZAMORA, FELICIA TEVES, HELEN TEVES, On June 13, 1956, Teotimo, Felicia, Pedro, Asuncion, Gorgonio
ALFREDO OSMEÑA, ROBERTO TEVES, JOAQUIN TEVES, III, and Arcadia Teves executed a document entitled "Settlement of
PETER TEVES, MILDRED TEVES, WILSON MABILOG, Estate and Sale," 6 adjudicating unto themselves, in equal shares,
LEONILO PATIGAYON, EDUARDO PATIGAYON, ALEXANDER Lot 769-A and conveying their shares, interests and participations
PATIGAYON, ALDRIN PATIGAYON, NOEL PATIGAYON, over the same in favor of Asuncion Teves for the consideration of
VICTOR PATIGAYON, MA. TEVES PATERNO OCHOTORENA, P425.00. A similar deed denominated "Extrajudicial Settlement
EXEQUILA TEVES, EMILIO JO, EMILIANA TEVES, MILAGROS and Sale" 7 was signed by Maria Teves on April 21, 1959. Under
TEVES, EDSEL PINILI, VICENTE TEVES, EMILIANA ISO, such deed, Maria conveys her own share over Lot 769-A in favor
ALBERTO TEVES, ERLINDA TEVES, DIOSDADO TEVES, of Asuncion Teves for the consideration of P80.00. The two
VICTORIA TEVES AND VIVENCIO NARCISO, petitioners, settlements were denounced by the plaintiffs as spurious. The
vs. trial court summarized the claims of the plaintiffs, viz —
COURT OF APPEALS, HEIRS OF ASUNCION IT-IT NAMELY:
ELISA IT-IT, SUSANA IT-IT, NORBERTO IT-IT, ISA-AC IT-IT, . . . Maria Teves Ochotorena
JR., JAIME IT-IT, FELICITAS IT-IT, TERESITA IT-IT, ANTONIO herself, denied having
NODADO, CORAZON IT-IT, JIMMY LERO, DANILO IT-IT, executed this Extrajudicial
EDITA GAMORA, PACITA VAILOCES, CRIS VAILOCES, Settlement and Sale over her
CECILIA CIMAFRANCA and CECILIA FLOR share or interest in Lot 769
CIMAFRANCA, respondents. claiming that her signature in
said document is a forgery.
GONZAGA-REYES, J.: She disowns her signature
declaring that as a married
Before us is a petition for review on certiorari assailing the woman she always signs a
decision 1 of the Court of Appeals which was promulgated on document in her husband's
August 18, 1992 affirming the July 11, 1991 decision 2 of Branch 38 family name. Further, she
of the Regional Trial Court of Negros Oriental in favor of declared that on the date she
defendants-appellees. purportedly signed said
document in Dumaguete City
The facts, as culled from the pleadings of the parties herein and before the notary public, she
the decision of the lower courts, are as follows: was in her home in Katipunan,
Zamboanga del Norte.
Marcelina Cimafranca and Joaquin Teves had nine children,
namely Teotimo, Felicia, Pedro, Andres, Asuncion, Gorgonio, On Exhibit "G" which is
Cresenciano, Arcadia and Maria. Andres, however, predeceased likewise offered as Exhibit "3"
both his parents and died without issue. After Marcelina for the defendants, plaintiffs
Cimafranca and Joaquin Teves died, intestate and without debts, hold that said document is
in 1943 and 1953, respectively, their children executed spurious claiming that the
extrajudicial settlements purporting to adjudicate unto signatures of Pedro Teves,
themselves the ownership over two parcels of land belonging to Felicia Teves and Gorgonio
their deceased parents and to alienate their shares thereto in Teves are all forgeries. To
favor of their sister Asuncion Teves. The validity of these support this allegation, Helen
settlements executed pursuant to section 1 of Rule 74 of the Rules T. Osmena, daughter of Felicia
of Court is the primary issue in the present case.1âwphi1.nêt Teves and Erlinda Teves,
daughter of Gorgonio Teves
were presented as witnesses.
On May 9, 1984, plaintiffs-appellants Ricardo and Arcadia Teves
Being allegedly familiar with
filed a complaint with the Regional Trial Court of Negros Oriental
the style and character of the
for the partition and reconveyance of two parcels of land located
handwriting of their parents
in Dumaguete, designated as Lots 769-A and 6409, against the
these witnesses declared
heirs of Asuncion Teves. The complaint was subsequently
unequivocally that the
amended to include Maria Teves and the heirs of Teotimo, Felicia,
signatures of their parents
Pedro, and Gorgonio Teves as plaintiffs and the spouses Lucresio
appearing on the document
Baylosis and Pacita Nocete, and Cecilia Cimafranca-Gamos and
are forgeries.
Cecilia Flor Cimafranca as defendants. 3 Plaintiffs-appellants
alleged that defendants-appellees, without any justifiable reason,
refused to partition the said parcels of land and to convey to In sum, plaintiffs argue that
plaintiffs their rightful shares. 4 these fraudulent documents
which defendants rely in
claiming ownership to the
Lot 769, covered by Original Certificate of Title (OCT) No. 4682-
disputed properties are all
A, 5 is registered in the names of Urbana Cimafranca, one-fourth
nullities and have no force in
(1/4) share, Marcelina Cimafranca, the wife of Joaquin Teves, one-
law and could not be used as
fourth (1/4) share, Domingo Villahermosa, one-eighth (1/8) share,
basis for any legal title.
Antero Villahermosa, one-eighth (1/8) share, Cecilia Cimafranca,
Consequently, in their view,
one-eighth (1/8) share and Julio Cimafranca, one-eighth (1/8)
they are entitled to the reliefs
share. The present controversy involves only Marcelina
demanded particularly, to

their respective shares of the
disputed properties. 8
The other property in dispute is Lot 6409 which was originally
covered by OCT No. 9091 9 and was registered in the name of
Joaquin Teves and his two sisters, Matea and Candida Teves.
However, Matea and Candida died without issue, causing the
entire property to pass to Joaquin Teves. On December 14, 1971,
Lot 6409 was adjudicated and divided in equal shares in a "Deed
of Extrajudicial Settlement & Sale" 10 executed by Joaquin Teves'
children — Asuncion, Teotimo, Felisia, Gorgonio, Arcadia and
Maria Teves. In the same deed, the shares of these same heirs in
Lot 6409 were sold to Asuncion Teves for P100.00. Asuncion
Teves took possession of the land and acquired title 11over the
same on March 22, 1972. After her death in 1981, her children,
defendants-appellees It-it herein, extrajudicially settled Asuncion
Teves' property, adjudicating unto themselves Lot 6409. 12 On
July 20, 1983 a new transfer certificate of title 13 was issued in the
names of Asuncion Teves' children, namely Elisa, Susana,
Norberto, Isaac, Jaime, Felicitas, Teresita, Corazon, and Danilo,
all surnamed It-it. On July 2, 1984, the It-its sold Lot 6409 to
defendants-appellees Lucrecio Baylosis, Sr. and Pacita Nocete-
Baylosis for P20,000.00 14 and a transfer certificate of title 15 was
issued in the name of the Baylosis couple.
Plaintiffs-appellants claim that the Deed of Extrajudicial
Settlement & Sale covering Lot 6409 is also spurious. Their
arguments were discussed in the trial court's decision as follows
— all to part with said property which is legally
Presented as Exhibit "D" and "1" for both the
plaintiffs and defendants respectively, is a
document denominated as "Extrajudicial
Settlement and Sale" executed on December 4,
1971 by and among the heirs of Joaquin Teves
and Marcelina Cimafranca. This document
which gave birth to TCT No. 5761 over Lot 6409
registered in the name of Asuncion Teves It-it is
questioned by the plaintiffs as spurious for the
following reasons:
1. Erasure of the word
"quitclaim" is superimposed
with the word "sale" in
handwriting.
2. The consideration of "One
peso" stated in document is
intercalated with the word
"hundred" in handwriting.
3. The signature of Maria
Teves Ochotorena, Pedro
Teves and Felicia Teves are
forgeries.
4. The thumbmark imposed on
the name of Gorgonio Teves
does not actually belong to
Gorgonio Teves who was an
educated man and skilled in
writing according to his
daughter.
Aside from these defects which would make
said document null and void, Arcadia Teves who
is one of the living sisters of the mother of the
41
principal defendants although confirming the
authenticity of her signature averred that in
reality no consideration was ever given to her
and that her impression of the said document
was that she was only giving her consent to sell
her share of the land.
Plaintiffs likewise contend that as regards the
share of Ricardo Teves, son of Crescenciano
Teves who predeceased Joaquin and Marcelina,
it was not at all affected in that extrajudicial
settlement and sale since neither Crescenciano
Teves nor his son Ricardo Teves participated in
its execution.
xxx xxx xxx
Likewise, plaintiffs offered TCT No. 5761 for Lot
6409 registered in the name of Asuncion Teves
It-it as Exhibit "B" as proof that said property
was later titled in trust for all the heirs of
Joaquin Teves and which was used later as basis
in effecting a deed of sale in favor of co-
defendant Lucresio Baylosis. In this light, the
plaintiffs argue that the sale of said property is a
nullity for it was not only attended with bad
faith on the part of both the vendor and the
vendee but primarily the vendor had no right at
owned by others. 16
In answer to plaintiffs-appellants' charges of fraud, defendants-
appellees maintained that the assailed documents were executed
with all the formalities required by law and are therefore binding
and legally effective as bases for acquiring ownership or legal title
over the lots in question. Furthermore, it is contended that
plaintiffs-appellants have slept on their rights and should now be
deemed to have abandoned such rights. 17
The trial court ruled in favor of defendants-appellees and
rendered judgment dismissing the complaint with costs against
plaintiffs-appellants. As regards Lot 6409, the court declared that
the Extrajudicial Settlement and Sale executed by the heirs of
Joaquin Teves and Marcelina Cimafranca was duly executed with
all the formalities required by law, thus, validly conveying Lot
6409 in favor of Asuncion Teves. Moreover, it stated that, even
granting the truth of the imputed infirmities in the deed, the right
of plaintiffs-appellants to bring an action for partition and
reconveyance was already barred by prescription. An action for
the annulment of a partition must be brought within four years
from the discovery of the fraud, while an action for the
reconveyance of land based upon an implied or constructive trust
prescribes after ten years from the registration of the deed or
from the issuance of the title. The complaint in this case was filed
on May 9, 1984, exactly 12 years, 1 month and 17 days after the
issuance of the transfer certificate of title in the name of Asuncion
Teves on March 22, 1972. Thus, ownership over Lot 6409
rightfully belonged to defendants-appellees It-it.
Moreover, the trial court held that the extrajudicial settlements
over both Lots 6409 and 769, having been prepared and
acknowledged before a notary public, are public documents,
vested with public interest, the sanctity of which deserves to be
upheld unless overwhelmed by clear and convincing evidence.
The evidence presented by the plaintiffs to support their charges
of forgery was considered by the court insufficient to rebut the
legal presumption of validity accorded to such documents. 18

The Court of Appeals upheld the trial court's decision affirming
the validity of the extrajudicial statements, with a slight
modification. It disposed of the case, thus —
WHEREFORE, premises considered, the
decision appealed from is AFFIRMED with the
modification in that herein defendant-appellees
are hereby ORDERED to partition Lot 769-A and
deliver to plaintiff-appellant Ricardo Teves one-
eight (sic) (1/8) portion thereof corresponding to
the share of his deceased father Cresenciano
Teves. No costs.
The appellate court said that plaintiffs-appellants' biased and
interested testimonial evidence consisting of mere denials of their
signatures in the disputed instruments is insufficient to prove the
alleged forgery and to overcome the evidentiary force of the
notarial documents. It also ruled that the plaintiffs-appellants'
claim over Lot 6409 was barred by prescription after the lapse of
ten years from the issuance of title in favor of Asuncion Teves,
while their claim over Lot 769-A is barred by laches since more
than 25 years has intervened between the sale to Asuncion Teves
and the filing of the present case in 1984.
The appellate court noted that the conveyance of Lot 769-A in
favor of Asuncion Teves did not affect the share of Cresenciano
Teves as he was not a signatory to the settlements. It also found
that Ricardo Teves, Cresenciano's heir, is in possession of a
portion of Lot 769-A and that defendants-appellees do no not
claim ownership over such portion. Thus, the defendants-
appellees It-it were ordered to partition and convey to Ricardo
Teves his one-eighth share over Lot 769-A.1âwphi1.nêt
As regards the extrajudicial settlement involving Lot 6409,
although it was found by the appellate court that Cresenciano
Teves was also not a signatory thereto, it held that it could not
order the reconveyance of the latter's share in such land in favor
of his heir Ricardo Teves because Cresenciano had predeceased
Joaqin Teves. Moreover, Ricardo Teves, by a deed simply
denominated as "Agreement" executed on September 13, 1955
wherein he was represented by his mother, authorized the heirs
of Joaquin Teves to sell his share in Lot 6409. 19
Plaintiffs-appellants assailed the appellate court's decision upon
the following grounds —
I. IN CONSIDERING RICARDO TEVES AS
BOUND BY THE SIGNATURE OF HIS MOTHER,
INSPITE OF DEATH OF CRESENCIANO TEVES
IN 1944; AND UNDER THE OLD CIVIL CODE
THE SPOUSE CANNOT INHERIT EXCEPT THE
USUFRUCT;
II. IN UPHOLDING SWEEPINGLY THE
PRESUMPTION OF REGULARITY OF
NOTARIZED DEED, DESPITE CLEAR,
CONVINCING, SUBSTANTIAL AND
SUFFICIENT EVIDENCE THAT MARIA
OCHOTORENA WAS IN MINDANAO; THE
NOTARY PULIC DID NOT KNOW MARIA
OCHOTORENA AND THE SIGNATURES OF
THE OTHER HEIRS IN THE QUESTIONED
DOCUMENT ARE BELIED BY COMPARISON
WITH THE GENUINE SIGNATURE IN EXH. "E";
III. IN VALIDATING THE ONE PESO
CONSIDERATION, INSPITE OF NO OTHER
42
VALUABLE CONSIDERATION, THE
SUPERIMPOSED P100 WAS UNILATERALLY
INSERTED, SHOWING FICTITIOUS AND
SIMULATED CONSIDERATION; AND
IV. PRESCRIPTION DOES NOT START FROM A
VOID CONTRACT. 20
We affirm that the extrajudicial settlements executed by the heirs
of Joaquin Teves and Marcelina Cimafranca are legally valid and
binding.
The extrajudicial settlement of a decedent's estate is authorized
by section 1 of Rule 74 of the Rules of Court, which provides in
pertinent part
that —
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, . . .
xxx xxx xxx
Thus, for a partition pursuant to section 1 of Rule 74 to be
valid, the following conditions must concur: (1) the
decedent left no will; (2) the decedent left no debts, or if
there were debts left, all had been paid; (3) the heirs are
all of age, or if they are minors, the latter are represented
by their judicial guardian or legal representatives; (4) the
partition was made by means of a public instrument or
affidavit duly filed with the Register of Deeds. 21
We uphold, finding no cogent reason to reverse, the trial and
appellate courts' factual finding that the evidence presented by
plaintiffs-appellants is insufficient to overcome the evidentiary
value of the extrajudicial settlements. The deeds are public
documents and it has been held by this Court that a public
document executed with all the legal formalities is entitled to a
presumption of truth as to the recitals contained therein. 22 In
order to overthrow a certificate of a notary public to the effect
that the grantor executed a certain document and acknowledged
the fact of its execution before him, mere preponderance of
evidence will not suffice. Rather, the evidence must be so clear,
strong and convincing as to exclude all reasonable dispute as to
the falsity of the certificate. When the evidence is conflicting, the
certificate will be upheld. 23 The appellate court's ruling that the
evidence presented by plaintiffs-appellants does not constitute
the clear, strong, and convincing evidence necessary to overcome
the positive value of the extrajudicial settlements executed by the
parties, all of which are public documents, being essentially a
finding of fact, is entitled to great respect by the appellate court
and should not be disturbed on appeal. 24
It is noted that the Deed of Extrajudicial Settlement & Sale
covering Lot 6409 purports to divide Joaquin Teves' estate among
only six of his heirs, namely Asuncion, Teotimo, Felisia, Gorgonio,
Arcadia and Maria Teves. 25 It does not mention nor bear the
signatures of either Pedro or Cresenciano Teves although they
are both intestate heirs of Joaquin Teves and as such, are entitled
to a proportionate share of the decedent's estate. Contrary to the
ruling of the appellate court, the fact that Cresenciano

predeceased Joaquin Teves does not mean that he or, more
accurately, his heirs, lose the right to share in the partition of the
property for this is a proper case for representation, wherein the
representative is raised to the place and degree of the person
represented and acquires the rights which the latter would have if
he were living. 26
However, notwithstanding their non-inclusion in the settlement,
the action which Pedro and Cresenciano might have brought for
the reconveyance of their shares in the property has already
prescribed. An action for reconveyance based upon an implied
trust pursuant to article 1456 of the Civil Code prescribes in ten
years from the registration of the deed or from the issuance of
the title. 27 Asuncion Teves acquired title over Lot 6409 in 1972,
but the present case was only filed by plaintiffs-appellants in
1984, which is more than 10 years from the issuance of title. 28
The division of Lot 769-A, on the other hand, was embodied in
two deeds. The first extrajudicial settlement was entered into by
Teotimo, Felicia, Pedro, Gorgonio, Arcadia and Asuncion Teves in
1956 29, while the second deed was executed in 1959 by Maria
Teves. 30 Cresenciano was not a signatory to either settlement.
However, in contrast to the extrajudicial settlement covering Lot
6409, the two extrajudicial settlements involving Lot 769-A do
not purport to exclude Cresenciano from his participation in Lot
769-A or to cede his share therein in favor of Asuncion. The
settlement clearly adjudicated the property in equal shares in
favor of the eight heirs of Marcelina Cimafranca. Moreover, the
deeds were intended to convey to Asuncion Teves only the shares
of those heirs who affixed their signatures in the two documents.
The pertinent portions of the extrajudicial settlement executed in
1956, of which substantively identical provisions are included in
the 1959 deed, provide —
xxx xxx xxx
5. That by virtue of the right of succession the
eight heirs above mentioned inherit and
adjudicate unto themselves in equal shares Lot
No. 769-A and our title thereto is evidenced by
the O.C. of Title No. 4682-A of the Land
Records of Negros Oriental.
THAT FOR AND IN CONSIDERATION of the
sum of FOUR HUNDRED TWENTY-FIVE
(P425.00) PESOS, Philippine Currency which we
have received from ASUNCION TEVES; WE,
Teotimo, Felicia, Pedro, Gorgonio and Arcadia,
all surnamed Teves, do hereby sell, transfer and
convey unto Asuncion Teves, married to Isaac
Itit, Filipino, of legal age and resident of and
with postal address in the City of
Dumaguete, all our shares, interests and
participations over Lot 769-A of the subdivision
plan, Psd, being a portion of Lot No. 769 of the
Cadastral Survey of Dumaguete, her heirs,
successors and assigns, together with all the
improvements thereon.
xxx xxx xxx
It has even been admitted by both parties that Ricardo
Teves is in possession of an undetermined portion of Lot
769-A and defendants-appellees It-it do not claim
ownership over his share in the land. 31 Thus, contrary to
the appellate court's ruling, there is no basis for an action
for reconveyance of Ricardo Teves' share since, in the
43
first place, there has been no conveyance. Ricardo Teves
is entitled to the ownership and possession of one-eighth
of Lot 769-A.
Neither does Ricardo Teves have a right to demand partition of
Lot 769-A because the two extajudicial settlements have already
effectively partitioned such property. Every act which is 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. 32 The extrajudicial settlements executed in 1956 and
1959 adjudicated Lot 769-A in equal shares unto the eight heirs of
Marcelina Cimafranca. Such a partition, which was legally made,
confers upon each heir the exclusive ownership of the property
adjudicated to him. 33 Although Cresenciano, Ricardo's
predecessor-in-interest, was not a signatory to the extrajudicial
settlements, the partition of Lot 769-A among the heirs was made
in accordance with their intestate shares under the law. 34
With regards to the requisite of registration of extrajudicial
settlements, it is noted that the extrajudicial settlements covering
Lot 769-A were never registered. However, in the case of Vda. de
Reyes vs. CA, 35 the Court, interpreting section 1 of Rule 74 of the
Rules of Court, upheld the validity of an oral partition of the
decedent's estate and declared that the non-registration of an
extrajudicial settlement does not affect its intrinsic validity. It was
held in this case that —
[t]he requirement that a partition be put in a
public document and registered has for its
purpose the protection of creditors and at the
same time the protection of the heirs
themselves against tardy claims. The object of
registration is to serve as constructive notice to
others. It follows then that the intrinsic validity
of partition not executed with the prescribed
formalities does not come into play when there
are no creditors or the rights of creditors are not
affected. Where no such rights are involved, it is
competent for the heirs of an estate to enter
into an agreement for distribution in a manner
and upon a plan different from those provided
by law.
Thus, despite its non-registration, the extrajudicial
settlements involving Lot 769-A are legally effective and
binding among the heirs of Marcelina Cimafranca since
their mother had no creditors at the time of her death.
Except for the portion of Lot 769-A occupied by Ricardo Teves,
both parcels of land have been and continue to be in the
possession of Asuncion Teves and her successors-in-
interest. 36 Despite this, no explanation was offered by plaintiffs-
appellants as to why they instituted the present action
questioning the extrajudicial settlements only in 1984, which is
more than 25 years after the assailed conveyance of Lot 769-A
and more than 10 years after the issuance of a transfer certificate
of title over Lot 6409, both in favor of Asuncion Teves. Such
tardiness indubitably constitutes laches, which is the negligence
or omission to assert a right within a reasonable time, warranting
a presumption that the party entitled to assert it either has
abandoned it or declined to assert
it. 37 Thus, even assuming that plaintiffs-appellants had a
defensible cause of action, they are barred from pursuing the
same by reason of their long and inexcusable inaction.
An extrajudicial settlement is a contract and it is a well-
entrenched doctrine that the law does not relieve a party from
 44

the effects of a contract, entered into with all the required

formalities and with full awareness of what he was doing, simply
because the contract turned out to be a foolish or unwise
investment. 38 Therefore, although plaintiffs-appellants may
regret having alienated their hereditary shares in favor of their
sister Asuncion, they must now be considered bound by their own
contractual acts.1âwphi1.nêt

WHEREFORE, the August 18, 1992 decision of the Court of

Appeals is hereby AFFIRMED. No pronouncements as to costs.

11. G.R. No. L-273 March 29, 1947
CRESENCIA HERNANDEZ, plaintiff-appellee,
vs.
ZACARIAS ANDAL, defendant-appellant.
QUIRINO DIMASACAT, MARIA HERNANDEZ and AQUILINA
HERNANDEZ, intervenors-appellants.
Pedro Pañganiban y Tolentino for appellants.
Vicente Reyes Villavicencio for appellee.
TUASON, J.:
The plaintiff, Cresencia Hernandez, the intervenors, Maria and
Aquilina Hernandez, and Pedro and Basilia Hernandez who are
not parties here, are brother and sisters. They acquired in
common by descent from their father a parcel of land of which he
died seized and known as lot No. 120073 of the Batangas
cadastral survey.
On January 23, 1944, the intervenors sold 1800 square meters of
this parcel, a portion which is particularly described in the deed of
conveyance Exhibit A, to Zacarias Andal, the defendant, and
Andal's wife in consideration of P860. This portion purports to be
the combined shares of the intervenors in the larger parcel,
allotted to them in a verbal partition alleged to have been made
(time not stated) among the five brother and sisters.
After the sale, on a date as to which the evidence is in
disagreement but which is not now important, the plaintiff
attempted to repurchase the land sold to Andal. According to her
original complaint, dated February 3, 1944, she offered the
purchasers P150 as price of repurchase, this being, according to
that complaint, the amount Andal had paid for Maria Hernandez's
and Aquilina Hernandez's shares, but Andal, it is alleged, refused
to part with the property.
On April 8, the plaintiff filed a supplemental complaint. She
alleged that when the cause was called for trial on March 8, she
announced in open court that she was willing to repurchase her
sister's share from Andal for P860 and reimburse Andal for his
expense; that Andal asked for continuance until the 29th stating
that he had made other expenses; that on 29th she brought P860
to repurchase the land in question but the case was again
postponed because the plaintiff's sisters had intervened; and that
meanwhile, on the 26th, Andal resold the land fictitiously to the
vendors for P970.
It results that on the date last mentioned Andal executed a deed
of sale for P970 in favor of the intervenors, an amount which
included Andal's expenses as well as the normal sale price. The
document of repurchase gave as reason for the transaction the
fact that it had been agreed that in the event trouble should arise
the sellers should return to the buyer what they had received and
pay the latter his expenses.
On February 14, 1944, the defendant filed his answer alleging that
Maria and Aquilina Hernandez had sold him their respective
portions of the inherited land for P860 and that he had no
objection to disposing of those portions in favor of the plaintiff for
P860 plus the expenses he had incurred in the execution of the
deed of sale amounting to P50, but that he was unwilling to
accept P150, which was all the plaintiff offered him besides his
expenses.
On April 4, 1944, Maria and Aquilina Hernandez's answer in
intervention was filed. The intervenors alleged that there had
45
been a partition among them and their brother and sisters "with
the share of each delineated and marked, and after partition and
delineation everyone took exclusive, separate and independent
possession of his portion in the partition." They charged the
plaintiff with bad faith in that "it was upon her request for chance
that the sale to the defendant, about to take place last
November, was delayed till January of this year when she finally
informed the intervenors that they could sell to the defendant, or
she could pay only P150 and could not raise the amount of P860
offered by the defendant."
Cresencia Hernandez, the plaintiff, was the only witness to testify
on her own behalf. Substantially she reiterated the allegations in
her two complaints. Zacarias Andal, the defendant, also testified.
He said that he was in possession of the land in question until he
returned it to the intervenors. He declared that the plaintiff
offered to repurchase the land from him long after he had bought
it, that is, when she was about to file her action. He stated that
after he came from Candelaria, Tayabas, with the document of
sale he showed it to the plaintiff: that was on the 23rd of January.
He was able to do this because he lived near Cresencia and passed
by her house on his way home from Candelaria. He said that
Cresencia Hernandez upon being shown the document merely
exclaimed, "Oh, so you already have a document." When asked
whether the land "described in the complaint of the herein
plaintiff has been the object of partition among the co-owners
Pedro, Basilia, Cresencia, Maria and Aquilina surnamed
Hernandez," counsel for the plaintiff objected on the ground that
the best evidence was the document of partition, and the
objection was sustained. The same objection and the same ruling
were made on the same ground when the witness was queried
how it was that the land he had bought from Maria and Aquilina
Hernandez had been specified in the deed of sale, Exhibit A.
In consequence of this ruling, counsel for the defendant and
intervenors did not call any more witnesses but only announced
that he had witnesses ready to prove that a parol partition among
the five brother and sisters had been made, mentioning the
names of six such witnesses. Counsel for the plaintiff again
objected asserting that "under the Rules of Court agreement
affecting real estate may not be proved except by means of
writing subscribed by the person against whom the proof is
offered. "Upon this objection, the court ruled that under Rules 74
and 123 of the Rules of Court (Statute of Frauds) as well as under
article 1248 of the Civil Code, parol evidence of partition was
inadmissible, adding that to decide the case it had enough with
the testimony and evidence offered by the parties.
Thereafter the court handed down its decision declaring that the
resale of the land by Zacarias Andal in favor of Maria and Aquilina
Hernandez was illegal and in bad faith. It, however, did not seem
to have found as a fact the allegation that the resale was
simulated. The court then made this judgment:
(a) declarando y sin valor alguno el documento de
reventaotorgado por el demandado Zacarias Andal en 26
de marzo de 1944, a favor de Maria y Aquilina Hernandez
sobre el terrenocuestionado que se presento como
Exhibito 2 de dichodemandado, y consiguientemente se
anulan tambien todas lastransacciones posteriores que
las mencionadas Maria y Aquilina Hernandez hayan
hecho sobre el terreno cuestionado despuesdel 26 de
marzo de 1944, asi como tambien cualquiera
anotacionen la Oficiana del Registrador de Titulos de
Batangas que hayaanotado dicha reventa por el
demandado Zacarias Andal a favorde las terceristas
Maria y Aquilina Hernandez en el citado dia 26 de marzo
de 1944; y

(b) se ordena al aqui demandado Zacarias Andal, que
otorgue unaescritura de reventa a favor de la aqui
demandante Cresencia Hernandez, de las participaciones
de las terceristas en el terrenodescrito en la demanda
suplementaria previo pago de P860 mas lacantidad de
P50 como gastos de documentacion. Se absuelve al
demandado de los daños y perjuicios que reclama la
demandante. Se absuelve tambien a la demandante de
la contra-demanda de lasterceristas.
Sin especial pronunciamento en cuanto a las costas.
The defendant and the intervenors are appealing from the
foregoing decision and in their joint brief made one assignment of
error:
The lower court erred in refusing to admit oral evidence
for proving a contract of partition among the heirs on the
ground that it was not admissible.
Before proceeding with a discussion of the questions raised we
are tempted to point up some seeming incongruities in the
above-quoted judgment. Although Zacarias Andal is no longer
interested in the case, as far as the land is concerned, and even
though the intervenors have become again the absolute owners
and are now in full possession of the property, while Andal has
already gotten his money back, the judgment would have Andal
execute a deed of resale in favor of the plaintiff and received from
her the price of repurchase. The judgment is silent as to the
intervenors with reference to the execution of the deed of sale or
the receipt of the sale price. And the lower court made no finding
and expressed no opinion as to whether the offer of P150 instead
of P860, not to mention Andal's expenses, by the plaintiff as price
of repurchase was sufficient compliance with article 1067 of the
Civil Code on which the court rested the plaintiff's cause of action.
However, in this decision we are concerned mainly with the
application of section 21 of Rule 123 and section 1 of Rule 74 both
of the Rules of Court. Article 1248 of the Civil Code has no bearing
on the case.
There is a conflict of authority as to whether an agreement of
partition is such a contract as is required to be in writing under the
statute of frauds. One line of authorities holds the affirmative
view; other authorities say no. The reason for the rule that
excludes partition from the operation of the statute of frauds is
that partition is not a conveyance but simply a separation and
designation of that part of the land which belongs to each tenant
in common. (27 C.J., 206.) The differences in the conclusions
reached are "due perhaps to varied phraseology of the statutes"
in the several states. (40 Amer. Jur., 15.) However the case may
be, as enacted in the Philippines, first in section 335 of the former
Code of Civil Procedure, and now in Rule 123, section 21, of the
Rules of Court, the law has been uniformly interpreted in a long
line of cases to be applicable to executory and not to completed
or executed contracts. (27 C.J., 206.) In this jurisdiction
performance of the contract takes it out of the operation of the
statute. (Gomez vs. Salcedo, 26 Phil., 485; Almirol and
Cariño vs. Monserrat, 48 Phil., 67.) The statute of frauds does not
declare the contracts therein enumerated void and of no legal
effect, but only makes ineffective the action for specific
performance. (Almirol and Cariño vs. Monserrat, supra.) In the
United States, even in those states where the affirmative view of
the question has been followed, "the weight of authority upholds
the rule that an oral partition is effective when several possession
is taken under it by the respective parties to the agreement." (27
C.J., 206.)
46
On general principle, independent and in spite of the statute of
frauds, courts of equity have enforced oral partition when it has
been completely or partly performed.
Regardless of whether a parol partition or agreement to
partition is valid and enforceable at law, equity will in
proper cases, where the parol partition has actually been
consummated by the taking of possession in severalty
and the exercise of ownership by the parties of the
respective portions set off to each, recognize and
enforce such parol partition and the rights of the parties
thereunder. Thus, it has been held or stated in a number
of cases involving an oral partition under which the
parties went into possession, exercised acts of
ownership, or otherwise partly performed the partition
agreement, that equity will confirm such partition and in
a proper case decree title in accordance with the
possession in severalty.
In numerous cases it has been held or stated that parol
partitions may be sustained on the ground of estoppel of
the parties to assert the rights of a tenant in common as
to parts of the land divided by parol partition as to which
possession in severalty was taken and acts of individual
ownership were exercised. And a court of equity will
recognize the agreement and decree it to be valid and
effectual for the purpose of concluding the right of the
parties as between each other to hold their respective
parts in severalty.
A parol partition may also be sustained on the ground
that the parties thereto have acquiesced in and ratified
the partition by taking possession in severalty, exercising
acts of ownership with respect thereto, or otherwise
recognizing the existence of the partition.
A number of cases have specifically applied the doctrine
of part performance, or have stated that a part
performance is necessary, to take a parol partition out of
the operation of the statute of frauds. It has been held
that where there was a partition in fact between tenants
in common, and a part performance, a court of equity
would have regard to and enforce such partition agreed
to by the parties. (40 Amer. Jur., 15-18.)
It is on the effects of Rule 74, section 1, of the Rules of Court on a
parol partition that there are sharp divergences of opinion among
the members of this Court. This section reads:
If the decedent left no debts and the heirs and legatees
are all of age, or the minors are represented by their
judicial guardians, the parties may, without securing
letters of administration, divide the estate among
themselves as they see fit by means of a public
instrument file 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 or one
legatee, he may adjudicate to himself the entire estate
by means of an affidavit filed in the office of the register
of deeds. It shall be presumed that the decedent left no
debts if no creditor files a petition for letters of
administration within two years after the death of the
decedent.
It is contended that under this rule a verbal partition is entirely
void and cannot be validated by any acts of the parties short of
the execution of a public document and its registration.

As a general proposition, transactions, so far as they affect the
parties, are required to be reduced to writing either as a condition
of jural validity or as a means of providing evidence to prove the
transactions. Written form exacted by the statute of frauds, for
example, "is for evidential purposes only." (Domalagan vs. Bolifer,
33 Phil., 471.) The decisions of this Court which we have noticed
were predicated on this assumption. The Civil Code, too, requires
the accomplishment of acts or contracts in a public instrument,
not in order to validate the act or contract but only to insure its
efficacy so that after the existence of the acts or contracts has
been admitted, the party bound may be compelled to execute the
document. (Hawaiian Philippine Co. vs .Hernaez, 45 Phil., 746.)
Is section 1 of Rule 74 constitutive and not merely evidential of
partition? In other words, is writing the act that confers legal
validity upon the agreement? There are no indications in the
phraseology of this rule which justify an affirmative answer to
these questions. It must be noted that where the law intends a
writing or other formality to be the essential requisite to the
validity of the transactions it says so in clear and unequivocal
terms. Thus, the statute of frauds as originally enacted in England
and as enacted in some of the states, uses the words "utterly
void" with statute transactions required to be in writing are
absolutely void and not merely voidable if not made in the
manner indicated. Again article 633 of the Civil Code says that
donation may be valid only when made in a public document.
Article 146 of the Mortgage Law makes known its intention to
have the execution of a public instrument and its registration in
the registry indispensable to the validity of the contract by using
this phrase: "in order that voluntary mortgages may be legally
created in a valid manner." Article 1765 of the Civil Code also
employs for the same purpose similar expression with reference
to the execution of a public document: "in order that mortgage
may be validly constituted." And with respect to the formalities of
last wills and testaments, section 618 of Act No. 190 makes this
emphatic statement: "No will shall be valid to pass upon any
estate real or personal nor change or affect the same, unless it be
written etc." Other examples might be mentioned.
Section 1 of Rule 74 contains no such express or clear declaration
that the required public instruments is to be constitutive of a
contract of partition or an inherent element of its effectiveness as
between the parties. And this Court had no apparent reason, in
adopting this rule, to make the efficacy of a partition as between
the parties dependent on the execution of a public instrument
and its registration. On the other hand, the opposite theory is not
without reasonable support. We can think of possible factors
against the proposition that a public document and its
registration were contemplated as necessary ingredients to give
life to a contract of partition so that without them no oral
partition can bind the parties.
1. In the first place, the Rules of Court of which the rule under
consideration forms a part were promulgated by the Judicial
Department under authority to deal with matters of procedure
exclusively. For this court to prescribe what is to be a binding
agreement between co-heirs in the settlement of their private
affairs which in no way affect the rights of third parties would be
to transcends its rule-making power. We bring out this limitation
upon the authority of this court to make rules, as an aid to
interpretation, as a method of arriving at the conclusion that
section 1 of Rule 74 was meant to be remedial and not a rule of
substantive law of far-reaching importance and serious juridical
and practical implications. It is to be presumed that the framers of
the Rules of Court realized the bounds of this court's functions
and did not intend to trespass on purely substantive rights of the
parties to the partition. To the extent the execution and
registration of a notarized instrument are made essential
47
elements to validity to protect innocent third parties, the rule is
legitimate and necessary; legitimate because decedent's estate
are placed under the jurisdiction of the courts to administer and
distribute. The interests of third parties eliminated, the rule loses
its character as one of procedure and practice and invades the
realm of substantive law.
Section 596 of Act No. 190, which is the precursor of section 1
Rule 74, is enlightening and instructive. The former after stating
that heirs may apportion and divide the estate among themselves
as they may see fit by agreement duly executed in writing by all of
them, adds the words "and not otherwise." These words, in our
opinion, were expressive of an intention to make the written
formality inherent element of the validity of a parol partition. But
what is far more to the point is that by logical process of
deduction the elimination from the new rule of the words "and
not otherwise" imports the casting away from the prescribed
public document of its jural character which the document
enjoyed in the former code. At the same time, the inclusion of the
aforesaid words in the old provision serves to emphasize the
necessity of a positive and clear language if a given contractual
formality is to be the exclusive basis of the contract's binding
effect on the parties. It is of course unnecessary to say that the
attaching of jural character to the prescribed public instrument in
section 596 of Act No. 190 is no argument for contending that
such document must be clothed with the same raiment in the
new Rules. Act No. 190 was a mixture of procedural and
substantive provisions, having been enacted by the legislative
body itself which, unlike this court, was unhampered and
untrammelled, except by the fundamental law, in the choice of its
subjects of legislation.
2. The civil law looks upon the role of public instruments in acts
and contracts with greater liberality with a view to better
adaptation to human frailties and idiosyncracies. In their blind
faith in friends and relatives, in their lack of experience and
foresight, and their ignorance, men, in spite of laws, will make
and continue to make verbal contracts. The advantages of an air-
tight policy concerning such contracts fall far short of
compensating for the resulting damage, injustice, inconveniences
and confusion. So even though articles 1278, 1279 and 1280 of the
Civil Code have made provisions for public instrument for all
transactions and contracts whose object is the creation,
modification or extinction of real rights in immovables, it has
been recognized and held that verbal contracts may be effective
between the parties. A leading case on this subject is Thunga
Chui vs. Que Bentec (2 Phil., 561), Mr. Justice Williard writing the
decision. It was said in that case that when the essential requisites
for the existence of a contract are present, the contract is binding
upon the parties, and, although required to be in writing by article
1280 of the Civil Code, the plaintiff can maintain an action under
article 1279 to compel the execution of a written instrument. It
says that "article 1279 does not impose an obligation, but confers
a privilege upon both contracting parties, and the fact that the
plaintiff has not made use of same does not bar his action." It
further says that article 1279, far from making the enforceability
of the contract dependent upon any special intrinsic form,
recognizes its enforceability by the mere act of granting the
contracting parties an adequate remedy whereby to compel the
execution of public writing or any other special form whenever
such form is necessary in order that contract may produce the
effect which is desired according to whatever its object. This
doctrine was iterated and reiterated in a series of decisions
perhaps longer than that on any other legal topic. And it has been
extended even to verbal contracts involving land registered under
the Torrens Act. Do the Rules of Court adhere to this salutary
principle? We can perceive no sufficient ground for the new Rules
to depart from it. No considerations of public policy enter into a
 48

partition of hereditary estate among co-heirs greater than those incompatible with this decision, with costs of this appeal against
involved in a contract between strangers which operates to the appellee.
create, transmit, modify or extinguish property rights in land. If as
between strangers the creation, transmission, modification or
extinction of real rights may be lawfully effected by parol
agreement notwithstanding the requirement that it be put in
writing, the new rule could not be more intransigent when the
transaction is between co-heirs and there is no change of
ownership but simply designation and segregation of that part
which belongs to each heir.

The requirement that a partition be put in a public document and

registered has, in our opinion, for its purpose the protection of
creditors and at the same time the protection of the heirs
themselves against tardy claims. Note that the last sentence of
the section speaks of debts and creditors. The object of
registration is to serve as constructive notice, and this means
notice to others. It must follow that the intrinsic validity of
partition not executed with the prescribed formalities does not
come into play when, as in this case, there are no creditors or the
rights of creditors are not affected. No rights of creditors being
involved, it is competent for the heirs of an estate to enter into an
agreement for distribution in a manner and upon a plan different
from those provided by law.

It is said that the findings, conclusions and judgment in the

appealed decision are not assigned as errors and that for this
reason the appeal should be dismissed. We do not think that the
premise of this objection is exactly correct. The evidence on parol
partition tendered by the defendant and intervenors was ruled
out and they specifically complain of this exclusion as error. In this
manner the assignment of error squarely meets and attacks the
opinion and judgment of the trial court. A superficial analysis of
the case will show that on the validity of the alleged partition
hangs the result of the entire litigation, and on that validity
depends in turn the competence of the excluded evidence. These
two interrelated points are the core of the whole case. All other
points are incidental to and revolve around them. If a completed
oral partition may be enforced, as the defendant and the
intervenors contend and as we opine, their evidence should be
allowed, and if allowed and it establishes their allegation, the
plaintiff's cause of action vanishes.

If the appellant's assignment of error be not considered a direct

challenge to the decision of the court below, we still believe that
the objection takes a narrow view of practice and procedure
contrary to the liberal spirit which pervades the Rules of Court.
The first injunction of the new Rules (Rule 1, section 2) is that they
"shall be liberally construed in order to promote their object and
to assist the parties in obtaining just, speedy, and inexpensive
determination of every action and proceeding." In line with the
modern trends of procedure, we are told that, "while an
assignment of error which is required by law or rule of court has
been held essential to appellate review, and only those assigned
will be considered, there are a number of cases which appear to
accord to the appellate court a broad discretionary power to
waive the lack of proper assignment of errors and consider errors
not assigned. And an unassigned error closely related to an error
properly assigned, or upon which the determination of the
question raised by the error properly assigned is dependent, will
be considered by the appellate court notwithstanding the failure
to assign it as error." (4 C.J.S., 1734; 3 C.J., 1341, footnote 77.) At
the least, the assignment of error, viewed in this light, authorizes
us to examine and pass upon the decision of the court below.

The judgment is reversed and the case is remanded to the court

of origin for further proceeding and a new decision not