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Republic of the Philippines According to the petitioner, Dominga Garcia died intestate in 1955 (Extra-

SUPREME COURT judicial Settlement of the Estate of Dominga Garcia dated May 27, 1966, p.
Manila 8, Rollo). She left in the Philippines a 1,966-square-meter lot on Claveria
Street, Townsite of Davao, District of Davao, registered in her name under
FIRST DIVISION T.C.T. No. 296 (T-2774) of the Registry of Deeds of Davao City. Since her
departure for China with her family, neither she, nor her husband, nor any
G.R. No. L-44347 September 29, 1988 of their children has returned to the Philippines to claim the lot.

VICENTE TAN, petitioner, Dominga's adoptive parent, Cornelia Pizarro, died in May 1936. In 1948, her
vs. nephew, Ramon Pizarro, occupied a part of Dominga's property and
CITY OF DAVAO, respondent. collected the rentals from the owners of other houses occupying the land.
Another nephew of Cornelia, Segundo Reyes, in a burst of civic spirit,
informed the Solicitor General about the property. The City Fiscal and NBI
Occeña Law Office for petitioner.
agents, Antonio Gonzaga and Felix Valencia, investigated Segundo Reyes,
Ramon Pizarro and Aurelio Pizarro regarding the whereabouts of Dominga
The City Legal Officer for respondent.
Garcia, Tan Seng, and their children.

During the investigation, Ramon Pizarro alleged that Vicenta Tan, daughter
of Dominga, was married and living in Bacolod City, but he did not know her
GRIÑO-AQUINO, J.: exact address. Aurelio Pizarro, on the other hand, controverted that
statement because as far as he knew, Vicenta Tan left for China with her
This 26-year old case involves what is probably now a valuable lot in the City mother and brothers in 1923.
of Davao whose owner left for China with her entire family in 1923 and never
returned. Like all such estates facing escheat proceedings, it is fair game for On September 12,1962, the City of Davao filed a petition in the Court of First
poseurs and fakers claiming to be the missing heir of the deceased owner. Instance of Davao, Branch I (Special Civil Case No. 1220) to declare Dominga
Garcia's land escheated in its favor. It alleged that Dominga Garcia and her
The spouses Cornelia Pizarro and Baltazar Garcia, during their lifetime, were children are presumed to be dead and since Dominga Garcia left no heir
residents of Davao City. As they were childless, they adopted a three-year person by law entitled to inherit her estate, the same should be escheated
old girl whom they named Dominga Garcia and brought up as their own. At pursuant to Rule 92 of the Rules of Court (pp. 1-5, Record on Appeal).
the age of nineteen years, Dominga Garcia married a Chinaman, Tan Seng
alias Seng Yap, with whom she had three children, named Vicente, who was The court set the petition for hearing and directed the City to cause (as it did
born in 1916, Mariano who was born in 1918, and Luis who was born in ) the publication of its petition in the 'Mindanao Times," a newspaper of
1921. In 1923, Dominga Garcia and her three children emigrated to Canton, general circulation in the city and province of Davao, and in the Official
China. In less than a year, Tan Seng followed his family to his country of Gazette, once a week for six (6) consecutive weeks (pp. 6-8, Record on
origin. Appeal).
Ramon Pizarro opposed the escheat petition on the ground that courts are recognized her from her pictures
not authorized to declare that a person is presumed to be dead and that (Exhs. 1, 2, and 3).
Dominga Garcia's being in Red China is not a sufficient ground to deprive her
of her property by escheat proceedings (pp. 8-9, Record on Appeal). On still another occasion, Pizarro testified that the title of the land was given
to him by Dominga Garcia when she and her husband returned to Davao
On June 15, 1966, Pizarro filed a motion to dismiss the escheat petition (pp. before the war and borrowed money from him for their trip to China.
13-15, Record on Appeal), but he withdrew his motion three days later (p.
15, Record on Appeal). Pizarro's witness, a septuagenarian Arsenio Suazo, who claimed to be a
distant relative of Cornelia Pizarro and Dominga Garcia, testified that the
Numerous incidents delayed the trial of the case, among them: (1) the last time he saw Vicenta was when she was 5 years old. He Identified her as
court's order denying the oppositor's motion to dismiss the escheat petition, the woman with buck teeth in the pictures (Exhs. 1, 2 and 3) because he
which reached the Court of Appeals and the Supreme Court (L-38423); (2) remembered that, even as a 5-year-old, "her teeth were not in good form
the court's order requiring Pizarro to render an accounting which also and were somewhat protruding."
reached the Court of Appeals and Supreme Court (L-38642); and (3) the
court's order for receivership which reached the Court of Appeals and the Another witness, Ramon Regino, a nephew of Pizarro, calculated that
Supreme Court (L-39224). Vicenta was 7 years old when he last saw her. He testified that the pictures
(Exhs. 1, 2, and 3) bore a similarity to Vicenta whose face, he recalled, was
At the trial, the petitioner's evidence on the Identity of the land; the fact "somewhat long."
that the registered owner, Dominga Garcia, and her children and husband
had left for China in 1923; that she died intestate in 1955; and that none of The trial court found Suazos testimony "not credible" or "improbable" for it
her heirs is found in the Philippines, were not seriously disputed. was impossible for him to Identify the woman in the picture as Vicenta on
the basis only of his recollection that she had protruding teeth as a child,
The controversy centers on whether Dominga's daughter, Vicenta Tan, is because, the court argued, "it is a matter of common knowledge ... that the
alive in China or in Hongkong, as alleged by Pizarro who tried to prove it teeth of children of five years of age are temporary, and are replaced by
through: (1) supposed pictures of the missing heir (Exhs. 1, 2, and 3); (2) an permanent teeth at the age of seven or eight years."
Extrajudicial Settlement and Adjudication of Dominga's Estate (Exh. 19, pp. (p. 185, Record on Appeal.)
8-9, Rollo) allegedly executed by Vicenta in Hongkong on May 27, 1966; and
(3) a Special Power of Attorney (Exh. 20) that she supposedly signed The court also found Regino's testimony "Incredible, patently incredible" (p.
(thumbmarked) in favor of Pizarro on the same date also in Hongkong (pp. 185, Record on Appeal).
53-56, Rollo).
Neither did the trial court believe Pizarro's allegation that the pictures,
Pizarro testified that his aunt Cornelia Pizarro gave him the papers Exhibits 1, 2, and 3, were those of Vicenta Tan. The court observed that the
pertaining to the land and told him to take care of it before she died in 1936. woman in the picture, who supposedly made the Extrajudicial Settlement
and Special Power of Attorney (Exhs. 19 and 20) did not know how to sign
On cross-examination, he alleged that in 1960 he met Vicenta on Claveria her name, thus contradicting Pizarro's statement that Vicente, at age 7,
Street, that she told him to take care of her property because she would already knew how to write and that when they met in Hongkong, they
come again later; that they met again in Hongkong in 1966; and he conversed in Chavacano and in English. On the other hand, the court pointed
out, since Vicenta left for China in 1923 when she was only 7 years old, and Ramon Pizarro shall make an accounting of the income he
as she grew up in China, it could not be true that she spoke Chavacano and collected from himself and those who are occupying the
could write in the Roman alphabet land from the time he took possession of it in 1936 when
(p. 194, Record on Appeal). his aunt Cornelia Pizarro died until the City of Davao takes
possession of the property and shall deliver the same to
The Court did not believe that Pizarro and Vicenta met in Davao in 1960, for the city.
if that were true, he did not need to be shown the scar on Vicenta's thigh in
order for him to recognize her. Furthermore, it is improbable that a woman Ramon Pizarro shall likewise deliver to the City of Davao
whom he had not seen for 43 years would bare her thigh to him. The trial the owner's duplicate of Transfer Certificate of Title No.
court pointed out in its decision that: 296 (T-2774) which is in his possession, without costs. (p.
198, Record on Appeal.)
... There is no proof that Vicenta Tan, daughter of Dominga
Garcia, was the one who in fact sent the picture other than Pizarro appealed to the Court of Appeals (CA-G.R. No. L-51786-R). He passed
the claim of Pizarro that he received the same from her. away on June 16, 1975 during the pendency of the appeal.
Likewise, there is no proof that the woman in Exhibit I is
Vicenta Tan, daughter of Dominga Garcia, except the On August 19,1975, a certain Luis Tan, alias Chen Yek An claiming to be the
testimony of Pizarro that he received the picture from her. long missing son of Dominga Garcia, filed a motion for intervention in the
An impostor might have sent her picture to Pizarro foist Court of Appeals. He alleged that he had been living in mainland China; that
herself upon him as the daughter of Dominga Garcia. And he failed to come to the trial because of a government prohibition barring
this is the woman whom Pizarro met in Hongkong (p. 196, his entry to the Philippines; that after diplomatic relations with China were
Record on Appeal.) restored, he returned to this country to oppose the escheat proceedings on
the properties of his mother, Dominga Garcia.
The trial court found that Pizarro's testimonies "ring with untruthfulness;
they are replete with inconsistencies" (p. 17, Record on Appeal) and the The City of Davao opposed the motion for intervention for tardiness. The
witnesses who corroborated him were "unworthy of belief" (p. 198, Record Court of Appeals disallowed it because the trial had long been terminated,
on Appeal). and the intervention, if allowed, would unduly delay the adjudication of the
rights of the original parties
On March 23, 1972, the trial court rendered judgment whose dispositive (p. 26, Rollo).
portion is quoted below:
On April 2, 1976, the Court of Appeals affirmed the appealed decision of the
WHEREFORE, the land in the name of Dominga Garcia trial court. Vicenta Tan and/or her attorney-in-fact, Ramon Pizarro,
covered by Transfer Certificate of Title No. 296 (T-2774) of appealed by petition for certiorari to this Court, alleging that the Court of
the Register of Deeds of Davao City, as well as the rentals Appeals erred:
thereon, shall escheat and the same are hereby assigned
to the City of Davao for the benefit of public schools and 1. in ruling that the city of Davao had personality to file the
public charitable institutions and centers in the said city. escheat petition; and
2. in declaring that petitioner Vicenta Tan may be The Court of Appeals should have dismissed the appeal of Vicenta Tan and
presumed dead. Ramon Pizarro earlier because the records show that Vicenta was never a
party in the escheat proceedings. The trial court's order dated February 4,
We find no merit in the petition for review. 1972 ordering that she be substituted for Ramon Pizarro as oppositor (p. 16,
Record on Appeal) was set aside by the same court in its Order of March 23,
With respect to the argument that only the Republic of the Philippines, 1972 (p. 178, Record on Appeal) which was not appealed.
represented by the Solicitor-General, may file the escheat petition under
Section 1, Rule 91 of the Revised (1964) Rules of Court, the Appellate Court Vicenta Tan, if she still exists, was never served with summons extra-
correctly ruled that the case did not come under Rule 91 because the territorially under Section 17, Rule 14 of the Rules of Court. She never
petition was filed on September 12,1962, when the applicable rule was still appeared in the trial court by herself, or counsel and never filed a pleading
Rule 92 of the 1940 Rules of Court which provided: therein, hence, she never submitted to the court's jurisdiction.

Sec. 1. When and by whom,petition filed.—When a person Every action must be prosecuted and defended in the name of the real
dies intestate, seized of real or personal property in the party-in-interest (Sec. 2, Rule 3, Rules of Court; Ferrer vs. Villamor, 60 SCRA
Philippines, leaving no heirs or person by law entitled to 106; Filipinas Industrial Corp. vs. San Diego, 23 SCRA 706; 1 Moran 144).
the same, the municipality or city where the deceased last Ramon Pizarro, the alleged administrator of Dominga Garcia's property, was
resided, if he resided in the Philippines, or the municipality not a real party in interest. He had no personality to oppose the escheat
or city in which he had estate if he resided out of the petition.
Philippines, may file a petition in the court of first instance
of the province setting forth the facts, and praying that the The Court of Appeals did not err in affirming the trial court's ruling that
estate of the deceased be declared escheated. (Emphasis Dominga Garcia and her heirs may be presumed dead in the escheat
supplied.) proceedings as they are, in effect, proceedings to settle her estate. Indeed,
while a petition instituted for the sole purpose of securing a judicial
Rule 91 of the Revised rules of Court, which provides that only the Republic declaration that a person is presumptively dead cannot be entertained if
of the Philippines, through the Solicitor General, may commence escheat that were the only question or matter involved in the case, the courts are
proceedings, did not take effect until January 1, 1964. Although the escheat not barred from declaring an absentee presumptively dead as an incident
proceedings were still pending then, the Revised Rules of Court could not be of, or in connection with, an action or proceeding for the settlement of the
applied to the petition because to do so would work injustice to the City of intestate estate of such absentee. Thus ruled this Court in In re Szatraw 81
Davao. Rule 144 of the 1964 Rules of Court contains this "saving" clause: Phil 461:

These rules shall take effect on January 1, 1964. They shall ... This presumption ... may arise and be invoked and trade
govern all cases brought after they take effect, and also all in a case, either in an action or in a special proceeding,
further proceedings in cases pending, except to the extent which is tried or heard by, and submitted for-decision to,
that in the opinion of the court, their application would not competent court. Independently of such an action or
be feasible or would work injustice, in which event the special proceeding, the presumption of death cannot be
former procedure shall apply. invoked, nor can it be made the subject of an action or
special proceeding. (Emphasis added.)
Direct evidence proving that Dominga Garcia, her husband and her children which the court a quo has overlooked and failed to
are in fact dead, is not necessary. It may be presumed under Article 390 of consider, or has misunderstood and misapplied, and
the New Civil Code which provides: which if properly appreciated and accurately were held
would change the result of this litigation.
ART. 390. After an absence of seven years, it being
unknown whether or not the absentee still lives, he shall For one thing, if it is true that Vicenta Tan left the
be presumed dead for all purposes, except for those of Philippines only in 1960, as oppositor Pizarro would like
succession. the court to believe, it has not been explained why he
omitted to secure copies of her departure papers from
The absentee shall not be presumed dead for the purpose either the Department of Foreign Affairs, the Bureau of
of opening his succession till after an absence of ten years Immigration or the former Chinese Embassy, and present
... them to the court to establish her existence as late as
1960.
The Court of Appeals found that the City of Davao was able to prove the
facts from which the presumption arises. It said: For another, if it is also true that he met her in Hongkong
in 1966, we are at a loss why he failed to arrange for her
... Its evidence preponderantly shows that in 1923 return to the Philippines. We do not believe it would have
Dominga Garcia and her family left the Philippines bound been difficult to do so, considering that she had been a
for China. Since then until the instant petition was filed on resident of this country for more than 40 years and had
September 12, 1962, a period covering about 39 years, been absent for only about six years and that her return
nothing had been heard about them. It is not known was imperative on account of a court action against her
whether all or any of them is still alive at present. No heir, property which required her personal presence. But even
devisee or any other person entitled to the estate of if this were impossible, oppositor Pizarro would not be left
Dominga Garcia has appeared and claimed the same up to without any other remedy. He could have arranged for the
this time except Luis Tan whose status as alleged heir has taking of her deposition in Hongkong by means of letters
still to be proven in the proper court. rogatory under Sections 11 and 12, Rule 24 of the Revised
Rules of Court, in the same manner that, according to him,
he arranged their meeting in the Crown Colony sometime
The assertion of appellant Pizarro that in 1960 he met and
in 1966.
talked with Vicenta Tan in Claveria, Davao City, before she
went to China, and again in 1966, when he went to
Hongkong, was not believed by the court below. After The unexplained failure of oppositor Pizarro to take
assessing and evaluating the evidence, we find no advantage of any of these remedies available to him
sufficient cause to disturb the conclusion of the trial court heavily tilts the scale against the credibility of his claim.
made on a finding of fact based on conflicting testimony (pp. 30-31, Rollo.)
and depending largely upon the credibility of witnesses
who testified before it. In our review of the evidence, we These factual findings of the Court of Appeals are binding on Us. They may
have not come across any material fact or circumstance not be disturbed in this petition for review where only legal questions may
be raised This is an appeal from the order of the Court of First Instance of Laguna of
(Sec. 2, Rule 45). October 29, 1936, which denied the applicants motion questioning the
appearance and intervention in the case of the oppositors Colegio de San
WHEREFORE, finding no reversible error in the decision of the Court of Jose and Carlos Young, and from the resolution of the 30th of the same
Appeals in CA-G.R. No. 51786-R, the petition for review is denied for lack of month which denied the petition for escheat filed by the said petitioners,
merit. with the costs against the latter.

SO ORDERED. This case was commenced in the said by a petition filed by the petitioners in
behalf of the municipality of San Pedro, Province of Laguna, wherein they
Narvasa, Cruz, Gancayco and Medialdea, JJ., concur. claim the Hacienda de San Pedro Tunasa by the right of escheat. The Colegio
de San Jose, Inc., appeared specially and assailed the petition upon the
grounds that the court has no jurisdiction to take cognizance and decide the
case and that the petition does not allege sufficient facts to entitle the
applicants to the remedy prayed for; and asked that the petition be finally
dismissed. Carlos Young intervened and filed a motion asking for the
dismissal or the petition upon the ground that the Code of Civil Procedure,
under which the same was filed, is not applicable because it was not yet in
force when the original owner of the hacienda died, which was in April,
Republic of the Philippines
1596, and that the petition was irregularly docketed as the applicants had
SUPREME COURT
paid at the docket fees which the clerk of court should collect. Subsequently
Manila
the attorneys for both parties filed another motions of minor importance,
almost all of which contains the arguments advanced in support of their
EN BANC contentions. On October 29, 1936, the court overruled the objection to the
appearance and intervention in the case by the Colegio de San Jose and
G.R. No. L-45460 February 25, 1938 Carlos Young, entering the order which is one of those appealed from. And
on the 30th of the same moth the court entered the resolution, also
THE MUNICIPAL COUNCIL OF SAN PEDRO, LAGUNA, ET AL., applicants- appealed from, dismissing the petition for escheat, with the costs to the
appellants, petitioners.
vs.
COLEGIO DE SAN JOSE, INC., ET AL., oppositors-appellees. The petitioners attribute to the court the following errors: "(1) In overruling
the objection of the appellant of September 2, 1936, and in not excluding
Juan S. Rustia for appellants. the appellees Carlos Young and Colegio de San Jose, Inc., from these
Araneta, Zaragoza and Araneta for appellee Colegio de San Jose, Inc. proceedings. (2) In sustaining definitely the appellees' petitions to dismiss,
Francisco Alfonso for appellee Young. without previous hearing and in derogation of the right to amend in any
case. (3) In improperly and unseasonably taking judicial notice of certain
IMPERIAL, J.: facts in other judicial records to reinforce the appealed resolutions, and in
erroneously distorting those facts judicially taken notice of. (4) In holding
that the municipality of San Jose has neither right standing to file a petition
for escheat; that the petition does not state facts sufficient a cause of action debts and charges, shall escheat; and shall assign the personal
and that the same does not lie, and that the Court of First Instance of Laguna estate to the municipality where he was last an inhabitant in the
is without jurisdiction to take cognizance of and decide said petition. (5) In Islands, and the real estate to the municipality in which the same is
finally dismissing the petition upon the dilatory exceptions thereto, and the situated. If he never was a inhabitant of the Islands, the whole
ordering the payment of costs when no hearing has yet taken place." estate may be assigned to the several municipalities where the
same is located. Such estate shall be for the use of schools in the
1. The sworn petition which gave rise to the proceeding is based upon the municipalities, respectively, and shall be managed and disposed or
provisions of section 750 and 751 of the Code of Civil Procedure, the English by the municipal council like other property appropriated to the
text of which reads:1ªvvphïl.nët use of schools.

SEC. 750. Procedure when person dies intestate without heirs. — Accordingly to the first of the said sections, the essential facts which should
When a person dies intestate, seized of real or personal property in be alleged in the petition, which are jurisdiction because they confer
the Philippines Islands, leaving no heir or person by law entitled to jurisdiction upon the Court of First Instance, are: That a person has died
the same, the president and municipal council of the municipality intestate or without leaving any will; that he has left real or personal
where the deceased last resided, if he was an inhabitant of these property; that he was the owner thereof; that he has not left any heir or
Islands, or of the municipality in which he had estate, if he resided person who is by law entitled to the property; and that the one who applies
out of the Islands, may, on behalf of the municipality, the file a for the escheat is the municipality where deceased had his last residence, or
petition with the Court of First Instance of the province for an in case should have no residence in the country, the municipality where the
inquisition in the premises; the court shall there upon appoint a property is situated.
time and place of hearing, and deciding on such petition, and cause
a notice thereof to be published in some newspaper of general The following section provides that after the publications and trial, if the
circulation in the province of which the deceased was last an court finds that the deceased is in fact the owner of real and personal
inhabitant, if within the Philippines Island, and if not, some property situated in the country and has not left any heirs or other person
newspaper of general circulation in the province in which he had entitled thereto, it may order, after the payments of debts and other legal
estate. The notice shall recite the substance of the facts and expenses, the escheat, and in such case it shall adjudicate the personal
request set forth in the petition, the time and place at which property to the municipality where the deceased had his last place of
persons claiming the estate may appear and be heard before the residence and the real property to the municipality or municipalities where
court, and shall be published at least six weeks successively, the last they are situated.
of which publication shall be at least six weeks before the time
appointed by the court to make inquisition. Escheat, under sections 750 and 751, is a proceeding whereby the real and
personal property of a deceased person become the property of the State
SEC. 751. Decree of the court in such case. — If, at the time upon his death without leaving any will or legal heirs (21 C.J., sec. 1, p. 848;
appointed for the that purpose, the court that the person died American L. & T. Co. vs. Grand River Co., 159 Fed., 775; In re Miner, 143 Cal.,
intestate, seized of real or personal property in the Islands, leaving 194; Johnston vs. Spicer 107 N.Y., 185; Wright vs. Methodist Episcopal
no heirs or person entitled to the same and no sufficient cause is Church, Hoffm. [N.Y.], 201; In re Linton's, 198 Pa., 438; State vs. Goldberg,
shown to the contrary, the court shall order and decree that the 113 Tenn., 298). It is not an ordinary action contemplated by section 1 of the
estate of the deceased in these Islands, after the payment of just Code of Civil Procedure, but a special proceeding in accordance with the said
section and Chapter XXXIX, Part II, of the same Code. The proceeding, as which is untenable from all standpoints. And when the motion to dismiss is
provided by section 750, should be commenced by petition and not by entertained upon this ground, the petition may be dismissed
complaint. unconditionally and the petitioner is not entitled, as in the case of a
demurrer, to be afforded an opportunity to amend his petition.
In a special proceeding for escheat under section 750 and 751 the petitioner
is not the sole and exclusive interested party. Any person alleging to have a 3. The petitioners assign as third error the judicial notice which the court
direct right or interest in the property sought to be escheated is likewise and took of the complaint filed in civil case No. 6790, docketed and pending in
interest and necessary party and may appear and oppose the petition for the same court, wherein the petitioner recognized the personality Colegio
escheat. In the present case the Colegio de San Jose, Inc., and Carlos Young de San Jose, Inc., and Carlos Young and the latters' interest in said action of
appeared alleging to have a material interest in the Hacienda de San Pedro interpleader and in the Hacienda de San Pedro Tunasan which is the same
Tunasa; and the former because it claims to be the exclusive owner of the subject matter of the instant proceedings.
hacienda, and the latter because he claim to be the lessee thereof under a
contract legality entered with the former. In view of these allegations it is In general, courts are not authorized to take judicial notice, in the
erroneous to hold that the said parties are without right either to appear in adjudication of cases pending before them, of the contents of the records
case or to substantiate their respective alleged right. This unfavorably of the other cases, even when such cases have been tried or are pending in
resolves the petitioners' first assignment of error. the same court, and notwithstanding the fact that both cases may have been
heard or are actually pending before the same judge. (U.S. vs. Claveria, 29
2. The final dismissal of the petition for escheat decreed by the court is Phil., 527.) The rule is squarely applicable to the present case, wherefore,
assigned by the petitioners as the second error committed by it upon the we hold that the assignment of error is tenable.
contention that the demurrer, to which amount the motions for dismissal,
is not a pleading authorized by law in this kind of proceeding and because, 4. In the appealed resolution the court held that the municipality of San
in any event, the court should have given them an opportunity to amend the Pedro, represented by the petitioners, has no personality to institute the
petition. petition for escheat that the latter does not state sufficient facts, and that
the court is without jurisdiction either to take cognizance of the proceeding
Chapter XXXIX of the Code of Civil Procedure, relative to the escheat of or to grant the remedy sought. These legal conclusions are the subject
properties, does not in fact authorize the filing of a demurrer to the petition matter of the fourth assignment of error.
presented for that purpose, and section 91 and 99 permitting the
interposition of demurrers to the complaint and answer, respectively, are According to the allegations of the petition, the petitioners base their right
not applicable to special proceedings. But is no reason of a procedure nature to the escheat upon the fact that the temporal properties of the Father of
which prevents the filing of a motion to dismiss based upon any of the the Society of Jesus, among them, the Hacienda de San Pedro Tunasan, were
grounds provided by law for a demurrer to a complaint. In such case, the confiscated by order of the King of Spain and passed from then on the Crown
motion to dismiss pays the role of a demurrer and the court should resolve of Spain. The following allegations of the petition are important and specific
the legal question raised therein. When, for instance, a petition for escheat and clearly the theory maintained by the petitioners: "11. As a result of the
does not state facts which entitle the petitioner to the remedy prayed from perpetual expulsion of the Jesuits in their dominions, the King also decreed
and even admitting them hypothetically it is clear that there are nor grounds the confiscation of all their properties, estate, rents, foundation, etc., in
for the court to proceed to the inquisition provided by law, we see no reason favor of the Crown of Spain, and the order of the King was thus complied
to disallow an interest party from filing a motion to dismiss the petition with here in the Philippines. The Hacienda de San Pedro Tunasa from then
on passed to the Crown of Spain under the administration and management considerations regarding the personality of the municipality of San Pedro
on its respective here, the Governor-General of the Philippines Islands. 12. and the court's lack of jurisdiction.
As a result of the war between Spain and the United States, the latter
acquired by way of transfer, all the properties of the Crown of Spain in the 5. The last assignment of error does not require any further consideration.
Philippines, under articles III and VIII of the Treaty of Peace entered into in The questions raised therein have already been passed upon in the
Paris on December 10, 1989, and among which properties was included the preceding considerations, with the exception of the order to pay costs. With
Hacienda de San Pedro Tunasan. 13. That the said hacienda thereafter respect thereto, there is no reason why they should not be taxed against the
passed to the Government of the Philippines Islands by virtue of the Act of petitioners, they being defeated party (section 487, Code of Civil Procedure).
the United States Congress of July 1, 1992 (Philippine Bill), by mere That no trial was had is not a bar to the imposition of costs under the
administration for the benefit of the inhabitant of the Philippines; and there provisions of section 492.
after, under the Tydings-McDuffie law approved by the same Congress on
March 24, 1934, section 5, the United States, in turn, have ceded to the For the foregoing reasons, the appealed order and resolution are affirmed,
Commonwealth of the Philippines, upon its inauguration, all the properties, with the costs of this instance against the petitioners and appellants. So
estate, etc., ceded by Spain to the United States as above stated, among ordered.
them being the Hacienda de San Pedro Tunasan. Said Commonwealth was
inaugurated on November 15, 1935."
Avanceña, C.J., Villa-Real, Abad Santos, Diaz, Laurel and Concepcion, JJ.,
concur.
If the hacienda de San Pedro Tunasan,, which is the only property sought to
be escheated and adjudicated to the municipality of San Pedro, has already
passed to the ownership of the Commonwealth of the Philippines, it is
evident that the petitioners cannot claim that the same be escheated to the
said municipality, because it is no longer the case of real property owned by
a deceased person who has not left any heirs or person who may legality
claim it, these being the conditions required by section 750 and without
which a petition for escheat should not lie from the moment the hacienda
was confiscated by the Kingdom of Spain, the same ceased to be the
property of the children of Esteban Rodriguez de Figueroa, the Colegio de
San Jose or the Jesuit Father, and became the property of the
Commonwealth of the Philippines by virtue of the transfer under the Treaty
of Paris, alleged in the petition. If the municipality of San Pedro believes that
it has some other right to the hacienda, distinct from the escheat relied upon
in its petition which gave rise to this proceeding, it should bring the proper
action, but it cannot avail itself successfully of the remedy provided by
section 750 of the Code of Civil Procedure. We, therefore, hold that the
court did not commit the error assigned in ruling that the petition does not
allege sufficient facts justifying the escheat of the hacienda in favor of the
municipality of San Pedro and in finally dismissing the same. Having reached
this conclusion we do not believe it necessary to go into further
EN BANC Issues having been joined, and the requisite evidence presented by both
parties, the court declared both the sale and the lease valid and binding and
[G.R. No. L-1411. September 29, 1953.] dismissed the complaint. The court likewise ordered plaintiff to turn over
the property to defendant and to pay a rental of P50 a month from August
DIONISIO RELLOSA, Petitioner, vs. GAW CHEE HUN, Respondent. 1, 1945 until the property has been actually delivered. As this decision was
affirmed in toto by the Court of Appeals, plaintiff sued out the present
DECISION petition for review.

BAUTISTA ANGELO, J.: One of the issues raised by petitioner refers to the validity of Seirei No. 6
issued on April 2, 1943 by the Japanese authorities which prohibits an alien
This is a petition for review of a decision of the Court of Appeals holding that from acquiring any private land not agricultural in nature during the
the sale in question is valid and, even if it were invalid, plaintiff cannot occupation unless the necessary approval is obtained from the Director
maintain the action under the principle of pari delicto. General of the Japanese Military Administration. Petitioner contends that
the sale in question cannot have any validity under the above military
On February 2, 1944, Dionisio Rellosa sold to Gaw Chee Hun a parcel of land, directive in view of the failure of respondent to obtain the requisite approval
together with the house erected thereon, situated in the City of Manila, and it was error for the Court of Appeals to declare said directive without
Philippines, for the sum of P25,000. The vendor remained in possession of any binding effect because the occupation government could not have
the property under a contract of lease entered into on the same date issued it under article 43 of the Hague Regulations which command that
between the same parties. Alleging that the sale was executed subject to laws that are municipal in character of an occupied territory should be
the condition that the vendee, being a Chinese citizen, would obtain the respected and cannot be ignored unless prevented by military necessity.
approval of the Japanese Military Administration in accordance with (seirei)
No. 6 issued on April 2, 1943, by the Japanese authorities, and said approval We do not believe it necessary to consider now the question relative to the
has not been obtained, and that, even if said requirement were met, the validity of Seirei No. 6 of the Japanese Military Administration for the simple
sale would at all events be void under article XIII, section 5, of our reason that in our opinion the law that should govern the particular
Constitution, the vendor instituted the present action in the Court of First transaction is not the above directive but the Constitution adopted by the
Instance of Manila seeking the annulment of the sale as well as the lease then Republic of the Philippines on September 4, 1943, it appearing that the
covering the land and the house above mentioned, and praying that, once aforesaid transaction was executed on February 2, 1944. Said Constitution,
the sale and the lease are declared null and void, the vendee be ordered to in its article VIII, section 5, provides that "no private agricultural land shall
return to vendor the duplicate of the title covering the property, and be be transferred or assigned except to individuals, corporations, or
restrained from in any way dispossessing the latter of said property. associations qualified to acquire or hold lands of the public domain in the
Philippines", which provisions are similar to those contained in our present
Defendant answered the complaint setting up as special defense that the Constitution. As to whether the phrase "private agricultural land" employed
sale referred to in the complaint was absolute and unconditional and was in in said Constitution includes residential lands, as the one involved herein,
every respect valid and binding between the parties, it being not contrary to there can be no doubt because said phrase has already been interpreted in
law, morals and public order, and that plaintiff is guilty of estoppel in that, the affirmative sense by this court in the recent case of Krivenko vs. Register
by having executed a deed of lease over the property, he thereby recognized of Deeds, 79 Phil. 461, wherein this court held that "under the Constitution
the title of defendant to that property. aliens may not acquire private or public agricultural lands, including
residential lands." This matter has been once more submitted to the court
for deliberation, but the ruling was reaffirmed. This ruling fully disposes of which are illegal because opposed to public policy come under this
the question touching on the validity of the sale of the property herein limitation. The cases in which this limitation may apply only "include the
involved. class of contracts which are intrinsically contrary to public policy, contracts
in which the illegality itself consists in their opposition to public policy, and
The sale in question having been entered into in violation of the any other species of illegal contracts in which, from their particular
Constitution, the next question to be determined is, can petitioner have the circumstances, incidental and collateral motives of public policy require
sale declared null and void and recover the property considering the effect relief." Examples of this class of contracts are usurious contracts, marriage-
of the law governing rescission of contracts? Our answer must of necessity brokerage contracts and gambling contracts. (Idem. pp. 735-737.)
be in the negative following the doctrine laid down in the case of Trinidad
Gonzaga de Cabauatan, et al. vs. Uy Hoo, et al., 88 Phil. 103, wherein we In our opinion, the contract in question does not come under this exception
made the following pronouncement: "We can, therefore, say that even if because it is not intrinsically contrary to public policy, nor one where the
the plaintiffs can still invoke the Constitution, or the doctrine in the Krivenko illegality itself consists in its opposition to public policy. It is illegal not
Case, to set aside the sale in question, they are now prevented from doing because it is against public policy but because it is against the Constitution.
so if their purpose is to recover the lands that they have voluntarily parted Nor may it be contended that to apply the doctrine of pari delicto would be
with, because of their guilty knowledge that what they were doing was in tantamount to contravening the fundamental policy embodied in the
violation of the Constitution. They cannot escape this conclusion because constitutional prohibition in that it would allow an alien to remain in the
they are presumed to know the law. As this court well said: 'A party to an illegal possession of the land, because in this case the remedy is lodged
illegal contract cannot come into a court of law and ask to have his illegal elsewhere. To adopt the contrary view would be merely to benefit petitioner
objects carried out. The law will not aid either party to an illegal agreement; and not to enhance public interest.
it leaves the parties where it finds them.' The rule is expressed in the
maxims: 'Ex dolo malo non oritur actio,' and 'In pari delicto potior est The danger foreseen by counsel in the application of the doctrine above
conditio defendentis.' (Bough and Bough vs. Cantiveros and Hanopol, 40 adverted to is more apparent than real. If we go deeper in the analysis of
Phil., 210, 216.)" our situation we would not fail to see that the best policy would be for
Congress to approve a law laying down the policy and the procedure to be
The doctrine above adverted to is the one known as In Pari Delicto. This is followed in connection with transactions affected by our doctrine in the
well known not only in this jurisdiction but also in the United States where Krivenko case. We hope that this should be done without much delay. And
common law prevails. In the latter jurisdiction, the doctrine is stated thus: even if this legislation be not forthcoming in the near future, we do not
"The proposition is universal that no action arises, in equity or at law, from believe that public interest would suffer thereby if only our executive
an illegal contract; no suit can be maintained for its specific performance, or department would follow a more militant policy in the conservation of our
to recover the property agreed to be sold or delivered, or the money agreed natural resources as or dained by our Constitution. And we say so because
to be paid, or damages for its violation. The rule has sometimes been laid there are at present two ways by which this situation may be remedied, to
down as though it were equally universal, that where the parties are in pari wit, (1) action for reversion, and (2) escheat to the state. An action for
delicto, no affirmative relief of any kind will be given to one against the reversion is slightly different from escheat proceeding, but in its effects they
other." (Pomeroy's Equity Jurisprudence, Vol. 3, 5th ed., p. 728.) are the same. They only differ in procedure. Escheat proceedings may be
instituted as a consequence of a violation of article XIII, section 5 of our
It is true that this doctrine is subject to one important limitation, namely, Constitution, which prohibits transfers of private agricultural lands to aliens,
"whenever public policy is considered as advanced by allowing either party whereas an action for reversion is expressly authorized by the Public Land
to sue for relief against the transaction" (idem, p. 733). But not all contracts Act (sections 122, 123, and 124 of Commonwealth Act No. 141).
In the United States, as almost everywhere else, the doctrine which imputes "SEC. 122. No land originally acquired in any manner under the
to the sovereign or to the government the ownership of all lands and makes provisions of this Act, nor any permanent improvement on such
such sovereign or government the original source of private titles, is well land, shall be encumbered, alienated, or transferred, except to
recognized (42 Am. Jur., 785). This doctrine, which was expressly affirmed in persons, corporations, associations, or partnerships who may
Lawrence vs. Garduo, G. R. No. 16542, and which underlies all titles in the acquire lands of the public domain under this Act or to corporations
Philippines, (See Ventura, Land Registration and Mortgages, 2nd ed., pp. 2- organized in the Philippines authorized therefor by their charters."
3) has been enshrined in our Constitution (article XIII). The doctrine
regarding the course of all titles being the same here as in the United States, "SEC. 123. No land originally acquired in any manner under the
it would seem that if escheat lies against aliens holding lands in those states provisions of any previous Act, ordinance, royal decree, royal order,
of the Union where common law prevails or where similar constitutional or or any other provision of law formerly in force in the Philippines
statutory prohibitions exist, no cogent reason is perceived why similar with regard to public lands, terrenos baldios y realenqos, or lands
proceedings may not be instituted in this jurisdiction. of any other denomination that were actually or presumptively of
the public domain or by royal grant or in any other form, nor any
"Escheat is an incident or attribute of sovereignty, and rests on the permanent improvement on such land, shall be encumbered,
principle of the ultimate ownership by the state of all property alienated, or conveyed, except to persons, corporations or
within its jurisdiction.' (30 C.J.S., 1164.) associations who may acquire land of the public domain under this
Act or to corporate bodies organized in the Philippines whose
". . . America escheats belong universally to the state or some charters authorize them to do so: Provided, however, That this
corporation thereof as the ultimate proprietor of land within its prohibition shall not be applicable to the conveyance or acquisition
Jurisdiction." (19 Am. Jur., 382.) by reason of hereditary succession duly acknowledged and
legalized by competent courts; Provided, further, That in the event
"An escheat is nothing more or less than the reversion of property of the ownership of the lands and improvements mentioned in this
to the state, which takes place when the title fails." (Delany vs. section and in the last preceding section being transferred by
State, 42 N. D., 630, 174 N.W., 290, quoted in footnote 6, 19 Am. judicial decree to persons, corporations or associations not legally
Jur., 381.) capacitated to acquire the same under the provisions of this Act,
such persons, corporation, or associations shall be obliged to
"As applied to the right of the state to lands purchased by an alien, alienate said lands or improvements to others so capacitated
it would more properly be termed a 'forfeiture' at common law." within the precise period of five years; otherwise, such property
(19 Am. Jur., 381.) shall revert to the Government."

"In modern law escheat denotes a falling of the estate into the "SEC. 124. Any acquisition, conveyance, alienation, transfer, or
general property of the state because the tenant is an alien or other contract made or executed in violation of any of the
because he has died intestate without lawful heirs to take his estate provisions of sections one hundred and eighteen, one hundred and
by succession, or because of some other disability to take or hold twenty, one hundred and twenty-one, one hundred and twenty-
property imposed by law." (19 Am. Jur., two, and one hundred and twenty-three of this Act shall be
unlawful and null and void from its execution and shall produce the
With regard to an action for reversion, the following sections of effect of annulling and cancelling the grant, title, patent, or permit
Commonwealth Act No. 141 are pertinent: originally issued, recognized or confirmed, actually or
presumptively, and cause the reversion of the property and its Republic of the Philippines
improvements to the State." SUPREME COURT
Manila
Note that the last quoted provision declared any prohibited conveyance not
only unlawful but null and void ab initio. More important yet, it expressly THIRD DIVISION
provides that such conveyances will produce "the effect of annulling and
cancelling the grant, title, patent, or permit, originally issued, recognized of G.R. No. L-30381 August 30, 1988
confirmed, actually or presumptively", and of causing "the reversion of the
property and its improvements to the State." The reversion would seem to
REPUBLIC OF THE PHILIPPINES, petitioner,
be but a consequence of the annulment and cancellation of the original
vs.
grant or title, and this is so for in the event of such annulment or cancellation
COURT OF FIRST INSTANCE OF MANILA, BRANCH XIII, HON. JESUS P.
no one else could legitimately claim the property except its original owner
MORFE, PRESIDING JUDGE, AND PRES. ROXAS RURAL BANK
or grantor the state.
INC., respondents.
We repeat. There are two ways now open to our government whereby it
could implement the doctrine of this Court in the Krivenko case thereby The Solicitor General for petitioner.
putting in force and carrying to its logical conclusion the mandate of our
Constitution. By following either of these remedies, or by approving an Leonardo De Ocampo, Jr. and Alfredo Arungayan Jr., for private
implementary law as above suggested, we can enforce the fundamental respondent.
policy of our Constitution regarding our natural resources without doing
violence to the principle of pari delicto. With these remedies open to us, we The instant appeal by certiorari seeks (1) to annul and set aside the Orders
see no justifiable reason for pursuing the extreme unusual remedy now dated October 26,1968 and March 1, 1969 of the then Court of First Instance
vehemently urged by the amici curiae. (CFI) of Manila, Branch XIII in Civil Case No. 73707 entitled "Republic of the
Philippines, Plaintiff, versus Bank of America, et al., Defendants," which
In view of the foregoing, we hold that the sale in question is null and void, orders respectively dismissed herein petitioner's complaint for escheat as
but plaintiff is barred from taking the present action under the principle of against private respondent Pres. Roxas Rural Bank for improper venue and
pari delicto. denied petitioner's motion for reconsideration of such dismissal order; and
(2) the reinstatement of the aforesaid against private respondent.
The decision appealed from is hereby affirmed without pronouncement as
to costs. The antecedents are as follows:

Labrador, J., concurs. Pursuant to Section 2 of Act No. 3936, otherwise known as the Unclaimed
Balance Law, some 31 banks including herein private respondent Pres. Roxas
Paras, C.J., Tuason and Montemayor, JJ., concur in theresult. Rural Bank forwarded to the Treasurer of the Philippines in January of 1968
separate statements under oath by their respective managing officers of all
deposits and credits held by them in favor, or in the names of such
depositors or creditors known to be dead, or who have not been heard from,
or who have not made further deposits or withdrawals during the preceding
ten years or more. In the sworn statement submitted by private respondent found, could be included in one single action, pursuant to the provisions of
Bank, only two (2) names appeared: Jesus Ydirin with a balance of P126.54 Act No. 3936.
and Leonora Trumpeta with a deposit of P62.91.
c. Whether or not Section 2(b), Rule 4 of the Revised Rules of Court on
Upon receipt of these sworn statements, the Treasurer of the Philippines venue, likewise, governs escheat proceedings instituted by the Republic in
caused the same to be published in the February 25, March 3 and March 10, the Court of First Instance of Manila.
1968 issues of the "Philippines Herald", an English newspaper, and the"El
Debate", a Spanish newspaper, both of general circulation in the It is petitioner's contention that private respondent bank, being a mere
Philippines. nominal party, could not file a motion to dismiss on the ground of improper
venue, the real party in interest being the depositors themselves; that the
Thereafter, or on July 25, 1968, the Republic of the Philippines instituted avowed purpose of Act No. 3936 is to benefit the government by escheating
before the CFI of Manila a complaint for escheat against the aforesaid 31 unto itself dormant bank deposits and that this purpose will be defeated if
banks, including herein private respondent. Likewise named defendants escheat proceedings will have to be instituted in each and every province or
therein were the individual depositors and/or creditors reported in the city where a bank is located because of the publication expense; that the
sworn statements and listed in Annex "A" of the complaint. Summonses convenience or inconvenience of the depositors is not the determining
were accordingly issued to defendant banks and the creditors/depositors factor as to venue of action, but that in view of Rule 144 of the Revised Rules
requiring them to file severally their answers to the complaint within 60 days of Court, which provides that all cases brought after the effectivity of the
after the first publication of the summons with notice that should they fail Rules on January 1, 1964 shall be governed by the provisions of the Rules of
to file their answers, plaintiff would take judgment against them by default. Court, Section 2(b) of Rule 4 on venue is made applicable and available to
The aforesaid complaint, list of depositors-creditors (Annex "A"of the the Republic in the instant case.
complaint), summons and notice were duly published in the August 25,
September 1, and September 8, 1968 issues of the "Philippines Herald" and We find these contentions unmeritorious.
"El Debate."
A "real party in interest" has been defined as the party who would be
On October 5,1968, private respondent Bank filed before the CFI a motion benefitted or injured by the judgment of the suit or the party entitled to
to dismiss the complaint as against it on the ground of improper venue. avail of the suit. 1 There can be no doubt that private respondent bank falls
Opposed by the petitioner, the motion to dismiss was granted in the first under this definition for the escheat of the dormant deposits in favor of the
assailed Order. Its motion for reconsideration of said dismissal order having government would necessarily deprive said bank of the use of such deposits.
been denied in the second assailed order, petitioner interposed the instant It is in this sense that it stands to be "injured by the judgment of the suit;"
appeal on pure questions of law, to wit: and it is for this reason that Section 3 of Act No. 3936 specifically provides
that the bank shall be joined as a party in the action for escheat, thus:
a. Whether or not Pres. Roxas Rural Bank is a real party in interest in the
escheat proceedings or in Civil Case No. 73707 of the Court of First Instance Section 3. Whenever the Attorney General shall be
of Manila. informed of such unclaimed balances, he shall commence
an action or actions in the name of the People of the
b. Whether or not venue of action in Civil Case No. 73707 has been properly Philippines in the Court of First Instance of the province
laid in the City of Manila, since all defendant banks, wherever they may be where the bank is located, in which shall be joined as
parties the bank and such creditors or depositors. All or Anent the third issue raised, suffice it to say that Section 2(b) of Rule 4 of
any member of such creditors or depositors or banks, may the Revised Rules of Court cannot govern escheat proceedings principally
be included in one action. (Emphasis supplied.) because said section refers to personal actions. Escheat proceedings are
actions in rem which must be brought in the province or city where
Indeed, if the bank were not a real party in interest, the legislature would the rem in this case the dormant deposits, is located.
not have provided for its joining as a party in the escheat proceedings.
We note that while private respondent bank's motion to dismiss was
Besides, under Section 2, Rule 3 of the Rules of Court, private respondent granted, the trial court in a subsequent order dated November 16, 1968
bank is a real party in interest as its presence in the action is necessary for a declared private respondent bank's depositors and co-defendants Jose
complete determination and settlement of the questions involved therein. Ydirin and Leonora Trumpeta in default for failure to file their answers.
Private respondent bank being a real party in interest, it may and can file a Considering that the complaint in Civil Case No. 73707 states a common
motion to dismiss on the ground of improper venue. cause of action against private respondent bank and its depositors-co-
defendants, and considering further that the motion to dismiss filed by
In defense of the second issue raised, petitioner points to the last sentence private respondent bank alleged facts 3 that would warrant dismissal of the
of Section 3 of Act No. 3936 above-quoted as authority for saying that the complaint against said co-defendants, we apply by analogy Section 4 of Rule
venue of the escheat proceedings was properly laid in the City of Manila. 18 of the Rules of Court, 4 thereby decreeing the benefits of the dismissal of
Petitioner's reliance on said sentence is patently misplaced, the same having the complaint to extend to private respondent bank's co-defendants Jose
been obviously read out of context instead of in relation to the sentence Ydirin and Leonora Trumpeta and their successors- in-interest.
preceding it.
WHEREFORE, the instant appeal by certiorari is hereby denied. No costs.
The first sentence of Section 3 of Act No. 3936 directs the Attorney General,
now Solicitor General, to commence an action or actions in the name of the SO ORDERED.
People of the Philippines in the Court of First Instance of the province where
the bank is located. The phrase "or actions" in this section is very significant. Gutierrez, Jr., Feliciano, Bidin and Cortes, JJ., concur.
It manifests awareness on the part of the legislators that a single action to
cover all banks wherever located in the Philippines would not be legally
feasible in view of the venue prescribed for such action under the same
section, i.e., the province where the bank is located. Thus, the addition of
the last sentence, which the lower court had correctly interpreted to mean
"that for escheat of unclaimed bank balances all banks located in one and
the same province where the Court of First Instance concerned is located
may be made parties defendant "in one action" 2 was clearly intended to
save on litigation and publication expenses, but certainly not as authority
for the lumping together of all banks wherever found in the Philippines in
one single escheat proceedings.
Republic of the Philippines Anne Fallon Murphy. The value of the estate belonging to both Thomas
SUPREME COURT Fallon and Anne Fallon Murphy were residents of the United States and as
Manila nothing was known about them from their relatives in the United States, the
petitioning municipalities believed that they had died without heirs. Hence
EN BANC the petition for escheat.

G.R. No. L-14157 October 26, 1960 At the hearing of the petition, evidence was submitted that Anne Fallon
Murphy died on March 12, 1936 in San Francisco, California (ROA p. 21),
In the matter of escheat proceedings of the estate of the deceased Anne while Thomas Fallon, died on May 26, 1936, also in San Francisco, California
Fallon Murphy and Tomas Fallon married to Julia Fallon. MUNICIPALITIES (ROA p. 25). Julia Fallon, on the other hand, died in San Francisco, California
OF MAGALLON, ISABELA and LA CASTELLANA, NEGROS on December 2, 1944 (ROA p. 26).
OCCIDENTAL, petitioners-appellees,
vs. Opposition to the petition for escheat was filed by Ignatius Bezore. Elwood
IGNATIUS HENRY BEZORE, ET AL., oppositors-heirs appellants. Knickerbocker and Mary Irene Fallon McCormick Henry Bezore claims that
he is the a nephew of the decedents because his mother was their sister.
Martiniano O. dela Cruz for appellant. Elwood Knickerbocker also claims to be the sole legatee of his wife Loreta
Assistant General Antonio A. Torres and Solicitor Conrado T. Limcaoco for Knickerbocker, who in turn, was the residuary legatee of Anne Fallon
Murphy. Mary Irene Murphy McCormick likewise claims that she is the niece
of the decedents as her father was a brother of said decedents. Conformably
These are escheat proceedings instituted by the Municipalities of Magallon,
to their petitions, all the oppositors pray that the petition for escheat be
La Castellana and Isabela, Province of Negros Occidental, in the Court of First
dismissed and that the properties of the decedents be disturbed among
Instance of that province, praying that the estates of the deceased Anne
them.
Fallon Murphy and Thomas Fallon the latter married to Julia Fallon,
consisting of agricultural lands and residential lots, as well as accrued rentals
deposited with the Warner, Barnes and Co., Ltd., be escheated in favor of The court, after hearing, found that Anne Fallon Murphy died in San
the above-named municipalities, respectively, wherever the real estates are Francisco on March 12, 1936 and Thomas Fallon, also in the same city on
situated. Finding that the petition was in order, the judge of the court May 26, 1936; that Thomas Fallon was survived by his wife Julia Fallon, who
ordered the publication of the petition and set the same for hearing before in turn, died in San Francisco on December 22, 1944; that Ane Fallon Murphy
itself on October 9, 1957. executed a will on February 7, 1935, which was admitted to probate on May
7, 1937. Considering these facts the court denied the petition for escheat of
the properties of the deceased Anne Fallon Murphy and Thomas Fallon, for
The evidence shows that the properties sought to be escheated originally to
the reason that Thomas Fallon died with an heir his wife Julia Fallon, and
Charles J. Fallon, an American citizen, married to Rosario Santaromana.
Anne Fallon Murphy, for her part, died leaving a will, in which she disposed
Fallon died in Manila on March 25, 1935, so his wife acquired by inheritance
of all her properties.
one-half of the said properties as owner, and the other half as usufructuary.
The value of the properties of Charles J. Fallon in 1936 is estimated at
P46l,105.41 (Exhibit "H"). His wife Rosario Santaromana died in 1943, and As to prayers contained in the opposition asking that the oppositors be
thereupon the properties which she held in usufruct were transmitted to declared heirs of the deceased Thomas Fallon and Anne Fallon Murphy, the
the brother and sister of her deceased husband, namely, Thomas Fallon and
court declared that the evidence submitted was not competent or sufficient [G.R. No. 143483. January 31, 2002]
to sustain the claim of the oppositors and, therefore denied said prayers.

The petitioning municipalities presented no appeal, but the oppositors did


appeal, claiming that the lower court erred in not rendering judgment in REPUBLIC OF THE PHILIPPINES represented by the REGISTER OF DEEDS OF
their favor and in not declaring them heirs of the decedents Anne Fallon PASAY CITY, petitioner, vs. COURT OF APPEALS (SPECIAL FORMER
Murphy and Thomas Fallon. 3RD DIVISION) AND AMADA H. SOLANO, assisted by her
husband ROMEO SOLANO, respondents.
This appeal can not be entertained. While it is possible for the estates of the
deceased Anne Fallon Murphy and Thomas Fallon, who at the time of their DECISION
death were residents of San Francisco, California, to be settled here, or more
BELLOSILLO , J.:
especially in Negros Occidental where they had properties, these
proceedings were instituted as escheat proceedings and not for the
settlement of the estate of deceased persons. The court acquired This petition for certiorari seeks to nullify two (2) Resolutions of the
jurisdiction to hear the petition for escheat by virtue of the publication of Court of Appeals dated 12 November 1998 and 4 May 2000 giving due
the petition for escheat. The jurisdiction acquired can not be converted into course to the petition for annulment of judgment filed by private
one for the distribution of the properties of the said decedents. For such respondent Amada H. Solano on 3 February 1997 and denying petitioner's
proceedings (for the distribution of the estate of the decedents) to be motion for reconsideration.
instituted, the proper parties must be presented and the proceedings should For more than three (3) decades (from 1952 to 1985) private
comply with the requirements of the Rule. Hence, the court of First Instance respondent Amada Solano served as the all-around personal domestic
did not have the power to order, or to proceed with, the distribution of the helper of the late Elizabeth Hankins, a widow and a French national. During
estates of the decedents in these escheat proceedings, and adjudicate the Ms. Hankins' lifetime and most especially during the waning years of her life,
properties to the oppositors. respondent Solano was her faithful girl Friday and a constant companion
since no close relative was available to tend to her needs.
WHEREFORE, the decision appealed from should be, as it hereby is,
affirmed, without costs. In recognition of Solano's faithful and dedicated service, Ms. Hankins
executed in her favor two (2) deeds of donation involving two (2) parcels of
land covered by TCT Nos. 7807 and 7808 of the Registry of Deeds. Private
Paras, C.J., Bengzon. Padilla, Bautista Angelo, Reyes, J.B.L. Barrera, Gutierrez
respondent alleged that she misplaced the deeds of donation and were
David, and Paredes, JJ., concur.
nowhere to be found.
While the deeds of donation were missing, the Republic filed a petition
for the escheat of the estate of Elizabeth Hankins before
the Regional TrialCourt of Pasay City.[1] During the proceedings, a motion
for intervention was filed by Romeo Solano, spouse of private respondent,
and one GaudencioRegosa, but on 24 June 1987 the motion was denied by
the trial court for the reason that "they miserably failed to show valid claim
or right to the properties in question."[2] Since it was established that there
were no known heirs and persons entitled to the properties of decedent Herein petitioner invokes lack of jurisdiction over the subject matter on the
Hankins, the lower court escheated the estate of the decedent in favor part of respondent RTC to entertain the escheat proceedings x x x because
of petitioner Republic of the Philippines. the parcels of land have been earlier donated to herein petitioner in 1983
and 1984 prior to the death of said Hankins; and therefore, respondent court
By virtue of the decision of the trial court, the Registry of Deeds
could not have ordered the escheat of said properties in favor of
of Pasay City cancelled TCT Nos. 7807 and 7808 and issued new ones, TCT
the Republic of the Philippines, assign them to respondent Pasay City
Nos. 129551 and 129552, both in the name of Pasay City. government, order the cancellation of the old titles in the name of Hankins
In the meantime, private respondent claimed that she accidentally and order the properties registered in the name of respondent Pasay City
found the deeds of donation she had been looking for for a long time. In x x x x The 1997 Rules of Civil Procedure specifically laid down the grounds
view of this development, respondent Amada Solano filed on 28 January of annulment filed before this Court, to wit: extrinsic fraud and lack of
1997 a petition before the Court of Appeals for the annulment of the lower jurisdiction. Jurisdiction over the subject matter is conferred by law and this
court's decision alleging, among other, that[3] - jurisdiction is determined by the allegations of the complaint. It is axiomatic
that the averments of the complaint determine the nature of the action and
13.1. The deceased Elizabeth Hankins having donated the subject properties consequently the jurisdiction of the courts. Thus whether or not the
to the petitioner in 1983 (for TCT No. 7807) and 1984 (for TCT No. 7808), properties in question are no longer part of the estate of the deceased
these properties did not and could not form part of her estate when she died Hankins at the time of her death; and, whether or not the alleged donations
on September 20, 1985. Consequently, they could not validly be escheated are valid are issues in the present petition for annulment which can be
to the Pasay City Government; resolved only after a full blown trial x x x x

13.2. Even assuming arguendo that the properties could be subject of It is for the same reason that respondents espousal of the statute of
escheat proceedings, the decision is still legally infirm for escheating the limitations against herein petition for annulment cannot prosper at this
properties to an entity, the Pasay City Government, which is not authorized stage of the proceedings.Indeed, Section 4, Rule 91 of the Revised Rules of
by law to be the recipient thereof. The property should have been escheated Court expressly provides that a person entitled to the estate must file his
in favor of the Republic of the Philippines under Rule 91, Section 1 of the claim with the court a quo within five (5) years from the date of said
New Rules of Court x x x x judgment. However, it is clear to this Court that herein petitioner is not
claiming anything from the estate of the deceased at the time of her death
on September 20, 1985; rather she is claiming that the subject parcels of
On 17 March 1997 the Office of the Solicitor General representing
land should not have been included as part of the estate of the said
public respondents RTC and the Register of Deeds (herein petitioner) filed
decedent as she is the owner thereof by virtue of the deeds of donation in
an answer setting forth their affirmative defenses, to wit: (a) lack of
her favor.
jurisdiction over the nature of the action; and, (b) the cause of action was
barred by the statute of limitations.
In effect, herein petitioner, who alleges to be in possession of the premises
Finding no cogent reason to justify the dismissal of the petition for in question, is claiming ownership of the properties in question and the
annulment, the Court of Appeals issued on 12 November 1998 the first of its consequent reconveyance thereof in her favor which cause of action
assailed Resolutions giving due course to the petition for annulment of prescribes ten (10) years after the issuance of title in favor of
judgment and setting the date for trial on the merits. In upholding the respondent Pasay City on August 7, 1990. Herein petition was seasonably
theory of respondent Solano, the Appeals Court ruled that - filed on February 3, 1997 under Article 1144, to wit:
Art. 1144. The following actions must be brought within ten years from the within which to file claims before the court a quo as set forth in Rule 91 of
time the right of action accrues: (1) Upon a written contract; (2) Upon an the Revised Rules of Court has set in.
obligation created by law; (3) Upon a judgment.
The present controversy revolves around the nature of the parcels of
land purportedly donated to private respondent which will ultimately
And Article 1456, to wit:
determine whether the lower court had jurisdiction to declare the same
escheated in favor of the state.
Art. 1456. If property is acquired through mistake or fraud, the person
obtaining it is, by force of law, considered a trustee of an implied trust for We rule for the petitioner. Escheat is a proceeding, unlike that of
the benefit of the person from whom the property comes. [4] succession or assignment, whereby the state, by virtue of its sovereignty,
steps in and claims the real or personal property of a person who dies
In its Resolution of 4 May 2000 the Court of Appeals denied the motion intestate leaving no heir. In the absence of a lawful owner, a property is
for reconsideration filed by public respondents Register of Deeds claimed by the state to forestall an open "invitation to self-service by the
of PasayCity and the Presiding judge of the lower court and set the trial on first comers."[5] Since escheat is one of the incidents of sovereignty, the state
the merits for June 15 and 16, 2000. may, and usually does, prescribe the conditions and limits the time within
which a claim to such property may be made. The procedure by which the
In its effort to nullify the Resolutions herein before mentioned, escheated property may be recovered is generally prescribed by statue, and
petitioner points out that the Court of Appeals committed grave abuse of a time limit is imposed within which such action must be brought.
discretion amounting to lack or excess of jurisdiction (a) in denying
petitioner's affirmative defenses set forth in its answer and motion for In this jurisdiction, a claimant to an escheated property must file his
reconsideration, and in setting the case for trial and reception of evidence; claim "within five (5) years from the date of such judgment, such person
and, (b) in giving due course to private respondent's petition for annulment shall have possession of and title to the same, or if sold, the municipality or
of decision despite the palpable setting-in of the 5-year statute of limitations city shall be accountable to him for the proceeds, after deducting the estate;
within which to file claims before the court a quo set forth in Rule 91 of the but a claim not made shall be barred forever."[6] The 5-year period is not a
Revised Rules of Court and Art. 1014 of the Civil Code. device capriciously conjured by the state to defraud any claimant; on the
contrary, it is decidedly prescribed to encourage would-be claimants to be
Petitioner argues that the lower court had jurisdiction when it punctilious in asserting their claims, otherwise they may lose them forever
escheated the properties in question in favor of the city government and the in a final judgment.
filing of a petition for annulment of judgment on the ground of subsequent
discovery of the deeds of donation did not divest the lower court of its Incidentally, the question may be asked: Does herein private
jurisdiction on the matter. It further contends that Rule 47 of the 1997 Rules respondent, not being an heir but allegedly a donee, have the personality to
of Civil Procedure only provides for two (2) grounds for the annulment of be a claimant within the purview of Sec. 4, Rule 91, of the Revised Rules of
judgment, namely:extrinsic fraud and lack of jurisdiction. As such the Court? In this regard, we agree with the Solicitor General that the case
discovery of the deeds of donation seven (7) years after the finality of the of Municipal Council of San Pedro, Laguna v. Colegio de San Jose, Inc.,[7] is
escheat proceedings is an extraneous matter which is clearly not an instance applicable at least insofar as it concerns the Court's discussion on who is
of extrinsic fraud nor a ground to oust the lower court of its jurisdiction. an"interested party" in an escheat proceeding -

Petitioner also insists that notwithstanding the execution of the deeds In a special proceeding for escheat under sections 750 and 751 the
of donation in favor of private respondent, the 5-year statute of limitations petitioner is not the sole and exclusive interested party. Any person alleging
to have a direct right or interest in the property sought to be escheated is indicating that no transfer of ownership involving the disputed properties
likewise an interested party and may appear and oppose the petition for was ever made by the deceased during her lifetime. In the absence
escheat. In the present case, the Colegio de San Jose, Inc. and Carlos Young therefore of any clear and convincing proof showing that the subject lands
appeared alleging to have a material interest in the Hacienda de San had been conveyed by Hankins to private respondent Solano, the same still
Pedro Tunasan; the former because it claims to be the exclusive owner of remained, at least before the escheat, part of the estate of the decedent
the hacienda, and the latter because he claims to be the lessee thereof and the lower court was right not to assume otherwise. The Court of Appeals
under a contract legally entered with the former (underscoring supplied). therefore cannot perfunctorily presuppose that the subject properties were
no longer part of the decedent's estate at the time the lower court handed
In the instant petition, the escheat judgment was handed down by the down its decision on the strength of a belated allegation that the same had
lower court as early as 27 June 1989 but it was only on 28 January 1997, previously been disposed of by the owner. It is settled that courts decide
more or less seven (7) years after, when private respondent decided to only after a close scrutiny of every piece of evidence and analyze each case
contest the escheat judgment in the guise of a petition for annulment of with deliberate precision and unadulterated thoroughness, the judgment
judgment before the Court of Appeals. Obviously, private respondent's not being diluted by speculations, conjectures and unsubstantiated
belated assertion of her right over the escheated properties militates assertions.
against recovery.
WHEREFORE, the petition is GRANTED. The assailed Resolution of the
A judgment in escheat proceedings when rendered by a court of Court of Appeals dated 12 November 1998 giving due course to the petition
competent jurisdiction is conclusive against all persons with actual or for annulment of judgment, and its Resolution dated 4 May 2000 denying
constructive notice, but not against those who are not parties or privies petitioner's motion for reconsideration, are SET ASIDE. The decision of the
thereto. As held in Hamilton v. Brown,[8] "a judgment of escheat was held RTC-Br. 114, Pasay City, dated 27 June 1989, is REINSTATED.
conclusive upon persons notified by advertisement to all persons
SO ORDERED.
interested. Absolute lack on the part of petitioners of any dishonest intent
to deprive the appellee of any right, or in any way injure him, constitutes
due process of law, proper notice having been observed." With the lapse of
the 5-year period therefore, private respondent has irretrievably lost her
right to claim and the supposed "discovery of the deeds of donation" is not
enough justification to nullify the escheat judgment which has long attained
finality.
In the mind of this Court the subject properties were owned by the
decedent during the time that the escheat proceedings were being
conducted and the lower court was not divested of its jurisdiction to escheat
them in favor of Pasay City notwithstanding an allegation that they had
been previously donated. We recall that a motion for intervention was
earlier denied by the escheat court for failure to show "valid claim or right
to the properties in question."[9] Where a person comes into an escheat
proceeding as a claimant, the burden is on such intervenor to establish his
title to the property and his right to intervene. A fortiori, the certificates of
title covering the subject properties were in the name of the decedent