THE HEIRS OF PEDRO ESCANLAR, FRANCISCO HOLGADO and the SPOUSES DR.

EDWIN A. JAYME and ELISA TAN-JAYME, petitioners, vs. THE HON. COURT OF
APPEALS, GENEROSA MARTINEZ, CARMEN CARI-AN, RODOLFO CARI-AN, NELLY
CHUA CARI-AN, for herself and as guardian ad litem of her minor son, LEONELL C.
CARI-AN, FREDISMINDA CARI-AN, the SPOUSES PAQUITO CHUA and NEY
SARROSA-CHUA and THE REGISTER OF DEEDS OF NEGROS
OCCIDENTAL, respondents.
[G.R. No. 119777. October 23, 1997]

FRANCISCO HOLGADO and HRS. OF PEDRO ESCANLAR, namely BERNARDO,

FELY, SONIA, LILY, DYESEBEL and NOEMI all surnamed ESCANLAR, petitioners,
vs. HON. COURT OF APPEALS, GENEROSA MARTINEZ, CARMEN CARI-AN,
RODOLFO CARI-AN, NELLY CHUA CARI-AN, for herself and as guardian ad litem of
her minor son, LEONELL C. CARI-AN and FREDISMINDA CARI-AN, and SP. PAQUITO
CHUA and NEY SARROSA CHUA and REGISTER OF DEEDS OF NEGROS
OCCIDENTAL, respondents.
[G.R. No. 120690. October 23, 1997]

ROMERO, J.:

DOCTRINE: Hereditary rights in an estate can be validly sold without need of court
approval and that when private respondents Cari-an sold their rights, interests and
participation in Lot Nos. 1616 and 1617, they could legally sell the same without the
approval of the probate court.

FACTS: Spouses Guillermo Nombre and Victoriana Cari-an died without issue in 1924
and 1938, respectively. Nombre’s heirs include his nephews and grandnephews.
Victoriana was succeeded by her late brother’s son, Gregorio Cari-an.

After Gregorio’s death in 1971, his wife, Generosa Martinez and children (Rodolfo,
Carmen, Leonardo and Fredisminda) were adjudged as heirs by representation to
Victoriana’s estate. Leonardo passed away, leaving his widow, Nelly Chua vda. de Cari-
an and minor Leonell as his heirs.

Two parcels of land, denominated by Lot 1616 and 1617, formed part of the estate of
Guillermo Nombre and Victoriana Cari-an.

In 1978, Gregorio’s heirs executed a deed of sale of rights, interests and

participation in favor of Pedro Escanlar and Francisco Holgado over the ½
undivided share of Victoriana for P275,000 to be paid to the heirs, except the share
of the minor Leonell Cari-an which shall be deposited to the Municipal Treasurer. Said
contract of sale will be effective only upon approval of CFI

Escanlar and Holgado, the vendees, were concurrently the lessees of the subject
property. In a deed of agreement executed by both parties confirming and affirming the
contract of sale, they stipulated the following:
a. That the balance of the purchase price (P225,000) shall be paid on or before
May 1979
b. Pending complete payment thereof, the vendees shall not assign, sell, lease or
mortgage the rights, interests and participation thereof
 c. In the event of nonpayment of the balance of said purchase price, the sum of
P50,000 (down payment) shall be deemed as damages

Escanlar and Holgado were unable to pay the individual shares of the Cari-an heirs,
amounting to P55,000 each, on the due date. However, said heirs received at least 12
installment payments from Escanlar and Holgado after May 1979. Rodolfo was fully paid
by June 1979, Generosa Martinez, Carmen and Fredisminda were likewise fully
compensated for their individual shares. The minor’s share was deposited with the RTC
in September 1982.

Being former lessees, Escanlar and Holgado continued in possession of Lots 1616 and
Lots 1617. Interestingly, they continued to pay rent based on their lease contract.

Subsequently, Escanlar and Holgado sought to intervene in the probate proceedings of

Guillermo and Victoriana as buyers of Victoriana’s share. In 1982, the probate court
approved the motion filed by the heirs of Guillermo and Victoriana to sell their respective
shares in the estate. Thereafter, the Cari-ans, sold their shares in 8 parcels of land
including lots 1616 and 1617 to spouses Chua for P1.85 million.

The Cari-ans instituted a case for cancellation of sale against Escanlar and Holgado
alleging the latter’s failure to pay the balance of the purchase price on the stipulated
date.

Escanlar and Holgado averred that the Cari-ans, having been paid, had no right to resell
the subject lots and that the spouses Chua were purchasers in bad faith.

The trial court held in favor of the heirs of Cari-an citing that the sale between the Cari-
ans and Escanlar is void as it was not approved by the probate court which was required
in the deed of sale.

CA affirmed the same and cited that the questioned deed of sale of rights is a contract to
sell because it shall become effective only upon approval by the probate court and upon
full payment of the purchase price.

ISSUE: Whether or not the sale to Escanlar and Holgado was nullified because it was
not approved by the probate court as required by the contested deed of sale of rights,
interests and participation and because the Cari-ans were not fully paid.

RULING: NO

RATIO: The petitioners are correct in saying that the need for approval by the probate
court exists only where specific properties of the estate are sold and not when only ideal
and indivisible shares of an heir are disposed of.

In the case of Dillena v. Court of Appeals, the Court declared that it is within the
jurisdiction of the probate court to approve the sale of properties of a deceased person
by his prospective heirs before final adjudication. It is settled that court approval is
necessary for the validity of any disposition of the decedents estate. However, reference
to judicial approval cannot adversely affect the substantive rights of the heirs to dispose
of their ideal share in the co-heirship and/or co-ownership among the heirs. It must be
recalled that during the period of indivision of a decedents estate, each heir, being
a co-owner, has full ownership of his part and may therefore alienate it. But the
effect of the alienation with respect to the co-owners shall be limited to the portion
which may be allotted to him in the division upon the termination of the co-
ownership.

From the foregoing, it is clear that hereditary rights in an estate can be validly sold
without need of court approval and that when private respondents Cari-an sold
their rights, interests and participation in Lot Nos. 1616 and 1617, they could
legally sell the same without the approval of the probate court.

As a general rule, the pertinent contractual stipulation (requiring court approval) should
be considered as the law between the parties. However, the presence of two factors
militate against this conclusion. First, the evident intention of the parties appears to be
contrary to the mandatory character of said stipulation. Whoever crafted the document of
conveyance, must have been of the belief that the controversial stipulation was a legal
requirement for the validity of the sale. But the contemporaneous and subsequent acts
of the parties reveal that the original objective of the parties was to give effect to the
deed of sale even without court approval. Receipt and acceptance of the numerous
installments on the balance of the purchase price by the Cari-ans and leaving petitioners
in possession of Lot Nos. 1616 and 1617 reveal their intention to effect the mutual
transmission of rights and obligations.

It was only after private respondents Cari-an sold their shares in the subject lots again
to the spouses Chua, in September 1982, that these same heirs filed the case at bar for
the cancellation of the September 1978 conveyance. Worth considering too is the fact
that although the period to pay the balance of the purchase price expired in May 1979,
the heirs continued to accept payments until late 1979 and did not seek judicial relief
until late 1982 or three years later.

Second, we hold that the requisite approval was virtually rendered impossible by the
Cari-ans because they opposed the motion for approval of the sale filed by petitioners
and sued the latter for the cancellation of that sale.

The probate court explained:

(e) While it is true that Escanlar and Holgado filed a similar motion for the approval of
Deed of Sale executed by some of the heirs in their favor concerning the one-half (1/2)
portions of Lots 1616 and 1617 as early as November 10, 1981, yet the Court could not
have favorably acted upon it, because there exists a pending case for the rescission of
that contract, instituted by the vendors therein against Pedro Escanlar and Francisco
Holgado and filed before another branch of this Court. Until now, this case, which
attacks the very source of whatever rights or interests Holgado and Escanlar may have
acquired over one-half (1/2) portions of Lots Nos. 1616 and 1617, is pending resolution
by another court.

Having provided the obstacle and the justification for the stipulated approval not to be
granted, private respondents Cari-an should not be allowed to cancel their first
transaction with petitioners because of lack of approval by the probate court, which lack
is of their own making.
WHEREFORE, the petitions are hereby GRANTED. The decision of the Court of
Appeals under review is hereby REVERSED AND SET ASIDE. The case is
REMANDED to the Regional Trial Court of Negros Occidental, Branch 61 for petitioners
and private respondents Cari-an or their successors-in-interest to determine exactly
which 1/2 portion of Lot Nos. 1616 and 1617 will be owned by each party, at the option
of petitioners. The trial court is DIRECTED to order the issuance of the corresponding
certificates of title in the name of the respective parties and to resolve the matter of
rental payments of the land not delivered to the Chua spouses subject to the rates
specified above with legal interest from date of demand.