Cases Orig Combined

JAO vs.
CA
Rodolfo and Perico were the only sons of the spouses Jao, who died intestate in 1988 and
1989, respectively. The decedents left real estate, cash, shares of stock and other personal
properties. Perico instituted a petition for issuance of letters of administration over the estate
of his parents. Pending the appointment of a regular administrator, Perico moved that he be
appointed as special administrator.
Rodolfo moved for the dismissal of the petition on the ground of improper venue. He argued
that the deceased spouses did not reside in Quezon City either during their lifetime or at the
time of their deaths. The decedents actual residence was in Angeles City, Pampanga, where
his late mother used to run and operate a bakery. In his opposition, Perico countered that
their deceased parents actually resided in Rodolfos house in Quezon City at the time of their
deaths. As a matter of fact, it was conclusively declared in their death certificates that it was
their last residence before they died.
ISSUE:
Where should the settlement proceedings be had --- in Pampanga, where the decedents had
their permanent residence, or in Quezon City, where they actually stayed before their
demise?
HELD:
Rule 73, Section 1 of the Rules of Court clearly states that the estate of an inhabitant of the
Philippines shall be settled or letters of administration granted in the proper court located in
the province where the decedent resides at the time of his death.
In Raymond v. Court of Appeals19 and Bejer v. Court of Appeals, the court ruled that venue
for ordinary civil actions and that for special proceedings have one and the same meaning.
As thus defined, "residence", in the context of venue provisions, means nothing more than a
persons actual residence or place of abode, provided he resides therein with continuity and
consistency. All told, the lower court and the CA correctly held that venue for the settlement
of the decedents intestate estate was properly laid in the Quezon City court.
RIOFERIO vs. CA
ISSUE:
Whether the heirs may bring suit to recover property of the estate pending the appointment
of an administrator?
FACTS:
Alfonso Orfinada, Jr. died without a will in Angeles City leaving several personal and real
properties located in Angeles City, Dagupan City and Kalookan City. He also left a widow,
respondent Esperanza Orfinada with whom he had seven children who are the herein
respondents.
Apart from the respondents, the demise of the decedent left in mourning his paramour and
their children.
Respondents discovered that petitioner Teodora Rioferio and her children executed
an Extrajudicial Settlement of Estate of a Deceased Person with Quitclaim involving the
properties of the estate of the decedent located in Dagupan City. Respondents also found
out that petitioners were able to obtain a loan of P700,000.00 from the Rural Bank of
Mangaldan Inc. by executing a Real Estate Mortgage over the properties subject of the
extra-judicial settlement.
Respondent Alfonso "Clyde" Orfinada III filed a Petition for Letters of Administration before
the RTC of Angeles City, praying that letters of administration encompassing the estate of
Alfonso Orfinada, Jr. be issued to him.
Respondents filed a Complaint for the Annulment/Rescission of Extra Judicial Settlement of
Estate of a Deceased Person with Quitclaim, Real Estate Mortgage and Cancellation of
Transfer Certificate of Titles with Nos. 63983, 63985 and 63984 and Other Related
Documents with Damages against petitioners, the Rural Bank of Mangaldan, Inc. and the
Register of Deeds of Dagupan City before the Regional Trial Court, Branch 42, Dagupan
City.
Petitioners filed their Answer to the aforesaid complaint interposing the defense that the
property subject of the contested deed of extra-judicial settlement pertained to the properties
originally belonging to the parents of Teodora Riofero and that the titles thereof were
delivered to her as an advance inheritance but the decedent had managed to register them
in his name. Petitioners also raised the affirmative defense that respondents are not the real
parties-in-interest but rather the Estate of Alfonso O. Orfinada, Jr. in view of the pendency of
the administration proceedings. Petitioners filed a Motion to Set Affirmative Defenses for
Hearing on the aforesaid ground.
Even if administration proceedings have already been commenced, the heirs may still bring
the suit if an administrator has not yet been appointed. And even if there is an appointed
administrator, jurisprudence recognizes two exceptions, viz: (1) if the executor or
administrator is unwilling or refuses to bring suit; and (2) when the administrator is alleged to
have participated in the act complained of and he is made a party defendant. Evidently, the
necessity for the heirs to seek judicial relief to recover property of the estate is as compelling
when there is no appointed administrator, if not more, as where there is an appointed
administrator but he is either disinclined to bring suit or is one of the guilty parties himself.
All told, therefore, the rule that the heirs have no legal standing to sue for the recovery of
property of the estate during the pendency of administration proceedings has three
exceptions, the third being when there is no appointed administrator such as in this case.
As the appellate court did not commit an error of law in upholding the order of the lower
court, recourse to this Court is not warranted.
WHEREFORE, the petition for review is DENIED.
NITTSCHER vs. NITTSCHER

Dr. Werner Karl Johann Nittscher filed with the RTC of Makati City a petition for the probate
of his holographic will and for the issuance of letters testamentary to herein respondent Atty.
Rogelio Nogales.
Dr. Nittscher died. Hence, Atty. Nogales filed a petition for letters testamentary for the
administration of the estate of the deceased. Dr. Nittschers surviving spouse, herein
petitioner Cynthia Nittscher, moved for the dismissal of the said petition. However, the court
denied petitioners motion to dismiss, and granted respondents petition for the issuance of
letters testamentary.
Petitioner moved for reconsideration, but her motion was denied for lack of merit. Atty.
Nogales was issued letters testamentary and was sworn in as executor.
Petitioner appealed to the Court of Appeals alleging that respondents petition for the
issuance of letters testamentary should have been dismissed outright as the RTC had no
jurisdiction over the subject matter and that she was denied due process.
The appellate court dismissed the appeal, thus:
WHEREFORE, the foregoing considered, the appeal is hereby DISMISSED and the
assailed Order isAFFIRMED in toto. The court a quo is ordered to proceed with
dispatch in the proceedings below.
SO ORDERED.6
Petitioners motion for reconsideration of the aforequoted decision was denied for lack of
merit. Hence, the present petition anchored on the following grounds:
I.
BOTH THE CA AND THE LOWER COURT ERRED IN NOT DISMISSING
OUTRIGHT THE PETITION FOR LETTERS TESTAMENTARY FILED BY ATTY.
NOGALES WHEN, OBVIOUSLY, IT WAS FILED IN VIOLATION OF REVISED
CIRCULAR NO. 28-91 AND ADMINISTRATIVE CIRCULAR NO. 04-94 OF THIS
HONORABLE COURT.
II.
THE CA ERRED IN NOT DECLARING THAT THE LOWER COURT [HAS] NO
JURISDICTION OVER THE SUBJECT MATTER OF THE PRESENT SUIT.
III.
THE CA ERRED IN CONCLUDING THAT SUMMONS WERE PROPERLY ISSUED
TO THE PARTIES AND ALL PERSONS INTERESTED IN THE PROBATE OF THE
HOLOGRAPHIC WILL OF DR. NITTSCHER.
IV.
THE CA ERRED IN CONCLUDING THAT THE PETITIONER WAS NOT DEPRIVED

OF DUE PROCESS OF LAW BY THE LOWER COURT.7
Petitioner contends that respondents petition for the issuance of letters testamentary lacked
a certification against forum-shopping. She adds that the RTC has no jurisdiction over the
subject matter of this case because Dr. Nittscher was allegedly not a resident of the
Philippines; neither did he leave real properties in the country. Petitioner claims that the
properties listed for disposition in her husbands will actually belong to her. She insists she
was denied due process of law because she did not receive by personal service the notices
of the proceedings.
Respondent Atty. Nogales, however, counters that Dr. Nittscher did reside and own real
properties in Las Pias, Metro Manila. He stresses that petitioner was duly notified of the
probate proceedings. Respondent points out that petitioner even appeared in court to
oppose the petition for the issuance of letters testamentary and that she also filed a motion
to dismiss the said petition. Respondent maintains that the petition for the issuance of letters
testamentary need not contain a certification against forum-shopping as it is merely a
continuation of the original proceeding for the probate of the will.
We resolve to deny the petition.
As to the first issue, Revised Circular No. 28-918 and Administrative Circular No. 04-949 of
the Court require a certification against forum-shopping for all initiatory pleadings filed in
court. However, in this case, the petition for the issuance of letters testamentary is not an
initiatory pleading, but a mere continuation of the original petition for the probate of Dr.
Nittschers will. Hence, respondents failure to include a certification against forum-shopping
in his petition for the issuance of letters testamentary is not a ground for outright dismissal of
the said petition.
Anent the second issue, Section 1, Rule 73 of the Rules of Court provides:
SECTION 1. Where estate of deceased persons settled. If the decedent is an
inhabitant of the Philippines at the time of his death, whether a citizen or an
alien, his will shall be proved, or letters of administration granted, and his
estate settled, in the Court of First Instance (now Regional Trial Court) in the
province in which he resides at the time of his death, and if he is an inhabitant of
a foreign country, the Court of First Instance (now Regional Trial Court) of any
province in which he had estate. (Emphasis supplied.)
In this case, the RTC and the Court of Appeals are one in their finding that Dr. Nittscher was
a resident of Las Pias, Metro Manila at the time of his death. Such factual finding, which we
find supported by evidence on record, should no longer be disturbed. Time and again we
have said that reviews on certiorari are limited to errors of law. Unless there is a showing that
the findings of the lower court are totally devoid of support or are glaringly erroneous, this
Court will not analyze or weigh evidence all over again. 10
Hence, applying the aforequoted rule, Dr. Nittscher correctly filed in the RTC of Makati City,
which then covered Las Pias, Metro Manila, the petition for the probate of his will and for
the issuance of letters testamentary to respondent.
Regarding the third and fourth issues, we note that Dr. Nittscher asked for the allowance of
his own will. In this connection, Section 4, Rule 76 of the Rules of Court states:
SEC. 4. Heirs, devisees, legatees, and executors to be notified by mail or personally.
If the testator asks for the allowance of his own will, notice shall be sent only to his
compulsory heirs.
In this case, records show that petitioner, with whom Dr. Nittscher had no child, and Dr.
Nittschers children from his previous marriage were all duly notified, by registered mail, of
the probate proceedings. Petitioner even appeared in court to oppose respondents petition
for the issuance of letters testamentary and she also filed a motion to dismiss the said
petition. She likewise filed a motion for reconsideration of the issuance of the letters
testamentary and of the denial of her motion to dismiss. We are convinced petitioner was
accorded every opportunity to defend her cause. Therefore, petitioners allegation that she
was denied due process in the probate proceedings is without basis.
As a final word, petitioner should realize that the allowance of her husbands will is
conclusive only as to its due execution. 11 The authority of the probate court is limited to
ascertaining whether the testator, being of sound mind, freely executed the will in
accordance with the formalities prescribed by law.12 Thus, petitioners claim of title to the
properties forming part of her husbands estate should be settled in an ordinary action before
the regular courts.
WHEREFORE, the petition is DENIED for lack of merit. The assailed Decision dated July 31,
2003 and Resolution dated October 21, 2003 of the Court of Appeals in CA-G.R. CV No.
55330, which affirmed the Order dated September 29, 1995 of the Regional Trial Court,
Branch 59, Makati City, in SP Proc. No. M-2330 are AFFIRMED.
No pronouncement as to costs.
SO ORDERED.
Carpio, Carpio-Morales, Tinga, Velasco, Jr., JJ., concur.
Footnotes
Rollo, pp. 79-93. Penned by Associate Justice Josefina Guevara-Salonga, with
Associate Justices Roberto A. Barrios and Arturo D. Brion concurring.
1
Id. at 95.
CA rollo, pp. 81-85. Penned by Judge Lucia Violago Isnani.
Rollo, p. 167.
Id. at 79-80.
Id. at 93.
Id. at 459-460.
Additional Requisites for Petitions Filed with the Supreme Court and the Court of
Appeals to Prevent Forum Shopping or Multiple Filing of Petitions and Complaints.
Effective April 1, 1994.
8
Additional Requisites for Civil Complaints, Petitions and Other Initiatory Pleadings
Filed in All Courts and Agencies, Other Than the Supreme Court and the Court of
Appeals, to Prevent Forum Shopping or Multiple Filing of Such Pleadings. Effective
April 1, 1994.
9
Quezon City Government v. Dacara, G.R. No. 150304, June 15, 2005, 460 SCRA
243, 245.
10
11
Civil Code, Article 838.
Art. 838. No will shall pass either real or personal property unless it is proved and
allowed in accordance with the Rules of Court.
xxxx
Subject to the right of appeal, the allowance of the will, either during the lifetime of
the testator or after his death, shall be conclusive as to its due execution.
Maloles II v. Phillips, G.R. Nos. 129505 & 133359, January 31, 2000, 324 SCRA
172, 180.
12
Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 139868
June 8, 2006
ALONZO Q. ANCHETA, Petitioner,

vs.
CANDELARIA GUERSEY-DALAYGON, Respondent.
DECISION
AUSTRIA-MARTINEZ, J.:
Spouses Audrey ONeill (Audrey) and W. Richard Guersey (Richard) were American citizens
who have resided in the Philippines for 30 years. They have an adopted daughter, Kyle
Guersey Hill (Kyle). On July 29, 1979, Audrey died, leaving a will. In it, she bequeathed her
entire estate to Richard, who was also designated as executor.1 The will was admitted to
probate before the Orphans Court of Baltimore, Maryland, U.S.A, which named James N.
Phillips as executor due to Richards renunciation of his appointment. 2 The court also named
Atty. Alonzo Q. Ancheta (petitioner) of the Quasha Asperilla Ancheta Pena & Nolasco Law
Offices as ancillary administrator.3
In 1981, Richard married Candelaria Guersey-Dalaygon (respondent) with whom he has two
children, namely, Kimberly and Kevin.
On October 12, 1982, Audreys will was also admitted to probate by the then Court of First
Instance of Rizal, Branch 25, Seventh Judicial District, Pasig, in Special Proceeding No.
9625.4 As administrator of Audreys estate in the Philippines, petitioner filed an inventory and
appraisal of the following properties: (1) Audreys conjugal share in real estate with
improvements located at 28 Pili Avenue, Forbes Park, Makati, Metro Manila, valued
atP764,865.00 (Makati property); (2) a current account in Audreys name with a cash balance
of P12,417.97; and (3) 64,444 shares of stock in A/G Interiors, Inc. worth P64,444.00.5
On July 20, 1984, Richard died, leaving a will, wherein he bequeathed his entire estate to
respondent, save for his rights and interests over the A/G Interiors, Inc. shares, which he left
to Kyle.6 The will was also admitted to probate by the Orphans Court of Ann Arundel,
Maryland, U.S.A, and James N. Phillips was likewise appointed as executor, who in turn,
designated Atty. William Quasha or any member of the Quasha Asperilla Ancheta Pena &
Nolasco Law Offices, as ancillary administrator.
Richards will was then submitted for probate before the Regional Trial Court of Makati,
Branch 138, docketed as Special Proceeding No. M-888. 7 Atty. Quasha was appointed as
ancillary administrator on July 24, 1986.8
On October 19, 1987, petitioner filed in Special Proceeding No. 9625, a motion to declare
Richard and Kyle as heirs of Audrey.9 Petitioner also filed on October 23, 1987, a project of
partition of Audreys estate, with Richard being apportioned the undivided interest in the
Makati property, 48.333 shares in A/G Interiors, Inc., andP9,313.48 from the Citibank current
account; and Kyle, the undivided interest in the Makati property, 16,111 shares in A/G
Interiors, Inc., and P3,104.49 in cash.10
The motion and project of partition was granted and approved by the trial court in its Order
dated February 12, 1988.11 The trial court also issued an Order on April 7, 1988, directing the
Register of Deeds of Makati to cancel TCT No. 69792 in the name of Richard and to issue a
new title in the joint names of the Estate of W. Richard Guersey ( undivided interest) and
Kyle ( undivided interest); directing the Secretary of A/G Interiors, Inc. to transfer 48.333
shares to the Estate of W. Richard Guersey and 16.111 shares to Kyle; and directing the
Citibank to release the amount of P12,417.97 to the ancillary administrator for distribution to
the heirs.12
Consequently, the Register of Deeds of Makati issued on June 23, 1988, TCT No. 155823 in
the names of the Estate of W. Richard Guersey and Kyle. 13
Meanwhile, the ancillary administrator in Special Proceeding No. M-888 also filed a project of
partition wherein 2/5of Richards undivided interest in the Makati property was allocated to
respondent, while 3/5 thereof were allocated to Richards three children. This was opposed by
respondent on the ground that under the law of the State of Maryland, "a legacy passes to
the legatee the entire interest of the testator in the property subject of the
legacy."14 Since Richard left his entire estate to respondent, except for his rights and
interests over the A/G Interiors, Inc, shares, then his entire undivided interest in the Makati
property should be given to respondent.
The trial court found merit in respondents opposition, and in its Order dated December 6,
1991, disapproved the project of partition insofar as it affects the Makati property. The trial
court also adjudicated Richards entire undivided interest in the Makati property to
respondent.15
On October 20, 1993, respondent filed with the Court of Appeals (CA) an amended
complaint for the annulment of the trial courts Orders dated February 12, 1988 and April 7,
1988, issued in Special Proceeding No. 9625.16Respondent contended that petitioner willfully
breached his fiduciary duty when he disregarded the laws of the State of Maryland on the
distribution of Audreys estate in accordance with her will. Respondent argued that since
Audrey devised her entire estate to Richard, then the Makati property should be wholly
adjudicated to him, and not merely thereof, and since Richard left his entire estate, except
for his rights and interests over the A/G Interiors, Inc., to respondent, then the entire Makati
property should now pertain to respondent.
Petitioner filed his Answer denying respondents allegations. Petitioner contended that he
acted in good faith in submitting the project of partition before the trial court in Special
Proceeding No. 9625, as he had no knowledge of the State of Marylands laws on testate
and intestate succession. Petitioner alleged that he believed that it is to the "best interests of
the surviving children that Philippine law be applied as they would receive their just shares."
Petitioner also alleged that the orders sought to be annulled are already final and executory,
and cannot be set aside.
On March 18, 1999, the CA rendered the assailed Decision annulling the trial courts Orders
dated February 12, 1988 and April 7, 1988, in Special Proceeding No. 9625. 17 The dispositive
portion of the assailed Decision provides:
WHEREFORE, the assailed Orders of February 12, 1998 and April 7, 1988 are hereby
ANNULLED and, in lieu thereof, a new one is entered ordering:
(a) The adjudication of the entire estate of Audrey ONeill Guersey in favor of the
estate of W. Richard Guersey; and
(b) The cancellation of Transfer Certificate of Title No. 15583 of the Makati City
Registry and the issuance of a new title in the name of the estate of W. Richard
Guersey.
SO ORDERED.18
Petitioner filed a motion for reconsideration, but this was denied by the CA per Resolution
dated August 27, 1999.19
Hence, the herein petition for review on certiorari under Rule 45 of the Rules of Court
alleging that the CA gravely erred in not holding that:
A) THE ORDERS OF 12 FEBRUARY 1988 AND 07 APRIL 1988 IN SPECIAL
PROCEEDINGS NO. 9625 "IN THE MATTER OF THE PETITION FOR PROBATE
OF THE WILL OF THE DECEASED AUDREY GUERSEY, ALONZO Q. ANCHETA,
ANCILLARY ADMINISTRATOR", ARE VALID AND BINDING AND HAVE LONG
BECOME FINAL AND HAVE BEEN FULLY IMPLEMENTED AND EXECUTED AND
CAN NO LONGER BE ANNULLED.
B) THE ANCILLARY ADMINISTRATOR HAVING ACTED IN GOOD FAITH, DID NOT
COMMIT FRAUD, EITHER EXTRINSIC OR INTRINSIC, IN THE PERFORMANCE
OF HIS DUTIES AS ANCILLARY ADMINISTRATOR OF AUDREY ONEIL
GUERSEYS ESTATE IN THE PHILIPPINES, AND THAT NO FRAUD, EITHER
EXTRINSIC OR INTRINSIC, WAS EMPLOYED BY [HIM] IN PROCURING SAID
ORDERS.20
Petitioner reiterates his arguments before the CA that the Orders dated February 12, 1988
and April 7, 1988 can no longer be annulled because it is a final judgment, which is
"conclusive upon the administration as to all matters involved in such judgment or order, and
will determine for all time and in all courts, as far as the parties to the proceedings are
concerned, all matters therein determined," and the same has already been executed. 21
Petitioner also contends that that he acted in good faith in performing his duties as an
ancillary administrator. He maintains that at the time of the filing of the project of partition, he
was not aware of the relevant laws of the State of Maryland, such that the partition was
made in accordance with Philippine laws. Petitioner also imputes knowledge on the part of
respondent with regard to the terms of Aubreys will, stating that as early as 1984, he already
apprised respondent of the contents of the will and how the estate will be divided. 22
Respondent argues that petitioners breach of his fiduciary duty as ancillary administrator of
Aubreys estate amounted to extrinsic fraud. According to respondent, petitioner was dutybound to follow the express terms of Aubreys will, and his denial of knowledge of the laws of
Maryland cannot stand because petitioner is a senior partner in a prestigious law firm and it
was his duty to know the relevant laws.
Respondent also states that she was not able to file any opposition to the project of partition
because she was not a party thereto and she learned of the provision of Aubreys will
bequeathing entirely her estate to Richard only after Atty. Ancheta filed a project of partition
in Special Proceeding No. M-888 for the settlement of Richards estate.
A decree of distribution of the estate of a deceased person vests the title to the land of the
estate in the distributees, which, if erroneous may be corrected by a timely appeal. Once it
becomes final, its binding effect is like any other judgment in rem. 23 However, in exceptional
cases, a final decree of distribution of the estate may be set aside for lack of jurisdiction or
fraud.24 Further, in Ramon v. Ortuzar,25 the Court ruled that a party interested in a probate
proceeding may have a final liquidation set aside when he is left out by reason of
circumstances beyond his control or through mistake or inadvertence not imputable to
negligence.26
The petition for annulment was filed before the CA on October 20, 1993, before the issuance
of the 1997 Rules of Civil Procedure; hence, the applicable law is Batas Pambansa Blg. 129
(B.P. 129) or the Judiciary Reorganization Act of 1980. An annulment of judgment filed under
B.P. 129 may be based on the ground that a judgment is void for want of jurisdiction or that
the judgment was obtained by extrinsic fraud. 27 For fraud to become a basis for annulment of
judgment, it has to be extrinsic or actual, 28 and must be brought within four years from the
discovery of the fraud.29
In the present case, respondent alleged extrinsic fraud as basis for the annulment of the
RTC Orders dated February 12, 1988 and April 7, 1988. The CA found merit in respondents
cause and found that petitioners failure to follow the terms of Audreys will, despite the
latters declaration of good faith, amounted to extrinsic fraud. The CA ruled that under Article
16 of the Civil Code, it is the national law of the decedent that is applicable, hence, petitioner
should have distributed Aubreys estate in accordance with the terms of her will. The CA also
found that petitioner was prompted to distribute Audreys estate in accordance with Philippine
laws in order to equally benefit Audrey and Richard Guerseys adopted daughter, Kyle
Guersey Hill.
Petitioner contends that respondents cause of action had already prescribed because as
early as 1984, respondent was already well aware of the terms of Audreys will, 30 and the
complaint was filed only in 1993. Respondent, on the other hand, justified her lack of
immediate action by saying that she had no opportunity to question petitioners acts since
she was not a party to Special Proceeding No. 9625, and it was only after Atty. Ancheta filed
the project of partition in Special Proceeding No. M-888, reducing her inheritance in the
estate of Richard that she was prompted to seek another counsel to protect her interest. 31
It should be pointed out that the prescriptive period for annulment of judgment based on
extrinsic fraud commences to run from the discovery of the fraud or fraudulent act/s.
Respondents knowledge of the terms of Audreys will is immaterial in this case since it is not
the fraud complained of. Rather, it is petitioners failure to introduce in evidence the pertinent
law of the State of Maryland that is the fraudulent act, or in this case, omission, alleged to
have been committed against respondent, and therefore, the four-year period should be
counted from the time of respondents discovery thereof.
Records bear the fact that the filing of the project of partition of Richards estate, the
opposition thereto, and the order of the trial court disallowing the project of partition in
Special Proceeding No. M-888 were all done in 1991. 32Respondent cannot be faulted for
letting the assailed orders to lapse into finality since it was only through Special Proceeding
No. M-888 that she came to comprehend the ramifications of petitioners acts. Obviously,
respondent had no other recourse under the circumstances but to file the annulment case.
Since the action for annulment was filed in 1993, clearly, the same has not yet prescribed.
Fraud takes on different shapes and faces. In Cosmic Lumber Corporation v. Court of
Appeals,33 the Court stated that "man in his ingenuity and fertile imagination will always
contrive new schemes to fool the unwary."
There is extrinsic fraud within the meaning of Sec. 9 par. (2), of B.P. Blg. 129, where it is one
the effect of which prevents a party from hearing a trial, or real contest, or from presenting all
of his case to the court, or where it operates upon matters, not pertaining to the judgment
itself, but to the manner in which it was procured so that there is not a fair submission of the
controversy. In other words, extrinsic fraud refers to any fraudulent act of the prevailing party
in the litigation which is committed outside of the trial of the case, whereby the defeated
party has been prevented from exhibiting fully his side of the case by fraud or deception
practiced on him by his opponent. Fraud is extrinsic where the unsuccessful party has been
prevented from exhibiting fully his case, by fraud or deception practiced on him by his
opponent, as by keeping him away from court, a false promise of a compromise; or where
the defendant never had any knowledge of the suit, being kept in ignorance by the acts of
the plaintiff; or where an attorney fraudulently or without authority connives at his defeat;
these and similar cases which show that there has never been a real contest in the trial or
hearing of the case are reasons for which a new suit may be sustained to set aside and
annul the former judgment and open the case for a new and fair hearing. 34
The overriding consideration when extrinsic fraud is alleged is that the fraudulent scheme of
the prevailing litigant prevented a party from having his day in court. 35
Petitioner is the ancillary administrator of Audreys estate. As such, he occupies a position of
the highest trust and confidence, and he is required to exercise reasonable diligence and act
in entire good faith in the performance of that trust. Although he is not a guarantor or insurer
of the safety of the estate nor is he expected to be infallible, yet the same degree of
prudence, care and judgment which a person of a fair average capacity and ability exercises
in similar transactions of his own, serves as the standard by which his conduct is to be
judged.36
Petitioners failure to proficiently manage the distribution of Audreys estate according to the
terms of her will and as dictated by the applicable law amounted to extrinsic fraud. Hence the
CA Decision annulling the RTC Orders dated February 12, 1988 and April 7, 1988, must be
upheld.
It is undisputed that Audrey Guersey was an American citizen domiciled in Maryland, U.S.A.
During the reprobate of her will in Special Proceeding No. 9625, it was shown, among
others, that at the time of Audreys death, she was residing in the Philippines but is domiciled
in Maryland, U.S.A.; her Last Will and Testament dated August 18, 1972 was executed and
probated before the Orphans Court in Baltimore, Maryland, U.S.A., which was duly
authenticated and certified by the Register of Wills of Baltimore City and attested by the
Chief Judge of said court; the will was admitted by the Orphans Court of Baltimore City on
September 7, 1979; and the will was authenticated by the Secretary of State of Maryland
and the Vice Consul of the Philippine Embassy.
Being a foreign national, the intrinsic validity of Audreys will, especially with regard as to who
are her heirs, is governed by her national law, i.e., the law of the State of Maryland, as
provided in Article 16 of the Civil Code, to wit:
Art. 16. Real property as well as personal property is subject to the law of the country where
it is situated.
However, intestate and testamentary succession, both with respect to the order of
succession and to the amount of successional rights and to the intrinsic validity of
testamentary provisions, shall be regulated by the national law of the person whose
succession is under consideration, whatever may be the nature of the property and
regardless of the country wherein said property may be found. (Emphasis supplied)
Article 1039 of the Civil Code further provides that "capacity to succeed is governed by the
law of the nation of the decedent."
As a corollary rule, Section 4, Rule 77 of the Rules of Court on Allowance of Will Proved
Outside the Philippines and Administration of Estate Thereunder, states:
SEC. 4. Estate, how administered.When a will is thus allowed, the court shall grant letters
testamentary, or letters of administration with the will annexed, and such letters testamentary
or of administration, shall extend to all the estate of the testator in the Philippines. Such
estate, after the payment of just debts and expenses of administration, shall be
disposed of according to such will, so far as such will may operate upon it; and the
residue, if any, shall be disposed of as is provided by law in cases of estates in the
Philippines belonging to persons who are inhabitants of another state or country. (Emphasis
supplied)
While foreign laws do not prove themselves in our jurisdiction and our courts are not
authorized to take judicial notice of them; 37 however, petitioner, as ancillary administrator of
Audreys estate, was duty-bound to introduce in evidence the pertinent law of the State of
Maryland.38
Petitioner admitted that he failed to introduce in evidence the law of the State of Maryland on
Estates and Trusts, and merely relied on the presumption that such law is the same as the
Philippine law on wills and succession. Thus, the trial court peremptorily applied Philippine
laws and totally disregarded the terms of Audreys will. The obvious result was that there was
no fair submission of the case before the trial court or a judicious appreciation of the
evidence presented.
Petitioner insists that his application of Philippine laws was made in good faith. The Court
cannot accept petitioners protestation. How can petitioner honestly presume that Philippine
laws apply when as early as the reprobate of Audreys will before the trial court in 1982, it
was already brought to fore that Audrey was a U.S. citizen, domiciled in the State of
Maryland. As asserted by respondent, petitioner is a senior partner in a prestigious law firm,
with a "big legal staff and a large library." 39 He had all the legal resources to determine the
applicable law. It was incumbent upon him to exercise his functions as ancillary administrator
with reasonable diligence, and to discharge the trust reposed on him faithfully. Unfortunately,
petitioner failed to perform his fiduciary duties.
Moreover, whether his omission was intentional or not, the fact remains that the trial court
failed to consider said law when it issued the assailed RTC Orders dated February 12, 1988
and April 7, 1988, declaring Richard and Kyle as Audreys heirs, and distributing Audreys
estate according to the project of partition submitted by petitioner. This eventually prejudiced
respondent and deprived her of her full successional right to the Makati property.
In GSIS v. Bengson Commercial Bldgs., Inc.,40 the Court held that when the rule that the
negligence or mistake of counsel binds the client deserts its proper office as an aid to justice
and becomes a great hindrance and chief enemy, its rigors must be relaxed to admit
exceptions thereto and to prevent a miscarriage of justice, and the court has the power to
except a particular case from the operation of the rule whenever the purposes of justice
require it.
The CA aptly noted that petitioner was remiss in his responsibilities as ancillary administrator
of Audreys estate. The CA likewise observed that the distribution made by petitioner was
prompted by his concern over Kyle, whom petitioner believed should equally benefit from the
Makati property. The CA correctly stated, which the Court adopts, thus:
In claiming good faith in the performance of his duties and responsibilities, defendant Alonzo
H. Ancheta invokes the principle which presumes the law of the forum to be the same as the
foreign law (Beam vs. Yatco, 82 Phil. 30, 38) in the absence of evidence adduced to prove
the latter law (Slade Perkins vs. Perkins, 57 Phil. 205, 210). In defending his actions in the
light of the foregoing principle, however, it appears that the defendant lost sight of the fact
that his primary responsibility as ancillary administrator was to distribute the subject estate in
accordance with the will of Audrey ONeill Guersey. Considering the principle established
under Article 16 of the Civil Code of the Philippines, as well as the citizenship and the
avowed domicile of the decedent, it goes without saying that the defendant was also dutybound to prove the pertinent laws of Maryland on the matter.
The record reveals, however, that no clear effort was made to prove the national law of
Audrey ONeill Guersey during the proceedings before the court a quo. While there is claim
of good faith in distributing the subject estate in accordance with the Philippine laws, the
defendant appears to put his actuations in a different light as indicated in a portion of his
direct examination, to wit:
xxx
It would seem, therefore, that the eventual distribution of the estate of Audrey ONeill
Guersey was prompted by defendant Alonzo H. Anchetas concern that the subject realty
equally benefit the plaintiffs adopted daughter Kyle Guersey.
Well-intentioned though it may be, defendant Alonzo H. Anchetas action appears to have
breached his duties and responsibilities as ancillary administrator of the subject
estate. While such breach of duty admittedly cannot be considered extrinsic fraud
under ordinary circumstances, the fiduciary nature of the said defendants position,
as well as the resultant frustration of the decedents last will, combine to create a
circumstance that is tantamount to extrinsic fraud. Defendant Alonzo H. Anchetas
omission to prove the national laws of the decedent and to follow the latters last will, in sum,
resulted in the procurement of the subject orders without a fair submission of the real issues
involved in the case.41 (Emphasis supplied)
This is not a simple case of error of judgment or grave abuse of discretion, but a total
disregard of the law as a result of petitioners abject failure to discharge his fiduciary duties.
It does not rest upon petitioners pleasure as to which law should be made applicable under
the circumstances. His onus is clear. Respondent was thus excluded from enjoying full rights
to the Makati property through no fault or negligence of her own, as petitioners omission
was beyond her control. She was in no position to analyze the legal implications of
petitioners omission and it was belatedly that she realized the adverse consequence of the
same. The end result was a miscarriage of justice. In cases like this, the courts have the
legal and moral duty to provide judicial aid to parties who are deprived of their rights. 42
The trial court in its Order dated December 6, 1991 in Special Proceeding No. M-888 noted
the law of the State of Maryland on Estates and Trusts, as follows:
Under Section 1-301, Title 3, Sub-Title 3 of the Annotated Code of the Public General Laws
of Maryland on Estates and Trusts, "all property of a decedent shall be subject to the estate
of decedents law, and upon his death shall pass directly to the personal representative, who
shall hold the legal title for administration and distribution," while Section 4-408 expressly
provides that "unless a contrary intent is expressly indicated in the will, a legacy passes to
the legatee the entire interest of the testator in the property which is the subject of the
legacy". Section 7-101, Title 7, Sub-Title 1, on the other hand, declares that "a personal
representative is a fiduciary" and as such he is "under the general duty to settle and
distribute the estate of the decedent in accordance with the terms of the will and the estate of
decedents law as expeditiously and with as little sacrifice of value as is reasonable under the
circumstances".43
In her will, Audrey devised to Richard her entire estate, consisting of the following: (1)
Audreys conjugal share in the Makati property; (2) the cash amount of P12,417.97; and (3)
64,444 shares of stock in A/G Interiors, Inc. worthP64,444.00. All these properties passed on
to Richard upon Audreys death. Meanwhile, Richard, in his will, bequeathed his entire estate
to respondent, except for his rights and interests over the A/G Interiors, Inc. shares, which he
left to Kyle. When Richard subsequently died, the entire Makati property should have then
passed on to respondent. This, of course, assumes the proposition that the law of the State
of Maryland which allows "a legacy to pass to the legatee the entire estate of the testator in
the property which is the subject of the legacy," was sufficiently proven in Special Proceeding
No. 9625. Nevertheless, the Court may take judicial notice thereof in view of the ruling in
Bohanan v. Bohanan.44 Therein, the Court took judicial notice of the law of Nevada despite
failure to prove the same. The Court held, viz.:
We have, however, consulted the records of the case in the court below and we have found
that during the hearing on October 4, 1954 of the motion of Magdalena C. Bohanan for
withdrawal of P20,000 as her share, the foreign law, especially Section 9905, Compiled
Nevada Laws, was introduced in evidence by appellants' (herein) counsel as Exhibit "2" (See
pp. 77-79, Vol. II, and t.s.n. pp. 24-44, Records, Court of First Instance). Again said law was
presented by the counsel for the executor and admitted by the Court as Exhibit "B" during
the hearing of the case on January 23, 1950 before Judge Rafael Amparo (see Records,
Court of First Instance, Vol. 1).
In addition, the other appellants, children of the testator, do not dispute the above-quoted
provision of the laws of the State of Nevada. Under all the above circumstances, we are
constrained to hold that the pertinent law of Nevada, especially Section 9905 of the
Compiled Nevada Laws of 1925, can be taken judicial notice of by us, without proof of such
law having been offered at the hearing of the project of partition.
In this case, given that the pertinent law of the State of Maryland has been brought to record
before the CA, and the trial court in Special Proceeding No. M-888 appropriately took note of
the same in disapproving the proposed project of partition of Richards estate, not to mention
that petitioner or any other interested person for that matter, does not dispute the existence
or validity of said law, then Audreys and Richards estate should be distributed according to
their respective wills, and not according to the project of partition submitted by petitioner.
Consequently, the entire Makati property belongs to respondent.
Decades ago, Justice Moreland, in his dissenting opinion in Santos v. Manarang, 45 wrote:
A will is the testator speaking after death. Its provisions have substantially the same force
and effect in the probate court as if the testator stood before the court in full life making the
declarations by word of mouth as they appear in the will. That was the special purpose of the
law in the creation of the instrument known as the last will and testament. Men wished to
speak after they were dead and the law, by the creation of that instrument, permitted them to
do so x x x All doubts must be resolved in favor of the testator's having meant just what he
said.
Honorable as it seems, petitioners motive in equitably distributing Audreys estate cannot
prevail over Audreys and Richards wishes. As stated in Bellis v. Bellis: 46
x x x whatever public policy or good customs may be involved in our system of legitimes,
Congress has not intended to extend the same to the succession of foreign nationals. For it
has specifically chosen to leave, inter alia, the amount of successional rights, to the
decedent's national Law. Specific provisions must prevail over general ones. 47
Before concluding, the Court notes the fact that Audrey and Richard Guersey were American
citizens who owned real property in the Philippines, although records do not show when and
how the Guerseys acquired the Makati property.
Under Article XIII, Sections 1 and 4 of the 1935 Constitution, the privilege to acquire and
exploit lands of the public domain, and other natural resources of the Philippines, and to
operate public utilities, were reserved to Filipinos and entities owned or controlled by them.
In Republic v. Quasha,48 the Court clarified that the Parity Rights Amendment of 1946, which
re-opened to American citizens and business enterprises the right in the acquisition of lands
of the public domain, the disposition, exploitation, development and utilization of natural
resources of the Philippines, does not include the acquisition or exploitation of private
agricultural lands. The prohibition against acquisition of private lands by aliens was carried
on to the 1973 Constitution under Article XIV, Section 14, with the exception of private lands
acquired by hereditary succession and when the transfer was made to a former natural-born
citizen, as provided in Section 15, Article XIV. As it now stands, Article XII, Sections 7 and 8
of the 1986 Constitution explicitly prohibits non-Filipinos from acquiring or holding title to
private lands or to lands of the public domain, except only by way of legal succession or if
the acquisition was made by a former natural-born citizen.
In any case, the Court has also ruled that if land is invalidly transferred to an alien who
subsequently becomes a citizen or transfers it to a citizen, the flaw in the original transaction
is considered cured and the title of the transferee is rendered valid. 49 In this case, since the
Makati property had already passed on to respondent who is a Filipino, then whatever flaw, if
any, that attended the acquisition by the Guerseys of the Makati property is now
inconsequential, as the objective of the constitutional provision to keep our lands in Filipino
hands has been achieved.
WHEREFORE, the petition is denied. The Decision dated March 18, 1999 and the
Resolution dated August 27, 1999 of the Court of Appeals are AFFIRMED.
Petitioner is ADMONISHED to be more circumspect in the performance of his duties as an
official of the court.
No pronouncement as to costs.
SO ORDERED.
MA. ALICIA AUSTRIA-MARTINEZ
Associate Justice
WE CONCUR:
ARTEMIO V. PANGANIBAN
Chief Justice
Chairperson
(On leave)
CONSUELO YNARES-SANTIAGO
Associate Justice
ROMEO J. CALLEJO, SR.

Asscociate Justice
MINITA V. CHICO-NAZARIO
Associate Justice
C E R TI F I C ATI O N
Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the
conclusions in the above Decision were reached in consultation before the case was
assigned to the writer of the opinion of the Courts Division.
Chief Justice
Footnotes
1
CA rollo, pp. 84-88.
Id. at 89-91.
Id. at 92.
Supra, note 2.
Id. at 95-98.
Id. at 99-100.
Id. at 101.
Id. at 102-103.
10
Id. at 104-106.
11
Id. at 107.
12
Id. at 108-109.
13
Id. at 114-116.
14
RTC Order dated December 6, 1991, CA rollo, p. 48.
15
16
Id. at 71-81.
Penned by Associate Justice Fermin A. Martin, Jr. (retired), and concurred in by

Associate Justices Romeo J. Callejo, Sr. (now Associate Justice of this Court) and
Mariano M. Umali (retired).
17
18
CA rollo, p. 553.
19
Id. at 617-618.
20
Rollo, p. 36.
21
Id. at 174.
22
Id. at 183.
23
Reyes v. Barretto-Datu, 125 Phil 501 (1967).
24
Kilayko v. Tengco, G.R. No. L-45425, March 27, 1992, 207 SCRA 600.
25
89 Phil. 730 (1951).
26
Id. at 741.
27
Ybaez v. Court of Appeals, 323 Phil. 643 (1996).
28
Stilianpulos v. The City of Legaspi, 374 Phil. 879 (1999).
29
Article 1391, Civil Code.
30
Rollo, p. 46, 183.
31
Id. at 157-158.
32
See RTC-Branch 138 Order dated December 6, 1991, pp. 194-198, CA rollo.
33
332 Phil. 948 (1996).
34
Id. at 961-962.
35
Teodoro v. Court of Appeals, 437 Phil. 336 (2002).
36
Lao v. Genato, G.R. No. L-56451, June 19, 1985, 137 SCRA 77.
37
Llorente v. Court of Appeals, 399 Phil. 342 (2000).
38
Bohanan v. Bohanan, 106 Phil. 997 (1960).
39
Rollo, p. 156.
40
426 Phil. 111 (2002).
41
42
Pael v. Court of Appeals, 382 Phil. 222 (2000).
43
CA rollo, p. 48.
44
Supra., Bohanan case, note 38.
45
27 Phil. 209 (1914).
46
126 Phil. 726 (1967).
47
Id. at 732.
48
150-B Phil. 140 (1972).
United Church Board of World Ministries v. Sebastian, No. L-34672, March 30,
1988, 159 SCRA 446; Halili v. Court of Appeals, 350 Phil. 906 (1998); Lee v.
Republic, 418 Phil. 793 (2001).
49

SUPREME COURT
THIRD DIVISION
G.R. No. 153798 September 2, 2005
BELEN SAGAD ANGELES, Petitioners,
vs.
ALELI "CORAZON" ANGELES MAGLAYA, Respondent.
DECISION
GARCIA, J.:
In this petition for review on certiorari under Rule 45 of the Rules of Court, petitioner Belen
Sagad Angeles seeks to set aside the Decision dated May 29, 2002 1 of the Court of Appeals
in CA G.R. CV No. 66037, reversing an earlier Order of the Regional Trial Court at Caloocan
City which dismissed the petition for the settlement of the intestate estate of Francisco
Angeles, thereat commenced by the herein respondent Aleli "Corazon" Angeles-Maglaya.
The legal dispute between the parties started when, on March 25, 1998, in the Regional Trial
Court (RTC) at Caloocan City, respondent filed a petition2 for letters of administration and her
appointment as administratrix of the intestate estate of Francisco M. Angeles (Francisco,
hereinafter). In the petition, docketed as Special Proceedings No. C-2140 and raffled to
Branch 120 of the court, respondent alleged, among other things, the following:
1. That Francisco, a resident of 71 B. Serrano St., Grace Park, Caloocan, died intestate on
January 21, 1998 in the City of Manila, leaving behind four (4) parcels of land and a building,
among other valuable properties;
2. That there is a need to appoint an administrator of Franciscos estate;
3. That she (respondent) is the sole legitimate child of the deceased and Genoveva
Mercado, and, together with petitioner, Belen S. Angeles, decedents wife by his second
marriage, are the surviving heirs of the decedent; and
4. That she has all the qualifications and none of the disqualifications required of an
administrator.
Petitioner opposed the basic petition and prayed that she, instead of respondent, be made
the administratrix of Franciscos estate.3 In support of her opposition and plea, petitioner
alleged having married Francisco on August 7, 1948 before Judge Lucio M. Tianco of the
Municipal Court of Rizal, a union which was ratified two (2) months later in religious rites at
the Our Lady of Grace Parish in Caloocan City, and that Francisco represented in their
marriage contract that he was single at that time. Petitioner also averred that
respondent could not be the daughter of Francisco for, although she was recorded as
Franciscos legitimate daughter, the corresponding birth certificate was not signed by him.
Pressing on, petitioner further alleged that respondent, despite her claim of being the
legitimate child of Francisco and Genoveva Mercado, has not presented the marriage
contract between her supposed parents or produced any acceptable document to prove
such union. And evidently to debunk respondents claim of being the only child of Francisco,
petitioner likewise averred that she and Francisco had, during their marriage, legally adopted
Concesa A. Yamat, et al. Petitioner thus urged that she, being the surviving spouse of
Francisco, be declared as possessed of the superior right to the administration of his estate.
In her reply to opposition, respondent alleged, inter alia, that per certification of the
appropriate offices, the January to December 1938 records of marriages of the Civil
Registrar of Bacolor, Pampanga where the alleged 1938 Francisco-Genoveva wedding took
place, were destroyed. In the same reply, respondent dismissed as of little consequence the
adoption adverted to owing to her having interposed with the Court of Appeals a petition to
nullify the decree of adoption entered by the RTC at Caloocan. 4
Issues having been joined, trial ensued. Respondent, as petitioner a quo, commenced the
presentation of her evidence by taking the witness stand. She testified having been born on
November 20, 1939 as the legitimate child of Francisco M. Angeles and Genoveva Mercado,
who died in January 1988.5 She also testified having been in open and continuous
possession of the status of a legitimate child. Four (4) other witnesses testified on her behalf,
namely: Tomas Angeles,6 Francisco Yaya, 7 Jose O. Carreon8 and Paulita Angeles de la
Cruz.9Respondent also offered in evidence her birth certificate which contained an entry
stating that she was born at the Mary Johnston Hospital, Tondo, Manila, to Francisco
Angeles and Genoveva Mercado and whereon the handwritten word "Yes" appears on the
space below the question "Legitimate? (Legitimo?)"; pictures taken during respondents
wedding as bride to Atty. Guillermo T. Maglaya; and a copy of her marriage contract.
Likewise offered were her scholastic and government service records.
After respondent rested her case following her formal offer of exhibits, petitioner filed a
"Motion to Dismiss" under Section 1(g), Rule 16 of the Rules of Court. In it, she prayed for
the dismissal of the petition for letters of administration on the ground that the petition failed
"to state or prove a cause of action", it being her stated position that "[P]etitioner [Corzaon],
by her evidence, failed to establish her filiation vis--vis the decedent, i.e., that she is in fact
a legitimate child of Francisco M. Angeles."10
To the motion to dismiss, respondent interposed an opposition, followed by petitioners reply,
to which respondent countered with a rejoinder.
Eventually, in an Order dated July 12, 1999,11 the trial court, on its finding that
respondent failed to prove her filiation as legitimate child of Francisco, dismissed the petition,
thus:
WHEREFORE, the instant petition is hereby ordered DISMISSED for failure of the
[respondent] to state a cause of action in accordance with Section 1(g) of Rule 16 of the
1997 Rules of Civil of Procedure. (Word in bracket added]
Respondent then moved for reconsideration, which motion was denied by the trial court in its
Order of December 17, 1999.12 Therefrom, respondent went on appeal to the Court of
Appeals where her recourse was docketed asCA-G.R. CV No. 66037.
As stated at the threshold hereof, the Court of Appeals, in its assailed Decision dated May
29, 2002,13 reversed and set aside the trial courts order of dismissal and directed it to
appoint respondent as administratrix of the estate of Francisco, to wit:
WHEREFORE, the appealed order of dismissal is REVERSED. The Trial Court is hereby
ordered to appoint petitioner-appellant Aleli "Corazon" Angeles as administratrix of the
intestate estate of Francisco Angeles.
SO ORDERED.
The appellate court predicated its ruling on the interplay of the following main premises:
1. Petitioners Motion to Dismiss filed with the trial court, albeit premised on the alleged
failure of the underlying petition for letter of administration to state or prove a cause of action,
actually partakes of a demurrer to evidence under Section 1 of Rule 33; 14
2. Petitioners motion being a demurer, it follows that she thereby waived her right to present
opposing evidence to rebut respondents testimonial and documentary evidence; and
3. Respondent has sufficiently established her legitimate filiation with the deceased
Francisco.
Hence, petitioners instant petition for review on certiorari, on the submission that the Court
of Appeals erred: (1) in reversing the trial courts order of dismissal; 15 (2) in treating her
motion to dismiss as a demurrer to evidence; (3) in holding that respondent is a legitimate
daughter of Francisco; and (4) in decreeing respondents appointment as administratrix of
Franciscos intestate estate.
We resolve to grant the petition.
The principal issue tendered in this case boils down to the question of whether or not
respondent is the legitimate child of decedent Francisco M. Angeles and Genoveva
Mercado. The Court of Appeals resolved the issue in the affirmative and, on the basis of
such determination, ordered the trial court to appoint respondent as administratrix of
Franciscos estate.
We are unable to lend concurrence to the appellate courts conclusion on the legitimate
status of respondent, or, to be precise, on her legitimate filiation to the decedent. A legitimate
child is a product of, and, therefore, implies a valid and lawful marriage. Remove the element
of lawful union and there is strictly no legitimate filiation between parents and child. Article
164 of the Family Code cannot be more emphatic on the matter: "Children conceived or born
during the marriage of the parents are legitimate."
In finding for respondent, the Court of Appeals, citing and extensibly quoting from Tison vs.
Court of Appeals,16stated that since petitioner "opted not to present any contrary
evidence", the presumption on respondents legitimacy stands "unrebutted."17
Following is an excerpt from Tison:
It seems that both the court a quo and respondent appellate court have regrettably
overlooked the universally recognized presumption on legitimacy. There is no presumption of
the law more firmly established and founded on sounder morality and more convincing than
the presumption that children born in wedlock are legitimate.And well-settled is the rule
that the issue of legitimacy cannot be attacked collaterally.
The rationale for this rule has been explained in this wise:
The presumption of legitimacy in the Family Code . . .
actually fixes a status for the child born in wedlock, and that civil status cannot be
attacked collaterally. xxx
xxx xxx xxx
Upon the expiration of the periods provided in Article 170 [of the Family Code], the action to
impugn the legitimacy of a child can no longer be bought. The status conferred by the
presumption, therefore, becomes fixed, and can no longer be questioned. The obvious
intention of the law is to prevent the status of a child born in wedlockfrom being in a state
of uncertainty. It also aims to force early action to settle any doubt as to the paternity of such
child so that the evidence material to the matter . . . may still be easily available.
xxxxxxxxx
Only the husband can contest the legitimacy of a child born to his wife . . . .(Words in
bracket added; Emphasis ours)
Contextually, the correct lesson of Tison, which the appellate court evidently misapplied, is
that: (a) a child is presumed legitimate only if conceived or born in wedlock; and (b) the
presumptive legitimacy of such child cannot be attacked collaterally.
A party in whose favor the legal presumption exists may rely on and invoke such legal
presumption to establish a fact in issue. He need not introduce evidence to prove that
fact.18 For, a presumption is prima facie proof of the fact presumed. However, it cannot be
over-emphasized, that while a fact thus prima facie established by legal presumption shall,
unless overthrown, stand as proved, 19 the presumption of legitimacy under Article 164 of the
Family Code20 may be availed only upon convincing proof of the factual basis
therefor, i.e., that the childs parents were legally married and that his/her conception or birth
occurred during the subsistence of that marriage. Else, the presumption of law that a child is
legitimate does not arise.
In the case at bench, the Court of Appeals, in its decision under review, did not categorically
state from what facts established during the trial was the presumption of respondents
supposed legitimacy arose. But even if perhaps it wanted to, it could not have possibly done
so. For, save for respondents gratuitous assertion and an entry in her certificate of birth,
there is absolutely no proof of the decedents marriage to respondents mother, Genoveva
Mercado. To stress, no marriage certificate or marriage contract doubtless the best
evidence of Franciscos and Genovevas marriage, if one had been solemnized 21 was
offered in evidence. No priest, judge, mayor, or other solemnizing authority was called to the
witness box to declare that he solemnized the marriage between the two. None of the four
(4) witnesses respondent presented could say anything about, let alone affirm, that
supposed marriage. At best, their testimonies proved that respondent was Franciscos
daughter. For example, Tomas Angeles and Paulita Angeles de la Cruz testified that they
know respondent to be their cousin because his (Tomas) father and her (Paulitas) mother,
who are both Franciscos siblings, told them so.22 And one Jose Carreon would testify seeing
respondent in 1948 in Franciscos house in Caloocan, the same Francisco who used to court
Genoveva before the war.23 In all, no evidence whatsoever was presented of the execution of
the Francisco Angeles-Genoveva Mercado marriage contract; when and where their
marriage was solemnized; the identity of the solemnizing officer; the persons present, and
like significant details.
While perhaps not determinative of the issue of the existence of marriage between Francisco
and Genoveva, we can even go to the extent of saying that respondent has not even
presented a witness to testify that her putative parents really held themselves out to the
public as man-and-wife. Clearly, therefore, the Court of Appeals erred in crediting respondent
with the legal presumption of legitimacy which, as above explained, should flow from a lawful
marriage between Francisco and Genevova. To reiterate, absent such a marriage, as here,
there is no presumption of legitimacy and, therefore, there was really nothing for petitioner to
rebut.
Parenthetically, for all her unyielding stance that her mother and Francisco Angeles were
married in 1938, respondent never, thru the years, even question what would necessarily be
a bigamous Francisco-Belen Sagad marriage. Ironical as it may seem, respondent herself
undermined her very own case. As it were, she made certain judicial admission negating her
own assertion as well as the appellate courts conclusion - that Francisco was legally
married to Genoveva. As may be recalled, respondent had declared that her mother
Genoveva died in1988, implying, quite clearly, that when Francisco contracted marriage with
petitioner Belen S. Angeles in 1948, Genoveva and Francisco were already "spouses". Now,
then, if, as respondent maintained despite utter lack of evidence, that Genoveva Mercado
and Francisco were married in 1938, it follows that the marriage of Francisco to petitioner
Belen Angeles in 1948, or prior to Genovevas death, would necessarily have to be
bigamous, hence void,24 in which case petitioner could not be, as respondent alleged in her
petition for letters of administration, a "surviving spouse" of the decedent. We quote the
pertinent allegation:
4. The surviving heirs of decedent are the petitioner [Corazon] herself who is 58 years old,
and BELEN S. Angeles, the surviving spouse of deceased Francisco M. Angeles by his
second marriage, who is about 77 years old . . . .YEARS OLD . . . " (Emphasis and word in
bracket added)
We can concede, because Article 172 of the Family Code appears to say so, that the
legitimate filiation of a child can be established by any of the modes therein defined even
without direct evidence of the marriage of his/her supposed parents. Said article 172 reads:
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 judgments; 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.
Here, respondent presented, in support of her claim of legitimacy, a copy of her Birth
Certificate dated November 23, 1939 issued by the Civil Registrar of the City of Manila (Exh.
"E"). In it, her birth was recorded as the legitimate child of Francisco Angeles and Genoveva
Mercado. And the word "married" is written in the certificate to indicate the union of Francisco
and Genoveva.
Petitioner, however, contends, citing jurisprudence, that "[I]t was error for the Court of
Appeals to have ruled . . . that [respondents] Birth Certificate indubitably establishes that
she is the legitimate daughter of Francisco and Genoveva who are legally married".
The contention commends itself for concurrence. The reason is as simple as it is elementary:
the Birth Certificate presented was not signed by Francisco against whom legitimate filiation
is asserted. Not even by Genoveva. It was signed by the attending physician, one Rebecca
De Guzman, who certified to having attended the birth of a child. Such certificate, albeit
considered a public record of a private document is, under Section 23, Rule 132 of the Rules
of Court, evidence only of the fact which gave rise to its execution: the fact of birth of a
child.25Jurisprudence teaches that a birth certificate, to be considered as validating proof of
paternity and as an instrument of recognition, must be signed by the father and mother
jointly, or by the mother alone if the father refuses.26 Dr. Arturo Tolentino, commenting on the
probative value of the entries in a certificate of birth, wrote:
xxx if the alleged father did not intervene in the making of the birth certificate, the putting of
his name by the mother or doctor or registrar is void; the signature of the alleged father is
necessary.27
The conclusion reached by the Court of Appeals that the Birth Certificate of respondent,
unsigned as it were by Francisco and Genoveva, establishes and "indubitably" at that - not
only respondents filiation to Francisco but even her being a legitimate daughter of Francisco
and Genoveva, taxes credulity to the limit. In a very real sense, the appellate court regarded
such certificate as defining proof of filiation, and not just filiation but of legitimate filiation, by
inferring from it that Francisco and Genoveva are legally married. In the apt words of
petitioner, the appellate court, out of a Birth Certificate signed by a physician who merely
certified having attended "the birth of a child who was born alive at 3:50 P.M. ", created " a
marriage that of Francisco and Genoveva, and filiation (that said child) is the daughter of
Francisco"28
It cannot be over-emphasized that the legitimate filiation of a child is a matter fixed by law
itself.29 It cannot, as the decision under review seems to suggest, be made dependent on the
declaration of the attending physician or midwife, or that of the mother of the newborn child.
For then, an unwed mother, with or without the participation of a doctor or midwife, could
veritably invest legitimate status to her offspring through the simple expedient of writing the
putative fathers name in the appropriate space in the birth certificate. A long time past, this
Court cautioned against according a similar unsigned birth certificate prima facie evidentiary
value of filiation:
Give this certificate evidential relevancy, and we thereby pave the way for any scheming
unmarried mother to extort money for her child (and herself) from any eligible bachelor or
affluent pater familias. How? She simply causes the midwife to state in the birth certificate
that the newborn babe is her legitimate offspring with that individual and the certificate will be
accepted for registration . . . . And any lawyer with sufficient imagination will realize the
exciting possibilities from such mischief of such prima facie evidence when and if the
"father" dies in ignorance of the fraudulent design xxx30
Just like her Birth Certificate, respondent can hardly derive comfort from her marriage
contract to Atty. Maglaya and from her student and government records which indicated or
purported to show that Francisco Angeles is her father. The same holds true for her wedding
pictures which showed Francisco giving respondents hands in marriage. These papers or
documents, unsigned as they are by Francisco or the execution of which he had no part, are
not sufficient evidence of filiation or recognition.31 And needless to stress, they cannot
support a finding of the legitimate union of Francisco and Genoveva.
The argument may be advanced that the aforesaid wedding pictures, the school and service
records and the testimony of respondents witnesses lend support to her claim of enjoying
open and continuous possession of the status of a child of Francisco. The Court can even
concede that respondent may have been the natural child of Francisco with Genoveva.
Unfortunately, however, that angle is not an, or at issue in the case before us. For,
respondent peremptorily predicated her petition for letters of administration on her being a
legitimate child of Francisco who was legally married to her mother, Genoveva, propositions
which we have earlier refuted herein.
If on the foregoing score alone, this Court could very well end this disposition were it not for
another compelling consideration which petitioner has raised and which we presently take
judicially notice of.
As may be recalled, respondent, during the pendency of the proceedings at the trial court,
filed with the Court of Appeals a petition for the annulment of the decision of the RTC
Caloocan granting the petition of spouses Francisco Angeles and petitioner Belen S. Angeles
for the adoption of Concesa A. Yamat and two others. In that petition, docketed with the
appellate court as CA-G.R. SP No. 47832 and captioned "Aleli Corazon Angeles Maglaya
vs. Hon Jaime T. Hamoy, Consesa A. Yamat, Teodora A. Santos, Franco Angeles and Belen
S. Angeles",respondent alleged that as legitimate daughter of Francisco, she should have
been notified of the adoption proceedings.
Following a legal skirmish, the Court of Appeals referred the aforementioned annulment case
to RTC, Caloocan for reception of evidence. Eventually, in a Decision 32 dated December 17,
2003, the Court of Appeals dismissedCA-G.R. SP No. 47832 on the ground, inter alia, that
herein respondent is not, contrary to her claim, a "legitimate daughter" of Francisco, nor "a
child of a lawful wedlock between Francisco M. Angeles and Genoveva Y. Mercado". Wrote
the appellate court in that case:
Petitioner [Aleli "Corazon Maglaya] belabors with repetitious persistence the argument that
she is a legitimate child or the only daughter of Francisco M. Angeles and Genoveva Y.
Mercado . . . .
In the case at bench, other than the self-serving declaration of the petitioner, there is nothing
in the record to support petitioners claim that she is indeed a legitimate child of the late
Francisco M. Angeles and Genoveva Y. Mercado. xxx In other words, Francisco M. Angeles
was never married before or at anytime prior to his marriage to Belen Sagad, contrary to the
claim of petitioner that Francisco M. Angeles and Genoveva Y. Mercado were married in
1938
While petitioner may have submitted certifications to the effect that the records of marriages
during the war years . . . were totally destroyed, no secondary evidence was presented by
petitioner to prove the existence of the marriage between Francisco M. Angeles and
Genoveva Y. Mercado, even as no witness was presented to confirm the celebration of such
marriage . . . .
Petitioner presented pictures. x x x However, it is already settled law that photographs are
not sufficient evidence of filiation or acknowledgment.
To be sure, very little comfort is provided by petitioners birth certificate and even her
marriage contract.. . . Reason: These documents were not signed by Francisco . . . . Equally
inconsequential are petitioners school records . . . . all these lacked the signatures of both
Francisco and Genoveva . . . .
xxx xxx xxx
Having failed to prove that she is the legitimate daughter or acknowledged natural child of
the late Francisco M. Angeles, petitioner cannot be a real party in interest in the adoption
proceedings, as her consent thereto is not essential or required. (Emphasis in the original;
words in bracket added)
Significantly, the aforesaid December 17, 2003 Decision of the appellate court in CA-G.R.
SP No.47832 was effectively affirmed by this Court via its Resolution dated August 9, 2004
in G.R. No. 163124, denying Aleli "Corazon" Maglayas petition for Review on
Certiorari,33 and Resolution dated October 20, 2004, 34 denying with "FINALITY" her motion
for reconsideration. Another Resolution dated January 24, 2005 resolved to "NOTE
WITHOUT ACTION" Maglayas second motion for reconsideration.
In the light of the ruling of the Court of Appeals in CA-G.R. SP No. 47832, as affirmed with
finality by this Court inG.R. No. 163124, there can be no serious objection to applying in this
case the rule on conclusiveness of judgment,35 one of two (2) concepts embraced in the res
judicata principle. Following the rule on conclusiveness of judgment, herein respondent is
precluded from claiming that she is the legitimate daughter of Francisco and Genoveva
Mercado. In fine, the issue of herein respondents legitimate filiation to Francisco and the
latters marriage to Genoveva, having been judicially determined in a final judgment by a
court of competent jurisdiction, has thereby become res judicata and may not again be
resurrected or litigated between herein petitioner and respondent or their privies in a
subsequent action, regardless of the form of the latter.36
Lest it be overlooked, the same ruling of the appellate court in CA-G.R. SP No. 47832, as
sustained by this Court in G.R. No. 163124, virtually confirms the ratio of the trial courts
order of dismissal in Special Proceedings (SP) No. C-2140, i.e, that respondent failed to
establish that she is in fact a legitimate child of Francisco. Accordingly, the question of
whether or not the Motion to Dismiss37 interposed by herein petitioner, as respondent in SP
No. C-2140, is in the nature of a demurer to evidence has become moot and academic. It
need not detain us any minute further.
Finally, it should be noted that on the matter of appointment of administrator of the estate of
the deceased, the surviving spouse is preferred over the next of kin of the decedent. 38 When
the law speaks of "next of kin", the reference is to those who are entitled, under the statute of
distribution, to the decedents property; 39 one whose relationship is such that he is entitled to
share in the estate as distributed,40 or, in short, an heir. In resolving, therefore, the issue of
whether an applicant for letters of administration is a next of kin or an heir of the decedent,
the probate court perforce has to determine and pass upon the issue of filiation. A separate
action will only result in a multiplicity of suits. Upon this consideration, the trial court acted
within bounds when it looked into and pass upon the claimed relationship of respondent to
the late Francisco Angeles.
WHEREFORE, the herein assailed decision of the Court of Appeals is
hereby REVERSED and SET ASIDE, and the order of the trial court dismissing Special
Proceedings No. C-2140 REINSTATED.
No costs.
SO ORDERED.
CANCIO C. GARCIA
Associate Justice
WE CONCUR:
Associate Justice
Chairman
ANGELINA SANDOVAL-GUTIERREZ
RENATO C. CORONA
Associate Justice
Associate Justice
CONCHITA CARPIO MORALES

Associate Justice
ATTESTATION
I attest that the conclusions in the above decision were reached in consultation before the
case was assigned to the writer of the opinion of the Courts Division.
Associate Justice
Chairman, Third Division
CERTIFICATION
Pursuant to Article VIII, Section 13 of the Constitution, and the Division Chairman's
Attestation, it is hereby certified that the conclusions in the above decision were reached in
consultation before the case was assigned to the writer of the opinion of the Court.
HILARIO G. DAVIDE, JR.
Chief Justice
Footnotes
Penned by Associate Justice Ruben T. Reyes, with Associate Justices Renato C.
Dacudao and Amelita G. Tolentino, concurring; Annex "A", Petition; Rollo pp. 192215.
1
Annex "B", Petition; Rollo, pp. 218-221.
Annex "C" Petition, Rollo, p. 232 et seq.
Rollo, pp. 243 et seq.
T.S.N, August 14, 1998, p. 34.
Son of Demetrio Angeles, Franciscos brother.
Employed as auto mechanic by Liberty Taxi Corporation where Francisco was

President and General Manager.
7
A former town mate and employee of Francisco.
Niece of Francisco.
10
11
12
Rollo, p. 482.
13
See Note #1, supra.
Sec 1. Demurrer to evidence. After the plaintiff has completed the presentation of
his evidence, the defendant may move for dismissal on the ground that upon the
facts and law the plaintiff has shown no right to relief. If his motion is denied, he shall
have the right to present evidence. If the motion is granted but on appeal the order of
dismissal is reversed he shall be deemed to have waived the right to present
evidence.
14
15
See Note # 11, supra.
16
276 SCRA 582 [1997].
17
Page 15 of the CA Decision, Rollo, p. 206.
18
Tison vs. Court of Appeals, 276 SCRA 582 [1997].
Republic vs. Sandiganbayan, 406 SCRA 190, 268 [2003], citing DefensorSantiago, RULES OF COURT ANNOTATED, 1999 ed., p. 857.
19
Art. 164. Children conceived or born during the marriage of the parents are
legitimate.
20
21
Lim Tanhu vs. Ramolete, 66 SCRA 425 [1975].
22
TSN, Sept. 18, 1998, p. 8; TSN Jan. 19, 1999, p. 4.
23
TSN Oct. 29, 1998 pp. 43 & 47.
24
Art. 35 (4) and 41, Family Code.
Sec. 23. Public documents as evidence. Documents consisting of entries in

public records made in the performance of a duty by a public officer are prima facie
evidence of the facts therein stated. All other public documents are evidence . . . of
the fact which gave rise to their execution and of the date of the latter.
25
26
Reyes vs. Court of Appeals, 135 SCRA 439 [1985].
Tolentino, Commentaries & Jurisprudence on the Civil Code of the Philippines, Vol.
I, 1990 ed., p. 540, citing Bercilles vs. GSIS, 128 SCRA 53 [1984] and Reyes vs. CA,
135 SCRA 439 [1985].
27
28
Rollo, pp. 134-135.
29
Sayson vs. Court of Appeals, 205 SCRA 321 [1999].
30
Crisolo vs. Macadaeg, 94 Phil.862 [1954].
Bercilles vs. GSIS, supra; [1984]; Reyes vs. CA, supra; Colorado vs. Court of
Appeals, 135 SCRA 47 [1985].
31
Per Associate Justice Renato C. Dacudao, concurred in by Associate Justices

Edgardo P. Cruz and Elizer R. Delos Santos; Rollo, pp. 1215 et seq.
32
33
Rollo, p. 1232.
34
Ibid., p. 1233
The rule on conclusiveness of judgment precludes the relitigation of particular facts

or issues in another action between the same parties on a different claim or cause of
action (Calalang vs. Register of Deeds of Quezon City, 231 SCRA 88 [1994].
35
36
Carlet vs. Court of Appeals, 275 SCRA 97 [1997].
37
See Note #10, supra.
Under Sec. 6(b), Rule 78, Rules of Court, the administration of the estate of a
person who dies intestate shall be granted to the surviving husband or wife, as the
case may be, or next of kin, or both, in the discretion of the court, or to such person
as such surviving husband or wife, or next of kin, requests to have appointed, if
competent and willing to serve.
38
39
Ventura vs. Ventura, 160 SCRA 810 [1988].
40
Tavera vs. El Hogar Filipino, Inc. 98 Phil. 481 [1980].

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 156842
December 10, 2004
SOTERO A. PUNONGBAYAN, petitioner,

vs.
DANILO G. PUNONGBAYAN, respondent.
DECISION
PUNO, J.:
Assailed in this petition for review is the Decision dated August 9, 2002 1 of the Court of
Appeals (CA) in CA-G.R. SP No. 63002 2 which granted the special civil action
for certiorari and mandamus filed by herein respondent, as well as its Resolution dated
January 14, 20033 which denied petitioners motion for reconsideration.
The antecedent facts are as follows:
On July 31, 1969, Escolastica Punongbayan-Paguio died intestate leaving behind
considerable properties in Misamis Oriental, Iligan City, and Bulacan. She was survived by
her husband, Miguel Paguio; brothers Nicolas (now deceased) and SOTERO (herein
petitioner), sisters Leonila and Leonora (both now deceased), all surnamed Punongbayan;
nephews DANILO (herein respondent), Restituto, Perfecto, and Alfredo, and nieces Brigida,
Lilia, Marilou, Adeluisa, and Grace, who were the children of Escolasticas brother, Perfecto
Punongbayan, Sr., who predeceased her. Proceedings for the settlement of her estate were
initiated in the then Court of First Instance of Misamis Oriental, docketed as Special
Proceedings No. 1053.4 Miguel Paguio was appointed administrator and later, DANILO, as
co-administrator to represent the interests of the Punongbayan family.
On September 30, 1974, the above-mentioned heirs executed a compromise agreement
distributing among themselves the estate of the decedent consisting of forty-one (41) parcels
of land in Misamis Oriental, Iligan City, and Bulacan. They likewise authorized the
administrator to sell five (5) parcels of land to pay the liabilities of the estate. The intestate
court approved the agreement on June 7, 1976. Intestate proceedings, however, were left
dormant from 1976 to 1993. On August 4, 1994, SOTERO, Leonila and Leonora (both now
deceased) moved for the immediate distribution of the estate in accordance with the
Compromise Agreement of 1974. They asked that DANILO be ordered to deposit the
proceeds from the sales of estate properties with the Clerk of Court and to render an
accounting of his administration for the past twenty (20) years. 5
The intestate court granted the motion in an Order dated February 1, 1995 and directed
DANILO to
1. Effect the immediate distribution of the Estate in accordance with the Compromise
Agreement dated September 30, 1974 approved by this Honorable Court in its Order
of June 7, 1976;
2. Deposit with the Clerk of Court the proceeds of the sale of whatever properties
[were] already sold; and
3. Render an accounting of his administration of the estate for the last twenty (20)
years or from the time he assumed as administrator up to the present, within sixty
(60) days from receipt of this Order.
DANILO assailed6 the order in a special civil action for certiorari with the CA7 which, however,
dismissed the same. We affirmed the dismissal in G. R. No. 128928, 8 there being no
reversible error on the part of the CA.9 After the decision became final and executory, the
corresponding writ of execution was issued by the intestate court on March 30, 1998. The
writ was served upon DANILOs wife but not upon DANILO himself as he was always absent
from his residence and place of work whenever the sheriff came to serve the writ. A warrant
of arrest was issued against him. DANILO filed an urgent motion to recall the warrant which
was denied. Consequently, he assailed the order in a petition for certiorari before the CA,
docketed as CA-G.R. SP No. 57754. 10 During the pendency of the petition, DANILO was
arrested but was later on released from custody by the CA upon his manifestation that he will
comply with the intestate courts writ of execution, copy of which was served upon him in
open court, and that he will attend the next hearing to submit the certificates of placement of
the proceeds from the sales of a substantial portion of the estate under his administration.
Respondent did not appear during said hearing which prompted the CA to recall his release
order and to direct the National Bureau of Investigation to arrest him. On October 19, 2000,
the CA dismissed the petition for utter lack of merit, ruling that DANILOs clear and
contumacious refusal to obey the intestate courts writ of execution for several years should
no longer be countenanced. 11
Meanwhile, SOTERO moved for his appointment as co-administrator of the estate in June
2000 on the grounds that DANILO failed to discharge his duties as administrator, to render
an accounting of his administration, and to turn over P25,000,000.00 in proceeds from the
sales of a substantial portion of the estate, as required in the Order dated February 1, 1995.
The motion was granted and SOTERO took his oath as co-administrator of the estate on
August 30, 2000.
On September 1, 2000, DANILO filed a "Motion to Order Sotero Punongbayan to Render an
Accounting"12alleging that SOTERO appropriated five (5) lots of the estate to the exclusion of
the other heirs; that two (2) of the five lots were illegally sold to third persons while two (2)
others were illegally transferred in his own name; and, that the fifth lot was leased to a third
person without turning over lease rentals to the estate. DANILO alleged that he encountered
difficulties in rendering an accounting of estate income and properties because of the illegal
sales and lease made by SOTERO. Hence, DANILO alleged that SOTERO should be made
to account first for the income derived from such illegal transfers and lease before he
(DANILO) could render the full accounting required by the intestate court.
The motion was denied in an Order dated September 15, 2000 13 as well as a subsequent
motion for reconsideration thereof.14 DANILO again filed a special civil action
for certiorari and mandamus with the CA to assail the order.15
On August 9, 2002, the CA rendered its decision, the dispositive portion of which reads
WHEREFORE, there being grave abuse of discretion in the issuance of the Orders
dated September 15, 2000 and November 10, 2000, this petition is GRANTED and
said Orders are hereby NULLIFIED and SET ASIDE and in lieu thereof, an Order is
hereby issued ordering private respondent Sotero Punongbayan to render an
accounting of all the properties and monies belonging to the estate that came into his
possession and to deposit with the probate (sic) court the proceeds of the sale of the
estate properties.
SO ORDERED.16
SOTEROs motion for reconsideration was denied. 17 Hence, this petition for review.
Respondent raised certain procedural infirmities in his comment which allegedly warrant the
outright dismissal of the petition. 18 We find no merit in them, 19 hence, proceed to resolve this
petition on the merits.
Two substantial issues confront us: First, whether the intestate courts Order dated
September 15, 2000 was a final order which should have been appealed by respondent, or
an interlocutory one which was properly assailed in a petition for certiorari with the CA on the
ground of grave abuse of discretion. Second, whether the CA erred in granting the writ
of certiorari.
A court order is final in character if it puts an end to the particular matter resolved, or settles
definitely the matter therein disposed of, such that no further questions can come before the
court except the execution of the order.20On the other hand, a court order is merely
interlocutory if it is provisional and leaves substantial proceeding to be had in connection
with its subject.21
In the instant case, the Order dated September 15, 2000, which denied respondents motion
for petitioner to render an accounting was an interlocutory order. The motion was filed under
Section 8, Rule 85 of the Rules of Court, which provides
Every executor or administrator shall render an account of his administration within
one (1) year from the time of receiving letters testamentary or of administration,
unless the court otherwise directs because of extensions of time for presenting
claims against, or paying the debts of, the estate, or of disposing of the estate; and
he shall render such further accounts as the court may require until the estate is
wholly settled.
and Sec. 7, Rule 87, of the same Rules, which provides
The court, on complaint of an executor or administrator, may cite a person entrusted
by an executor or administrator with any part of the estate of the deceased to appear
before it, and may require such person to render a full account, on oath, of the
money, goods, chattels, bonds, accounts, or other papers belonging to such estate
as came to his possession in trust for such executor or administrator, and of his
proceedings thereon; and if a person so cited refuses to appear to render such
account, the court may punish him for contempt as having disobeyed a lawful order
of the court.
Applying Sec. 8, Rule 85, the intestate court denied the motion on the ground that it was
premature considering that petitioner has been co-administrator for only one (1) day at the
time it was filed. With the denial, petitioners accountability as co-administrator was in no way
settled as it did not preclude or forestall future accountings by him which, under said Sec. 8,
he is obliged to render within one (1) year from receiving letters of administration, or as
required by the court until the estate is settled. Neither an accounting or an examination of
petitioner under Section 7, Rule 87, definitely settle the issue of his alleged illegal transfers
and lease since a proceeding under this section, like that under Sec. 6 22 of the same Rule, is
merely in the nature of fact-finding inquiries.23 It is intended to elicit information or evidence
relative to estate properties. The Regional Trial Court (RTC) of Cagayan de Oro City which
has jurisdiction over the administration and settlement of the estate has limited jurisdiction
and is without authority to resolve issues of ownership with finality especially when third
persons are involved.24Separate actions should be instituted by the administrator for the
purpose.25 In fine, denial of respondents motion for petitioner to render an accounting is an
interlocutory order not subject to appeal but may be challenged before a superior court
through a petition for certiorari under Rule 65.26
Be that as it may, we rule that the CA erred in granting the writ of certiorari.
Certiorari under Rule 65 will lie only where a grave abuse of discretion or an act without or in
excess of jurisdiction is clearly shown. 27 The abuse of discretion must be so patent and gross
as to amount to an evasion of a positive duty or a virtual refusal to perform a duty enjoined
by law, or to act at all in contemplation of law as where the power is exercised in an arbitrary
and despotic manner by reason of passion and hostility.28
The intestate court correctly denied respondents motion for accounting. It is obvious that the
motion was just another ploy of the respondent to delay his compliance with the courts
Order dated February 1, 1995 directing him to render an accounting of his administration of
the estate and to turn over the certificates of placement of the proceeds from the sales of
estate properties amounting to millions of pesos, which has long become final and executory
with its affirmance by the CA in CA-G.R. SP No. 4115629 and finally by this Court, in G.R. No.
128928.30Indeed, the ground resurrected by respondent in the motion, that petitioner should
be made to account first for the alleged illegal transfers of estate properties made by him
before he (respondent) could render his own accounting, was already passed upon and
rejected by the CA in aforesaid CA-G.R. SP No. 41156, viz:
x x x [P]etitioners argument that the intestate court should first declare illegal sales
of estate properties made by Sotero Punongbayan and other heirs, is incorrect for
two reasons: (1) the petitioner has already initiated cases for the annulment of the
said sales x x x hence, the intestate court will be barred from entertaining and
resolving the same controversies by the principle of lis pendens, and (2) questions of
title to real property cannot be determined in testate or intestate proceedings. 31
The issue of petitioners alleged illegal transfers are, in fact, pending before the RTC of
Malolos, Bulacan where cases32 for their annulment have been filed by respondent.
Respondent admits that they involve the very same properties in respect to which the motion
for accounting was filed.33 Thus, there is no more reason for respondent to further delay the
accounting of his administration of the estate for even the petition for certiorari which he filed
to question the warrant of arrest that had to be issued for his non-compliance was dismissed
by the CA in CA-G.R. SP No. 5775434 wherein his "clear and contumacious" refusal to obey
court processes was condemned.
Clearly, respondent was not entitled to the writ of certiorari erroneously issued by the
CA. Certiorari, being an equitable remedy, will not issue where the petitioner is in bad faith. 35
IN VIEW WHEREOF, the petition is GRANTED. The assailed Decision dated August 9, 2002
of the Court of Appeals in CA-G.R. SP No. 63002, as well as its Resolution dated January
14, 2003, are REVERSED and SET ASIDE. The Order dated September 15, 2000 of the
Regional Trial Court of Cagayan de Oro City, Branch 19, in Special Proceedings No. 1053 is
REINSTATED.
SO ORDERED.
Austria-Martinez, Callejo, Sr., Tinga, and Chico-Nazario, JJ., concur.
Footnotes
1
Rollo, pp. 55-63.
Entitled "Danilo G. Punongbayan v. Hon. Anthony E. Santos, in his capacity as

Presiding Judge of Branch 19, Regional Trial Court of Cagayan de Oro City, and
Sotero A. Punongbayan."
2
Rollo, pp. 65-66.
Entitled "In the Matter of the Intestate Estate of the deceased Escolastica
Punongbayan-Paguio."
4
Miguel Paguio relinquished his right to act as administrator after he received all his
shares, conjugal as well as an heir, in the estate of his deceased wife in accordance
with the Compromise Agreement of 1974.See Resolution dated August 14, 2000 of
the RTC-Cagayan de Oro City, Branch 19, in Spec. Proc. No. 1053; CA Rollo, p. 228.
5
He contended: (1) that Sotero Punongbayan and other heirs made unauthorized
sales of estate properties in Bulacan which should first be declared illegal before a
distribution of estate properties could be made; (2) that the proceeds from sales of
estate properties were deposited in three banks in the name of the estate and it is
better that they remain there; and (3) that he is still consolidating all income of the
estate for purposes of accounting.
6
Docketed as CA-G.R. SP No. 41156 and entitled "Danilo G. Punongbayan v. Hon.

Anthony E. Santos and Sotero Punongbayan."
7
Entitled "Danilo Punongbayan v. Court of Appeals, et al."
Resolution dated June 23, 1997.
10
Entitled "Danilo G. Punongbayan v. Sotero A. Punongbayan."
11
CA Rollo, pp. 194-203.
12
Id. at 108-111.
13
Rollo, p. 93.
14
Order dated November 10, 2000.
15
Supra at Note 2.
16
Rollo, p. 62.
17
Resolution dated January 14, 2003.
The grounds are: the Court of Appeals was erroneously impleaded as partyrespondent in the petition; and, no affidavit of service was attached to the motion for
extension of time to file petition and to the petition itself.
18
Petitioners affidavits of service of the motion for extension of time to file petition
and of the petition itself appear on pages 8 and 53, respectively, of the rollo of this
case.
19
Hydro Resources Contractors Corporation v. Court of Appeals, 204 SCRA 309,

318-319 (1991).
20
21
Id. at 319.
Sec. 6. Proceedings when property concealed, embezzled, or fraudulently

conveyed. - If an executor or administrator, heir, legatee, creditor, or other individual
interested in the estate of the deceased, complains to the court having jurisdiction of
the estate that a person is suspected of having concealed, embezzled, or conveyed
away any of the money, goods, or chattels of the deceased, or that such person has
in his possession or has knowledge of any deed, conveyance, bond, contract, or
other writing which contains evidence of or tends to disclose the right, title, interest,
or claim of the deceased to real or personal estate, or the last will and testament of
the deceased, the court may cite such suspected person to appear before it and may
examine him on oath on the matter of such complaint and if the person so cited
refuses to appear, or to answer on such examination or such interrogatories as are
put to him, the court may punish him for contempt, and commit him to prison until he
submits to the order of the court.
22
23
Regalado, F., Remedial Law Compendium (2000), Vol. II, p. 79.
See Valera v. Inserto, 149 SCRA 533 (1987), re Sec. 6, a similar fact-finding inquiry
sanctioned under Rule 87 of the Rules of Court.
24
25
Id.
See Chua v. Absolute Management Corporation, 413 SCRA 547 (2003), re Sec. 6
of Rule 87.
26
27
Palomado v. National Labor Relations Commission, 257 SCRA 680 (1996).
Commissioner of Internal Revenue v. Court of Appeals, 257 SCRA 200 1996;

Paredes v. Civil Service Commission, 192 SCRA 84 (1990).
28
29
Supra at Note 7.
30
Supra at Note 8.
31
Civil Case No. 361-M-94 entitled "Danilo G. Punongbayan v. Sotero

Punongbayan, et al." and Civil Case No. 722-M-94 entitled "Danilo G. Punongbayan
v. Sotero Punongbayan," both for reconveyance; SeePetition, p. 35, Rollo, p.
45; also respondents Comment, pp. 10-11, Id., pp. 225-226.
32
33
See Comment, p. 11; Id., p. 226.
34
Supra at Note 10.
35
See Manahan v. Cruz, 61 SCRA 137 (1974).

SUPREME COURT
Manila
THIRD DIVISION
G.R. Nos. 130371 &130855
August 4, 2009
REPUBLIC OF THE PHILIPPINES, Petitioner,

vs.
FERDINAND R. MARCOS II and IMELDA R. MARCOS, Respondents.
DECISION
DEL CASTILLO, J.:
Before this Court is a Petition for Review on Certiorari1 under Rule 45 of the Rules of Court,
seeking to set aside the March 13, 1997 Decision 2 and August 27, 1997 Resolution3 of the
Court of Appeals (CA) in CA-G.R. SP No. 43450.
The facts of the case are as follows:
On January 11, 1996, the Regional Trial Court (RTC) of Pasig City Branch 156, acting as a
probate court, in Special Proceeding No. 10279, issued an Order 4 granting letters
testamentary in solidum to respondents Ferdinand R. Marcos II and Imelda Trinidad
Romualdez-Marcos as executors of the last will and testament of the late Ferdinand E.
Marcos.
The dispositive portion of the January 11, 1996 Order reads:
WHEREFORE, finding the Last Will and Testament of Ferdinand Edralin Marcos to have
been duly executed in accordance with law, the same is hereby ALLOWED AND ADMITTED
TO PROBATE.
Upon the filing of a bond in the amount of P50,000.00, let letters testamentary be
issued in solidum to Imelda Trinidad Romualdez-Marcos AND Ferdinand Romualdez
Marcos II, named executors therein.
Pending the filing of said bond and their oath, Commissioner Liwayway Vinzons-Chato of the
Bureau of Internal Revenue is hereby authorized to continue her functions as Special
Administrator of the Estate of Ferdinand Edralin Marcos.
Let NOTICE be given to all known heirs and creditors of the decedent, and to any other
persons having an interest in the estate for them to lay their claim against the Estate or
forever hold their peace.
SO ORDERED.5
On January 15, 1996, the petitioner Republic of the Philippines filed a Motion for Partial
Reconsideration6 in so far as the January 11, 1996 RTC Order granted letters testamentary
to respondents. On the other hand, respondent Imelda Marcos filed her own motion for
reconsideration on the ground that the will is lost and that petitioner has not proven its
existence and validity.
On February 5, 1996, respondent Ferdinand Marcos II filed a Compliance stating that he
already filed a bond in the amount of P50,000.00 as directed by the January 11, 1996 RTC
Order and that he took his oath as named executor of the will on January 30, 1996.
On March 13, 1996, the RTC issued Letters of Administration7 to BIR Commissioner
Liwayway Vinzons-Chato in accordance with an earlier Order dated September 9, 1994,
appointing her as Special Administratrix of the Marcos Estate.
On April 1, 1996, respondent Ferdinand Marcos II filed a Motion to Revoke the Letters of
Administration issued by the RTC to BIR Commissioner Vinzons-Chato.
On April 26, 1996, the RTC issued an Order8 denying the motion for partial reconsideration
filed by petitioner as well as the motion for reconsideration filed by respondent Imelda
Marcos, the penultimate portion of which reads:
Under the Rules, a decedents testamentary privilege must be accorded utmost respect.
Guided by this legal precept, therefore, in resolving the two (2) motions at hand, the Court is
constrained to DENY both.
Examining the arguments poised by the movants, the Court observed that these are but a
mere rehash of issues already raised and passed upon by the Court.
One has to review the previous orders issued by the Court in this case, e.g., the orders
dated September 9, 1994, November 25, 1994, as well as October 3, 1995, to see that even
as far back then, the Court has considered the matter of competency of the oppositors and
of Commissioner Liwayway Vinzons-Chato as having been settled.
It cannot be overstressed that the assailed January 11, 1996 Orders of the Court was arrived
at only after extensive consideration of every legal facet available on the question of validity
of the Will.
WHEREFORE, for lack of merit, the motion for reconsideration filed separately by petitioner
Republic and oppositor Imelda R. Marcos are both DENIED.
SO ORDERED.9
On June 6, 1996, petitioner filed with this Court a Petition for Review on Certiorari, under
Ruled 45 of the Rules of Court, questioning the aforementioned RTC Orders granting letters
testamentary to respondents.
On February 5, 1997, the First Division of this Court issued a Resolution referring the petition
to the CA, to wit:
xxxx
The special civil action for certiorari as well as all the other pleadings filed herein
are REFERRED to the Court of Appeals for consideration and adjudication on the
merits or any other action as it may deem appropriate, the latter having jurisdiction
concurrent with this Court over the Case, and this Court having been cited to no special and
important reason for it to take cognizance of said case in the first instance. 10 (Emphasis and
Underscoring Supplied)
On March 13, 1997, the CA issued a Decision,11 dismissing the referred petition for having
taken the wrong mode of appeal, the pertinent portions of which reads:
Consequently, for having taken the wrong mode of appeal, the present petition should be
dismissed in accordance with the same Supreme Court Circular 2-90 which expressly
provides that:
4. Erroneous Appeals An appeal taken to either the Supreme Court or the Court of
Appeals by the wrong or inappropriate mode shall be dismissed.
IN VIEW OF THE FOREGOING, the instant petition for review is hereby DISMISSED.
SO ORDERED.12
Petitioner filed a Motion for Reconsideration, 13 which was, however denied by the CA in a
Resolution14 dated August 27, 1997.
Hence, herein petition, with petitioner raising the following assignment of errors, to wit:
I.
THE COURT OF APPEALS GRAVELY ERRED IN DISMISSING THE PETITION ON
TECHNICAL GROUNDS DESPITE THE SUPREME COURT RESOLUTION
SPECIFICALLY REFERRING SAID PETITION FOR A DECISION ON THE MERITS.
II.
THE PROBATE COURT GRAVELY ERRED IN FAILING TO CONSIDER THAT
RESPONDENTS IMELDA R. MARCOS AND FERDINAND R. MARCOS II SHOULD
BE DISQUALIFIED TO ACT AND SERVE AS EXECUTORS.
III.
THE PROBATE COURT GRAVELY ERRED IN FAILING TO CONSIDER THAT SAID
PRIVATE RESPONDENTS HAVE DENIED AND DISCLAIMED THE VERY
EXISTENCE AND VALIDITY OF THE MARCOS WILL.
IV.
THE PROBATE COURT GRAVELY ERRED IN FAILING TO CONSIDER THAT ITS
ORDER OF JANUARY 11, 1996, WHICH ADMITTED THE MARCOS WILL TO
PROBATE AND WHICH DIRECTED THE ISSUANCE OF LETTERS
TESTAMENTARY IN SOLIDUM TO PRIVATE RESPONDENTS AS EXECUTORS OF
SAID MARCOS WILL, WAS BASED ON THE EVIDENCE OF THE REPUBLIC

ALONE.
V.
THE PROBATE COURT GRAVELY ERRED IN FAILING TO CONSIDER THAT
BOTH PRIVATE RESPONDENTS HAVE OBSTRUCTED THE TRANSFER TO THE
PHILIPPINES OF THE MARCOS ASSETS DEPOSITED IN THE SWISS BANKS.15
In the meantime, on October 9, 2002, the RTC, acting on the pending unresolved motions
before it, issued an Order16 which reads:
WHEREFORE, the Court hereby appoints as joint special administrators of the estate of
the late Ferdinand E. Marcos, the nominee of the Republic of the Philippines (the
Undersecretary of the Department of Justice whom the Secretary of Justice will designate for
this purpose) and Mrs. Imelda Romualdez Marcos and Mr. Ferdinand R. Marcos II, to serve
as such until an executor is finally appointed.
SO ORDERED.
The petition is without merit.
When the assailed Orders granting letters testamentary in solidum to respondents were
issued by the RTC, petitioner sought to question them by filing a petition for review
on certiorari under Rule 45 of the Rules of Court.
Supreme Court Circular No. 2-90,17 which was then in effect, reads:
2. Appeals from Regional Trial Courts to the Supreme Court. Except in criminal cases
where the penalty imposed is life imprisonment to reclusion perpetua, judgments of
regional trial courts may be appealed to the Supreme Court only by petition for review
on certiorari in accordance with Rule 45 of the Rules of Court in relation to Section 17
of the Judiciary Act of 1948, as amended, this being the clear intendment of the provision
of the Interim Rules that "(a)ppeals to the Supreme Court shall be taken by petition for
certiorari which shall be governed by Rule 45 of the Rules of Court. (Emphasis and
Underscoring Supplied)
The pertinent portions of Section 1718 of the Judiciary Act of 1948 read:
The Supreme Court shall further have exclusive jurisdiction to review, revise, reverse, modify
or affirm on certiorarias the law or rules of court may provide, final judgments and decrees of
inferior courts as herein provided, in
(1) All cases in which the constitutionality or validity of any treaty, law, ordinance, or
executive order or regulation is in question;
(2) All cases involving the legality of any tax, impost, assessment or toll, or any
penalty imposed in relation thereto;
(3) All cases in which the jurisdiction of any inferior court is in issue;
(4) All other cases in which only errors or questions of law are involved: Provided,
however, That if, in addition to constitutional, tax or jurisdictional questions, the cases
mentioned in the three next preceding paragraphs also involve questions of fact or
mixed questions of fact and law, the aggrieved party shall appeal to the Court of
Appeals; and the final judgment or decision of the latter may be reviewed, revised,
reversed, modified or affirmed by the Supreme Court on writ of certiorari; and
(5) Final awards, judgments, decision or orders of the Commission on Elections,
Court of Tax Appeals, Court of Industrial Relations, the Public Service Commission,
and the Workmens Compensation Commission.
A reading of Supreme Court Circular 2-90, in relation to Section 17 of the Judiciary Act of
1948, clearly shows that the subject matter of therein petition, that is, the propriety of
granting letters testamentary to respondents, do not fall within any ground which can be the
subject of a direct appeal to this Court. The CA was thus correct in declaring that the "issues
raised by petitioner do not fall within the purview of Section 17 of the Judiciary Act of 1948
such that the Supreme Court should take cognizance of the instant case." 19
Moreover, the Courts pronouncement in Suarez v. Judge Villarama20 is instructive:
Section 4 of Circular No. 2-90, in effect at the time of the antecedents, provides that an
appeal taken to either the Supreme Court or the Court of Appeals by the wrong mode
or inappropriate mode shall be dismissed. This rule is now incorporated in Section 5,
Rule 56 of the 1997 Rules of Civil Procedure.
Moreover, the filing of the case directly with this Court runs afoul of the doctrine of
hierarchy of courts. Pursuant to this doctrine, direct resort from the lower courts to
the Supreme Court will not be entertained unless the appropriate remedy cannot be
obtained in the lower tribunals. This Court is a court of last resort, and must so remain if it
is to satisfactorily perform the functions assigned to it by the Constitution and immemorial
tradition. Thus, a petition for review on certiorari assailing the decision involving both
questions of fact and law must first be brought before the Court of Appeals.21
Also, in Southern Negros Development Bank v. Court of Appeals, 22 this Court ruled:
It is incumbent upon private respondent qua appellants to utilize the correct mode of appeal
of the decisions of trial courts to the appellate courts. In the mistaken choice of their remedy,
they can blame no one but themselves (Jocson v. Baguio, 179 SCRA 550 [1989]; Yucuanseh
Drug Co. v. National Labor Union, 101 Phil. 409 [1957]).
xxxx
Pursuant to Section 4 of Circular No. 2-90, which provides that "[a]n appeal taken to
either the Supreme Court or the Court of Appeals by the wrong mode or inappropriate
mode shall be dismissed," the only course of action of the Court to which an
erroneous appeal is made is to dismiss the same.There is no longer any justification
for allowing transfers of erroneous appeals from one court to another (Quesada v.
Court of Appeals, G.R. No. 93869, November 12, 1990, First Division, Minute Resolution). 23
Based on the foregoing, petitioner cannot deny that the determination of whether or not
respondents should be disqualified to act as executors is a question of fact. Hence, the
proper remedy was to appeal to the CA, not to this Court.
Petitioner is adamant, however, that notwithstanding the improper remedy, the CA should not
have dismissed therein petition. Petitioner argues in the wise:
However, as can be seen in the Resolution of February 5, 1997, (Annex "H") this Honorable
Court deemed it more proper to transmit the first Petition for Review to respondent appellate
court for the reason that:
This Court having been cited to no special and important reason for it to take cognizance of
said case in the first instance. x x x
It would appear then that even though this Honorable Court apparently considers the
Republics petition as deserving to be given due course, it deemed it in the best interest of
the parties concerned if the Court of Appeals would first take cognizance of said case,
thereby preserving its stance as a court of last resort.
Additionally, this Honorable Court itself plainly stated that the case under review is:
.REFERRED to the Court of Appeals for consideration and adjudication on the merits.
The latter having jurisdiction concurrent with this Court over the case 24
Petitioners arguments are misplaced. To stress, the February 5, 1997 Resolution reads:
The special civil action for certiorari as well as all the other pleadings filed herein are
REFERRED to the Court of Appeals for consideration and adjudication on the merits or any
other action as it may deem appropriate, the latter having jurisdiction concurrent with this
Court over the Case, and this Court having been cited to no special and important reason for
it to take cognizance of said case in the first instance. 25
Based thereon, this Court agrees with the ruling of the CA that said resolution gave the CA
discretion and latitude to decide the petition as it may deem proper. The resolution is clear
that the petition was referred to the CA for consideration and adjudication on the
merits or any other action as it may deem appropriate. Thus, no error can be attributed to the
CA when the action it deemed appropriate was to dismiss the petition for having availed of
an improper remedy. More importantly, the action of the CA was sanctioned under Section 4
of Supreme Court Circular 2-90 which provides that "an appeal taken to either the Supreme
Court or the Court of Appeals by the wrong mode or inappropriate mode shall be dismissed."
Moreover, petitioner mistakenly relies in Oriental Media, Inc. v. Court of Appeals,26 in which
this Court made the following pronouncements:
In the case at bar, there was no urgency or need for Oriental to resort to the
extraordinary remedy ofcertiorari for when it learned of the case and the judgment against
it on July 25, 1986, due to its receipt of a copy of the decision by default; no execution had
as yet been ordered by the trial court. As aforementioned, Oriental had still the time and the
opportunity to file a motion for reconsideration, as was actually done. Upon the denial of its
motion for reconsideration in the first case, or at the latest upon the denial of its
petition for relief from judgment, Oriental should have appealed. Oriental should have
followed the procedure set forth in the Rules of Court for
Rules of procedure are intended to ensure the orderly administration of justice and the
protection of substantive rights in judicial and extrajudicial proceedings. It is a mistake to
purpose that substantive law and adjective law are contradictory to each other or, as has
often been suggested, that enforcement of procedural rules should never be permitted if it
will result in prejudice to the substantive rights of the litigants. This is not exactly true; the
concept is much misunderstood. As a matter of fact, the policy of the courts is to give effect
to both kinds of law, as complementing each other, in the just and speedy resolution of the
dispute between the parties. Observance of both substantive rights is equally guaranteed by
due process whatever the source of such rights, be it the Constitution itself or only a statute
or a rule of court.27
In the case at bar, as found by this Court in its February 5, 1997 Resolution, therein petition
offered no important or special reason for the Court to take cognizance of it at the first
instance. Petitioner offered no plausible reason why it went straight to this Court when an
adequate and proper remedy was still available. The CA was thus correct that the remedy
that petitioner should have availed of was to file an appeal under Rule 109 of the Rules of
Court which states:
Section 1. Orders of judgments from which appeals taken. An interested person may
appeal in special proceedings from an order or judgment rendered by a Court of First
Instance or a Juvenile and Domestic Relations Court, where such order or judgment:
(a) allows or disallows a will;
Because of the preceding discussion, herein petition must necessarily fail. However, even if
this Court were to set aside petitioners procedural lapses, a careful review of the records of
the case reveal that herein petition is without merit.
At the crux of the controversy is a determination of whether or not respondents are
incompetent to serve as executors of the will of Ferdinand Marcos.
Ozeata v. Pecson28 is instructive:
The choice of his executor is a precious prerogative of a testator, a necessary concomitant of
his right to dispose of his property in the manner he wishes. It is natural that the testator
should desire to appoint one of his confidence, one who can be trusted to carry out his
wishes in the disposal of the estate. The curtailment of this right may be considered as a
curtailment of the right to dispose. And as the rights granted by will take effect from the time
of death (Article 777, Civil Code of the Philippines), the management of his estate by the
administrator of his choice should be made as soon as practicable, when no reasonable
objection to his assumption of the trust can be interposed any longer. It has been held that
when a will has been admitted to probate, it is the duty of the court to issue letters
testamentary to the person named as executor upon his application(23 C.J. 1023).
xxxx
The case of In re Erlanger's Estate, 242 N.Y.S. 249, also reiterates the same principle.
The courts have always respected the right to which a testator enjoys to determine who is
most suitable to settle his testamentary affairs, and his solemn selection should not lightly be
disregarded. After the admission of a will to probate, the courts will not name a better
executor for the testator nor disqualify, by a judicial veto, the widow or friend or other
person selected in the will, except upon strict proof of the statutory grounds of
incompetency. Matter of Leland's Will, 219 N.Y. 387, 393, 114 N.E. 854. x x x29
Section 1(c), Rule 78 of the Rules of Court defines who are incompetent to serve as
executors, to wit:
Section 1. Who are incompetent to serve as executors or administrators. No person is
competent to serve as executor or administrator who:
xxxx
(c) Is in the opinion of the court unfit to execute the duties of trust by reason of
drunkenness, improvidence, orwant of understanding or integrity, or by reason
of conviction of an offense involving moral turpitude. (Emphasis Supplied)
In the case at bar, petitioner anchored its opposition to the grant of letters testamentary to
respondents, specifically on the following grounds: (1) want of integrity, and (2) conviction of
an offense involving moral turpitude. Petitioner contends that respondents have been
convicted of a number of cases30 and, hence, should be characterized as one without
integrity, or at the least, with questionable integrity.31
The RTC, however, in its January 11, 1996 Order, made the following findings:
However, except for petitioner Republics allegation of want of integrity on the part of Imelda
Trinidad Romualdez-Marcos and Ferdinand Romualdez Marco II, named executors in the
last will and testament, so as to render them "incompetent" to serve as executors, the Court
sees at this time, no evidence on record, oral or documentary, to substantiate and
support the said allegation. (Emphasis Supplied)
Based on the foregoing, this Court stresses that an appellate court is disinclined to interfere
with the action taken by the probate court in the matter of removal of an executor or
administrator unless positive error or gross abuse of discretion is shown. 32 The Rules of
Court gives the lower court the duty and discretion to determine whether in its opinion an
individual is unfit to serve as an executor. 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 of orders of the court.33
Hence, in order to reverse the findings of the RTC, this Court must evaluate the evidence
presented or alleged by petitioner in support of its petition for disqualification. However, after
a painstaking review of the records and evidence on hand, this Court finds that the RTC
committed no error or gross abuse of discretion when it ruled that petitioner failed to
substantiate its allegation.
Petitioner conveniently omits to state that the two cases against respondent Imelda Marcos
have already been reversed by this Court. Her conviction in Criminal Case No. 17453 was
reversed by this Court in Dans, Jr. v. People.34 Likewise, her conviction in Criminal Case No.
17450 was reversed by this Court in Marcos v. Sandiganbayan.35 Hence, the so-called
"convictions" against respondent Imelda Marcos cannot serve as a ground for her
disqualification to serve as an executor.
On the other hand, the eight cases filed against respondent Ferdinand Marcos II involve four
charges for violation of Section 45 (failure to file income tax returns) and four charges for
violation of Section 50 (non-payment of deficiency taxes) of the National Internal Revenue
Code of 1977 (NIRC).
It is a matter of record, that in CA-G.R. CR No. 18569, 36 the CA acquitted respondent
Ferdinand Marcos II of all the four charges for violation of Section 50 and sustained his
conviction for all the four charges for violation of Section 45. It, however, bears to stress, that
the CA only ordered respondent Marcos II to pay a fine for his failure to file his income tax
return. Moreover, and as admitted by petitioner,37 said decision is still pending appeal.
Therefore, since respondent Ferdinand Marcos II has appealed his conviction relating to four
violations of Section 45 of the NIRC, the same should not serve as a basis to disqualify him
to be appointed as an executor of the will of his father. More importantly, even
assuming arguendo that his conviction is later on affirmed, the same is still insufficient to
disqualify him as the "failure to file an income tax return" is not a crime involving moral
turpitude.
In Villaber v. Commision on Elections,38 this Court held:
As to the meaning of "moral turpitude," we have consistently adopted the definition in Black's
Law Dictionary as "an act of baseness, vileness, or depravity in the private duties which
a man owes his fellow men, or to society in general, contrary to the accepted and
customary rule of right and duty between man and woman, or conduct contrary to
justice, honesty, modesty, or good morals."
In In re Vinzon, the term "moral turpitude" is considered as encompassing "everything which
is done contrary to justice, honesty, or good morals."
xxxx
We, however, clarified in Dela Torre vs. Commission on Elections that "not every
criminal act involves moral turpitude," and that ''as to what crime involves moral
turpitude is for the Supreme Court to determine."39
Moreover, In De Jesus-Paras v. Vailoces:40
Indeed, it is well-settled that "embezzlement, forgery, robbery, and swindling are crimes
which denote moral turpitude and, as a general rule, all crimes of which fraud is an
element are looked on as involving moral turpitude" (58 C.J.S., 1206).
The "failure to file an income tax return" is not a crime involving moral turpitude as the mere
omission is already a violation regardless of the fraudulent intent or willfulness of the
individual. This conclusion is supported by the provisions of the NIRC as well as previous
Court decisions which show that with regard to the filing of an income tax return, the NIRC
considers three distinct violations: (1) a false return, (2) a fraudulent return with intent to
evade tax, and (3) failure to file a return.
The same is illustrated in Section 51(b) of the NIRC which reads:

(b) Assessment and payment of deficiency tax xxx
In case a person fails to make and file a return or list at the time prescribed by
law, or makes willfully or otherwise, false or fraudulent return or list x x x. (Emphasis
Supplied)
Likewise, in Aznar v. Court of Tax Appeals,41 this Court observed:
To our minds we can dispense with these controversial arguments on facts, although we do
not deny that the findings of facts by the Court of Tax Appeals, supported as they are by very
substantial evidence, carry great weight, by resorting to a proper interpretation of Section
332 of the NIRC. We believe that the proper and reasonable interpretation of said provision
should be that in the three different cases of (1) false return, (2) fraudulent return with
intent to evade tax, (3) failure to file a return, the tax may be assessed, or a proceeding in
court for the collection of such tax may be begun without assessment, at any time within ten
years after the discovery of the (1) falsity, (2) fraud, and (3) omission. Our stand that the
law should be interpreted to mean a separation of the three different situations of
false return, fraudulent return with intent to evade tax, and failure to file a return is
strengthened immeasurably by the last portion of the provision which segregates the
situations into three different classes, namely, "falsity," "fraud" and
"omission."42 (Emphasis Supplied)
Applying the foregoing considerations to the case at bar, the filing of a "fraudulent return with
intent to evade tax" is a crime involving moral turpitude as it entails willfulness and fraudulent
intent on the part of the individual. The same, however, cannot be said for "failure to file a
return" where the mere omission already constitutes a violation. Thus, this Court holds that
even if the conviction of respondent Marcos II is affirmed, the same not being a crime
involving moral turpitude cannot serve as a ground for his disqualification.
Anent the third error raised by petitioner, the same has no merit.
Petitioner contends that respondents denied the existence of the will, and are,
therefore, estopped from claiming to be the rightful executors thereof. Petitioner further
claims that said actions clearly show that respondents lack the competence and integrity to
serve as officers of the court.
This Court does not agree with the posture taken by petitioner, and instead, accepts the
explanation given by respondents, to wit:
Respondents opposed the petition for probate not because they are disclaiming the
existence of the will, but because of certain legal grounds, to wit: (a) petitioner does not have
the requisite interest to institute it; (b) the original copy of the will was not attached to the
petition for probate as required by the rules; and (c) the Commissioner of the Bureau of
Internal Revenue is not qualified to be appointed as administrator of the estate. 43
Based on the foregoing, considering the nature of their opposition, respondents cannot be
held guilty of estoppelas they merely acted within their rights when they put in issue legal
grounds in opposing the probate proceedings. More importantly, even if said grounds were
later on overruled by the RTC, said court was still of opinion that respondents were fit to
serve as executors notwithstanding their earlier opposition. Again, in the absence of palpable
error or gross abuse of discretion, this Court will not interfere with the RTCs discretion.
As for the remaining errors assigned by petitioner, the same are bereft of merit.
Petitioner contends that respondents have strongly objected to the transfer to the Philippines
of the Marcos assets deposited in the Swiss Banks44 and thus the same should serve as a
ground for their disqualification to act as executors. This Court does not agree. In the first
place, the same are mere allegations which, without proof, deserve scant consideration.
Time and again, this Court has stressed that this Court is a court of law and not a court of
public opinion. Moreover, petitioner had already raised the same argument in its motion for
partial reconsideration before the RTC. Said court, however, still did not find the same as a
sufficient ground to disqualify respondents. Again, in the absence of palpable error or gross
abuse of discretion, this Court will not interfere with the RTCs discretion.
1avvphi1
Lastly, petitioner argues that the assailed RTC Orders were based solely on their own
evidence and that respondents offered no evidence to show that they were qualified to serve
as executors.45 It is basic that one who alleges a fact has the burden of proving it and a mere
allegation is not evidence.46 Consequently, it was the burden of petitioner (not respondents)
to substantiate the grounds upon which it claims that respondents should be disqualified to
serve as executors, and having failed in doing so, its petition must necessarily fail.
WHEREFORE, premises considered, the March 13, 1997 Decision and August 27, 1997
Resolution of the Court of Appeals in CA-G.R. SP No. 43450 are hereby AFFIRMED.
The Regional Trial Court of Pasig City, Branch 156, acting as a probate court in Special
Proceeding No. 10279, is hereby ORDERED to issue letters testamentary, in solidum, to
Imelda Romualdez-Marcos and Ferdinand Marcos II.
SO ORDERED.
DIOSDADO M. PERALTA
Associate Justice
WE CONCUR:
Associate Justice
Chairperson
Associate Justice
PRESBITERO J. VELASCO, JR.

Associate Justice
ANTONIO EDUARDO B. NACHURA

Associate Justice
ATT E S TATI O N
I attest that the conclusions in the above Decision had been reached in consultation before
the case was assigned to the writer of the opinion of the Courts Division.
Associate Justice
Third Division, Chairperson
Pursuant to Section 13, Article VIII of the Constitution and the Division Chairpersons
Attestation, I certify that the conclusions in the above Decision were reached in consultation
before the case was assigned to the writer of the opinion of the Courts Division.
REYNATO S. PUNO
Chief Justice
Footnotes
1
Rollo (G.R. No. 130371), pp. 7-41.
Penned by Associate Justice Ramon A. Barcelona, with Associate Justices Artemon

D. Luna and Hilarion L. Aquino, concurring; id. at 45-50.
2
Id. at 52-55.
Id. at 56-65.
Id. at 65. (Emphasis supplied.)
Id. at 70-79.
Id. at 80.
Id. at 66-69.
Id. at 69.
10
Id. at 89.
11
Id. at 45-50.
12
13
Id. at 84-92.
14
Id. at 52-55.
15
Id. at 15-16.
16
Id. at 240-243. (Emphasis supplied)
Guidelines to be observed in Appeals to the Court of Appeals and to the Supreme

Court; March 9, 1990.
17
SEC. 17. Jurisdiction of the Supreme Court. The Supreme Court shall have
original jurisdiction over cases affecting ambassadors, other public ministers, and
consuls; and original and exclusive jurisdiction in petitions for the issuance of writs of
certiorari, prohibition and mandamus against the Court of Appeals.
18
In the following cases, the Supreme Court shall exercise original and
concurrent jurisdiction with the Court of First Instance:
1. In petitions for the issuance of writs of certiorari, prohibition,
mandamus, quo warranto, and habeas corpus; and
2. In actions brought to prevent and restrain violations of law
concerning monopolies and combinations in restraint of trade.
The Supreme Court shall have exclusive jurisdiction to review, revise,
reverse, modify or affirm on appeal, certiorari or writ of error, as the law or
rules of court may provide, final judgment and decrees of inferior courts as
herein provided, in
(1) All criminal cases involving offenses for which the penalty imposed is
death or life imprisonment; and those involving other offenses which,
although not so punished, arose out of the same occurrence or which may
have been committed by the accused on the same occasion, as that giving
rise to the more serious offense, regardless of whether the accused are
charged as principals, accomplices, or accessories, or whether they have
been tried jointly or separately;
(2) All cases involving petitions for naturalization or denaturalization; and
(3) All decisions of the Auditor General, if the appellant is a private person or
entity.
19
Rollo (G.R. No. 130371), p. 48.
20
G.R. No. 124512, June 27, 2006, 493 SCRA 74.
21
Id. at 81-82. (Emphasis supplied.)
22
G.R. No. 112066, June 27, 1994, 233 SCRA 460.
23
Id. at 464-465.
24
Rollo (G.R. No. 130371), pp. 17-18.
25
Id. at 89. (Emphasis supplied)

SUPREME COURT
Baguio City
FIRST DIVISION
G.R. No. 162956
April 10, 2008
FAUSTINO REYES, ESPERIDION REYES, JULIETA C. RIVERA, and EUTIQUIO DICO,

JR., petitioners,
vs.
PETER B. ENRIQUEZ, for himself and Attorney-in-Fact of his daughter DEBORAH ANN
C. ENRIQUEZ, and SPS. DIONISIO FERNANDEZ and CATALINA
FERNANDEZ, respondents.
DECISION
PUNO, C.J.:
This case is a Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court
from the decision of the Court of Appeals (CA) dated September 29, 2003 in CA G.R. CV No.
68147, entitled "Peter B. Enriquez, et al. v. Faustino Reyes, et al., reversing the decision of
the Regional Trial Court (RTC) of Cebu City, Branch XI dated June 29, 2000, which
dismissed the complaint filed by the respondents herein. 1
The subject matter of the present case is a parcel of land known as Lot No. 1851 Flr-133
with an aggregate area of 2,017 square meters located in Talisay, Cebu. 2
According to petitioners Faustino Reyes, Esperidion Reyes, Julieta C. Rivera, and Eutiquio
Dico, Jr., they are the lawful heirs of Dionisia Reyes who co-owned the subject parcel of land
with Anacleto Cabrera as evidenced by Transfer Certificate of Title (TCT) No. RT-3551 (T8070). On April 17, 1996, petitioners executed an Extrajudicial Settlement with Sale of the
Estate of Dionisia Reyes (the Extra Judicial Settlement) involving a portion of the subject
parcel of land. On March 21, 1997, the petitioners and the known heirs of Anacleto Cabrera
executed a Segregation of Real Estate and Confirmation of Sale (the Segregation and
Confirmation) over the same property. By virtue of the aforestated documents, TCT No. RT35551 (T-8070) was cancelled and new TCTs were issued: (1) TCT No. T-98576 in the name
of Anacleto Cabrera covering Lot 1851-A; (2) TCT No. T-98577 covering Lot 1851-B in the
name of petitioner Eutiquio Dico, Jr.; (3) TCT No. T-98578 covering Lot 1851-C in the name
of petitioner Faustino Reyes; (4) TCT No. T-98579 covering Lot 1851-D in the name of
petitioner Esperidion Reyes; (5) TCT No. T-98580 covering Lot 1851-E in the name of
petitioner Julieta G. Rivera; (6) TCT No. T-98581 covering Lot 1851-F in the name of Felipe
Dico; and (7) TCT No. T-98582 covering Lot 1851-G in the name of Archimedes C. Villaluz. 3
Respondents Peter B. Enriquez (Peter) for himself and on behalf of his minor daughter
Deborah Ann C. Enriquez (Deborah Ann), also known as Dina Abdullah Enriquez Alsagoff,
on the other hand, alleges that their predecessor-in-interest Anacleto Cabrera and his wife
Patricia Seguera Cabrera (collectively the Spouses Cabrera) owned pro-indiviso share in
the subject parcel of land or 1051 sq. m. They further allege that Spouses Cabrera were
survived by two daughters Graciana, who died single and without issue, and Etta, the wife
of respondent Peter and mother of respondent Deborah Ann who succeeded their parents
rights and took possession of the 1051 sq. m. of the subject parcel of land. During her
lifetime, Graciana sold her share over the land to Etta. Thus, making the latter the sole owner
of the one-half share of the subject parcel of land. Subsequently, Etta died and the property
passed on to petitioners Peter and Deborah Ann by virtue of an Extra-Judicial Settlement of
Estate. On June 19, 1999, petitioners Peter and Deborah Ann sold 200 sq. m. out of the
1051 sq. m. for P200,000.00 to Spouses Dionisio and Catalina Fernandez (Spouses
Fernandez), also their co-respondents in the case at bar. After the sale, Spouses Fernandez
took possession of the said area in the subject parcel of land. 4
When Spouses Fernandez, tried to register their share in the subject land, they discovered
that certain documents prevent them from doing so: (1) Affidavit by Anacleto Cabrera dated
March 16, 1957 stating that his share in Lot No. 1851, the subject property, is approximately
369 sq. m.; (2) Affidavit by Dionisia Reyes dated July 13, 1929 stating that Anacleto only
owned of Lot No. 1851, while 302.55 sq. m. belongs to Dionisia and the rest of the
property is co-owned by Nicolasa Bacalso, Juan Reyes, Florentino Reyes and Maximiano
Dico; (3) Extra-Judicial Settlement with Sale of the Estate of Dionisia Reyes dated April 17,
1996; (4) certificates of title in the name of the herein petitioners; and (5) Deed of
Segregation of Real Estate and Confirmation of Sale dated March 21, 1997 executed by the
alleged heirs of Dionisia Reyes and Anacleto Cabrera. Alleging that the foregoing documents
are fraudulent and fictitious, the respondents filed a complaint for annulment or nullification
of the aforementioned documents and for damages. 5 They likewise prayed for the
"repartition and resubdivision" of the subject property.6
The RTC, upon motion of the herein petitioners, dismissed the case on the ground that the
respondents-plaintiffs were actually seeking first and foremost to be declared heirs of
Anacleto Cabrera since they can not demand the partition of the real property without first
being declared as legal heirs and such may not be done in an ordinary civil action, as in this
case, but through a special proceeding specifically instituted for the purpose. 7
On appeal, the Court of Appeals (CA) reversed the RTC and directed the trial court to
proceed with the hearing of the case.8 The Motion for Reconsideration filed by the herein
petitioners was similarly denied.9
Hence this petition.
The primary issue in this case is whether or not the respondents have to institute a special
proceeding to determine their status as heirs of Anacleto Cabrera before they can file an
ordinary civil action to nullify the affidavits of Anacleto Cabrera and Dionisia Reyes, the
Extra-Judicial Settlement with the Sale of Estate of Dionisia Reyes, and the Deed of
Segregation of Real Estate and Confirmation of Sale executed by the heirs of Dionisia Reyes
and the heirs of Anacleto Cabrera, as well as to cancel the new transfer certificates of title
issued by virtue of the above-questioned documents.
We answer in the affirmative.
An ordinary civil action is one by which a party sues another for the enforcement or
protection of a right, or the prevention or redress of a wrong. 10 A special proceeding, on the
other hand, is a remedy by which a party seeks to establish a status, a right or a particular
fact.11
The Rules of Court provide that only a real party in interest is allowed to prosecute and
defend an action in court.12 A real party in interest is the one who stands to be benefited or
injured by the judgment in the suit or the one entitled to the avails thereof. 13 Such interest, to
be considered a real interest, must be one which is present and substantial, as distinguished
from a mere expectancy, or a future, contingent, subordinate or consequential interest. 14 A
plaintiff is a real party in interest when he is the one who has a legal right to enforce or
protect, while a defendant is a real party in interest when he is the one who has a correlative
legal obligation to redress a wrong done to the plaintiff by reason of the defendants act or
omission which had violated the legal right of the former.15The purpose of the rule is to
protect persons against undue and unnecessary litigation. 16 It likewise ensures that the court
will have the benefit of having before it the real adverse parties in the consideration of a
case.17 Thus, a plaintiffs right to institute an ordinary civil action should be based on his own
right to the relief sought.
In cases wherein alleged heirs of a decedent in whose name a property was registered sue
to recover the said property through the institution of an ordinary civil action, such as a
complaint for reconveyance and partition,18 or nullification of transfer certificate of titles and
other deeds or documents related thereto,19 this Court has consistently ruled that a
declaration of heirship is improper in an ordinary civil action since the matter is "within the
exclusive competence of the court in a special proceeding." 20 In the recent case of Portugal
v. Portugal-Beltran,21 the Court had the occasion to clarify its ruling on the issue at hand, to
wit:
The common doctrine in Litam, Solivio and Guilas in which the adverse parties are
putative heirs to the estate of a decedent or parties to the special proceedings for its
settlement is that if the special proceedings are pending, or if there are no special
proceedings filed but there is, under the circumstances of the case, a need to
file one, then the determination of, among other issues, heirship should be
raised and settled in said special proceedings. Where special proceedings had
been instituted but had been finally closed and terminated, however, or if a putative
heir has lost the right to have himself declared in the special proceedings as co-heir
and he can no longer ask for its re-opening, then an ordinary civil action can be filed
for his declaration as heir in order to bring about the annulment of the partition or
distribution or adjudication of a property or properties belonging to the estate of the
deceased.22
In the instant case, while the complaint was denominated as an action for the "Declaration of
Non-Existency[sic], Nullity of Deeds, and Cancellation of Certificates of Title, etc.," a review
of the allegations therein reveals that the right being asserted by the respondents are their
right as heirs of Anacleto Cabrera who they claim co-owned one-half of the subject property
and not merely one-fourth as stated in the documents the respondents sought to annul. As
correctly pointed out by the trial court, the ruling in the case of Heirs of Guido Yaptinchay v.
Hon. Roy del Rosario23 is applicable in the case at bar. In the said case, the petitioners
therein, claiming to be the legal heirs of the late Guido and Isabel Yaptinchay filed for
annulment of the transfer certificates of title issued in the name of Golden Bay Realty
Corporation on the ground that the subject properties rightfully belong to the petitioners
predecessor and by virtue of succession have passed on to them. In affirming the trial court
therein, this Court ruled:
...(T)he plaintiffs who claimed to be the legal heirs of the said Guido and Isabel
Yaptinchay have not shown any proof or even a semblance of it except the
allegations that they are the legal heirs of the aforementioned Yaptinchays that
they have been declared the legal heirs of the deceased couple. Now, the
determination of who are the legal heirs of the deceased couple must be made in the
proper special proceedings in court, and not in an ordinary suit for reconveyance of
property. This must take precedence over the action for reconveyance. 24
In the same manner, the respondents herein, except for their allegations, have yet to
substantiate their claim as the legal heirs of Anacleto Cabrera who are, thus, entitled to the
subject property. Neither is there anything in the records of this case which would show that
a special proceeding to have themselves declared as heirs of Anacleto Cabrera had been
instituted. As such, the trial court correctly dismissed the case for there is a lack of cause of
action when a case is instituted by parties who are not real parties in interest. While a
declaration of heirship was not prayed for in the complaint, it is clear from the allegations
therein that the right the respondents sought to protect or enforce is that of an heir of one of
the registered co-owners of the property prior to the issuance of the new transfer certificates
of title that they seek to cancel. Thus, there is a need to establish their status as such heirs in
the proper forum.
Furthermore, in Portugal,25 the Court held that it would be superfluous to still subject the
estate to administration proceedings since a determination of the parties' status as heirs
could be achieved in the ordinary civil case filed because it appeared from the records of the
case that the only property left by the decedent was the subject matter of the case and that
the parties have already presented evidence to establish their right as heirs of the decedent.
In the present case, however, nothing in the records of this case shows that the only property
left by the deceased Anacleto Cabrera is the subject lot, and neither had respondents Peter
and Deborah Ann presented any evidence to establish their rights as heirs, considering
especially that it appears that there are other heirs of Anacleto Cabrera who are not parties
in this case that had signed one of the questioned documents. Hence, under the
circumstances in this case, this Court finds that a determination of the rights of respondents
Peter and Deborah Ann as heirs of Anacleto Cabrera in a special proceeding is necessary.
IN VIEW WHEREOF, the petition is GRANTED. The decision of the Court of Appeals is
hereby REVERSED and the decision of the Regional Trial Court dated June 29,
2000 DISMISSING the complaint is REINSTATED.
No costs.
SO ORDERED.
REYNATO S. PUNO
Chief Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
RENATO C. CORONA
Associate Justice
ADOLFO S. AZCUNA
Associate Justice
TERESITA J. LEONARDO-DE CASTRO

Associate Justice
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the
above Decision had been reached in consultation before the case was assigned to the writer
of the opinion of the Courts Division.
REYNATO S. PUNO
Chief Justice
Footnotes
*
On official leave.
Rollo, p. 10.
Id. at p. 88.
Id. at pp. 12-13.
Id. at pp. 88-89.
Id. at pp. 89-90.
Id. at p. 34.
Id. at pp. 43-44.
Id. at pp. 20-26.
Id. at pp. 28-29.
10
Sec. 1 (a), Rule 1, Rules of Court.
11
Id. at Sec. 1(c), Rule 1.
12
Id. at Sec. 2, Rule 3.
13
Id.
Ibonilla v. Province of Cebu, G.R. No. 97463, June 26, 1992 citing Garcia v. David,
67 Phil. 279 (1939).
14
15
Id. citing Lee v. Romillo, Jr., G.R. No. L-60937, May 28, 1988, 161 SCRA 589.
Fajardo v. Freedom to Build, Inc., 400 Phil. 1272 (2000) citing Moore v. Jamieson,
45L Pa 299, 306 A2d 283.
16
Id. citing Washakie Country School Dist. v. Herschier, (Wyo) 606 P2d 310 cert. den.
449 U.S. 824, 66 L. Ed. 2d 28, 101 S. Ct. 86.
17
Solivio v. Court of Appeals, G.R. No. 83484, February 12, 1990, 182 SCRA 119
(1990).
18
19
Portugal v. Portugal-Beltran, G.R. No. 155555, August 16, 2005, 467 SCRA 184.
20
Litam, etc., et al. v. Rivera, 100 Phil. 364 (1956).
21
Supra note 19.
22
Id; emphases supplied.
Heirs of Guido Yaptinchay v. Hon. Roy del Rosario, G.R. No. 124320, March 2,
1999, 304 SCRA 18.
23
24
Id.
25
Supra note 19.

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 166520
March 14, 2008
VILMA C. TAN, GERARDO "JAKE" TAN and GERALDINE TAN, REPRESENTED BY

EDUARDO NIERRAS,Petitioners,
vs.
THE HON. FRANCISCO C. GEDORIO, JR., IN HIS CAPACITY AS PRESIDING JUDGE OF
THE REGIONAL TRIAL COURT, BRANCH 12, ORMOC CITY, ROGELIO LIM SUGA and
HELEN TAN RACOMA, REPRESENTED BY ROMUALDO LIM, Respondents.
DECISION
CHICO-NAZARIO, J.:
This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court seeking the
reversal of the Decision1 dated 29 July 2004 of the Court of Appeals in CA-G.R. SP No.
79335. The assailed Decision of the Court of Appeals affirmed the Order 2 dated 17 July 2003
of the Regional Trial Court (RTC) of Ormoc City in SP. PROC. No. 4014-0 denying
reconsideration of its Order dated 12 June 2003 whereby it appointed Romualdo D. Lim as
special administrator to the estate of the late Gerardo Tan.
The factual and procedural antecedents of this case are as follows:
Gerardo Tan (Gerardo) died on 14 October 2000, leaving no will. On 31 October 2001,
private respondents, who are claiming to be the children of Gerardo Tan, filed with the RTC a
Petition for the issuance of letters of administration. The Petition was docketed as Special
Proceeding No. 4014-0 and was raffled to Branch 12. Petitioners, claiming to be legitimate
heirs of Gerardo Tan, filed an Opposition to the Petition.
Private respondents then moved for the appointment of a special administrator, asserting the
need for a special administrator to take possession and charge of Gerardos estate until the
Petition can be resolved by the RTC or until the appointment of a regular administrator. They
prayed that their attorney-in-fact, Romualdo D. Lim (Romualdo), be appointed as the special
administrator. Petitioners filed an Opposition to private respondents Motion for Appointment,
arguing that none of the private respondents can be appointed as the special administrator
since they are not residing in the country. Petitioners contend further that Romualdo does not
have the same familiarity, experience or competence as that of their co-petitioner Vilma C.
Tan (Vilma) who was already acting as de facto administratrix of his estate since his death.
On 18 March 2002, Atty. Clinton Nuevo (Nuevo), as court-appointed commissioner, issued
directives to Vilma, in her capacity as de facto administratrix, to wit:
b.1.) requiring the de facto administratrix Ms. Vilma Tan to deposit in the fiduciary
account of the Court all money and or cash at hand or deposited in the bank(s) which
rightfully belong to the estate of the decedent within five (5) days from receipt hereof;
b.2.) requiring the same administratrix to deposit in the same account the proceeds
of all sugarcane harvest or any crop harvest, if any, done in the past or is presently
harvesting or about to undertake, which belong to the estate of the decedent;
b.3.) relative to the foregoing, the same de facto administratrix is also required to
submit a financial report to the Commission as regards the background of the cash at
hand or deposited in bank(s), if any, the expenses incurred in course of her
administration and other relevant facts including that of the proceeds of the
sugarcane/crop harvest, which submission will be done upon deposit of the foregoing
with the court as above-required. 3
More than a year later or on 23 May 2003, the RTC, acting on the private respondents
Urgent Ex-parte Motion to resolve pending incident, gave Vilma another 10 days to comply
with the directive of Atty. Nuevo. Again, no compliance has been made.
Consequently, on 12 June 2003, RTC Judge Eric F. Menchavez issued an Order 4 appointing
Romualdo as special administrator of Gerardos Estate, the fallo of which states:
Foregoing considered, the motion for the appointment of a special administrator is hereby
GRANTED. Mr. Romualdo D. Lim is hereby appointed as Special Administrator and shall
immediately take possession and charge of the goods, chattels, rights, credits and estate of
the deceased and preserve the same for the executor or administrator afterwards appointed,
upon his filing of a bond in the amount of P50,000.00 and upon approval of the same by this
Court.5
Petitioners filed on 19 June 2003 a Motion for Reconsideration of the foregoing Order,
claiming that petitioner Vilma should be the one appointed as special administratix as she
was allegedly next of kin of the deceased.
On 17 July 2003, respondent Judge Francisco Gedorio (Gedorio), in his capacity as RTC
Executive Judge, issued an Order6 denying petitioners Motion for Reconsideration.
1avvphi1
Petitioners instituted with the Court of Appeals a Petition for Certiorari and Prohibition
assailing the 17 July 2003 Order, again insisting on petitioner Vilmas right to be appointed
as special administratix. Petitioners likewise prayed for the issuance of preliminary injunction
and/or temporary restraining order (TRO) to enjoin Romualdo from entering the estate and
acting as special administrator thereof.
On 29 July 2004, the Court of Appeals issued a Decision denying petitioners Petition. On 6
December 2004, the Court of Appeals similarly denied the ensuing Motion for
Reconsideration filed by petitioners, to wit:
WHEREFORE, in view of all the foregoing premises, judgment is hereby rendered by us
DENYING and DISMISSING the petition filed in this case and AFFIRMING the assailed order
in Special Proceeding No. 4014-0.7
On 22 January 2005, petitioners filed the instant Petition for Review on Certiorari assigning
the following errors:
I.
THE COURT OF APPEALS AND THE COURT A QUO BOTH GRIEVOUSLY ERRED
IN DENYING PETITIONERS PLEA TO BE GIVEN PRIMACY IN THE
ADMINISTRATION OF THEIR FATHERS ESTATE.
II.
THE COURT OF APPEALS LIKEWISE ERRED IN DENYING PETITIONERS PLEA
FOR THE ISSUANCE OF A WRIT OF PRELIMINARY INJUNCTION AND/OR A
TEMPORARY RESTRAINING ORDER AGAINST PRIVATE RESPONDENTS AND
THEIR ATTORNEY-IN-FACT.8
On 14 February 2005, this Court issued a Resolution9 denying the Petition on the ground of
late filing, failure to submit an affidavit of service of a copy of the Petition on the Court of
Appeals and proof of such service, failure to properly verify the Petition, and failure to pay
the deposit for the Salary Adjustment for the Judiciary (SAJ) fund and sheriffs fee. Upon
Motion for Reconsideration filed by petitioners, however, this Court issued on 18 July 2005 a
Resolution10 reinstating the Petition.
Petitioners contend11 that they should be given priority in the administration of the estate
since they are allegedly the legitimate heirs of the late Gerardo, as opposed to private
respondents, who are purportedly Gerardos illegitimate children. Petitioners rely on the
doctrine that generally, it is the nearest of kin, whose interest is more preponderant, who is
preferred in the choice of administrator of the decedents estate.
Petitioners also claim that they are more competent than private respondents or their
attorney-in-fact to administer Gerardos estate. Petitioners Vilma and Gerardo "Jake" Tan
(Jake) claim to have lived for a long time and continue to reside on Gerardos estate, while
respondents are not even in the Philippines, having long established residence abroad.
Petitioners additionally claim that petitioner Vilma has been acting as the administratrix of the
estate since Gerardos death on 14 October 2000 and is thus "well steeped in the actual
management and operation of the estate (which essentially consists of agricultural
landholdings)."12
As regards the denial of petitioners plea for the issuance of a Writ of Preliminary Injunction
and/or TRO, petitioners argue that such denial would leave Romualdo, private respondents
attorney-in-fact, free to enter Gerardos estate and proceed to act as administrator thereof to
the prejudice of petitioners.
The appeal is devoid of merit.

The order of preference petitioners speak of is found in Section 6, Rule 78 of the Rules of
Court, which provides:
SEC. 6. When and to whom letters of administration granted.If no executor is named in the
will, or the executor or executors are incompetent, refuse the trust, or fail to give bond, or a
person dies intestate, administration shall be granted:
(a) To the surviving husband or wife, as the case may be, or next of kin, or both, in
the discretion of the court, or to such person as such surviving husband or wife, or
next of kin, requests to have appointed, if competent and willing to serve;
(b) If such surviving husband or wife, as the case may be, or next of kin, or the
person selected by them, be incompetent or unwilling, or if the husband or widow, or
next of kin, neglects for thirty (30) days after the death of the person to apply for
administration or to request that administration be granted to some other person, it
may be granted to one or more of the principal creditors, if competent and willing to
serve;
(c) If there is no such creditor competent and willing to serve, it may be granted to
such other person as the court may select.
However, this Court has consistently ruled that the order of preference in the appointment of
a regular administrator as provided in the afore-quoted provision does not apply to the
selection of a special administrator.13 The preference under Section 6, Rule 78 of the Rules
of Court for the next of kin refers to the appointment of a regular administrator, and not of
a special administrator, as the appointment of the latter lies entirely in the discretion
of the court, and is not appealable.14
Not being appealable, the only remedy against the appointment of a special administrator is
Certiorari under Rule 65 of the Rules of Court, which was what petitioners filed with the Court
of Appeals. Certiorari, however, requires nothing less than grave abuse of discretion, a term
which implies such capricious and whimsical exercise of judgment which is equivalent to an
excess or lack of jurisdiction. The abuse of discretion must be so patent and gross as to
amount to an evasion of a positive duty or a virtual refusal to perform a duty enjoined by law,
or to act at all in contemplation of law.15
We agree with the Court of Appeals that there was no grave abuse of discretion on the part
of respondent Judge Gedorio in affirming Judge Menchavezs appointment of Romualdo as
special administrator. Judge Menchavez clearly considered petitioner Vilma for the position
of special administratrix of Gerardos estate, but decided against her appointment for the
following reasons:
Atty. Clinton C. Nuevo, in his capacity as court appointed commissioner, directed oppositor
Vilma Tan in the latters capacity as de fact[o] administratrix, to deposit in the fiduciary
account of the court all money and cash at hand or deposited in the banks which rightfully
belong to the estate within five days from receipt of the directive. Oppositor Vilma Tan was
likewise directed to deposit in the same account the proceeds of all sugarcane harvest or
any crop from the estate of the decedent. She was likewise directed to submit a financial
report as regards the background of the cash on hand, if any, the expenses incurred in the
course of her administration. The directive was issued by Atty. Nuevo on March 18, 2002 or
more than a year ago. On May 23, 2003, this Court, acting on the urgent ex parte motion to
resolve pending incident, gave Vilma Tan another ten days to comply with the directive of
Atty. Nuevo. Again, no compliance has been made.
This Court is called upon to preserve the estate of the late Gerardo Tan for the benefit of all
heirs be that heir is (sic) the nearest kin or the farthest kin. The actuation of oppositor Vilma
Tan does not satisfy the requirement of a special administrator who can effectively and
impartially administer the estate of Gerardo Tan for the best interest of all the
heirs.16 (Emphases supplied.)
Assuming for the sake of argument that petitioner Vilma is indeed better suited for the job as
special administratrix, as opposed to Romualdo, who was actually appointed by the court as
special administrator of Gerardos estate, the latters appointment, at best, would constitute a
mere error of judgment and would certainly not be grave abuse of discretion. An error of
judgment is one which the court may commit in the exercise of its jurisdiction, and which
error is reviewable only by an appeal. On the other hand, an error of jurisdiction is one in
which the act complained of was issued by the court, officer or a quasi-judicial body without
or in excess of jurisdiction, or with grave abuse of discretion which is tantamount to lack or
excess of jurisdiction.17 The Court of Appeals could not have reversed a mere error of
judgment in a Certiorari petition.
Furthermore, petitioners were not able to sufficiently substantiate their claim that their copetitioner Vilma would have been the more competent and capable choice to serve as the
special administratrix of Gerardos estate. Contrary to petitioners bare assertions, both the
RTC and the Court of Appeals found that the documented failure of petitioner Vilma to
comply with the reportorial requirements after the lapse of a considerable length of time
certainly militates against her appointment.
We find immaterial the fact that private respondents reside abroad, for the same cannot be
said as regards their attorney-in-fact, Romualdo, who is, after all, the person appointed by
the RTC as special administrator. It is undisputed that Romualdo resides in the country and
can, thus, personally administer Gerardos estate.
If petitioners really desire to avail themselves of the order of preference provided in Section
6, Rule 78 of the Rules of Court, so that petitioner Vilma as the supposed next of kin of the
late Gerardo may take over administration of Gerardos estate, they should already pursue
the appointment of a regular administrator and put to an end the delay which necessitated
the appointment of a special administrator. The appointment of a special administrator is
justified only when there is delay in granting letters, testamentary (in case the decedent
leaves behind a will) or administrative (in the event that the decedent leaves behind no will,
as in the Petition at bar) occasioned by any cause.18 The principal object of the appointment
of a temporary administrator is to preserve the estate until it can pass into the hands of a
person fully authorized to administer it for the benefit of creditors and heirs. 19
In the case at bar, private respondents were constrained to move for the appointment of a
special administrator due to the delay caused by the failure of petitioner Vilma to comply with
the directives of the court-appointed commissioner. It would certainly be unjust if petitioner
Vilma were still appointed special administratix, when the necessity of appointing one has
been brought about by her defiance of the lawful orders of the RTC or its appointed officials.
Petitioners submit the defense that petitioner Vilma was unable to comply with the directives
of the RTC to deposit with the court the income of Gerardos estate and to provide an
accounting thereof because of the fact that Gerardos estate had no income. This defense is
clearly specious and insufficient justification for petitioner Vilmas non-compliance. If the
estate truly did not have any income, petitioners should have simply filed a manifestation to
that effect, instead of continuing to disregard the courts orders.
Finally, as we are now resolving the case in favor of private respondents, there is no longer
any need to discuss petitioners arguments regarding the denial by the appellate court of
their prayer for the issuance of a writ of preliminary injunction and/or TRO.
WHEREFORE, the instant Petition for Review on Certiorari is DENIED. The Decision dated
29 July 2004 of the Court of Appeals in CA-G.R. SP No. 79335 affirming the Order dated 17
July 2003 of the Regional Trial Court (RTC) of Ormoc City, in SP. PROC. No. 4014-0 denying
reconsideration of its Order dated 12 June 2003, whereby it appointed Romualdo D. Lim as
special administrator of the estate of Gerardo Tan, is AFFIRMED. Costs against petitioners.
SO ORDERED.
Associate Justice
WE CONCUR:
Associate Justice
Chairperson
Associate Justice

Associate Justice
RUBEN T. REYES
Associate Justice
ATT E S TATI O N
I attest that the conclusions in the above Decision were reached in consultation before the
case was assigned to the writer of the opinion of the Courts Division.
Associate Justice
Chairperson, Third Division
Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairpersons
Attestation, it is hereby certified that the conclusions in the above Decision were reached in
consultation before the case was assigned to the writer of the opinion of the Courts Division.
REYNATO S. PUNO
Chief Justice
Footnotes
Penned by Associate Justice Isaias P. Dicdican with Associate Justices Elvi John S.
Asuncion and Ramon M. Bato, Jr., concurring; rollo, pp. 22-26.
1
Issued by public respondent Executive Judge Francisco C. Gedorio, Jr. Records, p.

130.
2
Id. at 82.
Id. at 112-113.
Id. at 113.
Id. at 130.
Rollo, p. 26.
Id. at 15.
Id. at 110-111.
10
Id. at 135.
11
Petitioners state in their Memorandum:

Petitioner Vilma Tan is Gerardos biological daughter; Jake and Geraldine
Tan, together with their late brother Christopher, are petitioner Vilma Tans
biological children who were adopted by Gerardo Tan via adoption
proceedings docketed as Sp. Proc. No. 1386 at the Regional Trial Court
Branch VII, Tacloban City, Leyte.
The late Christopher Tan died on October 28, 1994, when he was only
seventeen (17) years old. He was single when he died, he had no children
and did not leave a last will and testament. For this reason, his interests in
the estate of the late Gerardo Tan are represented by his biological mother,
herein Petitioner Vilma Tan. (Rollo, p. 176.)
12
Id. at 8.
Ozaeta v. Pecson, 93 Phil. 416, 419-420 (1953); Roxas v. Pecson, 82 Phil. 407,
410 (1948); Heirs of Belinda Dalhlia Castillo v. Lacuata-Gabriel, G.R. No. 162934, 11
November 2005, 474 SCRA 747, 757.
13
14
Pijuan v. De Gurrea, 124 Phil. 1527, 1531-1532 (1966).
Perez v. Court of Appeals, G.R. No. 162580, January 27, 2006, 480 SCRA 411,
416; Banal III v. Panganiban, G.R. No. 167474, 15 November 2005, 475 SCRA 164,
174.
15
16
Records, p. 113.
17
Fortich v. Corona, 352 Phil. 461, 477 (1998).
18
Section 1, Rule 80 of the Rules of Court provides:

Section 1. Appointment of special administrator.When there is delay in
granting letters testamentary or of administration by any cause including an
appeal from the allowance or disallowance of a will, the court may appoint a
special administrator to take possession and charge of the estate of the
deceased until the questions causing the delay are decided and executors or
administrators appointed.
19
De Guzman v. Guadiz, Jr., G.R. No. L-48585, 31 March 1980, 96 SCRA 938, 945.

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 167979
March 15, 2006
WILSON S. UY, as Judicial Administrator of the Intestate Estate of the Deceased JOSE
K. C. UY,Petitioner,
vs.
THE HON. COURT OF APPEALS, HON. ANASTACIO C. RUFON, As Presiding Judge of
Branch 52, of the Regional Trial Court, Sixth Judicial Region, sitting at Bacolod City,
and JOHNNY K. H. UY, Respondents.
DECISION
YNARES-SANTIAGO, J.:
Petitioner assails the August 20, 2004 Decision of the Court of Appeals in CA-G.R. SP No.
72678,1 affirming the January 22, 2002 Order of the Regional Trial Court, Branch 52 of
Bacolod City in Special Proceedings No. 97-241, 2 as well as the April 29, 2005 Resolution
denying the motion for reconsideration.3
The facts of the case show that Jose K.C. Uy (Deceased) died intestate on August 20, 1996
and is survived by his spouse, Sy Iok Ing Uy, and his five children, namely, Lilian S. Uy, Lilly
S. Uy, Livian S. Uy-Garcia , Lilen S. Uy and Wilson S. Uy (Petitioner).
On February 18, 1997, Special Proceedings No. 97-241 was instituted and Lilia Hofilea was
appointed as special administrator of the estate of the deceased. Petitioner moved to
reconsider the order appointing Lilia Hofilea as special administrator with prayer that letters
of administration be issued to him instead. 4
On June 9, 1998, Judge Ramon B. Posadas revoked Lilia Hofileas appointment as special
administrator and denied her petition to be appointed as regular administrator. Meanwhile,
letters of administration were granted to petitioner, who took his oath of office as
administrator on June 23, 1998.
On February 17, 1999, Johnny K. H. Uy (Private Respondent) filed a motion to intervene,
praying that he be appointed as administrator of the estate in lieu of petitioner. He alleged
that he is the brother and a creditor of the deceased, and has knowledge of the properties
that should be included in the estate.
The trial court initially denied private respondents motion to intervene, 5 but on March 16,
2000,6 it reconsidered its earlier order and appointed private respondent as co-administrator
of the estate. Petitioners motion for reconsideration was denied.
Petitioner then moved that private respondent bring into the estate properties belonging to
the deceased, which motion was granted by the trial court. Not satisfied with the compliance
of private respondent, petitioner reiterated his motion for removal of the former as coadministrator, but the same was denied.
The trial court found that private respondent substantially complied with the order directing
him to bring into the estate properties owned by or registered in the name of the deceased
not subject of any adverse claim or controversy when he listed the alleged properties
suspected to be concealed, embezzled or conveyed away by the persons named therein.
Thus, it found no cogent reason to remove private respondent as co-administrator.7
Thereafter, petitioner appealed to the Court of Appeals by way of a petition for certiorari
which however, dismissed the petition.
The Court of Appeals held that the refusal of the trial court to remove private respondent as
co-administrator of the estate is neither an error of jurisdiction nor a grave abuse of
discretion; that the appointment of private respondent was justified; that the order of
preference under Section 6 of Rule 78 of the Rules of Court does not rule out the
appointment of co-administrators; that the institution of a case for annulment of title and
reconveyance against respondent does not justify private respondents removal as coadministrator.
Petitioners motion for reconsideration was denied, hence, this petition on the following
grounds:
WHETHER OR NOT THE COURT OF APPEALS AND THE RESPONDENT REGIONAL
TRIAL COURT HAVE ACTED WITHOUT JURISDICTION OR IN GRAVE ABUSE OF THEIR
DISCRETION TANTAMOUNT TO LACK OF JURISDICTION (sic), IN VIOLATION [OF] THE
ESTABLISHED AND ACCEPTED RULE OF LAW AND IN COMPLETE DISREGARD OF
SUBSTANTIAL JUSTICE AND EQUITY IN APPOINTING A CO-ADMINISTRATOR OF AN
ESTATE (IN THE PROCESS OF SETTLEMENT) WHERE THERE IS AN INCUMBENT
ADMINISTRATOR WHOSE APPOINTMENT IS FIRM, FINAL, IMPLEMENTED AND
INAPPEALABLE, AND WHICH (sic) APPOINTMENT HAS NOT BEEN CANCELLED,
RECALLED, REVOKED OR RESCINDED BY APPOINTING, AT THAT, A PERSON
(a)
ALIEN TO THE ESTATE OF THE DECEASED, WITH VARIOUS SERIOUS INTERESTS
(ACTUAL JUDICIAL CONTROVERSIES) IN CONFLICT WITH THOSE OF THE ESTATE,
AND
(B)
WITH NO PROPER INTEREST IN THE ESTATE AND WHO IS PERSONALLY UNFIT,

UNSUITABLE, UNWORTHY, UNDESERVING OF THE TRUST INHERENT IN THE
POSITION OF CO-ADMINISTRATOR OF THE ESTATE, AND UNACCEPTABLE AND
REPULSIVE TO THE FAMILY OF THE LEGAL HEIRS OF THE DECEASED; AND THEN
REFUSING TO REMOVE HIM AS CO-ADMINISTRATOR AFTER IT WAS SHOWN THAT
HIS REPRESENTATIONS ON WHICH HE WAS APPOINTED CO-ADMINISTRATOR WERE
EMPTY AND FALSE; AND
WHETHER OR NOT THE RESPONDENT COURT OF APPEALS DENIED PETITIONER
HIS CONSTITUTIONAL RIGHTS TO DUE PROCESS OF LAW AND HIS RIGHT TO
PETITION THE GOVERNMENT FOR REDRESS OF GRIEVANCES BY NOT ADDRESSING
AND RESOLVING THE ISSUES BROUGHT TO IT BY THE PETITIONER, MORE
ESPECIFICALLY THE ISSUES OF
(1)
RES JUDICATA AND STABILITY OF THE JUDGMENT APPOINTING THE
PETITIONER HEREIN AS JUDICIAL ADMINISTRATOR OF THE ESTATE IN
QUESTION, AND
(2)
DECIDING THE ISSUES INVOLVED IN A MANNER CONTRARY TO THE RULES
SET DOWN BY THE SUPREME COURT ON THE MATTER.8
The main issues for resolution are: (1) whether the trial court acted with grave abuse of
discretion in appointing private respondent as co-administrator to the estate of the deceased;
and (2) whether the Court of Appeals deprived petitioner of his constitutional right to due
process and his right to petition the government for redress of grievances by not addressing
the issues raised before it.
The petition is without merit.
Petitioner asserts that his appointment as a regular administrator is already final,
unassailable or res judicata; that the inferior court has no authority to re-open the issue of
the appointment of an administrator without removing the incumbent administrator; that
private respondent is not only alien to the estate, but has a conflict of interest with it; that the
trial courts appointment of private respondent as co-administrator constitutes grave abuse of
discretion tantamount to lack of jurisdiction.
There is no question that petitioner was appointed as regular administrator of the estate of
the deceased Jose K. C. Uy on June 9, 1998. However, private respondent in his motion to
intervene sought to be appointed as administrator as he is not only the brother of the
decedent but also a creditor who knows the extent of the latters properties. Thus, the trial
court, while retaining petitioner as administrator, appointed private respondent as coadministrator of the estate.
The main function of a probate court is to settle and liquidate the estates of deceased
persons either summarily or through the process of administration. 9 In the case at bar, the
trial court granted letters of administration to petitioner and thereafter to private respondent
as co-administrator. Under Section 6, Rule 78 of the Rules of Court, the preference to whom
letters of administration may be granted are as follows:
SEC. 6. When and to whom letters of administration granted. If no executor is named in the
will, or the executor or executors are incompetent, refuse the trust, or fail to give bond, or a
person dies intestate, administration shall be granted:
(a) To the surviving husband or wife, as the case may be, or next of kin, or both, in
the discretion of the court, or to such person as such surviving husband or wife, or
next of kin, requests to have appointed, if competent and willing to serve;
(b) If such surviving husband or wife, as the case may be, or next of kin, or the
person selected by them, be incompetent or unwilling, or if the husband or widow, or
next of kin, neglects for thirty (30) days after the death of the person to apply for
administration or to request that administration be granted to some other person, it
may be granted to one or more of the principal creditors, if competent and willing to
serve;
(c) If there is no such creditor competent and willing to serve, it may be granted to
such other person as the court may select.
The order of preference in the appointment of an administrator depends on the attendant
facts and circumstances.10 In Sioca v. Garcia,11 this Court set aside the order of preference, to
wit:
It is well settled that a probate court cannot arbitrarily and without sufficient reason disregard
the preferential rights of the surviving spouse to the administration of the estate of the
deceased spouse. But, if the person enjoying such preferential rights is unsuitable, the
court may appoint another person. The determination of a persons suitability for the office
of administrator rests, to a great extent, in the sound judgment of the court exercising the
power of appointment and such judgment will not be interfered with on appeal unless it
appears affirmatively that the court below was in error.
x x x Unsuitableness may consist in adverse interest of some kind or hostility to those
immediately interested in the estate. x x x.12 (Emphasis supplied, citations omitted)
In the instant case, the order of preference was not disregarded by the trial court. Instead of
removing petitioner, it appointed private respondent, a creditor, as co-administrator since the
estate was sizeable and petitioner was having a difficult time attending to it alone. In fact,
petitioner did not submit any report regarding the estate under his administration. In its
March 16, 2000 Order,13 the trial court found thus:
Going over all the arguments of the parties, after hearing has been set relative thereto, this
Court has observed that indeed the judicial administrator had not submitted to the Court any
report about the Estate under his administration except those involving the cases he filed
and/or intervened in other branches. This may be due to his being inexperienced, but this
fact will not be reason enough to remove him from the administration of the Estate as
Judicial Administrator thereof. However, considering that the Intervenor is claiming to be the
patriarch of the Uy family and who claims to have enormous knowledge of the businesses
and properties of the decedent Jose K.C. Uy, it is the feeling of this Court that it will be very
beneficial to the Estate if he be appointed co-administrator (without removing the already
appointed Judicial Administrator) of the Estate of Jose K.C. Uy, if only to shed more light to
the alleged enormous properties/businesses and to bring them all to the decedents Estate
pending before this Court.14
A co-administrator performs all the functions and duties and exercises all the powers of a
regular administrator, only that he is not alone in the administration. 15 The practice of
appointing co-administrators in estate proceedings is not prohibited. In Gabriel v. Court of
Appeals,16 this Court reaffirmed that jurisprudence allows the appointment of coadministrators under certain circumstances, to wit:
Under both Philippine and American jurisprudence, the appointment of co-administrators has
been upheld for various reasons, viz: (1) to have the benefit of their judgment and perhaps at
all times to have different interests represented; (2) where justice and equity demand that
opposing parties or factions be represented in the management of the estate of the
deceased; (3) where the estate is large or, from any cause, an intricate and perplexing
one to settle; (4) to have all interested persons satisfied and the representatives to work in
harmony for the best interests of the estate; and (5) when a person entitled to the
administration of an estate desires to have another competent person associated with him in
the office.17 (Emphasis supplied)
Thus, petitioners argument that the trial court cannot re-open the issue of the appointment of
an administrator without removing the incumbent administrator is erroneous. In probate
proceedings, considerable latitude is allowed a probate court in modifying or revoking its own
orders as long as the proceedings are pending in the same court and timely applications or
motions for such modifications or revocations are made by the interested parties. 18 In the
instant case, the estate of the deceased has not yet been settled and the case is still within
the jurisdiction of the court.
The foregoing discussion renders moot the second issue raised by petitioner. We see no
cogent reason to set aside the findings of the Court of Appeals, because its findings of fact is
conclusive and binding on the parties and not subject to review by this Court, unless the
case falls under any of the exceptions to the rule. 19
WHEREFORE, the petition is DENIED. The August 20, 2004 Decision of the Court of
Appeals in CA-G.R. SP No. 72678 affirming the January 22, 2002 Order of the Regional Trial
Court in Special Proceedings No. 97-241, as well as the April 29, 2005 Resolution denying
the motion for reconsideration are AFFIRMED.
1avvphil.net
SO ORDERED.
Associate Justice
WE CONCUR:
Chief Justice
Chairperson
Associate Justice

Asscociate Justice
Associate Justice
conclusions in the above Decision were reached in consultation before the case was
Chief Justice
Footnotes
Rollo, pp. 63-67. Penned by Associate Justice Vicente L. Yap and concurred in by
Associate Justices Arsenio J. Magpale and Ramon M. Bato, Jr.
1
Id. at 77-79. Penned by Judge Anastacio C. Rufon.
Id. at 69-71.
Id. at 64.
Id.
Id. at 204-205.
Id. at 80-82.
Id. at 23-25.
Intestate Estate of the late Don San Pedro v. Court of Appeals, 333 Phil. 597, 616617 (1996), citing Manigat v. Castillo, 75 Phil. 532, 535 (1945).
9
10
Silverio, Sr. v. Court of Appeals, 364 Phil. 188, 210 (1999).
11
44 Phil. 711 (1923).
12
Id. at 712.
13
Rollo, p. 205.
14
Id.
15
De Borja v. Tan, 97 Phil. 872, 874-875 (1955).
16
G.R. No. 101512, August 7, 1992, 212 SCRA 413.
17
Id. at 423-424.
18
Oas v. Javillo, 54 Phil. 602, 604 (1930).
19
Siasat v. Court of Appeals, 425 Phil. 139, 145 (2002).

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 174873
August 26, 2008
QUASHA ANCHETA PEA AND NOLASCO LAW OFFICE FOR ITS OWN BEHALF, AND
REPRESENTING THE HEIRS OF RAYMOND TRIVIERE, petitioners,
vs.
LCN CONSTRUCTION CORP., respondent.
DECISION
CHICO-NAZARIO, J.:
This is a Petition for Review under Rule 45 of the Revised Rules of Court with petitioners
Quasha Ancheta Pea and Nolasco Law Office (Quasha Law Office) and the Heirs of
Raymond Triviere praying for the reversal of the Decision 1 dated 11 May 2006 and
Resolution2 dated 22 September 2006 of the Court of Appeals granting in part the Petition for
Certiorari filed by respondent LCN Construction Corporation (LCN) in CA-G.R. SP No.
81296.
The factual antecedents of the case are as follows:
Raymond Triviere passed away on 14 December 1987. On 13 January 1988, proceedings
for the settlement of his intestate estate were instituted by his widow, Amy Consuelo Triviere,
before the Regional Trial Court (RTC) of Makati City, Branch 63 of the National Capital
Region (NCR), docketed as Special Proceedings Case No. M-1678. Atty. Enrique P. Syquia
(Syquia) and Atty. William H. Quasha (Quasha) of the Quasha Law Office, representing the
widow and children of the late Raymond Triviere, respectively, were appointed administrators
of the estate of the deceased in April 1988. As administrators, Atty. Syquia and Atty. Quasha
incurred expenses for the payment of real estate taxes, security services, and the
preservation and administration of the estate, as well as litigation expenses.
In February 1995, Atty. Syquia and Atty. Quasha filed before the RTC a Motion for Payment
of their litigation expenses. Citing their failure to submit an accounting of the assets and
liabilities of the estate under administration, the RTC denied in May 1995 the Motion for
Payment of Atty. Syquia and Atty. Quasha.
In 1996, Atty. Quasha also passed away. Atty. Redentor Zapata (Zapata), also of the Quasha
Law Office, took over as the counsel of the Triviere children, and continued to help Atty.
Syquia in the settlement of the estate.
On 6 September 2002, Atty. Syquia and Atty. Zapata filed another Motion for Payment, 3 for
their own behalf and for their respective clients, presenting the following allegations:
(1) That the instant Petition was filed on January 13, 1988; and Atty. Enrique P.
Syquia was appointed Administrator by the Order of this Honorable Court dated April
12, 1988, and discharged his duties starting April 22, 1988, after properly posting his
administrator's bond up to this date, or more than fourteen (14) years later.
Previously, there was the co-administrator Atty. William H. Quasha, but he has
already passed away.
(2) That, together with Co-administrator Atty. William H. Quasha, they have
performed diligently and conscientiously their duties as Co-administrators, having
paid the required Estate tax and settled the various claims against the Estate,
totaling approximately twenty (20) claims, and the only remaining claim is the
unmeritorious claim of LCN Construction Corp., now pending before this Honorable
Court;
(3) That for all their work since April 22, 1988, up to July 1992, or for four (4) years,
they were only given the amount of P20,000.00 each on November 28, 1988; and
another P50,00.00 each on October 1991; and the amount of P100,000.00 each on
July 1992; or a total of P170,000.00 to cover their administration fees, counsel fees
and expenses;
(4) That through their work, they were able to settle all the testate (sic) claims except
the remaining baseless claim of LCN Construction Corp., and were able to dismiss
two (2) foreign claims, and were also able to increase the monetary value of the
estate from roughly over P1Million to the present P4,738,558.63 as of August 25,
2002 and maturing on September 27, 2002; and the money has always been with the
Philippine National Bank, as per the Order of this Honorable Court;
(5) That since July 1992, when the co-administrators were paid P100,000.00 each,
nothing has been paid to either Administrator Syquia or his client, the widow
Consuelo Triviere; nor to the Quasha Law Offices or their clients, the children of the
deceased Raymond Triviere;
(6) That as this Honorable Court will notice, Administrator Syquia has always been
present during the hearings held for the many years of this case; and the Quasha
Law Offices has always been represented by its counsel, Atty. Redentor C. Zapata;
and after all these years, their clients have not been given a part of their share in the
estate;
(7) That Administrator Syquia, who is a lawyer, is entitled to additional Administrator's
fees since, as provided in Section 7, Rule 85 of the Revised Rules of Court:
"x x x where the estate is large, and the settlement has been attended with
great difficulty, and has required a high degree of capacity on the part of the
executor or administrator, a greater sum may be allowed"
In addition, Atty. Zapata has also been present in all the years of this case. In
addition, they have spent for all the costs of litigation especially the transcripts, as
out-of-pocket expenses.
(8) That considering all the foregoing, especially the fact that neither the
Administrator or his client, the widow; and the Quasha Law Offices or their clients,
the children of the deceased, have received any money for more than ten (10) years
now, they respectfully move that the amount of P1Million be taken from the Estate
funds, to be divided as follows:
a) P450,000.00 as share of the children of the deceased [Triviere] who are
represented by the Quasha Ancheta Pea & Nolasco Law Offices;
b) P200,000.00 as attorney's fees and litigation expenses for the Quasha
Ancheta Pea & Nolasco Law Offices;
c) P150,000.00 as share for the widow of the deceased [Raymond Triviere],
Amy Consuelo Triviere; and
d) P200,000.00 for the administrator Syquia, who is also the counsel of the
widow; and for litigation costs and expenses.
LCN, as the only remaining claimant 4 against the Intestate Estate of the Late Raymond
Triviere in Special Proceedings Case No. M-1678, filed its Comment on/Opposition to the
afore-quoted Motion on 2 October 2002. LCN countered that the RTC had already resolved
the issue of payment of litigation expenses when it denied the first Motion for Payment filed
by Atty. Syquia and Atty. Quasha for failure of the administrators to submit an accounting of
the assets and expenses of the estate as required by the court. LCN also averred that the
administrators and the heirs of the late Raymond Triviere had earlier agreed to fix the
former's fees at only 5% of the gross estate, based on which, per the computation of LCN,
the administrators were even overpaid P55,000.00. LCN further asserted that contrary to
what was stated in the second Motion for Payment, Section 7, Rule 85 of the Revised Rules
of Court was inapplicable,5 since the administrators failed to establish that the estate was
large, or that its settlement was attended with great difficulty, or required a high degree of
capacity on the part of the administrators. Finally, LCN argued that its claims are still
outstanding and chargeable against the estate of the late Raymond Triviere; thus, no
distribution should be allowed until they have been paid; especially considering that as of 25
August 2002, the claim of LCN against the estate of the late Raymond Triviere amounted
toP6,016,570.65 as against the remaining assets of the estate totaling P4,738,558.63,
rendering the latter insolvent.
On 12 June 2003, the RTC issued its Order6 taking note that "the widow and the heirs of the
deceased Triviere, after all the years, have not received their respective share (sic) in the
Estate x x x."
The RTC declared that there was no more need for accounting of the assets and liabilities of
the estate considering that:
[T]here appears to be no need for an accounting as the estate has no more assets
except the money deposited with the Union Bank of the Philippines under Savings
Account No. 12097-000656-0 x x x; on the estate taxes, records shows (sic) that the
BIR Revenue Region No. 4-B2 Makati had issued a certificate dated April 27, 1988
indicating that the estate taxes has been fully paid. 7
As to the payment of fees of Atty. Syquia and the Quasha Law Office, the RTC found as
follows:
[B]oth the Co-Administrator and counsel for the deceased (sic) are entitled to the
payment for the services they have rendered and accomplished for the estate and
the heirs of the deceased as they have over a decade now spent so much time, labor
and skill to accomplish the task assigned to them; and the last time the
administrators obtained their fees was in 1992.8
Hence, the RTC granted the second Motion for Payment; however, it reduced the sums to be
paid, to wit:
In view of the foregoing considerations, the instant motion is hereby GRANTED. The
sums to be paid to the co-administrator and counsel for the heirs of the deceased
Triviere are however reduced.
Accordingly, the co-administrator Atty. Syquia and aforenamed counsel are
authorized to pay to be sourced from the Estate of the deceased as follows:
a) P450,000.00 as share of the children of the deceased who are represented by the
Quasha, Ancheta, Pena, Nolasco Law Offices;
b) P100,000.00 as attorney's fees and litigation expenses for said law firm;
c) P150,000.00 as share for the widow of the deceased Amy Consuelo Triviere; and
d) P100,000.00 for the Co-administrator Atty. Enrique P. Syquia and for litigation
costs and expenses.9
LCN filed a Motion for Reconsideration10 of the foregoing Order on 2 July 2003, but it was
denied by the RTC on 29 October 2003. 11
On 13 May 2004, LCN sought recourse from the Court of Appeals by assailing in CA-G.R.
SP No. 81296, a Petition for Certiorari, the RTC Orders dated 12 June 2003 and 2 July 2003,
for having been rendered with grave abuse of discretion. 12 LCN maintained that:
(1) The administrator's claim for attorney's fees, aside from being prohibited under
paragraph 3, Section 7 of Rule 85 is, together with administration and litigation
expenses, in the nature of a claim against the estate which should be ventilated and
resolved pursuant to Section 8 of Rule 86;
(2) The awards violate Section 1, Rule 90 of the Rules of Court, as there still exists
its (LCN's) unpaid claim in the sum of P6,016,570.65; and
(3) The alleged deliberate failure of the co-administrators to submit an accounting of

the assets and liabilities of the estate does not warrant the Court's favorable action
on the motion for payment.13
On 11 May 2006, the Court of Appeals promulgated a Decision essentially ruling in favor of
LCN.
While the Court of Appeals conceded that Atty. Syquia and the Quasha Law Office, as the
administrators of the estate of the late Raymond Triviere, were entitled to administrator's fees
and litigation expenses, they could not claim the same from the funds of the estate. Referring
to Section 7, Rule 85 of the Revised Rules of Court, the appellate court reasoned that the
award of expenses and fees in favor of executors and administrators is subject to the
qualification that where the executor or administrator is a lawyer, he shall not charge against
the estate any professional fees for legal services rendered by him. Instead, the Court of
Appeals held that the attorney's fees due Atty. Syquia and the Quasha Law Offices should be
borne by their clients, the widow and children of the late Raymond Triviere, respectively.
The appellate court likewise revoked the P450,000.00 share and P150,000.00 share
awarded by the RTC to the children and widow of the late Raymond Triviere, respectively, on
the basis that Section 1, Rule 91 of the Revised Rules of Court proscribes the distribution of
the residue of the estate until all its obligations have been paid.
The appellate court, however, did not agree in the position of LCN that the administrators'
claims against the estate should have been presented and resolved in accordance with
Section 8 of Rule 86 of the Revised Rules of Court. Claims against the estate that require
presentation under Rule 86 refer to "debts or demands of a pecuniary nature which could
have been enforced against the decedent during his lifetime and which could have been
reduced to simple judgment and among which are those founded on contracts." The Court of
Appeals also found the failure of the administrators to render an accounting excusable on
the basis of Section 8, Rule 85 of the Revised Rules of Court. 14
Finding the Petition for Certiorari of LCN partly meritorious, the Court of Appeals decreed:
WHEREFORE, premises considered, the instant petition is hereby PARTLY
GRANTED. The assailed Orders of the public respondent are hereby AFFIRMED
with MODIFICATION in that (1) the shares awarded to the heirs of the deceased Triviere in the assailed Order
of June 12, 2003 are hereby DELETED; and
(2) the attorney's fees awarded in favor of the co-administrators are
hereby DELETED. However, inasmuch as the assailed order fails to itemize these
fees from the litigation fees/administrator's fees awarded in favor of the coadministrators, public respondent is hereby directed to determine with particularity
the fees pertaining to each administrator.15
Petitioner filed a Motion for Reconsideration 16 of the 11 May 2006 Decision of the Court of
Appeals. The Motion, however, was denied by the appellate court in a Resolution dated 22
September 2006,17 explaining that:
In sum, private respondents did not earlier dispute [herein respondent LCN's] claim
in its petition that the law firm and its lawyers served as co-administrators of the
estate of the late Triviere. It is thus quite absurd for the said law firm to now dispute
in the motion for reconsideration its being a co-administrator of the estate.
[Herein petitioners], through counsel, likewise appear to be adopting in their motion
for reconsideration a stance conflicting with their earlier theory submitted to this
Court. Notably, the memorandum for [petitioner] heirs states that the claim for
attorney's fees is supported by the facts and law. To support such allegation, they
contend that Section 7 (3) of Rule 85 of the 1997 Rules of Civil Procedure finds no
application to the instant case since "what is being charged are not professional fees
for legal services rendered but payment for administration of the Estate which has
been under the care and management of the co-administrators for the past fourteen
(14) years." Their allegation, therefore, in their motion for reconsideration that
Section 7 (3) of Rule 85 is inapplicable to the case of Quasha Law Offices because it
is "merely seeking payment for legal services rendered to the estate and for litigation
expenses" deserves scant consideration.
xxxx
WHEREFORE, premises considered, private respondents' motion for reconsideration
is hereby DENIED for lack of merit. 18
Exhausting all available legal remedies, petitioners filed the present Petition for Review
on Certiorari based on the following assignment of errors:
I.
THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE AWARD
IN FAVOR OF THE HEIRS OF THE LATE RAYMOND TRIVIERE IS ALREADY A
DISTRIBUTION OF THE RESIDUE OF THE ESTATE.
II.
THE HONORABLE COURT OF APPEALS ERRED IN NULLIFYING THE AWARD
OF ATTORNEY'S FEES IN FAVOR OF THE CO-ADMINISTRATORS
I
The Court of Appeals modified the 12 June 2003 Order of the RTC by deleting the awards
of P450,000.00 andP150,000.00 in favor of the children and widow of the late Raymond
Triviere, respectively. The appellate court adopted the position of LCN that the claim of LCN
was an obligation of the estate which was yet unpaid and, under Section 1, Rule 90 of the
Revised Rules of Court, barred the distribution of the residue of the estate.
Petitioners, though, insist that the awards in favor of the petitioner children and widow of the
late Raymond Triviere is not a distribution of the residue of the estate, thus, rendering
Section 1, Rule 90 of the Revised Rules of Court inapplicable.
Section 1, Rule 90 of the Revised Rules of Court provides:
Section 1. When order for distribution of residue made. - When the debts, funeral
charges, and expenses of administration, the allowance to the widow, and
inheritance tax, if any, chargeable to the estate in accordance with law, have been
paid, the court, on the application of the executor or administrator, or of a person
interested in the estate, and after hearing upon notice, shall assign the residue of the
estate to the persons entitled to the same, naming them and the proportions, or
parts, to which each is entitled, and such persons may demand and recover their
respective shares from the executor or administrator, or any other person having the
same in his possession. If there is a controversy before the court as to who are the
lawful heirs of the deceased person or as to the distributive shares to which each
person is entitled under the law, the controversy shall be heard and decided as in
ordinary cases.
No distribution shall be allowed until the payment of the obligations above mentioned
has been made or provided for, unless the distributees, or any of them, give a bond,
in a sum to be fixed by the court, conditioned for the payment of said obligations
within such time as the court directs.
According to petitioners, the 12 June 2003 Order of the RTC should not be construed as a
final order of distribution. The 12 June 2003 RTC Order granting the second Motion for
Payment is a mere interlocutory order that does not end the estate proceedings. Only an
order of distribution directing the delivery of the residue of the estate to the proper
distributees brings the intestate proceedings to a close and, consequently, puts an end to the
administration and relieves the administrator of his duties.
A perusal of the 12 June 2003 RTC Order would immediately reveal that it was not yet
distributing the residue of the estate. The said Order grants the payment of certain amounts
from the funds of the estate to the petitioner children and widow of the late Raymond Triviere
considering that they have not received their respective shares therefrom for more than a
decade. Out of the reported P4,738,558.63 value of the estate, the petitioner children and
widow were being awarded by the RTC, in its 12 June 2003 Order, their shares in the
collective amount ofP600,000.00. Evidently, the remaining portion of the estate still needs to
be settled. The intestate proceedings were not yet concluded, and the RTC still had to hear
and rule on the pending claim of LCN against the estate of the late Raymond Triviere and
only thereafter can it distribute the residue of the estate, if any, to his heirs.
While the awards in favor of petitioner children and widow made in the RTC Order dated 12
June 2003 was not yet a distribution of the residue of the estate, given that there was still a
pending claim against the estate, still, they did constitute a partial and advance distribution of
the estate. Virtually, the petitioner children and widow were already being awarded shares in
the estate, although not all of its obligations had been paid or provided for.
Section 2, Rule 109 of the Revised Rules of Court expressly recognizes advance distribution
of the estate, thus:
Section 2. Advance distribution in special proceedings. - Notwithstanding a pending
controversy or appeal in proceedings to settle the estate of a decedent, the court
may, in its discretion and upon such terms as it may deem proper and just,
permit that such part of the estate as may not be affected by the controversy or
appeal be distributed among the heirs or legatees, upon compliance with the
conditions set forth in Rule 90 of these rules. (Emphases supplied.)
The second paragraph of Section 1 of Rule 90 of the Revised Rules of Court allows the
distribution of the estate prior to the payment of the obligations mentioned therein, provided
that "the distributees, or any of them, gives a bond, in a sum to be fixed by the court,
conditioned for the payment of said obligations within such time as the court directs."
In sum, although it is within the discretion of the RTC whether or not to permit the advance
distribution of the estate, its exercise of such discretion should be qualified by the following:
[1] only part of the estate that is not affected by any pending controversy or appeal may be
the subject of advance distribution (Section 2, Rule 109); and [2] the distributees must post a
bond, fixed by the court, conditioned for the payment of outstanding obligations of the estate
(second paragraph of Section 1, Rule 90). There is no showing that the RTC, in awarding to
the petitioner children and widow their shares in the estate prior to the settlement of all its
obligations, complied with these two requirements or, at the very least, took the same into
consideration. Its Order of 12 June 2003 is completely silent on these matters. It justified its
grant of the award in a single sentence which stated that petitioner children and widow had
not yet received their respective shares from the estate after all these years. Taking into
account that the claim of LCN against the estate of the late Raymond Triviere allegedly
amounted toP6,016,570.65, already in excess of the P4,738,558.63 reported total value of
the estate, the RTC should have been more prudent in approving the advance distribution of
the same.
Petitioners earlier invoked Dael v. Intermediate Appellate Court,,19 where the Court sustained
an Order granting partial distribution of an estate.
However, Dael is not even on all fours with the case at bar, given that the Court therein found
that:
Where, however, the estate has sufficient assets to ensure equitable distribution of
the inheritance in accordance with law and the final judgment in the proceedings and
it does not appear there are unpaid obligations, as contemplated in Rule 90, for
which provisions should have been made or a bond required, such partial distribution
may be allowed. (Emphasis supplied.)
No similar determination on sufficiency of assets or absence of any outstanding obligations
of the estate of the late Raymond Triviere was made by the RTC in this case. In fact, there is
a pending claim by LCN against the estate, and the amount thereof exceeds the value of the
entire estate.
Furthermore, in Dael, the Court actually cautioned that partial distribution of the decedent's
estate pending final termination of the testate or intestate proceeding should as much as
possible be discouraged by the courts, and, except in extreme cases, such form of advances
of inheritance should not be countenanced. The reason for this rule is that courts should
guard with utmost zeal and jealousy the estate of the decedent to the end that the creditors
thereof be adequately protected and all the rightful heirs be assured of their shares in the
inheritance.
Hence, the Court does not find that the Court of Appeals erred in disallowing the advance
award of shares by the RTC to petitioner children and the widow of the late Raymond
Triviere.
II
On the second assignment of error, petitioner Quasha Law Office contends that it is entitled
to the award of attorney's fees and that the third paragraph of Section 7, Rule 85 of the
Revised Rules of Court, which reads:
Section 7. What expenses and fees allowed executor or administrator. Not to charge
for services as attorney. Compensation provided by will controls unless renounced. x
x x.
xxxx
When the executor or administrator is an attorney, he shall not charge against the
estate any professional fees for legal services rendered by him. (Emphasis supplied.)
is inapplicable to it. The afore-quoted provision is clear and unequivocal and needs no
statutory construction. Here, in attempting to exempt itself from the coverage of said rule, the
Quasha Law Office presents conflicting arguments to justify its claim for attorney's fees
against the estate. At one point, it alleges that the award of attorney's fees was payment for
its administration of the estate of the late Raymond Triviere; yet, it would later renounce that
it was an administrator.
In the pleadings filed by the Quasha Law Office before the Court of Appeals, it referred to
itself as co-administrator of the estate.
In the Comment submitted to the appellate court by Atty. Doronila, the member-lawyer then
assigned by the Quasha Law Office to the case, it stated that:
The 12 June 2003 Order granted the Motion for Payment filed by Co-Administrator
and counsel Atty. Enrique P. Syquia and the counsel Atty. Cirilo E. Doronila and
Co-Administrator for the children of the late Raymond Triviere. x x x.20 (Emphasis
supplied.)
It would again in the same pleading claim to be the "co-administrator and counsel for the
heirs of the late Raymond Triviere."21
Finally, the Memorandum it submitted to the Court of Appeals on behalf of its clients, the
petitioner-children of the late Raymond Triviere, the Quasha Law Office alleged that:
2. The petition assails the Order of the Honorable Regional Trial Court of Makati,
Branch 63 granting the Motion for Payment filed by Co-Administrators Atty.
Enrique P. Syquia and the undersigned counseltogether with the children of the
deceased Raymond Triviere, and the Order dated 29 October 2003 denying
Petitioner's Motion for Reconsideration of the First Order.
xxxx
I. Statement of Antecedent Facts
xxxx
4. On 13 May 2004, Atty. Enrique Syquia, co-administrator and counsel for
respondent Amy Consuelo Triviere and the undersigned counsel, co-
administrator and counsel for the children of the late Raymond Triviere filed
their Comment.22
Petitioner Quasha Law Office asserts that it is not within the purview of Section 7, Rule 85 of
the Revised Rules of Court since it is not an appointed administrator of the estate. 23 When
Atty. Quasha passed away in 1996, Atty. Syquia was left as the sole administrator of the
estate of the late Raymond Triviere. The person of Atty. Quasha was distinct from that of
petitioner Quasha Law Office; and the appointment of Atty. Quasha as administrator of the
estate did not extend to his law office. Neither could petitioner Quasha Law Office be
deemed to have substituted Atty. Quasha as administrator upon the latter's death for the
same would be in violation of the rules on the appointment and substitution of estate
administrators, particularly, Section 2, Rule 82 of the Revised Rules of Court. 24 Hence, when
Atty. Quasha died, petitioner Quasha Law Office merely helped in the settlement of the
estate as counsel for the petitioner children of the late Raymond Triviere.
In its Memorandum before this Court, however, petitioner Quasha Law Office argues that
"what is being charged are not professional fees for legal services rendered but payment for
administration of the Estate which has been under the care and management of the coadministrators for the past fourteen (14) years." 25
On the other hand, in the Motion for Payment filed with the RTC on 3 September 2002,
petitioner Quasha Law Office prayed for P200,000.00 as "attorney's fees and litigation
expenses." Being lumped together, and absent evidence to the contrary, the P200,000.00 for
attorney's fees and litigation expenses prayed for by the petitioner Quasha Law Office can
be logically and reasonably presumed to be in connection with cases handled by said law
office on behalf of the estate. Simply, petitioner Quasha Law Office is seeking attorney's fees
as compensation for the legal services it rendered in these cases, as well as reimbursement
of the litigation expenses it incurred therein.
The Court notes with disfavor the sudden change in the theory by petitioner Quasha Law
Office. Consistent with discussions in the preceding paragraphs, Quasha Law Office initially
asserted itself as co-administrator of the estate before the courts. The records do not belie
this fact. Petitioner Quasha Law Office later on denied it was substituted in the place of Atty.
Quasha as administrator of the estate only upon filing a Motion for Reconsideration with the
Court of Appeals, and then again before this Court. As a general rule, a party cannot change
his theory of the case or his cause of action on appeal. 26 When a party adopts a certain
theory in the court below, he will not be permitted to change his theory on appeal, for to
permit him to do so would not only be unfair to the other party but it would also be offensive
to the basic rules of fair play, justice and due process.27Points of law, theories, issues and
arguments not brought to the attention of the lower court need not be, and ordinarily will not
be, considered by a reviewing court, as these cannot be raised for the first time at such late
stage.28
This rule, however, admits of certain exceptions.29 In the interest of justice and within the
sound discretion of the appellate court, a party may change his legal theory on appeal, only
when the factual bases thereof would not require presentation of any further evidence by the
adverse party in order to enable it to properly meet the issue raised in the new theory.30
On the foregoing considerations, this Court finds it necessary to exercise leniency on the rule
against changing of theory on appeal, consistent with the rules of fair play and in the interest
of justice. Petitioner Quasha Law Office presented conflicting arguments with respect to
whether or not it was co-administrator of the estate. Nothing in the records, however, reveals
that any one of the lawyers of Quasha Law Office was indeed a substitute administrator for
Atty. Quasha upon his death.
The court has jurisdiction to appoint an administrator of an estate by granting letters of
administration to a person not otherwise disqualified or incompetent to serve as such,
following the procedure laid down in Section 6, Rule 78 of the Rules of Court.
Corollary thereto, Section 2, Rule 82 of the Rules of Court provides in clear and unequivocal
terms the modes for replacing an administrator of an estate upon the death of an
administrator, to wit:
Section 2. Court may remove or accept resignation of executor or administrator.
Proceedings upon death, resignation, or removal. x x x.
When an executor or administrator dies, resigns, or is removed the remaining
executor or administrator may administer the trust alone, unless the court grants
letters to someone to act with him. If there is no remaining executor or
administrator, administration may be granted to any suitable person.
The records of the case are wanting in evidence that Quasha Law Office or any of its lawyers
substituted Atty. Quasha as co-administrator of the estate. None of the documents attached
pertain to the issuance of letters of administration to petitioner Quasha Law Office or any of
its lawyers at any time after the demise of Atty. Quasha in 1996. This Court is thus inclined to
give credence to petitioner's contention that while it rendered legal services for the
settlement of the estate of Raymond Triviere since the time of Atty. Quasha's death in 1996,
it did not serve as co-administrator thereof, granting that it was never even issued letters of
administration.
The attorney's fees, therefore, cannot be covered by the prohibition in the third
paragraph of Section 7, Rule 85 of the Revised Rules of Court against an attorney, to
charge against the estate professional fees for legal services rendered by them.
However, while petitioner Quasha Law Office, serving as counsel of the Triviere children from
the time of death of Atty. Quasha in 1996, is entitled to attorney's fees and litigation
expenses of P100,000.00 as prayed for in the Motion for Payment dated 3 September 2002,
and as awarded by the RTC in its 12 June 2003 Order, the same may be collected from the
shares of the Triviere children, upon final distribution of the estate, in consideration of the
fact that the Quasha Law Office, indeed, served as counsel (not anymore as coadministrator), representing and performing legal services for the Triviere children in the
settlement of the estate of their deceased father.
Finally, LCN prays that as the contractor of the house (which the decedent caused to be built
and is now part of the estate) with a preferred claim thereon, it should already be
awarded P2,500,000.00, representing one half (1/2) of the proceeds from the sale of said
house. The Court shall not take cognizance of and rule on the matter considering that,
precisely, the merits of the claim of LCN against the estate are still pending the proper
determination by the RTC in the intestate proceedings below.
WHEREFORE, premises considered, the Petition for Review on Certiorari is hereby PARTLY
GRANTED. The Decision dated 11 May 2006 and Resolution dated 22 September 2006 of
the Court of Appeals in CA-G.R. SP No. 81296 are AFFIRMED, with
the following MODIFICATIONS:
1) Petitioner Quasha Law Office is entitled to attorney's fees of ONE HUNDRED

THOUSAND PESOS (P100,000.00), for legal services rendered for the Triviere
children in the settlement of the estate of their deceased father, the same to be paid
by the Triviere children in the manner herein discussed; and
2) Attorneys Enrique P. Syquia and William H. Quasha are entitled to the payment of
their corresponding administrators' fees, to be determined by the RTC handling
Special Proceedings Case No. M-1678, Branch 63 of the Makati RTC, the same to
be chargeable to the estate of Raymond Trieviere.
SO ORDERED.
Associate Justice
WE CONCUR:
Associate Justice
Chairperson
Associate Justice

Associate Justice
RUBEN T. REYES
Associate Justice
ATTESTATION
the case was assigned to the writer of the opinion of the Court's Division.
Associate Justice
Chairperson, Third Division
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson's
Attestation, I certify that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the Court's Division.
REYNATO S. PUNO
Chief Justice
Footnotes
1
Penned by Associate Justice Rodrigo V. Cosico with Associate Justices Regalado

E. Maambong and Lucenito N. Tagle, concurring; rollo, pp. 43-52.
2
Id. at 54-56.
Rollo, pp. 72-76.
Respondent is a building contractor collecting payment for services rendered to the

late Raymond Triviere in the construction of a house together with civil works on
change orders and miscellaneous additional works. The claim in the amount
of P6,016,570.65 allegedly represents the unpaid principal balance of the original
contract, change orders, miscellaneous additional works, security, insurance,
accrued interest and attorney's fees due and demandable from the Estate.
5
Rollo, pp. 77-82.
Id. at 88-89.
Id.
Id.
Id. at 89.
10
Id. at 90-94.
11
Id. at 96.
12
Id. at 97-142.
13
Id. at 47.
14
Section 8, Rule 85 of the Rules of Court provides Sec. 8. When executor or administrator to render account. - Every executor
or administrator shall render an account of his administration within one (1)
year from the time of receiving letters testamentary or of administration,
unless the court otherwise directs because of extensions of time for
presenting claims against, or paying the debts of, the estate, or for disposing
of the estate; and he shall render such further accounts as the court may
require until the estate is wholly settled.
15
Rollo, p. 51.
16
Id. at 156-165.
17
Id. at 54-56.
18
Id. at 55-56.
19
G.R. No. 68873, 31 March 1989, 171 SCRA 526, 536.
20
CA rollo, p. 171.
21
Id. at 181.
22
Id. at 254.
23
Rollo, p. 19.
24
Section 2. Court may remove or accept resignation of executor or administrator;

Proceedings upon death, resignation, or removal. - x x x When an executor or
administrator dies, resigns, or is removed the remaining executor or administrator
may administer the trust alone, unless the court grants letters to someone to act with
him. x x x.
25
Petitioners' Memorandum; rollo, p. 228.
26
Mon v. Court of Appeals, G.R. No. 118292, 14 April 2004, 427 SCRA 165, 171;
Lianga Lumber Company v. Lianga Timber Co., Inc., 166 Phil. 661, 687 (1977).
27
Naval v. Court of Appeals, G.R. No. 167412, 22 February 2006, 483 SCRA 102,
109; Dosch v. National Labor Relations Commission, 208 Phil. 259, 272 (1983);
Capacete v. Baroro, 453 Phil. 392, 400 (2003).
28
Sta. Rosa Realty Development Corporation v. Amante, G.R. No. 112526, 16 March
2005, 453 SCRA 432, 477.
29
Capacete v. Baroro, supra note 27.
30
Lianga Lumber Company v. Lianga Timber Co., Inc., supra note 26.

SUPREME COURT
Manila
EN BANC
G.R. Nos. L-20787-8
June 29, 1965
J. ANTONIO ARANETA, plaintiff-appellee,

vs.
ANTONIO PEREZ, defendant-appellant.
Araneta, Mendoza and Papa for plaintiff-appellee.
Alfonso Felix, Jr. for defendant-appellant.
BAUTISTA ANGELO, J.:
On June 16, 1961, Antonio M. Perez executed a promissory note wherein he agreed to pay
J. Antonio Araneta, or order, the sum of P3,700.00 119 days from said date, or on October
13, 1961, and if it is not paid on the date of maturity, to pay interest at 9% per annum on the
amount of the loan, and P370.00 as attorney's fees in addition to costs and other
disbursements taxable under the Rules of Court.
The note having become due and Antonio M. Perez having failed to pay it despite demand
made upon him to do so, Araneta filed on October 31, 1961 a complaint in the Municipal
Court of Manila to collect its import under the terms therein stipulated (Civil Case No. 92265).
In his answer, defendant Perez admitted the execution of the promissory note as well as his
failure to pay it despite its maturity and demand, but he averred certain allegations that were
irrelevant to the complaint. Thus, Perez alleged that the proceeds of the note were applied
by him to the payment of the medical treatment of his minor daughter Angela Perez y
Tuason, who is the beneficiary of the trust then administered by Araneta as trustee in Special
Proceeding No. Q-73 of the Court of First Instance of Quezon City, and that the trust estate
is bound to pay the expenses of said treatment because they were for the benefit of said
minor and so the personal fund he borrowed from Araneta and for which he executed the
aforesaid promissory note should be paid by Araneta in the manner above-stated. In the
same answer, Perez set up a counterclaim demanding several amounts by way of moral
damages, exemplary damages, and attorney's fees.
On motion for judgment on the pleadings filed by Araneta, and without any opposition on the
part of defendant Perez, the municipal court rendered a decision on April 1962 ordering
Perez to pay the amounts prayed for in the complaint and dismissing his counterclaim for
damages. His motion for reconsideration having been denied, Perez appealed to the court a
quo where the appeal was docketed as Civil Case No. 50707 and where he filed practically
the same answer he filed in the municipal court.
In the meantime, or on February 8, 1962, Perez filed a complaint in the Municipal Court of
Manila against Araneta in his capacity as trustee of the minor child Angela Perez y Tuason in
Special Proceeding No. Q-73 of the Court of First Instance of Quezon City wherein, making
reference to Civil Case No. 92265 filed against him by Araneta, he repeated the same
allegations contained in the answer he interposed to the complaint of Araneta and prayed
that Araneta as trustee be required to pay Perez the amount of P3,700.00 advanced by the
latter in order to meet the obligation of the trust estate. And on the basis of a motion to
dismiss filed by Araneta as trustee, and over the opposition of Perez, the municipal court
dismissed the latter's complaint. His motion for reconsideration having been denied, Perez
appealed to the court a quo were his case was docketed as Civil Case No. 50706 and where
he filed an amended complaint against Araneta.
Considering that the two cases involved the same parties and the same promissory note,
they were ordered consolidated. And on September 7, 1962, the court a quo issued a joint
order wherein it affirmed the judgment on the pleadings rendered by the municipal court in
Civil Case No. 50707, while it affirmed the order of dismissal that was likewise issued by the
same court in Civil Case No. 50706. His motion for reconsideration filed in the two
consolidated cases having been denied, Perez interposed the present joint appeal.
Appellant contends that (1) the court a quo erred in finding Antonio Perez indebted to
Antonio Araneta in the sum of P3,700.00 requiring him to pay said amount to Araneta with
interest at the rate of 9% per annum from October 13, 1961 until its full payment, plus
P370.00 as attorney's fees, and in failing to find that the true debtor was the trust estate of
the children of Angela I. Tuason; and (2) assuming that the court a quo correctly ruled in
requiring Antonio Perez to pay the above amount to Antonio Araneta, nevertheless, the
court a quo erred in failing to require Araneta in his capacity as trustee of the aforesaid
children to reimburse Antonio Perez that amount upon proof by the latter of the payment
made by him of said amount.
1. The promissory note signed by appellant clearly states that he agreed to pay Araneta or
order the sum of P3,700.00 on October 13, 1961 and if the same is not paid on said date to
pay 9% interest thereon per annum until fully paid, plus the sum of P370.00 as attorney's
fees, in addition to the costs and other disbursements taxable under the Rules of Court.
Under these terms it is clear that appellant bound himself to pay personally said promissory
note which he cannot shift to another without the consent of the payee. Such is the
undertaking of the maker. Indeed, Section 60 of the Negotiable Instrument, Law provides
that "the maker of a negotiable instrument by making it engages that he will pay it according
to its tenor and admits the existence of the payee and his then capacity to indorse so that
appellant cannot now escape liability as maker by alleging that he spent the money for the
medical treatment of his daughter since it is not the payee's concern to know how said
proceeds should be spent. That is the sole concern of the maker. Payee's interest is merely
to see that the note be paid according to its terms.
Neither can appellant escape liability by resorting to the expedient that appellee, by moving
for judgment on the pleadings, is deemed to have admitted the material allegations of his
answer in Civil Case No. 50707, for the reason that said allegations are irrelevant and have
no bearing whatsoever on appellant's personal liability. In this connection, it is meet to recall
that appellant, after admitting the execution of the promissory note and his failure to pay it
despite demand thereof, made averments which in substance had the effect of a recoupment
of what he had spent against any share in the trust fund that may come to the minor for
whose benefit he claims to have spent the money.
Thus, he made the following affirmative defenses: That Da. Angela Tuason died in 1948
leaving estate worth five million pesos 2/9 of which she left in trust for the benefit of the
children of said Angela Tuason under the administration of appellee Araneta; that the will
was prepared by Araneta; that the estate is now worth one million pesos and despite thereof
Araneta professed inability to pay the allowance of P18,000.00 a year due the beneficiaries;
that Araneta sold some income producing properties of the trust and speculated with trust
funds in the stock market; that appellant had to advance certain expenses for the minors and
secure for them properties worth at least a quarter of a million pesos; that the two
beneficiaries are for unknown reasons short of funds so, that the appellant had to borrow the
sum of P3,700.00 for the medical treatment of minor Angela Perez y Tuason; that appellant
asked the trustee to advance said amount with the concurrence of the beneficiaries but the
trustee refused though he offered to lend the money out of his own pocket, and so appellant
executed the promissory note in question.
It is clear that insofar as the personal liability of appellant Perez on the promissory note is
concerned, which he admittedly executed for value in favor of appellee Araneta, all the
above recited allegations are irrelevant and immaterial and cannot tender any issue that will
affect his personal liability under the note. And this is so because the allegation regarding the
existence of the trust and its mismanagement on the part of appellee Araneta as trustee,
certainly, has nothing to do with the money lent by him to appellant. Neither has the
allegation that the proceeds of the note were spent by appellant for the medical treatment of
minor Angela anything to do with his personal obligation because the destination of the
proceeds of said note is certainly not the concern of Araneta. We are, therefore, of the
opinion that the court a quo did not err in rendering judgment on the pleadings in the light of
what is averred in appellee's complaint.
2. But even assuming for the sake of argument that what is claimed by appellant as to how
he spent the proceeds of the notes is true, that will not exempt him from his liability to
Araneta but would merely give him some basis to claim for recoupment against the share of
the trust fund belonging to the benefited minor if it is properly shown that there is fund
coming to said minor. Here, no such showing was made. Moreover, the trust herein created
merely provides for delivery to the beneficiaries of the share that may correspond to them in
the net income of the trust fund, but does not impose upon the trustee the duty to pay any
obligation or expenses that may be needed by said beneficiaries.
Appellant has cited several authorities to support his stand that the medical expenses in
question which were made for the sake of the beneficiary should be borne by the trust fund,
but from an examination thereof one may see that they require that beneficiary be insolvent
in order that the trust estate may be obliged to shoulder the expenses. 1 Here the beneficiary
is not in that situation for, as appellant himself has admitted, said beneficiary has properties
that are worth at least a quarter of a million pesos which are under the Guardianship Court of
Manila. There is, therefore, no room for the application of the ruling laid down in the cited
authorities.
The other authorities cited by appellant to bolster his claim are also inapplicable for they
sanction the applications of the trust fund to medical or other expenses of the beneficiaries
only when there is absolute necessity therefor, or when they themselves are unable to
provide for those expenses. As already stated, the beneficiaries here are well off or have
enough to provide for their necessities if only their guardian should take steps to attend to
them as required by the circumstances. But instead of doing so, appellant insists on having
appellee recoup with trust money what he had allegedly spent for his daughter's benefit thus
giving rise to the present dual litigation.
We take note of the written manifestation or "constancia" submitted to this Court by appellant
dated August 22, 1963 in his capacity as judicial guardian of the beneficiaries herein, as well
as of supplement thereof made on September 20, 1963, inviting attention of this Court to an
order issued by the Juvenile and Domestic Relations Court authorizing appellant as such
guardian to assign the amount of P3,700.00 to appellee herein for the purpose of
reimbursing him for the amount he had advanced and which is the subject of the promissory
note for which reason appellant now claims that this case is now moot and should be
dismissed. But to such manifestation appellee has filed a rejoinder dated September 2, 1963
stating that the request for dismissal is untenable since the order appealed from calls not
only for the payment of the sum of P3,700.00 but of 9% interest thereon per annum from
October 13, 1961 until payment and of the sum of P370.00 as attorney's fees.
We hold that appellant's claim is not justified considering that appellee was forced to file the
present suit in view of appellant's refusal to honor the note under consideration. The request,
therefore, for dismissal has no legal basis.
WHEREFORE, with the modification that the payment of interest on the note should start
from the date of extrajudicial demand, or October 18, 1961, we hereby affirm the order
appealed from in all other respects, without pronouncement as to costs.
Bengzon, C.J., Concepcion, Reyes, J.B.L., Paredes, Dizon, Regala, Makalintal, Bengzon,
J.P., and Zaldivar, JJ., concur.
Barrera, J., is on leave.
Footnotes
So where a trust fund is to be applied to the support of the beneficiary, a claim for
medical services rendered on the request of the beneficiary with the knowledge of
the trustee, may be enforced in equity as against the trustee where the beneficiary is
insolvent and it does not appear that the trustee had furnished him with all that is
necessary with respect to medical attendance. (90 C.J.S. p. 113)
1

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 159130
August 22, 2008
ATTY. GEORGE S. BRIONES, petitioner,

vs.
LILIA J. HENSON-CRUZ, RUBY J. HENSON, and ANTONIO J. HENSON respondents.
DECISION
BRION, J.:
We review in this petition1 the Decision of the Court of Appeals (Fifteenth Division) dated
February 11, 20032 in CA-G.R. SP No. 71844.
THE ANTECEDENTS
Respondent Ruby J. Henson filed on February 23, 1999 a petition for the allowance of the
will of her late mother, Luz J. Henson, with the Regional Trial Court (RTC) of Manila,
docketed as Special Proceedings No. 99-92870.
Lilia Henson-Cruz, one of the deceased's daughters and also a respondent in this petition,
opposed Ruby's petition. She alleged that Ruby understated the value of their late mother's
estate and acted with "unconscionable bad faith" in the management thereof. Lilia prayed
that her mother's holographic will be disallowed and that she be appointed as the Intestate
Administratrix.
Lilia subsequently moved for the appointment of an Interim Special Administrator of the
estate of her late mother, praying that the Prudential Bank & Trust Company-Ermita Branch
be appointed as Interim Special Administrator. The trial court granted the motion but
designated Jose V. Ferro (Senior Vice-President and Trust Officer, Trust Banking Group of
the Philippines National Bank) as the Special Administrator. Ferro, however, declined the
appointment.
The trial court then designated petitioner Atty. George S. Briones as Special Administrator of
the estate. Atty. Briones accepted the appointment, took his oath of office, and started the
administration of the estate. The significant highlights of his administration are listed below:
1. On November 22, 1999, the trial court directed the heirs of Luz J. Henson to turn
over the possession of all the properties of the deceased to the Special
Administrator.
2. On February 16, 2000, Atty. Briones moved that the trial court approve Special
Administrator's fees ofP75,000.00 per month. These fees were in addition to the
commission referred to in Section 7, Rule 85 of the Revised Rules of Court. The trial
court granted the motion but reduced the fees to P60,000.00 per month, retroactive
to the date Atty. Briones assumed office.
3. Atty. Briones filed a Special Administrator's Report No. 1 dated September 8, 2000
which contained an inventory of the properties in his custody and a statement of the
income received and the disbursements made for the estate. The trial court issued
an Order dated March 5, 2001 approving the report.
4. On September 17, 2001, the heirs of Luz J. Henson submitted a project of partition
of the estate for the trial court's approval.
5. On January 8, 2002, Atty. Briones submitted the Special Administrator's Final
Report for the approval of the court. He prayed that he be paid a commission
of P97,850,191.26 representing eight percent (8%) of the value of the estate under
his administration.
6. The respondents opposed the approval of the final report and prayed that they be
granted an opportunity to examine the documents, vouchers, and receipts mentioned
in the statement of income and disbursements. They likewise asked the trial court to
deny the Atty. Briones' claim for commission and that he be ordered to refund the
sum of P134,126.33 to the estate.
7. On February 21, 2002, the respondents filed an audit request with the trial court.
Atty. Briones filed his comment suggesting that the audit be done by an independent
auditor at the expense of the estate.
8. In an Order dated March 12, 2002, the trial court granted the request for audit and
appointed the accounting firm Alba, Romeo & Co. to conduct the audit.
9. The respondents moved for the reconsideration of Order dated March 12, 2002,
alleging that in view of the partition of the estate there was no more need for a
special administrator. They also clarified that they were not asking for an external
audit; they merely wanted to be allowed to examine the receipts, vouchers, bank
statements, and other documents in support of the Special Administrator's Final

Report and to examine the Special Administrator under oath.
10. The trial court handed down an Order dated April 13, 2002, the dispositive
portion of which reads:
IN VIEW OF THE FOREGOING, the court hereby:
1. Reiterates its designation of the accounting firm of Messrs.
Alba, Romeo & Co. to immediately conduct an audit of the
administration by Atty. George S. Briones of the estate of the
late Luz J. Henson, the expenses of which shall be charged
against the estate.
2. Suspends the approval of the report of the special
administrator except the payment of his commission, which is
hereby fixed at 1.8% of the value of the estate.
3. Directs the special administrator to deliver the residue to the heirs
in proportion to their shares. From the shares of Lilia J. Henson-Cruz,
there shall be deducted the advances made to her.
IT IS SO ORDERED.
On April 29, 2002, respondents filed with the Court of Appeals (CA) a Petition for Certiorari,
Prohibition, andMandamus which was raffled to the CA's Ninth Division and docketed
as CA-G.R. SP No. 70349. The petition assailed the Order dated March 12, 2002 which
appointed accounting firm Alba, Romeo & Co. as auditors and the Order dated April 3, 2002
which reiterated the appointment.
Prior the filing of the petition for certiorari in CA G.R. SP No. 70349, the heirs of Luz Henzon
filed on April 9, 2002 a Notice of Appeal with the RTC assailing the Order dated April 3, 2003
insofar as it directed the payment of Atty. Briones' commission. They subsequently filed their
record on appeal.
The trial court, however, denied the appeal and disapproved the record on appeal on May
23, 2002 on the ground of forum shopping. Respondents' motion for reconsideration was
likewise denied.
On July 26, 2002, the respondents filed a Petition for Mandamus with the appellate court,
docketed as CA-G.R. SP No. 71844. They claimed that the trial court unlawfully refused to
comply with its ministerial duty to approve their seasonably-perfected appeal. They refuted
the trial court's finding of forum shopping by declaring that the issues in their appeal and in
their petition for certiorari (CA-G.R. SP No. 70349) are not identical, although both stemmed
from the same Order of April 3, 2002. The appeal involved the payment of the special
administrator's commission, while the petition for certiorari assailed the appointment of an
accounting firm to conduct an external audit.
On the other hand, the petitioner insisted that the respondents committed forum shopping
when they assailed the Order of April 3, 2002 twice, i.e., through a special civil action
for certiorari and by ordinary appeal. Forum shopping took place because of the identity of
the reliefs prayed for in the two cases. The petitioner likewise posited that the trial court's
error, if any, in dismissing the appeal on the ground of forum shopping is an error of
judgment, not of jurisdiction, and hence is not correctible by certiorari.
On February 11, 2003, the Court of Appeals decided the respondents' petition
for Mandamus (CA-G.R. SP No. 71844) as follows:
WHEREFORE, the petition is GRANTED and respondent Judge is directed to
give due course to the appeal of petitioners from the Order dated April 3, 2002
insofar as it directed the payment of commission to private
respondent. [Emphasis supplied.]
SO ORDERED.
The Court of Appeals held that the trial court had neither the power nor the authority to deny
the appeal on the ground of forum shopping. It pointed out that under Section 13, Rule 41 of
the 1997 Rules of Civil Procedure, as amended, the authority of the trial court to dismiss an
appeal, either motu proprio or on motion, may be exercised only if the appeal was taken out
of time or if the appellate court docket and other fees were not paid within the reglementary
period.
Atty. Briones moved for the reconsideration of this decision. The appellate court denied his
motion in its Resolution dated July 17, 2003. Thereupon, he seasonably filed the present
Petition for Review on Certiorari on September 4, 2003 on the ground that the CA refused to
resolve the issue of forum shopping in its Decision of February 11, 2003 and its resolution of
July 17, 2003 in CA-G.R. SP No. 71844 (Petition for Mandamus to give due course to the
appeal).
In the interim, on August 5, 2003, the Court of Appeals (Ninth Division) handed down its
Decision3 in CA-G.R. SP No. 70439 (Petition for Certiorari, Prohibition, and Mandamus on
the appointment of the auditing firm), whose falloreads:
WHEREFORE, premises considered, the petition is GRANTED. The assailed Orders
dated March 12, 2002 and April 3, 2002 are REVERSED and SET ASIDE. Public
respondent Judge Artemio S. Tipon is hereby COMMANDED to allow petitionerheirs: 1) to examine all the receipts, bank statements, bank passbook, treasury bills,
and other documents in support of the Special Administrator's Final Report, as well
as the Statement of the Income and Disbusement Made from the Estate; and 2) to
cross-examine private respondent Briones, before finally approving the Special
Administrator's Final Report. [Emphasis supplied.]
SO ORDERED.
THE PARTIES' POSITIONS
The petitioner faults the appellate court for refusing to resolve the forum shopping issue in its
Decision of February 11, 2003 and the Resolution of July 17, 2003, thereby deciding the
case in a way not in accord with law or with applicable decisions of this Court. On the matter
of forum shopping, the appellate court simply stated in its decision that "In view of the fact
that respondent Judge had no power to disallow the appeal on the ground of forum
shopping, we deem it unnecessary to discuss whether or not petitioners committed forum
shopping." Neither did the appellate court pass upon the issue of forum shopping in its ruling
on the petitioner's motion for reconsideration, stating that forum shopping should be resolved
either in the respondent's appeal or in their petition for certiorari, prohibition,
and mandamus (CA-G.R. SP No. 70349).
As basis, the petitioner cites Section 3 of this Court's Circular No. 28-91 which provides that
"(a) Any violation of this Circular shall be a cause for the summary dismissal of the multiple
petition or complaint; and (b) Any willful and deliberate forum shopping by any party and his
lawyer with the filing of multiple petitions and complaints to ensure favorable action shall
constitute direct contempt of court."
To prove that forum shopping transpired, the petitioner cites the respondents' petition
for certiorari, prohibition, and mandamus (CA-G.R. SP No. 70349) that prayed for the
annulment of the assailed Order of April 3, 2002 in its entirety. To the petitioner, the attack on
the entire Order meant that even the payment of the special administrator's commission which was the subject of a separate appeal - was covered by the petition. The petitioner
further alleged that "to conceal the attempt at forum shopping, respondents deliberately
failed to mention the existence of their ordinary appeal of the same Order of April 3, 2002 in
the certification against forum shopping attached to their petition for certiorari, prohibition,
and mandamus in CA-G.R. SP No. 70349."
The petitioner cites in support of his position the cases of Silahis International, Inc. v.
National Labor Relations Commission,4 Tantoy Sr. v. Court of Appeals,5 and First Philippine
International Bank v. Court of Appeals.6 Silahis was cited for the proposition that only one
recourse - the appeal - should have been filed because the issues were inter-related. Tantoy,
Sr. spoke of related causes or the same or substantially the same reliefs in considering
whether there is forum shopping. On the other hand, First Philippine International Bank was
cited to emphasize that the key to a finding of forum shopping is the objective of the relief;
though differently worded, there is violation of the rule against forum shopping if the objective
in all the actions filed involves the same relief - in this case, the setting aside of the Order of
April 3, 2002. The petitioner noted that the respondents had succeeded in obtaining this
relief in their petition for certiorari, prohibition, and mandamus (CA-G.R. SP No. 70349) and
the ruling in this petition already constituted res judicata on the validity of the Order of April 3,
2002.
The respondents, for their part, claim that "the mere failure to specify in the decision the
contentions of the appellant and the reason for refusing to believe them is not sufficient to
hold the same contrary to the provisions of the law and the Constitution." 7 In support of the
twin recourses they took, they cite Argel v. Court of Appeals8where this Court rejected the
ground for objection similar to present petitioner's because "the special civil action
for certiorari and the appeal did not involve the same issue." The respondents saw as
ineffective the argument that the petition for certiorari prayed for the annulment of the entire
Order of April 3, 2002 since the petition and the appeal were very specific on the portions of
the Order that were being assailed. They pointed, too, to the decision in CA-G.R. SP No.
70349 which only passed upon the issues specified in the petition for certiorari, leaving
untouched the issue that they chose to raise via an appeal. As their last point, the
respondents claimed they saw no need to mention the pendency of the appeal in their nonforum shopping certification because the appeal dealt with an issue altogether different from
the issues raised in the petition for certiorari, citing for this purpose the specific wordings of
Section 5, Rule 7 of the Revised Rules of Court.
THE ISSUE
The sole issue presented to us for resolution is: Did the Court of Appeals (Fifteenth
Division) err in not dismissing the respondents' petition for mandamus (CA-G.R. SP
No. 71844) on the ground of forum shopping?
THE COURT'S RULING
We find the petition devoid of merit as the discussions below will show.
The Order of April 3, 2002
An examination of the RTC Order of April 3, 2002 shows that it resolved three matters,
namely: (1) the designation of the accounting firm of Alba, Romeo & Co. to conduct an audit
of the administration of Atty. George S. Briones of the estate of Luz J. Henson, at the
expense of the estate; (2) the payment of the petitioner's commission as the estate's Special
Administrator; and (3) the directive to the petitioner to deliver the residue of the estate to the
heirs in their proportional shares. Of these, only the first two are relevant to the present
petition as the third is the ultimate directive that will close the settlement of estate
proceedings.
The first part of the Order (the auditor's appointment) was the subject of the petition
for certiorari, prohibition, andmandamus that the respondents filed before the appellate court
(CA-G.R. SP No. 70349). Whether this part is interlocutory or one that fully settles the case
on the merits can be answered by the test that this Court laid down in Mirada v. Court of
Appeals: "The test to ascertain whether or not an order is interlocutory or final is - Does it
leave something to be done in the trial court with respect to the merits of the case? If
it does, it is interlocutory; if it does not it is final." 9
The terms of the trial court's order with respect to the appointment or "designation" of the
accounting firm is clear: "to immediately conduct an audit of the administration by Atty.
George S. Briones of the estate of the late Luz J. Henson, the expenses of which shall be
charged against the estate."
To audit, is "to examine and verify (as the books of account of a company or a treasurer's
accounts)." An audit is the "formal or official examination and verification of books of account
(as for reporting on the financial condition of a business at a given date or on the results of
its operations for a given period)."10 Black's Law Dictionary defines it no differently: "a
systematic inspection of accounting records involving analyses, tests and confirmations; a
formal or official examination and authentication of accounts, with witnesses, vouchers,
etc."11
Given that the subject matter of the audit is Atty. Briones' Final Report in the administration of
the estate of the decedent, its preparatory character is obvious; it is a prelude to the court's
final settlement and distribution of the properties of the decedent to the heirs. In the context
of what the court's order accomplishes, the court's designation of an auditor does not have
the effect of ruling on the pending estate proceeding on its merits (i.e., in terms of finally
determining the extent of the net estate of the deceased and distributing it to the heirs) or on
the merits of any independently determinable aspect of the estate proceeding; it is only for
purposes of confirming the accuracy of the Special Administrator's Final Report, particularly
of the reported charges against the estate. In other words, the designation of the auditor did
not resolve Special Proceedings No. 99-92870 or any independently determinable issue
therein, and left much to be done on the merits of the case. Thus, the April 3, 2002 Order
of the RTC is interlocutory in so far as it designated an accounting firm to audit the

petitioner's special administration of the estate.
In contrast with the interlocutory character of the auditor's appointment, the second part is
limited to the Special Administrator's commission which was fixed at 1.8% of the value of the
estate. To quote from the Order: the court hereby. . . 2. Suspends the approval of the report
of the special administrator except the payment of his commission, which is hereby fixed at
1.8% of the value of the estate." Under these terms, it is immediately apparent that this
pronouncement on an independently determinable issue - the special administrator's
commission - is the court's definite and final word on the matter, subject only to whatever a
higher body may decide if an appeal is made from the court's ruling.
From an estate proceeding perspective, the Special Administrator's commission is no less a
claim against the estate than a claim that third parties may make. Section 8, Rule 86 of the
Rules recognizes this when it provides for "Claim of Executor or Administrator Against an
Estate."12 Under Section 13 of the same Rule, the action of the court on a claim against the
estate "is appealable as in ordinary cases."13 Hence, by the express terms of the Rules,
the ruling on the extent of the Special Administrator's commission - effectively, a
claim by the special administrator against the estate - is the lower court's last word on
the matter and one that is appealable.
Available Recourses against
the April 3, 2002 Order
We bring up the above distinctions between the first two parts of the Order of April 3, 2002 to
highlight that the directives or determinations under the Order are not similarly final and
appealable in character. In this regard, Section 1, Rule 41 of the 1997 Rules of Rules of
Court lays down the rules on what are or are not subject to appeal and it provides:
Section 1. Subject of appeal. - An appeal may be taken from a judgment or final
order that completely disposes of the case or of a particular matter therein when
declared by these Rules to be appealable.
No appeal shall be taken from:
xxx
(c) An interlocutory order.
xxx
In all the above instances where the judgment or final order is not appealable, the
aggrieved party may file an appropriate special civil action under Rule 65.
Under these terms and taking into account the previous discussion of the nature of the
various parts of the Order of April 3, 2002, the lower court's determination of the special
administrator's commission is clearly appealable while the auditor's appointment is not. The
latter, under the express terms of the above provision, can be the subject of an "appropriate
special civil action under Rule 65."
Rulings abound on when an appeal or a petition for certiorari is the appropriate recourse to
take from a lower court ruling. 14 The twist in the present case is that the losing party took two
available recourses from the same Order of the lower court: an appeal was made with
respect to that portion of the Order that is final in character, and a petition for certiorari was
taken against the portion that, again by its nature, is interlocutory. It was under these
circumstances that the petitioner posited that forum shopping had been committed as the
respondents should have simply appealed, citing the interlocutory aspect as an error in the
appeal of the final aspect of the Order of April 3, 2002.
While the petitioner's position may be legally correct as a general rule, it is not true in the
present case considering the unique nature of the case that gave rise to the present petition.
The petitioner is the special administrator in a settlement of estate, a special proceeding
governed by Rule 72 to 109 of the Revised Rules of Court. Section 1, Rule 109 in part
states:
Section 1. Orders or judgments from which appeals may be taken. - An interested
person may appeal in special proceedings from an order or judgment rendered by a
Court of First Instance or a Juvenile Domestic Relations Court, where such order or
judgment:
xxxxxxxxx
(c) allows or disallows, in whole or in part, any claim against the estate of a deceased
person, or any claim presented on behalf of the estate in offset to a claim against it;
(d) settles the account of an executor, administrator, trustee or guardian;
(e) constitutes, in the proceedings relating to the settlement of the estate of a
deceased person x x x a final determination in the lower court of the rights of the
party appealing, except that no appeal shall be allowed from the appointment of a
special administrator.
The rationale behind allowing more than one appeal in the same case is to enable the rest of
the case to proceed in the event that a separate and distinct issue is resolved by the court
and held to be final.15 In this multi-appeal mode, the probate court loses jurisdiction only over
the subject matter of the appeal but retains jurisdiction over the special proceeding from
which the appeal was taken for purposes of further remedies the parties may avail of. 16
Where multi-appeals are allowed, we see no reason why a separate petition
for certiorari cannot be allowed on an interlocutory aspect of the case that is separate and
distinct as an issue from the aspect of the case that has been adjudged with finality by the
lower court. To reiterate, the matter appealed matter was the special administrator's
commission, a charge that is effectively a claim against the estate under administration,
while the matter covered by the petition for certiorari was the appointment of an auditor who
would pass upon the special administrator's final account. By their respective natures, these
matters can exist independently of one another and can proceed separately as envisioned
by the Rules under Rule 109.
The Forum Shopping Issue
Forum shopping is the act of a litigant who "repetitively availed of several judicial remedies in
different courts, simultaneously or successively, all substantially founded on the same
transactions and the same essential facts and circumstances, and all raising substantially
the same issues either pending in or already resolved adversely by some other court to
increase his chances of obtaining a favorable decision if not in one court, then in
another."17 It is directly addressed and prohibited under Section 5, Rule 7 of the 1997 Rules
of Civil Procedure, and is signaled by the presence of the following requisites: (1) identity of
parties, or at least such parties who represent the same interests in both actions, (2) identity
of the rights asserted and the relief prayed for, the relief being founded on the same facts,
and (3) identity of the two preceding particulars such that any judgment rendered in the
pending case, regardless of which party is successful, would amount to res judicata in the
other.18In simpler terms, the test to determine whether a party has violated the rule against
forum shopping is where the elements of litis pendentia are present or where a final
judgment in one case will amount to res judicata in the other.19
We see no forum shopping after considering these standards as neither litis
pendentia nor res judicata would result in one case from a ruling in the other, notwithstanding
that the appeal that subsequently became the subject of CA-G.R. SP No. 71844 and the
petition for certiorari in CA-G.R. SP No. 70439 both stemmed from the trial court's Order
dated April 3, 2002. The simple reason - as already discussed above - is that the petition and
the appeal involve two different and distinct issues so that a ruling in either one will not affect
the other.
Forum shopping is further negated when the nature of, and the developments in, the
proceedings are taken into account - i.e., an estate proceedings where the Rules expressly
allow separate appeals and where the respondents have meticulously distinguished what
aspect of the RTC's single Order could be appealed and what could not. Thus, the petitioner
cannot take comfort in the cases it cited relating to forum shopping; these cases, correct and
proper in their own factual settings, simply do not apply to the attendant circumstances and
special nature of the present case where the issues, although pertaining to the same
settlement of estate proceedings and although covered by the same court order, differ in
substance and in stage of finality and can be treated independently of one another for the
purposes of appellate review.
Did the Court of Appeals err in refusing to resolve the issue of forum shopping?
Given our above discussion and conclusions, we do not see forum shopping as an issue that
would have made a difference in the appellate court's ruling. Nor is it an issue that the
appellate court should, by law, have fully ruled upon on the merits. We agree with the
respondent that the appellate court is not required "to resolve every contention and issue
raised by a party if it believes it is not necessary to do so to decide the case." 20
The reality though is that the appellate court did rule on the issue when it stated that "it
becomes unnecessary to discuss whether the latter engaged in forum shopping. Apparently,
the issue on forum shopping was also raised in CA-G.R. SP No. 70349 and private
respondent can again raise the same in the appeal from the order dated April 3, 2002, where
the issue should be properly resolved."21 To the appellate court - faced with the task of ruling
on a petition for mandamus to compel the trial court to allow the respondents' appeal - forum
shopping was not an issue material to whether the trial court should or should not be
compelled; what was material are the requisite filing of a notice of appeal and record on
appeal, and the question of whether these have been satisfied. We cannot find fault with this
reasoning as the forum shopping issue - i.e., whether there was abuse of court processes in
the respondents' use of two recourses to assail the same trial court order - has specific
pertinence and relevance in the sufficiency and merits of the recourses the respondents
took.
In sum, we hold that the Court of Appeals did not err in refusing to resolve forum shopping as
an issue in its Decision in CA-G.R. SP No. 71844.
WHEREFORE, we hereby DENY the petition and, accordingly, AFFIRM the Decision of the
Court of Appeals dated February 11, 2003 in CA-G.R. SP No. 71844. Costs against the
petitioner.
SO ORDERED.
ARTURO D. BRION
Associate Justice
WE CONCUR:
LEONARDO A. QUISUMBING
Associate Justice
Chairperson
Associate Justice
DANTE O. TINGA
Associate Justice

Associate Justice
ATTESTATION
Associate Justice
Chairperson
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson's
REYNATO S. PUNO
Chief Justice
Footnotes
1
Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court.
Rollo, pp. 44-51; penned by Associate Justice Marina L. Buzon, with Associate
Justice Josefina Guevara-Salonga and Associate Justice Danilo B. Pine concurring.
3
Rollo, pp. 92-100; penned by Associate Justice B.A. Adefuin-De la Cruz, with
Associate Justice Jose L. Sabio, Jr. and Associate Justice Hakim S. Abdulwahid
concurring.
4
G.R. No. 104513, August 4, 1993, 225 SCRA 94.
G.R. No. 141427, April 20, 2001, 357 SCRA 329.
G.R. No. 115849, January 24, 1996, 252 SCRA 259.
Air France v. Carrascoso, G.R, No. L-21438, September 28, 1966, 18 SCRA 155.
G.R. No. 128805, October 12, 1999, 316 SCRA 511.
G.R. No. L-33007, June 18, 1976, 71 SCRA 295.
10
Webster's Third International Dictionary (1993 ed.), p. 143.
11
Fifth Ed. (1979), p. 120.
12
Section 8. Claim of executor or administrator against an estate. - If the executor or

administrator has a claim against the estate he represents, he shall give notice
thereof in writing, to the court, and the court shall appoint a special administrator,
who shall, in the adjustment of such claim, have the same power and be subject to
the same liability as the general administrator or executor in the settlement of other
claims. The court may order the executor or administrator to pay the special
administrator necessary funds to defend such action.
13
Section 13. Judgment appealable. The judgment of the court approving or

disapproving a claim, shall be filed with the record of the administration proceedings
with notice to both parties, and is appealable as in ordinary cases. A judgment
against the executor or administrator shall be that he pay, in due course of
administration, the amount ascertained to be due, and it shall not create any lien
upon the property of the estate, or give to the judgment creditor any priority of
payment.
14
See People v. Laguio, Jr., G.R. No. 128587, March 16, 2007, 518 SCRA 393.
15
Roman Catholic Archbishop of Manila v. Court of Appeals, G.R. No. 111324, July 5,
1996, 258 SCRA 186.
16
Valarao v. Pascual, G.R. No. 150164, November 26, 2002, 392 SCRA 695.
17
Gatmaytan v. Court of Appeals, G. R. No. 123332, February 3, 1997, 267 SCRA

487. See also:Mondragon Leisure and Resorts Corp. v. United Coconut Planters
Bank, 427 SCRA 585 (2044), citing T'Boli Agro-Industrial Development, Inc. (TADI) v.
Solidapsi, 394 SCRA 269 (2002).
18
Hongkong & Shanghai Banking Corp. Ltd. v. Catalan, G.R. Nos. 159590-91,
October 18, 2004, 440 SCRA 498, 513-514, citing Phil. Commercial International
Bank v. Court of Appeals, 406 SCRA 575 (2003).
19
Velasquez v. Hernandez, G.R. Nos. 150732 & 151095, August 31, 2004, 437
SCRA 357, 367, citingBangko Silangan Development Bank v. Court of Appeals, 360
SCRA 322 (2001), Phil. Economic Zone Authority v. Vianzon, 336 SCRA 309 (2000),
Progressive Development Corp. v. Court of Appeals, 301 SCRA 637 (1999).
20
Air France v. Carrascoso, supra note 7.
21
Rollo, pp. 54-55.

SUPREME COURT
Manila
EN BANC
G.R. No. L-26695 January 31, 1972

JUANITA LOPEZ GUILAS, petitioner,
vs.
JUDGE OF THE COURT OF FIRST INSTANCE OF PAMPANGA AND ALEJANDRO
LOPEZ respondents .
Filemon Cajator for petitioner.
Eligio G. Lagman for respondent Alejandro Lopez.
MAKASIAR, J.:p
It appears from the records that Jacinta Limson de Lopez, of Guagua, Pampanga was
married to Alejandro Lopez y Siongco. They had no children.
On April 28, 1936, Jacinta executed a will instituting her husband Alejandro as her sole heir
and executor (pp. 20-21, rec.).
In a Resolution dated October 26, 1953 in Sp. Proc. No. 894 entitled "En el Asunto de la
Adopcion de la Menor Juanita Lopez y Limson" (pp. 92-94, 103, rec.), herein petitioner
Juanita Lopez, then single and now married to Federico Guilas, was declared legally
adopted daughter and legal heir of the spouses Jacinta and Alejandro. After adopting legally
herein petitioner Juanita Lopez, the testatrix Doa Jacinta did not execute another will or
codicil so as to include Juanita Lopez as one of her heirs.
In an order dated March 5, 1959 in Testate Proceedings No. 1426, the aforementioned will
was admitted to probate and the surviving husband, Alejandro Lopez y Siongco, was
appointed executor without bond by the Court of First Instance of Pampanga (Annexes "A"
and "B", pp. 18-23, rec.). Accordingly, Alejandro took his oath of office as executor (Annex
"C", p. 24, rec.).
Nevertheless, in a project of partition dated March 19, 1960 executed by both Alejandro
Lopez and Juanita Lopez Guilas, the right of Juanita Lopez to inherit from Jacinta was
recognized and Lots Nos. 3368 and 3441 (Jacinta's paraphernal property), described and
embraced in Original Certificate of Title No. 13092, both situated in Bacolor Pampanga
Lot 3368 with an area of 68,141 square meters and Lot 3441 with an area of 163,231 square
meters, then assessed respectively at P3,070.00 and P5,800.00 (Annex "D", pp. 27-36, rec.)
were adjudicated to Juanita Lopez-Guilas as her share free from all liens, encumbrances
and charges, with the executor Alejandro Lopez, binding himself to free the said two parcels
from such liens, encumbrances and charges. The rest of the estate of the deceased
consisting of 28 other parcels of lands with a total assessed valuation of P69,020.00 and a
combined area of 743,924.67 square meters, as well as personal properties including a 1953
Buick car valued at P2,500.00 were allotted to Don Alejandro who assumed all the mortgage
liens on the estate (Annex "D", pp. 25-37, rec.).
In an order dated April 23, 1960, the lower court approved the said project of partition and
directed that the records of the case be sent to the archives, upon payment of the estate and
inheritance taxes (Annex "E", p. 38, rec.). Upon ex-parte petition of the adjudicatees
Alejandro Lopez and Juanita Lopez-Guilas dated August 25, 1961 (Annex "F", pp. 39-40,
rec.), the lower court in an order dated August 28, 1961, approved the correction of clerical
errors appearing in the project of partition (Annex "G", p. 41, rec.).
On April 10, 1964, herein petitioner Juanita Lopez-Guilas filed a separate ordinary action to
set aside and annul the project of partition, which case was docketed as Civil Case 2539
entitled "Juanita Lopez-Guilas vs. Alejandro Lopez" in the Court of First Instance of
Pampanga, on the ground of lesion, perpetration and fraud, and pray further that Alejandro
Lopez be ordered to submit a statement of accounts of all the crops and to deliver
immediately to Juanita lots nos. 3368 and 3441 of the Bacolor Cadastre, which were
allocated to her under the project of partition (p. 132, rec.).
Meanwhile, in Testate Proceedings No. 1426, Juanita filed a petition dated July 20, 1964
praying that Alejandro Lopez be directed to deliver to her the actual possession of said lots
nos. 3368 and 3441 as well as the 1,216 caverns of palay that he collected from the ten (10)
tenants or lessees of the said two lots (Annex "H", pp. 42-44, rec.).
In his opposition dated August 5, 1964 to the said petition, Alejandro Lopez claims that, by
virtue of the order dated April 23, 1960 which approved the project of partition submitted by
both Alejandro and Juanita and directed that the records of the case be archived upon
payment of the estate and inheritance taxes, and the order of December 15, 1960 which
"ordered closed and terminated the present case", the testate proceedings had already been
closed and terminated; and that he ceased as a consequence to be the executor of the
estate of the deceased; and that Juanita Lopez is guilty of laches and negligence in filing the
petition of the delivery of her share 4 years after such closure of the estate, when she could
have filed a petition for relief of judgment within sixty (60) days from December 15, 1960
under Rule 38 of the old Rules of Court (Annex "I") citing A. Austria vs. Heirs of Antonio
Ventenilla, L-100808, Sept. 18, 1956 (pp. 45-48, rec.).
In her reply dated November 17, 1965 to said opposition, Juanita contends that the actual
delivery and distribution of the hereditary shares to the heirs, and not the order of the court
declaring as closed and terminated the proceedings, determines the termination of the
probate proceedings (citing Intestate estate of the deceased Mercedes Cano, Timbol vs.
Cano, 59 O.G. No. 30, pp. 46-73, April 29, 1961, where it was ruled that "the probate court
loses jurisdiction of an estate under administration only after the payment of all the taxes,
and after the remaining estate is delivered to the heirs entitled to receive the same"); that the
executor Alejandro is estopped from opposing her petition because he was the one who
prepared, filed and secured court approval of, the aforesaid project of partition, which she
seeks to be implemented; that she is not guilty of laches, because when she filed on July 20,
1964, her petition for he delivery of her share allocated to her under the project of partition,
less than 3 years had elapsed from August 28, 1961 when the amended project of partition
was approved, which is within the 5-year period for the execution of judgment by motion
(Annex "J", pp. 49-52, rec.).
In its order dated October 2, 1964, the lower court after a "pre-trial" stated that because the
civil action for the annulment of the project of partition was filed on April 13, 1964, before the
filing on July 2, 1964 of the petition for delivery of the shares of Juanita Lopez, "the parties
have agreed to suspend action or resolution upon the said petition for the delivery of shares
until; after the civil action aforementioned has been finally settled and decided", and forthwith
set the civil action for annulment for trial on November 25, and December 2, 1964 (Annex
"K", pp. 53-54, rec.).
On June 11, 1965, Juanita filed an amended complaint in Civil Case 2539 (pp. 78-110, rec.),
where she acknowledges the partial legality and validity of the project of partition insofar as
the allocation in her favor of the Lots Nos. 3368 and 3441, the delivery of which she is
seeking (pp. 106-107, rec.).
In her motion dated November 17, 1965, Juanita sought the setting aside of the order dated
October 2, 1964 on the ground that while the said order considered her action for annulment
of the project of partition as a prejudicial question, her filing an amended complaint on June
11, 1965 in civil case No. 2539 wherein she admitted the partial legality and validity of the
project of partition with respect to the adjudication to her of the two lots as her share,
rendered said civil case No. 2539 no longer a prejudicial question to her petition of July 20,
1964 for the delivery of her share (Annex "L", pp. 55-59, rec.).
Alejandro filed his opposition dated December 1, 1965 to the aforesaid motion of Juanita to
set aside the order dated October 2, 1964 (Annex "M", pp. 60-61, rec.), to which Juanita filed
her rejoinder dated December 6, 1965 wherein she stated among others that pursuant to the
project of partition, executor Alejandro secured the cancellation of OCT. No. 13093 covering
the two parcels of land adjudicated to her under the project of partition and the issuance in
his exclusive name on August 4, 1961 TCT No. 26638-R covering the said Lots Nos. 3368
and 3441 of the Bacolor Cadastre (Annex "N", pp. 62-71, rec.).
In an order dated April 27, 1966, the lower court denied Juanita's motion to set aside the
order of October 2, 1964 on the ground that the parties themselves agreed to suspend
resolution of her petition for the delivery of her shares until after the civil action for annulment
of the project of partition has been finally settled and decided (Annex "O", p. 72, rec.).
Juanita filed a motion dated May 9, 1966 for the reconsideration of the order dated April 27,
1966 (Annex "P" pp. 73-77, rec.), to which Alejandro filed an opposition dated June 8, 1966
(Annex "Q", pp. 112-113, rec.).
Subsequently, Alejandro filed a motion dated July 25, 1966 praying that the palay deposited
with Fericsons and Ideal Rice Mill by the ten (10) tenants of the two parcels in question be
delivered to him (Annex "R", pp. 114-116, rec.),to which Juanita filed an opposition dated
July 26, 1966 (Annex "S", pp. 117-121, rec.). In an order dated September 8, 1966, the lower
court denied the motion for reconsideration of the order dated April 27, 1966, and directed
Fericsons Inc. and the Ideal Rice Mills to deliver to Alejandro or his representative the 229
cavans and 46 kilos and 325 and 1/2 cavans and 23 kilos of palay respectively deposited
with the said rice mills upon the filing by Alejandro of a bond in the amount of P12,000.00
duly approved by the court (Annex "T", pp. 122-127, rec.). Hence, this petition
for certiorari and mandamus.
The position of petitioner Juanita Lopez-Guilas should be sustained and the writs prayed for
granted.
The probate court loses jurisdiction of an estate under administration only after the payment
of all the debts and the remaining estate delivered to the heirs entitled to receive the same.
The finality of the approval of the project of partition by itself alone does not terminate the
probate proceeding (Timbol vs. Cano, 1 SCRA 1271, 1276, L-15445, April 29, 1961;
Siguiong vs. Tecson, 89 Phil., pp. 28-30). As long as the order of the distribution of the estate
has not been complied with, the probate proceedings cannot be deemed closed and
terminated Siguiong vs. Tecson, supra.); because a judicial partition is not final and
conclusive and does not prevent the heir from bringing an action to obtain his share,
provided the prescriptive period therefor has not elapsed (Mari vs. Bonilla, 83 Phil., 137). The
better practice, however, for the heir who has not received his share, is to demand his share
through a proper motion in the same probate or administration proceedings, or for reopening of the probate or administrative proceedings if it had already been closed, and not
through an independent action, which would be tried by another court or Judge which may
thus reverse a decision or order of the probate on intestate court already final and executed
and re-shuffle properties long ago distributed and disposed of (Ramos vs. Ortuzar, 89 Phil.,
730, 741-742; Timbol vs. Cano, supra.; Jingco vs. Daluz, L-5107, April 24, 1953, 92 Phil.
1082; Roman Catholic vs. Agustines, L-14710, March 29, 1960, 107 Phil., 455, 460-461).
Section 1 of Rule 90 of the Revised Rules of Court of 1964 as worded, which secures for the
heirs or legatees the right to "demand and recover their respective shares from the executor
or administrator, or any other person having the same in his possession", re-states the
aforecited doctrines.
The case of Austria vs. Heirs of Ventenilla (99 Phil. 1068) does not control the present
controversy; because the motion filed therein for the removal of the administratrix and the
appointment of a new administrator in her place was rejected by the court on the ground of
laches as it was filed after the lapse of about 38 years from October 5, 1910 when the court
issued an order settling and deciding the issues raised by the motion (L-10018, September
19, 1956, 99 Phil., 1069-1070). In the case at bar, the motion filed by petitioner for the
delivery of her share was filed on July 20, 1964, which is just more than 3 years from August
28, 1961 when the amended project of partition was approve and within 5 years from April
23, 1960 when the original project of partition was approved. Clearly, her right to claim the
two lots allocated to her under the project of partition had not yet expired. And in the light of
Section 1 of Rule 90 of the Revised Rules of Court of 1964 and the jurisprudence above
cited, the order dated December 15, 1960 of the probate court closing and terminating the
probate case did not legally terminate the testate proceedings, for her share under the
project of partition has not been delivered to her.
While it is true that the order dated October 2, 1964 by agreement of the parties suspended
resolution of her petition for the delivery of her shares until after the decision in the civil
action for the annulment of the project of partition (Civil Case 2539) she filed on April 10,
1964; the said order lost its validity and efficacy when the herein petitioner filed on June 11,
1965 an amended complaint in said Civil Case 2539 wherein she recognized the partial
legality and validity of the said project of partition insofar as the allocation in her favor of lots
Nos. 3368 and 3441 in the delivery of which she has been insisting all along (pp. 106-107,
rec.).
WHEREFORE, judgment is hereby rendered:
1. Granting the writs prayed for;
2. Setting aside the orders of the respondent court dated October 2, 1964 and April 27, 1966,
as null and void; and, without prejudice to the continuance of Civil Case No. 2539, which, by
reason of this decision, involves no longer Lots 3368 and 3441 of the Bacolor Cadastre, .
3. Directing.
(a) the Register of Deeds of Pampanga to cancel TCT No. 26638-R covering
the aforesaid lots Nos. 3368 and 3441 of the Bacolor Cadastre and to issue
anew Transfer Certificate of Title covering the said two lots in the name of
herein petitioner Juanita Lopez Guilas; and
(b) the respondent Alejandro Lopez
(1) to deliver to herein petitioner Juanita Lopez Guilas the possession of lots
Nos. 3368 and 3441;
(2) to deliver and/or pay to herein, petitioner all the rents, crops or income
collected by him from said lots Nos. 3368 and 3441 from April 23, 1960 until
the possession of the two aforementioned lots is actually delivered to her, or
their value based on the current market price; and
(3) to pay the costs.

So ordered.
Concepcion, C.J., Reyes, J.B.L., Makalintal, Zaldivar, Castro, Fernando, Teehankee,
Barredo and Villamor, JJ., concur.
epublic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 169454
December 27, 2007
THE HEIRS OF MARCELINO DORONIO, NAMELY: REGINA AND FLORA, BOTH

SURNAMED DORONIO,Petitioners,
vs.
HEIRS OF FORTUNATO DORONIO, NAMELY: TRINIDAD ROSALINA DORONIOBALMES, MODING DORONIO, FLORENTINA DORONIO, AND ANICETA ALCANTARAMANALO, Respondents.
DECISION
REYES, R.T., J.:
For Our review on certiorari is the Decision1 of the Court of Appeals (CA) reversing that2 of
the Regional Trial Court (RTC), Branch 45, Anonas, Urdaneta City, Pangasinan, in an action
for reconveyance and damages. The CA declared respondents as rightful owners of one-half
of the subject property and directed petitioners to execute a registerable document
conveying the same to respondents.
The Facts
Spouses Simeon Doronio and Cornelia Gante, now both deceased, were the registered
owners of a parcel of land located at Barangay Cabalitaan, Asingan, Pangasinan covered by
Original Certificate of Title (OCT) No. 352. 3 The courts below described it as follows:
Un terreno (Lote 1018), situada en el municipio de Asingan, Linda por el NE; con propriedad
de Gabriel Bernardino; con el SE con propriedad de Zacarias Najorda y Alejandro Najorda;
por el SO con propriedad de Geminiano Mendoza y por el NO con el camino para Villasis;
midiendo una extension superficial mil ciento cincuenta y dos metros cuadrados. 4
The spouses had children but the records fail to disclose their number. It is clear, however,
that Marcelino Doronio and Fortunato Doronio, now both deceased, were among them and
that the parties in this case are their heirs. Petitioners are the heirs of Marcelino Doronio,
while respondents are the heirs of Fortunato Doronio.
On April 24, 1919, a private deed of donation propter nuptias 5 was executed by spouses
Simeon Doronio and Cornelia Gante in favor of Marcelino Doronio and the latters wife,
Veronica Pico. One of the properties subject of said deed of donation is the one that it
described as follows:
Fourth A piece of residential land located in the barrio of Cabalitian but we did not measure
it, the area is bounded on the north by Gabriel Bernardino; on the east by Fortunato Doronio;
on the south by Geminiano Mendoza and on the west by a road to Villasis. Constructed on
said land is a house of light materials also a part of the dowry. Value 200.00. 6
It appears that the property described in the deed of donation is the one covered by OCT No.
352. However, there is a significant discrepancy with respect to the identity of the owner of
adjacent property at the eastern side. Based on OCT No. 352, the adjacent owners are
Zacarias Najorda and Alejandro Najorda, whereas based on the deed of donation, the owner
of the adjacent property is Fortunato Doronio. Furthermore, said deed of donation remained
a private document as it was never notarized. 7
Both parties have been occupying the subject land for several decades 8 although they have
different theories regarding its present ownership. According to petitioners, they are now the
owners of the entire property in view of the private deed of donation propter nuptias in favor
of their predecessors, Marcelino Doronio and Veronica Pico.
Respondents, on the other hand, claim that only half of the property was actually
incorporated in the said deed of donation because it stated that Fortunato Doronio, instead
of Zacarias Najorda and Alejandro Najorda, is the owner of the adjacent property at the
eastern side. Respondents posit that the donors respected and segregated the possession
of Fortunato Doronio of the eastern half of the land. They are the ones who have been
possessing said land occupied by their predecessor, Fortunato Doronio.
Eager to obtain the entire property, the heirs of Marcelino Doronio and Veronica Pico filed, on
January 11, 1993, before the RTC in Urdaneta, Pangasinan a petition "For the Registration
of a Private Deed of Donation"9 docketed as Petition Case No. U-920. No respondents were
named in the said petition10 although notices of hearing were posted on the bulletin boards of
Barangay Cabalitaan, Municipalities of Asingan and Lingayen. 11
During the hearings, no one interposed an objection to the petition. 12 After the RTC ordered a
general default,13the petition was eventually granted on September 22, 1993. This led to the
registration of the deed of donation, cancellation of OCT No. 352 and issuance of a new
Transfer Certificate of Title (TCT) No. 44481 in the names of Marcelino Doronio and Veronica
Pico.14 Thus, the entire property was titled in the names of petitioners predecessors.
On April 28, 1994, the heirs of Fortunato Doronio filed a pleading before the RTC in the form
of a petition in the same Petition Case No. U-920. The petition was for the reconsideration of
the decision of the RTC that ordered the registration of the subject deed of donation. It was
prayed in the petition that an order be issued declaring null and void the registration of the
private deed of donation and that TCT No. 44481 be cancelled. However, the petition was
dismissed on May 13, 1994 on the ground that the decision in Petition Case No. U-920 had
already become final as it was not appealed.
Determined to remain in their possessed property, respondent heirs of Fortunato Doronio (as
plaintiffs) filed an action for reconveyance and damages with prayer for preliminary
injunction15 against petitioner heirs of Marcelino Doronio (as defendants) before the RTC,
Branch 45, Anonas, Urdaneta City, Pangasinan. Respondents contended, among others,
that the subject land is different from what was donated as the descriptions of the property
under OCT No. 352 and under the private deed of donation were different. They posited that
spouses Simeon Doronio and Cornelia Gante intended to donate only one-half of the
property.
During the pre-trial conference, the parties stipulated, among others, that the property was
originally covered by OCT No. 352 which was cancelled by TCT No. 44481. They also
agreed that the issues are: (1) whether or not there was a variation in the description of the
property subject of the private deed of donation and OCT No. 352; (2) whether or not
respondents had acquired one-half of the property covered by OCT No. 352 by acquisitive
prescription; (3) whether or not the transfer of the whole property covered by OCT No. 352
on the basis of the registration of the private deed of donation notwithstanding the
discrepancy in the description is valid; (4) whether or not respondents are entitled to
damages; and (5) whether or not TCT No. 44481 is valid. 16
RTC Decision
After due proceedings, the RTC ruled in favor of petitioner heirs of Marcelino Doronio
(defendants). It concluded that the parties admitted the identity of the land which they all
occupy;17 that a title once registered under the torrens system cannot be defeated by
adverse, open and notorious possession or by prescription; 18 that the deed of donation in
consideration of the marriage of the parents of petitioners is valid, hence, it led to the
eventual issuance of TCT No. 44481 in the names of said parents; 19 and that respondent
heirs of Fortunato Doronio (plaintiffs) are not entitled to damages as they are not the rightful
owners of the portion of the property they are claiming. 20
The RTC disposed of the case, thus:
WHEREFORE, premises considered, the Court hereby renders judgment DISMISSING the
herein Complaint filed by plaintiffs against defendants. 21
Disagreeing with the judgment of the RTC, respondents appealed to the CA. They argued
that the trial court erred in not finding that respondents predecessor-in-interest acquired onehalf of the property covered by OCT No. 352 by tradition and/or intestate succession; that the
deed of donation dated April 26, 1919 was null and void; that assuming that the deed of
donation was valid, only one-half of the property was actually donated to Marcelino Doronio
and Veronica Pico; and that respondents acquired ownership of the other half portion of the
property by acquisitive prescription. 22
CA Disposition
In a Decision dated January 26, 2005, the CA reversed the RTC decision with the following
disposition:
WHEREFORE, the assailed Decision dated June 28, 2002 is REVERSED and SET ASIDE.
Declaring the appellants as rightful owners of one-half of the property now covered by TCT
No. 44481, the appellees are hereby directed to execute a registerable document conveying
the same to appellants.
SO ORDERED.23
The appellate court determined that "(t)he intention to donate half of the disputed property to
appellees predecessors can be gleaned from the disparity of technical descriptions
appearing in the title (OCT No. 352) of spouses Simeon Doronio and Cornelia Gante and in
the deed of donation propter nuptias executed on April 24, 1919 in favor of appellees
predecessors."24
The CA based its conclusion on the disparity of the following technical descriptions of the
property under OCT No. 352 and the deed of donation, to wit:
The court below described the property covered by OCT No. 352 as follows:
"Un terreno (Lote 1018), situada en el municipio de Asingan, Linda por el NE; con propriedad
de Gabriel Bernardino; con el SE con propriedad de Zacarias Najorda y Alejandro Najorda;
por el SO con propriedad de Geminiano Mendoza y por el NO con el camino para Villasis;
midiendo una extension superficial mil ciento cincuenta y dos metros cuadrados."
On the other hand, the property donated to appellees predecessors was described in the
deed of donation as:
"Fourth A piece of residential land located in the barrio of Cabalitian but we did not
measure it, the area is bounded on the north by Gabriel Bernardino; on the east by Fortunato
Doronio; on the south by Geminiano Mendoza and on the west by a road to Villasis.
Constructed on said land is a house of light materials also a part of the dowry. Value
200.00."25 (Emphasis ours)
Taking note "that the boundaries of the lot donated to Marcelino Doronio and Veronica Pico
differ from the boundaries of the land owned by spouses Simeon Doronio and Cornelia
Gante," the CA concluded that spouses Simeon Doronio and Cornelia Gante donated only
half of the property covered by OCT No. 352.26
Regarding the allegation of petitioners that OCT No. 352 is inadmissible in evidence, the CA
pointed out that, "while the OCT is written in the Spanish language, this document already
forms part of the records of this case for failure of appellees to interpose a timely objection
when it was offered as evidence in the proceedings a quo. It is a well-settled rule that any
objection to the admissibility of such evidence not raised will be considered waived and said
evidence will have to form part of the records of the case as competent and admitted
evidence."27
The CA likewise ruled that the donation of the entire property in favor of petitioners
predecessors is invalid on the ground that it impairs the legitime of respondents
predecessor, Fortunato Doronio. On this aspect, the CA reasoned out:
Moreover, We find the donation of the entire property in favor of appellees predecessors
invalid as it impairs the legitime of appellants predecessor. Article 961 of the Civil Code is
explicit. "In default of testamentary heirs, the law vests the inheritance, x x x, in the legitimate
x x x relatives of the deceased, x x x." As Spouses Simeon Doronio and Cornelia Gante died
intestate, their property shall pass to their lawful heirs, namely: Fortunato and Marcelino
Doronio. Donating the entire property to Marcelino Doronio and Veronica Pico and excluding
another heir, Fortunato, tantamounts to divesting the latter of his rightful share in his parents
inheritance. Besides, a persons prerogative to make donations is subject to certain
limitations, one of which is that he cannot give by donation more than what he can give by
will (Article 752, Civil Code). If he does, so much of what is donated as exceeds what he can
give by will is deemed inofficious and the donation is reducible to the extent of such excess. 28
Petitioners were not pleased with the decision of the CA. Hence, this petition under Rule 45.
Issues
Petitioners now contend that the CA erred in:
1. DECLARING ADMISSIBILITY OF THE ORIGINAL CERTIFICATE OF TITLE NO.
352 DESPITE OF LACK OF TRANSLATION THEREOF.
2. (RULING THAT) ONLY HALF OF THE DISPUTED PROPERTY WAS DONATED
TO THE PREDECESSORS-IN-INTEREST OF THE HEREIN APPELLANTS.
3. (ITS) DECLARATION THAT THE DONATION PROPTER NUPTIAS IS
INNOFICIOUS, IS PREMATURE, AND THUS IT IS ILLEGAL AND
UNPROCEDURAL.29
Our Ruling
OCT No. 352 in Spanish Although Not
Translated into English or Filipino Is
Admissible For Lack of Timely Objection
Petitioners fault the CA for admitting OCT No. 352 in evidence on the ground that it is written
in Spanish language. They posit that "(d)ocumentary evidence in an unofficial language shall
not be admitted as evidence, unless accompanied with a translation into English or
Filipino."30
The argument is untenable. The requirement that documents written in an unofficial

language must be accompanied with a translation in English or Filipino as a prerequisite for
its admission in evidence must be insisted upon by the parties at the trial to enable the court,
where a translation has been impugned as incorrect, to decide the issue. 31 Where such
document, not so accompanied with a translation in English or Filipino, is offered in evidence
and not objected to, either by the parties or the court, it must be presumed that the language
in which the document is written is understood by all, and the document is admissible in
evidence.32
Moreover, Section 36, Rule 132 of the Revised Rules of Evidence provides:
SECTION 36. Objection. Objection to evidence offered orally must be made immediately
after the offer is made.
Objection to a question propounded in the course of the oral examination of a witness shall
be made as soon as the grounds therefor shall become reasonably apparent.
An offer of evidence in writing shall be objected to within three (3) days after notice of the
offer unless a different period is allowed by the court.
In any case, the grounds for the objections must be specified. (Emphasis ours)
Since petitioners did not object to the offer of said documentary evidence on time, it is now
too late in the day for them to question its admissibility. The rule is that evidence not objected
may be deemed admitted and may be validly considered by the court in arriving at its
judgment.33 This is true even if by its nature, the evidence is inadmissible and would have
surely been rejected if it had been challenged at the proper time. 34
As a matter of fact, instead of objecting, petitioners admitted the contents of Exhibit "A," that
is, OCT No. 352 in their comment35 on respondents formal offer of documentary evidence. In
the said comment, petitioners alleged, among others, that "Exhibits A, B, C, D, E, F and G,
are admitted but not for the purpose they are offered because these exhibits being public
and official documents are the best evidence of that they contain and not for what a party
would like it to prove."36 Said evidence was admitted by the RTC.37 Once admitted without
objection, even though not admissible under an objection, We are not inclined now to reject
it.38 Consequently, the evidence that was not objected to became property of the case, and
all parties to the case are considered amenable to any favorable or unfavorable effects
resulting from the said evidence.39
Issues on Impairment of Legitime
Should Be Threshed Out in a Special
Proceeding, Not in Civil Action for
Reconveyance and Damages
On the other hand, petitioners are correct in alleging that the issue regarding the impairment
of legitime of Fortunato Doronio must be resolved in an action for the settlement of estates of
spouses Simeon Doronio and Cornelia Gante. It may not be passed upon in an action for
reconveyance and damages. A probate court, in the exercise of its limited jurisdiction, is the
best forum to ventilate and adjudge the issue of impairment of legitime as well as other
related matters involving the settlement of estate.40
An action for reconveyance with damages is a civil action, whereas matters relating to
settlement of the estate of a deceased person such as advancement of property made by
the decedent, partake of the nature of a special proceeding. Special proceedings require the
application of specific rules as provided for in the Rules of Court. 41
As explained by the Court in Natcher v. Court of Appeals: 42
Section 3, Rule 1 of the 1997 Rules of Civil Procedure defines civil action and special
proceedings, in this wise:
x x x a) A civil action is one by which a party sues another for the enforcement or protection
of a right, or the prevention or redress of a wrong.
A civil action may either be ordinary or special. Both are governed by the rules for ordinary
civil actions, subject to specific rules prescribed for a special civil action.
xxxx
c) A special proceeding is a remedy by which a party seeks to establish a status, a right or a
particular fact.
As could be gleaned from the foregoing, there lies a marked distinction between an action
and a special proceeding. An action is a formal demand of ones right 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. 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.
Usually, in special proceedings, no formal pleadings are required unless the statute
expressly so provides. In special proceedings, the remedy is granted generally upon an
application or motion.
Citing American Jurisprudence, a noted authority in Remedial Law expounds further:
It may accordingly be stated generally that actions include those proceedings which are
instituted and prosecuted according to the ordinary rules and provisions relating to actions at
law or suits in equity, and that special proceedings include those proceedings which are not
ordinary in this sense, but is instituted and prosecuted according to some special mode as in
the case of proceedings commenced without summons and prosecuted without regular
pleadings, which are characteristics of ordinary actions x x x. A special proceeding must
therefore be in the nature of a distinct and independent proceeding for particular relief, such
as may be instituted independently of a pending action, by petition or motion upon notice.
Applying these principles, an action for reconveyance and annulment of title with damages is
a civil action, whereas matters relating to settlement of the estate of a deceased person such
as advancement of property made by the decedent, partake of the nature of a special
proceeding, which concomitantly requires the application of specific rules as provided for in
the Rules of Court.
Clearly, matters which involve settlement and distribution of the estate of the decedent fall
within the exclusive province of the probate court in the exercise of its limited jurisdiction.
Thus, under Section 2, Rule 90 of the Rules of Court, questions as to advancement made or
alleged to have been made by the deceased to any heir may be heard and determined by
the court having jurisdiction of the estate proceedings, and the final order of the court
thereon shall be binding on the person raising the questions and on the heir.
While it may be true that the Rules used the word "may," it is nevertheless clear that the
same provision contemplates a probate court when it speaks of the "court having jurisdiction
of the estate proceedings."
Corollarily, the Regional Trial Court in the instant case, acting in its general jurisdiction, is
devoid of authority to render an adjudication and resolve the issue of advancement of the
real property in favor of herein petitioner Natcher, inasmuch as Civil Case No. 71075 for
reconveyance and annulment of title with damages is not, to our mind, the proper vehicle to
thresh out said question. Moreover, under the present circumstances, the RTC of Manila,
Branch 55, was not properly constituted as a probate court so as to validly pass upon the
question of advancement made by the decedent Graciano Del Rosario to his wife, herein
petitioner Natcher.
We likewise find merit in petitioners contention that before any conclusion about the legal
share due to a compulsory heir may be reached, it is necessary that certain steps be taken
first.43 The net estate of the decedent must be ascertained, by deducting all payable
obligations and charges from the value of the property owned by the deceased at the time of
his death; then, all donations subject to collation would be added to it. With the partible
estate thus determined, the legitime of the compulsory heir or heirs can be established; and
only then can it be ascertained whether or not a donation had prejudiced the legitimes. 44
Declaration of Validity of Donation
Can Be Challenged by an Interested
Party Not Impleaded in Petition for
Quieting of Title or Declaratory Relief
or Where There is No Res Judicata.
Moreover, This Court Can Consider
a Factual Matter or Unassigned Error
in the Interest of Substantial Justice.
Nevertheless, petitioners cannot preclude the determination of validity of the deed of
donation on the ground that (1) it has been impliedly admitted by respondents; (2) it has
already been determined with finality by the RTC in Petition Case No. U-920; or (3) the only
issue in an action for reconveyance is who has a better right over the land. 45
The validity of the private deed of donation propter nuptias in favor of petitioners
predecessors was one of the issues in this case before the lower courts. The pre-trial
order46 of the RTC stated that one of the issues before it is "(w)hether or not the transfer of
the whole property covered by OCT No. 352 on the basis of the private deed of donation
notwithstanding the discrepancy in the description is valid." Before the CA, one of the errors
assigned by respondents is that "THE TRIAL COURT ERRED IN NOT FINDING THAT THE
PRIVATE DEED OF DONATION DATED APRIL 26, 1919 WAS NULL AND VOID."47
The issue of the validity of donation is likewise brought to Us by petitioners as they stated in
their Memorandum48that one of the issues to be resolved is regarding the alleged fact that
"THE HONORABLE COURT OF APPEALS ERRED IN FINDING THE DONATION INVALID."
We are thus poised to inspect the deed of donation and to determine its validity.
We cannot agree with petitioners contention that respondents may no longer question the
validity of the deed of donation on the ground that they already impliedly admitted it. Under
the provisions of the Civil Code, a void contract is inexistent from the beginning. The right to
set up the defense of its illegality cannot be waived. 49 The right to set up the nullity of a void
or non-existent contract is not limited to the parties as in the case of annullable or voidable
contracts; it is extended to third persons who are directly affected by the contract. 50
Consequently, although respondents are not parties in the deed of donation, they can set up
its nullity because they are directly affected by the same. 51 The subject of the deed being the
land they are occupying, its enforcement will definitely affect them.
Petitioners cannot also use the finality of the RTC decision in Petition Case No. U-920 52 as a
shield against the verification of the validity of the deed of donation. According to petitioners,
the said final decision is one for quieting of title.53 In other words, it is a case for declaratory
relief under Rule 64 (now Rule 63) of the Rules of Court, which provides:
SECTION 1. Who may file petition. Any person interested under a deed, will, contract or
other written instrument, or whose rights are affected by a statute, executive order or
regulation, or ordinance, may, before breach or violation thereof, bring an action to determine
any question of construction or validity arising under the instrument or statute and for a
declaration of his rights or duties thereunder.
An action for the reformation of an instrument, to quiet title to real property or remove clouds
therefrom, or to consolidate ownership under Article 1607 of the Civil Code, may be brought
under this rule.
SECTION 2. Parties. All persons shall be made parties who have or claim any interest
which would be affected by the declaration; and no declaration shall, except as otherwise
provided in these rules, prejudice the rights of persons not parties to the action. (Emphasis
ours)
However, respondents were not made parties in the said Petition Case No. U-920. Worse,
instead of issuing summons to interested parties, the RTC merely allowed the posting of
notices on the bulletin boards of Barangay Cabalitaan, Municipalities of Asingan and
Lingayen, Pangasinan. As pointed out by the CA, citing the ruling of the RTC:
1wphi1
x x x In the said case or Petition No. U-920, notices were posted on the bulletin boards of
barangay Cabalitaan, Municipalities of Asingan and Lingayen, Pangasinan, so that there was
a notice to the whole world and during the initial hearing and/or hearings, no one interposed
objection thereto.54
Suits to quiet title are not technically suits in rem, nor are they, strictly speaking, in
personam, but being against the person in respect of the res, these proceedings are
characterized as quasi in rem.55 The judgment in such proceedings is conclusive only
between the parties.56 Thus, respondents are not bound by the decision in Petition Case No.
U-920 as they were not made parties in the said case.
The rules on quieting of title57 expressly provide that any declaration in a suit to quiet title
shall not prejudice persons who are not parties to the action.
That respondents filed a subsequent pleading 58 in the same Petition Case No. U-920 after
the decision there had become final did not change the fact that said decision became final
without their being impleaded in the case. Said subsequent pleading was dismissed on the
ground of finality of the decision. 59
Thus, the RTC totally failed to give respondents their day in court. As a result, they cannot be
bound by its orders. Generally accepted is the principle that no man shall be affected by any
proceeding to which he is a stranger, and strangers to a case are not bound by judgment
rendered by the court.60
Moreover, for the principle of res judicata to apply, the following must be present: (1) a
decision on the merits; (2) by a court of competent jurisdiction; (3) the decision is final; and
(4) the two actions involve identical parties, subject matter and causes of action. 61 The fourth
element is not present in this case. The parties are not identical because respondents were
not impleaded in Petition Case No. U-920. While the subject matter may be the same
property covered by OCT No. 352, the causes of action are different. Petition Case No. U920 is an action for declaratory relief while the case below is for recovery of property.
We are not persuaded by petitioners posture that the only issue in this action for
reconveyance is who has a better right over the land; and that the validity of the deed of
donation is beside the point.62 It is precisely the validity and enforceability of the deed of
donation that is the determining factor in resolving the issue of who has a better right over
the property. Moreover, notwithstanding procedural lapses as to the appropriateness of the
remedies prayed for in the petition filed before Us, this Court can brush aside the
technicalities in the interest of justice. In some instances, this Court even suspended its own
rules and excepted a case from their operation whenever the higher interests of justice so
demanded.63
Moreover, although respondents did not directly raise the issue of validity of the deed of
donation at the commencement of the case before the trial court, it was stipulated 64 by the
parties during the pre-trial conference. In any event, this Court has authority to inquire into
any question necessary in arriving at a just decision of a case before it. 65 Though not
specifically questioned by the parties, additional issues may also be included, if deemed
important for substantial justice to be rendered. 66
Furthermore, this Court has held that although a factual issue is not squarely raised below,
still in the interest of substantial justice, this Court is not prevented from considering a pivotal
factual matter. The Supreme Court is clothed with ample authority to review palpable errors
not assigned as such if it finds that their consideration is necessary in arriving at a just
decision.67
A rudimentary doctrine on appealed cases is that this Court is clothed with ample authority to
review matters, even if they are not assigned as errors on appeal, if it finds that their
consideration is necessary at arriving at a just decision of the case. 68 Also, 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 an error.69
Donation Propter Nuptias of Real
Property Made in a Private Instrument
Before the New Civil Code Took Effect
on August 30, 1950 is Void
We now focus on the crux of the petition, which is the validity of the deed of donation. It is
settled that only laws existing at the time of the execution of a contract are applicable to it
and not the later statutes, unless the latter are specifically intended to have retroactive
effect.70 Accordingly, the Old Civil Code applies in this case as the donation propter nuptias
was executed in 1919, while the New Civil Code took effect only on August 30, 1950.
1avvphi1
Under the Old Civil Code, donations propter nuptias must be made in a public instrument in
which the property donated must be specifically described. 71 Article 1328 of the Old Civil
Code provides that gifts propter nuptias are governed by the rules established in Title 2 of
Book 3 of the same Code. Article 633 of that title provides that the gift of real property, in
order to be valid, must appear in a public document. 72 It is settled that a donation of real
estate propter nuptias is void unless made by public instrument. 73
In the instant case, the donation propter nuptias did not become valid. Neither did it create
any right because it was not made in a public instrument. 74 Hence, it conveyed no title to the
land in question to petitioners predecessors.
Logically, then, the cancellation of OCT No. 352 and the issuance of a new TCT No. 44481 in
favor of petitioners predecessors have no legal basis. The title to the subject property
should, therefore, be restored to its original owners under OCT No. 352.
Direct reconveyance to any of the parties is not possible as it has not yet been determined in
a proper proceeding who among the heirs of spouses Simeon Doronio and Cornelia Gante is
entitled to it. It is still unproven whether or not the parties are the only ones entitled to the
properties of spouses Simeon Doronio and Cornelia Gante. As earlier intimated, there are
still things to be done before the legal share of all the heirs can be properly adjudicated. 75
Titled Property Cannot Be Acquired
By Another By Adverse Possession
or Extinctive Prescription
Likewise, the claim of respondents that they became owners of the property by acquisitive
prescription has no merit. Truth to tell, respondents cannot successfully invoke the argument
of extinctive prescription. They cannot be deemed the owners by acquisitive prescription of
the portion of the property they have been possessing. The reason is that the property was
covered by OCT No. 352. A title once registered under the torrens system cannot be
defeated even by adverse, open and notorious possession; neither can it be defeated by
prescription.76 It is notice to the whole world and as such all persons are bound by it and no
one can plead ignorance of the registration. 77
The torrens system is intended to guarantee the integrity and conclusiveness of the
certificate of registration, but it cannot be used for the perpetration of fraud against the real
owner of the registered land.78 The system merely confirms ownership and does not create it.
Certainly, it cannot be used to divest the lawful owner of his title for the purpose of
transferring it to another who has not acquired it by any of the modes allowed or recognized
by law. It cannot be used to protect a usurper from the true owner, nor can it be used as a
shield for the commission of fraud; neither does it permit one to enrich himself at the
expense of another.79 Where such an illegal transfer is made, as in the case at bar, the law
presumes that no registration has been made and so retains title in the real owner of the
land.80
Although We confirm here the invalidity of the deed of donation and of its resulting TCT No.
44481, the controversy between the parties is yet to be fully settled. The issues as to who
truly are the present owners of the property and what is the extent of their ownership remain
unresolved. The same may be properly threshed out in the settlement of the estates of the
registered owners of the property, namely: spouses Simeon Doronio and Cornelia Gante.
WHEREFORE, the appealed Decision is REVERSED AND SET ASIDE. A new one is
entered:
(1) Declaring the private deed of donation propter nuptias in favor of petitioners
predecessors NULL AND VOID; and
(2) Ordering the Register of Deeds of Pangasinan to:
(a) CANCEL Transfer Certificate of Title No. 44481 in the names of Marcelino
Doronio and Veronica Pico; and
(b) RESTORE Original Certificate of Title No. 352 in the names of its original
owners, spouses Simeon Doronio and Cornelia Gante.
SO ORDERED.
RUBEN T. REYES
Associate Justice
WE CONCUR:
Associate Justice
Chairperson
Associate Justice
Associate Justice

Associate Justice
ATT E S TATI O N
Associate Justice
Chairperson
REYNATO S. PUNO
Chief Justice
Footnotes
Rollo, pp. 39-51. Dated January 26, 2005 in CA-G.R. CV No. 76200 entitled "Heirs
of Fortunato Doronio v. Heirs of Marcelino Doronio, et al." Penned by Associate
Justice Vicente S.E. Veloso, with Associate Justices Roberto A. Barrios and Amelita
G. Tolentino, concurring.
1
Records, pp. 344-356. Dated June 28, 2002 in Civil Case No. U-6498. Penned by
Judge Joven F. Costales.
2
Rollo, pp. 43-44, 48-49.
Id. at 48-49; Exhibits "A" & "7."
Id. at 48; Exhibit "D."
Id. at 49; Exhibits "D-4" & "6."
Id.; CA rollo, pp. 37-38.
Id. at 44.
Id. at 42-43; Exhibit "5."
10
Id. at 45.
11
Id.
12
Id.
13
Id.
14
Id.
15
Civil Case No. U-6498.
16
Records, pp. 134-135.
17
CA rollo, p. 43; id. at 354.
18
Id. at 44-45; id at 354-356.
19
Id. at 45; id. at 355-356.
20
Id. at 46; id. at 356.
21
Id.
22
Id. at 46-47; CA rollo, pp. 19-20.
23
Id. at 51.
24
Id. at 48; CA rollo, p. 100.
25
Id. at 48-49; id. at 100-101.
26
Id.
27
Id. at 49-50; CA rollo, pp. 101-102.
28
Id. at 50; id. at 102.
29
Id. at 13.
30
Id. at 24.
Francisco, V.J., The Revised Rules of Court in the Philippines, Vol. VII, Part II,
1991 ed., p. 389.
31
32
Id.
People v. Pansensoy, G.R. No. 140634, September 12, 2002, 388 SCRA 669, 689;
People v. Barellano, G.R. No. 121204, December 2, 1999, 319 SCRA 567, 590.
33
Interpacific Transit, Inc. v. Aviles, G.R. No. 86062, June 6, 1990, 186 SCRA 385,
390.
34
35
Records, p. 188.
36
Id.
37
Id. at 189.
38
Interpacific Transit, Inc. v. Aviles, supra.
Quebral v. Court of Appeals, G.R. No. 101941, January 25, 1996, 252 SCRA 353,
365.
39
Natcher v. Court of Appeals, G.R. No. 133000, October 2, 2001, 366 SCRA 385,
394.
40
41
Id. at 392.
42
Supra at 391-392.
Natcher v. Court of Appeals, supra note 40, at 394; Pagkatipunan v. Intermediate

Appellate Court, G.R. No. 70722, July 3, 1991, 198 SCRA 719, 729.
43
44
Id.; Mateo v. Lagua, G.R. No. L-26270, October 30, 1969, 29 SCRA 864, 870.
45
Rollo, p. 148.
46
47
Rollo, pp. 46-47.
48
Id. at 144.
49
Civil Code, Art. 1409.
Manotok Realty, Inc. v. Court of Appeals, G.R. No. L-45038, April 30, 1987, 149
SCRA 372, 377, citing Tolentino, Civil Code of the Philippines, Vol. IV, 1973 ed., p.
604.
50
Arsenal v. Intermediate Appellate Court, G.R. No. L-66696, July 14, 1986, 143
SCRA 40, 49, citing Tolentino, Civil Code of the Philippines, Vol. IV, 1973 ed., p. 604.
51
Records, p. 14; Exhibit "C." Entitled "For the Registration of a Private Deed of
Donation The Heirs of Veronica Pico."
52
53
Rollo, p. 143.
54
Id. at 45; CA rollo, p. 97.
Realty Sales Enterprise, Inc. v. Intermediate Appellate Court, G.R. No. L-67451,
September 28, 1987, 154 SCRA 328, 348, citing McDaniel v. McElvy, 108 So. 820
(1926).
55
Foster-Gallego v. Galang, G.R. No. 130228, July 27, 2004, 435 SCRA 275, 293;
id.; Sandejas v. Robles, 81 Phil. 421, 424 (1948).
56
57
Rules of Court, Rule 64.
58
Rollo, p. 45; records, pp. 111-113.
59
Id.; CA rollo, p. 97.
Domingo v. Scheer, G.R. No. 154745, January 29, 2004, 421 SCRA 468, 483;
Matuguina Integrated Wood Products, Inc. v. Court of Appeals, G.R. No. 98310,
October 24, 1996, 263 SCRA 490, 505-506.
60
Alejandrino v. Court of Appeals, G.R. No. 114151, September 17, 1998, 295 SCRA
536, 554; Bernardo v. National Labor Relations Commission, G.R. No. 105819,
March 15, 1996, 255 SCRA 108, 118.
61
62
Rollo, p. 148.
Government of the United States of America v. Purganan, G.R. No. 148571,

September 24, 2002, 389 SCRA 623, 651; Fortich v. Corona, G.R. No. 131457, April
24, 1998, 289 SCRA 624, 646; Piczon v. Court of Appeals, G.R. Nos. 76378-81,
September 24, 1990, 190 SCRA 31, 38.
63
64
Records, p. 134.
Serrano v. National Labor Relations Commission, G.R. No. 117040, May 4, 2000,
331 SCRA 331, 338, citing Korean Airlines Co., Ltd. v. Court of Appeals, G.R. Nos.
114061 & 113842, August 3, 1994, 234 SCRA 717, 725; Vda. de Javellana v. Court of
Appeals, G.R. No. L-60129, July 29, 1983, 123 SCRA 799, 805.
65
Velarde v. Social Justice Society, G.R. No. 159357, April 28, 2004, 428 SCRA 283,
312.
66
Abra Valley College, Inc. v. Aquino, G.R. No. L-39086, June 15, 1988, 162 SCRA
106, 116; Perez v. Court of Appeals, G.R. No. L-56101, February 20, 1984, 127
SCRA 636, 645.
67
Nordic Asia Limited v. Court of Appeals, G.R. No. 111159, June 10, 2003, 403
SCRA 390, 396.
68
Id.; Sesbreo v. Central Board of Assessment Appeals, G.R. No. 106588, March
24, 1997, 270 SCRA 360, 370; Roman Catholic Archbishop of Manila v. Court of
Appeals, G.R. Nos. 77425 & 77450, June 19, 1991, 198 SCRA 300; Soco v.
Militante, G.R. No. L-58961, June 28, 1983, 123 SCRA 160, 183; Ortigas, Jr. v.
Lufthansa German Airlines, G.R. No. L-28773, June 30, 1975, 64 SCRA 610, 633.
69
Valencia v. Locquiao, G.R. No. 122134, October 3, 2003, 412 SCRA 600, 611;
Ortigas & Co., Ltd. v. Court of Appeals, G.R. No. 126102, December 4, 2000, 346
SCRA 748, 755; Philippine Virginia Tobacco Administration v. Gonzales, G.R. No. L34628, July 30, 1979, 92 SCRA 172, 185.
70
71
Valencia v. Locquiao, supra at 610.
Id.; Velasquez v. Biala, 18 Phil. 231, 234-235 (1911); Camagay v. Lagera, 7 Phil.
397 (1907).
72
Valencia v. Locquiao, supra; Solis v. Barroso, 53 Phil. 912, 914 (1928); Velasquez
v. Biala, supra; Camagay v. Lagera, supra at 398.
73
74
Solis v. Barroso, supra note 73.
75
Pagkatipunan v. Intermediate Appellate Court, supra note 43, at 732.
Ong v. Court of Appeals, G.R. No. 142056, April 19, 2001, 356 SCRA 768, 771;
Brusas v. Court of Appeals, G.R. No. 126875, August 26, 1999, 313 SCRA 176, 183;
Rosales v. Court of Appeals, G.R. No. 137566, February 28, 2001, 353 SCRA 179.
76
Brusas v. Court of Appeals, supra; Jacob v. Court of Appeals, G.R. No. 92159, July
1, 1993, 224 SCRA 189, 193-194.
77
Francisco v. Court of Appeals, G.R. No. 130768, March 21, 2002, 379 SCRA 638,
646; Bayoca v. Nogales, G.R. No. 138210, September 12, 2000, 340 SCRA 154,
169.
78
79
Bayoca v. Nogales, supra.
Balangcad v. Justices of the Court of Appeals, G.R. No. 84888, February 12, 1992,
206 SCRA 169, 175.
80

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 164108
May 8, 2009
ALFREDO HILADO, LOPEZ SUGAR CORPORATION, FIRST FARMERS HOLDING

CORPORATION, Petitioners,
vs.
THE HONORABLE COURT OF APPEALS, THE HONORABLE AMOR A. REYES,
Presiding Judge, Regional Trial Court of Manila, Branch 21 and ADMINISTRATRIX
JULITA CAMPOS BENEDICTO, Respondents.
DECISION
TINGA, J.:
The well-known sugar magnate Roberto S. Benedicto died intestate on 15 May 2000. He
was survived by his wife, private respondent Julita Campos Benedicto (administratrix
Benedicto), and his only daughter, Francisca Benedicto-Paulino. 1 At the time of his death,
there were two pending civil cases against Benedicto involving the petitioners. The first, Civil
Case No. 95-9137, was then pending with the Regional Trial Court (RTC) of Bacolod City,
Branch 44, with petitioner Alfredo Hilado as one of the plaintiffs therein. The second, Civil
Case No. 11178, was then pending with the RTC of Bacolod City, Branch 44, with petitioners
Lopez Sugar Corporation and First Farmers Holding Corporation as one of the plaintiffs
therein.2
On 25 May 2000, private respondent Julita Campos Benedicto filed with the RTC of Manila a
petition for the issuance of letters of administration in her favor, pursuant to Section 6, Rule
78 of the Revised Rules of Court. The petition was raffled to Branch 21, presided by
respondent Judge Amor A. Reyes. Said petition acknowledged the value of the assets of the
decedent to be P5 Million, "net of liabilities."3 On 2 August 2000, the Manila RTC issued an
order appointing private respondent as administrator of the estate of her deceased husband,
and issuing letters of administration in her favor.4 In January 2001, private respondent
submitted an Inventory of the Estate, Lists of Personal and Real Properties, and Liabilities of
the Estate of her deceased husband. 5 In the List of Liabilities attached to the inventory,
private respondent included as among the liabilities, the above-mentioned two pending
claims then being litigated before the Bacolod City courts.6 Private respondent stated that the
amounts of liability corresponding to the two cases as P136,045,772.50 for Civil Case No.
95-9137 and P35,198,697.40 for Civil Case No. 11178. 7 Thereafter, the Manila RTC required
private respondent to submit a complete and updated inventory and appraisal report
pertaining to the estate.8
On 24 September 2001, petitioners filed with the Manila RTC a Manifestation/Motion Ex
Abundanti Cautela,9praying that they be furnished with copies of all processes and orders
pertaining to the intestate proceedings. Private respondent opposed the
manifestation/motion, disputing the personality of petitioners to intervene in the intestate
proceedings of her husband. Even before the Manila RTC acted on the manifestation/motion,
petitioners filed an omnibus motion praying that the Manila RTC set a deadline for the
submission by private respondent of the required inventory of the decedents
estate.10 Petitioners also filed other pleadings or motions with the Manila RTC, alleging
lapses on the part of private respondent in her administration of the estate, and assailing the
inventory that had been submitted thus far as unverified, incomplete and inaccurate.
On 2 January 2002, the Manila RTC issued an order denying the manifestation/motion, on
the ground that petitioners are not interested parties within the contemplation of the Rules of
Court to intervene in the intestate proceedings.11 After the Manila RTC had denied
petitioners motion for reconsideration, a petition for certiorari was filed with the Court of
Appeals. The petition argued in general that petitioners had the right to intervene in the
intestate proceedings of Roberto Benedicto, the latter being the defendant in the civil cases
they lodged with the Bacolod RTC.
On 27 February 2004, the Court of Appeals promulgated a decision 12 dismissing the petition
and declaring that the Manila RTC did not abuse its discretion in refusing to allow petitioners
to intervene in the intestate proceedings. The allowance or disallowance of a motion to
intervene, according to the appellate court, is addressed to the sound discretion of the court.
The Court of Appeals cited the fact that the claims of petitioners against the decedent were
in fact contingent or expectant, as these were still pending litigation in separate proceedings
before other courts.
Hence, the present petition. In essence, petitioners argue that the lower courts erred in
denying them the right to intervene in the intestate proceedings of the estate of Roberto
Benedicto. Interestingly, the rules of procedure they cite in support of their argument is not
the rule on intervention, but rather various other provisions of the Rules on Special
Proceedings.13
To recall, petitioners had sought three specific reliefs that were denied by the courts a quo.
First, they prayed that they be henceforth furnished "copies of all processes and orders
issued" by the intestate court as well as the pleadings filed by administratrix Benedicto with
the said court.14 Second, they prayed that the intestate court set a deadline for the
submission by administratrix Benedicto to submit a verified and complete inventory of the
estate, and upon submission thereof, order the inheritance tax appraisers of the Bureau of
Internal Revenue to assist in the appraisal of the fair market value of the same. 15 Third,
petitioners moved that the intestate court set a deadline for the submission by the
administrator of her verified annual account, and, upon submission thereof, set the date for
her examination under oath with respect thereto, with due notice to them and other parties
interested in the collation, preservation and disposition of the estate. 16
The Court of Appeals chose to view the matter from a perspective solely informed by the rule
on intervention. We can readily agree with the Court of Appeals on that point. Section 1 of
Rule 19 of the 1997 Rules of Civil Procedure requires that an intervenor "has a legal interest
in the matter in litigation, or in the success of either of the parties, or an interest against both,
or is so situated as to be adversely affected by a distribution or other disposition of property
in the custody of the court x x x" While the language of Section 1, Rule 19 does not literally
preclude petitioners from intervening in the intestate proceedings, case law has consistently
held that the legal interest required of an intervenor "must be actual and material, direct and
immediate, and not simply contingent and expectant." 17
Nonetheless, it is not immediately evident that intervention under the Rules of Civil
Procedure necessarily comes into operation in special proceedings. The settlement of
estates of deceased persons fall within the rules of special proceedings under the Rules of
Court,18 not the Rules on Civil Procedure. Section 2, Rule 72 further provides that "[i]n the
absence of special provisions, the rules provided for in ordinary actions shall be, as far as
practicable, applicable to special proceedings."
We can readily conclude that notwithstanding Section 2 of Rule 72, intervention as set forth
under Rule 19 does not extend to creditors of a decedent whose credit is based on a
contingent claim. The definition of "intervention" under Rule 19 simply does not
accommodate contingent claims.
Yet, even as petitioners now contend before us that they have the right to intervene in the
intestate proceedings of Roberto Benedicto, the reliefs they had sought then before the RTC,
and also now before us, do not square with their recognition as intervenors. In short, even if
it were declared that petitioners have no right to intervene in accordance with Rule 19, it
would not necessarily mean the disallowance of the reliefs they had sought before the RTC
since the right to intervene is not one of those reliefs.
To better put across what the ultimate disposition of this petition should be, let us now turn
our focus to the Rules on Special Proceedings.
In several instances, the Rules on Special Proceedings entitle "any interested persons" or
"any persons interested in the estate" to participate in varying capacities in the testate or
intestate proceedings. Petitioners cite these provisions before us, namely: (1) Section 1,
Rule 79, which recognizes the right of "any person interested" to oppose the issuance of
letters testamentary and to file a petition for administration;" (2) Section 3, Rule 79, which
mandates the giving of notice of hearing on the petition for letters of administration to the
known heirs, creditors, and "to any other persons believed to have interest in the estate;" (3)
Section 1, Rule 76, which allows a "person interested in the estate" to petition for the
allowance of a will; (4) Section 6 of Rule 87, which allows an individual interested in the
estate of the deceased "to complain to the court of the concealment, embezzlement, or
conveyance of any asset of the decedent, or of evidence of the decedents title or interest
therein;" (5) Section 10 of Rule 85, which requires notice of the time and place of the
examination and allowance of the Administrators account "to persons interested;" (6)
Section 7(b) of Rule 89, which requires the court to give notice "to the persons interested"
before it may hear and grant a petition seeking the disposition or encumbrance of the
properties of the estate; and (7) Section 1, Rule 90, which allows "any person interested in
the estate" to petition for an order for the distribution of the residue of the estate of the
decedent, after all obligations are either satisfied or provided for.
Had the claims of petitioners against Benedicto been based on contract, whether express or
implied, then they should have filed their claim, even if contingent, under the aegis of the
notice to creditors to be issued by the court immediately after granting letters of
administration and published by the administrator immediately after the issuance of such
notice.19 However, it appears that the claims against Benedicto were based on tort, as they
arose from his actions in connection with Philsucom, Nasutra and Traders Royal Bank. Civil
actions for tort or quasi-delict do not fall within the class of claims to be filed under the notice
to creditors required under Rule 86.20These actions, being as they are civil, survive the death
of the decedent and may be commenced against the administrator pursuant to Section 1,
Rule 87. Indeed, the records indicate that the intestate estate of Benedicto, as represented
by its administrator, was successfully impleaded in Civil Case No. 11178, whereas the other
civil case21 was already pending review before this Court at the time of Benedictos death.
Evidently, the merits of petitioners claims against Benedicto are to be settled in the civil
cases where they were raised, and not in the intestate proceedings. In the event the claims
for damages of petitioners are granted, they would have the right to enforce the judgment
against the estate. Yet until such time, to what extent may they be allowed to participate in
the intestate proceedings?
Petitioners place heavy reliance on our ruling in Dinglasan v. Ang Chia, 22 and it does provide
us with guidance on how to proceed. A brief narration of the facts therein is in order.
Dinglasan had filed an action for reconveyance and damages against respondents, and
during a hearing of the case, learned that the same trial court was hearing the intestate
proceedings of Lee Liong to whom Dinglasan had sold the property years earlier. Dinglasan
thus amended his complaint to implead Ang Chia, administrator of the estate of her late
husband. He likewise filed a verified claim-in-intervention, manifesting the pendency of the
civil case, praying that a co-administrator be appointed, the bond of the administrator be
increased, and that the intestate proceedings not be closed until the civil case had been
terminated. When the trial court ordered the increase of the bond and took cognizance of the
pending civil case, the administrator moved to close the intestate proceedings, on the ground
that the heirs had already entered into an extrajudicial partition of the estate. The trial court
refused to close the intestate proceedings pending the termination of the civil case, and the
Court affirmed such action.
If the appellants filed a claim in intervention in the intestate proceedings it was only pursuant
to their desire to protect their interests it appearing that the property in litigation is involved in
said proceedings and in fact is the only property of the estate left subject of administration
and distribution; and the court is justified in taking cognizance of said civil case because of
the unavoidable fact that whatever is determined in said civil case will necessarily reflect and
have a far reaching consequence in the determination and distribution of the estate. In so
taking cognizance of civil case No. V-331 the court does not assume general jurisdiction over
the case but merely makes of record its existence because of the close interrelation of the
two cases and cannot therefore be branded as having acted in excess of its jurisdiction.
Appellants' claim that the lower court erred in holding in abeyance the closing of the intestate
proceedings pending determination of the separate civil action for the reason that there is no
rule or authority justifying the extension of administration proceedings until after the separate
action pertaining to its general jurisdiction has been terminated, cannot be entertained.
Section 1, Rule 88, of the Rules of Court, expressly provides that "action to recover real or
personal property from the estate or to enforce a lien thereon, and actions to recover
damages for an injury to person or property, real or personal, may be commenced against
the executor or administrator." What practical value would this provision have if the action
against the administrator cannot be prosecuted to its termination simply because the heirs
desire to close the intestate proceedings without first taking any step to settle the ordinary
civil case? This rule is but a corollary to the ruling which declares that questions concerning
ownership of property alleged to be part of the estate but claimed by another person should
be determined in a separate action and should be submitted to the court in the exercise of its
general jurisdiction. These rules would be rendered nugatory if we are to hold that an
intestate proceedings can be closed by any time at the whim and caprice of the heirs x x
x23 (Emphasis supplied) [Citations omitted]
It is not clear whether the claim-in-intervention filed by Dinglasan conformed to an action-inintervention under the Rules of Civil Procedure, but we can partake of the spirit behind such
pronouncement. Indeed, a few years later, the Court, citing Dinglasan, stated: "[t]he rulings
of this court have always been to the effect that in the special proceeding for the settlement
of the estate of a deceased person, persons not heirs, intervening therein to protect their
interests are allowed to do so to protect the same, but not for a decision on their action." 24
Petitioners interests in the estate of Benedicto may be inchoate interests, but they are viable
interests nonetheless. We are mindful that the Rules of Special Proceedings allows not just
creditors, but also "any person interested" or "persons interested in the estate" various
specified capacities to protect their respective interests in the estate. Anybody with a
contingent claim based on a pending action for quasi-delict against a decedent may be
reasonably concerned that by the time judgment is rendered in their favor, the estate of the
decedent would have already been distributed, or diminished to the extent that the judgment
could no longer be enforced against it.
In the same manner that the Rules on Special Proceedings do not provide a creditor or any
person interested in the estate, the right to participate in every aspect of the testate or
intestate proceedings, but instead provides for specific instances when such persons may
accordingly act in those proceedings, we deem that while there is no general right to
intervene on the part of the petitioners, they may be allowed to seek certain prayers or reliefs
from the intestate court not explicitly provided for under the Rules, if the prayer or relief
sought is necessary to protect their interest in the estate, and there is no other modality
under the Rules by which such interests can be protected. It is under this standard that we
assess the three prayers sought by petitioners.
The first is that petitioners be furnished with copies of all processes and orders issued in
connection with the intestate proceedings, as well as the pleadings filed by the administrator
of the estate. There is no questioning as to the utility of such relief for the petitioners. They
would be duly alerted of the developments in the intestate proceedings, including the status
of the assets of the estate. Such a running account would allow them to pursue the
appropriate remedies should their interests be compromised, such as the right, under
Section 6, Rule 87, to complain to the intestate court if property of the estate concealed,
embezzled, or fraudulently conveyed.
At the same time, the fact that petitioners interests remain inchoate and contingent
counterbalances their ability to participate in the intestate proceedings. We are mindful of
respondents submission that if the Court were to entitle petitioners with service of all
processes and pleadings of the intestate court, then anybody claiming to be a creditor,
whether contingent or otherwise, would have the right to be furnished such pleadings, no
matter how wanting of merit the claim may be. Indeed, to impose a precedent that would
mandate the service of all court processes and pleadings to anybody posing a claim to the
estate, much less contingent claims, would unduly complicate and burden the intestate
proceedings, and would ultimately offend the guiding principle of speedy and orderly
disposition of cases.
Fortunately, there is a median that not only exists, but also has been recognized by this
Court, with respect to the petitioners herein, that addresses the core concern of petitioners to
be apprised of developments in the intestate proceedings. In Hilado v. Judge Reyes,25 the
Court heard a petition for mandamus filed by the same petitioners herein against the RTC
judge, praying that they be allowed access to the records of the intestate proceedings, which
the respondent judge had denied from them. Section 2 of Rule 135 came to fore, the
provision stating that "the records of every court of justice shall be public records and shall
be available for the inspection of any interested person x x x." The Court ruled that
petitioners were "interested persons" entitled to access the court records in the intestate
proceedings. We said:
Petitioners' stated main purpose for accessing the records tomonitor prompt compliance
with the Rules governing the preservation and proper disposition of the assets of the
estate, e.g., the completion and appraisal of the Inventory and the submission by the
Administratrix of an annual accounting appears legitimate, for, as the plaintiffs in the
complaints for sum of money against Roberto Benedicto, et al., they have an interest over
the outcome of the settlement of his estate. They are in fact "interested persons" under Rule
135, Sec. 2 of the Rules of Court x x x26
Allowing creditors, contingent or otherwise, access to the records of the intestate
proceedings is an eminently preferable precedent than mandating the service of court
processes and pleadings upon them. In either case, the interest of the creditor in seeing to it
that the assets are being preserved and disposed of in accordance with the rules will be duly
satisfied. Acknowledging their right to access the records, rather than entitling them to the
service of every court order or pleading no matter how relevant to their individual claim, will
be less cumbersome on the intestate court, the administrator and the heirs of the decedent,
while providing a viable means by which the interests of the creditors in the estate are
preserved.
1awphi1
Nonetheless, in the instances that the Rules on Special Proceedings do require notice to any
or all "interested parties" the petitioners as "interested parties" will be entitled to such notice.
The instances when notice has to be given to interested parties are provided in: (1) Sec. 10,
Rule 85 in reference to the time and place of examining and allowing the account of the
executor or administrator; (2) Sec. 7(b) of Rule 89 concerning the petition to authorize the
executor or administrator to sell personal estate, or to sell, mortgage or otherwise encumber
real estates; and; (3) Sec. 1, Rule 90 regarding the hearing for the application for an order
for distribution of the estate residue. After all, even the administratrix has acknowledged in
her submitted inventory, the existence of the pending cases filed by the petitioners.
We now turn to the remaining reliefs sought by petitioners; that a deadline be set for the
submission by administratrix Benedicto to submit a verified and complete inventory of the
estate, and upon submission thereof: the inheritance tax appraisers of the Bureau of Internal
Revenue be required to assist in the appraisal of the fair market value of the same; and that
the intestate court set a deadline for the submission by the administratrix of her verified
annual account, and, upon submission thereof, set the date for her examination under oath
with respect thereto, with due notice to them and other parties interested in the collation,
preservation and disposition of the estate. We cannot grant said reliefs.
Section 1 of Rule 83 requires the administrator to return to the court a true inventory and
appraisal of all the real and personal estate of the deceased within three (3) months from
appointment, while Section 8 of Rule 85 requires the administrator to render an account of
his administration within one (1) year from receipt of the letters testamentary or of
administration. We do not doubt that there are reliefs available to compel an administrator to
perform either duty, but a person whose claim against the estate is still contingent is not the
party entitled to do so. Still, even if the administrator did delay in the performance of these
duties in the context of dissipating the assets of the estate, there are protections enforced
and available under Rule 88 to protect the interests of those with contingent claims against
the estate.
Concerning complaints against the general competence of the administrator, the proper
remedy is to seek the removal of the administrator in accordance with Section 2, Rule 82.
While the provision is silent as to who may seek with the court the removal of the
administrator, we do not doubt that a creditor, even a contingent one, would have the
personality to seek such relief. After all, the interest of the creditor in the estate relates to the
preservation of sufficient assets to answer for the debt, and the general competence or good
faith of the administrator is necessary to fulfill such purpose.
All told, the ultimate disposition of the RTC and the Court of Appeals is correct. Nonetheless,
as we have explained, petitioners should not be deprived of their prerogatives under the
Rules on Special Proceedings as enunciated in this decision.
WHEREFORE, the petition is DENIED, subject to the qualification that petitioners, as
persons interested in the intestate estate of Roberto Benedicto, are entitled to such notices
and rights as provided for such interested persons in the Rules on Settlement of Estates of
Deceased Persons under the Rules on Special Proceedings. No pronouncements as to
costs.
SO ORDERED.
DANTE O. TINGA
Associate Justice
WE CONCUR:
CONCHITA CARPIO MORALES*

Associate Justice
Acting Chairperson
Associate Justice
TERESITA J. LEONARDO-DE CASTRO**

Associate Justice
ARTURO D. BRION
Associate Justice
ATT E S TATI O N
Associate Justice
Acting Chairperson, Second Division
Attestation, it is hereby certified that the conclusions in the above Decision had been
reached in consultation before the case was assigned to the writer of the opinion of the
Courts Division.
REYNATO S. PUNO
Chief Justice
Footnotes
*
Acting Chairperson.
Per Special Order No. 619, Justice Teresita J. Leonardo-De Castro is hereby
designated as additional member of the Second Division in lieu of Justice Leonardo
A. Quisumbing, who is on official leave
**
Rollo, p. 45.
Id. at 13.
Id. at 56.
Id. at 67-69.
Id. at 76-85A.
Id. at 85-A.
Id.
Id. at 87.
Id. at 101-104.
10
Id. at 121-125.
11
Id. at 132-133.
Id. at 45-52. Decision penned by Associate Justice Amelita G Tolentino of the

Sixteenth Division, and concurred in by Associate Justices Eloy R. Bello, Jr. and
Magdangal M. De Leon.
12
More particularly, the Rules on Settlement of Estates of Deceased Persons. See

Rules 73 to 91, Revised Rules of Court.
13
14
See rollo, p. 103.
15
Id. at 124.
16
Id. at 124-125.
Batama Farmers Cooperative Marketing Association, Inc., et al., v. Hon. Rosal, etc.
et al., 149 Phil. 514, 519 (1971).
17
18
See Section 1(a), Rule 72, Rules of Court.
19
See Rules of Court, Rule 86, Secs. 1 & 3.
See Aguas v. Llemos, et al., 116 Phil. 112 (1962); Leung Ben v. O'Brien, 38 Phil.
182, 189-194 (1918)
20
21
88 Phil. 477 (1951).
22
G.R. No. L-3342, 18 April 1951.
23
Id. at 480-481.
Baquial v. Amihan, 92 Phil. 501, 503 (1953); citing 2 Moran, 432, 1952 revised
edition, citing the case of Intestate Estate of the Deceased Lee Liong, Dinglasan, et
al. v. Ang Chia, et al., G.R. No. L-3342, April 18, 1951.
24
25
G.R. No. 163155, 21 July 2006, 496 SCRA 282.
26
Id. at 301

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 165744
August 11, 2008
OSCAR C. REYES, petitioner,

vs.
HON. REGIONAL TRIAL COURT OF MAKATI, Branch 142, ZENITH INSURANCE
CORPORATION, and RODRIGO C. REYES, respondents.
DECISION
BRION, J.:
This Petition for Review on Certiorari under Rule 45 of the Rules of Court seeks to set aside
the Decision of the Court of Appeals (CA)1 promulgated on May 26, 2004 in CA-G.R. SP No.
74970. The CA Decision affirmed the Order of the Regional Trial Court (RTC), Branch 142,
Makati City dated November 29, 20022 in Civil Case No. 00-1553 (entitled "Accounting of All
Corporate Funds and Assets, and Damages") which denied petitioner Oscar C. Reyes
(Oscar) Motion to Declare Complaint as Nuisance or Harassment Suit.
BACKGROUND FACTS
Oscar and private respondent Rodrigo C. Reyes (Rodrigo) are two of the four children of the
spouses Pedro and Anastacia Reyes. Pedro, Anastacia, Oscar, and Rodrigo each owned
shares of stock of Zenith Insurance Corporation (Zenith), a domestic corporation established
by their family. Pedro died in 1964, while Anastacia died in 1993. Although Pedros estate
was judicially partitioned among his heirs sometime in the 1970s, no similar settlement and
partition appear to have been made with Anastacias estate, which included her
shareholdings in Zenith. As of June 30, 1990, Anastacia owned 136,598 shares of Zenith;
Oscar and Rodrigo owned 8,715,637 and 4,250 shares, respectively.3
On May 9, 2000, Zenith and Rodrigo filed a complaint4 with the Securities and Exchange
Commission (SEC) against Oscar, docketed as SEC Case No. 05-00-6615. The complaint
stated that it is "a derivative suit initiated and filed by the complainant Rodrigo C. Reyes to
obtain an accounting of the funds and assets of ZENITH INSURANCE
CORPORATION which are now or formerly in the control, custody, and/or possession of
respondent [herein petitioner Oscar] and to determine the shares of stock of deceased
spouses Pedro and Anastacia Reyes that were arbitrarily and fraudulently appropriated
[by Oscar] for himself [and] which were not collated and taken into account in the partition,
distribution, and/or settlement of the estate of the deceased spouses, for which he should be
ordered to account for all the income from the time he took these shares of stock, and
should now deliver to his brothers and sisters their just and respective shares."5 [Emphasis
supplied.]
In his Answer with Counterclaim, 6 Oscar denied the charge that he illegally acquired the
shares of Anastacia Reyes. He asserted, as a defense, that he purchased the subject shares
with his own funds from the unissued stocks of Zenith, and that the suit is not a bona
fide derivative suit because the requisites therefor have not been complied with. He thus
questioned the SECs jurisdiction to entertain the complaint because it pertains to the
settlement of the estate of Anastacia Reyes.
When Republic Act (R.A.) No. 87997 took effect, the SECs exclusive and original jurisdiction
over cases enumerated in Section 5 of Presidential Decree (P.D.) No. 902-A was transferred
to the RTC designated as a special commercial court.8 The records of Rodrigos SEC case
were thus turned over to the RTC, Branch 142, Makati, and docketed as Civil Case No. 001553.
On October 22, 2002, Oscar filed a Motion to Declare Complaint as Nuisance or Harassment
Suit.9 He claimed that the complaint is a mere nuisance or harassment suit and should,
according to the Interim Rules of Procedure for Intra-Corporate Controversies, be dismissed;
and that it is not a bona fide derivative suit as it partakes of the nature of a petition for the
settlement of estate of the deceased Anastacia that is outside the jurisdiction of a special
commercial court. The RTC, in its Order dated November 29, 2002 (RTC Order), denied the
motion in part and declared:
A close reading of the Complaint disclosed the presence of two (2) causes of action,
namely: a) a derivative suit for accounting of the funds and assets of the corporation
which are in the control, custody, and/or possession of the respondent [herein
petitioner Oscar] with prayer to appoint a management committee; and b) an action
for determination of the shares of stock of deceased spouses Pedro and Anastacia
Reyes allegedly taken by respondent, its accounting and the corresponding delivery
of these shares to the parties brothers and sisters. The latter is not a derivative suit
and should properly be threshed out in a petition for settlement of estate.
Accordingly, the motion is denied. However, only the derivative suit consisting of the
first cause of action will be taken cognizance of by this Court. 10
Oscar thereupon went to the CA on a petition for certiorari, prohibition, and mandamus11 and
prayed that the RTC Order be annulled and set aside and that the trial court be prohibited
from continuing with the proceedings. The appellate court affirmed the RTC Order and
denied the petition in its Decision dated May 26, 2004. It likewise denied Oscars motion for
reconsideration in a Resolution dated October 21, 2004.
Petitioner now comes before us on appeal through a petition for review on certiorari under
Rule 45 of the Rules of Court.
ASSIGNMENT OF ERRORS
Petitioner Oscar presents the following points as conclusions the CA should have made:
1. that the complaint is a mere nuisance or harassment suit that should be dismissed under
the Interim Rules of Procedure of Intra-Corporate Controversies; and
2. that the complaint is not a bona fide derivative suit but is in fact in the nature of a petition
for settlement of estate; hence, it is outside the jurisdiction of the RTC acting as a special
commercial court.
Accordingly, he prays for the setting aside and annulment of the CA decision and resolution,
and the dismissal of Rodrigos complaint before the RTC.
THE COURTS RULING
We find the petition meritorious.
The core question for our determination is whether the trial court, sitting as a special
commercial court, has jurisdiction over the subject matter of Rodrigos complaint. To resolve
it, we rely on the judicial principle that "jurisdiction over the subject matter of a case is
conferred by law and is determined by the allegations of the complaint, irrespective of
whether the plaintiff is entitled to all or some of the claims asserted therein." 12
JURISDICTION OF SPECIAL COMMERCIAL COURTS
P.D. No. 902-A enumerates the cases over which the SEC (now the RTC acting as a special
commercial court) exercises exclusive jurisdiction:
SECTION 5. In addition to the regulatory and adjudicative functions of the Securities
and Exchange Commission over corporations, partnership, and other forms of
associations registered with it as expressly granted under existing laws and decrees,
it shall have original and exclusive jurisdiction to hear and decide cases involving:
a) Devices or schemes employed by or any acts of the board of directors,

business associates, its officers or partners, amounting to fraud and
misrepresentation which may be detrimental to the interest of the public
and/or of the stockholders, partners, members of associations or
organizations registered with the Commission.
b) Controversies arising out of intra-corporate or partnership relations,
between and among stockholders, members, or associates; between any or
all of them and the corporation, partnership or association of which they are
stockholders, members, or associates, respectively; and between such
corporation, partnership or association and the State insofar as it concerns
their individual franchise or right to exist as such entity; and
c) Controversies in the election or appointment of directors, trustees, officers,
or managers of such corporations, partnerships, or associations.
The allegations set forth in Rodrigos complaint principally invoke Section 5, paragraphs (a)
and (b) above as basis for the exercise of the RTCs special court jurisdiction. Our focus in
examining the allegations of the complaint shall therefore be on these two provisions.
Fraudulent Devices and Schemes
The rule is that a complaint must contain a plain, concise, and direct statement of the
ultimate facts constituting the plaintiffs cause of action and must specify the relief
sought.13 Section 5, Rule 8 of the Revised Rules of Court provides that in all averments of
fraud or mistake, the circumstances constituting fraud or mistake must be stated with
particularity.14 These rules find specific application to Section 5(a) of P.D. No. 902-A which
speaks of corporate devices or schemes that amount to fraud or misrepresentation
detrimental to the public and/or to the stockholders.
In an attempt to hold Oscar responsible for corporate fraud, Rodrigo alleged in the complaint
the following:
3. This is a complaintto determine the shares of stock of the deceased
spouses Pedro and Anastacia Reyes that were arbitrarily and fraudulently
appropriated for himself [herein petitioner Oscar] which were not collated and
taken into account in the partition, distribution, and/or settlement of the estate of the
deceased Spouses Pedro and Anastacia Reyes, for which he should be ordered to
account for all the income from the time he took these shares of stock, and should
now deliver to his brothers and sisters their just and respective shares with the
corresponding equivalent amount of P7,099,934.82 plus interest thereon from 1978
representing his obligations to the Associated Citizens Bank that was paid for his
account by his late mother, Anastacia C. Reyes. This amount was not collated or
taken into account in the partition or distribution of the estate of their late mother,
Anastacia C. Reyes.
3.1. Respondent Oscar C. Reyes, through other schemes of fraud including
misrepresentation, unilaterally, and for his own benefit, capriciously
transferred and took possession and control of the management of Zenith
Insurance Corporation which is considered as a family corporation, and other
properties and businesses belonging to Spouses Pedro and Anastacia Reyes.
xxxx
4.1. During the increase of capitalization of Zenith Insurance Corporation, sometime
in 1968, the property covered by TCT No. 225324 was illegally and fraudulently used
by respondent as a collateral.
xxxx
5. The complainant Rodrigo C. Reyes discovered that by some manipulative
scheme, the shareholdings of their deceased mother, Doa Anastacia C.
Reyes, shares of stocks and [sic] valued in the corporate books at
P7,699,934.28, more or less, excluding interest and/or dividends,had been
transferred solely in the name of respondent. By such fraudulent manipulations
and misrepresentation, the shareholdings of said respondent Oscar C. Reyes
abruptly increased to P8,715,637.00 [sic] and becomes [sic] the majority stockholder
of Zenith Insurance Corporation, which portion of said shares must be distributed
equally amongst the brothers and sisters of the respondent Oscar C. Reyes including
the complainant herein.
xxxx
9.1 The shareholdings of deceased Spouses Pedro Reyes and Anastacia C.
Reyes valued at P7,099,934.28 were illegally and fraudulently transferred solely
to the respondents [herein petitioner Oscar] name and installed himself as a
majority stockholder of Zenith Insurance Corporation [and] thereby deprived his
brothers and sisters of their respective equal shares thereof including complainant
hereto.
xxxx
10.1 By refusal of the respondent to account of his [sic] shareholdings in the
company, he illegally and fraudulently transferred solely in his name wherein
[sic] the shares of stock of the deceased Anastacia C. Reyes [which] must be
properly collated and/or distributed equally amongst the children, including
the complainant Rodrigo C. Reyes herein, to their damage and prejudice.
xxxx
11.1 By continuous refusal of the respondent to account of his [sic] shareholding with
Zenith Insurance Corporation[,] particularly the number of shares of stocks illegally
and fraudulently transferred to him from their deceased parents Sps. Pedro and
Anastacia Reyes[,] which are all subject for collation and/or partition in equal shares
among their children. [Emphasis supplied.]
Allegations of deceit, machination, false pretenses, misrepresentation, and threats are
largely conclusions of law that, without supporting statements of the facts to which the
allegations of fraud refer, do not sufficiently state an effective cause of action. 15 The late
Justice Jose Feria, a noted authority in Remedial Law, declared that fraud and mistake are
required to be averred with particularity in order to enable the opposing party to controvert
the particular facts allegedly constituting such fraud or mistake. 16
Tested against these standards, we find that the charges of fraud against Oscar were not
properly supported by the required factual allegations. While the complaint contained
allegations of fraud purportedly committed by him, these allegations are not particular
enough to bring the controversy within the special commercial courts jurisdiction; they are
not statements of ultimate facts, but are mere conclusions of law: how and why the alleged
appropriation of shares can be characterized as "illegal and fraudulent" were not explained
nor elaborated on.
Not every allegation of fraud done in a corporate setting or perpetrated by corporate officers
will bring the case within the special commercial courts jurisdiction. To fall within this
jurisdiction, there must be sufficient nexus showing that the corporations nature, structure, or
powers were used to facilitate the fraudulent device or scheme. Contrary to this concept, the
complaint presented a reverse situation. No corporate power or office was alleged to have
facilitated the transfer of the shares; rather, Oscar, as an individual and without reference to
his corporate personality, was alleged to have transferred the shares of Anastacia to his
name, allowing him to become the majority and controlling stockholder of Zenith, and
eventually, the corporations President. This is the essence of the complaint read as a whole
and is particularly demonstrated under the following allegations:
5. The complainant Rodrigo C. Reyes discovered that by some manipulative
scheme, the shareholdings of their deceased mother, Doa Anastacia C. Reyes,
shares of stocks and [sic] valued in the corporate books at P7,699,934.28, more or
less, excluding interest and/or dividends, had been transferred solely in the name of
respondent. By such fraudulent manipulations and misrepresentation, the
shareholdings of said respondent Oscar C. Reyes abruptly increased to
P8,715,637.00 [sic] and becomes [sic] the majority stockholder of Zenith
Insurance Corporation, which portion of said shares must be distributed equally
amongst the brothers and sisters of the respondent Oscar C. Reyes including the
complainant herein.
xxxx
9.1 The shareholdings of deceased Spouses Pedro Reyes and Anastacia C.
Reyes valued at P7,099,934.28 were illegally and fraudulently transferred solely
to the respondents [herein petitioner Oscar] name and installed himself as a
majority stockholder of Zenith Insurance Corporation [and] thereby deprived his
brothers and sisters of their respective equal shares thereof including complainant
hereto. [Emphasis supplied.]
In ordinary cases, the failure to specifically allege the fraudulent acts does not constitute a
ground for dismissal since such defect can be cured by a bill of particulars. In cases
governed by the Interim Rules of Procedure on Intra-Corporate Controversies, however, a
bill of particulars is a prohibited pleading. 17 It is essential, therefore, for the complaint to show
on its face what are claimed to be the fraudulent corporate acts if the complainant wishes to
invoke the courts special commercial jurisdiction.
We note that twice in the course of this case, Rodrigo had been given the opportunity to
study the propriety of amending or withdrawing the complaint, but he consistently refused.
The courts function in resolving issues of jurisdiction is limited to the review of the
allegations of the complaint and, on the basis of these allegations, to the determination of
whether they are of such nature and subject that they fall within the terms of the law defining
the courts jurisdiction. Regretfully, we cannot read into the complaint any specifically alleged
corporate fraud that will call for the exercise of the courts special commercial jurisdiction.
Thus, we cannot affirm the RTCs assumption of jurisdiction over Rodrigos complaint on the
basis of Section 5(a) of P.D. No. 902-A.18
Intra-Corporate Controversy
A review of relevant jurisprudence shows a development in the Courts approach in
classifying what constitutes an intra-corporate controversy. Initially, the main consideration in
determining whether a dispute constitutes an intra-corporate controversy was limited to a
consideration of the intra-corporate relationship existing between or among the parties. 19 The
types of relationships embraced under Section 5(b), as declared in the case of Union Glass
& Container Corp. v. SEC,20 were as follows:
a) between the corporation, partnership, or association and the public;
b) between the corporation, partnership, or association and its stockholders,
partners, members, or officers;
c) between the corporation, partnership, or association and the State as far as its
franchise, permit or license to operate is concerned; and
d) among the stockholders, partners, or associates themselves. [Emphasis
supplied.]
The existence of any of the above intra-corporate relations was sufficient to confer
jurisdiction to the SEC, regardless of the subject matter of the dispute. This came to be
known as the relationship test.
However, in the 1984 case of DMRC Enterprises v. Esta del Sol Mountain Reserve,
Inc.,21 the Court introduced the nature of the controversy test. We declared in this case
that it is not the mere existence of an intra-corporate relationship that gives rise to an intracorporate controversy; to rely on the relationship test alone will divest the regular courts of
their jurisdiction for the sole reason that the dispute involves a corporation, its directors,
officers, or stockholders. We saw that there is no legal sense in disregarding or minimizing
the value of the nature of the transactions which gives rise to the dispute.
Under the nature of the controversy test, the incidents of that relationship must also be
considered for the purpose of ascertaining whether the controversy itself is intracorporate.22 The controversy must not only be rooted in the existence of an intra-corporate
relationship, but must as well pertain to the enforcement of the parties correlative rights and
obligations under the Corporation Code and the internal and intra-corporate regulatory rules
of the corporation. If the relationship and its incidents are merely incidental to the
controversy or if there will still be conflict even if the relationship does not exist, then no intracorporate controversy exists.
The Court then combined the two tests and declared that jurisdiction should be determined
by considering not only the status or relationship of the parties, but also the nature of the
question under controversy.23 This two-tier test was adopted in the recent case of Speed
Distribution, Inc. v. Court of Appeals:24
To determine whether a case involves an intra-corporate controversy, and is to be

heard and decided by the branches of the RTC specifically designated by the Court
to try and decide such cases, two elements must concur: (a) the status or
relationship of the parties; and (2) the nature of the question that is the subject of
their controversy.
The first element requires that the controversy must arise out of intra-corporate or
partnership relations between any or all of the parties and the corporation,
partnership, or association of which they are stockholders, members or associates;
between any or all of them and the corporation, partnership, or association of which
they are stockholders, members, or associates, respectively; and between such
corporation, partnership, or association and the State insofar as it concerns their
individual franchises. The second element requires that the dispute among the
parties be intrinsically connected with the regulation of the corporation. If the nature
of the controversy involves matters that are purely civil in character, necessarily, the
case does not involve an intra-corporate controversy.
Given these standards, we now tackle the question posed for our determination under the
specific circumstances of this case:
Application of the Relationship Test
Is there an intra-corporate relationship between the parties that would characterize the case
as an intra-corporate dispute?
We point out at the outset that while Rodrigo holds shares of stock in Zenith, he holds them
in two capacities: in his own right with respect to the 4,250 shares registered in his name,
and as one of the heirs of Anastacia Reyes with respect to the 136,598 shares registered in
her name. What is material in resolving the issues of this case under the allegations of the
complaint is Rodrigos interest as an heir since the subject matter of the present controversy
centers on the shares of stocks belonging to Anastacia, not on Rodrigos personally-owned
shares nor on his personality as shareholder owning these shares. In this light, all reference
to shares of stocks in this case shall pertain to the shareholdings of the deceased Anastacia
and the parties interest therein as her heirs.
Article 777 of the Civil Code declares that the successional rights are transmitted from the
moment of death of the decedent. Accordingly, upon Anastacias death, her children acquired
legal title to her estate (which title includes her shareholdings in Zenith), and they are, prior
to the estates partition, deemed co-owners thereof. 25 This status as co-owners, however,
does not immediately and necessarily make them stockholders of the corporation. Unless
and until there is compliance with Section 63 of the Corporation Code on the manner of
transferring shares, the heirs do not become registered stockholders of the corporation.
Section 63 provides:
Section 63. Certificate of stock and transfer of shares. The capital stock of stock
corporations shall be divided into shares for which certificates signed by the
president or vice-president, countersigned by the secretary or assistant secretary,
and sealed with the seal of the corporation shall be issued in accordance with the bylaws. Shares of stock so issued are personal property and may be transferred by
delivery of the certificate or certificates indorsed by the owner or his attorney-in-fact
or other person legally authorized to make the transfer. No transfer, however, shall
be valid, except as between the parties, until the transfer is recorded in the
books of the corporation so as to show the names of the parties to the

transaction, the date of the transfer, the number of the certificate or
certificates, and the number of shares transferred. [Emphasis supplied.]
No shares of stock against which the corporation holds any unpaid claim shall be
transferable in the books of the corporation.
Simply stated, the transfer of title by means of succession, though effective and valid
between the parties involved (i.e., between the decedents estate and her heirs), does not
bind the corporation and third parties. The transfer must be registered in the books of the
corporation to make the transferee-heir a stockholder entitled to recognition as such both by
the corporation and by third parties. 26
We note, in relation with the above statement, that in Abejo v. Dela Cruz27 and TCL Sales
Corporation v. Court of Appeals28 we did not require the registration of the transfer before
considering the transferee a stockholder of the corporation (in effect upholding the existence
of an intra-corporate relation between the parties and bringing the case within the jurisdiction
of the SEC as an intra-corporate controversy). A marked difference, however, exists between
these cases and the present one.
In Abejo and TCL Sales, the transferees held definite and uncontested titles to a specific
number of shares of the corporation; after the transferee had established prima
facie ownership over the shares of stocks in question, registration became a mere formality
in confirming their status as stockholders. In the present case, each of Anastacias heirs
holds only an undivided interest in the shares. This interest, at this point, is still inchoate and
subject to the outcome of a settlement proceeding; the right of the heirs to specific,
distributive shares of inheritance will not be determined until all the debts of the estate of the
decedent are paid. In short, the heirs are only entitled to what remains after payment of the
decedents debts;29 whether there will be residue remains to be seen. Justice Jurado aptly
puts it as follows:
No succession shall be declared unless and until a liquidation of the assets and
debts left by the decedent shall have been made and all his creditors are fully paid.
Until a final liquidation is made and all the debts are paid, the right of the heirs to
inherit remains inchoate. This is so because under our rules of procedure,liquidation
is necessary in order to determine whether or not the decedent has left any
liquid assets which may be transmitted to his heirs.30 [Emphasis supplied.]
Rodrigo must, therefore, hurdle two obstacles before he can be considered a stockholder of
Zenith with respect to the shareholdings originally belonging to Anastacia. First, he must
prove that there are shareholdings that will be left to him and his co-heirs, and this can be
determined only in a settlement of the decedents estate. No such proceeding has been
commenced to date. Second, he must register the transfer of the shares allotted to him to
make it binding against the corporation. He cannot demand that this be done unless and until
he has established his specific allotment (and prima facie ownership) of the shares. Without
the settlement of Anastacias estate, there can be no definite partition and distribution of the
estate to the heirs. Without the partition and distribution, there can be no registration of the
transfer. And without the registration, we cannot consider the transferee-heir a stockholder
who may invoke the existence of an intra-corporate relationship as premise for an intracorporate controversy within the jurisdiction of a special commercial court.
In sum, we find that insofar as the subject shares of stock (i.e., Anastacias shares) are
concerned Rodrigo cannot be considered a stockholder of Zenith. Consequently, we
cannot declare that an intra-corporate relationship exists that would serve as basis to bring
this case within the special commercial courts jurisdiction under Section 5(b) of PD 902-A,
as amended. Rodrigos complaint, therefore, fails the relationship test.
Application of the Nature of Controversy Test
The body rather than the title of the complaint determines the nature of an action. 31 Our
examination of the complaint yields the conclusion that, more than anything else, the
complaint is about the protection and enforcement of successional rights. The controversy it
presents is purely civil rather than corporate, although it is denominated as a "complaint for
accounting of all corporate funds and assets."
Contrary to the findings of both the trial and appellate courts, we read only one cause of
action alleged in the complaint. The "derivative suit for accounting of the funds and assets of
the corporation which are in the control, custody, and/or possession of the respondent
[herein petitioner Oscar]" does not constitute a separate cause of action but is, as correctly
claimed by Oscar, only an incident to the "action for determination of the shares of stock of
deceased spouses Pedro and Anastacia Reyes allegedly taken by respondent, its
accounting and the corresponding delivery of these shares to the parties brothers and
sisters." There can be no mistake of the relationship between the "accounting" mentioned in
the complaint and the objective of partition and distribution when Rodrigo claimed in
paragraph 10.1 of the complaint that:
10.1 By refusal of the respondent to account of [sic] his shareholdings in the
company, he illegally and fraudulently transferred solely in his name wherein [sic] the
shares of stock of the deceased Anastacia C. Reyes [which] must be properly
collated and/or distributed equally amongst the children including the complainant
Rodrigo C. Reyes herein to their damage and prejudice.
We particularly note that the complaint contained no sufficient allegation that justified the
need for an accountingother than to determine the extent of Anastacias shareholdings for
purposes of distribution.
Another significant indicator that points us to the real nature of the complaint are Rodrigos
repeated claims of illegal and fraudulent transfers of Anastacias shares by Oscar to the
prejudice of the other heirs of the decedent; he cited these allegedly fraudulent acts as basis
for his demand for the collation and distribution of Anastacias shares to the heirs. These
claims tell us unequivocally that the present controversy arose from the parties relationship
as heirs of Anastacia and not as shareholders of Zenith. Rodrigo, in filing the complaint, is
enforcing his rights as a co-heir and not as a stockholder of Zenith. The injury he seeks to
remedy is one suffered by an heir (for the impairment of his successional rights) and not by
the corporation nor by Rodrigo as a shareholder on record.
More than the matters of injury and redress, what Rodrigo clearly aims to accomplish
through his allegations of illegal acquisition by Oscar is the distribution of Anastacias
shareholdings without a prior settlement of her estate an objective that, by law and
established jurisprudence, cannot be done. The RTC of Makati, acting as a special
commercial court, has no jurisdiction to settle, partition, and distribute the estate of a
deceased. A relevant provision Section 2 of Rule 90 of the Revised Rules of Court that
contemplates properties of the decedent held by one of the heirs declares:
Questions as to advancement made or alleged to have been made by the

deceased to any heir may be heard and determined by the court having
jurisdiction of the estate proceedings; and the final order of the court thereon shall
be binding on the person raising the questions and on the heir. [Emphasis supplied.]
Worth noting are this Courts statements in the case of Natcher v. Court of Appeals:32
Matters which involve settlement and distribution of the estate of the decedent
fall within the exclusive province of the probate court in the exercise of its limited
jurisdiction.
xxxx
It is clear that trial courts trying an ordinary action cannot resolve to perform
acts pertaining to a special proceeding because it is subject to specific prescribed
rules. [Emphasis supplied.]
That an accounting of the funds and assets of Zenith to determine the extent and value of
Anastacias shareholdings will be undertaken by a probate court and not by a special
commercial court is completely consistent with the probate courts limited jurisdiction. It has
the power to enforce an accounting as a necessary means to its authority to determine the
properties included in the inventory of the estate to be administered, divided up, and
distributed. Beyond this, the determination of title or ownership over the subject shares
(whether belonging to Anastacia or Oscar) may be conclusively settled by the probate court
as a question of collation or advancement. We had occasion to recognize the courts
authority to act on questions of title or ownership in a collation or advancement situation
in Coca v. Pangilinan33 where we ruled:
It should be clarified that whether a particular matter should be resolved by the Court
of First Instance in the exercise of its general jurisdiction or of its limited probate
jurisdiction is in reality not a jurisdictional question. In essence, it is a procedural
question involving a mode of practice "which may be waived."
As a general rule, the question as to title to property should not be passed upon in
the testate or intestate proceeding. That question should be ventilated in a separate
action. That general rule has qualifications or exceptions justified by expediency and
convenience.
Thus, the probate court may provisionally pass upon in an intestate or testate
proceeding the question of inclusion in, or exclusion from, the inventory of a piece of
property without prejudice to its final determination in a separate action.
Although generally, a probate court may not decide a question of title or
ownership, yet if the interested parties are all heirs, or the question is one of
collation or advancement, or the parties consent to the assumption of jurisdiction
by the probate court and the rights of third parties are not impaired, the probate
court is competent to decide the question of ownership. [Citations omitted.
Emphasis supplied.]
In sum, we hold that the nature of the present controversy is not one which may be classified
as an intra-corporate dispute and is beyond the jurisdiction of the special commercial court to
resolve. In short, Rodrigos complaint also fails the nature of the controversy test.
DERIVATIVE SUIT
Rodrigos bare claim that the complaint is a derivative suit will not suffice to confer
jurisdiction on the RTC (as a special commercial court) if he cannot comply with the
requisites for the existence of a derivative suit. These requisites are:
a. the party bringing suit should be a shareholder during the time of the act or
transaction complained of, the number of shares not being material;
b. the party has tried to exhaust intra-corporate remedies, i.e., has made a demand
on the board of directors for the appropriate relief, but the latter has failed or refused
to heed his plea; and
c. the cause of action actually devolves on the corporation; the wrongdoing or harm
having been or being caused to the corporation and not to the particular stockholder
bringing the suit.34
Based on these standards, we hold that the allegations of the present complaint do not
amount to a derivative suit.
First, as already discussed above, Rodrigo is not a shareholder with respect to the
shareholdings originally belonging to Anastacia; he only stands as a transferee-heir whose
rights to the share are inchoate and unrecorded. With respect to his own individually-held
shareholdings, Rodrigo has not alleged any individual cause or basis as a shareholder on
record to proceed against Oscar.
Second, in order that a stockholder may show a right to sue on behalf of the corporation, he
must allege with some particularity in his complaint that he has exhausted his
remedies within the corporation by making a sufficient demand upon the directors or other
officers for appropriate relief with the expressed intent to sue if relief is denied. 35 Paragraph 8
of the complaint hardly satisfies this requirement since what the rule contemplates is the
exhaustion of remedies within the corporate setting:
8. As members of the same family, complainant Rodrigo C. Reyes has resorted [to]
and exhausted all legal means of resolving the dispute with the end view of amicably
settling the case, but the dispute between them ensued.
Lastly, we find no injury, actual or threatened, alleged to have been done to the corporation
due to Oscars acts. If indeed he illegally and fraudulently transferred Anastacias shares in
his own name, then the damage is not to the corporation but to his co-heirs; the wrongful
transfer did not affect the capital stock or the assets of Zenith. As already mentioned, neither
has Rodrigo alleged any particular cause or wrongdoing against the corporation that he can
champion in his capacity as a shareholder on record. 36
In summary, whether as an individual or as a derivative suit, the RTC sitting as special
commercial court has no jurisdiction to hear Rodrigos complaint since what is involved is
the determination and distribution of successional rights to the shareholdings of Anastacia
Reyes. Rodrigos proper remedy, under the circumstances, is to institute a special

proceeding for the settlement of the estate of the deceased Anastacia Reyes, a move that is
not foreclosed by the dismissal of his present complaint.
WHEREFORE, we hereby GRANT the petition and REVERSE the decision of the Court of
Appeals dated May 26, 2004 in CA-G.R. SP No. 74970. The complaint before the Regional
Trial Court, Branch 142, Makati, docketed as Civil Case No. 00-1553, is
ordered DISMISSED for lack of jurisdiction.
SO ORDERED.
ARTURO D. BRION
Associate Justice
WE CONCUR:
Associate Justice
Chairperson
*
RENATO C. CORONA
Associate Justice

Associate Justice

Associate Justice
ATTESTATION
Associate Justice
Chairperson
CERTIFICATION
REYNATO S. PUNO
Chief Justice
Footnotes
*
Designated Additional Member of the Second Division per Special Order No. 512
dated July 16, 2008.
1
Penned by Associate Justice Juan Q. Enriquez, Jr., with Associate Justice Romeo
A. Brawner (deceased) and Associate Justice Aurora Santiago-Lagman, concurring;
rollo, pp. 55-60.
2
Quoted in full in Petition, id., p. 18.
Id., p. 64.
Id., pp. 63-74.
Id., p. 65.
Id., pp. 92-115.
Section 5.2 thereof states: The Commissions jurisdiction over all cases enumerated
under Section 5 of P.D. No. 902-A is hereby transferred to the courts of general
jurisdiction or the appropriate Regional Trial Court: Provided, That the Supreme
Court in the exercise of its authority may designate the Regional Trial Court branches
that shall exercise jurisdiction over these cases. x x x.
8
Per A.M. No. 00-11-03 SC dated November 21, 2000.
Rollo, pp. 119-132.
10
Supra note 2.
11
Under Rule 65 of the Revised Rules of Court, rollo, pp. 11-49.
12
Speed Distributing Corp. v. Court of Appeals, G.R. No. 149351, March 17, 2004,
425 SCRA 691;Intestate Estate of Alexander Ty v. Court of Appeals, G.R. No.
112872, April 19, 2001, 356 SCRA 661.
13
See Revised Rules of Court, Rule 6, Section 1; Rule 7 Section 2(c); and Rule 8,
Section 1.
14
Abad v. CFI Pangasinan, G.R. No. 58507-08, February 26, 1992, 206 SCRA 567,
580.
15
Santos v. Liwag, G.R. No. L-24238, November 28, 1980, 101 SCRA 327.
16
Civil Procedure Annotated, Vol. 1 (2001 ed.), p. 303.
17
Rule 1, Section 8(2).
18
Referring specifically to corporate fraud; see quoted provision at page 5 hereof.
19
See Sunset View Condominium Corp. v. Campos, Jr., 104 SCRA 295; Philex
Mining Corp. v. Reyes, 118 SCRA 502; Desa Enterprises, Inc. v. SEC, 117 SCRA
321.
20
G.R. No. 64013, November 28, 1983, 126 SCRA 31.
21
G.R. No. 57936, September 28, 1984, 132 SCRA 293.
22
PSBA v. Leao, G.R. No. L-58468, February 24, 1984, 127 SCRA 778, 783.
23
CMH Agricultural Corporation v. Court of Appeals, G.R. No. 112625, March 7,

2002, 378 SCRA 545.
24
Speed Distributing Corp., v. Court of Appeals, supra note 12.
25
Article 1078 of the Civil Code states: Where there are two or more heirs, the whole
estate of the decedent is, before its partition, owned in common by such heirs,
subject to the payment of debts of the deceased.
26
Additionally, Section 97 of the National Internal Revenue Code requires a

certification from the Commissioner of Internal Revenue that the estate taxes have
been paid before any shares in a domestic corporation is transferred in the name of
the new owner.
27
G.R. No. L-63558, May 19, 1987, 149 SCRA 654.
28
29
Salvador v. Sta. Maria, G.R. No. L-25952, June 30, 1967, 20 SCRA 603.
30
Comments and Jurisprudence on Succession (1991 ed.), p. 5.
31
13 Fletcher 5912.
32
G.R. 133000, October 2, 2001, 366 SCRA 385, 392.
33
G.R. No. L-27082, January 21, 1978, 81 SCRA 278.
34
Villanueva, C., Philippine Corporate Law (1998 ed.), p. 370.
35
13 Fletcher 5963.
36
See 13 Fletcher 5915.

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 178933
September 16, 2009
RICARDO S. SILVERIO, JR. Petitioner,

vs.
COURT OF APPEALS (Fifth Division) and NELIA S. SILVERIO-DEE, Respondents.
DECISION
VELASCO, JR., J.:
The Case
This Petition for Review on Certiorari under Rule 65 seeks the reversal of the May 4, 2007
Resolution1 and July 6, 2007 Decision2 of the Court of Appeals (CA) in CA-G.R. SP No.
98764, entitled Nelia S. Silverio-Dee and Ricardo C. Silverio, Sr. (impleaded as necessary
party) v. Reinato G. Quilala, in his capacity as Presiding Judge of the RTC of Makati, Branch
57, Ricardo S. Silverio, Jr., Edmundo S. Silverio, represented by Nestor Dela Merced II, and
Sheriff Villamor R. Villegas.
The assailed resolution granted private respondents prayer for the issuance of a Temporary
Restraining Order against public respondent Judge Quilala. On the other hand, the assailed
decision set aside the Writ of Execution dated April 17, 2007 and the Notice to Vacate dated
April 19, 2007 while directing the respondent lower court to give due course to the appeal of
herein private respondent.
The Facts
The instant controversy stemmed from the settlement of estate of the deceased Beatriz
Silverio. After her death, her surviving spouse, Ricardo Silverio, Sr., filed an intestate
proceeding for the settlement of her estate. The case was docketed as SP. PROC. NO. M2629 entitled In Re: Estate of the Late Beatriz D. Silverio, Ricardo C. Silverio, Sr. v. Ricardo
S. Silverio Jr., et al. pending before the Regional Trial Court (RTC) of Makati City, Branch 57
(RTC).
On November 16, 2004, during the pendency of the case, Ricardo Silverio, Jr. filed a petition
to remove Ricardo C. Silverio, Sr. as the administrator of the subject estate. On November
22, 2004, Edmundo S. Silverio also filed a comment/opposition for the removal of Ricardo C.
Silverio, Sr. as administrator of the estate and for the appointment of a new administrator.
On January 3, 2005, the RTC issued an Order granting the petition and removing Ricardo
Silverio, Sr. as administrator of the estate, while appointing Ricardo Silverio, Jr. as the new
administrator.
On January 26, 2005, Nelia S. Silverio-Dee filed a Motion for Reconsideration of the Order
dated January 3, 2005, as well as all other related orders.
On February 4, 2005, Ricardo Silverio Jr. filed an Urgent Motion for an Order Prohibiting Any
Person to Occupy/Stay/Use Real Estate Properties Involved in the Intestate Estate of the
Late Beatriz Silverio, Without Authority from this Honorable Court. 3
Then, on May 31, 2005, the RTC issued an Omnibus Order 4 affirming its Order dated
January 3, 2005 and denying private respondents motion for reconsideration. In the
Omnibus Order, the RTC also authorized Ricardo Silverio, Jr. to, upon receipt of the order,
immediately exercise his duties as administrator of the subject estate. The Omnibus Order
also directed Nelia S. Silverio-Dee to vacate the property at No. 3, Intsia, Forbes Park,
Makati City within fifteen (15) days from receipt of the order.
Nelia Silverio-Dee received a copy of the Omnibus Order dated May 31, 2005 on June 8,
2005.
On June 16, 2005, private respondent filed a Motion for Reconsideration dated June 15,
20055 of the Omnibus Order. This was later denied by the RTC in an Order dated December
12, 2005, which was received by private respondent on December 22, 2005.
Notably, the RTC in its Order dated December 12, 20056 also recalled its previous order
granting Ricardo Silverio, Jr. with letters of administration over the intestate estate of Beatriz
Silverio and reinstating Ricardo Silverio, Sr. as the administrator.
From the Order dated December 12, 2005, Ricardo Silverio, Jr. filed a motion for
reconsideration which was denied by the RTC in an Order dated October 31, 2006. In the
same order, the RTC also allowed the sale of various properties of the intestate estate of the
late Beatriz Silverio to partially settle estate taxes, penalties, interests and other charges due
thereon. Among the properties authorized to be sold was the one located at No. 3 Intsia
Road, Forbes Park, Makati City.7
Meanwhile, on January 6, 2006, Nelia Silverio-Dee filed a Notice of Appeal dated January 5,
20068 from the Order dated December 12, 2005 while the Record on Appeal dated January
20, 20069 was filed on January 23, 2006.
Thereafter, on October 23, 2006, Ricardo Silverio, Jr. filed a Motion to Dismiss Appeal and
for Issuance of a Writ of Execution10 against the appeal of Nelia Silverio-Dee on the ground
that the Record on Appeal was filed ten (10) days beyond the reglementary period pursuant
to Section 3, Rule 41 of the Rules of Court.
Thus, on April 2, 2007, the RTC issued an Order11 denying the appeal on the ground that it
was not perfected within the reglementary period. The RTC further issued a writ of execution
for the enforcement of the Order dated May 31, 2005 against private respondent to vacate
the premises of the property located at No. 3, Intsia, Forbes Park, Makati City. The writ of
execution was later issued on April 17, 200712 and a Notice to Vacate13 was issued on April
19, 2007 ordering private respondent to leave the premises of the subject property within ten
(10) days.
Consequently, private respondent filed a Petition for Certiorari and Prohibition (With Prayer
for TRO and Writ of Preliminary Injunction) dated May 2, 200714 with the CA.
On May 4, 2007, the CA issued the assailed Resolution granting the prayer for the issuance
of a TRO. In issuing the TRO, the CA ruled that the Notice of Appeal was filed within the
reglementary period provided by the Rules of Court applying the "fresh rule period"
enunciated by this Court in Neypes v. Court of Appeals 15 as reiterated in Sumaway v. Union
Bank.16
Afterwards, on July 6, 2007, the CA issued the assailed decision granting the petition of
private respondent. The dispositive portion reads:
WHEREFORE, in view of the foregoing, the instant petition is GRANTED and GIVEN DUE
COURSE. Accordingly, the Order, dated April 2, 2007, the writ of execution, dated April 17,
2007, and the Notice to Vacate, dated April 19, 2007, are ANNULLED AND SET ASIDE.
Further, the court a quo is hereby directed to give due course to the appeal of Nelia S.
Silverio-Dee.
SO ORDERED.
Hence, the instant petition.
The Issues
-AThe Omnibus Order dated May 31, 2005 (Annex G of Annex C) and the Order dated
December 12, 2005 are Interlocutory Orders which are not subject to appeal under Sec. 1 of
Rule 41;
-BThe respondent Court seriously erred and/or committed grave abuse of discretion amounting
to lack of or excess of jurisdiction, in deliberately failing to decide that the basis of the
occupancy of Nelia S. Silverio-Dee are fraudulent documents, without any authority from the
Intestate Court;
-CThe respondent Court seriously erred and/or committed grave abuse of discretion amounting
to lack of or excess of jurisdiction, in issuing precipitately the temporary restraining order
(TRO) in its Resolution dated May 4, 2007 (Annex A-1);
-DThe respondent Court seriously erred and/or committed grave abuse of discretion amounting
to lack of or excess of jurisdiction in annulling the Order dated April 2, 2007, the Writ of
Execution dated April 17, 2007, and the Notice to Vacate dated April 19, 2007 because the
respondent Silverio-Dees occupancy of the Intestate property located at No. 3 Intsia Road,
Forbes Park, Makati City (Annex N of Annex C) will prevent the sale authorized by the Order
dated October 31, 2006 to secure funds for the payment of taxes due which are now high
and rapidly increasing payment of which must not be enjoined. 17
The Courts Ruling
This petition is meritorious.
The May 31, 2005 Order of the RTC Is an Interlocutory Order, Not Subject to an Appeal
To recapitulate, the relevant facts to the instant issue are as follows:
On May 31, 2005, the RTC issued an Omnibus Order ordering Nelia Silverio-Dee to vacate
the premises of the property located at No. 3, Intsia Road, Forbes Park, Makati City. She
received a copy of the said Order on June 8, 2005. Instead of filing a Notice of Appeal and
Record on Appeal, private respondent filed a motion for reconsideration of the Order. This
motion for reconsideration was denied in an Order dated December 12, 2005. This Order
was received by private respondent on December 22, 2005. On January 6, 2006, private
respondent filed her Notice of Appeal while she filed her Record on Appeal on January 23,
2006.
1avvphi1
Thus, in denying due course to the Notice/Record on Appeal, the RTC, in its Order dated
April 2, 2007, ruled:
Verily, the appeal taken by the movant Nelia Silverio-Dee from the Order of this Court dated
December 12, 2005 denying the Motion for Reconsideration is misplaced as no appeal may
be taken from the order denying the motion for reconsideration (see Section 1, Rule 41 of
the 1997 Rules of Civil Procedure in relation to Section 1(f), Rule 109 of the Rules of Court).
Furthermore, assuming that what said movant had appealed is the final Order dated May 31,
2005, still, the appeal cannot be given due course as the Record on Appeal had been filed
beyond the thirty-day period to appeal (see Section 3 Rule 41 of the Rules of Court)
WHEREFORE, the appeal filed by Nelia Silverio is hereby DENIED due course.
Let a writ of execution issue to enforce the Order dated May 31, 2005 against Nelia SilverioDee requiring her to vacate the premises at No. 3 Intsia, Forbes Park, Makati City.
SO ORDERED.
Thus, the denial of due course by the RTC was based on two (2) grounds: (1) that Nelia
Silverio-Dees appeal was against an order denying a motion for reconsideration which is
disallowed under Sec. 1(a), Rule 41 of the Rules of Court; and (2) that Nelia Silverio-Dees
Record on Appeal was filed beyond the reglementary period to file an appeal provided under
Sec. 3 of Rule 41.
Sec. 1(a), Rule 41 of the Rules of Court provides:
RULE 41
APPEAL FROM THE REGIONAL TRIAL COURTS
SECTION 1. Subject of appeal.An appeal may be taken from a judgment or final order that
completely disposes of the case, or of a particular matter therein when declared by these
Rules to be appealable.
No appeal may be taken from:
(a) An order denying a motion for new trial or reconsideration;
xxxx
In all the above instances where the judgment or final order is not appealable, the aggrieved
party may file an appropriate special civil action under Rule 65.
Petitioner argues that because private respondent filed a Notice of Appeal from the Order
dated December 12, 2005 which denied her motion for reconsideration of the Omnibus
Order dated May 31, 2005, her appeal is of an order denying a motion for reconsideration.
Thus, petitioner alleges that private respondent employed the wrong remedy in filing a notice
of appeal and should have filed a petition for certiorari with the CA under Rule 65 of the
Rules of Court instead.
The CA, however, ruled that the filing of the Notice of Appeal in this case was proper saying
that the appeal pertained to the earlier Omnibus Order dated May 31, 2005. The CA, citing
Apuyan v. Haldeman,18 argued that an order denying a motion for reconsideration may be
appealed as such order is the "final order" which disposes of the case. In that case, we
stated:
In the recent case of Quelnan v. VHF Philippines, Inc., We held, thus:
[T]his Court finds that the proscription against appealing from an order denying a motion
for reconsideration refers to an interlocutory order, and not to a final order or judgment. That
that was the intention of the above-quoted rules is gathered from Pagtakhan v. CIR, 39
SCRA 455 (1971), cited in above-quoted portion of the decision in Republic, in which this
Court held that an order denying a motion to dismiss an action is interlocutory, hence, not
appealable.
The rationale behind the rule proscribing the remedy of appeal from an interlocutory order is
to prevent undue delay, useless appeals and undue inconvenience to the appealing party by
having to assail orders as they are promulgated by the court, when they can be contested in
a single appeal. The appropriate remedy is thus for the party to wait for the final judgment or
order and assign such interlocutory order as an error of the court on appeal.
The denial of the motion for reconsideration of an order of dismissal of a complaint is not an
interlocutory order, however, but a final order as it puts an end to the particular matter
resolved, or settles definitely the matter therein disposed of, and nothing is left for the trial
court to do other than to execute the order.
Not being an interlocutory order, an order denying a motion for reconsideration of an order of
dismissal of a complaint is effectively an appeal of the order of dismissal itself.
The reference by petitioner, in his notice of appeal, to the March 12, 1999 Order denying his
Omnibus MotionMotion for Reconsideration should thus be deemed to refer to the January
17, 1999 Order which declared him non-suited and accordingly dismissed his complaint.
If the proscription against appealing an order denying a motion for reconsideration is applied
to any order, then there would have been no need to specifically mention in both abovequoted sections of the Rules "final orders or judgments" as subject to appeal. In other words,
from the entire provisions of Rule 39 and 41, there can be no mistaking that what is
proscribed is to appeal from a denial of a motion for reconsideration of an interlocutory order.
(Emphasis supplied.)
Thus, the question posed is whether the Omnibus Order dated May 31, 2005 is an
interlocutory order.
On this aspect, the CA ruled that the Omnibus Order dated May 31, 2005 was a final order,
to wit:
We note that the Order, dated December 12, 2005, is an offshoot of the Omnibus Order,
dated May 31, 2005. In the Omnibus Order, the court a quo ruled that the petitioner, as an
heir of the late Beatriz S. Silverio, had no right to use and occupy the property in question
despite authority given to her by Ricardo Silverio, Sr. when it said, thus:
x x x In the first place, Nelia S. Silverio-Dee cannot occupy the property in Intsia, Forbes
Park, admittedly belonging to the conjugal estate and subject to their proceedings without
authority of the Court. Based on the pretenses of Nelia Silverio-Dee in her memorandum, it
is clear that she would use and maintain the premises in the concept of a distributee. Under
her perception, Section 1 Rule 90 of the Revised Rules of Court is violated. x x x
xxxx
For the property at Intsia, Forbes Park cannot be occupied or appropriated by, nor distributed
to Nelia S. Silverio-Dee, since no distribution shall be allowed until the payment of the
obligations mentioned in the aforestated Rule is made. In fact, the said property may still be
sold to pay the taxes and/or other obligations owned by the estate, which will be difficult to
do if she is allowed to stay in the property.
Moreover, the alleged authority given by SILVERIO, SR. for Nelia S. Silverio-Dee to occupy
the property dated May 4, 2004, assuming it is not even antedated as alleged by SILVERIO,
JR., is null and void since the possession of estate property can only be given to a purported
heir by virtue of an Order from this Court (see Sec. 1 Rule 90, supra; and Sec. 2 Rule 84,
Revised Rules of Court). In fact, the Executor or Administrator shall have the right to the
possession and management of the real as well as the personal estate of the deceased only
when it is necessary for the payment of the debts and expenses of administration (See Sec.
3 Rule 84, Revised Rules of Court). With this in mind, it is without an iota of doubt that the
possession by Nelia S. Silverio-Dee of the property in question has absolutely no legal basis
considering that her occupancy cannot pay the debts and expenses of administration, not to
mention the fact that it will also disturb the right of the new Administrator to possess and
manage the property for the purpose of settling the estates legitimate obligations.
In the belated Memorandum of Nelia Silverio-Dee, she enclosed a statement of the
expenses she incurred pertaining to the house renovation covering the period from May 26,
2004 to February 28, 2005 in the total amount of Php12,434,749.55, which supports this
Courts conclusion that she is already the final distributee of the property. Repairs of such
magnitude require notice, hearing of the parties and approval of the Court under the Rules.
Without following this process, the acts of Nelia Silverio-Dee are absolutely without legal
sanction.
To our mind, the court a quos ruling clearly constitutes a final determination of the rights of
the petitioner as the appealing party. As such, the Omnibus Order, dated May 31, 2002 (the
predecessor of the Order dated December 12, 2002) is a final order; hence, the same may
be appealed, for the said matter is clearly declared by the rules as appealable and the
proscription does not apply.19 (Emphasis supplied.)
An interlocutory order, as opposed to a final order, was defined in Tan v. Republic: 20
A final order is one that disposes of the subject matter in its entirety or terminates a particular
proceeding or action, leaving nothing else to be done but to enforce by execution what has
been determined by the court, while an interlocutory order is one which does not dispose of
the case completely but leaves something to be decided upon. (Emphasis supplied.)
Additionally, it is only after a judgment has been rendered in the case that the ground for the
appeal of the interlocutory order may be included in the appeal of the judgment itself. The
interlocutory order generally cannot be appealed separately from the judgment. It is only
when such interlocutory order was rendered without or in excess of jurisdiction or with grave
abuse of discretion that certiorari under Rule 65 may be resorted to. 21
In the instant case, Nelia Silverio-Dee appealed the May 31, 2005 Order of the RTC on the
ground that it ordered her to vacate the premises of the property located at No. 3 Intsia
Road, Forbes Park, Makati City. On that aspect the order is not a final determination of the
case or of the issue of distribution of the shares of the heirs in the estate or their rights
therein. It must be borne in mind that until the estate is partitioned, each heir only has an
inchoate right to the properties of the estate, such that no heir may lay claim on a particular
property. In Alejandrino v. Court of Appeals, we succinctly ruled:
Art. 1078 of the Civil Code provides that where there are two or more heirs, the whole estate
of the decedent is, before partition, owned in common by such heirs, subject to the payment
of the debts of the deceased. Under a co-ownership, the ownership of an undivided thing or
right belongs to different persons. Each co-owner of property which is held pro indiviso
exercises his rights over the whole property and may use and enjoy the same with no other
limitation than that he shall not injure the interests of his co-owners. The underlying rationale
is that until a division is made, the respective share of each cannot be determined and every
co-owner exercises, together with his co-participants, joint ownership over the pro indiviso
property, in addition to his use and enjoyment of the same.
Although the right of an heir over the property of the decedent is inchoate as long as the
estate has not been fully settled and partitioned, the law allows a co-owner to exercise rights
of ownership over such inchoate right. Thus, the Civil Code provides:
Art. 493. Each co-owner shall have the full ownership of his part and of the fruits and
benefits pertaining thereto, and he may therefore alienate, assign or mortgage it, and even
substitute another person in its enjoyment, except when personal rights are involved. But the
effect of the alienation or the mortgage, with respect to the co-owners, shall be limited to the
portion which may be allotted to him in the division upon the termination of the coownership.22 (Emphasis supplied.)
Additionally, the above provision must be viewed in the context that the subject property is
part of an estate and subject to intestate proceedings before the courts. It is, thus, relevant to
note that in Rule 84, Sec. 2 of the Rules of Court, the administrator may only deliver
properties of the estate to the heirs upon order of the Court. Similarly, under Rule 90, Sec. 1
of the Rules of Court, the properties of the estate shall only be distributed after the payment
of the debts, funeral charges, and other expenses against the estate, except when
authorized by the Court.
Verily, once an action for the settlement of an estate is filed with the court, the properties
included therein are under the control of the intestate court. And not even the administrator
may take possession of any property that is part of the estate without the prior authority of
the Court.
In the instant case, the purported authority of Nelia Silverio-Dee, which she allegedly
secured from Ricardo Silverio, Sr., was never approved by the probate court. She, therefore,
never had any real interest in the specific property located at No. 3 Intsia Road, Forbes Park,
Makati City. As such, the May 31, 2005 Order of the RTC must be considered as
interlocutory and, therefore, not subject to an appeal.
1avvphi1
Thus, private respondent employed the wrong mode of appeal by filing a Notice of Appeal
with the RTC. Hence, for employing the improper mode of appeal, the case should have
been dismissed.23
The implication of such improper appeal is that the notice of appeal did not toll the
reglementary period for the filing of a petition for certiorari under Rule 65, the proper remedy
in the instant case. This means that private respondent has now lost her remedy of appeal
from the May 31, 2005 Order of the RTC.
Therefore, there is no longer any need to consider the other issues raised in the petition.
WHEREFORE, the May 4, 2007 Resolution and July 6, 2007 Decision of the CA in CA-G.R.
SP No. 98764 are REVERSED and SET ASIDE. Thus, the Decision dated April 2, 2007 of
the RTC denying due course to the appeal of Nelia Silverio-Dee; the Writ of Execution dated
April 17, 2007; and the Notice to Vacate dated April 19, 2007 are hereby REINSTATED.
No costs.
SO ORDERED.
Associate Justice
WE CONCUR:
Associate Justice
Chairperson
Associate Justice
TERESITA J. LEONARDO-DE CASTRO*

Associate Justice
DIOSDADO M. PERALTA
Associate Justice
ATT E S TATI O N
Associate Justice
Chairperson
REYNATO S. PUNO
Chief Justice
Footnotes
*
Additional member as per August 3, 2009 raffle.
Rollo, pp. 59-67. Penned by Associate Justice Arturo G. Tayag and concurred in by
Associate Justices Martin S. Villarama, Jr. and Hakim S. Abdulwahid.
1
Id. at 69-84. Penned by Associate Justice Arturo G. Tayag and concurred in by

Associate Justices Rodrigo V. Cosico and Hakim S. Abdulwahid.
2
Id. at 121-125.
Id. at 133-157.
Id. at 158-163.
Id. at 166-171.
Id. at 35.
Id. at 172-174.
Id. at 175-262.
10
Id. at 263-266.
11
Id. at 114-115.
12
Id. at 116-117.
13
Id. at 118.
14
Id. at 85-276.
15
G.R. No. 141524, September 14, 2005, 469 SCRA 633.
16
G.R. No. 142534, June 27, 2006, 493 SCRA 99.
17
Rollo, p. 38.
18
G.R. No. 129980, September 20, 2004, 438 SCRA 402, 418-419.
19
Rollo, pp. 77-80.
20
G.R. No. 170740, May 25, 2007, 523 SCRA 203, 210-211.
21
1 F. Regalado, Remedial Law Compendium 540 (8th revised ed.).
22
G.R. No. 114151, September 17, 1998, 295 SCRA 536, 548-549.
23
Rules of Court, Rule 50, Sec. 2.

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 174680
March 24, 2008
VICTORIA C. TAYAG, Petitioner,

vs.
FELICIDAD A. TAYAG-GALLOR, Respondent.
DECISION
TINGA, J.:
This is a petition for review on certiorari seeking the reversal of the Decision 1 of the Court of
Appeals dated 29 May 2006, and its Resolution2 dated 28 August 2006 in CA-G.R. SP No.
79205.
The antecedents are as follows:
On 15 January 2001, respondent herein, Felicidad A. Tayag-Gallor, filed a petition for the
issuance of letters of administration over the estate of Ismael Tayag. 3 Respondent alleged in
the petition, docketed as Special Proceeding No. 5994 (SP 5994), that she is one of the
three (3) illegitimate children of the late Ismael Tayag and Ester C. Angeles. The decedent
was married to petitioner herein, Victoria C. Tayag, but the two allegedly did not have any
children of their own.
On 7 September 2000, Ismael Tayag died intestate, leaving behind two (2) real properties
both of which are in the possession of petitioner, and a motor vehicle which the latter sold on
10 October 2000 preparatory to the settlement of the decedents estate. Petitioner allegedly
promised to give respondent and her brothersP100,000.00 each as their share in the
proceeds of the sale. However, petitioner only gave each of them half the amount she
promised.
Respondent further averred that on 20 November 2000, petitioner has caused the annotation
of 5 September 1984 affidavit executed by Ismael Tayag declaring the properties to be the
paraphernal properties of petitioner. The latter allegedly intends to dispose of these
properties to the respondents and her brothers prejudice.
Petitioner opposed the petition, asserting that she purchased the properties subject of the
petition using her own money. She claimed that she and Ismael Tayag got married in Las
Vegas, Nevada, USA on 25 October 1973, and that they have an adopted daughter, Carmela
Tayag, who is presently residing in the USA. It is allegedly not true that she is planning to sell
the properties. Petitioner prayed for the dismissal of the suit because respondent failed to
state a cause of action.4
In a Motion5 dated 31 August 2001, petitioner reiterated her sole ownership of the properties
and presented the transfer certificates of title thereof in her name. She also averred that it is
necessary to allege that respondent was acknowledged and recognized by Ismael Tayag as
his illegitimate child. There being no such allegation, the action becomes one to compel
recognition which cannot be brought after the death of the putative father. To prevent further
encroachment upon the courts time, petitioner moved for a hearing on her affirmative
defenses.
The Motion was denied in an Order6 dated 3 April 2003. Petitioners motion for
reconsideration was likewise denied in an Order7 dated 16 July 2003.
The appellate court, in a Decision8 dated 29 May 2006, upheld the denial of petitioners
motion and directed the trial court to proceed with the case with dispatch. The Court of
Appeals ruled, in essence, that the allegation that respondent is an illegitimate child suffices
for a cause of action, without need to state that she had been recognized and acknowledged
as such. However, respondent still has to prove her allegation and, correspondingly,
petitioner has the right to refute the allegation in the course of the settlement proceedings.
The Court of Appeals denied reconsideration in a Resolution 9 dated 28 August 2006.
In her Petition10 17 dated September 2006, petitioner asserts that respondent should not be
allowed to prove her filiation in the settlement of Ismael Tayags estate. If, following the case
of Uyguanco v. Court of Appeals,11 the claim of filiation may no longer be proved in an action
for recognition, with more reason that it should not be allowed to be proved in an action for
the settlement of the decedents estate. Thus, petitioner claims, respondent may no longer
maintain an action to prove that she is the illegitimate child of the decedent after the latters
death.
Unfortunately, the two-page Comment, 12 dated 17 April 2007, fails to shed any more light on
the present controversy.
The Reply13 dated 3 September 2007 reiterates the arguments in the petition.
The main issue in this case is deceptively simple. As crafted by the Court of Appeals, it is
whether respondents petition for the issuance of letters of administration sufficiently states a
cause of action considering that respondent merely alleged therein that she is an illegitimate
child of the decedent, without stating that she had been acknowledged or recognized as
such by the latter. The appellate court held that the mere allegation that respondent is an
illegitimate child suffices.
Rule 79 of the Rules of Court provides that a petition for the issuance of letters of
administration must be filed by an interested person. In Saguinsin v. Lindayag,14 the Court
defined an interested party as one who would be benefited by the estate, such as an heir, or
one who has a claim against the estate, such as a creditor. This interest, furthermore, must
be material and direct, not merely indirect or contingent.
Hence, where the right of the person filing a petition for the issuance of letters of
administration is dependent on a fact which has not been established or worse, can no
longer be established, such contingent interest does not make her an interested party. Here
lies the complication in the case which the appellate court had not discussed, although its
disposition of the case is correct.
1avvphi1
Essentially, the petition for the issuance of letters of administration is a suit for the settlement
of the intestate estate of Ismael Tayag. The right of respondent to maintain such a suit is
dependent on whether she is entitled to successional rights as an illegitimate child of the

decedent which, in turn, may be established through voluntary or compulsory recognition.
Voluntary recognition must be express such as that in a record of birth appearing in the civil
register, a final judgment, a public instrument or private handwritten instrument signed by the
parent concerned.15 The voluntary recognition of an illegitimate child by his or her parent
needs no further court action and is, therefore, not subject to the limitation that the action for
recognition be brought during the lifetime of the putative parent. 16 Judicial or compulsory
recognition, on the other hand, may be demanded by the illegitimate child of his parents and
must be brought during the lifetime of the presumed parents. 17
Petitioners thesis is essentially based on her contention that by Ismael Tayags death,
respondents illegitimate filiation and necessarily, her interest in the decedents estate which
the Rules require to be material and direct, may no longer be established. Petitioner,
however, overlooks the fact that respondents successional rights may be established not
just by a judicial action to compel recognition but also by proof that she had been voluntarily
acknowledged and recognized as an illegitimate child.
In Uyguangco v. Court of Appeals, supra, Graciano Uyguangco, claiming to be an illegitimate
child of the decedent, filed a complaint for partition against the latters wife and legitimate
children. However, an admission was elicited from him in the course of his presentation of
evidence at the trial that he had none of the documents mentioned in Article 278 18 of the
1950 Civil Code to show that he was the illegitimate son of the decedent. The wife and
legitimate children of the decedent thereupon moved for the dismissal of the case on the
ground that he could no longer prove his alleged filiation under the applicable provision of
the Civil Code.
The Court, applying the provisions of the Family Code which had then already taken effect,
ruled that since Graciano was claiming illegitimate filiation under the second paragraph of
Article 172 of the Family Code, i.e.,open and continuous possession of the status of an
illegitimate child, the action was already barred by the death of the alleged father.
In contrast, respondent in this case had not been given the opportunity to present evidence
to show whether she had been voluntarily recognized and acknowledged by her deceased
father because of petitioners opposition to her petition and motion for hearing on affirmative
defenses. There is, as yet, no way to determine if her petition is actually one to compel
recognition which had already been foreclosed by the death of her father, or whether indeed
she has a material and direct interest to maintain the suit by reason of the decedents
voluntary acknowledgment or recognition of her illegitimate filiation.
We find, therefore, that the allegation that respondent is an illegitimate child of the decedent
suffices even without further stating that she has been so recognized or acknowledged. A
motion to dismiss on the ground of failure to state a cause of action in the complaint
hypothetically admits the truth of the facts alleged therein. 19 Assuming the fact alleged to be
true, i.e., that respondent is the
decedents illegitimate child, her interest in the estate as such would definitely be material
and direct. The appellate court was, therefore, correct in allowing the proceedings to
continue, ruling that, "respondent still has the duty to prove the allegation (that she is an
illegitimate child of the decedent), just as the petitioner has the right to disprove it, in the
course of the settlement proceedings."
WHEREFORE, the instant petition is DENIED. The Decision of the Court of Appeals dated
29 May 2006 and its Resolution dated 28 August 2006 are AFFIRMED. No pronouncement
as to costs.
SO ORDERED.
DANTE O. TINGA
Associate Justice
WE CONCUR:
Associate Justice
Chairperson
Associate Justice
Associate Justice

Associate Justice
ATT E S TATI O N
Associate Justice
Chairperson, Second Division
Attestation, it is hereby certified that the conclusions in the above Decision had been
reached in consultation before the case was assigned to the writer of the opinion of the
Courts Division.
REYNATO S. PUNO
Chief Justice
Footnotes
1
Rollo, pp. 16-23.
Id. at 25.
Records, pp. 2-6.
Id. at 18-22; Opposition dated March 30, 2001.
Id. at 68.
CA rollo, p. 12.
Id. at 13.
Rollo, pp. 16-22.
Id. at 25.
10
Id. at 3-14.
11
G.R. No. 76873, 26 October 1989, 178 SCRA 684.
12
Rollo, pp. 72-73.
13
Id. at 79-81.
No. L-17759, 17 December 1962, 6 SCRA 874, citing Trillana v.

Crisostom and Espinosa v. Barrios, 70 Phil. 311 (1951).
14
15
Art. 175 in relation to Art. 172 and Art. 173, New Civil Code.
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.
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.
See also In the Matter of the Intestate Estate of the Deceased Josefa Delgado and
Guillermo Rustia,G.R. No. 155733, 27 January 2006, 480 SCRA 334.
16
Divinagracia v. Bellosillo, No. L-47407, 12 August 1986, 143 SCRA 356.

17
Id.
Art. 278. Recognition shall be made in the record of birth, a will, statement before a
court of record, or in any authentic writing.
18
19
Drilon v. Court of Appeals, G.R. No. 106922, 20 April 2001, 357 SCRA 13.

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 146989
February 7, 2007
MELENCIO GABRIEL, represented by surviving spouse, FLORDELIZA V.

GABRIEL, Petitioner,
vs.
NELSON BILON, ANGEL BRAZIL AND ERNESTO PAGAYGAY, Respondents.
DECISION
AZCUNA, J.:
This is a petition for review on certiorari1 assailing the Decision and Resolution of the Court
of Appeals, respectively dated August 4, 2000 and February 7, 2001, in CA-G.R. SP No.
52001 entitled "Nelson Bilon, et al. v. National Labor Relations Commission, et al."
The challenged decision reversed and set aside the decision 2 of the National Labor Relations
Commission (NLRC) dismissing respondents complaint for illegal dismissal and illegal
deductions, and reinstating the decision of the Labor Arbiter finding petitioner guilty of illegal
dismissal but not of illegal deductions subject to the modification that respondents be
immediately reinstated to their former positions without loss of seniority rights and privileges
instead of being paid separation pay.
Petitioner, represented by his surviving spouse, Flordeliza V. Gabriel, was the owneroperator of a public transport business, "Gabriel Jeepney," with a fleet of 54 jeepneys plying
the Baclaran-Divisoria-Tondo route. Petitioner had a pool of drivers, which included
respondents, operating under a "boundary system" of P400 per day.
The facts3 are as follows:
On November 15, 1995, respondents filed their separate complaints for illegal dismissal,
illegal deductions, and separation pay against petitioner with the National Labor Relations
Commission (NLRC). These were consolidated and docketed as NLRC-NCR Case No. 0011-07420-95.4
On December 15, 1995, the complaint was amended, impleading as party respondent the
Bacoor Transport Service Cooperative, Inc., as both parties are members of the cooperative.
Respondents alleged the following:
1) That they were regular drivers of Gabriel Jeepney, driving their respective units
bearing Plate Nos. PHW 553, NXU 155, and NWW 557, under a boundary system
of P400 per day, plying Baclaran to Divisoria via Tondo, and vice versa, since
December 1990, November 1984 and November 1991, respectively, up to April 30,
1995,5 driving five days a week, with average daily earnings of P400;
2) That they were required/forced to pay additional P55.00 per day for the following:
a) P20.00 police protection; b) P20.00 washing; c) P10.00 deposit; and [d)] P5.00
garage fees;
3) That there is no law providing the operator to require the drivers to pay police
protection, deposit, washing, and garage fees.
4) That on April 30, 1995, petitioner told them not to drive anymore, and when they
went to the garage to report for work the next day, they were not given a unit to drive;
and
5) That the boundary drivers of passenger jeepneys are considered regular
employees of the jeepney operators. Being such, they are entitled to security of
tenure. Petitioner, however, dismissed them without factual and legal basis, and
without due process.
On his part, petitioner contended that:
1) He does not remember if the respondents were ever under his employ as drivers
of his passenger jeepneys. Certain, however, is the fact that neither the respondents
nor other drivers who worked for him were ever dismissed by him. As a matter of
fact, some of his former drivers just stopped reporting for work, either because they
found some other employment or drove for other operators, and like the respondents,
the next time he heard from them was when they started fabricating unfounded
complaints against him;
2) He made sure that none of the jeepneys would stay idle even for a day so he
could collect his earnings; hence, it had been his practice to establish a pool of
drivers. Had respondents manifested their desire to drive his units, it would have
been immaterial whether they were his former drivers or not. As long as they
obtained the necessary licenses and references, they would have been
accommodated and placed on schedule;
3) While he was penalized or made to pay a certain amount in connection with
similar complaints by other drivers in a previous case before this, it was not because
his culpability was established, but due to technicalities involving oversight and
negligence on his part by not participating in any stage of the investigation thereof;
and
4) Respondents claim that certain amounts, as enumerated in the complaint, were
deducted from their days earnings is preposterous. Indeed, there were times when
deductions were made from the days earnings of some drivers, but such were
installment payments for the amount previously advanced to them. Most drivers,
when they got involved in accidents or violations of traffic regulations, managed to
settle them, and in the process they had to spend some money, but most of the time
they did not have the needed amount so they secured cash advances from him, with
the understanding that the same should be paid back by installments through
deductions from their daily earnings or boundary.
On the other hand, Bacoor Transport Service Cooperative, Inc. (BTSCI) declared that it
should not be made a party to the case because: 1) [I]t has nothing to do with the
employment of its member-drivers. The matter is between the member-operator and their
respective member-drivers. The member-drivers tenure of employment, compensation, work

conditions, and other aspects of employment are matters of arrangement between them and
the member-operators concerned, and the BTSCI has nothing to do with it, as can be
inferred from the Management Agreement between BTSCI and the member-operators; and
2) [T]he amount allegedly deducted from respondents and the purpose for which they were
applied were matters that the cooperative was not aware of, and much less imposed on
them.
On September 17, 1996, respondents filed a motion to re-raffle the case for the reason that
the Labor Arbiter (Hon. Roberto I. Santos) failed "to render his decision within thirty (30)
calendar days, without extension, after the submission of the case for decision."
On September 18, 1996, said Labor Arbiter inhibited himself from further handling the case
due to "personal reasons."
On November 8, 1996, Labor Arbiter Ricardo C. Nora, to whom the case was re-raffled,
ordered the parties to file their respective memoranda within ten days, after which the case
was deemed submitted for resolution.
On March 17, 1997, the Labor Arbiter (Hon. Ricardo C. Nora) handed down his decision, the
dispositive portion of which is worded as follows:
WHEREFORE, premises considered, judgment is hereby rendered declaring the illegality of
[respondents] dismissal and ordering [petitioner] Melencio Gabriel to pay the [respondents]
the total amount of ONE MILLION THIRTY FOUR THOUSAND PESOS [P1,034,000,]
representing [respondents] backwages and separation pay as follows:
1. Nelson Bilon
Backwages P 284,800
Separation Pay 26,400 P 321,200
2. Angel Brazil
Backwages P 294,800
Separation Pay 96,800 391,600
3. Ernesto Pagaygay
Backwages P 294,800
Separation Pay 26,400 321,200
P 1,034,000
[Petitioner] Melencio Gabriel is likewise ordered to pay attorneys fees equivalent to five
percent (5%) of the judgment award or the amount of P51,700 within ten (10) days from
receipt of this Decision.
All other issues are dismissed for lack of merit.

SO ORDERED.6
Incidentally, on April 4, 1997, petitioner passed away. On April 18, 1997, a copy of the above
decision was delivered personally to petitioners house. According to respondents,
petitioners surviving spouse, Flordeliza Gabriel, and their daughter, after reading the
contents of the decision and after they had spoken to their counsel, refused to receive the
same. Nevertheless, Bailiff Alfredo V. Estonactoc left a copy of the decision with petitioners
wife and her daughter but they both refused to sign and acknowledge receipt of the
decision.7
The labor arbiters decision was subsequently served by registered mail at petitioners
residence and the same was received on May 28, 1997.
On May 16, 1997, counsel for petitioner filed an entry of appearance with motion to dismiss
the case for the reason that petitioner passed away last April 4, 1997.
On June 5, 1997, petitioner appealed the labor arbiters decision to the National Labor
Relations Commission, First Division, contending that the labor arbiter erred:
1. In holding that [petitioner] Gabriel dismissed the complainants, Arb. Nora
committed a serious error in the findings of fact which, if not corrected, would cause
grave or irreparable damage or injury to [petitioner] Gabriel;
2. In holding that strained relations already exist between the parties, justifying an
award of separation pay in lieu of reinstatement, Arb. Nora not only committed a
serious error in the findings of fact, but he also abused his discretion;
3. In computing the amount of backwages allegedly due [respondents] from 30 April
1995 to 15 March 1997, Arb. Nora abused his discretion, considering that the case
had been submitted for decision as early as 1 March 1996 and that the same should
have been decided as early as 31 March 1996;
4. In using P400.00 and 22 days as factors in computing the amount of backwages
allegedly due [respondents], Arb. Nora abused his discretion and committed a
serious error in the findings of fact, considering that there was no factual or
evidentiary basis therefor;
5. In using 33.5 months as factor in the computation of the amount of backwages
allegedly due [respondents], Arb. Nora committed a serious error in the findings of
fact[,] because even if it is assumed that backwages are due from 30 April 1995 to 15
March 1997, the period between the two dates is only 22 months, and not 33
months as stated in the appealed decision; and
6. In not dismissing the case[,] despite notice of the death of [petitioner] Gabriel
before final judgment, Arb. Nora abused his discretion and committed a serious error
of law.8
On July 3, 1997, respondents filed a motion to dismiss petitioners appeal on the ground that
the "surety bond is defective" and the appeal was "filed out of time," which move was
opposed by petitioner.
Subsequently, on April 28, 1998, the NLRC promulgated its first decision, the dispositive
portion of which reads:
WHEREFORE, premises considered, the appealed decision is hereby reversed and set
aside. The above-entitled case is hereby dismissed for lack of employer-employee
relationship.
SO ORDERED.9
Respondents filed a motion for reconsideration. They claimed that the decision did not
discuss the issue of the timeliness of the appeal. The lack of employer-employee relationship
was mentioned in the dispositive portion, which issue was not raised before the labor arbiter
or discussed in the body of the questioned decision. In view of the issues raised by
respondents in their motion, the NLRC rendered its second decision on October 29, 1998.
The pertinent portions are hereby quoted thus:
In the case at bar, [petitioner] Melencio Gabriel was not represented by counsel during the
pendency of the case. A decision was rendered by the Labor Arbiter a quo on March 17,
1997 while Mr. Gabriel passed away on April 4, 1997 without having received a copy thereof
during his lifetime. The decision was only served on April 18, 1997 when he was no longer
around to receive the same. His surviving spouse and daughter cannot automatically
substitute themselves as party respondents. Thus, when the bailiff tendered a copy of the
decision to them, they were not in a position to receive them. The requirement of leaving a
copy at the partys residence is not applicable in the instant case because this presupposes
that the party is still living and is just not available to receive the decision.
The preceding considered, the decision of the labor arbiter has not become final because
there was no proper service of copy thereof to [petitioner] .
Undoubtedly, this case is for recovery of money which does not survive, and considering that
the decision has not become final, the case should have been dismissed and the appeal no
longer entertained.
WHEREFORE, in view of the foregoing, the Decision of April 28, 1998 is set aside and
vacated. Furthermore, the instant case is dismissed and complainants are directed to pursue
their claim against the proceedings for the settlement of the estate of the deceased Melencio
Gabriel.
SO ORDERED.10
Aggrieved by the decision of the NLRC, respondents elevated the case to the Court of
Appeals (CA) by way of a petition for certiorari. On August 4, 2000, the CA reversed the
decisions of the NLRC:
Article 223 of the Labor Code categorically mandates that "an appeal by the employer may
be perfected only upon the posting of a cash bond or surety bond x x x." It is beyond
peradventure then that the non-compliance with the above conditio sine qua non, plus the
fact that the appeal was filed beyond the reglementary period, should have been enough
reasons to dismiss the appeal.
In any event, even conceding ex gratia that such procedural infirmity [were] inexistent, this
petition would still be tenable based on substantive aspects.
The public respondents decision, dated April 28, 1998, is egregiously wrong insofar as it was
anchored on the absence of an employer-employee relationship. Well-settled is the rule that
the boundary system used in jeepney and (taxi) operations presupposes an employeremployee relationship (National Labor Union v. Dinglasan, 98 Phil. 649) .
The NLRC ostensibly tried to redeem itself by vacating the decision April 28, 1998. By so
doing, however, it did not actually resolve the matter definitively. It merely relieved itself of
such burden by suggesting that the petitioners "pursue their claim against the proceedings
for the settlement of the estate of the deceased Melencio Gabriel."
In the instant case, the decision (dated March 17, 1997) of the Labor Arbiter became final
and executory on account of the failure of the private respondent to perfect his appeal on
time.
Thus, we disagree with the ratiocination of the NLRC that the death of the private respondent
on April 4, 1997 ipso facto negates recovery of the money claim against the successors-ininterest . Rather, this situation comes within the aegis of Section 3, Rule III of the NLRC
Manual on Execution of Judgment, which provides:
SECTION 3. Execution in Case of Death of Party. Where a party dies after the finality of
the decision/entry of judgment of order, execution thereon may issue or one already issued
may be enforced in the following cases:
a) x x x ;
b) In case of death of the losing party, against his successor-in-interest, executor or
administrator;
c) In case of death of the losing party after execution is actually levied upon any of
his property, the same may be sold for the satisfaction thereof, and the sheriff making
the sale shall account to his successor-in-interest, executor or administrator for any
surplus in his hands.
Notwithstanding the foregoing disquisition though, We are not entirely in accord with the
labor arbiters decision awarding separation pay in favor of the petitioners. In this regard, it
[is] worth mentioning that in Kiamco v. NLRC,11 citing Globe-Mackay Cable and Radio
Corp. v. NLRC,12 the Supreme Court qualified the application of the "strained relations"
principle when it held -"If in the wisdom of the Court, there may be a ground or grounds for the non-application of
the above-cited provision (Art. 279, Labor Code) this should be by way of exception, such as
when the reinstatement may be inadmissible due to ensuing strained relations between the
employer and employee.
In such cases, it should be proved that the employee concerned occupies a position where
he enjoys the trust and confidence of his employer, and that it is likely that if reinstated, an
atmosphere of antipathy and antagonism may be generated as to adversely affect the
efficiency and productivity of the employee concerned x x x Obviously, the principle of
strained relations cannot be applied indiscriminately. Otherwise, reinstatement can never be
possible simply because some hostility is invariably engendered between the parties as a
result of litigation. That is human nature.
Besides, no strained relations should arise from a valid legal act of asserting ones right;
otherwise[,] an employee who shall assert his right could be easily separated from the
service by merely paying his separation pay on the pretext that his relationship with his
employer had already become strained."
Anent the award of backwages, the Labor Arbiter erred in computing the same from the date
the petitioners were illegally dismissed (i.e. April 30, 1995) up to March 15, 1997, that is two
(2) days prior to the rendition of his decision (i.e. March 17, 1997).
WHEREFORE, premises considered, the petition is GRANTED, hereby REVERSING and

SETTING ASIDE the assailed decisions of the National Labor Relations Commission, dated
April 28, 1998 ans October 29, 1998. Consequently, the decision of the Labor Arbiter, dated
March 17, 1997, is hereby REINSTATED, subject to the MODIFICATION that the private
respondent is ORDERED to immediately REINSTATE petitioners Nelson Bilon, Angel Brazil
and Ernesto Pagaygay to their former position without loss of seniority rights and privileges,
with full backwages from the date of their dismissal until their actual reinstatement. Costs
against private respondent.
SO ORDERED.13
Petitioner filed a motion for reconsideration but the same was denied by the CA in a
resolution dated February 7, 2001.
Hence, this petition raising the following issues:14
I
THE COURT OF APPEALS ERRED IN FINDING THAT PETITIONERS APPEAL TO THE
NATIONAL LABOR RELATIONS COMMISSION WAS FILED OUT OF TIME.
II
THE COURT OF APPEALS ERRED IN HOLDING THAT THE ALLEGED DEFECTS IN
PETITIONERS APPEAL BOND WERE OF SUCH GRAVITY AS TO PREVENT THE
APPEAL FROM BEING PERFECTED.
III
THE COURT OF APPEALS ERRED IN GRANTING RESPONDENTS PETITION FOR

CERTIORARI DESPITE THE FACT THAT THE SAME ASSAILED A DECISION WHICH HAD
BEEN VACATED IN FAVOR OF A NEW ONE WHICH, IN TURN, HAS SOLID LEGAL BASIS.
IV
THE COURT OF APPEALS ERRED IN APPLYING SECTION 3, RULE III, OF THE MANUAL
ON EXECUTION OF JUDGMENT OF THE NATIONAL LABOR RELATIONS COMMISSION
WHICH, BY ITS OWN EXPRESS TERMS, IS NOT APPLICABLE.
A resolution of the case requires a brief discussion of two issues which touch upon the
procedural and substantial aspects of the case thus: a) whether petitioners appeal was filed
out of time; and b) whether the claim survives.
As regards the first issue, the Court considers the service of copy of the decision of the labor
arbiter to have been validly made on May 28, 1997 when it was received through registered
mail. As correctly pointed out by petitioners wife, service of a copy of the decision could not
have been validly effected on April 18, 1997 because petitioner passed away on April 4,
1997.
Section 4, Rule III of the New Rules of Procedure of the NLRC provides:
SEC. 4. Service of Notices and Resolutions. (a) Notices or summons and copies of
orders, resolutions or decisions shall be served on the parties to the case personally by the
bailiff or authorized public officer within three (3) days from receipt thereof or by registered
mail; Provided, That where a party is represented by counsel or authorized representative,
service shall be made on such counsel or authorized representative; Provided further, That in
cases of decision and final awards, copies thereof shall be served on both parties and their
counsel .
For the purpose of computing the period of appeal, the same shall be counted from receipt of
such decisions, awards or orders by the counsel of record.
(b) The bailiff or officer personally serving the notice, order, resolution or decision shall
submit his return within two (2) days from date of service thereof, stating legibly in his return,
his name, the names of the persons served and the date of receipt which return shall be
immediately attached and shall form part of the records of the case. If no service was
effected, the serving officer shall state the reason therefore in the return.
Section 6, Rule 13 of the Rules of Court which is suppletory to the NLRC Rules of Procedure
states that: "[s]ervice of the papers may be made by delivering personally a copy to the party
or his counsel, or by leaving it in his office with his clerk or with a person having charge
thereof. If no person is found in his office, or his office is not known, or he has no office, then
by leaving the copy, between the hours of eight in the morning and six in the evening, at the
partys or counsels residence, if known, with a person of sufficient age and discretion then
residing therein."
The foregoing provisions contemplate a situation wherein the party to the action is alive upon
the delivery of a copy of the tribunals decision. In the present case, however, petitioner died
before a copy of the labor arbiters decision was served upon him. Hence, the above
provisions do not apply. As aptly stated by the NLRC:
In the case at bar, respondent Melencio Gabriel was not represented by counsel during
the pendency of the case. A decision was rendered by the Labor Arbiter a quo on March 17,
1997 while Mr. Gabriel passed away on April 4, 1997, without having received a copy thereof
during his lifetime. The decision was only served on April 18, 1997 when he was no longer
around to receive the same. His surviving spouse and daughter cannot automatically
substitute themselves as party respondents. Thus, when the bailiff tendered a copy of the
decision to them, they were not in a position to receive them. The requirement of leaving a
copy at the partys residence is not applicable in the instant case because this presupposes
that the party is still living and is not just available to receive the decision.
The preceding considered, the decision of the Labor Arbiter has not become final because
there was no proper service of copy thereof to party respondent. 15
Thus, the appeal filed on behalf of petitioner on June 5, 1997 after receipt of a copy of the
decision via registered mail on May 28, 1997 was within the ten-day reglementary period
prescribed under Section 223 of the Labor Code.
On the question whether petitioners surety bond was defective, Section 6, Rule VI of the
New Rules of Procedure of the NLRC provides:
SEC. 6. Bond. In case the decision of a Labor Arbiter involves monetary award, an
appeal by the employer shall be perfected only upon the posting of a cash or surety bond
issued by a reputable bonding company duly accredited by the Commission or the Supreme
Court in an amount equivalent to the monetary award, exclusive of moral and exemplary
damages and attorneys fees.
The employer as well as counsel shall submit a joint declaration under oath attesting that the
surety bond posted is genuine and that it shall be in effect until final disposition of the case.
The Commission may, in meritorious cases and upon Motion of the Appellant, reduce the
amount of the bond. (As amended on Nov. 5, 1993).
The Court believes that petitioner was able to comply substantially with the requirements of
the above Rule. As correctly pointed out by the NLRC:
While we agree with complainants-appellees that the posting of the surety bond is
jurisdictional, We do not believe that the "defects" imputed to the surety bond posted for and
in behalf of respondent-appellant Gabriel are of such character as to affect the jurisdiction of
this Commission to entertain the instant appeal.
It matters not that, by the terms of the bond posted, the "Liability of the surety herein shall
expire on June 5, 1998 and this bond shall be automatically cancelled ten (10) days after the
expiration." After all, the bond is accompanied by the joint declaration under oath of
respondent-appellants surviving spouse and counsel attesting that the surety bond is
genuine and shall be in effect until the final disposition of the case.
Anent complainants-appellees contention that the surety bond posted is defective for being
in the name of BTSCI which did not appeal and for having been entered into by Mrs. Gabriel
without BTSCIs authority, the same has been rendered moot and academic by the
certification issued by Gil CJ. San Juan, Vice-President of the bonding company to the effect
that "Eastern Assurance and Surety Corporation Bond No. 2749 was posted for and on
behalf appellant Melencio Gabriel and/or his heirs" and that "(T)he name "Bacoor Transport
Service Cooperative, Inc." was indicated in said bond due merely in (sic) advertence."
At any rate, the Supreme Court has time and again ruled that while Article 223 of the Labor
Code, as amended requiring a cash or surety bond in the amount equivalent to the monetary
award in the judgment appealed from for the appeal to be perfected, may be considered a
jurisdictional requirement, nevertheless, adhering to the principle that substantial justice is
better served by allowing the appeal on the merits threshed out by this Honorable
Commission, the foregoing requirement of the law should be given a liberal interpretation
(Pantranco North Express, Inc. v. Sison, 149 SCRA 238; C.W. Tan Mfg. v. NLRC, 170 SCRA
240; YBL v. NLRC, 190 SCRA 160; Rada v. NLRC, 205 SCRA 69; Star Angel Handicraft v.
NLRC, 236 SCRA 580).16
On the other hand, with regard to the substantive aspect of the case, the Court agrees with
the CA that an employer-employee relationship existed between petitioner and respondents.
In Martinez v. National Labor Relations Commission,17 citing National Labor Union v.
Dinglasan,18 the Court ruled that:
[T]he relationship between jeepney owners/operators and jeepney drivers under the
boundary system is that of employer-employee and not of lessor-lessee because in the lease
of chattels the lessor loses complete control over the chattel leased although the lessee
cannot be reckless in the use thereof, otherwise he would be responsible for the damages to
the lessor. In the case of jeepney owners/operators and jeepney drivers, the former
exercises supervision and control over the latter. The fact that the drivers do not receive fixed
wages but get only that in excess of the so-called "boundary" [that] they pay to the
owner/operator is not sufficient to withdraw the relationship between them from that of
employer and employee. Thus, private respondents were employees because they had
been engaged to perform activities which were usually necessary or desirable in the usual
business or trade of the employer.19
The same principle was reiterated in the case of Paguio Transport Corporation v. NLRC.20
The Court also agrees with the labor arbiter and the CA that respondents were illegally
dismissed by petitioner. Respondents were not accorded due process.21 Moreover, petitioner
failed to show that the cause for termination falls under any of the grounds enumerated in
Article 282
(then Article 283)22 of the Labor Code.23 Consequently, respondents are entitled to
reinstatement without loss of seniority rights and other privileges and to their full backwages
computed from the date of dismissal up to the time of their actual reinstatement in
accordance with Article 279 of the Labor Code.
Reinstatement is obtainable in this case because it has not been shown that there is an
ensuing "strained relations" between petitioner and respondents. This is pursuant to the
principle laid down in Globe-Mackay Cable and Radio Corporation v. NLRC24 as quoted
earlier in the CA decision.
With regard to respondents monetary claim, the same shall be governed by Section 20 (then
Section 21), Rule 3 of the Rules of Court which provides:
1awphi1.net
SEC. 20. Action on contractual money claims. When the action is for recovery of money
arising from contract, express or implied, and the defendant dies before entry of final
judgment in the court in which the action was pending at the time of such death, it shall not
be dismissed but shall instead be allowed to continue until entry of final judgment. A
favorable judgment obtained by the plaintiff therein shall be enforced in the manner provided
in these Rules for prosecuting claims against the estate of a deceased person. (21a)
In relation to this, Section 5, Rule 86 of the Rules of Court states:
SEC. 5. Claims which must be filed under the notice. If not filed, barred ; exceptions. All
claims for money against the decedent arising from contract, express or implied, whether the
same be due, not due, or contingent, ... and judgment for money against the decedent, must
be filed within the time limited in the notice; otherwise they are barred forever, except that
they may be set forth as counterclaims in any action that the executor or administrator may
bring against the claimants.
Thus, in accordance with the above Rules, the money claims of respondents must be filed
against the estate of petitioner Melencio Gabriel. 25
WHEREFORE, the petition is DENIED. The Decision and Resolution of the Court of Appeals
dated August 4, 2000 and February 7, 2001, respectively, in CA-G.R. SP No. 52001 are
AFFIRMED but with the MODIFICATION that the money claims of respondents should be
filed against the estate of Melencio Gabriel, within such reasonable time from the finality of
this Decision as the estate court may fix.
No costs.
SO ORDERED.
ADOLFO S. AZCUNA
Associate Justice
WE CONCUR:
REYNATO S. PUNO
Chairperson
Chief Justice
ANGELINA SANDOVAL-GUTIERREZ
Associate Justice
RENATO C. CORONA
Asscociate Justice
CANCIO C. GARCIA
Associate Justice
CERTIFICATION
conclusions in the above Decision had been reached in consultation before the case was
REYNATO S. PUNO
Chief Justice
Footnotes
1
Under Rule 45 of the Rules of Court.
In NLRC-NCR Case No. 00-11-07420-95 entitled "Nelson Bilon, et al. v. Melencio

Gabriel, et al."
2
Rollo, pp. 39-45, CA Decision, pp. 2-8.
Case entitled "Nelson B. Bilon, Angel Brazil and Ernesto Pagayagay. v. Melencio
Gabriel, Operator, and Bacoor Transport Service Cooperative, Inc."
4
Nelson B. Bilon was hired by petitioner in December 1990, Angel Brazil in

November 1984, and Ernesto Pagaygay in November 1991.
5
Rollo, pp. 82-83.
Id. at pp. 53-54.
10
Id. at 57- 58.
11
G.R. No. 129449, June 29, 1999, 309 SCRA 424.
12
G.R. No, 82511, March 3, 1992, 206 SCRA 701, 711-712.
13
Rollo, pp. 48-51.
14
Id. at pp. 150-151; Petitioners Memorandum, pp. 8-9.
15
16
17
G.R. No. 117495, May 29, 1997, 272 SCRA 793, 799-800.
18
98 Phil 648 (1956).
Art. 280 of The Labor Code of the Philippines; Zanotte Shoes v. NLRC, G.R. No.
100665, February 13, 1995, 241 SCRA 261.
19
20
G.R. No. 119500, August 28, 1998, 294 SCRA 657.
Article 277(b) of the Labor Code of the Philippines provides: "Subject to the
constitutional right of workers to security of tenure and their right to be protected
against dismissal except for a just and authorized cause and without prejudice to the
requirement of notice under Article 283 of this Code, the employer shall furnish the
worker whose employment is sought to be terminated a written notice containing a
statement of the causes for termination and shall afford the latter ample opportunity
to be heard and to defend himself with the assistance of his representative if he so
desiresAny decision taken by the employer shall be without prejudice to the right of
the workers to contest the validity or legality of his dismissal by filing a complaint with
the regional branch of the National Labor Relations Commission. The burden of
proving that the dismissal was for a valid or authorized cause shall rest on the
employer
21
ART. 282. TERMINATION BY EMPLOYER An employer may terminate an

employment for any of the following causes:
22
(a) Serious misconduct or willful disobedience by the employee of the lawful

orders of his employer or representative in connection with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him by his
employer or duly authorized representative;
(d) Commission of a crime or offense by the employee against the person of
his employer or any immediate member of his family or his duly authorized
representative; and,
(e) Other causes analogous to the foregoing.
Section 1 of Rule XXIII (then Rule XIV) of the Implementing Regulations of the
Labor Code of the Philippines also provides that no worker shall be dismissed except
for a just or authorized cause provided by law and after due process.
23
24
Supra note at 12.
Robledo v. National Labor Relations Commission, G.R. No. 110358, November 9,

1994, 238 SCRA 52.
25

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 118655 April 12, 2000
HEIRS OF ELIAS LORILLA, Namely: FE, ELIAS, JR. and SERVANDO, ALL SURNAMED
LORILLA, petitioners,
vs.
COURT OF APPEALS, COMMERCIAL CREDIT CORPORATION, HON. FRANCISCO
VILLANUEVA and SHERIFF HONORIO P. SANTOS, respondents.
QUISUMBING, J.
This petition for review assails the decision 1 of the Court of Appeals promulgated on
November 29, 1994, which dismissed the petition for annulment of the judgment rendered on
April 5, 1989, by the Regional Trial Court, Branch 58, of Makati in Civil Case No. 5262. 2 The
motion to reconsider the decision of the Court of Appeals was denied by said Court in a
Resolution promulgated on January 11, 1995. 3
The antecedent facts of this case as found by the Court of Appeals are as follows:
(1) On September 10, 1983, private respondent Commercial Credit
Corporation (now known as Pentacapital Finance Corporation and
hereinafter referred to as PENCAPITAL) filed a complaint with the Regional
Trial Court of Makati, Metro Manila, (hereinafter referred to as the Makati
Court) for a sum of money against Sanyu Machineries Agencies, Inc., Sanyu
Chemical Corporation, and several other defendants, among whom was Elias
Lorilla, (now deceased) who had acted as sureties for the two corporate
debtors. The complaint was docketed as Civil Case No. 5262 and was
assigned by raffle to Branch 58 of said court.
(2) PENCAPITAL sought for, and obtained from the Makati Court, a writ of
attachment on the real property of defendant Elias L. Lorilla covered by
Transfer Certificate of Title No. 298986, and which levy was duly annotated
on the certificate of title concerned.
(3) Defendant Elias Lorilla, together with four other individual defendants,
was initially represented by one Atty. Danny Tablizo, but who later on
withdrew his appearance and was substituted by another lawyer, Atty. Alfredo
Concepcion.
(4) During the pendency of Civil Case No. 5262, Elias L. Lorilla executed
a dacion en pago over the property attached in favor of the Joint Resources
Management Development Corporation (hereinafter referred to as JRMDC)
by reason of which Transfer Certificate of Title No. 298986 in the name of
Elias L. Lorilla was cancelled and replaced by Transfer Certificate of Title No.
114067 in the name of JRMDC. But the levy caused to be made by
PENCAPITAL over the property was carried over to the new certificate of title.
(5) On June 9, 1986, JRMDC filed suit against PENCAPITAL for the
cancellation of the latter's levy on the property in question with the Regional
Trial Court of Pasig, Metro Manila (hereinafter referred to as the Pasig Court),
which was docketed therein as Civil Case No. 63757 and assigned by raffle
to its Branch 153.
(6) On April 5, 1989, the Makati Court, after due hearing, rendered judgment
in Civil Case No. 5262 in favor of PENCAPITAL and against the defendants
therein, including Elias L. Lorilla. The dispositive portion of said judgment
reads:
WHEREFORE, premises considered, judgment is rendered in
favor of plaintiff and against defendants who are hereby
ordered to pay to plaintiff, jointly and severally, and solidarily
the total principal amount of P421,596.28 plus interest at
12% per annum and a penalty of 3% per month of default
from the time it became due on July 1, 1981 until fully paid,
and 20% of the entire amount due as attorney's fees, plus the
costs.
SO ORDERED.
(7) Despite receipt of a copy of the aforesaid decision by Alfredo Concepcion,
then counsel of record of defendant Elias L. Lorilla, no appeal whatsoever
was interposed from said judgment by said lawyer in behalf of defendant
Lorilla.
(8) On March 3, 1993, upon motion of PENCAPITAL, the Makati Court issued
a writ of execution in Civil Case No. 5262 and PENCAPITAL thereafter
proceeded against the property covered by TCT No. 298986 in the name of
defendant Lorilla.
(9) On May 26, 1993 the Pasig Court rendered decision in its Civil Case No.
53757 dismissing JRMDC's complaint for the cancellation of the levy on
attachment on the Lorilla property, ruling that the dacion en pago executed by
defendant Lorilla in favor of JRMDC cannot prevail over the prior writ of
attachment duly annotated on the property in favor of PENCAPITAL. No
appeal from the decision in Civil Case No. 53757 having been made by
JRMDC, the same became final and executory (Annex "15", Reply
Memorandum of PENCAPITAL).
(10) On September 15, 1993 petitioners herein as heirs of Elias L. Lorilla,
filed a motion in Civil Case No. 5262 to quash the writ of execution issued by
the Makati Court, arguing that since defendant Elias L. Lorilla passed away
on January 15, 1988, or one year and three months before the Makati Court
rendered decision in Civil Case No. 5262 on April 5, 1989, the case should
have been dismissed insofar as Elias L. Lorilla is concerned, in keeping with
Section 21, Rule 3 of the Rules of Court which provides:
Sec. 21. Where claim does not survive. When the action is
for recovery of money, debt, or interest therein, and the
defendant dies before final judgment in the Court of First
Instance, it shall be dismissed to be presented in the manner
especially provided in these rules.
(11) On February 8, 1994, the Makati Court, through its Acting Presiding
Judge, the Honorable Francisco Donato Villanueva, denied the motion to
quash said writ of execution, ruling that the judgment in Civil Case No. 5256
having become final, it is now beyond its authority to amend it by dismissing
the same insofar as defendant Elias L. Lorilla is concerned, and that the
suggested remedy, if at all, is a petition for its annulment. Petitioners moved
to reconsider the denial of their motion to quash the writ of execution, but the
Makati Court stood pat on its ruling, hence, petitioners' recourse to this Court
for annulment of judgment. 4
Petitioners, thus, filed with the Court of Appeals a Petition for Annulment of Judgment, Writ of
Execution, and/or Levy on Execution with Preliminary Injunction and Restraining Order to
annul or enjoin enforcement of the judgment dated April 5, 1989 of the Makati Court in Civil
Case No. 5262. In its decision promulgated on November 29, 1994, the Court of Appeals
resolved to deny the petition, hence petitioners' present recourse to this Court. They assign
the following errors:
I
THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION
IN NOT ANNULLING THE DECISION OF THE TRIAL COURT, DATED 5
APRIL 1989, INSOFAR AS DECEASED DEFENDANT ELIAS LORILLA IS
CONCERNED, THEREBY VIOLATION (sic) PETITIONERS RIGHT TO DUE
PROCESS OF LAW.
II
IN VIOLATING SECTION 21, RULE 3, AND SECTIONS 5 AND 7, RULE 86
OF THE REVISED RULES OF COURT.
III
IN DENYING PETITIONERS THEIR CONSTITUTIONAL RIGHT TO DUE
PROCESS OF LAW. 5
In our view, the main issue for resolution now is whether the respondent appellate court
erred and gravely abused its discretion in denying petitioners' action for annulment of
judgment of the RTC of Makati, Branch 58, concerning the deceased defendant Elias Lorilla.
Pertinently, we have to consider whether Section 21 of Rule 3 and Sections 5 and 7 of Rule
86 of the Revised Rules of Court are applicable in the present case. Similarly, we have to
inquire whether petitioners, heirs of Elias Lorilla, were deprived of their right to due process
of law.
Petitioners argue that the cause of action of private respondent Commercial Credit Corp.
(now known as Pentacapital Finance Corp. and hereinafter referred to as PENTACAPITAL)
did not survive for being in violation of Section 21 of Rule 3 of the Revised Rules of Court.
They claim that under this rule, the trial court lost jurisdiction over the person of Elias Lorilla
when he died, and consequently the action against him should have been dismissed.
Sec. 21 of Rule 3 states:
Sec. 21. Where claim does not survive. Where the action is for recovery of
money, debt or interest thereon, and the defendant dies before final judgment
in the Court of First Instance, it shall be dismissed to be prosecuted in the
manner especially provided in these rules.
Sec. 21 of Rule 3 provides that upon the defendant's death, the action "shall be dismissed to
be presented in the manner especially provided in these rules." Petitioners argue that this
manner is provided for in Sections 5 and 7 of Rule 86 of the Revised Rules of Court. 6 As
contemplated in Section 21 of Rule 3, the action has to be dismissed without prejudice to the
plaintiff thereafter presenting his claim as a money claim in the settlement of the estate of the
deceased defendant. 7 The claim becomes a mere incident in the testamentary or intestate
proceedings of the deceased where the whole matter may be fully terminated jointly with the
settlement and distribution of the estate. 8
In the present case, however, the records do not show if any notice of death was filed by
Atty. Alfredo Concepcion, counsel of record of Elias Lorilla in Civil Case No. 5262 before the
Makati Court. Thus, neither the Makati Court nor PENTACAPITAL were made aware of the
death of Elias Lorilla. The trial court could not be expected to know or take judicial notice of
the death of Lorilla, absent such notice. Neither could the petitioners have been made aware
of the trial court's judgment adverse to their father, for all notices and orders of the court
were sent to Lorilla's counsel of record, who did not bother to inform the parties concerned of
Elias Lorilla's death. Apparently, Lorilla's counsel failed in his duty to promptly inform the
court of the death of his client, as the Rules require. 9
As far as the Makati Court was concerned, until the Writ of Execution was issued and the
levy thereof on August 5, 1993, Lorilla continued to be represented by counsel of record,
Atty. Concepcion; and that upon service of a copy of the decision on said counsel at the
latter's address, Lorilla was deemed to have been validly served notice of the
judgment. 10 The failure of Atty. Concepcion to serve notice on the court and the adverse
parties regarding his client's death binds herein petitioners as much as the client himself
could be so bound. Jurisprudence teems with pronouncements that a client is bound by the
conduct, negligence and mistakes of his counsel. 11
In this case, petitioners claim that their right to due process was violated when the Court of
Appeals did not annul the decision of the Makati Court dated April 5, 1989. They claim that
as heirs of Elias Lorilla, they would be deprived of their lawful inheritance without due
process, as they were not parties to the case where the adverse decision against their father
was rendered. Said judgment, they posit, cannot be enforced against them because the
court had not acquired jurisdiction over them, nor over the estate of Elias Lorilla.
True, a judgment may be annulled for want of jurisdiction or lack of due process of law. 12 But
while petitioners were not properly substituted for Elias Lorilla as defendants, absent any
notice of his death, it could not be said that petitioners were deprived of due process of law,
for as far as the trial court was concerned, they were not parties to the case. To rule
otherwise would be, in fact, a more obvious and grievous transgression of due process.
Moreover in this case, we find that the property which petitioners claim as their lawful
inheritance, was no longer part of the estate of Elias Lorilla at the time of his death. For Elias
Lorilla had earlier executed a dacion en pagoover this property in favor of the Joint
Resources Management Development Corporation (JRMDC). By reason thereof, Lorilla's
transfer certificate of title was cancelled, and a new one was issued in favor of
JRMDC. 13 The levy of PENTACAPITAL annotated on Lorilla's certificate of title was carried
over onto the title of JRMDC. Elias Lorilla's payment of his obligation to JRMDC being one of
dation in payment, it is governed by the law on sales. 14The subject property was validly
transferred to JRMDC already. Hence petitioners could not claim that they were deprived of
their lawful inheritance without due process of law.
Sec. 21 of Rule 3 of the Revised Rules of Court sets out the procedure that should be
followed after the death of the defendant in a case. If he died "before final judgment in the
Court of First Instance," the action should be dismissed without prejudice to the plaintiff
presenting his claim in the settlement of the estate of the deceased in accordance with and
as required by Section 5 of Rule 86 of the Revised Rules of Court. 15 Here, however, the
property in question had already been taken out of the estate of Elias Lorilla, even before
judgment in Civil Case No. 5262 was rendered, and it was transferred to JRMDC by virtue of
the dacion en pago executed by Elias Lorilla. For this reason, Section 5 of Rule 86 loses its
pertinence to the case at bar.
Likewise, Section 7 of Rule 39 of the Revised Rules of Court 16 will not apply to the present
case. For it speaks of a situation where a party dies after the entry of the judgment or order
of the court. It does not cover a situation where the court was reportedly informed of the
death of a party only after final judgment.
Since there was no timely appeal taken from the judgment of the Regional Trial Court of
Makati dated April 5, 1989, in Civil Case No. 5262, that judgment had properly become final
and executory. As well said by respondent appellate court, to adopt a view contrary would ". .
. open the floodgates to protracted and endless litigations, because all that counsel for
defendant has to do, in an action for recovery of money, in case said defendant dies before
final judgment in a regional trial court, is to conceal such death from the court and thereafter
pretend to go through the motions of trial, and, after judgment is rendered against his client,
to question such judgment for being violative of Section 21, Rule 3 of the Rules of Court.
Thus, counsel for such defendant could unduly delay the rendering of a judgment against his
client. It is a fundamental concept in any jural system, that even at the risk of occasional
errors, judgments of courts should become final at some definite time fixed by law.
Interest rei publicae ut finis sit litim." 17
We see no reason, in the interest of justice, to disturb, much less annul, the aforesaid
judgment.
WHEREFORE, the assailed decision of the Court of Appeals promulgated on November 29,
1994 and its Resolution promulgated on January 11, 1995 are hereby AFFIRMED. Costs
against petitioners.
SO ORDERED.
Bellosillo, Mendoza, Buena and De Leon, Jr., JJ., concur.
Footnotes
1 Rollo, pp. 19-24.
2 CA Rollo, p. 9.
3 Supra, note 1 at 25.
4 Id. at 19-22.
5 Id. at 12.
6 Id. at 14-15 (Emphasis ours.).
7 Regalado, REMEDIAL LAW COMPENDIUM, Vol. I, pp. 66-67 (5th ed. 1988).
8 R. Martin, RULES OF COURT OF THE PHILIPPINES WITH NOTES AND
COMMENTS, Vol. I, pp. 232-233 (1989 ed.), citing Pabido vs. Jaranilla and Hidalgo
Cuyugan & Co., 60 Phil. 247 (1934).
9 Sec. 16, Rule 3, Revised Rules of Court provides: Duty of attorney upon death,
incapacity, or incompetency of party. Whenever a party to a pending case dies,
becomes incapacitated or incompetent it shall be the duty of his attorney to inform
the court promptly of such death, incapacity or incompetency, and to give the name
and residence of his executor, administrator, guardian or other legal representative";
Cordova vs. Tornilla, 246 SCRA 430, 432 (1995).
10 Sec. 2, Rule 13, Raised Rules of Court provides: Papers to be filed and served.
. . . If any of such parties has appeared by an attorney or attorneys, service upon
him shall be made upon his attorneys or one of them, unless service upon the party
himself is ordered by the court . . .
1wphi1.nt
11 Bernardo vs. Court of Appeals, 275 SCRA 413, 428 (1997); Casolita, Sr. vs. Court
of Appeals, 275 SCRA 257, 264-265 (1997); Salonga vs. Court of Appeals, 269
SCRA 534, 545 (1997); People vs. Salido 258 SCRA 291, 295 (1996); B.R.
Sebastian Enterprises, Inc. vs. Court of Appeals 206 SCRA 28, 39 (1992); Manila
Electric Co. vs. Court of Appeals, 187 SCRA 200, 208 (1990).
12 Salonga vs. Court of Appeals, 269 SCRA 534, 542 (1997).
13 Rollo, p. 20; CA Rollo, p. 107, back page.
14 Article 1245, New Civil Code.
15 F. Regalado, REMEDIAL LAW COMPENDIUM, Vol. I, pp. 99-100 (6th ed. 1997);
Section 5 of Rule 86 ("CLAIMS AGAINST ESTATE") provides: "Claims which must
be filed under the notice. If not filed, barred;exceptions. All claims for money
against the decedent arising from contract, express or implied, whether the same be
due, not due or contingent, all claims for funeral expenses and expenses for the last
sickness of the decedent, and judgment for money against the decedent, must be
filed within the time limited in the notice; otherwise they are barred forever, except
that they may be set forth as counterclaims in any action that the executor or
administrator may bring against the claimants. . .
16 Sec. 7 of Rule 39 provides: "Execution in case of death of party. Where the
party dies after the entry of the judgment or order, execution thereon may issue, or
one already issued may be enforced in the following cases. . ." (Emphasis ours).
17 Rollo, p. 23; Vda. De Kilayko vs. Judge Tengco, 207 SCRA 600, 612 (1992); Allied
Banking Corporation vs. Court of Appeals, 229 SCRA 252, 258 (1994).

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 141634
February 5, 2001
Heirs of Spouses REMEDIOS R. SANDEJAS and ELIODORO P. SANDEJAS SR. -ROBERTO R. SANDEJAS, ANTONIO R. SANDEJAS, CRISTINA SANDEJAS
MORELAND, BENJAMIN R. SANDEJAS, REMEDIOS R. SANDEJAS, and heirs of SIXTO
S. SANDEJAS II, RAMON R. SANDEJAS, TERESITA R. SANDEJAS, and ELIODORO R.
SANDEJAS JR., all represented by ROBERTO R. SANDEJAS, petitioners,
vs.
ALEX A. LINA, respondent.
PANGANIBAN, J.:
A contract of sale is not invalidated by the fact that it is subject to probate court approval. The
transaction remains binding on the seller-heir, but not on the other heirs who have not given
their consent to it. In settling the estate of the deceased, a probate court has jurisdiction over
matters incidental and collateral to the exercise of its recognized powers. Such matters
include selling, mortgaging or otherwise encumbering realty belonging to the estate. Rule 89,
Section 8 of the Rules of Court, deals with the conveyance of real property contracted by the
decedent while still alive. In contrast with Sections 2 and 4 of the same Rule, the said
provision does not limit to the executor or administrator the right to file the application for
authority to sell, mortgage or otherwise encumber realty under administration. The standing
to pursue such course of action before the probate court inures to any person who stands to
be benefited or injured by the judgment or to be entitled to the avails of the suit.
1wphi1.nt
The Case
Before us is a Petition for Review under Rule 45 of the Rules of Court, seeking to reverse
and set aside the Decision1 dated April 16, 1999 and the Resolution 2 dated January 12,
2000, both promulgated by the Court of Appeals in CA-GR CV No. 49491. The dispositive
portion of the assailed Decision reads as follows: 3
"WHEREFORE, for all the foregoing, [w]e hereby MODIFY the [O]rder of the lower
court dated January 13, 1995, approving the Receipt of Earnest Money With Promise
to Buy and Sell dated June 7, 1982, only to the three-fifth (3/5) portion of the
disputed lots covering the share of [A]dministrator Eliodoro Sandejas, Sr. [in] the
property. The intervenor is hereby directed to pay appellant the balance of the
purchase price of the three-fifth (3/5) portion of the property within thirty (30) days
from receipt of this [O]rder and x x x the administrator [is directed] to execute the
necessary and proper deeds of conveyance in favor of appellee within thirty (30)
days thereafter."
The assailed Resolution denied reconsideration of the foregoing disposition.
The Facts
The facts of the case, as narrated by the Court of Appeals (CA), are as follows: 4
"On February 17, 1981, Eliodoro Sandejas, Sr. filed a petition (Record, SP. Proc. No.
R-83-15601, pp. 8-10) in the lower court praying that letters of administration be
issued in his favor for the settlement of the estate of his wife, REMEDIOS R.
SANDEJAS, who died on April 17, 1955. On July 1, 1981, Letters of Administration
[were issued by the lower court appointing Eliodoro Sandejas, Sr. as administrator of
the estate of the late Remedios Sandejas (Record, SP. Proc. No. R-83-15601, p. 16).
Likewise on the same date, Eliodoro Sandejas, Sr. took his oath as administrator
(Record, SP. Proc. No. R-83-15601, p. 17). x x x.
"On November 19, 1981, the 4th floor of Manila City Hall was burned and among the
records burned were the records of Branch XI of the Court of First Instance of
Manila. As a result, [A]dministrator Eliodoro Sandejas, Sr. filed a [M]otion for
[R]econstitution of the records of the case on February 9, 1983 (Record, SP. Proc.
No. R-83-15601, pp. 1-5). On February 16, 1983, the lower court in its [O]rder
granted the said motion (Record, SP. Proc. No. R-83-15601, pp. 28-29).
"On April 19, 1983, an Omnibus Pleading for motion to intervene and petition-inintervention was filed by [M]ovant Alex A. Lina alleging among others that on June 7,
1982, movant and [A]dministrator Eliodoro P. Sandejas, in his capacity as seller,
bound and obligated himself, his heirs, administrators, and assigns, to sell forever
and absolutely and in their entirety the following parcels of land which formed part of
the estate of the late Remedios R. Sandejas, to wit:
1. 'A parcel of land (Lot No.22 Block No. 45 of the subdivision plan Psd21121, being a portion of Block 45 described on plan Psd-19508, G.L.R.O.
Rec. No. 2029), situated in the "Municipality of Makati, province of Rizal,
containing an area of TWO HUNDRED SEVENTY (270) SQUARE METERS,
more or less, with TCT No. 13465;
2. 'A parcel of land (Lot No. 21 Block No. 45 of the subdivision plan Psd21141, being a portion of Block 45 described on plan Psd-19508 G.L.R.O.
Rec. No. 2029), situated in the Municipality of Makati, Province of Rizal,
containing an area of TWO HUNDRED SEVENTY (270) SQUARE METERS,
more or less, with TCT No. 13464;'
3. 'A parcel of land (Lot No. 5 Block No. 45 of the subdivision plan Psd21141, being a portion of Block 45 described on plan Psd-19508 G.L.R.O.
containing an area of TWO HUNDRED EIGHT (208) SQUARE METERS,
4. 'A parcel of land (Lot No. 6, Block No. 45 of the subdivision plan Psd21141, being a portion of Block 45 described on plan Psd-19508 G.L.R.O.
containing an area of TWO HUNDRED EIGHT (208) SQUARE METERS,
"The [R]eceipt of the [E]arnest [M]oney with [P]romise to [S]ell and to [B]uy is
hereunder quoted, to wit:
'Received today from MR. ALEX A. LINA the sum of ONE HUNDRED
THOUSAND (P100,000.00) PESOS, Philippine Currency, per Metropolitan
Bank & Trust Company Chec[k] No. 319913 dated today for P100,000.00, x x
x as additional earnest money for the following:
xxx
xxx
xxx
all registered with the Registry of Deeds of the [P]rovince of Rizal (Makati
Branch Office) in the name of SELLER 'EL!ODORO SANDEJAS, Filipino
Citizen, of legal age, married to Remedios Reyes de Sandejas;' and which
undersigned, as SELLER, binds and obligates himself, his heirs,
administrators and assigns, to sell forever and absolutely in their entirety (all
of the four (4) parcels of land above described, which are contiguous to each
other as to form one big lot) to said Mr. Alex A. Lina, who has agreed to buy
all of them, also binding on his heirs, administrators and assigns, for the
consideration of ONE MILLION (P1,000,000.00) PESOS, Philippine
Currency, upon such reasonable terms of payment as may be agreed upon
by them. The parties have, however, agreed on the following terms and
conditions:
'1. The P100,000.00 herein received is in addition to the P70,000.00 earnest
money already received by SELLER from BUYER, all of which shall form part
of, and shall be deducted from, the purchase price of P1,000,000.00, once
the deed of absolute [sale] shall be executed;
'2. As a consideration separate and distinct from the price, undersigned
SELLER also acknowledges receipt from Mr. Alex A. Lina of the sum of ONE
THOUSAND (P1,000.00) PESOS, Philippine Currency, per Metropolitan
Bank & Trust Company Check No. 319912 dated today and payable to
SELLER for P1,000.00;
'3. Considering that Mrs. Remedios Reyes de Sandejas is already deceased
and as there is a pending intestate proceedings for the settlement of her
estate (Spec. Proc. No.138393, Manila CFI, Branch XI), wherein SELLER
was appointed as administrator of said Estate, and as SELLER, in his
capacity as administrator of said Estate, has informed BUYER that he
(SELLER) already filed a [M]otion with the Court for authority to sell the
above parcels of land to herein BUYER, but which has been delayed due to
the burning of the records of said Spec. Pro. No. 138398, which records are
presently under reconstitution, the parties shall have at least ninety (90) days
from receipt of the Order authorizing SELLER, in his capacity as
administrator, to sell all THE ABOVE DESCRIBED PARCELS OF LAND TO
HEREIN BUYER (but extendible for another period of ninety (90) days upon
the request of either of the parties upon the other), within which to execute
the deed of absolute sale covering all above parcels of land;
'4. In the event the deed of absolute sale shall not proceed or not be
executed for causes either due to SELLER'S fault, or for causes of which the
BUYER is innocent, SELLER binds himself to personally return to Mr. Alex A.
Lina the entire ONE HUNDRED SEVENTY THOUSAND ([P]170,000.00)
PESOS In earnest money received from said Mr. Lina by SELLER, plus
fourteen (14%) percentum interest per annum, all of which shall be
considered as liens of said parcels of land, or at least on the share therein of
herein SELLER;
'5. Whether indicated or not, all of above terms and conditions shall be
binding on the heirs, administrators, and assigns of both the SELLER
(undersigned MR. ELIODORO P. SANDEJAS, SR.) and BUYER (MR. ALEX

A. LINA).' (Record, SP. Proc. No. R-83-15601, pp. 52-54)
"On July 17, 1984, the lower court issued an [O]rder granting the intervention of Alex
A. Lina (Record, SP. Proc. No. R-83-15601, p. 167).
"On January 7, 1985, the counsel for [A]dministrator Eliodoro P. Sandejas filed a
[M]anifestation alleging among others that the administrator, Mr. Eliodoro P.
Sandejas, died sometime in November 1984 in Canada and said counsel is still
waiting for official word on the fact of the death of the administrator. He also alleged,
among others that the matter of the claim of Intervenor Alex A. Lina becomes a
money claim to be filed in the estate of the late Mr. Eliodoro P. Sandejas (Record, SP.
Proc. No. R-83-15601, p. 220). On February 15, 1985, the, lower court issued an
[O]rder directing, among others, that the counsel for the four (4) heirs and other heirs
of Teresita R. Sandejas to move for the appointment of [a] new administrator within
fifteen (15) days from receipt of this [O]rder (Record, SP. Proc. No. R-83-15601, p.
227). In the same manner, on November 4, 1985, the lower court again issued an
order, the content of which reads:
'On October 2, 1985, all the heirs, Sixto, Roberto, Antonio, Benjamin all
surnamed Sandejas were ordered to move for the appointment of [a] new
administrator. On October 16, 1985, the same heirs were given a period of
fifteen (15) days from said date within which to move for the appointment of
the new administrator. Compliance was set for October 30, 1985, no
appearance for the aforenamed heirs. The aforenamed heirs are hereby
ordered to show cause within fifteen (15) days from receipt of this Order why
this Petition for Settlement of Estate should not be dismissed for lack of
interest and failure to comply with a lawful order of this Court.
'SO ORDERED.' (Record, SP. Proc. No. R-83-15601, p. 273).
"On November 22, 1985, Alex A. Lina as petitioner filed with the Regional Trial Court
of Manila an Omnibus Pleading for (1) petition for letters of administration [and] (2) to
consolidate instant case with SP. Proc. No. R-83-15601 RTC-Branch XI-Manila,
docketed therein as SP. Proc. No. 85- 33707 entitled 'IN RE: INTESTATE ESTATE
OF ELIODORO P. SANDEJAS, SR., ALEX A. LINA PETITIONER", [for letters of
administration] (Record, SP. Proc. No.85-33707, pp. 1-7). On November 29, 1985,
Branch XXXVI of the Regional Trial Court of Manila issued an [O]rder consolidating
SP. Proc. No. 85-33707, with SP. Proc. No. R-83-15601 (Record, SP. Proc. No. 8533707, p. 13). Likewise, on December 13, 1985, the Regional Trial Court of Manila,
Branch XI, issued an [O]rder stating that 'this Court has no objection to the
consolidation of Special proceedings No. 85-331707, now pending before Branch
XXXVI of this Court, with the present proceedings now pending before this Branch'
(Record, SP. Proc. No. R-83- 15601, p. 279).
"On January 15, 1986, Intervenor Alex A. Lina filed [a] Motion for his appointment as
a new administrator of the Intestate Estate of Remedios R. Sandejas on the following
reasons:
'5.01. FIRST, as of this date, [i]ntervenor has not received any motion on the
part of the heirs Sixto, Antonio, Roberto and Benjamin, all surnamed
Sandejas, for the appointment of anew [a]dministrator in place of their father,

Mr. Eliodoro P. Sandejas, Sr.;
'5.02. SECOND, since Sp. Proc. 85-33707, wherein the [p]etitioner is herein
Intervenor Alex A. Lina and the instant Sp. PROC. R-83-15601, in effect are
already consolidated, then the appointment of Mr. Alex Lina as [a]dministrator
of the Intestate Estate of Remedios R. Sandejas in instant Sp. Proc. R-8315601, would be beneficial to the heirs and also to the Intervenor;
'5.03. THIRD, of course, Mr. Alex A. Lina would be willing to give way at
anytime to any [a]dministrator who may be proposed by the heirs of the
deceased Remedios R. Sandejas, so long as such [a]dministrator is
qualified.' (Record, SP. Proc. No. R-83-15601, pp. 281-283)
"On May 15, 1986, the lower court issued an order granting the [M]otion of Alex A.
Lina as the new [a]dministrator of the Intestate Estate of Remedios R. Sandejas in
this proceedings. (Record, SP. Proc. No. R-83-15601, pp. 288- 290)
"On August 281 1986, heirs Sixto, Roberto, Antonio and Benjamin, all surnamed
Sandejas, and heirs [sic] filed a [M]otion for [R]econsideration and the appointment of
another administrator Mr. Sixto Sandejasl in lieu of [I]ntervenor Alex A. Lina stating
among others that it [was] only lately that Mr. Sixto Sandejas, a son and heir,
expressed his willingness to act as a new administrator of the intestate estate of his
mother, Remedios R. Sandejas (Record, SP. Proc. No. 85-33707, pp. 29-31). On
October 2, 1986, Intervenor Alex A. Lina filed his [M]anifestation and [C]ounter
[M]otion alleging that he ha[d] no objection to the appointment of Sixto Sandejas as
[a]dministrator of the [i]ntestate [e]state of his mother Remedios R. Sandejas (Sp.
Proc. No.85-15601), provided that Sixto Sandejas be also appointed as administrator
of the [i]ntestate [e]state of his father, Eliodoro P . Sandejas, Sr. (Spec. Proc. No. 8533707), which two (2) cases have been consolidated (Record, SP. Proc. No. 8533707, pp. 34-36). On March 30, 1987, the lower court granted the said [M]otion and
substituted Alex Lina with Sixto Sandejas as petitioner in the said [P]etitions (Record,
SP. Proc. No. 85-33707, p. 52). After the payment of the administrator's bond
(Record, SP. Proc. No. 83-15601, pp. 348-349) and approval thereof by the court
(Record, SP. Proc. No. 83-15601, p. 361), Administrator Sixto Sandejas on January
16, 1989 took his oath as administrator of the estate of the deceased Remedios R.
Sandejas and Eliodoro P. Sandejas (Record, SP. Proc. No. 83-15601, p. 367) and
was likewise issued Letters of Administration on the same day (Record, SP. Proc.
No. 83-15601, p. 366).
"On November 29, 1993, Intervenor filed [an] Omnibus Motion (a) to approve the
deed of conditional sale executed between Plaintiff-in-lntervention Alex A. Lina and
Elidioro [sic] Sandejas, Sr. on June 7, 1982; (b) to compel the heirs of Remedios
Sandejas and Eliodoro Sandejas, Sr. thru their administrator, to execute a deed of
absolute sale in favor of [I]ntervenor Alex A. Lina pursuant to said conditional deed of
sale (Record, SP. Proc. No. 83-15601, pp. 554-561) to which the administrator filed a
[M]otion to [D]ismiss and/or [O]pposition to said omnibus motion on December 13,
1993 (Record, SP. Proc. No.83-15601, pp. 591-603).
"On January 13, 1995, the lower court rendered the questioned order granting
intervenor's [M]otion for the [A]pproval of the Receipt of Earnest Money with promise
to buy between Plaintiff-in-lntervention Alex A. Lina and Eliodoro Sandejas, Sr. dated
June 7, 1982 (Record, SP. Proc. No. 83-15601, pp. 652-654 ). x x x."
The Order of the intestate courts disposed as follows:
"WHEREFORE, [i]ntervenor's motion for the approval of the Receipt Of Earnest
Money With Promise To Sell And To Buy dated June 7, 1982, is granted. The
[i]ntervenor is directed to pay the balance of the purchase price amounting to
P729,000.00 within thirty (30) days from receipt of this Order and the Administrator is
directed to execute within thirty (30) days thereafter the necessary and proper deeds
of conveyancing."6
Ruling of the Court of Appeals
Overturning the RTC ruling, the CA held that the contract between Eliodoro Sandejas Sr. and
respondent was merely a contract to sell, not a perfected contract of sale. It ruled that the
ownership of the four lots was to remain in the intestate estate of Remedios Sandejas until
the approval of the sale was obtained from the settlement court. That approval was a positive
suspensive condition, the nonfulfillment of which was not tantamount to a breach. It was
simply an event that prevented the obligation from maturing or becoming effective. If the
condition did not happen, the obligation would not arise or come into existence.
The CA held that Section 1, Rule 897 of the Rules of Court was inapplicable, because the
lack of written notice to the other heirs showed the lack of consent of those heirs other than
Eliodoro Sandejas Sr. For this reason, bad faith was imputed to him, for no one is allowed to
enjoyed a claim arising from ones own wrongdoing. Thus, Eliodoro Sr. was bound, as a
matter of justice and good faith, to comply with his contractual commitments as an owner
and heir. When he entered into the agreement with respondent, he bound his conjugal and
successional shares in the property.
Hence, this Petition.8
Issues
In their Memorandum, petitioners submit the following issues for our resolution:
"a) Whether or not Eliodoro P. Sandejas Sr. is legally obligated to convey title to the
property referred to in the subject document which was found to be in the nature of a
contract to sell - where the suspensive condition set forth therein [i.e.] court approval,
was not complied with;
"b) Whether or not Eliodoro P. Sandejas Sr. was guilty of bad faith despite the
conclusion of the Court of Appeals that the respondent [bore] the burden of proving
that a motion for authority to sell ha[d] been filed in court;
"c) Whether or not the undivided shares of Eliodoro P. Sandejas Sr. in the subject
property is three-fifth (3/5) and the administrator of the latter should execute deeds of
conveyance therefor within thirty days from receipt of the balance of the purchase
price from the respondent; and
"d) Whether or not the respondent's petition-in-intervention was converted to a

money claim and whether the [trial court] acting as a probate court could approve the
sale and compel the petitioners to execute [a] deed of conveyance even for the share
alone of Eliodoro P. Sandejas Sr."9
In brief, the Petition poses the main issue of whether the CA erred in modifying the trial
court's Decision and in obligating petitioners to sell 3/5 of the disputed properties to
respondent, even if the suspensive condition had not been fulfilled. It also raises the
following collateral issues: (1) the settlement court's jurisdiction; (2) respondent-intervenor's
standing to file an application for the approval of the sale of realty in the settlement case, (3)
the decedent's bad faith, and (4) the computation of the decedent's share in the realty under
administration.
This Courts Ruling
The Petition is partially meritorious.
Main Issue:
Obligation With a Suspensive Condition
Petitioners argue that the CA erred in ordering the conveyance of the disputed 3/5 of the
parcels of land, despite the nonfulfillment of the suspensive condition -- court approval of the
sale -- as contained in the "Receipt of Earnest Money with Promise to Sell and to Buy" (also
referred to as the "Receipt"). Instead, they assert that because this condition had not been
satisfied, their obligation to deliver the disputed parcels of land was converted into a money
claim.
We disagree. Petitioners admit that the agreement between the deceased Eliodoro Sandejas
Sr. and respondent was a contract to sell. Not exactly. In a contract to sell, the payment of
the purchase price is a positive suspensive condition. The vendor's obligation to convey the
title does not become effective in case of failure to pay.10
On the other hand, the agreement between Eliodoro Sr. and respondent is subject to a
suspensive condition -- the procurement of a court approval, not full payment. There was no
reservation of ownership in the agreement. In accordance with paragraph 1 of the Receipt,
petitioners were supposed to deed the disputed lots over to respondent. This they could do
upon the court's approval, even before full payment. Hence, their contract was a conditional
sale, rather than a contract to sell as determined by the CA.
When a contract is subject to a suspensive condition, its birth or effectivity can take place
only if and when the condition happens or is fulfilled. 11 Thus, the intestate court's grant of the
Motion for Approval of the sale filed by respondent resulted in petitioners' obligation to
execute the Deed of Sale of the disputed lots in his favor. The condition having been
satisfied, the contract was perfected. Henceforth, the parties were bound to fulfil what they
had expressly agreed upon.
Court approval is required in any disposition of the decedent's estate per Rule 89 of the
Rules of Court. Reference to judicial approval, however, cannot adversely affect the
substantive rights of heirs to dispose of their own pro indiviso shares in the co-heirship or coownership.12 In other words, they can sell their rights, interests or participation in the property
under administration. A stipulation requiring court approval does not affect the validity and
the effectivity of the sale as regards the selling heirs. It merely implies that the property may
be taken out ofcustodia legis, but only with the court's permission.13 It would seem that the
suspensive condition in the present conditional sale was imposed only for this reason.
Thus, we are not persuaded by petitioners' argument that the obligation was converted into a
mere monetary claim. Paragraph 4 of the Receipt, which petitioners rely on, refers to a
situation wherein the sale has not materialized. In such a case," the seller is bound to return
to the buyer the earnest money paid plus interest at fourteen percent per annum. But the
sale was approved by the intestate court; hence, the proviso does not apply.
Because petitioners did not consent to the sale of their ideal shares in the disputed lots, the
CA correctly limited the scope of the Receipt to the pro-indiviso share of Eliodoro Sr. Thus, it
correctly modified the intestate court's ruling by excluding their shares from the ambit of the
transaction.
First Collateral Issue:
Jurisdiction of Settlement Court
Petitioners also fault the CA Decision by arguing, inter alia, (a) jurisdiction over ordinary civil
action seeking not merely to enforce a sale but to compel performance of a contract falls
upon a civil court, not upon an intestate court; and (b) that Section 8 of Rule 89 allows the
executor or administrator, and no one else, to file an application for approval of a sale of the
property under administration.
Citing Gil v. Cancio14 and Acebedo v. Abesamis,15 petitioners contend that the CA erred in
clothing the settlement court with the jurisdiction to approve the sale and to compel
petitioners to execute the Deed of Sale. They allege factual differences between these cases
and the instant case, as follows: in Gil, the sale of the realty in administration was a clear and
an unequivocal agreement for the support of the widow and the adopted child of the
decedent; and in Acebedo, a clear sale had been made, and all the heirs consented to the
disposition of their shares in the realty in administration.
We are not persuaded. We hold that Section 8 of Rule 89 allows this action to proceed. The
factual differences alleged by petitioners have no bearing on the intestate court's jurisdiction
over the approval of the subject conditional sale. Probate jurisdiction covers all matters
relating to the settlement of estates (Rules 74 & 86-91) and the probate of wills (Rules 7577) of deceased persons, including the appointment and the removal of administrators and
executors (Rules 78-85). It also extends to matters incidental and collateral to the exercise of
a probate court's recognized powers such as selling, mortgaging or otherwise encumbering
realty belonging to the estate. Indeed, the rules on this point are intended to settle the estate
in a speedy manner, so that the benefits that may flow from such settlement may be
immediately enjoyed by the heirs and the beneficiaries. 16
In the present case, the Motion for Approval was meant to settle the decedent's obligation to
respondent; hence, that obligation clearly falls under the jurisdiction of the settlement court.
To require respondent to file a separate action -- on whether petitioners should convey the
title to Eliodoro Sr.'s share of the disputed realty -- will unnecessarily prolong the settlement
of the intestate estates of the deceased spouses.
The suspensive condition did not reduce the conditional sale between Eliodoro Sr. and
respondent to one that was "not a definite, clear and absolute document of sale," as
contended by petitioners. Upon the occurrence of the condition, the conditional sale became
a reciprocally demandable obligation that is binding upon the parties. 17That Acebedo also
involved a conditional sale of real property18 proves that the existence of the suspensive
condition did not remove that property from the jurisdiction of the intestate court.
Second Collateral Issue:
Intervenor's Standing
Petitioners contend that under said Rule 89, only the executor or administrator is authorized
to apply for the approval of a sale of realty under administration. Hence, the settlement court
allegedly erred in entertaining and granting respondent's Motion for Approval.
1wphi1.nt
We read no such limitation. Section 8, Rule 89 of the Rules of Court, provides:

"SEC. 8. When court may authorize conveyance of realty which deceased contracted
to convey. Notice. Effect of deed. -- Where the deceased was in his lifetime under
contract, binding in law, to deed real property, or an interest therein, the court having
jurisdiction of the estate may, on application for that purpose, authorize the executor
or administrator to convey such property according to such contract, or with such
modifications as are agreed upon by the parties and approved by the court; and if the
contract is to convey real property to the executor or administrator, the clerk of the
court shall execute the deed. x x x."
This provision should be differentiated from Sections 2 and 4 of the same Rule, specifically
requiring only the executor or administrator to file the application for authority to sell,
mortgage or otherwise encumber real estate for the purpose of paying debts, expenses and
legacies (Section 2);19 or for authority to sell real or personal estate beneficial to the heirs,
devisees or legatees and other interested persons, although such authority is not necessary
to pay debts, legacies or expenses of administration (Section 4).20 Section 8 mentions only
an application to authorize the conveyance of realty under a contract that the deceased
entered into while still alive. While this Rule does not specify who should file the application,
it stands to reason that the proper party must be one .who is to be benefited or injured by the
judgment, or one who is to be entitled to the avails of the suit.21
Third Collateral Issue:
Bad Faith
Petitioners assert that Eliodoro Sr. was not in bad faith, because (a) he informed respondent
of the need to secure court approval prior to the sale of the lots, and (2) he did not promise
that he could obtain the approval.
We agree. Eliodoro Sr. did not misrepresent these lots to respondent as his own properties
to which he alone had a title in fee simple. The fact that he failed to obtain the approval of the
conditional sale did not automatically imply bad faith on his part. The CA held him in bad faith
only for the purpose of binding him to the conditional sale. This was unnecessary because
his being bound to it is, as already shown, beyond cavil.
Fourth Collateral Issue:

Computation of Eliodoro's Share
Petitioners aver that the CA's computation of Eliodoro Sr.'s share in the disputed parcels of
land was erroneous because, as the conjugal partner of Remedios, he owned one half of
these lots plus a further one tenth of the remaining half, in his capacity as a one of her legal
heirs. Hence, Eliodoro's share should be 11/20 of the entire property. Respondent poses no
objection to this computation.22
On the other hand, the CA held that, at the very least, the conditional sale should cover the
one half (1/2) pro indiviso conjugal share of Eliodoro plus his one tenth (1/10) hereditary
share as one of the ten legal heirs of the decedent, or a total of three fifths (3/5) of the lots in
administration.23
Petitioners' correct. The CA computed Eliodoro's share as an heir based on one tenth of the
entire disputed property. It should be based only on the remaining half, after deducting the
conjugal share.24
The proper determination of the seller-heir's shares requires further explanation. Succession
laws and jurisprudence require that when a marriage is dissolved by the death of the
husband or the wife, the decedent's entire estate - under the concept of conjugal properties
of gains -- must be divided equally, with one half going to the surviving spouse and the other
half to the heirs of the deceased.25 After the settlement of the debts and obligations, the
remaining half of the estate is then distributed to the legal heirs, legatees and devices. We
assume, however, that this preliminary determination of the decedent's estate has already
been taken into account by the parties, since the only issue raised in this case is whether
Eliodoro's share is 11/20 or 3/5 of the disputed lots.
WHEREFORE, The Petition is hereby PARTIALLY GRANTED. The appealed Decision and
Resolution areAFFIRMED with the MODIFICATION that respondent is entitled to only a proindiviso share equivalent to 11/20 of the disputed lots.
SO ORDERED.
Melo, Vitug, Gonzaga-Reyes, and Sandoval-Gutierrez, JJ., concur.
Footnote
Penned by Justice Mariano M. Umali of the Special Seventh Division of the Court of
Appeals with the concurrence of Justices Romeo J. Callejo Sr., acting Division
Chairman; and Bernardo P. Abesamis, member. Rollo, pp. 39-56.
1
Rollo, p. 58.
CA Decision, p. 18; rollo, p. 56.
CA Decision, pp. 2-8; rollo, pp. 40-46.
Penned by Judge Roberto A. Barrios of the Regional Trial Court of Manila, Branch
11.
5
RTC Order, p. 3; rollo, p. 73.
"SECTION 1. Order of sale of personalty. Upon the application of the executor or

administrator, and on written notice to the heirs and other persons interested, the
court may order the whole or a part of the personal estate to be sold, if it appears
necessary for the purpose of paying debts, expenses of administration, or legacies,
or the preservation of the property."
7
This case was submitted for resolution upon the receipt by this Court of the
Memorandum for the Petitioners on October 12, 2000, signed by Atty. Pascual T.
Lacas of Lacas, Lao & Associates. Respondents Memorandum, signed by Atty.
Rudegelio D. Tacorda, was submitted on October 5, 2000.
8
Rollo, p. 139.
Justice Jose C. Vitug, Compendium of Civil Law and Jurisprudence, rev. ed., p.
580; Cheng v. Genato,300 SCRA 722, 734, December 29, 1998; Odyssey Park, Inc.
v. Court of Appeals, 280 SCRA 253, 260, October 8, 1997.
10
Cheng v. Genato, supra, pp. 735-736; Coronel v. Court of Appeals, 263 SCRA 15,
33, October 7, 1996;Compendium, pp. 487-488, 580 & 603.
11
12
Acebedo v. Abesamis, 217 SCRA 186, 193, January 18, 1993.
13
Vda. de Cruz v. Ilagan, 81 SCRA 554, 561, September 30, 1948.
14
SCRA 796, 796-801, July 30, 1965.
15
Supra.
Sikat v. Vda. de Villanueva, 57 Phil. 486, 494, November 10, 1932; Magbanua v.
Akol, 72 Phil. 567, 572, June 27, 1941; Del Castillo v. Enriquez, 109 Phil. 491, 494495, September 30, 1960.
16
17
Art. 1458, Civil Code.
18
Supra, p.188.
"SEC. 2. When court may authorize sale, mortgage, or other encumbrance of

realty to pay debts and legacies through personalty not exhausted. - When the
personal estate of the deceased is not sufficient to pay the debts, expenses of
administration, and legacies, or where the sale of such personal estate may injure
the business or other interests of those interested in the estate, and where a testator
has not otherwise made sufficient provision for the payment of such debts, expenses,
and legacies, the court, on the application of the executor or administrator and on
written notice to the heirs, devisees, and legatees residing in the Philippines, may
authorize the executor or administrator to sell, mortgage, or otherwise encumber so
much as may be necessary of the real estate, in lieu of personal estate, for the
19
purpose of paying such debts, expenses, and legacies, if it clearly appears that such
sale, mortgage, or encumbrance would be beneficial to the persons interested; and if
a part cannot be sold, mortgaged, or otherwise encumbered without injury to those
interested in the remainder, the authority may be for the sale, mortgage, or other
encumbrance of the whole of such .real estate, or so much thereof as is necessary or
beneficial under the circumstances."
"Sec. 4. When court may authorize sale of estate as beneficial to interested
persons. Disposal of proceeds. - When it appears that the sale of the whole or a part
of the real or personal estate, will be beneficial to the heirs, devisees, It legatees, and
other interested persons, the court may, upon application of the executor or
administrator and on written notice to the heirs, devisees, and legatees who are
interested in the estate to be sold, authorize the executor or administrator to sell the
whole or apart of said estate, although not necessary to pay debts, legacies, or
expenses of administration; but such authority shall not be granted if inconsistent
with the provisions of a will. In case of such sale, the proceeds shall be assigned to
the persons entitled to the estate in the proper proportions."
20
21
Section 2, Rule 3, Rules of Court.
22
Respondent's Memorandum; rollo, p. 124.
23
1/2 + 1/10 = 6/10 or 3/5 reduced to the lowest term.
24
1/2 + [1/10 x 1/2] = 1/2+[1/20] = 10/20+ 1/20 = 11/20
Art. 129(7), Family Code; Armas v. Calisterio, GR No. 136467, April 6, 2000, p. 8,
per Vitug, J.; and Del Mundo v. Court of Appeals, 97 SCRA 373, 382, April 30, 1980.
25

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 145982
July 3, 2003
FRANK N. LIU, deceased, substituted by his surviving spouse Diana Liu, and children,
namely: Walter, Milton, Frank, Jr., Henry and Jockson, all surnamed Liu, Rebecca Liu
Shui and Pearl Liu Rodriguez,petitioners,
vs.
ALFREDO LOY, JR., TERESITA A. LOY and ESTATE OF JOSE VAO, respondents.
CARPIO, J.:
The Case
This is a petition for review on certiorari of the Decision1 dated 13 June 2000 and the
Resolution dated 14 November 2002 of the Court of Appeals which affirmed the Decision 2 of
the Regional Trial Court, Branch 14, Cebu City. The Court of Appeals agreed with the trial
court that the sales by the late Teodoro Vao to respondents Alfredo Loy, Jr. and Teresita A.
Loy of Lot Nos. 5 and 6, respectively, were valid. The Court of Appeals also agreed with the
trial court that the unilateral extrajudicial rescission by the late Teodoro Vao of the contract
to sell involving five lots, including Lot Nos. 5 and 6, between him and Benito Liu
(predecessor-in-interest of Frank Liu) was valid.
The Facts
On 13 January 1950, Teodoro Vao, as attorney-in-fact of Jose Vao, sold seven lots of the
Banilad Estate located in Cebu City to Benito Liu and Cirilo Pangalo. 3 Teodoro Vao dealt
with Frank Liu, the brother of Benito Liu, in the sale of the lots to Benito Liu and Cirilo
Pangalo. The lots sold to Benito Liu were Lot Nos. 5, 6, 13, 14, and 15 of Block 12 for a total
price of P4,900. Benito Liu gave a down payment of P1,000, undertaking to pay the balance
of P3,900 in monthly installments of P100 beginning at the end of January 1950. The lots
sold to Cirilo Pangalo were Lot Nos. 14 and 15 of Block 11 for a total price of P1,967.50.
Cirilo Pangalo gave P400 as down payment, undertaking to pay the balance of P1,567.50 in
monthly installments of P400 beginning at the end of January 1950. Meanwhile, Jose Vao
passed away.
Benito Liu subsequently paid installments totaling P2,900, leaving a balance of
P1,000.4 Apparently, Benito Liu stopped further payments because Teodoro Vao admitted
his inability to transfer the lot titles to Benito Liu. Later, in a letter 5 dated 16 October 1954,
Teodoro Vao informed Frank Liu6 that the Supreme Court had already declared valid the will
of his father Jose Vao. Thus, Teodoro Vao could transfer the titles to the buyers names
upon payment of the balance of the purchase price.
When Frank Liu failed to reply, Teodoro Vao sent him another letter,7 dated 1 January 1955,
reminding him of his outstanding balance. It appears that it was only after nine years that
Frank Liu responded through a letter,8dated 25 January 1964. In the letter, Frank Liu
informed Teodoro Vao that he was ready to pay the balance of the purchase price of the
seven lots. He requested for the execution of a deed of sale of the lots in his name and the
delivery of the titles to him.
On 22 April 1966, Benito Liu sold to Frank Liu the five lots (Lot Nos. 5, 6, 13, 14 and 15 of
Block 12) which Benito Liu purchased from Teodoro Vao. 9 Frank Liu assumed the balance
of P1,000 for the five lots. Cirilo Pangalo likewise sold to Frank Liu the two lots (Lot Nos. 14
and 15 of Block 11) that Pangalo purchased from Teodoro Vao. Frank Liu likewise assumed
the balance of P417 for the two lots.
On 21 March 1968, Frank Liu reiterated in a letter10 his request for Teodoro Vao to execute
the deed of sale covering the seven lots so he could secure the corresponding certificates of
title in his name. He also requested for the construction of the subdivision roads pursuant to
the original contract. In the letter, Frank Liu referred to another letter, dated 25 June 1966,
which he allegedly sent to Teodoro Vao. According to Frank Liu, he enclosed PBC Check
No. D-782290 dated 6 May 1966 for P1,417, which is the total balance of the accounts of
Benito Liu and Cirilo Pangalo on the seven lots. However, Frank Liu did not offer in evidence
the letter or the check. Frank Liu sent two other letters, 11 dated 7 June 1968 and 29 July
1968, to Teodoro Vao reiterating his request for the execution of the deed of sale in his
favor but to no avail.
On 19 August 1968, Teodoro Vao sold Lot No. 6 to respondent Teresita Loy for
P3,930.12 The Register of Deeds of Cebu City entered this sale in the Daybook on 24
February 1969.13
On 2 December 1968, Frank Liu filed a complaint against Teodoro Vao for specific
performance, execution of deed of absolute sale, issuance of certificates of title and
construction of subdivision roads, before the Court of First Instance of Davao. The case was
docketed as Civil Case No. 6300.14
On 19 December 1968, Frank Liu filed with the Register of Deeds of Cebu City a notice of lis
pendens on the seven lots due to the pendency of Civil Case No. 6300. 15 However, the
Register of Deeds denied the registration of the lis pendens "on the ground that the property
is under administration and said claim must be filed in court." 16
On 16 December 1969, Teodoro Vao sold Lot No. 5 to respondent Alfredo Loy for
P3,910.17 The Register of Deeds of Cebu City entered this sale in the Daybook on 16
January 1970.18
On 3 October 1970, the Court of First Instance of Davao, on motion of Teodoro Vao,
dismissed Civil Case No. 6300 on the ground that Frank Liu should have filed the claim with
the probate court.19 Thus, on 17 February 1972, Frank Liu filed before the probate court a
claim against the Estate of Jose Vao for "Specific Performance, Execution of Deed of
Absolute Sale, Issuance of Certificate of Title, and Construction of Subdivision Roads." 20
During the proceedings, Teodoro Vao died. His widow, Milagros Vao, succeeded as
administratrix of the Estate of Jose Vao.
On 24 February 1976, the probate court approved the claim of Frank Liu. On 5 March 1976,
Milagros Vao executed a deed of conveyance covering the seven lots in favor of Frank Liu,
in compliance with the probate courts order.21 The deed of conveyance included Lot Nos. 5
and 6, the same lots Teodoro Vao sold respectively to Alfredo Loy, Jr. on 16 December
1969 and to Teresita Loy on 19 August 1968.
On 19 March 1976, the probate court, upon an ex-parte motion filed by Teresita Loy, issued
an Order22 approving the 16 August 1968 sale by Teodoro Vao of Lot No. 6 in her favor.
Likewise, upon an ex-parte motion filed by Alfredo Loy, Jr., the probate court issued on 23
March 1976 an Order23 approving the 16 December 1969 sale of Lot No. 5 by Teodoro Vao
in his favor.
On 10 May 1976, the Register of Deeds of Cebu City cancelled TCT No. 44204 in the name
of the Estate of Jose Vao covering Lot No. 5 and issued a new title, TCT No. 64522, in the
name of Alfredo Loy, Jr. and Perfeccion V. Loy.24 Likewise, on the same date, the Register of
Deeds cancelled TCT No. 44205 in the name of the Estate of Jose Vao covering Lot No. 6,
and issued TCT No. 64523 in the name of Teresita A. Loy.25
On 3 June 1976, Milagros Vao, as administratrix of the estate, filed a motion for
reconsideration of the Orders of the probate court dated 19 and 23 March 1976. She
contended that she already complied with the probate courts Order dated 24 February 1976
to execute a deed of sale covering the seven lots, including Lot Nos. 5 and 6, in favor of
Frank Liu. She also stated that no one notified her of the motion of the Loys, and if the Loys
or the court notified her, she would have objected to the sale of the same lots to the Loys.
On 4 June 1976, Frank Liu filed a complaint for reconveyance or annulment of title of Lot
Nos. 5 and 6. Frank Liu filed the case in the Regional Trial Court of Cebu City, Branch 14,
which docketed it as Civil Case No. R-15342.
On 5 August 1978, the probate court denied the motion for reconsideration of Milagros Vao
on the ground that the conflicting claims regarding the ownership of Lot Nos. 5 and 6 were
already under litigation in Civil Case No. R-15342.
On 8 April 1991, the Regional Trial Court of Cebu City ("trial court"), Branch 14, rendered
judgment against Frank Liu as follows:
WHEREFORE, judgment is hereby rendered:
(1) Dismissing the complaint at bar; and
(2) Confirming the unilateral extrajudicial rescission of the contract Exhibit A
by the late Teodoro Vao, conditioned upon the refund by the Estate of Jose
Vao of one-half (1/2) of what the plaintiff had paid under that contract.
The counterclaims by the defendants Alfredo A. Loy, Jr. and Teresita A. Loy and by
the defendant Estate of Jose Vao, not having been substantiated, are hereby
denied.
Without special pronouncement as to costs.
SO ORDERED.26
Frank Liu appealed to the Court of Appeals, which affirmed in toto the decision of the trial
court. Frank Liu27 filed a motion for reconsideration but the Court of Appeals denied the
same.
Hence, the instant petition.
The Trial Courts Ruling
The trial court held that the contract between Teodoro Vao and Benito Liu was a contract to
sell. Since title to Lot Nos. 5 and 6 never passed to Benito Liu due to non-payment of the
balance of the purchase price, ownership of the lots remained with the vendor. Therefore, the
trial cour ruled that the subsequent sales to Alfredo Loy, Jr. and Teresita Loy of Lot Nos. 5
and 6, respectively, were valid.
The trial court viewed the letter of Teodoro Vao dated 1 January 1995 addressed to Frank
Liu as a unilateral extrajudicial rescission of the contract to sell. The trial court upheld the
unilateral rescission subject to refund by the Estate of Jose Vao of one-half (1/2) of what
Frank Liu paid under the contract.
The trial court ruled that Teodoro Vao, as administrator of the Estate of Jose Vao and as
sole heir of Jose Vao, acted both as principal and as agent when he sold the lots to Alfredo
Loy, Jr. and Teresita Loy. The probate court subsequently approved the sales. The trial court
also found that Alfredo Loy, Jr. and Teresita Loy were purchasers in good faith.
The Court of Appeals Ruling
In affirming in toto the trial courts decision, the appellate court found no evidence of fraud or
ill-motive on the part of Alfredo Loy, Jr. and Teresita Loy. The Court of Appeals cited the rule
that "the law always presumes good faith such that any person who seeks to be awarded
damages due to the acts of another has the burden of proving that the latter acted in bad
faith or ill-motive."
The Court of Appeals also held that the sales to Alfredo Loy, Jr. and Teresita Loy of Lot Nos.
5 and 6, respectively, were valid despite lack of prior approval by the probate court. The
Court of Appeals declared that Teodoro Vao sold the lots in his capacity as heir of Jose
Vao. The appellate court ruled that an heir has a right to dispose of the decedents property,
even if the same is under administration, because the hereditary property is deemed
transmitted to the heir without interruption from the moment of the death of the decedent.
The Court of Appeals held that there is no basis for the claim of moral damages and
attorneys fees. The appellate court found that Frank Liu failed to prove that he suffered
mental anguish due to the actuations of the Loys. The Court of Appeals likewise disallowed
the award of attorneys fees. The fact alone that a party was compelled to litigate and incur
expenses to protect his claim does not justify an award of attorneys fees. Besides, the Court
of Appeals held that where there is no basis to award moral damages, there is also no basis
to award attorneys fees.
The Issues
Petitioners28 raise the following issues:29
1. Whether prior approval of the probate court is necessary to validate the sale of Lot
Nos. 5 and 6 to Loys;
2. Whether the Loys can be considered buyers and registrants in good faith despite
the notice of lis pendens;
3. Whether Frank Liu has a superior right over Lot Nos. 5 and 6;
4. Whether the Court of Appeals erred in not passing upon the trial courts
declaration that the extra-judicial rescission by Teodoro Vao of the sale in favor of
Frank Liu is valid;
5.Whether petitioners are entitled to moral damages and attorneys fees.

The Courts Ruling
The petition is meritorious.
Whether there was a valid cancellation of the contract to sell
There was no valid cancellation of the contract to sell because there was no written notice of
the cancellation to Benito Liu or Frank Liu. There was even no implied cancellation of the
contract to sell. The trial court merely "viewed" the alleged "unilateral extrajudicial rescission"
from the letter of Teodoro Vao, dated 1 January 1955, addressed to Frank Liu, stating that:
Two months, I believe, is ample for the allowance of delays caused by your (sic)
either too busy, or having been some place else, or for consultations. These are the
only reasons I can think of that could have caused the delay in your answer, unless
you do not think an answer is necessary at all, as you are not the party concerned in
the matter.
I shall therefor (sic) appreciate it very much, if you will write me within ten days from
receipt of this letter, or enterprete (sic) your silence as my mistake in having written
to the wrong party, and therefor (sic) proceed to write Misters: B. Liu and C.
Pangalo.30 (Emphasis supplied)
Obviously, we cannot construe this letter as a unilateral extrajudicial rescission of the
contract to sell. As clearly stated in the letter, the only action that Teodoro Vao would take if
Frank Liu did not reply was that Teodoro Vao would write directly to Benito Liu and Cirilo
Pangalo. The letter does not mention anything about rescinding or cancelling the contract to
sell.
Although the law allows the extra-judicial cancellation of a contract to sell upon failure of one
party to comply with his obligation, notice of such cancellation must still be given to the party
who is at fault.31 The notice of cancellation to the other party is one of the requirements for a
valid cancellation of a contract to sell, aside from the existence of a lawful cause. Even the
case cited by the trial court emphasizes the importance of such notice:
Of course, it must be understood that the act of a party in treating a contract as
cancelled or resolved on account of infractions by the other contracting party must be
made known to the other and is always provisional, being ever subject to scrutiny
and review by the proper court. If the other party denies that rescission is justified, it
is free to resort to judicial action in its own behalf, and bring the matter to court.
Then, should the court, after due hearing, decide that the resolution of the contract
was not warranted, the responsible party will be sentenced to damages; in the
contrary case, the resolution will be affirmed, and the consequent indemnity awarded
to the party prejudiced.32 (Emphasis supplied)
The fact that Teodoro Vao advised Frank Liu to file his claim with the probate court is
certainly not the conduct of one who supposedly unilaterally rescinded the contract with
Frank Liu.33
In this case, there was prior delay or default by the seller. As admitted by Teodoro Vao, he
could not deliver the titles because of a case questioning the authenticity of the will of his
father. In a letter33 to Frank Liu dated 16 October 1954, Teodoro Vao stated:
Some time last May, if I remember correctly, you offered to settle the whole balance
of your account if I can have the Titles transferred immediately in your brothers
name, and to that of Mr. Pangalos. I cannot blame you if you were disappointed
then, to know that I could not have the titles transferred, even should you have paid
in full. (Emphasis supplied)
In the same letter of 16 October 1954, Teodoro Vao informed Frank Liu that the titles were
ready for transfer, thus:
However, last June 30, of this year, the Supreme Court, unanimously concurred in
the reversal of the decision of the Court of First Instance, as regard the legality of the
Will of my father. Now that the Will of my Father has been declared Legal, my
opponents have lost their personality in the case, and with it their power to harass
me in court. Also, sometime in the middle of July, also this year, the Supreme Court
again declared that all the sales I have made of the properties of my Father, were
Legal, and that I should be empowered to have the Titles transferred in the buyers
names, should they have paid in full. A few have already received their Titles. And
yours can be had too in two days time from the time you have paid in full.
Nevertheless, the subsequent approval by the probate court of the sale of Lot Nos. 5
and 6 to Frank Liu rendered moot any question on the continuing validity of the
contract to sell.
Whether the lis pendens in the Davao case served as notice to the Loys
The lis pendens in the Davao case did not serve as notice to the Loys. The Register of
Deeds of Cebu City denied registration of the lis pendens on 19 December 1968.35 Frank Liu
did not appeal to the Land Registration Commission 36 to keep alive the lis pendens. Republic
Act No. 1151,37 which took effect 17 June 1954, provides:
SEC. 4. Reference of doubtful matters to Commissioner of Land Registration.
When the Register of Deeds is in doubt with regard to the proper step to be taken or
memorandum to be made in pursuance of any deed, mortgage, or other instrument
presented to him for registration, or where any party in interest does not agree with
the Register of Deeds with reference to any such matter, the question shall be
submitted to the Commissioner of Land Registration either upon the certification of
the Register of Deeds, stating the question upon which he is in doubt, or upon the
suggestion in writing by the party in interest; and thereupon the Commissioner, after
consideration of the matter shown by the records certified to him, and in case of
registered lands, after notice to the parties and hearing, shall enter an order
prescribing the step to be taken or memorandum to be made. His decision in such
cases shall be conclusive and binding upon all Registers of Deeds: Provided,
however, That when a party in interest disagrees with a ruling or resolution of the
Commissioner and the issue involves a question of law, said decision may be
appealed to the Supreme Court within thirty days from and after receipt of the notice
thereof. (Emphasis supplied)
Frank Lius failure to appeal38 the denial of the registration rendered the lis
pendens ineffective. The Court of First Instance of Davao City eventually dismissed Frank
Lius complaint on 3 October 1970.
Whether the registration by the Loys of their contracts of sale made them the first
registrants in good faith to defeat prior buyers
The registration by the Loys of their contracts of sale did not defeat the right of prior buyers
because the person who signed the Loys contracts was not the registered owner. The
registered owner of Lot Nos. 5 and 6 was the "Estate of Jose Vao." Teodoro Vao was the
seller in the contract of sale with Alfredo Loy, Jr. The Estate of Jose Vao was the seller in
the contract of sale with Teresita Loy. Teodoro Vao signed both contracts of sale. The rule is
well-settled that "one who buys from a person who is not the registered owner is not a
purchaser in good faith."39 As held in Toledo-Banaga v. Court of Appeals:40
To repeat, at the time of the sale, the person from whom petitioner Tan bought the property is
neither the registered owner nor was the former authorized by the latter to sell the same.
She knew she was not dealing with the registered owner or a representative of the latter.
One who buys property with full knowledge of the flaws and defects in the title of his vendor
is enough proof of his bad faith and cannot claim that he acquired title in good faith as
against the owner or of an interest therein. When she nonetheless proceeded to buy the lot,
petitioner Tan gambled on the result of litigation. She is bound by the outcome of her
indifference with no one to blame except herself if she looses her claim as against one who
has a superior right or interest over the property. x x x.
The Loys were under notice to inquire why the land was not registered in the name of the
person who executed the contracts of sale. They were under notice that the lots belonged to
the "Estate of Jose Vao" and any sale of the lots required court approval. Any disposition
would be subject to the claims of creditors of the estate who filed claims before the probate
court.41
The contracts of the Loys did not convey ownership of the lots to them as against third
persons. The contracts were binding only on the seller, Teodoro Vao. The contracts of the
Loys would become binding against third persons only upon approval of the sale by the
probate court and registration with the Register of Deeds. Registration of the contracts
without court approval would be ineffective to bind third persons, especially creditors of the
estate. Otherwise, this will open the door to fraud on creditors of the estate.
Whether the probate courts ex-parte approval of the contracts of the Loys was valid
Section 8, Rule 89 of the 1964 Rules of Court42 specifically requires notice to all interested
parties in any application for court approval to convey property contracted by the decedent in
his lifetime. Thus:
SECTION 8. When court may authorize conveyance of realty which deceased
contracted to convey. Notice. Effect of deed. Where the deceased was in his
lifetime under contract, binding in law, to deed real property, or an interest therein,
the court having jurisdiction of the estate may, on application for that purpose,
authorize the executor or administrator to convey such property according to such
contract, or with such modifications as are agreed upon by the parties and approved
by the court; and if the contract is to convey real property to the executor or
administrator, the clerk of the court shall execute the deed. The deed executed by
such executor, administrator, or clerk of court shall be as effectual to convey the

property as if executed by the deceased in his lifetime; but no such conveyance shall
be authorized until notice of the application for that purpose has been given
personally or by mail to all persons interested, and such further notice has been
given, by publication or otherwise, as the court deems proper; nor if the assets in the
hands of the executor or administrator will thereby be reduced so as to prevent a
creditor from receiving his full debt or diminish his dividend. (Rule 89, 1964 Rules of
Court) (Emphasis supplied)
Despite the clear requirement of Section 8 of Rule 89, the Loys did not notify the
administratrix of the motion and hearing to approve the sale of the lots to them. The
administratrix, who had already signed the deed of sale to Frank Liu as directed by the same
probate court, objected to the sale of the same lots to the Loys. Thus, as found by the trial
court:
On June 3, 1976, Milagros H. Vao moved for the reconsideration of the Order issued by
Judge Ramolete on March 19, 1976 and March 23, 1976, contending that she had not been
personally served with copies of the motions presented to the Court by Alfredo Loy, Jr. and
by Teresita Loy seeking the approval of the sales of the lots in their favor, as well as the
Orders that were issued by the Court pursuant thereto; that the Court in its Order of February
24, 1976 had ordered her (Milagros H. Vao), to execute a deed of absolute sale in favor of
the plaintiff, which sale had been approved by the Court; that she had not known of the sale
of Lots 5 and 6 to any other person except to the plaintiff; that the sale of the two lots in favor
of plaintiff was made earlier, when there was yet no litigation with the Bureau of Internal
Revenue, while those in favor of the defendant Loys were made when there was already a
prohibition by the Court against any sale thereof; that the sales in favor of the Loys were
made without Court authority; and that if the approval of the sales had not been obtained exparte she would have informed the Court of the complication arising therefrom, and she
would not have executed the sale in favor of plaintiff, and she would have asked the Court to
decide first as to who had preference over said lots. 43
The failure to notify the administratrix and other interested persons rendered the sale to the
Loys void. As explained by Justice J.B.L. Reyes in De Jesus v. De Jesus: 44
Section 9, Rule 90, however, provides that authority can be given by the probate
court to the administrator to convey property held in trust by the deceased to the
beneficiaries of the trust only "after notice given as required in the last preceding
section"; i.e., that "no such conveyance shall be authorized until notice of the
application for that purpose has been given personally or by mail to all persons
interested, and such further notice has been given, by publication or otherwise, as
the court deems proper" (sec. 8, Rule 90). This rule makes it mandatory that notice
be served on the heirs and other interested persons of the application for approval of
any conveyance of property held in trust by the deceased, and where no such notice
is given, the order authorizing the conveyance, as well as the conveyance itself, is
completely void. (Emphasis supplied)
In this case, the administratrix, the wife of the deceased Teodoro Vao, was not notified of
the motion and hearing to approve the sale of the lots to the Loys. Frank Liu did not also
receive any notice, although he obviously was an interested party. The issuance of new titles
to the Loys on 10 May 1976 by the Registry of Deeds did not vest title to the Loys because
the "conveyance itself" was "completely void." The consequences for the failure to notify the
administratrix and other interested parties must be borne by the Loys.
Necessity of court approval of sales

Indisputably, an heir can sell his interest in the estate of the decedent, or even his interest in
specific properties of the estate. However, for such disposition to take effect against third
parties, the court must approve such disposition to protect the rights of creditors of the
estate. What the deceased can transfer to his heirs is only the net estate, that is, the gross
estate less the liabilities. As held in Baun v. Heirs of Baun: 45
The heir legally succeeds the deceased, from whom he derives his right and title, but
only after the liquidation of the estate, the payment of the debts of the same, and the
adjudication of the residue of the estate of the deceased; and in the meantime the
only person in charge by law to attend to all claims against the estate of the
deceased debtor is the executor or administrator appointed by the court.
In Opulencia v. Court of Appeals,46 an heir agreed to convey in a contract to sell her share in
the estate then under probate settlement. In an action for specific performance filed by the
buyers, the seller-heir resisted on the ground that there was no approval of the contract by
the probate court. The Court ruled that the contract to sell was binding between the parties,
but subject to the outcome of the testate proceedings. The Court declared:
x x x Consequently, although the Contract to Sell was perfected between the
petitioner (seller-heir) and private respondents (buyers) during the pendency of the
probate proceedings, the consummation of the sale or the transfer of ownership over
the parcel of land to the private respondents is subject to the full payment of the
purchase price and to the termination and outcome of the testate proceedings. x x x
Indeed, it is settled that the sale made by an heir of his share in an inheritance,
subject to the pending administration, in no wise stands in the way of such
administration. (Emphasis supplied)
In Alfredo Loys case, his seller executed the contract of sale after the death of the registered
owner Jose Vao. The seller was Teodoro Vao who sold the lot in his capacity as sole heir
of the deceased Jose Vao. Thus, Opulencia applies to the sale of the lot to Alfredo Loy, Jr.,
which means that the contract of sale was binding between Teodoro Vao and Alfredo Loy,
Jr., but subject to the outcome of the probate proceedings.
In Frank Lius case, as successor-in-interest of Benito Liu, his seller was Jose Vao, who
during his lifetime executed the contract to sell through an attorney-in-fact, Teodoro Vao.
This is a disposition of property contracted by the decedent during his lifetime. Section 8 of
Rule 89 specifically governs this sale:
SECTION 8. When court may authorize conveyance of realty which deceased
contracted to convey. Notice. Effect of deed. Where the deceased was in his
lifetime under contract, binding in law, to deed real property, or an interest therein,
the court having jurisdiction of the estate may, on application for that purpose,
authorize the executor or administrator to convey such property according to such
contract, or with such modifications as are agreed upon by the parties and approved
by the court; x x x
Thus, Frank Liu applied to the probate court for the grant of authority to the administratrix to
convey the lots in accordance with the contract made by the decedent Jose Vao during his
lifetime. The probate court approved the application.
In Teresita Loys case, her seller was the Estate of Jose Vao. Teodoro Vao executed the
contract of sale in his capacity as administrator of the Estate of Jose Vao, the registered
owner of the lots. The Court has held that a sale of estate property made by an administrator
without court authority is void and does not confer on the purchaser a title that is available
against a succeeding administrator.47
Manotok Realty, Inc. v. Court of Appeals48 emphasizes the need for court approval in the sale
by an administrator of estate property. The Court held in Manotok Realty:
We also find that the appellate court committed an error of law when it held that the
sale of the lot in question did not need the approval of the probate court.
Although the Rules of Court do not specifically state that the sale of an immovable property
belonging to an estate of a decedent, in a special proceeding, should be made with the
approval of the court, this authority is necessarily included in its capacity as a probate court.
An administrator under the circumstances of this case cannot enjoy blanket authority to
dispose of real estate as he pleases, especially where he ignores specific directives to
execute proper documents and get court approval for the sales validity.
Section 91 of Act No. 496 (Land Registration Act) specifically requires court approval for any
sale of registered land by an executor or administrator, thus:
SEC. 91. Except in case of a will devising the land to an executor to his own use or
upon some trust or giving to the executor power to sell, no sale or transfer of
registered land shall be made by an executor or by an administrator in the course of
administration for the payment of debts or for any other purpose, except in
pursuance of an order of a court of competent jurisdiction obtained as provided by
law. (Emphasis supplied)
Similarly, Section 88 of Presidential Decree No. 1529 (Property Registration Decree)
provides:
SEC. 88. Dealings by administrator subject to court approval. After a
memorandum of the will, if any, and order allowing the same, and letters
testamentary or letters of administration have been entered upon the certificate of
title as hereinabove provided, the executor or administrator may alienate or
encumber registered land belonging to the estate, or any interest therein, upon
approval of the court obtained as provided by the Rules of Court. (Emphasis
supplied)
Clearly, both the law and jurisprudence expressly require court approval before any sale of
estate property by an executor or administrator can take effect.
Moreover, when the Loys filed in March 1976 their ex-parte motions for approval of their
contracts of sale, there was already a prior order of the probate court dated 24 February
1976 approving the sale of Lot Nos. 5 and 6 to Frank Liu. In fact, the administratrix had
signed the deed of sale in favor of Frank Liu on 5 March 1976 pursuant to the court approval.
This deed of sale was notarized on 5 March 1976, which transferred ownership of Lot Nos. 5
and 6 to Frank Liu on the same date. 49
Thus, when the probate court approved the contracts of the Loys on 19 and 23 March 1976,
the probate court had already lost jurisdiction over Lot Nos. 5 and 6 because the lots no
longer formed part of the Estate of Jose Vao.
In Dolar v. Sundiam,50 an heir sold parcels of land that were part of the estate of the
decedent. The probate court approved the sale. Thereafter, the probate court authorized the
administrator to sell again the same parcels of land to another person. The Court ruled that
the probate court had already lost jurisdiction to authorize the further sale of the parcels of
land to another person because such property no longer formed part of the estate of the
decedent. The Court declared:
In our opinion, where, as in this case, a piece of property which originally is a part of
the estate of a deceased person is sold by an heir of the deceased having a valid
claim thereto, and said piece of property is, by mistake, subsequently inventoried or
considered part of the deceaseds estate subject to settlement, and, thereafter, with
the authority and approval of the probate court, it sold once more to another person,
a receiver of the property so sold may, during the pendency of a motion to set aside
the second sale, be appointed by the court when in its sound judgment the grant of
such temporary relief is reasonably necessary to secure and protect the rights of its
real owner against any danger of loss or material injury to him arising from the use
and enjoyment thereof by another who manifestly cannot acquire any right of
dominion thereon because the approving surrogate court had already lost jurisdiction
to authorize the further sale of such property. (Emphasis supplied)
Similarly, in this case, the Loys cannot acquire any right of dominion over Lot Nos. 5 and 6
because the probate court had already lost jurisdiction to authorize the second sale of the
same lots. Moreover, the probate courts approval of the sale to the Loys was completely
void due to the failure to notify the administratrix of the motion and hearing on the sale.
Whether the Loys were in good faith when they built on the Lots.
The Civil Code describes a possessor in good faith as follows:
Art. 526. He is deemed a possessor in good faith who is not aware that there exists
in his title or mode of acquisition any flaw which invalidates it.
He is deemed a possessor in bad faith who possesses in any case contrary to the foregoing.
Mistake upon a doubtful or difficult question of law may be the basis of good faith.
Art. 1127. The good faith of the possessor consists in the reasonable belief that the person
from whom he received the thing was the owner thereof, and could transmit his ownership.
In Duran v. Intermediate Appellate Court,51 the Court explained possession in good faith in
this manner:
Guided by previous decisions of this Court, good faith consists in the possessors
belief that the person from whom he received the thing was the owner of the same
and could convey his title (Arriola vs. Gomez de la Serna, 14 Phil. 627). Good faith,
while it is always presumed in the absence of proof to the contrary, requires a wellfounded belief that the person from whom title was received was himself the owner of
the land, with the right to convey it (Santiago vs. Cruz, 19 Phil. 148). There is good
faith where there is an honest intention to abstain from taking unconscientious
advantage from another (Fule vs. Legare, 7 SCRA 351).
The Loys were not in good faith when they built on the lots because they knew that they
bought from someone who was not the registered owner. The registered owner on the TCTs
of the lots was the "Estate of Jose Vao," clearly indicating that the sale required probate
court approval. Teodoro Vao did not show any court approval to the Loys when they
purchased the lots because there was none. To repeat, any one who buys from a person
who is not the registered owner is not a purchaser in good faith. 52 If the Loys built on the lots
before the court approval, then they took the risk.
Contract to sell versus contract of sale
A prior contract to sell made by the decedent prevails over the subsequent contract of sale
made by the administrator without probate court approval. The administrator cannot
unilaterally cancel a contract to sell made by the decedent in his lifetime. 53 Any cancellation
must observe all legal requisites, like written notice of cancellation based on lawful cause. 54
It is immaterial if the prior contract is a mere contract to sell and does not immediately
convey ownership.55 If it is valid, then it binds the estate to convey the property in accordance
with Section 8 of Rule 89 upon full payment of the consideration.
Frank Lius contract to sell became valid and effective upon its execution. 56 The seller, Jose
Vao, was then alive and thus there was no need for court approval for the immediate
effectivity of the contract to sell. In contrast, the execution of the contracts of sale of the Loys
took place after the death of the registered owner of the lots. The law requires court approval
for the effectivity of the Loys contracts of sale against third parties. The probate court did not
validly give this approval since it failed to notify all interested parties of the Loys motion for
court approval of the sale. Besides, the probate court had lost jurisdiction over the lots after it
approved the earlier sale to Frank Liu. Clearly, Frank Lius contract to sell prevails over the
Loys contracts of sale.
Whether petitioners are entitled to award of moral damages and attorneys fees.
The Court upholds the ruling of the trial and appellate courts that petitioners are not entitled
to moral damages. Moral damages should not enrich a complainant at the expense of the
defendant.57
Likewise, as found by the trial court and the appellate court, there is no basis to award
attorneys fees. The policy of the law is to put no premium on the right to litigate. 58 The court
may award attorneys fees only in the instances mentioned in Article 2208 of the Civil Code.
The award of attorneys fees is the exception rather than the rule. 59None of the instances
mentioned in Article 2208 apply to this case.
Conclusion
Since the Loys have no contract of sale validly approved by the probate court, while Frank
Liu has a contract of sale approved by the probate court in accordance with Section 8 of
Rule 89, Lot Nos. 5 and 6 belong to Frank Liu. The Estate of Jose Vao should reimburse
the Loys their payments on Lot Nos. 5 and 6, with annual interest at 6% from 4 June 1976,
the date of filing of the complaint, until finality of this decision, and 12% thereafter until full
payment.60
WHEREFORE, the Decision of the Court of Appeals is SET ASIDE and a new one is
RENDERED:
1. Declaring null and void the deeds of sale of Lot Nos. 5 and 6 executed by Teodoro
Vao in favor of Alfredo Loy, Jr. and Teresita Loy, respectively.
2.Ordering the Register of Deeds of Cebu City to cancel TCT Nos. 64522 and 64523
and to issue a new one in the name of petitioner Frank N. Liu;
3. Ordering the Estate of Jose Vao to reimburse to respondent Loys the amounts
paid on Lot Nos. 5 and 6, with interest at 6% per annum from 4 June 1976 until
finality of this decision, and 12% per annum thereafter until full payment.
SO ORDERED.
Davide, Jr., C.J., Vitug, Ynares-Santiago, and Azcuna, JJ., concur.
Footnotes
Penned by Associate Justice Jose L. Sabio, Jr., with Associate Justices Ramon
Mabutas, Jr. and Demetrio G. Demetria concurring.
1
Penned by Judge Renato C. Dacudao.
Exhibit "A," Records, pp. 6-9.
See Exhibits "B" and "F," ibid., pp. 62-63 and 68.
Exhibit "C," ibid., p. 64.
The contract between Teodoro Vao and Cirilo Pangalo provides that in case of
death of the vendee, the contract shall be considered as fully paid and a final deed of
sale shall be made in favor of the beneficiary, Frank N. Liu, provided vendee is not in
arrears of not more than two months. Also, in his letter to Frank Liu, dated 1 January
1955, Teodoro Vao stated that: "I have addressed my letter to you because ever
since 1949, it has always been you I dealt with, and not Mr. B. Liu, neither with Mr. C.
Pangalo, though the last two gentlemen were the ones who signed the agreements
for the purchase of the lots."
6
Exhibit "D," Records, p. 65.
Exhibit "E," Ibid., pp. 66-67; Although the letter adverted to another letter dated 18
January 1955 which he allegedly sent to Teodoro Vao, no such letter was offered in
evidence.
8
See Exhibit "B," Ibid., pp. 62-63.
10
Exhibit "F," ibid., p. 68.
11
Exhibits "G" and "H," ibid., pp. 69 and 70.
12
Exhibit "4Teresita," Folder of Exhibits, p. 22.
13
Exhibit "5Teresita," ibid., p. 23.
14
Exhibit "I," Records, pp. 71-75.
15
Exhibit "J," ibid., pp. 77-78.
16
Exhibit "J-3," ibid., back of p. 78.
17
Exhibit "3-Alfredo," Folder of Exhibits, p. 1.
18
Exhibits "4-Alfredo" and "5-Teresita," ibid., pp. 2 and 23.
In Special Proceeding No. 619-R, "In the Matter of the Last Will and Testament of
Jose Vao," at the Court of First Instance of Cebu; Exhibit "2-Vao," ibid., p. 64.
19
20
Exhibit "L," Records, pp. 81-83.
21
Exhibits "8-Vao" and "N," Folder of Exhibits, pp. 82-85 and Records, pp. 85-85A.
22
Exhibit "15-Teresita," ibid., p. 42.
23
Exhibit "12-Alfredo," Folder of Exhibits, p. 19.
24
Exhibit "9-Alfredo," ibid., p. 7.
25
Exhibit "11-Teresita," ibid., p. 29.
26
Rollo, p. 75.
Frank Liu died on 24 January 1992 and was substituted by his legal heirs.
27
Petitioners are Frank Lius spouse and children, who substituted him upon his
death.
28
29
Rollo, pp. 18-19.
30
Exhibit "D," Records, p. 65.
Active Realty & Development Corporation v. Daroya, G.R. No. 141205, 9 May
2002; Leao v. Court of Appeals, G.R. No. 129018, 15 November 2001, 369 SCRA
36; Padilla v. Paredes, G.R. No. 124874, 17 March 2000, 328 SCRA 434.
31
Lim v. Court of Appeals, G.R. No. 85733, 23 February 1990, 182 SCRA 564, 571,
citing University of the Philippines v. De Los Angeles, 146 Phil. 108, 114-115 (1970).
32
Civil Case No. 6300, instituted by Frank Liu against Teodoro Vao, was dismissed
on motion of Teodoro Vao on the ground that the remedy of Frank Liu is to file his
claim in the probate court; See Exhibits "2-Vao" and "4-Vao," Folder of Exhibits,
pp. 64 and 67.
33
34
Exhibit "C," Records, p. 64.
35
See Exhibit "J-3," Records, back of p. 78.
36
Now Land Registration Authority.
An Act Creating the Land Registration Commission, and Authorizing and

Appropriating the Necessary Funds Therefor.
37
Under Section 117 of the Property Registration Decree (PD No. 1529), which took
effect on 11 June 1978, the denial of the registration of a lis pendens must be
appealed within 5 days from notice of the denial.
38
Samonte v. Court of Appeals, G.R. No. 104223, 12 July 2001, 361 SCRA 173;
Egao v. Court of Appeals, G.R. No. 79787, June 29, 1989, 174 SCRA 484; Rivera v.
Tirona, 109 Phil. 505 (1960); Revilla and Fajardo v. Galindez, 107 Phil. 481 (1960);
Mirasol v. Gerochi, 93 Phil. 480 (1953); Mari v. Bonilla, 83 Phil. 137 (1949).
39
40
G.R. No. 127941, 28 January 1999, 302 SCRA 331, 345.
41
See Baun v. Heirs of Baun, 53 Phil. 654 (1929).
42
The Rules then prevailing.
43
Rollo, p. 188.
44
G.R. No. L-16553, 29 November 1961, 3 SCRA 548, 551.
45
Supra, see note 41.
46
355 Phil. 124 (1998).
Dillena v. Court of Appeals, G.R. No. L-77660, 28 July 1988, 163 SCRA 630;
Estate of Amadeo Matute Olave, et al. v. Hon. Reyes, et al., 208 Phil. 678 (1983);
Godoy v. Orellano, 42 Phil. 347 (1921).
47
48
G.R. No. L-35367, 9 April 1987, 149 SCRA 174, 179-180.
49
The Civil Code provides:

Art. 1477. The ownership of the thing sold shall be transferred to the vendee
upon the actual or constructive delivery thereof.
Art. 1496. The ownership of the thing sold is acquired by the vendee from the
moment it is delivered to him in any of the ways specified in Articles 1497 to
1501, or in any other manner signifying an agreement that the possession is
transferred from the vendor to the vendee.
Art. 1498. When the sale is made through a public instrument, the execution
thereof shall be equivalent to the delivery of the thing which is the object of
the contract, if from the deed the contrary does not appear or cannot clearly
be inferred. x x x
50
148 Phil. 630 (1971).
51
G.R. No. L-64159, 10 September 1985, 138 SCRA 489, 494.
52
See note 39.
53
Lim v. Court of Appeals, G.R. No. 85733, 23 February 1990, 182 SCRA 564.
54
Active Realty & Development Corporation v. Daroya, supra, see note 31.
55
See Adelfa Properties, Inc. v. Court of Appeals, 310 Phil. 623 (1995).
56
Article 1315 of the Civil Code provides:

Art. 1315. Contracts are perfected by mere consent, and from that moment
the parties are bound not only to the fulfillment of what has been expressly
stipulated but also to all the consequences which, according to their nature,
may be in keeping with good faith, usage and law.
57
People v. Sanchez, G.R. Nos. 121039-45, 18 October 2001, 367 SCRA 520.
Country Bankers Ins. Corp. v. Lianga Bay and Community Multi-Purpose

Cooperative, Inc. G.R. No. 136914, 25 January 2002; Padillo v. Court of Appeals,
G.R. No. 119707, 29 November 2001, 371 SCRA 27.
58
Twin Towers Condominium Corporation v. Court of Appeals, G.R. No. 123552, 27

February 2003.
59
See Martinez v. Court of Appeals, G.R. No. 123547, 21 May 2001, 358 SCRA 38;
Cavite Development Bank v. Lim, G.R. No. 131679, 1 February 2000, 324 SCRA
346; St. Dominic Corporation v. Intermediate Appellate Court, G.R. No. L-67207, 26
August 1985, 138 SCRA 242; Cruz v. Cabana, 214 Phil. 575 (1984); J.M. Tuason &
Co., Inc. v. Court of Appeals, G.R. No. L-41233, 21 November 1979, 94 SCRA 413.
See also Eastern Assurance and Surety Corp. v. Court of Appeals, 379 Phil. 84
(2000).
60

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 125835 July 30, 1998

NATALIA CARPENA OPULENCIA, petitioner,
vs.
COURT OF APPEALS, ALADIN SIMUNDAC and MIGUEL OLIVAN, respondents.
PANGANIBAN, J.:
Is a contract to sell a real property involved in restate proceedings valid and binding without
the approval of the probate court?
Statement of the Case
This is the main question raised in this petition for review before us, assailing the
Decision 1 of the Court of Appeals 2 in CA-GR CV No. 41994 promulgated on February 6,
1996 and its Resolution 3 dated July 19, 1996. The challenged Decision disposed as follows:
WHEREFORE, premises considered, the order of the lower court dismissing
the complaint is SET ASIDE and judgment is hereby rendered declaring the
CONTRACT TO SELL executed by appellee in favor of appellants as valid
and binding, subject to the result of the administration proceedings of the
testate Estate of Demetrio Carpena.
SO ORDERED. 4
Petitioner's Motion for Reconsideration was denied in the challenged Resolution.
The Facts
The antecedent facts, as succinctly narrated by Respondent Court of Appeals, are:
In a complaint for specific performance filed with the court a quo [herein
private respondents] Aladin Simundac and Miguel Oliven alleged that [herein
petitioner] Natalia Carpena Opulencia executed in their favor a "CONTRACT
TO SELL" Lot 2125 of the Sta. Rosa Estate, consisting of 23,766 square
meters located in Sta. Rosa, Laguna at P150.00 per square meter; that
plaintiffs paid a downpayment of P300,000.00 but defendant, despite
demands, failed to comply with her obligations under the contract. [Private
respondents] therefore prayed that [petitioner] be ordered to perform her
contractual obligations and to further pay damages, attorney's fee and
litigation expenses.
In her traverse, [petitioner] admitted the execution of the contract in favor of
plaintiffs and receipt of P300,000.00 as downpayment. However, she put
forward the following affirmative defenses: that the property subject of the
contract formed part of the Estate of Demetrio Carpena (petitioner's father),

in respect of which a petition for probate was filed with the Regional Trial
Court, Branch 24, Bian, Laguna; that at the time the contract was executed,
the parties were aware of the pendency of the probate proceeding; that the
contract to sell was not approved by the probate court; that realizing the
nullity of the contract [petitioner] had offered to return the downpayment
received from [private respondents], but the latter refused to accept it; that
[private respondents] further failed to provide funds for the tenant who
demanded P150,00.00 in payment of his tenancy rights on the land; that
[petitioner] had chosen to rescind the contract.
At the pre-trial conference the parties stipulated on [sic] the following facts:
1. That on February 3, 1989, [private respondents] and
[petitioner] entered into a contract to sell involving a parcel of
land situated in Sta. Rosa, Laguna, otherwise known as Lot
No. 2125 of the Sta. Rosa Estate.
2. That the price or consideration of the said sell [sic] is
P150.00 per square meters;
3. That the amount of P300,000.00 had already been
received by [petitioner];
4. That the parties have knowledge that the property subject
of the contract to sell is subject of the probate proceedings;
5. That [as] of this time, the probate Court has not yet issued
an order either approving or denying the said sale. (p. 3,
appealed Order of September 15, 1992, pp. 109-112, record).
[Private respondents] submitted their evidence in support of the material
allegations of the complaint. In addition to testimonies of witnesses, [private
respondents] presented the following documentary evidences: (1) Contract to
Sell (Exh A); (2) machine copy of the last will and testament of Demetrio
Carpena (defendant's father) to show that the property sold by defendant was
one of those devised to her in said will (Exh B); (3) receipts signed by
defendant for the downpayment in the total amount of P300,000.00 (Exhs C,
D & E); and (4) demand letters sent to defendant (Exhs F & G).
It appears that [petitioner], instead of submitting her evidence, filed a
Demurrer to Evidence. In essence, defendant maintained that the contract to
sell was null and void for want of approval by the probate court. She further
argued that the contract was subject to a suspensive condition, which was
the probate of the will of defendant's father Demetrio Carpena. An Opposition
was filed by [private respondents]. It appears further that in an Order dated
December 15, 1992 the court a quo granted the demurrer to evidence and
dismissed the complaint. It justified its action in dismissing the complaint in
the following manner:
It is noteworthy that when the contract to sell was consummated, no petition
was filed in the Court with notice to the heirs of the time and place of hearing,
to show that the sale is necessary and beneficial. A sale of properties of an

estate as beneficial to the interested parties must comply with the requisites
provided by law, (Sec. 7, Rule 89, Rules of Court) which are mandatory, and
without them, the authority to sell, the sale itself, and the order approving it,
would be null and void ab initio. (Arcilla vs. David, 77 Phil. 718, Gabriel, et al.,
vs. Encarnacion, et al., L-6736, May 4, 1954; Bonaga vs. Soler, 2 Phil. 755)
Besides, it is axiomatic that where the estate of a deceased person is already
the subject of a testate or intestate proceeding, the administrator cannot
enter into any transaction involving it without prior approval of the probate
Court. (Estate of Obave, vs. Reyes, 123 SCRA 767).
As held by the Supreme Court, a decedent's representative (administrator) is not
estopped from questioning the validity of his own void deed purporting to convey
land. (Bona vs. Soler, 2 Phil, 755). In the case at bar, the [petitioner,] realizing the
illegality of the transaction[,] has interposed the nullity of the contract as her
defense, there being no approval from the probate Court, and, in good faith offers
to return the money she received from the [private respondents]. Certainly, the
administratrix is not estop[ped] from doing so and the action to declare the
inexistence of contracts do not prescribe. This is what precipitated the filing of
[petitioner's] demurrer to evidence. 6
The trial court's order of dismissal was elevated to the Court of Appeals by private
respondents who alleged:
1. The lower court erred in concluding that the contract to sell is null and void,
there being no approval of the probate court.
2. The lower court erred in concluding that [petitioner] in good faith offers to
return the money to [private respondents].
3. The lower court erred in concluding that [petitioner] is not under estoppel
to question the validity of the contract to sell.
4. The lower court erred in not ruling on the consideration of the contract to sell
which is tantamount to plain unjust enrichment of [petitioner] at the expense of
[private respondents]. 7
Public Respondent's Ruling

Declaring the Contract to Sell valid, subject to the outcome of the testate proceedings on
Demetrio Carpena's estate, the appellate court set aside the trial court's dismissal of the
complaint and correctly ruled as follows:
It is apparent from the appealed order that the lower court treated the
contract to sell executed by appellee as one made by the administratrix of the
Estate of Demetrio Carpena for the benefit of the estate. Hence, its main
reason for voiding the contract in question was the absence of the probate
court's approval. Presumably, what the lower court had in mind was the sale
of the estate or part thereof made by the administrator for the benefit of the
estate, as authorized under Rule 89 of the Revised Rules of Court, which
requires the approval of the probate court upon application therefor with
notice to the heirs, devisees and legatees.
However, as adverted to by appellants in their brief, the contract to sell in

question is not covered by Rule 89 of the Revised Rules of Court since it was
made by appellee in her capacity as an heir, of a property that was devised to
her under the will sought to be probated. Thus, while the document
inadvertently stated that appellee executed the contract in her capacity as
"executrix and administratrix" of the estate, a cursory reading of the entire
text of the contract would unerringly show that what she undertook to sell to
appellants was one of the "other properties given to her by her late father,"
and more importantly, it was not made for the benefit of the estate but for her
own needs. To illustrate this point, it is apropos to refer to the preambular or
preliminary portion of the document, which reads:
WHEREAS, the SELLER is the lawful owner of a certain
parcel of land, which is more particularly described as follows:
xxx xxx xxx
xxx xxx xxx
xxx xxx xxx
WHEREAS, the SELLER suffers difficulties in her living and
has forced to offer the sale of the above-described property,
"which property was only one among the other properties
given to her by her late father," to anyone who can wait for
complete clearance of the court on the Last Will Testament of
her father.
WHEREAS, the SELLER in order to meet her need of cash,
has offered for sale the said property at ONE HUNDRED
FIFTY PESOS (150.00) Philippine Currency, per square
meter unto the BUYERS, and with this offer, the latter has
accepted to buy and/or purchase the same, less the area for
the road and other easements indicated at the back of
Transfer Certificate of Title No. 2125 duly confirmed after the
survey to be conducted by the BUYER's Licensed Geodetic
Engineer, and whatever area [is] left. (Emphasis added).
To emphasize, it is evident from the foregoing clauses of the contract that
appellee sold Lot 2125 not in her capacity as executrix of the will or
administratrix of the estate of her father, but as an heir and more importantly
as owner of said lot which, along with other properties, was devised to her
under the will sought to be probated. That being so, the requisites stipulated
in Rule 89 of the Revised Rules of Court which refer to a sale made by the
administrator for the benefit of the estate do not apply.
xxx xxx xxx
It is noteworthy that in a Manifestation filed with this court by appellants,
which is not controverted by appellee, it is mentioned that the last will and
testament of Demetrio Carpena was approved in a final judgment rendered in
Special Proceeding No. B-979 by the Regional Trial Court, Branch 24 Bian,
Laguna. But of course such approval does not terminate the proceeding[s]
since the settlement of the estate will ensue. Such proceedings will consist,
among others, in the issuance by the court of a notice to creditors (Rule 86),
hearing of money claims and payment of taxes and estate debts (Rule 88)
and distribution of the residue to the heirs or persons entitled thereto (Rule
90). In effect, the final execution of the deed of sale itself upon appellants'
payment of the balance of the purchase price will have to wait for the
settlement or termination of the administration proceedings of the Estate of
Demetrio Carpena. Under the foregoing premises, what the trial court should
have done with the complaint was not to dismiss it but to simply put on hold
further proceedings until such time that the estate or its residue will be
distributed in accordance with the approved will.
The rule is that when a demurrer to the evidence is granted by the trial court
but reversed on appeal, defendant loses the right to adduce his evidence. In
such a case, the appellate court will decide the controversy on the basis of
plaintiff's evidence. In the case at bench, while we find the contract to sell
valid and binding between the parties, we cannot as yet order appellee to
perform her obligations under the contract because the result of the
administration proceedings of the testate Estate of Demetrio Carpena has to
be awaited. Hence, we shall confine our adjudication to merely declaring the
validity of the questioned Contract to Sell.
Hence, this appeal. 8
The Issue
Petitioner raises only one issue:
Whether or not the Contract to Sell dated 03 February 1989 executed by the
[p]etitioner and [p]rivate [r]espondent[s] without the requisite probate court
approval is valid.
The Court's Ruling
The petition has no merit.
Contract to Sell Valid
In a nutshell, petitioner contends that "where the estate of the deceased person is already
the subject of a testate or intestate proceeding, the administrator cannot enter into any
transaction involving it without prior approval of the Probate Court." 9 She maintains that the
Contract to Sell is void because it was not approved by the probate court, as required by
Section 7, Rule 89 of the Rules of Court:
Sec. 7. Regulations for granting authority to sell, mortgage, or otherwise
encumber estate. The court having jurisdiction of the estate of the
deceased may authorize the executor or administrator to sell, mortgage, or
otherwise encumber real estate, in cases provided by these rules and when it
appears necessary or beneficial, under the following regulations:
xxx xxx xxx

Insisting that the above rule should apply to this case, petitioner argues that the stipulations
in the Contract to Sell require her to act in her capacity as an executrix or administratrix. She
avers that her obligation to eject tenants pertains to the administratrix or executrix, the estate
being the landlord of the said tenants. 10 Likewise demonstrating that she entered into the
contract in her capacity as executor is the stipulation that she must effect the conversion of
subject land from irrigated rice land to residential land and secure the necessary clearances
from government offices. Petitioner alleges that these obligations can be undertaken only by
an executor or administrator of an estate, and not by an heir. 11
The Court is not persuaded. As correctly ruled by the Court of Appeals, Section 7 of Rule 89
of the Rules of Court is not applicable, because petitioner entered into the Contract to Sell in
her capacity as an heiress, not as an executrix or administratrix of the estate. In the contract,
she represented herself as the "lawful owner" and seller of the subject parcel of land. 12 She
also explained the reason for the sale to be "difficulties in her living" conditions and
consequent "need of cash." 13 These representations clearly evince that she was not acting
on behalf of the estate under probate when she entered into the Contract to Sell.
Accordingly, the jurisprudence cited by petitioners has no application to the instant case.
We emphasize that hereditary rights are vested in the heir or heirs from the moment of the
decedent's death. 14Petitioner, therefore, became the owner of her hereditary share the
moment her father died. Thus, the lack of judicial approval does not invalidate the Contract to
Sell, because the petitioner has the substantive right to sell the whole or a part of her share
in the estate of her late father. 15 Thus, in Jakosalem vs. Rafols, 16 the Court resolved an
identical issue under the old Civil Code and held:
Art. 440 of the Civil Code provides that "the possession of hereditary property
is deemed to be transmitted to the heir without interruption from the instant of
the death of the decedent, in case the inheritance be accepted." And
Manresa with reason states that upon the death of a person, each of his heirs
"becomes the undivided owner of the whole estate left with respect to the
part or portion which might be adjudicated to him, a community of ownership
being thus formed among the coowners of the estate while it remains
undivided." . . . And according to article 399 of the Civil Code, every part
owner may assign or mortgage his part in the common property, and the
effect of such assignment or mortgage shall be limited to the portion which
may be allotted him in the partition upon the dissolution of the community.
Hence, where some of the heirs, without the concurrence of the others, sold
a property left by their deceased father, this Court, speaking thru its then
Chief Justice Cayetano Arellano, said that the sale was valid, but that the
effect thereof was limited to the share which may be allotted to the vendors
upon the partition of the estate.
Administration of the Estate Not
Prejudiced by the Contract to Sell
Petitioner further contends that "[t]o sanction the sale at this stage would bring about a
partial distribution of the decedent's estate pending the final termination of the testate
proceedings." 17 This becomes all the more significant in the light of the trial court's finding,
as stated in its Order dated August 20, 1997, that "the legitimate of one of the heirs has been
impaired." 18
Petitioner's contention is not convincing. The Contract to Sell stipulates that petitioner's offer
to sell is contingent on the "complete clearance of the court on the Last Will Testament of her
father." 19 Consequently, although the Contract to Sell was perfected between the petitioner
and private respondents during the pendency of the probate proceedings, the consummation
of the sale or the transfer of ownership over the parcel of land to the private respondents is
subject to the full payment of the purchase price and to the termination and outcome of the
testate proceedings. Therefore, there is no basis for petitioner's apprehension that the
Contract to Sell may result in a premature partition and distribution of the properties of the
estate. Indeed, it is settled that "the sale made by an heir of his share in an inheritance,
subject to the pending administration, in no wise stands in the way of such administration." 20
Estoppel
Finally, petitioner is estopped from backing out of her representations in her valid Contract to
Sell with private respondents, from whom she had already received P300,000 as initial
payment of the purchase price. Petitioner may not renege on her own acts and
representations, to the prejudice of the private respondents who have relied on
them. 21 Jurisprudence teaches us that neither the law nor the courts will extricate a party
from an unwise or undesirable contract he or she entered into with all the required formalities
and with full awareness of its consequences. 22
WHEREFORE, the petition is hereby DENIED and the assailed Decision of the Court of
Appeals AFFIRMED. Costs against petitioner.
SO ORDERED.
Davide, Jr., Bellosillo, Vitug and Quisumbing, JJ., concur.
#
Footnotes
1 Rollo, pp. 21-27.
2 Sixteenth Division composed of J. Godardo A. Jacinto, ponente; with the
concurrence of J. Salome A. Montoya, chairman; and J. Oswaldo D. Agcaoili,
member.
3 Rollo, p. 29.
4 Decision, p. 8; rollo, p. 27.
5 Rollo, p. 29.
6 Decision of the Court of Appeals, pp. 1-3; rollo, pp. 21-23.
7 Appellants' Brief before the Court of Appeals, p. 1.
8 The case was deemed submitted for resolution on December 1, 1997 when
the Court received Petitioner's Memorandum.
9 Memorandum for the Petitioner, p. 7; rollo, p. 81.

10 Petitioner's Memorandum, pp. 5-6; rollo, pp. 79-80.
11 Ibid., p. 6; rollo, p. 80.
12 Contract to Sell, p. 1; record, p. 5.
13 Ibid.
14 Art. 777, Civil Code, provides:
The rights to the succession are transmitted from the moment of the death of
the decedent.
15 Go Ong vs. Court of Appeals, 154 SCRA 270, 276-277, September 24,
1987; and De Borja vs. Vda. de Borja, 46 SCRA 577, 589, August 18, 1972.
16 73 Phil. 628-629 (1942), per Moran, J.
17 Petitioner's Memorandum, p. 7; rollo, p. 81.
18 Ibid.
19 Record, p. 5.
20 Go Ong vs. Court of Appeals, per Paras, J., supra, p.
277; citing Jakosalem vs. Rafols, 73 Phil 628 (1942).
21 Laureano Investment and Development Corporation vs. Court of Appeals,
272 SCRA 253, 263, May 6, 1997; citing Caltex (Philippines), Inc. vs. Court of
Appeals, 212 SCRA 448, 457, August 10, 1992.
22 Esguerra vs. Court of Appeals, 267 SCRA 380, 393, February 3,
1997, citing Republic vs. Sandiganbayan, 226 SCRA 314, September 10,
1993.

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 121597
June 29, 2001
PHILIPPINE NATIONAL BANK, petitioner,

vs.
HON. COURT OF APPEALS, ALLAN M. CHUA as Special Administrator of the Intestate
Estate of the late ANTONIO M. CHUA and Mrs. ASUNCION M. CHUA, respondents.
QUISUMBING, J.:
This petition assails the decision1 of the Court of Appeals dated July 25, 1995 in CA-G.R. CV
No. 36546, affirming the decision dated September 4, 1991 of the Regional Trial Court of
Balayan, Batangas, Branch 10 in Civil Case No. 1988.
The facts, as found by the trial court and by the Court of Appeals, are not disputed.
The spouses Antonio M. Chua and Asuncion M. Chua were the owners of a parcel of land
covered by Transfer Certificate of Title No. P-142 and registered in their names. Upon
Antonios death, the probate court appointed his son, private respondent Allan M. Chua,
special administrator of Antonios intestate estate. The court also authorized Allan to obtain a
loan accommodation of five hundred fifty thousand (P550,000.00) pesos from petitioner
Philippine National Bank to be secured by a real estate mortgage over the above-mentioned
parcel of land.
On June 29, 1989, Allan obtained a loan of P450,000.00 from petitioner PNB evidenced by a
promissory note, payable on June 29, 1990, with interest at 18.8 percent per annum. To
secure the loan, Allan executed a deed of real estate mortgage on the aforesaid parcel of
land.
On December 27, 1990, for failure to pay the loan in full, the bank extrajudicially foreclosed
the real estate mortgage, through the Ex-Officio Sheriff, who conducted a public auction of
the mortgaged property pursuant to the authority provided for in the deed of real estate
mortgage. During the auction, PNB was the highest bidder with a bid price P306,360.00.
Since PNBs total claim as of the date of the auction sale was P679,185.63, the loan had a
payable balance of P372,825.63. To claim this deficiency, PNB instituted an action with the
RTC, Balayan, Batangas, Branch 10, docketed as Civil Case No. 1988, against both Mrs.
Asuncion M. Chua and Allan Chua in his capacity as special administrator of his fathers
intestate estate.
Despite summons duly served, private respondents did not answer the complaint. The trial
court declared them in default and received evidence ex parte.
On September 4, 1991, the RTC rendered its decision, ordering the dismissal of PNBs
complaint.2
On appeal, the Court of Appeals affirmed the RTC decision by dismissing PNBs appeal for
lack of merit.3
Hence, the present petition for review on certiorari under Rule 45 of the Rules of Court.
Petitioner cites two grounds:
I
THE CA ERRED IN HOLDING THAT PNB CAN NO LONGER PURSUE ITS

DEFICIENCY CLAIM AGAINST THE ESTATE OF DECEASED ANTONIO M. CHUA,
HAVING ELECTED ONE OF ITS ALTERNATIVE RIGHT PURSUANT TO SECTION
7 RULE 86 OF THE RULES OF COURT DESPITE A SPECIAL ENACTMENT (ACT.
NO. 3135) COVERING EXTRAJUDICIAL FORECLOSURE SALE ALLOWING
RECOURSE FOR A DEFICIENCY CLAIM AS SUPPORTED BY CONTEMPORARY
JURISPRUDENCE.
II
THE CA ERRED IN HOLDING THAT ALLAN M. CHUA, AS SPECIAL
ADMINISTRATOR OF THE INTESTATE ESTATE OF HIS DECEASED FATHER
ANTONIO M. CHUA ON ONE HAND, AND HIM AND HIS MOTHER ASUNCION
CHUA AS HEIRS ON THE OTHER HAND ARE NO LONGER LIABLE FOR THE
DEBTS OF THE ESTATE.4
The primary issue posed before us is whether or not it was error for the Court of Appeals to
rule that petitioner may no longer pursue by civil action the recovery of the balance of
indebtedness after having foreclosed the property securing the same. A resolution of this
issue will also resolve the secondary issue concerning any further liability of respondents
and of the decedents estate.
Petitioner contends that under prevailing jurisprudence, when the proceeds of the sale are
insufficient to pay the debt, the mortgagee has the right to recover the deficiency from the
debtor.5 It also contends that Act 3135, otherwise known as "An Act to Regulate the Sale of
Property under Special Powers Inserted in or Annexed to Real Estate Mortgages," is the law
applicable to this case of foreclosure sale and not Section 7 of Rule 86 of the Revised Rules
of Court6 as held by the Court of Appeals. 7
Private respondents argue that having chosen the remedy of extrajudicial foreclosure of the
mortgaged property of the deceased, petitioner is precluded from pursuing its deficiency
claim against the estate of Antonio M. Chua. This they say is pursuant to Section 7, Rule 86
of the Rules of Court, which states that:
Sec. 7. Rule 86. Mortgage debt due from estate. A creditor holding a claim against
the deceased secured by mortgage or other collateral security, may abandon the
security and prosecute his claim in the manner provided in this rule, and share in the
general distribution of the assets of the estate; or he may foreclose his mortgage or
realize upon his security, by action in court, making the executor or administrator a
party defendant, and if there is a judgment for a deficiency, after the sale of the
mortgaged premises, or the property pledged, in the foreclosure or other proceeding
to realize upon the security, he may claim his deficiency judgment in the manner
provided in the preceding section; or he may rely upon his mortgage or other security
alone and foreclose the same at any time within the period of the statute of
limitations, and in that event he shall not be admitted as a creditor, and shall receive
no share in the distribution of the other assets of the estate; but nothing herein
contained shall prohibit the executor or administrator from redeeming the property
mortgaged or pledged by paying the debt for which it is hold as security, under the
direction of the court if the court shall adjudge it to be for the interest of the estate
that such redemption shall be made.
Pertinent to the issue at bar, according to petitioner, are our decisions he cited. 8 Prudential
Bank v. Martinez, 189 SCRA 612, 615 (1990), is particularly cited by petitioner as precedent
for holding that in extrajudicial foreclosure of mortgage, when the proceeds of the sale are
insufficient to pay the debt, the mortgagee has the right to recover the deficiency from the
mortgagor.
However, it must be pointed out that petitioners cited cases involve ordinary debts secured
by a mortgage. The case at bar, we must stress, involves a foreclosure of mortgage arising
out of a settlement of estate, wherein the administrator mortgaged a property belonging to
the estate of the decedent, pursuant to an authority given by the probate court. As the Court
of Appeals correctly stated, the Rules of Court on Special Proceedings comes into play
decisively.
To begin with, it is clear from the text of Section 7, Rule 89, that once the deed of real estate
mortgage is recorded in the proper Registry of Deeds, together with the corresponding court
order authorizing the administrator to mortgage the property, said deed shall be valid as if it
has been executed by the deceased himself. Section 7 provides in part:
Sec. 7. Rule 89. Regulations for granting authority to sell, mortgage, or otherwise
encumber estate The court having jurisdiction of the estate of the deceased may
authorize the executor or administrator to sell personal estate, or to sell, mortgage, or
otherwise encumber real estate, in cases provided by these rules when it appears
necessary or beneficial under the following regulations:
xxx
(f) There shall be recorded in the registry of deeds of the province in which the real
estate thus sold, mortgaged, or otherwise encumbered is situated, a certified copy of
the order of the court, together with the deed of the executor or administrator for such
real estate, which shall be valid as if the deed had been executed by the deceased in
his lifetime.
In the present case, it is undisputed that the conditions under the aforecited rule have been
complied with. It follows that we must consider Sec. 7 of Rule 86, appropriately applicable to
the controversy at hand.
Case law now holds that this rule grants to the mortgagee three distinct, independent and
mutually exclusive remedies that can be alternatively pursued by the mortgage creditor for
the satisfaction of his credit in case the mortgagor dies, among them:
(1) to waive the mortgage and claim the entire debt from the estate of the mortgagor
as an ordinary claim;
(2) to foreclose the mortgage judicially and prove any deficiency as an ordinary
claim; and
(3) to rely on the mortgage exclusively, foreclosing the same at any time before it is
barred by prescriptionwithout right to file a claim for any deficiency.9
In Perez v. Philippine National Bank,10 reversing Pasno vs. Ravina,11 we held:
The ruling in Pasno vs. Ravina not having been reiterated in any other case, we have
carefully reexamined the same, and after mature deliberation have reached the
conclusion that the dissenting opinion is more in conformity with reason and law. Of
the three alternative courses that section 7, Rule 87 (now Rule 86), offers the
mortgage creditor, to wit, (1) to waive the mortgage and claim the entire debt from
the estate of the mortgagor as an ordinary claim; (2) foreclose the mortgage judicially
and prove any deficiency as an ordinary claim; and (3) to rely on the mortgage
exclusively, foreclosing the same at any time before it is barred by
prescription, without right to file a claim for any deficiency, the majority opinion
in Pasno vs. Ravina, in requiring a judicial foreclosure, virtually wipes out the third
alternative conceded by the Rules to the mortgage creditor, and which would
precisely include extra-judicial foreclosures by contrast with the second alternative.
The plain result of adopting the last mode of foreclosure is that the creditor waives his right
to recover any deficiency from the estate.12 Following the Perez ruling that the third mode
includes extrajudicial foreclosure sales, the result of extrajudicial foreclosure is that the
creditor waives any further deficiency claim. The dissent in Pasno,as adopted in Perez,
supports this conclusion, thus:
When account is further taken of the fact that a creditor who elects to foreclose by
extrajudicial sale waives all right to recover against the estate of the deceased
debtor for any deficiency remaining unpaid after the sale it will be readily seen that
the decision in this case (referring to the majority opinion) will impose a burden upon
the estates of deceased persons who have mortgaged real property for the security
of debts, without any compensatory advantage.
Clearly, in our view, petitioner herein has chosen the mortgage-creditors option of
extrajudicially foreclosing the mortgaged property of the Chuas. This choice now bars any
subsequent deficiency claim against the estate of the deceased, Antonio M. Chua. Petitioner
may no longer avail of the complaint for the recovery of the balance of indebtedness against
said estate, after petitioner foreclosed the property securing the mortgage in its favor. It
follows that in this case no further liability remains on the part of respondents and the late
Antonio M. Chuas estate.
WHEREFORE, finding no reversible error committed by respondent Court of Appeals, the
instant petition is herebyDENIED. The assailed decision of the Court of Appeals in CA-G.R.
CV No. 36546 is AFFIRMED. Costs against petitioner.
1wphi1.nt
SO ORDERED.
Bellosillo, Mendoza, Buena, and De Leon, Jr., JJ., concur.
Footnote
1
Rollo, pp. 28-36.
Id. at 28.
Id. at 36.
Id. at 17.
Id. at 18.
Id.
Supra, note 5.
DBP vs. Tomeldan, 101 SCRA 171, 174 (1980); DBP vs. Zaragoza, 84 SCRA 668
(1978); DBP vs. Mirang, 66 SCRA 141 (1975); DBP vs. Vda. De Moll, 43 SCRA 82
(1972); Philippine Bank of Commerce vs. De Vera, 6 SCRA 1026 (1962).
8
Maglaque vs. PDB, 307 SCRA 156, 161-162 (1999); Vda. De Jacob vs. Court of
Appeals, 184 SCRA 294, 301 (1990); Bicol Savings and Loan Association vs. CA, et
al., 171 SCRA 630 (1989).
9
10
124 Phil. 260 (1966).
11
54 Phil. 378 (1930).
12
Pasno v. Ravina, supra.

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 147561
June 22, 2006
STRONGHOLD INSURANCE COMPANY, INC., Petitioner,

vs.
REPUBLIC-ASAHI GLASS CORPORATION, Respondent.
DECISION
PANGANIBAN, CJ:
Asurety companys liability under the performance bond it issues is solidary. The death of the
principal obligor does not, as a rule, extinguish the obligation and the solidary nature of that
liability.
The Case
Before us is a Petition for Review1 under Rule 45 of the Rules of Court, seeking to reverse
the March 13, 2001 Decision2 of the Court of Appeals (CA) in CA-GR CV No. 41630. The
assailed Decision disposed as follows:
"WHEREFORE, the Order dated January 28, 1993 issued by the lower court is REVERSED
and SET ASIDE. Let the records of the instant case be REMANDED to the lower court for
the reception of evidence of all parties." 3
The Facts
The facts of the case are narrated by the CA in this wise:
"On May 24, 1989, [respondent] Republic-Asahi Glass Corporation (Republic-Asahi) entered
into a contract with x x x Jose D. Santos, Jr., the proprietor of JDS Construction (JDS), for
the construction of roadways and a drainage system in Republic-Asahis compound in Barrio
Pinagbuhatan, Pasig City, where [respondent] was to pay x x x JDS five million three
hundred thousand pesos (P5,300,000.00) inclusive of value added tax for said construction,
which was supposed to be completed within a period of two hundred forty (240) days
beginning May 8, 1989. In order to guarantee the faithful and satisfactory performance of its
undertakings x x x JDS, shall post a performance bond of seven hundred ninety five
thousand pesos (P795,000.00). x x x JDS executed, jointly and severally with [petitioner]
Stronghold Insurance Co., Inc. (SICI) Performance Bond No. SICI-25849/g(13)9769.
"On May 23, 1989, [respondent] paid to x x x JDS seven hundred ninety five thousand pesos
(P795,000.00) by way of downpayment.
"Two progress billings dated August 14, 1989 and September 15, 1989, for the total amount
of two hundred seventy four thousand six hundred twenty one pesos and one centavo
(P274,621.01) were submitted by x x x JDS to [respondent], which the latter paid. According
to [respondent], these two progress billings accounted for only 7.301% of the work supposed
to be undertaken by x x x JDS under the terms of the contract.
"Several times prior to November of 1989, [respondents] engineers called the attention of x
x x JDS to the alleged alarmingly slow pace of the construction, which resulted in the fear
that the construction will not be finished within the stipulated 240-day period. However, said
reminders went unheeded by x x x JDS.
"On November 24, 1989, dissatisfied with the progress of the work undertaken by x x x JDS,
[respondent] Republic-Asahi extrajudicially rescinded the contract pursuant to Article XIII of
said contract, and wrote a letter to x x x JDS informing the latter of such rescission. Such
rescission, according to Article XV of the contract shall not be construed as a waiver of
[respondents] right to recover damages from x x x JDS and the latters sureties.
"[Respondent] alleged that, as a result of x x x JDSs failure to comply with the provisions of
the contract, which resulted in the said contracts rescission, it had to hire another contractor
to finish the project, for which it incurred an additional expense of three million two hundred
fifty six thousand, eight hundred seventy four pesos (P3,256,874.00).
"On January 6, 1990, [respondent] sent a letter to [petitioner] SICI filing its claim under the
bond for not less thanP795,000.00. On March 22, 1991, [respondent] again sent another
letter reiterating its demand for payment under the aforementioned bond. Both letters
allegedly went unheeded.
"[Respondent] then filed [a] complaint against x x x JDS and SICI. It sought from x x x JDS
payment ofP3,256,874.00 representing the additional expenses incurred by [respondent] for
the completion of the project using another contractor, and from x x x JDS and SICI, jointly
and severally, payment of P750,000.00 as damages in accordance with the performance
bond; exemplary damages in the amount of P100,000.00 and attorneys fees in the amount
of at least P100,000.00.
"According to the Sheriffs Return dated June 14, 1991, submitted to the lower court by
Deputy Sheriff Rene R. Salvador, summons were duly served on defendant-appellee SICI.
However, x x x Jose D. Santos, Jr. died the previous year (1990), and x x x JDS Construction
was no longer at its address at 2nd Floor, Room 208-A, San Buena Bldg. Cor. Pioneer St.,
Pasig, Metro Manila, and its whereabouts were unknown.
"On July 10, 1991, [petitioner] SICI filed its answer, alleging that the [respondents] money
claims against [petitioner and JDS] have been extinguished by the death of Jose D. Santos,
Jr. Even if this were not the case, [petitioner] SICI had been released from its liability under
the performance bond because there was no liquidation, with the active participation and/or
involvement, pursuant to procedural due process, of herein surety and contractor Jose D.
Santos, Jr., hence, there was no ascertainment of the corresponding liabilities of Santos and
SICI under the performance bond. At this point in time, said liquidation was impossible
because of the death of Santos, who as such can no longer participate in any liquidation.
The unilateral liquidation on the party (sic) of [respondent] of the work accomplishments did
not bind SICI for being violative of procedural due process. The claim of [respondent] for the
forfeiture of the performance bond in the amount of P795,000.00 had no factual and legal
basis, as payment of said bond was conditioned on the payment of damages which
[respondent] may sustain in the event x x x JDS failed to complete the contracted works.
[Respondent] can no longer prove its claim for damages in view of the death of Santos. SICI
was not informed by [respondent] of the death of Santos. SICI was not informed by
[respondent] of the unilateral rescission of its contract with JDS, thus SICI was deprived of its
right to protect its interests as surety under the performance bond, and therefore it was
released from all liability. SICI was likewise denied due process when it was not notified of
plaintiff-appellants process of determining and fixing the amount to be spent in the

completion of the unfinished project. The procedure contained in Article XV of the contract is
against public policy in that it denies SICI the right to procedural due process. Finally, SICI
alleged that [respondent] deviated from the terms and conditions of the contract without the
written consent of SICI, thus the latter was released from all liability. SICI also prayed for the
award of P59,750.00 as attorneys fees, andP5,000.00 as litigation expenses.
"On August 16, 1991, the lower court issued an order dismissing the complaint of
[respondent] against x x x JDS and SICI, on the ground that the claim against JDS did not
survive the death of its sole proprietor, Jose D. Santos, Jr. The dispositive portion of the
[O]rder reads as follows:
ACCORDINGLY, the complaint against the defendants Jose D. Santos, Jr., doing business
under trade and style, JDS Construction and Stronghold Insurance Company, Inc. is
ordered DISMISSED.
SO ORDERED.
"On September 4, 1991, [respondent] filed a Motion for Reconsideration seeking
reconsideration of the lower courts August 16, 1991 order dismissing its complaint.
[Petitioner] SICI field its Comment and/or Opposition to the Motion for Reconsideration. On
October 15, 1991, the lower court issued an Order, the dispositive portion of which reads as
follows:
WHEREFORE, premises considered, the Motion for Reconsideration is hereby given due
course. The Order dated 16 August 1991 for the dismissal of the case against Stronghold
Insurance Company, Inc., is reconsidered and hereby reinstated (sic). However, the case
against defendant Jose D. Santos, Jr. (deceased) remains undisturbed.
Motion for Preliminary hearing and Manifestation with Motion filed by [Stronghold] Insurance
Company Inc., are set for hearing on November 7, 1991 at 2:00 oclock in the afternoon.
SO ORDERED.
"On June 4, 1992, [petitioner] SICI filed its Memorandum for Bondsman/Defendant SICI (Re:
Effect of Death of defendant Jose D. Santos, Jr.) reiterating its prayer for the dismissal of
[respondents] complaint.
"On January 28, 1993, the lower court issued the assailed Order reconsidering its Order
dated October 15, 1991, and ordered the case, insofar as SICI is concerned, dismissed.
[Respondent] filed its motion for reconsideration which was opposed by [petitioner] SICI. On
April 16, 1993, the lower court denied [respondents] motion for reconsideration. x x x." 4
Ruling of the Court of Appeals
The CA ruled that SICIs obligation under the surety agreement was not extinguished by the
death of Jose D. Santos, Jr. Consequently, Republic-Asahi could still go after SICI for the
bond.
The appellate court also found that the lower court had erred in pronouncing that the
performance of the Contract in question had become impossible by respondents act of
rescission. The Contract was rescinded because of the dissatisfaction of respondent with the
slow pace of work and pursuant to Article XIII of its Contract with JDS.
The CA ruled that "[p]erformance of the [C]ontract was impossible, not because of
[respondents] fault, but because of the fault of JDS Construction and Jose D. Santos, Jr. for
failure on their part to make satisfactory progress on the project, which amounted to nonperformance of the same. x x x [P]ursuant to the [S]urety [C]ontract, SICI is liable for the
non-performance of said [C]ontract on the part of JDS Construction." 5
Hence, this Petition.6
Issue
Petitioner states the issue for the Courts consideration in the following manner:
"Death is a defense of Santos heirs which Stronghold could also adopt as its defense
against obligees claim."7
More precisely, the issue is whether petitioners liability under the performance bond was
automatically extinguished by the death of Santos, the principal.
The Courts Ruling
The Petition has no merit.
Sole Issue:
Effect of Death on the Suretys Liability
Petitioner contends that the death of Santos, the bond principal, extinguished his liability
under the surety bond. Consequently, it says, it is automatically released from any liability
under the bond.
As a general rule, the death of either the creditor or the debtor does not extinguish the
obligation.8 Obligations are transmissible to the heirs, except when the transmission is
prevented by the law, the stipulations of the parties, or the nature of the obligation. 9 Only
obligations that are personal10 or are identified with the persons themselves are extinguished
by death.11
Section 5 of Rule 8612 of the Rules of Court expressly allows the prosecution of money
claims arising from a contract against the estate of a deceased debtor. Evidently, those
claims are not actually extinguished.13 What is extinguished is only the obligees action or suit
filed before the court, which is not then acting as a probate court. 14
In the present case, whatever monetary liabilities or obligations Santos had under his
contracts with respondent were not intransmissible by their nature, by stipulation, or by
provision of law. Hence, his death did not result in the extinguishment of those obligations or
liabilities, which merely passed on to his estate.15 Death is not a defense that he or his estate
can set up to wipe out the obligations under the performance bond. Consequently, petitioner
as surety cannot use his death to escape its monetary obligation under its performance
bond.
The liability of petitioner is contractual in nature, because it executed a performance bond

worded as follows:
"KNOW ALL MEN BY THESE PRESENTS:
"That we, JDS CONSTRUCTION of 208-A San Buena Building, contractor, of Shaw Blvd.,
Pasig, MM Philippines, as principal and the STRONGHOLD INSURANCE COMPANY, INC. a
corporation duly organized and existing under and by virtue of the laws of the Philippines
with head office at Makati, as Surety, are held and firmly bound unto the REPUBLIC ASAHI
GLASS CORPORATION and to any individual, firm, partnership, corporation or association
supplying the principal with labor or materials in the penal sum of SEVEN HUNDRED
NINETY FIVE THOUSAND (P795,000.00), Philippine Currency, for the payment of which
sum, well and truly to be made, we bind ourselves, our heirs, executors, administrators,
successors and assigns, jointly and severally, firmly by these presents.
"The CONDITIONS OF THIS OBLIGATION are as follows;
"WHEREAS the above bounden principal on the ___ day of __________, 19__ entered into
a contract with the REPUBLIC ASAHI GLASS CORPORATION represented by
_________________, to fully and faithfully. Comply with the site preparation works road and
drainage system of Philippine Float Plant at Pinagbuhatan, Pasig, Metro Manila.
"WHEREAS, the liability of the Surety Company under this bond shall in no case exceed the
sum of PESOS SEVEN HUNDRED NINETY FIVE THOUSAND (P795,000.00) Philippine
Currency, inclusive of interest, attorneys fee, and other damages, and shall not be liable for
any advances of the obligee to the principal.
"WHEREAS, said contract requires the said principal to give a good and sufficient bond in
the above-stated sum to secure the full and faithfull performance on its part of said contract,
and the satisfaction of obligations for materials used and labor employed upon the work;
"NOW THEREFORE, if the principal shall perform well and truly and fulfill all the
undertakings, covenants, terms, conditions, and agreements of said contract during the
original term of said contract and any extension thereof that may be granted by the obligee,
with notice to the surety and during the life of any guaranty required under the contract, and
shall also perform well and truly and fulfill all the undertakings, covenants, terms, conditions,
and agreements of any and all duly authorized modifications of said contract that may
hereinafter be made, without notice to the surety except when such modifications increase
the contract price; and such principal contractor or his or its sub-contractors shall promptly
make payment to any individual, firm, partnership, corporation or association supplying the
principal of its sub-contractors with labor and materials in the prosecution of the work
provided for in the said contract, then, this obligation shall be null and void; otherwise it shall
remain in full force and effect. Any extension of the period of time which may be granted by
the obligee to the contractor shall be considered as given, and any modifications of said
contract shall be considered as authorized, with the express consent of the Surety.
"The right of any individual, firm, partnership, corporation or association supplying the
contractor with labor or materials for the prosecution of the work hereinbefore stated, to
institute action on the penal bond, pursuant to the provision of Act No. 3688, is hereby
acknowledge and confirmed."16
As a surety, petitioner is solidarily liable with Santos in accordance with the Civil Code, which
provides as follows:
"Art. 2047. By guaranty a person, called the guarantor, binds himself to the creditor to fulfill
the obligation of the principal debtor in case the latter should fail to do so.
"If a person binds himself solidarily with the principal debtor, the provisions of Section
4,17 Chapter 3, Title I of this Book shall be observed. In such case the contract is called a
suretyship."
xxxxxxxxx
"Art. 1216. The creditor may proceed against any one of the solidary debtors or some or all
of them simultaneously. The demand made against one of them shall not be an obstacle to
those which may subsequently be directed against the others, so long as the debt has not
been fully collected."
Elucidating on these provisions, the Court in Garcia v. Court of Appeals 18 stated thus:
"x x x. The suretys obligation is not an original and direct one for the performance of his own
act, but merely accessory or collateral to the obligation contracted by the principal.
Nevertheless, although the contract of a surety is in essence secondary only to a valid
principal obligation, his liability to the creditor or promisee of the principal is said to be direct,
primary and absolute; in other words, he is directly and equally bound with the principal. x x
x."19
Under the law and jurisprudence, respondent may sue, separately or together, the principal
debtor and the petitioner herein, in view of the solidary nature of their liability. The death of
the principal debtor will not work to convert, decrease or nullify the substantive right of the
solidary creditor. Evidently, despite the death of the principal debtor, respondent may still sue
petitioner alone, in accordance with the solidary nature of the latters liability under the
performance bond.
WHEREFORE, the Petition is DENIED and the Decision of the Court of Appeals AFFIRMED.
Costs against petitioner.
SO ORDERED.
Chief Justice
Chairman, First Division
WE CONCUR:
Associate Justice

Asscociate Justice
Associate Justice
Asscociate Justice
above Decision were reached in consultation before the case was assigned to the writer of
the opinion of the Courts Division.
Chief Justice
Footnotes
1
Rollo, pp. 9-20.
Id. at 23-37. Seventeenth Division. Penned by Justice Remedios A. SalazarFernando, with the concurrence of Justices Romeo A. Brawner (Division chair) and
Juan Q. Enriquez Jr. (member).
2
Assailed CA Decision, p. 14; rollo, p. 36.
Id. at 2-5; id. at 24-27.
Id. at 13-14; id. at 35-36.
To resolve old cases, the Court created the Committee on Zero Backlog of Cases
on January 26, 2006. Consequently, the Court resolved to prioritize the adjudication
of long-pending cases by redistributing them among all the justices. This case was
recently raffled and assigned to the undersigned ponente for study and report.
6
Petitioners Memorandum, p. 6; rollo, p. 172. Original in uppercase.
A. Tolentino, Commentaries And Jurisprudence On The Civil Code 272, Vol. IV

(1991).
8
Id. See also the Civil Code, Art. 1311, which states:
"Art. 1311. Contracts take effect only between the parties, their assigns and
heirs, except in case where the rights and obligations arising from the
contract are not transmissible by their nature, or by stipulation or by provision
of law. The heir is not liable beyond the value of the property he received
from the decedent."
Examples of purely personal actions are those for support, divorce, annulment of
marriage, legal separation (Lapuz Sy v. Eufemio, 43 SCRA 177, January 31, 1972).
See also Javier Security Special Watchman Agency v. Shell-Craft & Button Corp.,
10
117 Phil. 218, January 31, 1963, for an illustration of a contract that is not
transmissible by its nature, as when the special or personal qualification of the
obligor constitutes one of the principal motives of the contract.
11
A. Tolentino, Commentaries And Jurisprudence On The Civil Code, supra note 8.
"SEC. 5. Claims which must be filed under the notice. If not filed, barred;
exceptions.--All claims for money against the decedent, arising from contract,
express or implied, whether the same be due, not due, or contingent, all claims for
funeral expenses and expenses for the last sickness of the decedent, and judgment
for money against the decedent, must be filed within the time limited in the notice;
otherwise they are barred forever, except that they may be set forth as counterclaims
in any action that the executor or administrator may bring against the claimants. x x
x."
12
13
E. Paras, Rules Of Court Annotated 125, Vol. 1 (1989).
14
Id.
See Limjoco v. Intestate of Fragante, 80 Phil. 776, April 27, 1948; Suiliong &Co. v.
Chio-Taysan, 12 Phil. 13, November 11, 1908; Pavia v. De La Rosa, 8 Phil. 70,
March 18, 1907.
15
16
Performance Bond; rollo, p. 69.
17
This refers to the Civil Code, Arts. 1207 to 1222.
191 SCRA 493, November 20, 1990. See also International Finance Corporation v.
Imperial Textile Mills, Inc., GR 160324, November 15, 2005.
18
19
Id. at 495-496, per Cruz, J.

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 147999
February 27, 2004
SUI MAN HUI CHAN and GONZALO CO, petitioners

vs.
HON. COURT OF APPEALS and OSCAR D. MEDALLA, respondents.
DECISION
QUISUMBING, J.:
For review on certiorari is the Decision1 dated May 3, 2001, of the Court of Appeals in CAG.R. SP No. 61889, affirming the Order2 dated January 11, 2000, of the Regional Trial Court
(RTC) of Mandaluyong City, Branch 213, in Civil Case No. MC99-666, which had denied
petitioners Motion to Dismiss the complaint filed by private respondent.
The facts, as culled from records, are as follows:
On March 30, 1999, private respondent Oscar Medalla filed a complaint before the RTC of
Mandaluyong City, docketed as Civil Case No. MC99-666, for collection of a sum of money
arising from breach of a contract of lease and damages, against petitioners Sui Man Hui
Chan and Gonzalo Co.
The complaint alleged that on November 14, 1988, Napoleon C. Medalla as lessor and
Ramon Chan as lessee entered into a Lease Contract 3 over a hotel building located at No.
29 Abanao Street, Baguio City. Chan would use the leased premises as a restaurant named
"Cypress Inn". Pertinently, the parties agreed on the following:
1. The period of lease shall be for ten (10) years or from 15 July 1988 to 15 July
1998.
2. The payment of the realty taxes due to the government on the leased premises
shall be for the account of the Lessee.
3. The agreement is binding upon the heirs and/or successors-in-interest of the
Lessor and the Lessee.
Petitioner Gonzalo Co was employed by Ramon Chan as the general manager of "Cypress
Inn" and acted as his agent in all his dealings with Napoleon Medalla.
On August 5, 1989, Ramon Chan died. He was survived by his wife, petitioner Sui Man Hui
Chan, who continued to operate the restaurant.
On July 17, 1996, Napoleon Medalla died. Among his heirs is private respondent Oscar
Medalla, who succeeded him as owner and lessor of the leased premises. The contract was
neither amended nor terminated after the death of the original parties but was continued by
their respective successors-in-interest pursuant to the terms thereof. Petitioners Chan and
Co, the latter, in his capacity as agent and general manager, continued to deal with private
respondent Medalla in all transactions pertaining to the contract.
On various occasions, petitioners failed to pay the monthly rentals due on the leased
premises. Despite several Statements of Accounts sent by Medalla, petitioners failed to pay
the rentals due but, nonetheless, continued to use and occupy the leased premises.
On February 26, 1997, Medalla sent a letter addressed to Ramon Chan, indicating that (1)
the contract of lease would expire on July 15, 1998, and (2) he was not amenable to a
renewal of said contract after its expiration.
Medalla then sent demand letters to petitioners, but the latter still failed to pay the unpaid
rentals. He also found out that petitioners had not paid the realty taxes due on the leased
premises since 1991, amounting toP610,019.11. Medalla then asked petitioners to settle the
unpaid rentals, pay the unpaid real estate taxes, and vacate the leased premises.
On January 1999, petitioners vacated the premises but without paying their unpaid rentals
and realty taxes. Aggrieved by petitioners refusal to pay the amounts owing, which had
reached P4,147,901.80 by March 1999, private respondent Medalla instituted Civil Case No.
MC99-666.
In their Answer to the Complaint, petitioners denied owing private respondent the amounts
claimed by the latter. They alleged that the late Ramon Chan had paid all the rentals due up
to March 15, 1998. Moreover, they need not pay any balance owing on the rentals as they
were required to pay two (2) months advance rentals upon signing of the contract and make
a guarantee deposit amounting to P220,000. On the matter of unpaid realty taxes, petitioners
alleged that private respondent was responsible therefor as the owner of the leased
premises, notwithstanding any contrary stipulations in the contract.
On July 19, 1999, petitioners filed a Supplemental Answer with Motion to Dismiss alleging
that they were neither parties nor privies to the Contract of Lease, hence they are not the
real parties-in-interest.
Private respondent filed a Reply and Opposition to petitioners Supplemental Answer with
Motion to Dismiss dated August 2, 1999, praying for the denial of the Motion to Dismiss for
having been belatedly filed in direct contravention of Section 1, Rule 16, of the 1997 Rules of
Civil Procedure.4 He further alleged that petitioner Chan, as the owner of the business and
petitioner Co as the agent of petitioner Chan, are clearly real parties-in-interest in the case.
Private respondent pointed to their continuous dealings with him in all transactions relating to
the contract after the death of Ramon Chan and even after the expiration of the Contract of
Lease.
On January 11, 2000, the RTC denied petitioners Motion to Dismiss, thus:
WHEREFORE, in view of the foregoing, the motion to dismiss dated July 19, 1999 filed by
defendant through counsel against plaintiff is hereby DENIED for lack of merit.
SO ORDERED.5
The trial court pointed out that petitioners continued to transact business with private
respondent after the death of Ramon Chan as shown by the communications between the
parties. It also declared that private respondents acquiescence to petitioners continued
occupation and enjoyment of the leased premises and the latters recognition of the formers
ownership of said premises reflected an oral agreement between the parties to continue the
Lease Contract.
Petitioners moved for reconsideration on the ground that any claim should be filed against
the estate of Ramon Chan in an estate proceeding pursuant to Section 5, Rule 86, of the
Revised Rules of Court6 since Ramon Chans estate is the real party-in-interest. The court
denied said motion and declared that Section 5, Rule 86 is inapplicable in the case. It
pointed out that the unpaid rentals being claimed were those for the period April 1993 to
December 1998. These were incurred by petitioners and not by the late Ramon Chan, who
died on August 5, 1989.
Dissatisfied, petitioners elevated the matter to the Court of Appeals through a special civil
action of certiorari, docketed as CA-G.R. SP No. 61889. The Court of Appeals, however,
affirmed the RTC Orders, as follows:
WHEREFORE, foregoing premises considered, the petition having no merit in fact and in law
is hereby DENIED DUE COURSE and ACCORDINGLY ORDERED DISMISSED. The
assailed Orders are resultantly AFFIRMED WITH COSTS TO PETITIONERS.
SO ORDERED.7
Hence, the instant petition submitting as sole issue for our resolution:
whether or not respondent Court of Appeals committed serious error in law in affirming the
RTC Orders denying petitioners motion to dismiss and the subsequent motion for
reconsideration.8
Petitioners argue that the Court of Appeals erred in affirming the RTCs Orders because they
are not the real parties-in-interest and hence, were improperly impleaded in the complaint as
defendants. Petitioners insist that they were neither parties nor were they privy to the
Contract of Lease between the late Ramon Chan and Napoleon Medalla. They vigorously
assert that any claim for unpaid rentals should be made against the estate of Ramon Chan
pursuant to Section 5, Rule 86 of the Revised Rules of Court.
We find for private respondent. Prefatorily, it bears stressing that petitioners Motion to
Dismiss was filed after an Answer had already been filed. This alone warranted an outright
dismissal of the motion for having been filed in contravention of the clear and explicit
mandate of Section 1, Rule 16, of the Revised Rules of Civil Procedure. Under this section, a
motion to dismiss shall be filed within the time for but before filing the answer to the
complaint or pleading asserting a claim.9 Here, petitioners filed their Supplemental Answer
with Motion to Dismiss almost two months after filing their Answer, in clear contravention of
the aforecited rule.
The Court of Appeals stated that the grant or denial of a Motion to Dismiss is an interlocutory
order, and it cannot be the proper subject of a special civil action for certiorari. The proper
remedy in such a case is to appeal after a decision has been rendered, the CA said. A writ
of certiorari is not intended to correct every controversial interlocutory ruling; it is resorted to
only to correct a grave abuse of discretion or a whimsical exercise of judgment equivalent to
lack or excess of jurisdiction. The function of a petition for certiorari is limited to keeping an
inferior court within the bounds of its jurisdiction and to relieve persons from arbitrary acts,
acts which courts or judges have no power or authority in law to perform. Certiorari is not
designed to correct erroneous findings and conclusions made by the court. 10 On this score,
we are in agreement with the appellate court.
At any rate, we find no merit to petitioners contention that they are not real parties-in-interest
since they are not parties nor signatories to the contract and hence should not have been
impleaded as defendants. It is undeniable that petitioner Chan is an heir of Ramon Chan
and, together with petitioner Co, was a successor-in-interest to the restaurant business of the
late Ramon Chan. Both continued to operate the business after the death of Ramon. Thus,
they are real parties-in-interest in the case filed by private respondent, notwithstanding that
they are not signatories to the Contract of Lease.
A lease contract is not essentially personal in character. Thus, the rights and obligations
therein are transmissible to the heirs.11 The general rule, therefore, is that heirs are bound by
contracts entered into by their predecessors-in-interest except when the rights and
obligations arising therefrom are not transmissible by (1) their nature, (2) stipulation or (3)
provision of law.12 In the subject Contract of Lease, not only were there no stipulations
prohibiting any transmission of rights, but its very terms and conditions explicitly provided for
the transmission of the rights of the lessor and of the lessee to their respective heirs and
successors. The contract is the law between the parties. The death of a party does not
excuse nonperformance of a contract, which involves a property right, and the rights and
obligations thereunder pass to the successors or representatives of the deceased. Similarly,
nonperformance is not excused by the death of the party when the other party has a property
interest in the subject matter of the contract.13
Finally, as to petitioners contention that any claim should have been filed before the estate
proceeding of Ramon Chan pursuant to Section 5 of Rule 86, the trial court found that the
unpaid rentals sought to be claimed were for the period April 1993 to December 1998. Note
that Ramon Chan, the original lessee, died on August 5, 1989. In other words, as the unpaid
rentals did not accrue during the lifetime of Ramon Chan, but well after his death, his estate
might not be held liable for them. Hence, there is no indubitable basis to apply Section 5,
Rule 86, of the Revised Rules of Court as petitioners urge respondents to do.
WHEREFORE, the instant petition is DENIED and the Decision of the Court of Appeals in
CA-G.R. SP. No. 61889 is AFFIRMED. Costs against petitioners.
SO ORDERED.
Callejo, Sr., and Tinga, JJ., concur.
Puno, J., (Chairman), on leave.
Austria-Martinez, J., no part.
Footnotes
Rollo, pp. 14-17. Penned by Associate Justice Jose L. Sabio, Jr., with Associate
Justices Ma. Alicia Austria-Martinez (now a member of this Court) and Hilarion L.
Aquino, concurring.
1
Rollo, pp. 57-59.
SEC. 1. Grounds. Within the time for but before filing the answer to the complaint
or pleading asserting a claim, a motion to dismiss may be made
4
CA Rollo, p. 14.
SEC. 5. Claims which must be filed under the notice. If not filed, barred; exceptions.
All claims for money against the decedent, arising from contract, express or
implied, whether the same be due, not due, or contingent, all claims for funeral
expenses and expenses for the last sickness of the decedent, and judgment for
money against the decedent, must be filed within the time limited in the notice;
otherwise they are barred forever, except that they may be set forth as counterclaims
in any action that the executor or administrator may bring against the claimants.
Where an executor or administrator commences an action, or prosecutes an action
already commenced by the deceased in his lifetime, the debtor may set forth by
answer the claims he has against the decedent, instead of presenting them
independently to the court as herein provided, and mutual claims may be set off
against each other in such action; and if final judgment is rendered in favor of the
defendant, the amount so determined shall be considered the true balance against
the estate, as though the claim had been presented directly before the court in the
administration proceedings. Claims not yet due, or contingent, may be approved at
their present value.
6
Rollo, p. 16.
Id. at 8.
Kho v. Court of Appeals, G.R. No. 115758, 19 March 2002, 379 SCRA 410, 421.
Indiana Aerospace University v. Commission on Higher Education, G.R. No.

139371, 4 April 2001, 356 SCRA 367, 384.
10
Heirs of Fausta Dimaculangan v. IAC, G.R. No. 68021, 20 February 1989, 170
SCRA 393, 399.
11
12
DKC Holdings Corporation v. Court of Appeals, 386 Phil. 107, 115 (2000).
13
Id. at 118.

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 149787
June 18, 2008
JUDGE ANTONIO C. SUMALJAG, petitioner,

vs.
SPOUSES DIOSDIDIT and MENENDEZ M. LITERATO; and MICHAELES MAGLASANG
RODRIGO, respondents.
DECISION
CARPIO MORALES, J.:
Before this Court is the Petition for Review on Certiorari under Rule 45 of the Rules of Court
assailing the Decision1 of the Court of Appeals ("CA") dated June 26, 2001 and its related
Resolution2 dated September 4, 2001 in CA-G.R. SP No. 59712. The assailed Decision
dismissed the petition for certiorari filed by petitioner Judge Antonio C. Sumaljag (the
"petitioner") in the interlocutory matter outlined below in Civil Cases B-1239 and B1281 before the trial court. The challenged Resolution denied the petitioner's motion for
reconsideration.
ANTECEDENT FACTS
On November 16, 1993, Josefa D. Maglasang ("Josefa") filed with the Regional Trial Court
("RTC"), Branch 14, Baybay, Leyte a complaint3 (docketed as Civil Case No. B-1239) for the
nullity of the deed of sale of real property purportedly executed between her as vendor and
the spouses Diosdidit and Menendez Literato (the "respondent spouses") as vendees. The
complaint alleged that this deed of sale dated October 15, 1971 of Lot 1220-D is spurious.
Josefa was the sister of Menendez Maglasang Literato ("Menendez"). They were two (2) of
the six (6) heirs who inherited equal parts of a 6.3906-hectare property (Lot 1220) passed on
to them by their parents Cristito and Inecita Diano Maglasang. 4 Lot 1220-D was partitioned to
Josefa, while Lot 1220-E was given to Menendez.
The respondent spouses' response to the complaint was an amended answer with
counterclaim5 denying that the deed of sale was falsified. They impleaded the petitioner with
Josefa as counterclaim defendant on the allegation that the petitioner, at the instance of
Josefa, occupied Lot 1220-D and Lot 1220-E without their (the respondent spouses')
authority; Lot 1220-E is theirs by inheritance while 1220-D had been sold to them by Josefa.
They also alleged that the petitioner acted in bad faith in acquiring the two (2) lots because
he prepared and notarized on September 26, 1986 the contract of lease over the whole of
Lot 1220 between all the Maglasang heirs (but excluding Josefa) and Vicente Tolo, with the
lease running from 1986 to 1991; thus, the petitioner then knew that Josefa no longer owned
Lot 1220-D.
Civil Case No. 12816 is a complaint that Menendez filed on April 4, 1996 with the RTC for the
declaration of the inexistence of lease contract, recovery of possession of land, and
damages against the petitioner and Josefa after the RTC dismissed the respondent spouses'
counterclaim in Civil Case No. 1239. The complaint alleged that Josefa, who had previously
sold Lot 1220-D to Menendez, leased it, together with Lot 1220-E, to the petitioner.
Menendez further averred that the petitioner and Josefa were in bad faith in entering their
contract of lease as they both knew that Josefa did not own the leased lots. Menendez
prayed, among others, that this lease contract between Josefa and the petitioner be declared
null and void.
Josefa died on May 3, 1999 during the pendency of Civil Case Nos. B-1239 and B-1281.
On August 13, 1999, Atty. Zenen A. Puray ("Atty. Puray") - the petitioner's and Josefa's
common counsel - asked the RTC in Civil Case No. 1239 that he be given an extended
period or up to September 10, 1999 within which to file a formal notice of death and
substitution of party.
The RTC granted the motion in an order dated August 13, 1999. 7 On August 26, 1999, Atty.
Puray filed with the RTC a notice of death and substitution of party,8 praying that Josefa - in
his capacity as plaintiff and third party counterclaim defendant - be substituted by the
petitioner. The submission alleged that prior to Josefa's death, she executed a Quitclaim
Deed9 over Lot 1220-D in favor of Remismundo D. Maglasang10 who in turn sold this property
to the petitioner.
Menendez, through counsel, objected to the proposed substitution, alleging that Atty. Puray
filed the notice of death and substitution of party beyond the thirty-day period provided under
Section 16, Rule 3 of the 1997 Rules of Civil Procedure, as amended. She recommended
instead that Josefa be substituted by the latter's full-blood sister, Michaeles Maglasang
Rodrigo ("Michaeles").
The RTC denied Atty. Puray's motion for substitution and instead ordered the appearance of
Michaeles as representative of the deceased Josefa. This Order provides:
WHEREFORE, in view of the foregoing, the motion is hereby DENIED for lack of
merit and instead order the appearance of Mrs. Mechailes Maglasang-Rodrigo of
Brgy. Binulho, Albuera, Leyte, as representative of the deceased Josefa Maglasang.
SO ORDERED.11
The RTC subsequently denied the petitioner's motion for reconsideration in an order 12 dated
May 25, 2000.
The petitioner went to the CA on a petition for certiorari (docketed as CA-G.R. SP No. 59712)
to question the above interlocutory orders. In a Decision 13 dated June 26, 2001, the CA
dismissed the petition for lack of merit. The appellate court similarly denied the petitioner's
motion for reconsideration in its Resolution14 dated September 4, 2001.
The present petition essentially claims that the CA erred in dismissing CA-G.R. No. SP
59712 since: (a) the property under litigation was no longer part of Josefa's estate since she
was no longer its owner at the time of her death; (b) the petitioner had effectively been
subrogated to the rights of Josefa over the property under litigation at the time she died; (c)
without an estate, the heir who was appointed by the lower court no longer had any interest
to represent; (d) the notice of death was seasonably submitted by the counsel of Josefa to
the RTC within the extended period granted; and (e) the petitioner is a transferee pendente
lite who the courts should recognize pursuant to Rule 3, Section 20 of the Rules of Court.
THE COURT'S RULING
We resolve to deny the petition for lack of merit.
The Governing Rule.
The rule on substitution in case of death of a party is governed by Section 16, Rule 3 of the
1997 Rules of Civil Procedure, as amended, which provides:
Section 16. Death of a party; duty of counsel. -Whenever a party to a pending action
dies, and the claim is not thereby extinguished, it shall be the duty of his counsel to
inform the court within thirty (30) days after such death of the fact thereof, and to give
the name and address of his legal representative or representatives. Failure of
counsel to comply with this duty shall be a ground for disciplinary action.
The heirs of the deceased may be allowed to be substituted for the deceased,
without requiring the appointment of an executor or administrator and the court
may appoint a guardian ad litem for the minor heirs.
The court shall forthwith order said legal representative or representatives to appear
and be substituted within a period of thirty (30) days from notice.
If no legal representative is named by the counsel for the deceased party, or if the
one so named shall fail to appear within the specified period, the court may order the
opposing party, within a specified time, to procure the appointment of an executor or
administrator for the estate of the deceased, and the latter shall immediately appear
for and on behalf of the deceased. The court charges in procuring such appointment,
if defrayed by the opposing party, may be recovered as costs. (Emphasis ours)
The purpose behind this rule is the protection of the right to due process of every party to the
litigation who may be affected by the intervening death. The deceased litigant is herself or
himself protected as he/she continues to be properly represented in the suit through the duly
appointed legal representative of his estate.15
Application of the Governing Rule.
a. Survival of the pending action
A question preliminary to the application of the above provision is whether Civil Case Nos. B1239 and B-1281 are actions that survive the death of Josefa. We said in Gonzalez v.
Pagcor:16
"The criteria for determining whether an action survives the death of a plaintiff or
petitioner was elucidated upon in Bonilla v. Barcena (71 SCRA 491 (1976). as
follows:
. . . The question as to whether an action survives or not depends on the
nature of the action and the damage sued for. In the causes of action which
survive, the wrong complained [of] affects primarily and principally property
and property rights, the injuries to the person being merely incidental, while in
the causes of action which do not survive, the injury complained of is to the
person, the property and rights of property affected being incidental. . . .
Since the question involved in these cases relate to property and property rights, then we are
dealing with actions that survive so that Section 16, Rule 3 must necessarily apply.
b. Duty of Counsel under the Rule.
The duty of counsel under the aforecited provision is to inform the court within thirty (30)
days after the death of his client of the fact of death, and to give the name and address of
the deceased's legal representative or representatives. Incidentally, this is the only
representation that counsel can undertake after the death of a client as the fact of death
terminated any further lawyer-client relationship.17
In the present case, it is undisputed that the counsel for Josefa did in fact notify the lower
court, although belatedly, of the fact of her death.18 However, he did as well inform the lower
court that "2. That before she died she executed a QUITCLAIM DEED in favor of
REMISMUNDO D. MAGLASANG over the land in question (Lot No. 1220-D of
Benolho, Albuera, Leyte), evidenced by a QUITCLAIM DEED, copy of which is
hereto attached as Annex "B" who in turn sold it in favor of JUDGE ANTONIO
SUMALJAG, evidenced by a DEED OF ABSOLUTE SALE, copy of which is hereto
attached as Annex "C"."
Further, counsel asked that "the deceased Josefa Maglasang in her capacity as plaintiff and
as Third Party Counterclaim Defendant be substituted in the case at bar by JUDGE
ANTONIO SUMALJAG whose address is 38 Osmena Street, Ormoc City" pursuant to
"Section 16, Rule 3 of the 1997 Rules of Civil Procedure".
This notification, although filed late, effectively informed the lower court of the death of
litigant Josefa Maglasang so as to free her counsel of any liability for failure to make a report
of death under Section 16, Rule 3 of the Rules of Court. In our view, counsel satisfactorily
explained to the lower court the circumstances of the late reporting, and the latter in fact
granted counsel an extended period. The timeliness of the report is therefore a non-issue.
The reporting issue that goes into the core of this case is whether counsel properly gave the
court the name and address of the legal representative of the deceased that Section 16,
Rule 3 specifies. We rule that he did not. The "legal representatives" that the provision
speaks of, refer to those authorized by law - the administrator, executor or guardian 19 who,
under the rule on settlement of estate of deceased persons, 20 is constituted to take over the
estate of the deceased. Section 16, Rule 3 likewise expressly provides that "the heirs of the
deceased may be allowed to be substituted for the deceased, without requiring the
appointment of an executor or administrator . . .". Significantly, the person - now the present
petitioner - that counsel gave as substitute was not one of those mentioned under Section
16, Rule 3. Rather, he is a counterclaim co-defendant of the deceased whose proferred
justification for the requested substitution is the transfer to him of the interests of the
deceased in the litigation prior to her death.
Under the circumstances, both the lower court and the CA were legally correct in not giving
effect to counsel's suggested substitute.
First, the petitioner is not one of those allowed by the Rules to be a substitute. Section 16,
Rule 3 speaks for itself in this respect.
Second, as already mentioned above, the reason for the Rule is to protect all concerned who
may be affected by the intervening death, particularly the deceased and her estate. We note
in this respect that the Notice that counsel filed in fact reflects a claim against the interest of
the deceased through the transfer of her remaining interest in the litigation to another party.
Interestingly, the transfer is in favor of the very same person who is suggested to the court as
the substitute. To state the obvious, the suggested substitution effectively brings to naught
the protection that the Rules intend; plain common sense tells us that the transferee who has
his own interest to protect, cannot at the same time represent and fully protect the interest of
the deceased transferor.
Third, counsel has every authority to manifest to the court changes in interest that transpire
in the course of litigation. Thus, counsel could have validly manifested to the court the
transfer of Josefa's interests in the subject matter of litigation pursuant to Section 19, Rule
3.21 But this can happen only while the client-transferor was aliveand while the manifesting
counsel was still the effective and authorized counsel for the client-transferor, not after the
death of the client when the lawyer-client relationship has terminated. The fact that the
alleged transfer may have actually taken place is immaterial to this conclusion, if only for the
reason that it is not for counsel, after the death of his client, to make such manifestation
because he then has lost the authority to speak for and bind his client. Thus, at most, the
petitioner can be said to be a transferee pendente lite whose status is pending with the lower
court.
Lastly, a close examination of the documents attached to the records disclose that the
subject matter of the Quitclaim allegedly executed by Josefa in favor of Remismundo is Lot
1220-E, while the subject matter of the deed of sale executed by Remismundo in the
petitioner's favor is Lot 1220-D. This circumstance alone raises the possibility that there is
more than meets the eye in the transactions related to this case.
c. The Heirs as Legal Representatives.
The CA correctly harked back to the plain terms of Section 16, Rule 3 in determining who the
appropriate legal representative/s should be in the absence of an executor or administrator.
The second paragraph of the Section 16, Rule 3 of the 1997 Rules of Court, as amended, is
clear - the heirs of the deceased may be allowed to be substituted for the deceased, without
requiring the appointment of an executor or administrator. Our decisions on this matter have
been clear and unequivocal. In San Juan, Jr. v. Cruz, this Court held:
The pronouncement of this Court in Lawas v. Court of Appeals x x x that priority is
given to the legal representative of the deceased (the executor or administrator) and
that it is only in case of unreasonable delay in the appointment of an executor or
administrator, or in cases where the heirs resort to an extra-judicial settlement of the
estate that the court may adopt the alternative of allowing the heirs of the deceased
to be substituted for the deceased, is no longer true.22 (Emphasis ours)
We likewise said in Gochan v. Young: 23
For the protection of the interests of the decedent, this Court has in previous instances
recognized the heirs as proper representatives of the decedent, even when there is already
an administrator appointed by the court. When no administrator has been appointed, as in
this case, there is all the more reason to recognize the heirs as the proper representatives of
the deceased.
Josefa's death certificate24 shows that she was single at the time of her death. The records
do not show that she left a will. Therefore, as correctly held by the CA, in applying Section
16, Rule 3, her heirs are her surviving sisters (Michaelis, Maria, Zosima, and Consolacion)
and the children of her deceased sister, Lourdes (Manuel, Cesar, Huros and Regulo) who
should be her legal representatives. Menendez, although also a sister, should be excluded
for being one of the adverse parties in the cases before the RTC.
WHEREFORE, premises considered, we DENY the petition for lack of merit.
We AFFIRM the Court of Appeals decision that the surviving heirs of the deceased Josefa namely Michaelis M. Rodrigo; Maria M. Cecilio; Zosima D. Maglasang; Consolacion M. Bagaw; and the children of Lourdes M. Lumapas, namely Manuel Lumapas, Cesar Lumapas,
Huros Lumapas and Regulo Maquilan - should be her substitutes and are hereby so ordered
to be substituted for her in Civil Case Nos. B-1239 and B-1281.
Costs against the petitioner.
SO ORDERED.
ARTURO D. BRION
Associate Justice
WE CONCUR:
Associate Justice
Chairperson
DANTE O. TINGA
Associate Justice
**
RUBEN T. REYES
Associate Justice
TERESITA J. LEONARDO-DE CASTRO

Associate Justice
ATTESTATION
Associate Justice
Chairperson
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson's
REYNATO S. PUNO
Chief Justice
Footnotes
Designated as additional member of the Second Division per Special Order No. 504
dated May 15, 2008.
*
Designated as additional member of the Second Division per Special Order No. 505
dated May 15, 2008.
**
Penned by Associate Justice Marina L. Buzon and concurred in by Associate

Justice Eubulo G. Verzola (deceased) and Associate Justice Bienvenido L.
Reyes; rollo, pp. 85-91.
1
Id., p. 92.
Annex "A," id., pp. 30-34.
In Civil Case B-641 for Partition and Damages.
Annex "B," rollo, pp. 36-44.
Annex "D," id., pp. 48-54.
Annex "G," id., p. 75.
Annex "H," id., pp. 76-77.
Id., p. 79.
It appears from the records that Remismundo D. Maglasang is the son of Zosima
D. Maglasang.
10
11
Order dated December 16, 1990, Annex "I," rollo, pp. 81-82.
12
Annex "J," id., pp. 83-84.
13
Annex "K," id., pp. 85-91.
14
Annex "L," id., pp. 92-93.
Napere v. Barbarona, G.R. No. 160426, January 31, 2008, citing Heirs of Bertuldo
Hinog v. Melicor, 455 SCRA 460, 478 (2005).
15
16
G.R. No. 144891, May 27, 2004, 429 SCRA 533.
Lavina v. Court of Appeals, G.R. No. 78295, April 10, 1989, 171 SCRA
691; Haberer v. CA, Nos. L-42699 to L-42707, May 26, 1981, 104 SCRA 540.
17
18
Annex "H," rollo, p. 76.
In the commentary of Justice Oscar M. Herrera (ret.) in his book Remedial Law,
Volume 1, 2007 edition, he stated that the terms "administrator, executor, or
guardian" to whom the notice of death should be addressed under the old Rules,
were deleted and deemed included in the term "legal representative or
representatives."
19
20
Rule 73-90 of the Rules of Court.
Section 19. Transfer of interest. - In case of any transfer of interest, the action may
be continued by or against the original party, unless the court upon motion directs the
person to whom the interest is transferred to be substituted I the action or joined with
the original party.
21
22
San Juan, Jr. v. Cruz, G.R. No. 167321, July 31, 2006, 497 SCRA 410.
23
Gochan v. Young, G.R. No. 131889, March 12, 2001, 354 SCRA 207.
24
Annex "F," rollo, p. 74.

SUPREME COURT
Baguio City
SECOND DIVISION
G.R. No. 82562 April 11, 1997

LYDIA VILLEGAS, MA TERESITA VILLEGAS, ANTONIO VILLEGAS, JR., and
ANTONIETTE VILLEGAS,petitioners,
vs.
THE COURT OF APPEALS, PEOPLE OF THE PHILIPPINES and ANTONIO V.
RAQUIZA, respondents.
G.R. No. 82592 April 11, 1997
ANTONIO V. RAQUIZA, petitioner,
vs.
COURT OF APPEALS, LYDIA A. VILLEGAS, ANTONIO VILLEGAS, JR., MA.
ANTONETTE VILLEGAS, MA. LYDIA VILLEGAS and ESTATE OF ANTONIO J.
VILLEGAS, respondents.
ROMERO, J.:
This case originated from a libel suit filed by then Assemblyman Antonio V. Raquiza against
then Manila Mayor Antonio J. Villegas, who allegedly publicly imputed to him acts
constituting violations of the Anti-Graft and Corrupt Practices Act. He did this on several
occasions in August 1968 through (a) a speech before the Lion's Club of Malasiqui,
Pangasinan on August 10; (b) public statements in Manila on August 13 and in Davao on
August 17, which was coupled with a radio-TV interview; and (c) a public statement shortly
prior to his appearance before the Senate Committee on Public Works (the Committee) on
August 20 to formally submit a letter-complaint implicating Raquiza, among other
government officials.
The Committee, however, observed that all the allegations in the complaint were based
mainly on the uncorroborated testimony of a certain Pedro U. Fernandez, whose credibility
turned out to be highly questionable. Villegas also failed to submit the original copies of his
documentary evidence. Thus, after thorough investigation, Raquiza was cleared of all
charges by the Committee. 1 All these acts of political grandstanding received extensive
media coverage.
On July 25, 1969, an information for libel was filed by the Office of the City Fiscal of Manila
with the then Court of First Instance of Manila against Villegas who denied the charge. After
losing in the 1971 elections, Villegas left for the United States where he stayed until his
death on November 16, 1984. Nevertheless, trial proceeded onabsentia by the time of his
death the in 1984, the prosecution had already rested its case Two months after notice of his
death, the court issued an order dismissing the crimal aspect of the case but reserving the
right to resolve its civil aspect. No memorandum was ever filed in his behalf.
Judge Marcelo R. Obien 2 rendered judgment on March 7, 1985, the dispositive portion of
which was amended on March 26 to read as follows:
WHEREFORE, and in view of the foregoing considerations, judgment is
hereby rendered as follows:
1. The dismissal of the criminal case against Antonio J. Vlllegas, on account
of his death on November 16, 1984. is hereby reiterated.
2. Ordenng the estate of Antonio J. Villegas, represented herein by his legal
heirs, namely: Lydia A Villegas, Ma. Teresita Villegas, Antonio Villegas, Jr.,
Ma. Anton(i)ette Villegas, and Ma. Lydia Villegas (sic), to pay plaintiff Antonio
V. Raquiza Two Hundred Million Pesos (P200,000,000.00), itemized as
follows:
a) One Hundred Fifty Million Pesos (P150.000.000.00) as moral damages:
b) Two Hundred Thousand Pesos (P200.000.00) as actual damages:
c) Forty-nine Million Eight Hundred Thousand Pesos (P49,800,000.00) as
exemplary damages; and
d) The cost of suit.
SO ORDERED. 3 (Amendments underscored)
The heirs of Villegas (the Heirs), through their father's counsel, Atty. Norberto, Quisumbing
appealed the decision on these three main grounds:
1. Whether the trial court, three months after notice of the death of the
accused and before his counsel could file a memorandum in his behalf, could
velidly render judgment in the case?
2. Whether in the absence of formal substitution of parties, the trial court
could validly render judgment against the heirs and estate of a deceased
accused?
3 Whether, under the facts of the instant case, deceased Villegas was liable
for libel, and assuming he was, whether the damages awarded by the trial
court were just and reasonable?
On March 15, 1988, the Court of Appeals rendered a decision affirming the trial court's
judgment modified only with respect to the award of damages which was reduced to P2
million representing P1.5 million, P300,000.00, and P200,000.00 in moral exemplary and
actual damages, respectively. Both parties elevated said decision to this Court for review
In their petition (G.R. No. 82562), the Heirs once again raise the very same issues brought
before the Court of Appeals, albeit reworded. On the other hand, petitioner Requiza (G.R.
No. 82592) questions the extensions of time to file appellant's brief granted by the appellate
court to the Heirs, as well as the drastic reduction in the award of damages.
It is immediately apparent that the focal issue in these petitions is the effect of the death of
Villegas before the case was decided by the trial court. Stated otherwise, did the death of the
accused before final judgment extinguish his civil liability?
Fortunately, this Court has already settled this issue with the promulgation of the case
of People v. Bayotas (G.R. No. 102007) on September 2, 1994, 4 viz.:
It is thus evident that as jurisprudence evolved from Castillo 5 to Torrijos, 6 the rule
established was that the survival of the civil liability depends on whether the
same can be predicated on sources of obligations other than delict. Stated
differently, the claim for civil liability is also extinguished together with the criminal
action if it were solely based thereon, i.e., civil liability ex delicto.
xxx xxx xxx

(I)n recovering damages for injury to persons thru an independent civil action
based on Article 33 of the Civil Code, the same must be filed against the
executor or administrator of the estate of deceased accused (undet Sec. 1, Rule
87, infra.) and not against the estate under Sec. 5, Rule 86 because this rule
explicitly limits the claim to those for funeral expenses, expenses for the last
sickness of the decedent, judgment for money and claims arising from contract,
express or implied. 7
xxx xxx xxx

From this lengthy dlsquisition, we summarize our ruling herein:
1 Death of the accused pending appeal of his conviction extinguishes his
criminal liability as well as the civil liability based solely thereon As opined by
Justice Regalado, in this regard, "the death of the accused prior to final
judgment terminates his criminal liability and only the civil
liability directly arising from and based solely on the offense committed, i.e.,
civil liability ex delicto in senso strictiore."
2 Corollarily the claim for civil liability survives notwithstanding the death of
(the) accused, if the same may also be predicated on a source of obligation
other than delict. Article 1157 of the Civil Code enumerates these other
sources of obligation from which the civil liability may arise as a result of the
same act or omission:
a) Law
b) Contracts
c) Quasi-contracts
d) x x x x x x x x x
e) Quasi-delicts
3. Where the civil liability survives, as explained in Number 2 above, an action for
recovery therefor may be pursued but only by way of filing a separate civil action
and subject to Section 1, Rule 111 of the 1985 Rules on Criminal Procedure as
amended. 8This separate civil action may be enforced either against the
executor/administrator o(f) the estate of the accused, depending on the source of
obligation upon which the same is based as explained above.
4. Finally, the private offended party need not fear a forfeiture of his right to
file this separate civil action by prescription, in cases where during the
prosecution of the criminal action and prior to its extinction, the private
offended party instituted together therewith the civil action. In such case, the
statute of limitations on the civil liability is deemed interrupted during the
pendency of the criminal case, conformably with (the) provisions of Article
1155 of the Civil Code, that should thereby avoid any apprehension on a
possible privation of right by prescription. (Emphasis supplied).
The source of Villegas' civil liability in the present case is the felonious act of libel he
allegedly committed. Yet, this act could also be deemed a quasi-delict within the purview of
Article 33 9 in relation to Article 1157 of the Civil Code. If the Court ruled in Bayotas that the
death of an accused during the pendency of his appeal extinguishes not only his criminal but
also his civil liability unless the latter can be predicated on a source of obligation other than
the act or omission complained of, with more reason should it apply to the case at bar where
the accused died shortly after the prosecution had rested its case and before he was able to
submit his memorandum and all this before any decision could even be reached by the trial
court.
The Bayotas ruling, however, makes the enforcement of a deceased accused's civil liability
dependent on two factors, namely, that it be pursued by filing a separate civil action and that
it be made subject to Section 1, Rule 111 of the 1985 Rules on Criminal Procedure, as
amended. Obviously, in the case at bar, the civil action was deemed instituted with the
criminal. There was no waiver of the civil action and no reservation of the right to institute the
same, nor was it instituted prior to the criminal action. What then is the recourse of the
private offended party in a criminal case such as this which must be dismissed in accordance
with the Bayotas doctrine, where the civil action was impliedly instituted with it?
The answer is likewise provided in Bayatas, thus:
Assuming that for lack of express reservation, Belamala's civil civil for damages
was to be considered instituted together with the crinimal action still, since both
proceedings were terminated without finals adjudication the civil action of the
offended party under Article 33 may yet be enforced separately 10 (Emphasis
supplied)
Hence, logically, the court a quo should have dismissed both actions against Vilegas which
dismissal will not, however, bar Raquiza as the private offended party from pursuing his
claim for damages against the executor or administrator of the former's estate,
notwitnstanding the fact that he did not reserve the right to institute a civil separate civil
action based on Article 33 of the Civil Code.
It cannot be argued either that to follow Bayotas would result in further delay in this
protracted litigation. This is because the resolution of the civil aspect of the case after the
dismissal of the main criminal action by the trial court was technically defective There was no
proper substitution of parties, as correctly pointed out by the Heirs and repeatedly put in
issue by Atty. Quisumbing. What should have been followed by the court a quo was the
procedure laid down in the Rules of Court, specifically, Section 17, Rule 3, in connection with
Section 1, Rule 87. The pertinent provisions state as follws:
Rule 3
Sec.17. Death of party. After a party dies and the claim is not there
extinguished, the court shall order upon proper notice the legal
representative of the deceased to appear and to be substituted for the
deceased, within a period of thirty (30) days, or within such time as may
begranted. . . . The heirs of the deceased may be allowed to be for the
deceased, without requiring the appointment of an executor or administrator
and the court may appoint guardian ad litem for the minor heirs.
Rule 87
Sec. 1. Actions which may and which may not be brought against or executor
or administrator. No action upon a claim for the recovery of money or debt
or interest thereon shall be commencedagainst the executor or
administrator; but actions to recover real or personal property, or an interest
therein, from the estate, or to enforce a lien thereon, and actions to recover
damages for an injury to person or property, real or personal may be
commenced against him.
Accordingly, the Court sees no more necessity in resolving the other issues used by both
parties in these petitions.
WHEREFORE, the petition in G.R. No. 82562 is GRANTED and the petition in G.R. No.
82592 is DENIED. The decisions of the Court of Appeals in CA-G.R. CR No. 82186 dated
March 15, 1988, and of the Manila Regional Trial Court, Branch 44, dated March 7, 1985, as
amended, are hereby REVERSED and SET ASIDE, without prejudice to the right of the
private offended party Antonio V. Raquiza, to file the appropriate civil action for damages
against the executor or administrator of the estate or the heirs of the late Antonto J. Villegas
in accordance with the foregoing procedure.
SO ORDERED.
Regalado, Puno, Mendoza and Torres, Jr., JJ., concur.
Footnotes
1 Exhibit "WW." pp. 255-279 of original exhibits.

2 Presiding Judge, Manila Regional Trial Court, Branch 44.
3 Records. p. 621.
4 236 SCRA 239 (1994).
5 People v. Castillo and Ocfemia, 81 SCRA 120 (1978).
6 Torrijos v. Court of Appeals, 67 SCRA 394 (1975).
7 Citing Belamala v. Polinar, 21 SCRA 970 (1967).
8 In states inter alia
"Rule III
Prosecution of Civil Action
Sec. 1 Institution of criminal and civil actions When a criminal action is
instituted, the civil action for the recovery of civil liability is impliedly instituted
with the criminal action, unless the offended party waives the civil action,
reserves his right to institute it the civil action prior to the criminal action.
xxx xxx xxx
The reservation of the right to institute the separate civil action shall be made
before the prosecution starts to present its evidence and under
circumstances affording the offended party a reasonable opportunity to make
such reservation.
xxx xxx xxx
9 Art. 33. In cases of defamation, fraud, and physical injuries a civil action for
damages, entirely separate and distinct from the criminal action may be
brought by the injured party. Such civil action shall proceed independently of
the criminal prosecution and shall require only a preponderance of evidence.
10 Belamala, supra.

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 149926
February 23, 2005
UNION BANK OF THE PHILIPPINES, petitioner,

vs.
EDMUND SANTIBAEZ and FLORENCE SANTIBAEZ ARIOLA, respondents.
DECISION
CALLEJO, SR., J.:
Before us is a petition for review on certiorari under Rule 45 of the Revised Rules of Court
which seeks the reversal of the Decision1 of the Court of Appeals dated May 30, 2001 in CAG.R. CV No. 48831 affirming the dismissal2 of the petitioners complaint in Civil Case No.
18909 by the Regional Trial Court (RTC) of Makati City, Branch 63.
The antecedent facts are as follows:
On May 31, 1980, the First Countryside Credit Corporation (FCCC) and Efraim M.
Santibaez entered into a loan agreement3 in the amount of P128,000.00. The amount was
intended for the payment of the purchase price of one (1) unit Ford 6600 Agricultural AllPurpose Diesel Tractor. In view thereof, Efraim and his son, Edmund, executed a promissory
note in favor of the FCCC, the principal sum payable in five equal annual amortizations
ofP43,745.96 due on May 31, 1981 and every May 31st thereafter up to May 31, 1985.
On December 13, 1980, the FCCC and Efraim entered into another loan agreement, 4 this
time in the amount ofP123,156.00. It was intended to pay the balance of the purchase price
of another unit of Ford 6600 Agricultural All-Purpose Diesel Tractor, with accessories, and
one (1) unit Howard Rotamotor Model AR 60K. Again, Efraim and his son, Edmund,
executed a promissory note for the said amount in favor of the FCCC. Aside from such
promissory note, they also signed a Continuing Guaranty Agreement 5 for the loan dated
December 13, 1980.
Sometime in February 1981, Efraim died, leaving a holographic will. 6 Subsequently in March
1981, testate proceedings commenced before the RTC of Iloilo City, Branch 7, docketed as
Special Proceedings No. 2706. On April 9, 1981, Edmund, as one of the heirs, was
appointed as the special administrator of the estate of the decedent. 7 During the pendency of
the testate proceedings, the surviving heirs, Edmund and his sister Florence Santibaez
Ariola, executed a Joint Agreement 8 dated July 22, 1981, wherein they agreed to divide
between themselves and take possession of the three (3) tractors; that is, two (2) tractors for
Edmund and one (1) tractor for Florence. Each of them was to assume the indebtedness of
their late father to FCCC, corresponding to the tractor respectively taken by them.
On August 20, 1981, a Deed of Assignment with Assumption of Liabilities 9 was executed by
and between FCCC and Union Savings and Mortgage Bank, wherein the FCCC as the
assignor, among others, assigned all its assets and liabilities to Union Savings and Mortgage
Bank.
Demand letters10 for the settlement of his account were sent by petitioner Union Bank of the
Philippines (UBP) to Edmund, but the latter failed to heed the same and refused to pay.
Thus, on February 5, 1988, the petitioner filed a Complaint 11 for sum of money against the
heirs of Efraim Santibaez, Edmund and Florence, before the RTC of Makati City, Branch
150, docketed as Civil Case No. 18909. Summonses were issued against both, but the one
intended for Edmund was not served since he was in the United States and there was no
information on his address or the date of his return to the Philippines. 12 Accordingly, the
complaint was narrowed down to respondent Florence S. Ariola.
On December 7, 1988, respondent Florence S. Ariola filed her Answer 13 and alleged that the
loan documents did not bind her since she was not a party thereto. Considering that the joint
agreement signed by her and her brother Edmund was not approved by the probate court, it
was null and void; hence, she was not liable to the petitioner under the joint agreement.
On January 29, 1990, the case was unloaded and re-raffled to the RTC of Makati City,
Branch 63.14Consequently, trial on the merits ensued and a decision was subsequently
rendered by the court dismissing the complaint for lack of merit. The decretal portion of the
RTC decision reads:
WHEREFORE, judgment is hereby rendered DISMISSING the complaint for lack of merit. 15
The trial court found that the claim of the petitioner should have been filed with the probate
court before which the testate estate of the late Efraim Santibaez was pending, as the sum
of money being claimed was an obligation incurred by the said decedent. The trial court also
found that the Joint Agreement apparently executed by his heirs, Edmund and Florence, on
July 22, 1981, was, in effect, a partition of the estate of the decedent. However, the said
agreement was void, considering that it had not been approved by the probate court, and
that there can be no valid partition until after the will has been probated. The trial court
further declared that petitioner failed to prove that it was the now defunct Union Savings and
Mortgage Bank to which the FCCC had assigned its assets and liabilities. The court also
agreed to the contention of respondent Florence S. Ariola that the list of assets and liabilities
of the FCCC assigned to Union Savings and Mortgage Bank did not clearly refer to the
decedents account. Ruling that the joint agreement executed by the heirs was null and void,
the trial court held that the petitioners cause of action against respondent Florence S. Ariola
must necessarily fail.
The petitioner appealed from the RTC decision and elevated its case to the Court of Appeals
(CA), assigning the following as errors of the trial court:
1. THE COURT A QUO ERRED IN FINDING THAT THE JOINT AGREEMENT
(EXHIBIT A) SHOULD BE APPROVED BY THE PROBATE COURT.
2. THE COURT A QUO ERRED IN FINDING THAT THERE CAN BE NO VALID
PARTITION AMONG THE HEIRS UNTIL AFTER THE WILL HAS BEEN PROBATED.
3. THE COURT A QUO ERRED IN NOT FINDING THAT THE DEFENDANT HAD
WAIVED HER RIGHT TO HAVE THE CLAIM RE-LITIGATED IN THE ESTATE
PROCEEDING.16
The petitioner asserted before the CA that the obligation of the deceased had passed to his
legitimate children and heirs, in this case, Edmund and Florence; the unconditional signing of
the joint agreement marked as Exhibit "A" estopped respondent Florence S. Ariola, and that
she cannot deny her liability under the said document; as the agreement had been signed by
both heirs in their personal capacity, it was no longer necessary to present the same before
the probate court for approval; the property partitioned in the agreement was not one of
those enumerated in the holographic will made by the deceased; and the active participation
of the heirs, particularly respondent Florence S. Ariola, in the present ordinary civil action
was tantamount to a waiver to re-litigate the claim in the estate proceedings.
On the other hand, respondent Florence S. Ariola maintained that the money claim of the
petitioner should have been presented before the probate court. 17
The appellate court found that the appeal was not meritorious and held that the petitioner
should have filed its claim with the probate court as provided under Sections 1 and 5, Rule
86 of the Rules of Court. It further held that the partition made in the agreement was null and
void, since no valid partition may be had until after the will has been probated. According to
the CA, page 2, paragraph (e) of the holographic will covered the subject properties
(tractors) in generic terms when the deceased referred to them as "all other properties."
Moreover, the active participation of respondent Florence S. Ariola in the case did not
amount to a waiver. Thus, the CA affirmed the RTC decision, viz.:
WHEREFORE, premises considered, the appealed Decision of the Regional Trial Court of
Makati City, Branch 63, is hereby AFFIRMED in toto.
SO ORDERED.18
In the present recourse, the petitioner ascribes the following errors to the CA:
I.
THE HONORABLE COURT OF APPEALS ERRED IN FINDING THAT THE JOINT
AGREEMENT SHOULD BE APPROVED BY THE PROBATE COURT.
II.
THE COURT OF APPEALS ERRED IN FINDING THAT THERE CAN BE NO VALID

PARTITION AMONG THE HEIRS OF THE LATE EFRAIM SANTIBAEZ UNTIL AFTER THE
WILL HAS BEEN PROBATED.
III.
THE COURT OF APPEALS ERRED IN NOT FINDING THAT THE RESPONDENT HAD
WAIVED HER RIGHT TO HAVE THE CLAIM RE-LITIGATED IN THE ESTATE
PROCEEDING.
IV.
RESPONDENTS CAN, IN FACT, BE HELD JOINTLY AND SEVERALLY LIABLE WITH THE
PRINCIPAL DEBTOR THE LATE EFRAIM SANTIBAEZ ON THE STRENGTH OF THE
CONTINUING GUARANTY AGREEMENT EXECUTED IN FAVOR OF PETITIONERAPPELLANT UNION BANK.
V.
THE PROMISSORY NOTES DATED MAY 31, 1980 IN THE SUM OF P128,000.00 AND
DECEMBER 13, 1980 IN THE AMOUNT OF P123,000.00 CATEGORICALLY ESTABLISHED
THE FACT THAT THE RESPONDENTS BOUND THEMSELVES JOINTLY AND
SEVERALLY LIABLE WITH THE LATE DEBTOR EFRAIM SANTIBAEZ IN FAVOR OF
PETITIONER UNION BANK.19
The petitioner claims that the obligations of the deceased were transmitted to the heirs as
provided in Article 774 of the Civil Code; there was thus no need for the probate court to
approve the joint agreement where the heirs partitioned the tractors owned by the deceased
and assumed the obligations related thereto. Since respondent Florence S. Ariola signed the
joint agreement without any condition, she is now estopped from asserting any position
contrary thereto. The petitioner also points out that the holographic will of the deceased did
not include nor mention any of the tractors subject of the complaint, and, as such was
beyond the ambit of the said will. The active participation and resistance of respondent
Florence S. Ariola in the ordinary civil action against the petitioners claim amounts to a
waiver of the right to have the claim presented in the probate proceedings, and to allow any
one of the heirs who executed the joint agreement to escape liability to pay the value of the
tractors under consideration would be equivalent to allowing the said heirs to enrich
themselves to the damage and prejudice of the petitioner.
The petitioner, likewise, avers that the decisions of both the trial and appellate courts failed
to consider the fact that respondent Florence S. Ariola and her brother Edmund executed
loan documents, all establishing thevinculum juris or the legal bond between the late Efraim
Santibaez and his heirs to be in the nature of a solidary obligation. Furthermore, the
Promissory Notes dated May 31, 1980 and December 13, 1980 executed by the late Efraim
Santibaez, together with his heirs, Edmund and respondent Florence, made the obligation
solidary as far as the said heirs are concerned. The petitioner also proffers that, considering
the express provisions of the continuing guaranty agreement and the promissory notes
executed by the named respondents, the latter must be held liable jointly and severally liable
thereon. Thus, there was no need for the petitioner to file its money claim before the probate
court. Finally, the petitioner stresses that both surviving heirs are being sued in their
respective personal capacities, not as heirs of the deceased.
In her comment to the petition, respondent Florence S. Ariola maintains that the petitioner is
trying to recover a sum of money from the deceased Efraim Santibaez; thus the claim
should have been filed with the probate court. She points out that at the time of the execution
of the joint agreement there was already an existing probate proceedings of which the
petitioner knew about. However, to avoid a claim in the probate court which might delay
payment of the obligation, the petitioner opted to require them to execute the said
agreement.
1a\^/phi1.net
According to the respondent, the trial court and the CA did not err in declaring that the
agreement was null and void. She asserts that even if the agreement was voluntarily
executed by her and her brother Edmund, it should still have been subjected to the approval
of the court as it may prejudice the estate, the heirs or third parties. Furthermore, she had
not waived any rights, as she even stated in her answer in the court a quo that the claim
should be filed with the probate court. Thus, the petitioner could not invoke or claim that she
is in estoppel.
Respondent Florence S. Ariola further asserts that she had not signed any continuing
guaranty agreement, nor was there any document presented as evidence to show that she
had caused herself to be bound by the obligation of her late father.
The petition is bereft of merit.
The Court is posed to resolve the following issues: a) whether or not the partition in the
Agreement executed by the heirs is valid; b) whether or not the heirs assumption of the
indebtedness of the deceased is valid; and c) whether the petitioner can hold the heirs liable
on the obligation of the deceased.
1awphi1.nt
At the outset, well-settled is the rule that a probate court has the jurisdiction to determine all
the properties of the deceased, to determine whether they should or should not be included
in the inventory or list of properties to be administered. 20 The said court is primarily
concerned with the administration, liquidation and distribution of the estate. 21
In our jurisdiction, the rule is that there can be no valid partition among the heirs until after
the will has been probated:
In testate succession, there can be no valid partition among the heirs until after the will has
been probated. The law enjoins the probate of a will and the public requires it, because
unless a will is probated and notice thereof given to the whole world, the right of a person to
dispose of his property by will may be rendered nugatory. The authentication of a will decides
no other question than such as touch upon the capacity of the testator and the compliance
with those requirements or solemnities which the law prescribes for the validity of a will. 22
This, of course, presupposes that the properties to be partitioned are the same properties
embraced in the will.23In the present case, the deceased, Efraim Santibaez, left a
holographic will24 which contained, inter alia, the provision which reads as follows:
(e) All other properties, real or personal, which I own and may be discovered later after my
demise, shall be distributed in the proportion indicated in the immediately preceding
paragraph in favor of Edmund and Florence, my children.
We agree with the appellate court that the above-quoted is an all-encompassing provision
embracing all the properties left by the decedent which might have escaped his mind at that
time he was making his will, and other properties he may acquire thereafter. Included therein
are the three (3) subject tractors. This being so, any partition involving the said tractors
among the heirs is not valid. The joint agreement 25 executed by Edmund and Florence,
partitioning the tractors among themselves, is invalid, specially so since at the time of its
execution, there was already a pending proceeding for the probate of their late fathers
holographic will covering the said tractors.
It must be stressed that the probate proceeding had already acquired jurisdiction over all the
properties of the deceased, including the three (3) tractors. To dispose of them in any way
without the probate courts approval is tantamount to divesting it with jurisdiction which the
Court cannot allow.26 Every act intended to put an end to indivision among co-heirs and
legatees or devisees is deemed to be a partition, although it should purport to be a sale, an
exchange, a compromise, or any other transaction. 27 Thus, in executing any joint agreement
which appears to be in the nature of an extra-judicial partition, as in the case at bar, court
approval is imperative, and the heirs cannot just divest the court of its jurisdiction over that
part of the estate. Moreover, it is within the jurisdiction of the probate court to determine the
identity of the heirs of the decedent.28 In the instant case, there is no showing that the
signatories in the joint agreement were the only heirs of the decedent. When it was
executed, the probate of the will was still pending before the court and the latter had yet to
determine who the heirs of the decedent were. Thus, for Edmund and respondent Florence
S. Ariola to adjudicate unto themselves the three (3) tractors was a premature act, and
prejudicial to the other possible heirs and creditors who may have a valid claim against the
estate of the deceased.
The question that now comes to fore is whether the heirs assumption of the indebtedness of
the decedent is binding. We rule in the negative. Perusing the joint agreement, it provides
that the heirs as parties thereto "have agreed to divide between themselves and take
possession and use the above-described chattel and each of them to assume the
indebtedness corresponding to the chattel taken as herein after stated which is in favor of
First Countryside Credit Corp."29 The assumption of liability was conditioned upon the
happening of an event, that is, that each heir shall take possession and use of their
respective share under the agreement. It was made dependent on the validity of the
partition, and that they were to assume the indebtedness corresponding to the chattel that
they were each to receive. The partition being invalid as earlier discussed, the heirs in effect
did not receive any such tractor. It follows then that the assumption of liability cannot be
given any force and effect.
The Court notes that the loan was contracted by the decedent. The petitioner, purportedly a
creditor of the late Efraim Santibaez, should have thus filed its money claim with the
probate court in accordance with Section 5, Rule 86 of the Revised Rules of Court, which
provides:
l^vvphi1.net
Section 5. Claims which must be filed under the notice. If not filed barred; exceptions. All
claims for money against the decedent, arising from contract, express or implied, whether
the same be due, not due, or contingent, all claims for funeral expenses for the last sickness
of the decedent, and judgment for money against the decedent, must be filed within the time
limited in the notice; otherwise they are barred forever, except that they may be set forth as
counterclaims in any action that the executor or administrator may bring against the
claimants. Where an executor or administrator commences an action, or prosecutes an
action already commenced by the deceased in his lifetime, the debtor may set forth by
answer the claims he has against the decedent, instead of presenting them independently to
the court as herein provided, and mutual claims may be set off against each other in such
action; and if final judgment is rendered in favor of the defendant, the amount so determined
shall be considered the true balance against the estate, as though the claim had been
presented directly before the court in the administration proceedings. Claims not yet due, or
contingent, may be approved at their present value.
The filing of a money claim against the decedents estate in the probate court is
mandatory.30 As we held in the vintage case of Py Eng Chong v. Herrera:31
This requirement is for the purpose of protecting the estate of the deceased by informing
the executor or administrator of the claims against it, thus enabling him to examine each
claim and to determine whether it is a proper one which should be allowed. The plain and
obvious design of the rule is the speedy settlement of the affairs of the deceased and the
early delivery of the property to the distributees, legatees, or heirs. `The law strictly requires
the prompt presentation and disposition of the claims against the decedent's estate in order
to settle the affairs of the estate as soon as possible, pay off its debts and distribute the
residue.32
Perusing the records of the case, nothing therein could hold private respondent Florence S.
Ariola accountable for any liability incurred by her late father. The documentary evidence
presented, particularly the promissory notes and the continuing guaranty agreement, were
executed and signed only by the late Efraim Santibaez and his son Edmund. As the
petitioner failed to file its money claim with the probate court, at most, it may only go after
Edmund as co-maker of the decedent under the said promissory notes and continuing
guaranty, of course, subject to any defenses Edmund may have as against the petitioner. As
the court had not acquired jurisdiction over the person of Edmund, we find it unnecessary to
delve into the matter further.
We agree with the finding of the trial court that the petitioner had not sufficiently shown that it
is the successor-in-interest of the Union Savings and Mortgage Bank to which the FCCC
assigned its assets and liabilities.33 The petitioner in its complaint alleged that "by virtue of
the Deed of Assignment dated August 20, 1981 executed by and between First Countryside
Credit Corporation and Union Bank of the Philippines"34 However, the documentary
evidence35 clearly reflects that the parties in the deed of assignment with assumption of
liabilities were the FCCC, and the Union Savings and Mortgage Bank, with the conformity of
Bancom Philippine Holdings, Inc. Nowhere can the petitioners participation therein as a
party be found. Furthermore, no documentary or testimonial evidence was presented during
trial to show that Union Savings and Mortgage Bank is now, in fact, petitioner Union Bank of
the Philippines. As the trial court declared in its decision:
[T]he court also finds merit to the contention of defendant that plaintiff failed to prove or
did not present evidence to prove that Union Savings and Mortgage Bank is now the Union
Bank of the Philippines. Judicial notice does not apply here. "The power to take judicial
notice is to [be] exercised by the courts with caution; care must be taken that the requisite
notoriety exists; and every reasonable doubt upon the subject should be promptly resolved in
the negative." (Republic vs. Court of Appeals, 107 SCRA 504). 36
This being the case, the petitioners personality to file the complaint is wanting.
Consequently, it failed to establish its cause of action. Thus, the trial court did not err in
dismissing the complaint, and the CA in affirming the same.
IN LIGHT OF ALL THE FOREGOING, the petition is hereby DENIED. The assailed Court of
Appeals Decision is AFFIRMED. No costs.
SO ORDERED.
Puno, (Chairman), Austria-Martinez, Tinga, and Chico-Nazario, JJ., concur.
Footnotes
Penned by Associate Justice Bienvenido L. Reyes with Associate Justices Eubulo
G. Verzola (deceased), and Marina L. Buzon, concurring.
1
Penned by Presiding Judge Julio R. Logarta.
Records, pp. 8-12.
Id. at 13-18.
Id. at 19-20.
Exhibit 7.
Annex A of the Answer, Records, p. 48.
Exhibit A.
Exhibit G.
10
Exhibits E and F.
11
Records, p. 1.
12
See Sheriffs Return of Service, Id. at 39.
13
Records, p. 42.
14
Id. at 83.
15
Id. at 522.
16
CA Rollo, p. 43.
17
Id. at 76.
18
Rollo, p. 30.
19
Id. at 7-8.
See Ortega v. Court of Appeals, 153 SCRA 96 (1987); See also Morales v. CFI of
Cavite, Br. V, 146 SCRA 373 (1986).
20
21
See De la Cruz v. Camon, 16 SCRA 886 (1966).
22
Vda. de Kilayko v. Tengco, 207 SCRA 600 (1992).
23
Ralla v. Untalan, 172 SCRA 858 (1989).
24
Exhibit 7.
25
Exhibit A.
26
See Sandoval v. Santiago, 83 Phil 784 (1949).
27
Article 1082, New Civil Code.
28
See Reyes v. Ysip, 97 Phil 11 (1955).
29
See Exhibit 7.
30
See De Bautista v. De Guzman, 125 SCRA 676 (1983).
31
70 SCRA 130 (1976).
32
Ibid.
33
See Exhibit G.
34
Records, p. 4.
35
Exhibit G.
36
Records, p. 521.

SUPREME COURT
Manila
EN BANC
G.R. No. 102007 September 2, 1994

PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs.
ROGELIO BAYOTAS y CORDOVA, accused-appellant.
The Solicitor General for plaintiff-appellee.
Public Attorney's Office for accused-appellant.
ROMERO, J.:
In Criminal Case No. C-3217 filed before Branch 16, RTC Roxas City, Rogelio Bayotas y
Cordova was charged with Rape and eventually convicted thereof on June 19, 1991 in a
decision penned by Judge Manuel E. Autajay. Pending appeal of his conviction, Bayotas died
on February 4, 1992 at
the National Bilibid Hospital due to cardio respiratory arrest secondary to hepatic
encephalopathy secondary to hipato carcinoma gastric malingering. Consequently, the
Supreme Court in its Resolution of May 20, 1992 dismissed the criminal aspect of the
appeal. However, it required the Solicitor General to file its comment with regard to Bayotas'
civil liability arising from his commission of the offense charged.
In his comment, the Solicitor General expressed his view that the death of accused-appellant
did not extinguish his civil liability as a result of his commission of the offense charged. The
Solicitor General, relying on the case ofPeople v. Sendaydiego 1 insists that the appeal
should still be resolved for the purpose of reviewing his conviction by the lower court on
which the civil liability is based.
Counsel for the accused-appellant, on the other hand, opposed the view of the Solicitor
General arguing that the death of the accused while judgment of conviction is pending
appeal extinguishes both his criminal and civil penalties. In support of his position, said
counsel invoked the ruling of the Court of Appeals in People v. Castillo and Ocfemia 2 which
held that the civil obligation in a criminal case takes root in the criminal liability and,
therefore, civil liability is extinguished if accused should die before final judgment is
rendered.
We are thus confronted with a single issue: Does death of the accused pending appeal of his
conviction extinguish his civil liability?
In the aforementioned case of People v. Castillo, this issue was settled in the affirmative.
This same issue posed therein was phrased thus: Does the death of Alfredo Castillo affect
both his criminal responsibility and his civil liability as a consequence of the alleged crime?
It resolved this issue thru the following disquisition:
Article 89 of the Revised Penal Code is the controlling statute. It reads, in
part:
Art. 89. How criminal liability is totally extinguished.
Criminal liability is totally extinguished:
1. By the death of the convict, as to the personal penalties;
and as to the pecuniary penalties liability therefor is
extinguished only when the death of the offender occurs
before final judgment;
With reference to Castillo's criminal liability, there is no question. The law is
plain. Statutory construction is unnecessary. Said liability is extinguished.
The civil liability, however, poses a problem. Such liability is extinguished only
when the death of the offender occurs before final judgment. Saddled upon
us is the task of ascertaining the legal import of the term "final judgment." Is it
final judgment as contradistinguished from an interlocutory order? Or, is it a
judgment which is final and executory?
We go to the genesis of the law. The legal precept contained in Article 89 of
the Revised Penal Code heretofore transcribed is lifted from Article 132 of the
Spanish El Codigo Penal de 1870 which, in part, recites:
La responsabilidad penal se extingue.
1. Por la muerte del reo en cuanto a las penas personales
siempre, y respecto a las pecuniarias, solo cuando a su
fallecimiento no hubiere recaido sentencia firme.
xxx xxx xxx
The code of 1870 . . . it will be observed employs the term "sentencia firme."
What is "sentencia firme" under the old statute?
XXVIII Enciclopedia Juridica Espaola, p. 473, furnishes the ready answer: It

says:
SENTENCIA FIRME. La sentencia que adquiere la fuerza de
las definitivas por no haberse utilizado por las partes
litigantes recurso alguno contra ella dentro de los terminos y
plazos legales concedidos al efecto.
"Sentencia firme" really should be understood as one which is definite.
Because, it is only when judgment is such that, as Medina y Maranon puts it,
the crime is confirmed "en condena determinada;" or, in the words of
Groizard, the guilt of the accused becomes "una verdad legal." Prior
thereto, should the accused die, according to Viada, "no hay legalmente, en
tal caso, ni reo, ni delito, ni responsabilidad criminal de ninguna clase." And,
as Judge Kapunan well explained, when a defendant dies before judgment
becomes executory, "there cannot be any determination by final judgment
whether or not the felony upon which the civil action might arise exists," for
the simple reason that "there is no party defendant." (I Kapunan, Revised
Penal Code, Annotated, p. 421. Senator Francisco holds the same view.
Francisco, Revised Penal Code, Book One, 2nd ed., pp. 859-860)
The legal import of the term "final judgment" is similarly reflected in the
Revised Penal Code. Articles 72 and 78 of that legal body mention the term
"final judgment" in the sense that it is already enforceable. This also brings to
mind Section 7, Rule 116 of the Rules of Court which states that a judgment
in a criminal case becomes final "after the lapse of the period for perfecting
an appeal or when the sentence has been partially or totally satisfied or
served, or the defendant has expressly waived in writing his right to appeal."
By fair intendment, the legal precepts and opinions here collected funnel
down to one positive conclusion: The term final judgment employed in the
Revised Penal Code means judgment beyond recall. Really, as long as a
judgment has not become executory, it cannot be truthfully said that
defendant is definitely guilty of the felony charged against him.
Not that the meaning thus given to final judgment is without reason. For
where, as in this case, the right to institute a separate civil action is not
reserved, the decision to be rendered must, of necessity, cover "both the
criminal and the civil aspects of the case." People vs. Yusico (November 9,
1942), 2 O.G., No. 100, p. 964. See also: People vs. Moll, 68 Phil., 626,
634; Francisco, Criminal Procedure, 1958 ed., Vol. I, pp. 234, 236. Correctly,
Judge Kapunan observed that as "the civil action is based solely on the
felony committed and of which the offender might be found guilty, the death
of the offender extinguishes the civil liability." I Kapunan, Revised Penal
Code, Annotated, supra.
Here is the situation obtaining in the present case: Castillo's criminal liability
is out. His civil liability is sought to be enforced by reason of that criminal
liability. But then, if we dismiss, as we must, the criminal action and let the
civil aspect remain, we will be faced with the anomalous situation whereby
we will be called upon to clamp civil liability in a case where the source
thereof criminal liability does not exist. And, as was well stated
in Bautista, et al. vs. Estrella, et al., CA-G.R.

No. 19226-R, September 1, 1958, "no party can be found and held criminally
liable in a civil suit," which solely would remain if we are to divorce it from the
criminal proceeding."
This ruling of the Court of Appeals in the Castillo case 3 was adopted by the Supreme Court
in the cases of People of the Philippines v. Bonifacio Alison, et al., 4 People of the Philippines
v. Jaime Jose, et al. 5 and People of the Philippines v. Satorre 6 by dismissing the appeal in
view of the death of the accused pending appeal of said cases.
As held by then Supreme Court Justice Fernando in the Alison case:
The death of accused-appellant Bonifacio Alison having been established,
and considering that there is as yet no final judgment in view of the pendency
of the appeal, the criminal and civil liability of the said accused-appellant
Alison was extinguished by his death (Art. 89, Revised Penal Code; Reyes'
Criminal Law, 1971 Rev. Ed., p. 717, citing People v. Castillo and Ofemia
C.A., 56 O.G. 4045); consequently, the case against him should be
dismissed.
On the other hand, this Court in the subsequent cases of Buenaventura Belamala
v. Marcelino Polinar 7 andLamberto Torrijos v. The Honorable Court of Appeals 8 ruled
differently. In the former, the issue decided by this court was: Whether the civil liability of one
accused of physical injuries who died before final judgment is extinguished by his demise to
the extent of barring any claim therefore against his estate. It was the contention of the
administrator-appellant therein that the death of the accused prior to final judgment
extinguished all criminal and civil liabilities resulting from the offense, in view of Article 89,
paragraph 1 of the Revised Penal Code. However, this court ruled therein:
We see no merit in the plea that the civil liability has been extinguished, in
view of the provisions of the Civil Code of the Philippines of 1950 (Rep. Act
No. 386) that became operative eighteen years after the revised Penal Code.
As pointed out by the Court below, Article 33 of the Civil Code establishes a
civil action for damages on account of physical injuries, entirely separate and
distinct from the criminal action.
Art. 33. In cases of defamation, fraud, and physical injuries, a
civil action for damages, entirely separate and distinct from
the criminal action, may be brought by the injured party. Such
civil action shall proceed independently of the criminal
prosecution, and shall require only a preponderance of
evidence.
Assuming that for lack of express reservation, Belamala's civil action for
damages was to be considered instituted together with the criminal action
still, since both proceedings were terminated without final adjudication, the
civil action of the offended party under Article 33 may yet be enforced
separately.
In Torrijos, the Supreme Court held that:
xxx xxx xxx
It should be stressed that the extinction of civil liability follows the extinction
of the criminal liability under Article 89, only when the civil liability arises from
the criminal act as its only basis. Stated differently, where the civil liability
does not exist independently of the criminal responsibility, the extinction of
the latter by death, ipso facto extinguishes the former, provided, of course,
that death supervenes before final judgment. The said principle does not
apply in instant case wherein the civil liability springs neither solely nor
originally from the crime itself but from a civil contract of purchase and sale.
(Emphasis ours)
xxx xxx xxx
In the above case, the court was convinced that the civil liability of the accused who
was charged with estafa could likewise trace its genesis to Articles 19, 20 and 21 of
the Civil Code since said accused had swindled the first and second vendees of the
property subject matter of the contract of sale. It therefore concluded: "Consequently,
while the death of the accused herein extinguished his criminal liability including fine,
his civil liability based on the laws of human relations remains."
Thus it allowed the appeal to proceed with respect to the civil liability of the accused,
notwithstanding the extinction of his criminal liability due to his death pending appeal of his
conviction.
To further justify its decision to allow the civil liability to survive, the court relied on the
following ratiocination: Since Section 21, Rule 3 of the Rules of Court 9 requires the dismissal
of all money claims against the defendant whose death occurred prior to the final judgment
of the Court of First Instance (CFI), then it can be inferred that actions for recovery of money
may continue to be heard on appeal, when the death of the defendant supervenes after the
CFI had rendered its judgment. In such case, explained this tribunal, "the name of the
offended party shall be included in the title of the case as plaintiff-appellee and the legal
representative or the heirs of the deceased-accused should be substituted as defendantsappellants."
It is, thus, evident that as jurisprudence evolved from Castillo to Torrijos, the rule established
was that the survival of the civil liability depends on whether the same can be predicated on
sources of obligations other than delict. Stated differently, the claim for civil liability is also
extinguished together with the criminal action if it were solely based thereon, i.e., civil
liability ex delicto.
However, the Supreme Court in People v. Sendaydiego, et al. 10 departed from this longestablished principle of law. In this case, accused Sendaydiego was charged with and
convicted by the lower court of malversation thru falsification of public documents.
Sendaydiego's death supervened during the pendency of the appeal of his conviction.
This court in an unprecedented move resolved to dismiss Sendaydiego's appeal but only to
the extent of his criminal liability. His civil liability was allowed to survive although it was clear
that such claim thereon was exclusively dependent on the criminal action already
extinguished. The legal import of such decision was for the court to continue exercising
appellate jurisdiction over the entire appeal, passing upon the correctness of Sendaydiego's
conviction despite dismissal of the criminal action, for the purpose of determining if he is
civilly liable. In doing so, this Court issued a Resolution of July 8, 1977 stating thus:
The claim of complainant Province of Pangasinan for the civil liability

survived Sendaydiego because his death occurred after final judgment was
rendered by the Court of First Instance of Pangasinan, which convicted him
of three complex crimes of malversation through falsification and ordered him
to indemnify the Province in the total sum of P61,048.23 (should be
P57,048.23).
The civil action for the civil liability is deemed impliedly instituted with the
criminal action in the absence of express waiver or its reservation in a
separate action (Sec. 1, Rule 111 of the Rules of Court). The civil action for
the civil liability is separate and distinct from the criminal action (People and
Manuel vs. Coloma, 105 Phil. 1287; Roa vs. De la Cruz, 107 Phil. 8).
When the action is for the recovery of money and the defendant dies before
final judgment in the Court of First Instance, it shall be dismissed to be
prosecuted in the manner especially provided in Rule 87 of the Rules of
Court (Sec. 21, Rule 3 of the Rules of Court).
The implication is that, if the defendant dies after a money judgment had
been rendered against him by the Court of First Instance, the action survives
him. It may be continued on appeal (Torrijos vs. Court of Appeals, L-40336,
October 24, 1975; 67 SCRA 394).
The accountable public officer may still be civilly liable for the funds
improperly disbursed although he has no criminal liability (U.S. vs. Elvina, 24
Phil. 230; Philippine National Bank vs. Tugab, 66 Phil. 583).
In view of the foregoing, notwithstanding the dismissal of the appeal of the
deceased Sendaydiego insofar as his criminal liability is concerned, the Court
Resolved to continue exercising appellate jurisdiction over his possible civil
liability for the money claims of the Province of Pangasinan arising from the
alleged criminal acts complained of, as if no criminal case had been instituted
against him, thus making applicable, in determining his civil liability, Article 30
of the Civil Code . . . and, for that purpose, his counsel is directed to inform
this Court within ten (10) days of the names and addresses of the decedent's
heirs or whether or not his estate is under administration and has a duly
appointed judicial administrator. Said heirs or administrator will be substituted
for the deceased insofar as the civil action for the civil liability is concerned
(Secs. 16 and 17, Rule 3, Rules of Court).
Succeeding cases 11 raising the identical issue have maintained adherence to our ruling
in Sendaydiego; in other words, they were a reaffirmance of our abandonment of the settled
rule that a civil liability solely anchored on the criminal (civil liability ex delicto) is extinguished
upon dismissal of the entire appeal due to the demise of the accused.
But was it judicious to have abandoned this old ruling? A re-examination of our decision
in Sendaydiego impels us to revert to the old ruling.
To restate our resolution of July 8, 1977 in Sendaydiego: The resolution of the civil action
impliedly instituted in the criminal action can proceed irrespective of the latter's extinction
due to death of the accused pending appeal of his conviction, pursuant to Article 30 of the
Civil Code and Section 21, Rule 3 of the Revised Rules of Court.
Article 30 of the Civil Code provides:

When a separate civil action is brought to demand civil liability arising from a
criminal offense, and no criminal proceedings are instituted during the
pendency of the civil case, a preponderance of evidence shall likewise be
sufficient to prove the act complained of.
Clearly, the text of Article 30 could not possibly lend support to the ruling in Sendaydiego.
Nowhere in its text is there a grant of authority to continue exercising appellate jurisdiction
over the accused's civil liability ex delictowhen his death supervenes during appeal. What
Article 30 recognizes is an alternative and separate civil action which may be brought to
demand civil liability arising from a criminal offense independently of any criminal action. In
the event that no criminal proceedings are instituted during the pendency of said civil case,
the quantum of evidence needed to prove the criminal act will have to be that which is
compatible with civil liability and that is, preponderance of evidence and not proof of guilt
beyond reasonable doubt. Citing or invoking Article 30 to justify the survival of the civil action
despite extinction of the criminal would in effect merely beg the question of whether civil
liability ex delicto survives upon extinction of the criminal action due to death of the accused
during appeal of his conviction. This is because whether asserted in
the criminal action or in a separate civil action, civil liability ex delicto is extinguished by the
death of the accused while his conviction is on appeal. Article 89 of the Revised Penal Code
is clear on this matter:
Art. 89. How criminal liability is totally extinguished. Criminal liability is
totally extinguished:
1. By the death of the convict, as to the personal penalties; and as to
pecuniary penalties, liability therefor is extinguished only when the death of
the offender occurs before final judgment;
xxx xxx xxx
However, the ruling in Sendaydiego deviated from the expressed intent of Article 89. It
allowed claims for civil liability ex delicto to survive by ipso facto treating the civil action
impliedly instituted with the criminal, as one filed under Article 30, as though no criminal
proceedings had been filed but merely a separate civil action. This had the effect of
converting such claims from one which is dependent on the outcome of the criminal action to
an entirely new and separate one, the prosecution of which does not even necessitate the
filing of criminal proceedings. 12One would be hard put to pinpoint the statutory authority for
such a transformation. It is to be borne in mind that in recovering civil liability ex delicto, the
same has perforce to be determined in the criminal action, rooted as it is in the court's
pronouncement of the guilt or innocence of the accused. This is but to render fealty to the
intendment of Article 100 of the Revised Penal Code which provides that "every person
criminally liable for a felony is also civilly liable." In such cases, extinction of the criminal
action due to death of the accused pending appeal inevitably signifies the concomitant
extinction of the civil liability. Mors Omnia Solvi. Death dissolves all things.
In sum, in pursuing recovery of civil liability arising from crime, the final determination of the
criminal liability is a condition precedent to the prosecution of the civil action, such that when
the criminal action is extinguished by the demise of accused-appellant pending appeal
thereof, said civil action cannot survive. The claim for civil liability springs out of and is
dependent upon facts which, if true, would constitute a crime. Such civil liability is an
inevitable consequence of the criminal liability and is to be declared and enforced in the
criminal proceeding. This is to be distinguished from that which is contemplated under Article
30 of the Civil Code which refers to the institution of a separate civil action that does not
draw its life from a criminal proceeding. The Sendaydiego resolution of July 8, 1977,
however, failed to take note of this fundamental distinction when it allowed the survival of the
civil action for the recovery of civil liability ex delicto by treating the same as a separate civil
action referred to under Article 30. Surely, it will take more than just a summary judicial
pronouncement to authorize the conversion of said civil action to an independent one such
as that contemplated under Article 30.
Ironically however, the main decision in Sendaydiego did not apply Article 30, the resolution
of July 8, 1977 notwithstanding. Thus, it was held in the main decision:
Sendaydiego's appeal will be resolved only for the purpose of showing his
criminal liability which is the basis of the civil liability for which his estate would be
liable. 13
In other words, the Court, in resolving the issue of his civil liability, concomitantly made a
determination on whether Sendaydiego, on the basis of evidenced adduced, was indeed
guilty beyond reasonable doubt of committing the offense charged. Thus, it upheld
Sendaydiego's conviction and pronounced the same as the source of his civil liability.
Consequently, although Article 30 was not applied in the final determination of
Sendaydiego's civil liability, there was a reopening of the criminal action already extinguished
which served as basis for Sendaydiego's civil liability. We reiterate: Upon death of the
accused pending appeal of his conviction, the criminal action is extinguished inasmuch as
there is no longer a defendant to stand as the accused; the civil action instituted therein for
recovery of civil liability ex delicto is ipso facto extinguished, grounded as it is on the criminal.
Section 21, Rule 3 of the Rules of Court was also invoked to serve as another basis for
the Sendaydiegoresolution of July 8, 1977. In citing Sec. 21, Rule 3 of the Rules of Court, the
Court made the inference that civil actions of the type involved in Sendaydiego consist of
money claims, the recovery of which may be continued on appeal if defendant dies pending
appeal of his conviction by holding his estate liable therefor. Hence, the Court's conclusion:
"When the action is for the recovery of money" "and the defendant dies
before final judgment in the court of First Instance, it shall be dismissed to be
prosecuted in the manner especially provided" in Rule 87 of the Rules of
Court (Sec. 21, Rule 3 of the Rules of Court).
The implication is that, if the defendant dies after a money judgment had
been rendered against him by the Court of First Instance, the action survives
him. It may be continued on appeal.
Sadly, reliance on this provision of law is misplaced. From the standpoint of procedural law,
this course taken inSendaydiego cannot be sanctioned. As correctly observed by Justice
Regalado:
xxx xxx xxx
I do not, however, agree with the justification advanced in
both Torrijos and Sendaydiego which, relying on the provisions of Section 21,
Rule 3 of the Rules of Court, drew the strained implication therefrom that
where the civil liability instituted together with the criminal liabilities had
already passed beyond the judgment of the then Court of First Instance (now
the Regional Trial Court), the Court of Appeals can continue to exercise
appellate jurisdiction thereover despite the extinguishment of the component
criminal liability of the deceased. This pronouncement, which has been
followed in the Court's judgments subsequent and consonant
to Torrijos and Sendaydiego, should be set aside and abandoned as being
clearly erroneous and unjustifiable.
Said Section 21 of Rule 3 is a rule of civil procedure in ordinary civil actions.
There is neither authority nor justification for its application in criminal
procedure to civil actions instituted together with and as part of criminal
actions. Nor is there any authority in law for the summary conversion from
the latter category of an ordinary civil action upon the death of the
offender. . . .
Moreover, the civil action impliedly instituted in a criminal proceeding for recovery of civil
liability ex delicto can hardly be categorized as an ordinary money claim such as that
referred to in Sec. 21, Rule 3 enforceable before the estate of the deceased accused.
Ordinary money claims referred to in Section 21, Rule 3 must be viewed in light of the
provisions of Section 5, Rule 86 involving claims against the estate, which
in Sendaydiego was held liable for Sendaydiego's civil liability. "What are contemplated in
Section 21 of Rule 3, in relation to Section 5 of Rule 86, 14 are contractual money claims
while the claims involved in civil liability ex delicto may include even the restitution of
personal or real property." 15Section 5, Rule 86 provides an exclusive enumeration of what
claims may be filed against the estate. These are: funeral expenses, expenses for the last
illness, judgments for money and claim arising from contracts, expressed or implied. It is
clear that money claims arising from delict do not form part of this exclusive enumeration.
Hence, there could be no legal basis in (1) treating a civil action ex delicto as an ordinary
contractual money claim referred to in Section 21, Rule 3 of the Rules of Court and (2)
allowing it to survive by filing a claim therefor before the estate of the deceased accused.
Rather, it should be extinguished upon extinction of the criminal action engendered by the
death of the accused pending finality of his conviction.
Accordingly, we rule: if the private offended party, upon extinction of the civil liability ex
delicto desires to recover damages from the same act or omission complained of, he must
subject to Section 1, Rule 111 16 (1985 Rules on Criminal Procedure as amended) file a
separate civil action, this time predicated not on the felony previously charged but on other
sources of obligation. The source of obligation upon which the separate civil action is
premised determines against whom the same shall be enforced.
If the same act or omission complained of also arises from quasi-delict or may, by provision
of law, result in an injury to person or property (real or personal), the separate civil action
must be filed against the executor or administrator 17 of the estate of the accused pursuant to
Sec. 1, Rule 87 of the Rules of Court:
Sec. 1. Actions which may and which may not be brought against executor or
administrator. No action upon a claim for the recovery of money or debt or
interest thereon shall be commenced against the executor or administrator;
but actions to recover real or personal property, or an interest therein, from
the estate, or to enforce a lien thereon, and actions to recover damages for
an injury to person or property, real or personal, may be commenced against

him.
This is in consonance with our ruling in Belamala 18 where we held that, in recovering
damages for injury to persons thru an independent civil action based on Article 33 of the Civil
Code, the same must be filed against the executor or administrator of the estate of deceased
accused and not against the estate under Sec. 5, Rule 86 because this rule explicitly limits
the claim to those for funeral expenses, expenses for the last sickness of the decedent,
judgment for money and claims arising from contract, express or implied. Contractual money
claims, we stressed, refers only to purely personal obligations other than those which have
their source in delict or tort.
Conversely, if the same act or omission complained of also arises from contract, the
separate civil action must be filed against the estate of the accused, pursuant to Sec. 5, Rule
86 of the Rules of Court.
From this lengthy disquisition, we summarize our ruling herein:
1. Death of the accused pending appeal of his conviction extinguishes his criminal liability as
well as the civil liability based solely thereon. As opined by Justice Regalado, in this regard,
"the death of the accused prior to final judgment terminates his criminal liability and only the
civil liability directly arising from and based solely on the offense committed, i.e., civil
liability ex delicto in senso strictiore."
2. Corollarily, the claim for civil liability survives notwithstanding the death of accused, if the
same may also be predicated on a source of obligation other than delict. 19 Article 1157 of the
Civil Code enumerates these other sources of obligation from which the civil liability may
arise as a result of the same act or omission:
a) Law 20
b) Contracts
c) Quasi-contracts
d) . . .
e) Quasi-delicts
3. Where the civil liability survives, as explained in Number 2 above, an action for recovery
therefor may be pursued but only by way of filing a separate civil action and subject to
Section 1, Rule 111 of the 1985 Rules on Criminal Procedure as amended. This separate
civil action may be enforced either against the executor/administrator or the estate of the
accused, depending on the source of obligation upon which the same is based as explained
above.
4. Finally, the private offended party need not fear a forfeiture of his right to file this separate
civil action by prescription, in cases where during the prosecution of the criminal action and
prior to its extinction, the private-offended party instituted together therewith the civil action.
In such case, the statute of limitations on the civil liability is deemed interrupted during the
pendency of the criminal case, conformably with provisions of Article 1155 21 of the Civil Code,
that should thereby avoid any apprehension on a possible privation of right by prescription. 22
Applying this set of rules to the case at bench, we hold that the death of appellant Bayotas
extinguished his criminal liability and the civil liability based solely on the act complained
of, i.e., rape. Consequently, the appeal is hereby dismissed without qualification.
WHEREFORE, the appeal of the late Rogelio Bayotas is DISMISSED with costs de oficio.
SO ORDERED.
Narvasa, C.J., Feliciano, Padilla, Bidin, Regalado, Davide, Jr., Bellosillo, Melo,
Quiason, Puno, Vitug, Kapunan and Mendoza, JJ., concur.
Cruz, J., is on leave.
#Footnotes
1 Nos. L-33252, L-33253 and L-33254, 81 SCRA 120.

2 No. 22211-R, November 4, 1959, 56 O.G. No. 23, p. 4045.
3 supra.
4 L-30612, April 27, 1972, 44 SCRA 523.
5 No. L-28397, June 17, 1976, 71 SCRA 273.
6 No. L-26282, August 27, 1976, 72 SCRA 439.
7 No. L-24098, November 18, 1967, 21 SCRA 970.
8 No. L-40336, October 24, 1975, 67 SCRA 394.
9 Sec. 21. Where claim does not survive. When the action is for recovery
of money, debt or interest thereon, and the defendant dies before final
judgment in the Court of First Instance, it shall be dismissed to be prosecuted
in the manner especially provided in these rules.
10 Supra.
11 People v. Badeo, G.R. No. 72990, November 21, 1991, 204 SCRA 122;
Petralba v. Sandiganbayan, G.R. No. 81337, August 16, 1991, 200 SCRA
644; Dumlao v. Court of Appeals, No. L-51625, October 5, 1988, 166 SCRA
269; Rufo Mauricio Construction v. Intermediate Appellate Court, No. L75357, November 27, 1987, 155 SCRA 712; People v. Salcedo, No. L-48642,
June 22, 1987, 151 SCRA 220; People v. Pancho, No. L-32507, November 4,
1986, 145 SCRA 323; People v. Navoa, No. L-67966, September 28, 1984,
132 SCRA 410; People v. Asibar,

No. L-37255, October 23, 1982, 117 SCRA 856; People v. Tirol, No. L-30538,
January 31, 1981, 102 SCRA 558; and People v. Llamoso, No. L-24866, July
13, 1979, 91 SCRA 364.
12 Justice Barredo in his concurring opinion observed that:
. . . this provision contemplates prosecution of the civil liability arising from a
criminal offense without the need of any criminal proceeding to prove the
commission of the crime as such, that is without having to prove the criminal
liability of the defendant so long as his act causing damage or prejudice to
the offended party is proven by preponderance of evidence.
13 Supra, p. 134.
14 Sec. 5. Claims which must be filed under the notice. If not filed,
barred; exceptions. All claims for money against the decedent, arising
from contract, express or implied, whether the same be due, not due, or
contingent, all claims for funeral expenses and expenses for the last sickness
of the decedent, and judgment for money against the decedent, must be filed
within the time limited in the notice; otherwise they are barred forever, except
that they may be set forth as counterclaims in any action that the executor or
administrator may bring against the claimants. Where an executor or
administrator commences an action, or prosecutes an action already
commenced by the deceased in his lifetime, the debtor may set forth by
answer the claims he has against the decedent, instead of presenting them
independently to the court as herein provided, and mutual claims may be set
off against each other in such action; and if final judgment is rendered in
favor of the defendant, the amount so determined shall be considered the
true balance against the estate, as though the claim had been presented
directly before the court in the administration proceedings. Claims not yet
due, or contingent, may be approved at their present value.
15 As explained by J. Regalado in the deliberation of this case.
16 Sec. 1. Institute of criminal and civil actions. When a criminal action is
instituted, the civil action for the recovery of civil liability is impliedly instituted
with the criminal action, unless the offended party waives the civil action,
reserves his right to institute it separately, or institutes the civil action prior to
the criminal action.
Such civil action includes recovery of indemnity under the Revised Penal
Code, and damages under Article 32, 33, 34 and 2176 of the Civil Code of
the Philippines arising from the same act or omission of the accused.
A waiver of any of the civil actions extinguishes the others. The institution of,
or the reservation of the right to file, any of said civil actions separately
waives the others.
The reservation of the right to institute the separate civil actions shall be
made before the prosecution starts to present its evidence and under
circumstances affording the offended party a reasonable opportunity to make

such reservation.
In no case may the offended party recover damages twice for the same act
or omission of the accused.
When the offended party seeks to enforce civil liability against the accused
by way of moral, nominal, temperate or exemplary damages, the filing fees
for such civil action as provided in these Rules shall constitute a first lien on
the judgment except in an award for actual damages.
In cases wherein the amount of damages, other than actual, is alleged in the
complaint or information, the corresponding filing fees shall be paid by the
offended party upon the filing thereof in court for trial.
17 Justice Regalado cited the Court's ruling in Belamala that since the
damages sought, as a result of the felony committed amounts to injury to
person or property, real or personal, the civil liability to be recovered must be
claimed against the executor/administrator and not against the estate.
18 Ibid.
19 Justice Vitug who holds a similar view stated: "The civil liability may still be
pursued in a separate civil action but it must be predicated on a source of
obligation other than delict, except when by statutory provision an
independent civil action is authorized such as, to exemplify, in the instance
enumerated in Article 33 of the Civil Code." Justice Regalado stressed that:
Conversely, such civil liability is not extinguished and survives the deceased
offender where it also arises simultaneously from or exists as a consequence
or by reason of a contract, as in Torrijos; or from law, as stated in Torrijos and
in the concurring opinion in Sendaydiego, such as in reference to the Civil
Code; or from a quasi-contract; or is authorized by law to be pursued in an
independent civil action, as in Belamala. Indeed, without these exceptions, it
would be unfair and inequitable to deprive the victim of his property or
recovery of damages therefor, as would have been the fate of the second
vendee in Torrijos or the provincial government in Sendaydiego."
20 See Articles 19, 20, 21, 31, 32, 33, 34, 2176 of the Civil Code; see related
provisions of the Rules on Criminal Procedure, as amended, particularly Sec.
1, Rule 111.
21 Art. 1155. The prescription of actions is interrupted when they are filed
before the court, when there is a written extrajudicial demand by the
creditors, and when there is any written acknowledgment of the debt by the
debtor.
22 As explained by J. Vitug in the deliberation of this case.

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 159130
August 22, 2008
ATTY. GEORGE S. BRIONES, petitioner,

vs.
LILIA J. HENSON-CRUZ, RUBY J. HENSON, and ANTONIO J.
HENSON respondents.
DECISION
BRION, J.:
We review in this petition1 the Decision of the Court of Appeals
(Fifteenth Division) dated February 11, 20032 in CA-G.R. SP No. 71844.
THE ANTECEDENTS
Respondent Ruby J. Henson filed on February 23, 1999 a petition for
the allowance of the will of her late mother, Luz J. Henson, with the
Regional Trial Court (RTC) of Manila, docketed as Special Proceedings
No. 99-92870.
Lilia Henson-Cruz, one of the deceased's daughters and also a
respondent in this petition, opposed Ruby's petition. She alleged that
Ruby understated the value of their late mother's estate and acted with
"unconscionable bad faith" in the management thereof. Lilia prayed that
her mother's holographic will be disallowed and that she be appointed

as the Intestate Administratrix.
Lilia subsequently moved for the appointment of an Interim Special
Administrator of the estate of her late mother, praying that the Prudential
Bank & Trust Company-Ermita Branch be appointed as Interim Special
Administrator. The trial court granted the motion but designated Jose V.
Ferro (Senior Vice-President and Trust Officer, Trust Banking Group of
the Philippines National Bank) as the Special Administrator. Ferro,
however, declined the appointment.
The trial court then designated petitioner Atty. George S. Briones as
Special Administrator of the estate. Atty. Briones accepted the
appointment, took his oath of office, and started the administration of
the estate. The significant highlights of his administration are listed
below:
1. On November 22, 1999, the trial court directed the heirs of Luz
J. Henson to turn over the possession of all the properties of the
deceased to the Special Administrator.
2. On February 16, 2000, Atty. Briones moved that the trial court
approve Special Administrator's fees ofP75,000.00 per month.
These fees were in addition to the commission referred to in
Section 7, Rule 85 of the Revised Rules of Court. The trial court
granted the motion but reduced the fees to P60,000.00 per month,
retroactive to the date Atty. Briones assumed office.
3. Atty. Briones filed a Special Administrator's Report No. 1 dated
September 8, 2000 which contained an inventory of the properties
in his custody and a statement of the income received and the
disbursements made for the estate. The trial court issued an
Order dated March 5, 2001 approving the report.
4. On September 17, 2001, the heirs of Luz J. Henson submitted
a project of partition of the estate for the trial court's approval.
5. On January 8, 2002, Atty. Briones submitted the Special
Administrator's Final Report for the approval of the court. He
prayed that he be paid a commission of P97,850,191.26
representing eight percent (8%) of the value of the estate under
his administration.
6. The respondents opposed the approval of the final report and

prayed that they be granted an opportunity to examine the
documents, vouchers, and receipts mentioned in the statement of
income and disbursements. They likewise asked the trial court to
deny the Atty. Briones' claim for commission and that he be
ordered to refund the sum of P134,126.33 to the estate.
7. On February 21, 2002, the respondents filed an audit request
with the trial court. Atty. Briones filed his comment suggesting that
the audit be done by an independent auditor at the expense of the
estate.
8. In an Order dated March 12, 2002, the trial court granted the
request for audit and appointed the accounting firm Alba, Romeo
& Co. to conduct the audit.
9. The respondents moved for the reconsideration of Order dated
March 12, 2002, alleging that in view of the partition of the estate
there was no more need for a special administrator. They also
clarified that they were not asking for an external audit; they
merely wanted to be allowed to examine the receipts, vouchers,
bank statements, and other documents in support of the Special
Administrator's Final Report and to examine the Special
Administrator under oath.
10. The trial court handed down an Order dated April 13, 2002,
the dispositive portion of which reads:
IN VIEW OF THE FOREGOING, the court hereby:
1. Reiterates its designation of the accounting
firm of Messrs. Alba, Romeo & Co. to immediately
conduct an audit of the administration by Atty.
George S. Briones of the estate of the late Luz J.
Henson, the expenses of which shall be charged
against the estate.
2. Suspends the approval of the report of the
special administrator except the payment of his
commission, which is hereby fixed at 1.8% of the
value of the estate.
3. Directs the special administrator to deliver the

residue to the heirs in proportion to their shares. From
the shares of Lilia J. Henson-Cruz, there shall be
deducted the advances made to her.
IT IS SO ORDERED.
On April 29, 2002, respondents filed with the Court of Appeals (CA)
a Petition for Certiorari, Prohibition, andMandamus which was
raffled to the CA's Ninth Division and docketed as CA-G.R. SP No.
70349. The petition assailed the Order dated March 12, 2002 which
appointed accounting firm Alba, Romeo & Co. as auditors and the Order
dated April 3, 2002 which reiterated the appointment.
Prior the filing of the petition for certiorari in CA G.R. SP No. 70349, the
heirs of Luz Henzon filed on April 9, 2002 a Notice of Appeal with the
RTC assailing the Order dated April 3, 2003 insofar as it directed the
payment of Atty. Briones' commission. They subsequently filed their
record on appeal.
The trial court, however, denied the appeal and disapproved the record
on appeal on May 23, 2002 on the ground of forum shopping.
Respondents' motion for reconsideration was likewise denied.
On July 26, 2002, the respondents filed a Petition for Mandamus with
the appellate court, docketed as CA-G.R. SP No. 71844. They claimed
that the trial court unlawfully refused to comply with its ministerial duty to
approve their seasonably-perfected appeal. They refuted the trial court's
finding of forum shopping by declaring that the issues in their appeal
and in their petition for certiorari (CA-G.R. SP No. 70349) are not
identical, although both stemmed from the same Order of April 3, 2002.
The appeal involved the payment of the special administrator's
commission, while the petition for certiorari assailed the appointment of
an accounting firm to conduct an external audit.
On the other hand, the petitioner insisted that the respondents
committed forum shopping when they assailed the Order of April 3,
2002 twice, i.e., through a special civil action for certiorari and by
ordinary appeal. Forum shopping took place because of the identity of
the reliefs prayed for in the two cases. The petitioner likewise posited
that the trial court's error, if any, in dismissing the appeal on the ground
of forum shopping is an error of judgment, not of jurisdiction, and hence

is not correctible by certiorari.
On February 11, 2003, the Court of Appeals decided the respondents'
petition for Mandamus (CA-G.R. SP No. 71844) as follows:
WHEREFORE, the petition is GRANTED and respondent
Judge is directed to give due course to the appeal of
petitioners from the Order dated April 3, 2002 insofar as it
directed the payment of commission to private
respondent. [Emphasis supplied.]
SO ORDERED.
The Court of Appeals held that the trial court had neither the power nor
the authority to deny the appeal on the ground of forum shopping. It
pointed out that under Section 13, Rule 41 of the 1997 Rules of Civil
Procedure, as amended, the authority of the trial court to dismiss an
appeal, either motu proprio or on motion, may be exercised only if the
appeal was taken out of time or if the appellate court docket and other
fees were not paid within the reglementary period.
Atty. Briones moved for the reconsideration of this decision. The
appellate court denied his motion in its Resolution dated July 17, 2003.
Thereupon, he seasonably filed the present Petition for Review on
Certiorari on September 4, 2003 on the ground that the CA refused to
resolve the issue of forum shopping in its Decision of February 11, 2003
and its resolution of July 17, 2003 in CA-G.R. SP No. 71844 (Petition
for Mandamus to give due course to the appeal).
In the interim, on August 5, 2003, the Court of Appeals (Ninth Division)
handed down its Decision3 in CA-G.R. SP No. 70439 (Petition
for Certiorari, Prohibition, and Mandamus on the appointment of the
auditing firm), whose falloreads:
WHEREFORE, premises considered, the petition is GRANTED.
The assailed Orders dated March 12, 2002 and April 3, 2002 are
REVERSED and SET ASIDE. Public respondent Judge Artemio S.
Tipon is hereby COMMANDED to allow petitioner-heirs: 1) to
examine all the receipts, bank statements, bank passbook,
treasury bills, and other documents in support of the Special
Administrator's Final Report, as well as the Statement of the
Income and Disbusement Made from the Estate; and 2) to crossexamine private respondent Briones, before finally approving the
Special Administrator's Final Report. [Emphasis supplied.]
SO ORDERED.
THE PARTIES' POSITIONS
The petitioner faults the appellate court for refusing to resolve the forum
shopping issue in its Decision of February 11, 2003 and the Resolution
of July 17, 2003, thereby deciding the case in a way not in accord with
law or with applicable decisions of this Court. On the matter of forum
shopping, the appellate court simply stated in its decision that "In view
of the fact that respondent Judge had no power to disallow the appeal
on the ground of forum shopping, we deem it unnecessary to discuss
whether or not petitioners committed forum shopping." Neither did the
appellate court pass upon the issue of forum shopping in its ruling on
the petitioner's motion for reconsideration, stating that forum shopping
should be resolved either in the respondent's appeal or in their petition
for certiorari, prohibition, and mandamus (CA-G.R. SP No. 70349).
As basis, the petitioner cites Section 3 of this Court's Circular No. 28-91
which provides that "(a) Any violation of this Circular shall be a cause for
the summary dismissal of the multiple petition or complaint; and (b) Any
willful and deliberate forum shopping by any party and his lawyer with
the filing of multiple petitions and complaints to ensure favorable action
shall constitute direct contempt of court."
To prove that forum shopping transpired, the petitioner cites the
respondents' petition for certiorari, prohibition, and mandamus (CA-G.R.
SP No. 70349) that prayed for the annulment of the assailed Order of
April 3, 2002 in its entirety. To the petitioner, the attack on the entire
Order meant that even the payment of the special administrator's
commission - which was the subject of a separate appeal - was covered
by the petition. The petitioner further alleged that "to conceal the attempt
at forum shopping, respondents deliberately failed to mention the
existence of their ordinary appeal of the same Order of April 3, 2002 in
the certification against forum shopping attached to their petition
for certiorari, prohibition, and mandamus in CA-G.R. SP No. 70349."
The petitioner cites in support of his position the cases of Silahis
International, Inc. v. National Labor Relations Commission,4 Tantoy Sr.
v. Court of Appeals,5 and First Philippine International Bank v. Court of

Appeals.6 Silahis was cited for the proposition that only one recourse the appeal - should have been filed because the issues were interrelated. Tantoy, Sr. spoke of related causes or the same or substantially
the same reliefs in considering whether there is forum shopping. On the
other hand, First Philippine International Bank was cited to emphasize
that the key to a finding of forum shopping is the objective of the relief;
though differently worded, there is violation of the rule against forum
shopping if the objective in all the actions filed involves the same relief in this case, the setting aside of the Order of April 3, 2002. The
petitioner noted that the respondents had succeeded in obtaining this
relief in their petition for certiorari, prohibition, and mandamus (CA-G.R.
SP No. 70349) and the ruling in this petition already constituted res
judicata on the validity of the Order of April 3, 2002.
The respondents, for their part, claim that "the mere failure to specify in
the decision the contentions of the appellant and the reason for refusing
to believe them is not sufficient to hold the same contrary to the
provisions of the law and the Constitution."7 In support of the twin
recourses they took, they cite Argel v. Court of Appeals8where this Court
rejected the ground for objection similar to present petitioner's because
"the special civil action for certiorari and the appeal did not involve the
same issue." The respondents saw as ineffective the argument that the
petition for certiorari prayed for the annulment of the entire Order of April
3, 2002 since the petition and the appeal were very specific on the
portions of the Order that were being assailed. They pointed, too, to the
decision in CA-G.R. SP No. 70349 which only passed upon the issues
specified in the petition for certiorari, leaving untouched the issue that
they chose to raise via an appeal. As their last point, the respondents
claimed they saw no need to mention the pendency of the appeal in
their non-forum shopping certification because the appeal dealt with an
issue altogether different from the issues raised in the petition
for certiorari, citing for this purpose the specific wordings of Section 5,
Rule 7 of the Revised Rules of Court.
THE ISSUE
The sole issue presented to us for resolution is: Did the Court of
Appeals (Fifteenth Division) err in not dismissing the respondents'
petition for mandamus (CA-G.R. SP No. 71844) on the ground of
forum shopping?
THE COURT'S RULING

We find the petition devoid of merit as the discussions below will
show.
The Order of April 3, 2002
An examination of the RTC Order of April 3, 2002 shows that it resolved
three matters, namely: (1) the designation of the accounting firm of Alba,
Romeo & Co. to conduct an audit of the administration of Atty. George
S. Briones of the estate of Luz J. Henson, at the expense of the estate;
(2) the payment of the petitioner's commission as the estate's Special
Administrator; and (3) the directive to the petitioner to deliver the
residue of the estate to the heirs in their proportional shares. Of
these, only the first two are relevant to the present petition as the third
is the ultimate directive that will close the settlement of estate
proceedings.
The first part of the Order (the auditor's appointment) was the subject of
the petition for certiorari, prohibition, andmandamus that the
respondents filed before the appellate court (CA-G.R. SP No. 70349).
Whether this part is interlocutory or one that fully settles the case on the
merits can be answered by the test that this Court laid down in Mirada v.
Court of Appeals: "The test to ascertain whether or not an order is
interlocutory or final is - Does it leave something to be done in the
trial court with respect to the merits of the case? If it does, it is
interlocutory; if it does not it is final." 9
The terms of the trial court's order with respect to the appointment or
"designation" of the accounting firm is clear: "to immediately conduct an
audit of the administration by Atty. George S. Briones of the estate of
the late Luz J. Henson, the expenses of which shall be charged against
the estate."
To audit, is "to examine and verify (as the books of account of a
company or a treasurer's accounts)." An audit is the "formal or official
examination and verification of books of account (as for reporting on the
financial condition of a business at a given date or on the results of its
operations for a given period)."10 Black's Law Dictionary defines it no
differently: "a systematic inspection of accounting records involving
analyses, tests and confirmations; a formal or official examination and
authentication of accounts, with witnesses, vouchers, etc."11
Given that the subject matter of the audit is Atty. Briones' Final Report in
the administration of the estate of the decedent, its preparatory
character is obvious; it is a prelude to the court's final settlement and
distribution of the properties of the decedent to the heirs. In the context
of what the court's order accomplishes, the court's designation of an
auditor does not have the effect of ruling on the pending estate
proceeding on its merits (i.e., in terms of finally determining the extent of
the net estate of the deceased and distributing it to the heirs) or on the
merits of any independently determinable aspect of the estate
proceeding; it is only for purposes of confirming the accuracy of the
Special Administrator's Final Report, particularly of the reported charges
against the estate. In other words, the designation of the auditor did not
resolve Special Proceedings No. 99-92870 or any independently
determinable issue therein, and left much to be done on the merits of
the case. Thus, the April 3, 2002 Order of the RTC is interlocutory in
so far as it designated an accounting firm to audit the petitioner's
special administration of the estate.
In contrast with the interlocutory character of the auditor's appointment,
the second part is limited to the Special Administrator's commission
which was fixed at 1.8% of the value of the estate. To quote from the
Order: the court hereby. . . 2. Suspends the approval of the report of the
special administrator except the payment of his commission, which is
hereby fixed at 1.8% of the value of the estate." Under these terms, it is
immediately apparent that this pronouncement on an independently
determinable issue - the special administrator's commission - is the
court's definite and final word on the matter, subject only to whatever a
higher body may decide if an appeal is made from the court's ruling.
From an estate proceeding perspective, the Special Administrator's
commission is no less a claim against the estate than a claim that third
parties may make. Section 8, Rule 86 of the Rules recognizes this when
it provides for "Claim of Executor or Administrator Against an
Estate."12 Under Section 13 of the same Rule, the action of the court on
a claim against the estate "is appealable as in ordinary cases."13 Hence,
by the express terms of the Rules, the ruling on the extent of the
Special Administrator's commission - effectively, a claim by the
special administrator against the estate - is the lower court's last
word on the matter and one that is appealable.
Available Recourses against

the April 3, 2002 Order
We bring up the above distinctions between the first two parts of the
Order of April 3, 2002 to highlight that the directives or determinations
under the Order are not similarly final and appealable in character. In
this regard, Section 1, Rule 41 of the 1997 Rules of Rules of Court lays
down the rules on what are or are not subject to appeal and it provides:
Section 1. Subject of appeal. - An appeal may be taken from a
judgment or final order that completely disposes of the case or of
a particular matter therein when declared by these Rules to be
appealable.
No appeal shall be taken from:
xxx
(c) An interlocutory order.
xxx
In all the above instances where the judgment or final order is not
appealable, the aggrieved party may file an appropriate special
civil action under Rule 65.
Under these terms and taking into account the previous discussion of
the nature of the various parts of the Order of April 3, 2002, the lower
court's determination of the special administrator's commission is clearly
appealable while the auditor's appointment is not. The latter, under the
express terms of the above provision, can be the subject of an
"appropriate special civil action under Rule 65."
Rulings abound on when an appeal or a petition for certiorari is the
appropriate recourse to take from a lower court ruling.14 The twist in the
present case is that the losing party took two available recourses from
the same Order of the lower court: an appeal was made with respect to
that portion of the Order that is final in character, and a petition
for certiorari was taken against the portion that, again by its nature, is
interlocutory. It was under these circumstances that the petitioner
posited that forum shopping had been committed as the respondents
should have simply appealed, citing the interlocutory aspect as an error

in the appeal of the final aspect of the Order of April 3, 2002.
While the petitioner's position may be legally correct as a general rule, it
is not true in the present case considering the unique nature of the case
that gave rise to the present petition. The petitioner is the special
administrator in a settlement of estate, a special proceeding governed
by Rule 72 to 109 of the Revised Rules of Court. Section 1, Rule 109 in
part states:
Section 1. Orders or judgments from which appeals may be taken.
- An interested person may appeal in special proceedings from an
order or judgment rendered by a Court of First Instance or a
Juvenile Domestic Relations Court, where such order or
judgment:
xxxxxxxxx
(c) allows or disallows, in whole or in part, any claim against the
estate of a deceased person, or any claim presented on behalf of
the estate in offset to a claim against it;
(d) settles the account of an executor, administrator, trustee or
guardian;
(e) constitutes, in the proceedings relating to the settlement of the
estate of a deceased person x x x a final determination in the
lower court of the rights of the party appealing, except that no
appeal shall be allowed from the appointment of a special
administrator.
The rationale behind allowing more than one appeal in the same case is
to enable the rest of the case to proceed in the event that a separate
and distinct issue is resolved by the court and held to be final.15 In this
multi-appeal mode, the probate court loses jurisdiction only over the
subject matter of the appeal but retains jurisdiction over the special
proceeding from which the appeal was taken for purposes of further
remedies the parties may avail of.16
Where multi-appeals are allowed, we see no reason why a separate
petition for certiorari cannot be allowed on an interlocutory aspect of the
case that is separate and distinct as an issue from the aspect of the
case that has been adjudged with finality by the lower court. To
reiterate, the matter appealed matter was the special administrator's
commission, a charge that is effectively a claim against the estate under
administration, while the matter covered by the petition for certiorari was
the appointment of an auditor who would pass upon the special
administrator's final account. By their respective natures, these matters
can exist independently of one another and can proceed separately as
envisioned by the Rules under Rule 109.
The Forum Shopping Issue
Forum shopping is the act of a litigant who "repetitively availed of
several judicial remedies in different courts, simultaneously or
successively, all substantially founded on the same transactions and the
same essential facts and circumstances, and all raising substantially the
same issues either pending in or already resolved adversely by some
other court to increase his chances of obtaining a favorable decision if
not in one court, then in another."17 It is directly addressed and
prohibited under Section 5, Rule 7 of the 1997 Rules of Civil Procedure,
and is signaled by the presence of the following requisites: (1) identity of
parties, or at least such parties who represent the same interests in both
actions, (2) identity of the rights asserted and the relief prayed for, the
relief being founded on the same facts, and (3) identity of the two
preceding particulars such that any judgment rendered in the pending
case, regardless of which party is successful, would amount to res
judicata in the other.18In simpler terms, the test to determine whether a
party has violated the rule against forum shopping is where the
elements of litis pendentia are present or where a final judgment in one
case will amount to res judicata in the other.19
We see no forum shopping after considering these standards as
neither litis pendentia nor res judicata would result in one case from a
ruling in the other, notwithstanding that the appeal that subsequently
became the subject of CA-G.R. SP No. 71844 and the petition
for certiorari in CA-G.R. SP No. 70439 both stemmed from the trial
court's Order dated April 3, 2002. The simple reason - as already
discussed above - is that the petition and the appeal involve two
different and distinct issues so that a ruling in either one will not affect
the other.
Forum shopping is further negated when the nature of, and the
developments in, the proceedings are taken into account - i.e., an estate
proceedings where the Rules expressly allow separate appeals and

where the respondents have meticulously distinguished what aspect of
the RTC's single Order could be appealed and what could not. Thus, the
petitioner cannot take comfort in the cases it cited relating to forum
shopping; these cases, correct and proper in their own factual settings,
simply do not apply to the attendant circumstances and special nature
of the present case where the issues, although pertaining to the same
settlement of estate proceedings and although covered by the same
court order, differ in substance and in stage of finality and can be treated
independently of one another for the purposes of appellate review.
Did the Court of Appeals err in refusing to resolve the issue of forum
shopping?
Given our above discussion and conclusions, we do not see forum
shopping as an issue that would have made a difference in the
appellate court's ruling. Nor is it an issue that the appellate court should,
by law, have fully ruled upon on the merits. We agree with the
respondent that the appellate court is not required "to resolve every
contention and issue raised by a party if it believes it is not necessary to
do so to decide the case." 20
The reality though is that the appellate court did rule on the issue when
it stated that "it becomes unnecessary to discuss whether the latter
engaged in forum shopping. Apparently, the issue on forum shopping
was also raised in CA-G.R. SP No. 70349 and private respondent can
again raise the same in the appeal from the order dated April 3, 2002,
where the issue should be properly resolved."21 To the appellate court faced with the task of ruling on a petition for mandamus to compel the
trial court to allow the respondents' appeal - forum shopping was not an
issue material to whether the trial court should or should not be
compelled; what was material are the requisite filing of a notice of
appeal and record on appeal, and the question of whether these have
been satisfied. We cannot find fault with this reasoning as the forum
shopping issue - i.e., whether there was abuse of court processes in the
respondents' use of two recourses to assail the same trial court order has specific pertinence and relevance in the sufficiency and merits of
the recourses the respondents took.
In sum, we hold that the Court of Appeals did not err in refusing to
resolve forum shopping as an issue in its Decision in CA-G.R. SP No.
71844.
WHEREFORE, we hereby DENY the petition and,

accordingly, AFFIRM the Decision of the Court of Appeals dated
February 11, 2003 in CA-G.R. SP No. 71844. Costs against the
petitioner.
SO ORDERED.
ARTURO D. BRION
Associate Justice
WE CONCUR:
Associate Justice
Chairperson
Associate Justice
DANTE O. TINGA
Associate Justice

Associate Justice
ATTESTATION
I attest that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of
the Court's Division.
Associate Justice
Chairperson
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, and the Division
Chairperson's Attestation, it is hereby certified that the conclusions in
the above Decision were reached in consultation before the case was
assigned to the writer of the opinion of the Court's Division.
REYNATO S. PUNO
Chief Justice
Footnotes
1
Petition for Review on Certiorari under Rule 45 of the Revised

Rules of Court.
2
Rollo, pp. 44-51; penned by Associate Justice Marina L. Buzon,

with Associate Justice Josefina Guevara-Salonga and Associate
Justice Danilo B. Pine concurring.
3
Rollo, pp. 92-100; penned by Associate Justice B.A. Adefuin-De

la Cruz, with Associate Justice Jose L. Sabio, Jr. and Associate
Justice Hakim S. Abdulwahid concurring.
4
G.R. No. 104513, August 4, 1993, 225 SCRA 94.
G.R. No. 141427, April 20, 2001, 357 SCRA 329.
Air France v. Carrascoso, G.R, No. L-21438, September 28,

1966, 18 SCRA 155.
8
G.R. No. 128805, October 12, 1999, 316 SCRA 511.
G.R. No. L-33007, June 18, 1976, 71 SCRA 295.
10
Webster's Third International Dictionary (1993 ed.), p. 143.
11
Fifth Ed. (1979), p. 120.
12
Section 8. Claim of executor or administrator against an estate.

- If the executor or administrator has a claim against the estate he
represents, he shall give notice thereof in writing, to the court, and
the court shall appoint a special administrator, who shall, in the
adjustment of such claim, have the same power and be subject to
the same liability as the general administrator or executor in the
settlement of other claims. The court may order the executor or
administrator to pay the special administrator necessary funds to
defend such action.
13
Section 13. Judgment appealable. The judgment of the court

approving or disapproving a claim, shall be filed with the record of
the administration proceedings with notice to both parties, and is
appealable as in ordinary cases. A judgment against the executor
or administrator shall be that he pay, in due course of
administration, the amount ascertained to be due, and it shall not
create any lien upon the property of the estate, or give to the
judgment creditor any priority of payment.
14
See People v. Laguio, Jr., G.R. No. 128587, March 16, 2007,
518 SCRA 393.
15
Roman Catholic Archbishop of Manila v. Court of Appeals, G.R.

No. 111324, July 5, 1996, 258 SCRA 186.
16
Valarao v. Pascual, G.R. No. 150164, November 26, 2002, 392

SCRA 695.
17
Gatmaytan v. Court of Appeals, G. R. No. 123332, February 3,

1997, 267 SCRA 487. See also:Mondragon Leisure and Resorts
Corp. v. United Coconut Planters Bank, 427 SCRA 585 (2044),
citing T'Boli Agro-Industrial Development, Inc. (TADI) v. Solidapsi,
394 SCRA 269 (2002).
18
Hongkong & Shanghai Banking Corp. Ltd. v. Catalan, G.R. Nos.

159590-91, October 18, 2004, 440 SCRA 498, 513-514, citing
Phil. Commercial International Bank v. Court of Appeals, 406
SCRA 575 (2003).
19
Velasquez v. Hernandez, G.R. Nos. 150732 & 151095, August

31, 2004, 437 SCRA 357, 367, citingBangko Silangan
Development Bank v. Court of Appeals, 360 SCRA 322 (2001),
Phil. Economic Zone Authority v. Vianzon, 336 SCRA 309 (2000),

Progressive Development Corp. v. Court of Appeals, 301 SCRA
637 (1999).
20
Air France v. Carrascoso, supra note 7.
21
Rollo, pp. 54-55.

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 143365
December 4, 2008
GENEROSO SALIGUMBA, ERNESTO SALIGUMBA, and HEIRS OF SPOUSES VALERIA

SALIGUMBA AND ELISEO SALIGUMBA, SR., petitioners,
vs.
MONICA PALANOG, respondent.
DECISION
CARPIO, J.:
The Case
This is a petition for review of the Decision dated 24 May 2000 of the Regional Trial Court,
Branch 5, Kalibo, Aklan (RTC-Branch 5) in Civil Case No. 5288 for Revival of Judgment. The
case is an offshoot of the action for Quieting of Title with Damages in Civil Case No. 2570.
The Facts
Monica Palanog, assisted by her husband Avelino Palanog (spouses Palanogs), filed a
complaint dated 28 February 1977 for Quieting of Title with Damages against defendants,
spouses Valeria Saligumba and Eliseo Saligumba, Sr. (spouses Saligumbas), before the
Regional Trial Court, Branch 3, Kalibo, Aklan (RTC-Branch 3). The case was docketed as
Civil Case No. 2570. In the complaint, spouses Palanogs alleged that they have been in
actual, open, adverse and continuous possession as owners for more than 50 years of a
parcel of land located in Solido, Nabas, Aklan. The spouses Saligumbas allegedly prevented
them from entering and residing on the subject premises and had destroyed the barbed
wires enclosing the land. Spouses Palanogs prayed that they be declared the true and
rightful owners of the land in question.
When the case was called for pre-trial on 22 September 1977, Atty. Edilberto Miralles (Atty.
Miralles), counsel for spouses Saligumbas, verbally moved for the appointment of a
commissioner to delimit the land in question. Rizalino Go, Deputy Sheriff of Aklan, was
appointed commissioner and was directed to submit his report and sketch within 30
days.1 Present during the delimitation were spouses Palanogs, spouses Saligumbas, and
Ernesto Saligumba, son of spouses Saligumbas. 2
After submission of the Commissioners Report, spouses Palanogs, upon motion, were
granted 10 days to amend their complaint to conform with the items mentioned in the report. 3
Thereafter, trial on the merits ensued. At the hearing on 1 June 1984, only the counsel for
spouses Palanogs appeared. The trial court issued an order resetting the hearing to 15
August 1984 and likewise directed spouses Saligumbas to secure the services of another
counsel who should be ready on that date. 4 The order sent to Eliseo Saligumba, Sr. was
returned to the court unserved with the notation "PartyDeceased" while the order sent to
defendant Valeria Saligumba was returned with the notation "Party in Manila." 5
At the hearing on 15 August 1984, spouses Palanogs direct examination was suspended
and the continuation of the hearing was set on 25 October 1984. The trial court stated that
Atty. Miralles, who had not withdrawn as counsel for spouses Saligumbas despite his
appointment as Municipal Circuit Trial Court judge, would be held responsible for the case of
spouses Saligumbas until he formally withdrew as counsel. The trial court reminded Atty.
Miralles to secure the consent of spouses Saligumbas for his withdrawal. 6 A copy of this
order was sent to Valeria Saligumba but the same was returned unserved with the notation
"Party in Manila."7
The hearing set on 25 October 1984 was reset to 25 January 1985 and the trial court
directed that a copy of this order be sent to Eliseo Saligumba, Jr. at COA, PNB, Manila. 8
The presentation of evidence for spouses Palanogs resumed on 25 January 1985 despite
the motion of Atty. Miralles for postponement on the ground that his client was sick. The
exhibits were admitted and plaintiffs spouses Palanogs rested their case. Reception of
evidence for the defendants spouses Saligumbas was scheduled on 3, 4, and 5 June 1985. 9
On 3 June 1985, only spouses Palanogs and counsel appeared. Upon motion of the
spouses Palanogs, spouses Saligumbas were deemed to have waived the presentation of
their evidence.
On 3 August 1987, after a lapse of more than two years, the trial court considered the case
submitted for decision.
On 7 August 1987, RTC-Branch 3 rendered a judgment in Civil Case No. 2570 declaring
spouses Palanogs the lawful owners of the subject land and ordering spouses Saligumbas,
their agents, representatives and all persons acting in privity with them to vacate the
premises and restore possession to spouses Palanogs.
The trial court, in a separate Order dated 7 August 1987, directed that a copy of the courts
decision be furnished plaintiff Monica Palanog and defendant Valeria Saligumba.
Thereafter, a motion for the issuance of a writ of execution of the said decision was filed but
the trial court, in its Order dated 8 May 1997, ruled that since more than five years had
elapsed after the date of its finality, the decision could no longer be executed by mere
motion.
Thus, on 9 May 1997, Monica Palanog (respondent), now a widow, filed a Complaint seeking
to revive and enforce the Decision dated 7 August 1987 in Civil Case No. 2570 which she
claimed has not been barred by the statute of limitations. She impleaded petitioners
Generoso Saligumba and Ernesto Saligumba, the heirs and children of the spouses
Saligumbas, as defendants. The case was docketed as Civil Case No. 5288 before the RTCBranch 5.
Petitioner Generoso Saligumba, for himself and in representation of his brother Ernesto who
was out of the country working as a seaman, engaged the services of the Public Attorneys
Office, Kalibo, Aklan which filed a motion for time to allow them to file a responsive pleading.
Petitioner Generoso Saligumba filed his Answer 10alleging that: (1) respondent had no cause
of action; (2) the spouses Saligumbas died while Civil Case No. 2570 was pending and no
order of substitution was issued and hence, the trial was null and void; and (3) the court did
not acquire jurisdiction over the heirs of the spouses Saligumbas and therefore, the
judgment was not binding on them.
Meanwhile, on 19 December 1997, the trial court granted respondents motion to implead
additional defendants namely, Eliseo Saligumba, Jr. and Eduardo Saligumba, who are also
the heirs and children of spouses Saligumbas.11 They were, however, declared in default on
1 October 1999 for failure to file any responsive pleading. 12
The Trial Courts Ruling
On 24 May 2000, the RTC-Branch 5 rendered a decision in favor of respondent ordering the
revival of judgment in Civil Case No. 2570. The trial court ruled that the non-substitution of
the deceased spouses did not have any legal significance. The land subject of Civil Case No.
2570 was the exclusive property of defendant Valeria Saligumba who inherited the same
from her deceased parents. The death of her husband, Eliseo Saligumba, Sr., did not change
the complexion of the ownership of the property that would require his substitution. The
spouses Saligumbas children, who are the petitioners in this case, had no right to the
property while Valeria Saligumba was still alive. The trial court further found that when
defendant Valeria Saligumba died, her lawyer, Atty. Miralles, did not inform the court of the
death of his client. The trial court thus ruled that the non-substitution of the deceased
defendant was solely due to the negligence of counsel. Moreover, petitioner Ernesto
Saligumba could not feign ignorance of Civil Case No. 2570 as he was present during the
delimitation of the subject land. The trial court likewise held that the decision in Civil Case
No. 2570 could not be the subject of a collateral attack. There must be a direct action for the
annulment of the said decision.
Petitioners elevated the matter directly to this Court. Hence, the present petition.
The Courts Ruling
The instant case is an action for revival of judgment and the judgment sought to be revived
in this case is the decision in the action for quieting of title with damages in Civil Case No.
2570. This is not one for annulment of judgment.
An action for revival of judgment is no more than a procedural means of securing the
execution of a previous judgment which has become dormant after the passage of five years
without it being executed upon motion of the prevailing party. It is not intended to re-open
any issue affecting the merits of the judgment debtors case nor the propriety or correctness
of the first judgment.13 An action for revival of judgment is a new and independent action,
different and distinct from either the recovery of property case or the reconstitution case,
wherein the cause of action is the decision itself and not the merits of the action upon which
the judgment sought to be enforced is rendered. 14 Revival of judgment is premised on the
assumption that the decision to be revived, either by motion or by independent action, is
already final and executory.15
The RTC-Branch 3 Decision dated 7 August 1987 in Civil Case No. 2570 had been rendered
final and executory by the lapse of time with no motion for reconsideration nor appeal having
been filed. While it may be true that the judgment in Civil Case No. 2570 may be revived and
its execution may be had, the issue now before us is whether or not execution of judgment
can be issued against petitioners who claim that they are not bound by the RTC-Branch 3
Decision dated 7 August 1987 in Civil Case No. 2570.
Petitioners contend that the RTC-Branch 3 Decision of 7 August 1987 in Civil Case No. 2570
is null and void since there was no proper substitution of the deceased spouses Saligumbas
despite the trial courts knowledge that the deceased spouses Saligumbas were no longer
represented by counsel. They argue that they were deprived of due process and justice was
not duly served on them.
Petitioners argue that the trial court even acknowledged the fact of death of spouses
Saligumbas but justified the validity of the decision rendered in that case despite lack of
substitution because of the negligence or fault of their counsel. Petitioners contend that the
duty of counsel for the deceased spouses Saligumbas to inform the court of the death of his
clients and to furnish the name and address of the executor, administrator, heir or legal
representative of the decedent under Rule 3 presupposes adequate or active representation
by counsel. However, the relation of attorney and client was already terminated by the
appointment of counsel on record, Atty. Miralles, as Municipal Circuit Trial Court judge even
before the deaths of the spouses Saligumbas were known. Petitioners invoke the Order of 1
June 1984 directing the spouses Saligumbas to secure the services of another lawyer to
replace Atty. Miralles. The registered mail containing that order was returned to the trial court
with the notation that Eliseo Saligumba, Sr. was "deceased." Petitioners thus question the
decision in Civil Case No. 2570 as being void and of no legal effect because their parents
were not duly represented by counsel of record. Petitioners further argue that they have
never taken part in the proceedings in Civil Case No. 2570 nor did they voluntarily appear or
participate in the case. It is unfair to bind them in a decision rendered against their deceased
parents. Therefore, being a void judgment, it has no legal nor binding effect on petitioners.
Civil Case No. 2570 is an action for quieting of title with damages which is an action
involving real property. It is an action that survives pursuant to Section 1, Rule 87 16 as the
claim is not extinguished by the death of a party. And when a party dies in an action that
survives, Section 17 of Rule 3 of the Revised Rules of Court 17 provides for the procedure,
thus:
Section 17. Death of Party. - After a party dies and the claim is not thereby
extinguished, the court shall order, upon proper notice, the legal representative of
the deceased to appear and to be substituted for the deceased, within a period of
thirty (30) days, or within such time as may be granted. If the legal representative
fails to appear within said time, the court may order the opposing party to procure the
appointment of a legal representative of the deceased within a time to be specified
by the court, and the representative shall immediately appear for and on behalf of the
interest of the deceased. The court charges involved in procuring such appointment,
if defrayed by the opposing party, may be recovered as costs. The heirs of the
deceased may be allowed to be substituted for the deceased, without requiring the
appointment of an executor or administrator and the court may appoint guardian ad
litem for the minor heirs. (Emphasis supplied)
Under the express terms of Section 17, in case of death of a party, and upon proper notice, it
is the duty of the court to order the legal representative or heir of the deceased to appear for
the deceased. In the instant case, it is true that the trial court, after receiving
an informal notice of death by the mere notation in the envelopes, failed to order the
appearance of the legal representative or heir of the deceased. There was no court order for
deceaseds legal representative or heir to appear, nor did any such legal representative ever
appear in court to be substituted for the deceased. Neither did the respondent ever procure
the appointment of such legal representative, nor did the heirs ever ask to be substituted.
It appears that Eliseo Saligumba, Sr. died on 18 February 1984 while Valeria Saligumba died
on 2 February 1985. No motion for the substitution of the spouses was filed nor an order
issued for the substitution of the deceased spouses Saligumbas in Civil Case No. 2570. Atty.
Miralles and petitioner Eliseo Saligumba, Jr., despite notices sent to them to appear, never
confirmed the death of Eliseo Saligumba, Sr. and Valeria Saligumba. The record is bereft of
any evidence proving the death of the spouses, except the mere notations in the envelopes
enclosing the trial courts orders which were returned unserved.
Section 17 is explicit that the duty of the court to order the legal representative or heir to
appear arises only "upon proper notice." The notation "Party-Deceased" on the unserved
notices could not be the "proper notice" contemplated by the rule. As the trial court could not
be expected to know or take judicial notice of the death of a party without the proper
manifestation from counsel, the trial court was well within its jurisdiction to proceed as it did
with the case. Moreover, there is no showing that the courts proceedings were tainted with
irregularities.18
Likewise, the plaintiff or his attorney or representative could not be expected to know of the
death of the defendant if the attorney for the deceased defendant did not notify the plaintiff or
his attorney of such death as required by the rules. 19 The judge cannot be blamed for
sending copies of the orders and notices to defendants spouses in the absence of proof of
death or manifestation to that effect from counsel.20
Section 16, Rule 3 of the Revised Rules of Court likewise expressly provides:
SEC. 16. Duty of attorney upon death, incapacity or incompetency of party. Whenever a party to a pending case dies, becomes incapacitated or incompetent, it
shall be the duty of his attorney to inform the court promptly of such death, incapacity
or incompetency, and to give the name and residence of his executor, administrator,
guardian or other legal representative.
It is the duty of counsel for the deceased to inform the court of the death of his client. The
failure of counsel to comply with his duty under Section 16 to
inform the court of the death of his client and the non-substitution of such party will not
invalidate the proceedings and the judgment thereon if the action survives the death of such
party. The decision rendered shall bind the partys successor-in-interest. 21
The rules operate on the presumption that the attorney for the deceased party is in a better
position than the attorney for the adverse party to know about the death of his client and to
inform the court of the name and address of his legal representative. 22
Atty. Miralles continued to represent the deceased spouses even after the latters demise.
Acting on their behalf, Atty. Miralles even asked for postponement of the hearings and did not
even confirm the death of his clients nor his appointment as Municipal Circuit Trial Court
judge. These clearly negate petitioners contention that Atty. Miralles ceased to be spouses
Saligumbas counsel.
Atty. Miralles still remained the counsel of the spouses Saligumbas despite the alleged
appointment as judge. Records show that when Civil Case No. 2570 was called for trial on
25 October 1984, Atty. Miralles appeared and moved for a postponement. The 25 October
1984 Order reads:
ORDER
Upon petition of Judge Miralles who is still the counsel on record of this case and
who is held responsible for anything that will happen in this case, postpone the
hearing of this case to JANUARY 25, 1985 AT 8:30 in the morning. x x x 23
The trial court issued an Order dated 1 June 1984 directing the defendants to secure the
services of another counsel. This order was sent to Eliseo Saligumba, Sr. by registered mail
but the same was returned with the notation "Party-Deceased" while the notice to Valeria
Saligumba was returned with the notation "Party in Manila." 24Eliseo Saligumba, Sr. died on
18 February 1984. When Atty. Miralles appeared in court on 25 October 1984, he did not
affirm nor inform the court of the death of his client. There was no formal substitution. The
trial court issued an order resetting the hearing to 25 January 1985 and directed that a copy
of the order be furnished petitioner Eliseo Saligumba, Jr. at COA, PNB, Manila by registered
mail.25 When the case was called on 25 January 1985, Atty. Miralles sought for another
postponement on the ground that his client was sick and under medical treatment in
Manila.26 Again, there was no manifestation from counsel about the death of Eliseo
Saligumba, Sr. The trial court issued an Order dated 25 January 1985 setting the reception
of evidence for the defendants on 3, 4, and 5 June 1985. A copy of this order was sent to
Eliseo Saligumba, Jr. by registered mail. Nonetheless, as the trial court in Civil Case No.
5288 declared, the non-substitution of Eliseo Saligumba, Sr. did not have any legal
significance as the land subject of Civil Case No. 2570 was the exclusive property of Valeria
Saligumba who inherited it from her deceased parents.
This notwithstanding, when Valeria Saligumba died on 2 February 1985, Atty. Miralles again
did not inform the trial court of the death of Valeria Saligumba. There was no formal
substitution nor submission of proof of death of Valeria Saligumba. Atty. Miralles was remiss
in his duty under Section 16, Rule 3 of the Revised Rules of Court. The counsel of record is
obligated to protect his clients interest until he is released from his professional relationship
with his client. For its part, the court could recognize no other representation on behalf of the
client except such counsel of record until a formal substitution of attorney is effected. 27
An attorney must make an application to the court to withdraw as counsel, for the relation
does not terminate formally until there is a withdrawal of record; at least, so far as the
opposite party is concerned, the relation otherwise continues until the end of the
litigation.28 Unless properly relieved, the counsel is responsible for the conduct of the
case.29 Until his withdrawal shall have been approved, the lawyer remains counsel of record
who is expected by his client as well as by the court to do what the interests of his client
require. He must still appear on the date of hearing for the attorney-client relation does not
terminate formally until there is a withdrawal of record. 30
Petitioners should have questioned immediately the validity of the proceedings absent any
formal substitution. Yet, despite the courts alleged lack of jurisdiction over the persons of
petitioners, petitioners never bothered to challenge the same, and in fact allowed the
proceedings to go on until the trial court rendered its decision. There was no motion for
reconsideration, appeal or even an action to annul the judgment in Civil Case No. 2570.
Petitioners themselves could not feign ignorance of the case since during the pendency of
Civil Case No. 2570, petitioner Ernesto Saligumba, son of the deceased spouses, was
among the persons present during the delimitation of the land in question before the
Commissioner held on 5 November 1977. 31 Petitioner Eliseo Saligumba, Jr. was likewise
furnished a copy of the trial courts orders and notices. It was only the Answer filed by
petitioner Generoso Saligumba in Civil Case No. 5288 that confirmed the dates when the
spouses Saligumbas died and named the latters children. Consequently, Atty. Miralles was
responsible for the conduct of the case since he had not been properly relieved as counsel
of record. His acts bind his clients and the latters successors-in-interest.
In the present case for revival of judgment, the other petitioners have not shown much
interest in the case. Petitioners Eliseo Saligumba, Jr. and Eduardo Saligumba were declared
in default for failure to file their answer. Petitioner Ernesto Saligumba was out of the country
working as a seaman. Only petitioner Generoso Saligumba filed an Answer to the complaint.
The petition filed in this Court was signed only by petitioner Generoso Saligumba as
someone signed on behalf of petitioner Ernesto Saligumba without the latters authority to do
so.
WHEREFORE, we DENY the petition. We AFFIRM the Decision dated 24 May 2000 of the
Regional Trial Court, Branch 5, Kalibo, Aklan in Civil Case No. 5288. Costs against
petitioners.
SO ORDERED.
ANTONIO T. CARPIO
Associate Justice
WE CONCUR:
REYNATO S. PUNO
Chief Justice
Chairperson
RENATO C. CORONA
Associate Justice
ADOLFO S. AZCUNA
Associate Justice
DANTE O. TINGA
Associate Justice
CERTIFICATION
above Decision had been reached in consultation before the case was assigned to the writer
of the opinion of the Courts Division.
REYNATO S. PUNO
Chief Justice
Footnotes
As replacement of Justice Teresita J. Leonardo-De Castro who is on official leave
per Special Order No. 539.
*
Records of Civil Case No. 2570, p. 23.
Id. at 31, Commissioners Report.
Id. at 55.
Id. at 102.
Id. at 104-105.
Id. at 108.
Id. at 112.
Id. at 115.
Id. at 119-120.
10
Records of Civil Case No. 5288, pp. 10-12.
11
Id. at 25.
12
Id. at 49.
Panotes v. City Townhouse Development Corporation, G.R. No. 154739, 23

January 2007, 512 SCRA 269; Filipinas Investment and Finance Corporation v.
13
Intermediate Appellate Court, G.R. Nos. 66059-60, 4 December 1989, 179 SCRA
728; Azotes v. Blanco, 85 Phil. 90 (1949).
Juco v. Heirs of Toma Siy Chung Fu, G.R. No. 150233, 16 February 2005, 451
SCRA 464; Santana-Cruz v. Court of Appeals, 414 Phil. 47 (2001).
14
15
Baares II v. Balising, 384 Phil. 567 (2000).
16
Section 1, Rule 87 of the Revised Rules of Court provides:

SECTION 1. Actions which may and which may not be brought against
executor or administrator. - No action upon a claim for the recovery of money
or debt or interest thereon shall be commenced against the executor or
administrator; but actions to recover real or personal property, or an interest
therein, from the estate, or to enforce a lien thereon, and actions to recover
damages for an injury to person or property, real or personal, may be
commenced against him.
Spouses Eliseo Saligumba, Sr. and Valeria Saligumba died before the effectivity of
the 1997 Rules on Civil Procedure. Section 17, Rule 3 of the Rules of Court was
amended and is now Section 16, Rule 3 of the 1997 Rules on Civil Procedure which
reads:
17
Section 16. Death of a party; duty of counsel. - Whenever a party to a

pending action dies, and the claim is not thereby extinguished, it shall be the
duty of his counsel to inform the court within thirty (30) days after such death
of the fact thereof, and to give the name and address of his legal
representative or representatives. Failure of counsel to comply with this duty
shall be a ground for disciplinary action.
The heirs of the deceased may be allowed to be substituted for the
and the court may appoint a guardian ad litem for the minor heirs.
The court shall forthwith order said legal representative or representatives to
appear and be substituted within a period of thirty (30) days from notice.
If no legal representative is named by the counsel for the deceased party, or
if the one so named shall fail to appear within the specified period, the court
may order the opposing party, within a specified time, to procure the
appointment of an executor or administrator for the estate of the deceased
and the latter shall immediately appear for and on behalf of the deceased.
The court charges in procuring such appointment, if defrayed by the
opposing party, may be recovered as costs.
18
Florendo, Jr. v. Coloma, 214 Phil. 268 (1984).
19
Republic v. Bagtas, No. L-17474, 25 October 1962, 6 SCRA 262.
20
Ang Kek Chen v. Judge Andrade, 376 Phil. 136 (1999).
21
Benavidez v. Court of Appeals, 372 Phil. 615 (1999).
22
Heirs of Maximo Regoso v. CA, G.R. No. 91879, 6 July 1992, 211 SCRA 348.
23
24
Id. at 104-105.
25
Id. at 115.
26
Id. at 119.
27
Wack Wack Golf and Country Club, Inc. v. Court of Appeals, 106 Phil. 501 (1959).
28
Visitacion v. Manit, 137 Phil. 348 (1969).
Tumbagahan v. Court of Appeals, No. L-32684, 20 September 1988, 165 SCRA

485; Cortez v. Court of Appeals, 172 Phil. 400 (1978).
29
30
Orcino v. Gaspar, 344 Phil. 792 (1997).
31

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 175910
July 30, 2009
ATTY. ROGELIO E. SARSABA, Petitioner,

vs.
FE VDA. DE TE, represented by her Attorney-in-Fact, FAUSTINO
CASTAEDA, Respondents.
DECISION
DEL CASTILLO, J.:
Before us is a petition for review on certiorari1 with prayer for preliminary injunction assailing
the Order2 dated March 22, 2006 of the Regional Trial Court (RTC), Branch 19, Digos City,
Davao del Sur, in Civil Case No. 3488.
The facts, as culled from the records, follow.
On February 14, 1995, a Decision was rendered in NLRC Case No. RAB-11-07-00608-93
entitled, Patricio Sereno v. Teodoro Gasing/Truck Operator, finding Sereno to have been
illegally dismissed and ordering Gasing to pay him his monetary claims in the amount
of P43,606.47. After the Writ of Execution was returned unsatisfied, Labor Arbiter Newton R.
Sancho issued an Alias Writ of Execution 3 on June 10, 1996, directing Fulgencio R. Lavarez,
Sheriff II of the National Labor Relations Commission (NLRC), to satisfy the judgment award.
On July 23, 1996, Lavarez, accompanied by Sereno and his counsel, petitioner Atty. Rogelio
E. Sarsaba, levied a Fuso Truck bearing License Plate No. LBR-514, which at that time was
in the possession of Gasing. On July 30, 1996, the truck was sold at public auction, with
Sereno appearing as the highest bidder.4
Meanwhile, respondent Fe Vda. de Te, represented by her attorney-in-fact, Faustino
Castaeda, filed with the RTC, Branch 18, Digos, Davao del Sur, a Complaint 5 for recovery
of motor vehicle, damages with prayer for the delivery of the truck pendente lite against
petitioner, Sereno, Lavarez and the NLRC of Davao City, docketed as Civil Case No. 3488.
Respondent alleged that: (1) she is the wife of the late Pedro Te, the registered owner of the
truck, as evidenced by the Official Receipt6 and Certificate of Registration;7 (2) Gasing merely
rented the truck from her; (3) Lavarez erroneously assumed that Gasing owned the truck
because he was, at the time of the "taking,"8 in possession of the same; and (4) since neither
she nor her husband were parties to the labor case between Sereno and Gasing, she should
not be made to answer for the judgment award, much less be deprived of the truck as a
consequence of the levy in execution.
Petitioner filed a Motion to Dismiss9 on the following grounds: (1) respondent has no legal
personality to sue, having no real interests over the property subject of the instant complaint;
(2) the allegations in the complaint do not sufficiently state that the respondent has cause of
action; (3) the allegations in the complaint do not contain sufficient cause of action as against
him; and (4) the complaint is not accompanied by an Affidavit of Merit and Bond that would
entitle the respondent to the delivery of the tuck pendente lite.
The NLRC also filed a Motion to Dismiss10 on the grounds of lack of jurisdiction and lack of
cause of action.
Meanwhile, Lavarez filed an Answer with Compulsory Counterclaim and Third-Party
Complaint.11 By way of special and affirmative defenses, he asserted that the RTC does not
have jurisdiction over the subject matter and that the complaint does not state a cause of
action.
On January 21, 2000, the RTC issued an Order12 denying petitioner's Motion to Dismiss for
lack of merit.
In his Answer,13 petitioner denied the material allegations in the complaint. Specifically, he
cited as affirmative defenses that: respondent had no legal personality to sue, as she had no
interest over the motor vehicle; that there was no showing that the heirs have filed an
intestate estate proceedings of the estate of Pedro Te, or that respondent was duly
authorized by her co-heirs to file the case; and that the truck was already sold to Gasing on
March 11, 1986 by one Jesus Matias, who bought the same from the Spouses Te. Corollarily,
Gasing was already the lawful owner of the truck when it was levied on execution and, later
on, sold at public auction.
Incidentally, Lavarez filed a Motion for Inhibition,14 which was opposed15 by respondent.
On October 13, 2000, RTC Branch 18 issued an Order 16 of inhibition and directed the
transfer of the records to Branch 19. RTC Branch 19, however, returned the records back to
Branch 18 in view of the appointment of a new judge in place of Judge-designate Rodolfo A.
Escovilla. Yet, Branch 19 issued another Order17 dated November 22, 2000 retaining the
case in said branch.
Eventually, the RTC issued an Order18 dated May 19, 2003 denying the separate motions to
dismiss filed by the NLRC and Lavarez, and setting the Pre-Trial Conference on July 25,
2003.
On October 17, 2005, petitioner filed an Omnibus Motion to Dismiss the Case on the
following grounds:19 (1) lack of jurisdiction over one of the principal defendants; and (2) to
discharge respondent's attorney-in-fact for lack of legal personality to sue.
It appeared that the respondent, Fe Vda. de Te, died on April 12, 2005. 20
Respondent, through her lawyer, Atty. William G. Carpentero, filed an
Opposition,21 contending that the failure to serve summons upon Sereno is not a ground for
dismissing the complaint, because the other defendants have already submitted their
respective responsive pleadings. He also contended that the defendants, including herein
petitioner, had previously filed separate motions to dismiss the complaint, which the RTC
denied for lack of merit. Moreover, respondent's death did not render functus officio her right
to sue since her attorney-in-fact, Faustino Castaeda, had long testified on the complaint on
March 13, 1998 for and on her behalf and, accordingly, submitted documentary exhibits in
support of the complaint.
On March 22, 2006, the RTC issued the assailed Order 22 denying petitioner's aforesaid
motion.
Petitioner then filed a Motion for Reconsideration with Motion for Inhibition, 23 in which he
claimed that the judge who issued the Order was biased and partial. He went on to state that
the judge's husband was the defendant in a petition for judicial recognition of which he was
the counsel, docketed as Civil Case No. C-XXI-100, before the RTC, Branch 21, Bansalan,
Davao del Sur. Thus, propriety dictates that the judge should inhibit herself from the case.
Acting on the motion for inhibition, Judge Carmelita Sarno-Davin granted the same 24 and
ordered that the case be re-raffled to Branch 18. Eventually, the said RTC issued an
Order25 on October 16, 2006 denying petitioner's motion for reconsideration for lack of merit.
Hence, petitioner directly sought recourse from the Court via the present petition involving
pure questions of law, which he claimed were resolved by the RTC contrary to law, rules and
existing jurisprudence.26
There is a "question of law" when the doubt or difference arises as to what the law is on
certain state of facts, and which does not call for an examination of the probative value of the
evidence presented by the parties-litigants. On the other hand, there is a "question of fact"
when the doubt or controversy arises as to the truth or falsity of the alleged facts. Simply put,
when there is no dispute as to fact, the question of whether or not the conclusion drawn
therefrom is correct, is a question of law.27
Verily, the issues raised by herein petitioner are "questions of law," as their resolution rest
solely on what the law provides given the set of circumstances availing. The first issue
involves the jurisdiction of the court over the person of one of the defendants, who was not
served with summons on account of his death. The second issue, on the other hand,
pertains to the legal effect of death of the plaintiff during the pendency of the case.
At first brush, it may appear that since pure questions of law were raised, petitioner's resort
to this Court was justified and the resolution of the aforementioned issues will necessarily
follow. However, a perusal of the petition requires that certain procedural issues must initially
be resolved before We delve into the merits of the case.
Notably, the petition was filed directly from the RTC which issued the Order in the exercise of
its original jurisdiction. The question before Us then is: whether or not petitioner correctly
availed of the mode of appeal under Rule 45 of the Rules of Court.
Significantly, the rule on appeals is outlined below, to wit: 28
(1) In all cases decided by the RTC in the exercise of its original jurisdiction,
appeal may be made to the Court of Appeals by mere notice of appeal where the
appellant raises questions of fact or mixed questions of fact and law;
(2) In all cases decided by the RTC in the exercise of its original
jurisdiction where the appellant raises only questions of law, the appeal must be
taken to the Supreme Court on a petition for review oncertiorari under Rule 45.
(3) All appeals from judgments rendered by the RTC in the exercise of its appellate
jurisdiction, regardless of whether the appellant raises questions of fact, questions of
law, or mixed questions of fact and law, shall be brought to the Court of Appeals by
filing a petition for review under Rule 42.
Accordingly, an appeal may be taken from the RTC which exercised its original jurisdiction,
before the Court of Appeals or directly before this Court, provided that the subject of the
same is a judgment or final order that completely disposes of the case, or of a particular
matter therein when declared by the Rules to be appealable. 29The first mode of appeal, to be
filed before the Court of Appeals, pertains to a writ of error under Section 2(a), Rule 41 of the
Rules of Court, if questions of fact or questions of fact and law are raised or involved. On the
other hand, the second mode is by way of an appeal by certiorari before the Supreme Court
under Section 2(c), Rule 41, in relation to Rule 45, where only questions of law are raised or
involved.30
An order or judgment of the RTC is deemed final when it finally disposes of a pending
action, so that nothing more can be done with it in the trial court. In other words, the order or
judgment ends the litigation in the lower court.31 On the other hand, an order which does not
dispose of the case completely and indicates that other things remain to be done by the
court as regards the merits, is interlocutory. Interlocutory refers to something between the
commencement and the end of the suit which decides some point or matter, but is not a final
decision on the whole controversy.32
The subject of the present petition is an Order of the RTC, which denied petitioner's
Omnibus Motion to Dismiss, for lack of merit.
We have said time and again that an order denying a motion to dismiss is
interlocutory.33 Under Section 1(c), Rule 41 of the Rules of Court, an interlocutory order is not
appealable. As a remedy for the denial, a party has to file an answer and interpose as a
defense the objections raised in the motion, and then to proceed to trial; or, a party may
immediately avail of the remedy available to the aggrieved party by filing an appropriate
special civil action for certiorari under Rule 65 of the Revised Rules of Court. Let it be
stressed though that a petition for certiorari is appropriate only when an order has been
issued without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack
or excess of jurisdiction.
Based on the foregoing, the Order of the RTC denying petitioner's Omnibus Motion to
Dismiss is not appealable even on pure questions of law. It is worth mentioning that the
proper procedure in this case, as enunciated by this Court, is to cite such interlocutory order
as an error in the appeal of the case -- in the event that the RTC rules in favor of respondent
-- and not to appeal such interlocutory order. On the other hand, if the petition is to be treated
as a petition for review under Rule 45, it would likewise fail because the proper subject would
only be judgments or final orders that completely dispose of the case.34
Not being a proper subject of an appeal, the Order of the RTC is considered interlocutory.
Petitioner should have proceeded with the trial of the case and, should the RTC eventually
render an unfavorable verdict, petitioner should assail the said Order as part of an appeal
that may be taken from the final judgment to be rendered in this case. Such rule is founded
on considerations of orderly procedure, to forestall useless appeals and avoid
undue inconvenience to the appealing party by having to assail orders as they are
promulgated by the court, when all such orders may be contested in a single appeal.
In one case,35 the Court adverted to the hazards of interlocutory appeals:
It is axiomatic that an interlocutory order cannot be challenged by an appeal. Thus, it has
been held that "the proper remedy in such cases is an ordinary appeal from an adverse
judgment on the merits, incorporating in said appeal the grounds for assailing the
interlocutory order. Allowing appeals from interlocutory orders would result in the `sorry
spectacle of a case being subject of a counterproductive ping-pong to and from the
appellate court as often as a trial court is perceived to have made an error in any of its
interlocutory rulings. x x x.
Another recognized reason of the law in permitting appeal only from a final order or
judgment, and not from an interlocutory or incidental one, is to avoid multiplicity of appeals in
a single action, which must necessarily suspend the hearing and decision on the merits of
the case during the pendency of the appeal. If such appeal were allowed, trial on the merits
of the case would necessarily be delayed for a considerable length of time and compel the
adverse party to incur unnecessary expenses, for one of the parties may interpose as many
appeals as incidental questions may be raised by him, and interlocutory orders rendered or
issued by the lower court.36
And, even if We treat the petition to have been filed under Rule 65, the same is still
dismissible for violating the principle on hierarchy of courts. Generally, a direct resort to us in
a petition for certiorari is highly improper, for it violates the established policy of strict
observance of the judicial hierarchy of courts.37 This principle, as a rule, requires that
recourse must first be made to the lower-ranked court exercising concurrent jurisdiction with
a higher court. However, the judicial hierarchy of courts is not an iron-clad rule. A strict
application of the rule is not necessary when cases brought before the appellate courts do
not involve factual but legal questions.38
In the present case, petitioner submits pure questions of law involving the effect of nonservice of summons following the death of the person to whom it should be served, and the
effect of the death of the complainant during the pendency of the case. We deem it best to
rule on these issues, not only for the benefit of the bench and bar, but in order to prevent
further delay in the trial of the case. Resultantly, our relaxation of the policy of strict
observance of the judicial hierarchy of courts is warranted.
Anent the first issue, petitioner argues that, since Sereno died before summons was served
on him, the RTC should have dismissed the complaint against all the defendants and that the
same should be filed against his estate.
The Sheriff's Return of Service39 dated May 19, 1997 states that Sereno could not be served
with copy of the summons, together with a copy of the complaint, because he was already
dead.
In view of Sereno's death, petitioner asks that the complaint should be dismissed, not only
against Sereno, but as to all the defendants, considering that the RTC did not acquire
jurisdiction over the person of Sereno.
1avvph!1
Jurisdiction over a party is acquired by service of summons by the sheriff, his deputy or other
proper court officer, either personally by handing a copy thereof to the defendant or by
substituted service.40 On the other
hand, summons is a writ by which the defendant is notified of the action brought against him.
Service of such writ is the means by which the court may acquire jurisdiction over his
person.41
Records show that petitioner had filed a Motion to Dismiss on the grounds of lack of legal
personality of respondent; the allegations in the complaint did not sufficiently state that
respondent has a cause of action or a cause of action against the defendants; and, the
complaint was not accompanied by an affidavit of merit and bond. The RTC denied the
motion and held therein that, on the basis of the allegations of fact in the complaint, it can
render a valid judgment. Petitioner, subsequently, filed his answer by denying all the material
allegations of the complaint. And by way of special and affirmative defenses, he reiterated
that respondent had no legal personality to sue as she had no real interest over the property
and that while the truck was still registered in Pedro Te's name, the same was already sold to
Gasing.
Significantly, a motion to dismiss may be filed within the time for but before the filing of an
answer to the complaint or pleading asserting a claim. 42 Among the grounds mentioned is the
court's lack of jurisdiction over the person of the defending party.
As a rule, all defenses and objections not pleaded, either in a motion to dismiss or in an
answer, are deemed waived.43 The exceptions to this rule are: (1) when the court has no
jurisdiction over the subject matter, (2) when there is another action pending between the
parties for the same cause, or (3) when the action is barred by prior judgment or by statute of
limitations, in which cases, the court may dismiss the claim.
In the case before Us, petitioner raises the issue of lack of jurisdiction over the person of
Sereno, not in his Motion to Dismiss or in his Answer but only in his Omnibus Motion to
Dismiss. Having failed to invoke this ground at the proper time, that is, in a motion to dismiss,
petitioner cannot raise it now for the first time on appeal.
In fine, We cannot countenance petitioner's argument that the complaint against the other
defendants should have been dismissed, considering that the RTC never acquired
jurisdiction over the person of Sereno. The court's failure to acquire jurisdiction over one's
person is a defense which is personal to the person claiming it. Obviously, it is now
impossible for Sereno to invoke the same in view of his death. Neither can petitioner invoke
such ground, on behalf of Sereno, so as to reap the benefit of having the case dismissed
against all of the defendants. Failure to serve summons on Sereno's person will not be a
cause for the dismissal of the complaint against the other defendants, considering that they
have been served with copies of the summons and complaints and have long submitted their
respective responsive pleadings. In fact, the other defendants in the complaint were given
the chance to raise all possible defenses and objections personal to them in their respective
motions to dismiss and their subsequent answers.
We agree with the RTC in its Order when it resolved the issue in this wise:
As correctly pointed by defendants, the Honorable Court has not acquired jurisdiction over
the person of Patricio Sereno since there was indeed no valid service of summons insofar as
Patricio Sereno is concerned. Patricio Sereno died before the summons, together with a
copy of the complaint and its annexes, could be served upon him.
However, the failure to effect service of summons unto Patricio Sereno, one of the
defendants herein does not render the action DISMISSIBLE, considering that the three (3)
other defendants, namely, Atty. Rogelio E. Sarsaba, Fulgencio Lavares and the NLRC, were
validly served with summons and the case with respect to the answering defendants may still
proceed independently. Be it recalled that the three (3) answering defendants have
previously filed a Motion to Dismiss the Complaint which was denied by the Court.
Hence, only the case against Patricio Sereno will be DISMISSED and the same may be filed
as a claim against the estate of Patricio Sereno, but the case with respect to the three (3)
other accused will proceed.
Anent the second issue, petitioner moves that respondent's attorney-in-fact, Faustino
Castaeda, be discharged as he has no more legal personality to sue on behalf of Fe Vda.
de Te, who passed away on April 12, 2005, during the pendency of the case before the RTC.
When a party to a pending action dies and the claim is not extinguished, the Rules of Court
require a substitution of the deceased.44 Section 1, Rule 87 of the Rules of Court enumerates
the actions that survived and may be filed against the decedent's representatives as follows:
(1) actions to recover real or personal property or an interest thereon, (2) actions to enforce
liens thereon, and (3) actions to recover damages for an injury to a person or a property. In
such cases, a counsel is obliged to inform the court of the death of his client and give the
name and address of the latter's legal representative. 45
The rule on substitution of parties is governed by Section 16, 46 Rule 3 of the 1997 Rules of
Civil Procedure, as amended.
Strictly speaking, the rule on substitution by heirs is not a matter of jurisdiction, but a
requirement of due process. The rule on substitution was crafted to protect every party's right
to due process. It was designed to ensure that the deceased party would continue to be
properly represented in the suit through his heirs or the duly appointed legal representative
of his estate. Moreover, non-compliance with the Rules results in the denial of the right to
due process for the heirs who, though not duly notified of the proceedings, would be
substantially affected by the decision rendered therein. Thus, it is only when there is a denial
of due process, as when the deceased is not represented by any legal representative or heir,
that the court nullifies the trial proceedings and the resulting judgment therein. 47
In the case before Us, it appears that respondent's counsel did not make any manifestation
before the RTC as to her death. In fact, he had actively participated in the proceedings.
Neither had he shown any proof that he had been retained by respondent's legal
representative or any one who succeeded her.
However, such failure of counsel would not lead Us to invalidate the proceedings that have
long taken place before the RTC. The Court has repeatedly declared that failure of the
counsel to comply with his duty to inform the court of the death of his client, such that no
substitution is effected, will not invalidate the proceedings and the judgment rendered
thereon if the action survives the death of such party. The trial court's jurisdiction over the
case subsists despite the death of the party.48
The purpose behind this rule is the protection of the right to due process of every party to the
litigation who may be affected by the intervening death. The deceased litigants are
themselves protected as they continue to be properly represented in the suit through the duly
appointed legal representative of their estate.49
Anent the claim of petitioner that the special power of attorney 50 dated March 4, 1997
executed by respondent in favor of Faustino has become functus officio and that the agency
constituted between them has been extinguished upon the death of respondent, corollarily,
he had no more personality to appear and prosecute the case on her behalf.
Agency is extinguished by the death of the principal. 51 The only exception where the agency
shall remain in full force and effect even after the death of the principal is when if it has been
constituted in the common interest of the latter and of the agent, or in the interest of a third
person who has accepted the stipulation in his favor.52
A perusal of the special power of attorney leads us to conclude that it was constituted for the
benefit solely of the principal or for respondent Fe Vda. de Te. Nowhere can we infer from
the stipulations therein that it was created for the common interest of respondent and her
attorney-in-fact. Neither was there any mention that it was to benefit a third person who has
accepted the stipulation in his favor.
On this ground, We agree with petitioner. However, We do not believe that such ground
would cause the dismissal of the complaint. For as We have said, Civil Case No. 3488,
which is an action for the recovery of a personal property, a motor vehicle, is an action that
survives pursuant to Section 1, Rule 87 of the Rules of Court. As such, it is not extinguished
by the death of a party.
In Gonzalez v. Philippine Amusement and Gaming Corporation,53 We have laid down the
criteria for determining whether an action survives the death of a plaintiff or petitioner, to wit:
x x x The question as to whether an action survives or not depends on the nature of the
action and the damage sued for. If the causes of action which survive the wrong complained
[of] affects primarily and principally property and property rights, the injuries to the person
being merely incidental, while in the causes of action which do not survive the injury
complained of is to the person the property and rights of property affected being incidental. x
xx
Thus, the RTC aptly resolved the second issue with the following ratiocination:
While it may be true as alleged by defendants that with the death of Plaintiff, Fe Vda. de Te,
the Special Power of Attorney she executed empowering the Attorney-in-fact, Faustino
Castaeda to sue in her behalf has been rendered functus officio, however, this Court
believes that the Attorney-in-fact had not lost his personality to prosecute this case.
It bears stressing that when this case was initiated/filed by the Attorney-in-fact, the plaintiff
was still very much alive.
Records reveal that the Attorney-in-fact has testified long before in behalf of the said plaintiff
and more particularly during the state when the plaintiff was vehemently opposing the
dismissal of the complainant. Subsequently thereto, he even offered documentary evidence
in support of the complaint, and this court admitted the same. When this case was initiated,
jurisdiction was vested upon this Court to try and hear the same to the end. Well-settled is
the rule to the point of being elementary that once jurisdiction is acquired by this Court, it
attaches until the case is decided.
Thus, the proper remedy here is the Substitution of Heirs and not the dismissal of this case
which would work injustice to the plaintiff.
SEC. 16, RULE 3 provides for the substitution of the plaintiff who dies pending hearing of the
case by his/her legal heirs. As to whether or not the heirs will still continue to engage the
services of the Attorney-in-fact is another matter, which lies within the sole discretion of the
heirs.
In fine, We hold that the petition should be denied as the RTC Order is interlocutory; hence,
not a proper subject of an appeal before the Court. In the same breath, We also hold that, if
the petition is to be treated as a petition for certiorari as a relaxation of the judicial hierarchy
of courts, the same is also dismissible for being substantially insufficient to warrant the Court
the nullification of the Order of the RTC.
Let this be an occasion for Us to reiterate that the rules are there to aid litigants in
prosecuting or defending their cases before the courts. However, these very rules should not
be abused so as to advance one's personal purposes, to the detriment of orderly
administration of justice. We can surmise from the present case herein petitioner's
manipulation in order to circumvent the rule on modes of appeal and the hierarchy of courts
so that the issues presented herein could be settled without going through the established
procedures. In Vergara, Sr. v. Suelto, 54 We stressed that this should be the constant policy
that must be observed strictly by the courts and lawyers, thus:
x x x. The Supreme Court is a court of last resort, and must so remain if it is to satisfactorily
perform the functions assigned to it by the fundamental charter and immemorial tradition. It
cannot and should not be burdened with the task of dealing with causes in the first instance.
Its original jurisdiction to issue the so-called extraordinary writs should be exercised only
where absolutely necessary or where serious and important reasons exist therefor. Hence,
that jurisdiction should generally be exercised relative to actions or proceedings before the
Court of Appeals, or before constitutional or other tribunals, bodies or agencies whose acts
for some reason or another are not controllable by the Court of Appeals. Where the issuance
of an extraordinary writ is also within the competence of the Court of Appeals or a Regional
Trial Court, it is in either of these courts that the specific action for the writs procurement
must be presented. This is and should continue to be the policy in this regard, a policy that
courts and lawyers must strictly observe.55
WHEREFORE, premises considered, the Petition is DENIED. The Order dated March 22,
2006 of the Regional Trial Court, Branch 19, Digos, Davao del Sur in Civil Case No. 3488, is
hereby AFFIRMED. Costs against the petitioner.
SO ORDERED.
DIOSDADO M. PERALTA
Associate Justice
WE CONCUR:
Associate Justice
Chairperson
Associate Justice
PRESBITERIO J. VELASCO, JR.

Associate Justice

Associate Justice
ATTESTATION
Associate Justice
Third Division, Chairperson
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution and the Division Chairpersons
Attestation, I certify that the conclusions in the above Decision were reached in consultation
before the case was assigned to the writer of the opinion of the Courts Division.
REYNATO S. PUNO
Chief Justice
Footnotes
1
Pursuant to Rule 45 of the 1997 Rules of Civil Procedure; rollo, pp. 11-26.
Penned by Judge Carmelita Sarno-Davin; id. at 33-34.
Records, pp. 76-78.
Certificate of Sale; id. at 45.
Records, pp. 2-7.
Annex "B" of the Complaint, id. at 11.
Annex "C" of the Complaint, id. at 12.
Extract from the Police Blotter of the Kiblawan Municipal Police Office, dated April 1,
1997, Annex "D" of the Complaint, id. at 13.
8
Records, pp. 16-26.
10
Id. at 62-65.
11
Id. at 92-98.
12
Penned by Judge Rodolfo A. Escovilla; id. at 175-177.
13
14
Id. at 206-210.
15
Id. at 212-213; 216-217.
16
Id. at 218.
17
Id. at 228.
18
Id. at 246-248.
19
Rollo, pp. 56-58.
20
Named as Prescilla Suarez Te in her Death Certificate, records, p. 305.
21
Rollo, pp. 308-310.
22
Supra note 2.
23
Rollo, pp. 36-42.
24
Order dated August 1, 2006; id. at 46-48.
25
Rollo, p. 50.
26
Id. at 20.
27
Cucueco v. Court of Appeals, 484 Phil. 254, 264 (2004).
Sevilleno v. Carilo, G.R. No. 146454, September 14, 2007, 533 SCRA 385, 388,
citing Macawiwili Gold Mining and Development Co., Inc. v. Court of Appeals, 297
SCRA 602 (1998). Significantly, under the Revised Rules on Criminal Procedure, all
criminal cases, where the penalty imposed by the RTC is death,reclusion perpetua or
life imprisonment, are now appealed before the Court of Appeals, instead of directly
before this Court on automatic review, which new procedure was in accordance with
the pronouncement inPeople v. Mateo (G.R. Nos. 147678-87, July 7, 2007, 433
SCRA 640).
28
29
1997 Rule of Civil Procedure (as amended), Rule 41, Sec. 1.
First Bancorp, Inc. v. Court of Appeals, G. R. No. 151132, June 22, 2006, 492
SCRA 221, 235, citing Rule 41, Section 2, 1997 Rules of Civil Procedure, as
amended.
30
Madrigal Transport, Inc. v. Lapanday Holdings Corporation, G.R. No. 156067,

August 1, 2004, 436 SCRA 123, 132.
31
Philippine Computer Solutions, Inc. v. Hernandez, G.R. No. 168776, July 17, 2007,
527 SCRA 809, 824.
32
Mondragon Leisure and Resorts Corporation v. United Coconut Planters Bank, 471
Phil. 570, 574 (2004).
33
De Castro v. Fernandez, G.R. No. 155041, February 14, 2007, 515 SCRA 682,
686.
34
Philippine Computer Solutions, Inc. v. Hernandez, supra note 32, at 825, citing Go
v. Court of Appeals, 297 SCRA 574, 581-582 (1998).
35
Judy Anne L. Santos v. People of the Philippines and Bureau of Internal Revenue,
G.R. No. 173176, August 26, 2008.
36
37
Pacoy v. Cajigal, G.R. No. 157472, September 28, 2007, 534 SCRA 338, 346.
38
Rogelio Z. Bagabuyo v. Comelec, G.R. No. 176970, December 8, 2008.
39
Records, p. 49.
St. Aviation Services Co., Pte., Ltd. v. Grand International Airways, Inc., G.R. No.
140288, October 23, 2006, 505 SCRA 30, 36.
40
41
Casimina v. Legaspi, G.R. No. 147530, June 29, 2005, 462 SCRA 171, 177-178.
42
1997 Rules of Civil Procedure (as amended), Rule 16, Sec. 1(a).
43
1997 Rules of Civil Procedure (as amended), Rule 9, Sec. 1.
De la Cruz v. Joaquin, G.R. No. 162788, July 28, 2005, 464 SCRA 576, 583. See
also Board of Liquidators v. Heirs of M. Kalaw et al., 127 Phil. 399, 414 (1967).
44
45
Napere v. Barbarona, G.R. No. 160426, January 31, 2008, 543 SCRA 376, 381.
SEC. 16. Death of party; duty of counsel. - Whenever a party to a pending action
dies, and the claim is not thereby extinguished, it shall be the duty of his counsel to
inform the court within thirty (30) days after such death of the fact thereof, and to give
the name and address of his legal representative or representatives. Failure of
counsel to comply with this duty shall be a ground for disciplinary action.
46
The heirs of the deceased may be allowed to be substituted for the

and the court may appoint a guardian ad litem for the minor heirs.
The court shall forthwith order said legal representative or representatives to
appear and be substituted within a period of thirty (30) from notice. If no legal
representative is named by the counsel for the deceased party, or if the one
so named shall fail to appear within the specified period, the court may order
the opposing party, within a specified time, to procure the appointment of an
executor or administrator for the estate of the deceased and the latter shall
immediately appear for and on behalf of the deceased. The court charges in
procuring such appointment, if defrayed by the opposing party, may be
recovered as costs.
47
Napere v. Barbona, supra note 45, at 382.
48
Id.
49
Sumaljag v. Literato, G.R. No. 149787, June 18, 2008, 555 SCRA 53, 62.
50
Records, pp. 9-10.
51
New Civil Code, Article 1919 (3).
52
New Civil Code, Article 1930.
53
G.R. No. 144891, May 27, 2004, 429 SCRA 533, 540.
54
G.R. No. L-74766, December 21, 1987, 156 SCRA 753.
55

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JAO vs.

NITTSCHER vs. NITTSCHER

THE CA ERRED IN CONCLUDING THAT THE PETITIONER WAS NOT DEPRIVED

SEC. 4. Heirs, devisees, legatees, and executors to be notified by mail or personally.

CA rollo, pp. 81-85. Penned by Judge Lucia Violago Isnani.

Civil Code, Article 838.

Republic of the Philippines

ALONZO Q. ANCHETA, Petitioner,

ROMEO J. CALLEJO, SR.

CA rollo, pp. 84-88.

CA rollo, pp. 93-94.

RTC Order dated December 6, 1991, CA rollo, p. 48.

CA rollo, pp. 117-121.

Penned by Associate Justice Fermin A. Martin, Jr. (retired), and concurred in by

Reyes v. Barretto-Datu, 125 Phil 501 (1967).

89 Phil. 730 (1951).

Ybaez v. Court of Appeals, 323 Phil. 643 (1996).

Stilianpulos v. The City of Legaspi, 374 Phil. 879 (1999).

Article 1391, Civil Code.

Rollo, p. 46, 183.

332 Phil. 948 (1996).

Teodoro v. Court of Appeals, 437 Phil. 336 (2002).

Llorente v. Court of Appeals, 399 Phil. 342 (2000).

Bohanan v. Bohanan, 106 Phil. 997 (1960).

426 Phil. 111 (2002).

CA rollo, pp. 551-553.

Pael v. Court of Appeals, 382 Phil. 222 (2000).

Supra., Bohanan case, note 38.

27 Phil. 209 (1914).

126 Phil. 726 (1967).

150-B Phil. 140 (1972).

Republic of the Philippines

CONCHITA CARPIO MORALES

Annex "B", Petition; Rollo, pp. 218-221.

Annex "C" Petition, Rollo, p. 232 et seq.

Rollo, pp. 243 et seq.

T.S.N, August 14, 1998, p. 34.

Son of Demetrio Angeles, Franciscos brother.

Employed as auto mechanic by Liberty Taxi Corporation where Francisco was

A former town mate and employee of Francisco.

Rollo, pp. 421 et seq.

Rollo, pp. 458 et seq.

See Note #1, supra.

See Note # 11, supra.

276 SCRA 582 [1997].

Page 15 of the CA Decision, Rollo, p. 206.

Tison vs. Court of Appeals, 276 SCRA 582 [1997].

Lim Tanhu vs. Ramolete, 66 SCRA 425 [1975].

TSN, Sept. 18, 1998, p. 8; TSN Jan. 19, 1999, p. 4.

TSN Oct. 29, 1998 pp. 43 & 47.

Art. 35 (4) and 41, Family Code.

Sec. 23. Public documents as evidence. Documents consisting of entries in

Reyes vs. Court of Appeals, 135 SCRA 439 [1985].

Rollo, pp. 134-135.

Sayson vs. Court of Appeals, 205 SCRA 321 [1999].

Crisolo vs. Macadaeg, 94 Phil.862 [1954].

Per Associate Justice Renato C. Dacudao, concurred in by Associate Justices

The rule on conclusiveness of judgment precludes the relitigation of particular facts

Carlet vs. Court of Appeals, 275 SCRA 97 [1997].

See Note #10, supra.

Ventura vs. Ventura, 160 SCRA 810 [1988].

Tavera vs. El Hogar Filipino, Inc. 98 Phil. 481 [1980].