G.R. No.

165554

July 26, 2010

LAZARO
PASCO
and
LAURO
PASCO, Petitioners,
vs.
HEIRS OF FILOMENA DE GUZMAN, represented by CRESENCIA DE GUZMANPRINCIPE, Respondents.

1) To represent us on all matters concerning the intestate estate of our

deceased sister, Filomena de Guzman;

DECISION
DEL CASTILLO, J.:
No court should shield a party from compliance with valid obligations based on wholly
unsubstantiated claims of mistake or fraud. Having refused to abide by a compromise
agreement, the aggrieved party may either enforce it or regard it as rescinded and
insist upon the original demand.
This Petition for Review on Certiorari1 assails the May 13, 2004 Decision2 of the Court
of Appeals (CA) and its October 5, 2004 Resolution 3 in CA-G.R. SP No. 81464 which
dismissed petitioners appeal and affirmed the validity of the parties Compromise
Agreement.
Factual Antecedents
4

The present petition began with a Complaint for Sum of Money and Damages filed
on December 13, 2000 by respondents, the heirs of Filomena de Guzman (Filomena),
represented by Cresencia de Guzman-Principe (Cresencia), against petitioners Lauro
Pasco (Lauro) and Lazaro Pasco (Lazaro). The case was filed before the Municipal
Trial Court (MTC) of Bocaue, Bulacan, and docketed as Civil Case No. MM-3191.5
6

In their Complaint, herein respondents alleged that on February 7, 1997, petitioners

obtained a loan in the amount of P140,000.00 from Filomena (now deceased). To
secure the petitioners loan, Lauro executed a chattel mortgage on his Isuzu Jeep in
favor of Filomena. Upon her death, her heirs sought to collect from the petitioners, to
no avail. Despite numerous demands, petitioners refused to either pay the balance of
the loan or surrender the Isuzu Jeep to the respondents. Thus, respondents were
constrained to file the collection case to compel the petitioners to pay the principal
amount of P140,000.00 plus damages in the amount of 5% monthly interest from
February 7, 1997, 25% attorneys fees, exemplary damages, and expenses of
litigation.

Page 1 of 37

Filomenas heirs, consisting of Avelina de Guzman-Cumplido, Cecilia de Guzman,

Rosita de Guzman, Natividad de Guzman, and Cresencia de Guzman-Principe,
authorized Cresencia to act as their attorney-in-fact through a Special Power of
Attorney7 (SPA) dated April 6, 1999. The SPA authorized Cresencia to do the
following on behalf of the co-heirs:

2) To file cases for collection of all accounts due said Filomena de Guzman
or her estate, including the power to file petition for foreclosure of mortgaged
properties;
3) To do and perform all other acts necessary to carry out the powers
hereinabove conferred.
During the pre-trial of the case on February 15, 2002, the parties verbally agreed to
settle the case. On February 21, 2002, the parties jointly filed a Compromise
Agreement8 that was signed by the parties and their respective counsel. Said
Compromise Agreement, approved by the MTC in an Order9 dated April 4, 2002,
contained the following salient provisions:
1. That [petitioners] admit their principal loan and obligation to the
[respondents] in the sum of One Hundred Forty Thousand Pesos
(P140,000.00) Philippine currency; in addition to the incidental and other
miscellaneous expenses that they have incurred in the pursuit of this case,
in the further sum of P18,700.00;
2. That, [petitioners] undertake to pay to the [respondents] their
aforementioned obligations, together with attorneys fees equivalent to ten
percentum (10%) of the total sum thereof, directly at the BULACAN OFFICE
of the [respondents] counsel, located at No. 24 Hornbill Street, St. Francis
Subdivision, Bo. Pandayan, Meycauayan, Bulacan, WITHOUT NEED OF
FURTHER DEMAND in the following specific manner, to wit:
P60,000.00 to be paid on or before May 15, 2002
P10,000.00 monthly payments thereafter, starting June 15, 2002
up to and until the aforementioned obligations shall have been fully
paid;

3. That, provided that [petitioners] shall truely [sic] comply with the foregoing
specifically agreed manner of payments, [respondents] shall forego and
waive all the interests charges of 5% monthly from February 7, 1998 and the
25% attorneys fees provided for in Annex "AA" of the Complaint;

respondents. Thus, the Compromise Agreement merely reduced the parties

agreement into writing.

4. In the event of failure on the part of the [petitioners] to comply with any of
the specific provisions of this Compromise Agreement, the [respondents]
shall be entitled to the issuance of a "Writ of Execution" to enforce the
satisfaction of [petitioners] obligations, as mentioned in paragraph 1,
together with the 5% monthly interests charges and attorneys fees
mentioned in paragraph 3 thereof.10

The RTC initially granted petitioners prayer for the issuance of a Temporary
Restraining Order (TRO)19 on November 18, 2002, and later issued a preliminary
injunction in an Order 20 dated December 10, 2002, primarily on the ground that the
SPA did not specifically authorize Cresencia to settle the case. However, Presiding
Judge Herminia V. Pasamba later inhibited herself,21 so the case was re-raffled to
Branch 6, presided over by Judge Manuel D.J. Siayngo.22 The grant of the preliminary
injunction was thus reconsidered and set aside in an Order23dated May 15, 2003. In
the same Order, the RTC dismissed the petition and held that (1) the MTC had
jurisdiction over the subject matter; (2) Cresencia was authorized to institute the
action and enter into a Compromise Agreement on behalf of her co-heirs; and (3) the
MTCs approval of the Compromise Agreement was not done in a capricious,
whimsical, or arbitrary manner; thus, petitioners resort to certiorari under Rule 65 was
improper. Petitioners Motion for Reconsideration24 was denied,25 hence they sought
recourse before the CA.

Ruling of the Municipal Trial Court

Unfortunately, this was not the end of litigation. On May 2, 2002, petitioners filed a
verified Motion to Set Aside Decision11 alleging that the Agreement was written in a
language not understood by them, and the terms and conditions thereof were not fully
explained to them. Petitioners further questioned the MTCs jurisdiction, arguing that
the total amount allegedly covered by the Compromise Agreement amounted
to P588,500.00, which exceeded the MTCs P200,000.00 jurisdictional limit. In an
Order12 dated June 28, 2002, the MTC denied the motion; it also granted Cresencias
prayer for the issuance of a writ of execution. The writ of execution 13 was
subsequently issued on July 3, 2002. Petitioners Motion for Reconsideration and to
Quash Writ/Order of Execution14 dated August 1, 2002 was denied by the MTC in an
Order15 dated September 5, 2002.

Ruling of the Regional Trial Court

Ruling of the Court of Appeals

In its Decision26 dated May 13, 2004 and Resolution27 dated October 5,
2004, the CA dismissed petitioners appeal, and held that:

Undeterred, on October 10, 2002, petitioners filed a Petition for Certiorari and
Prohibition with Application for Temporary Restraining Order/Preliminary
Injunction16 before the Regional Trial Court (RTC) of Bocaue. The case was raffled to
Branch 82,17 and docketed as Civil Case No. 764-M-2002. In their petition, petitioners
argued that the MTC gravely abused its discretion in approving the Compromise
Agreement because (1) the amount involved was beyond the jurisdiction of the MTC;
(2) the MTC failed to ascertain that the parties fully understood the contents of the
Agreement; (3) Crescencia had no authority to represent her co-heirs because
Filomenas estate had a personality of its own; and (4) the Compromise Agreement
was void for failure of the judge and Cresencia to explain the terms and conditions to
the petitioners.

1) the MTC had jurisdiction, since the principal amount of the loan only
amounted to P140,000.00;
2) Cresencia was duly authorized by her co-heirs to enter into the
Compromise Agreement;
3) Petitioners improperly sought recourse before the RTC through a Petition
for Certiorari under Rule 65, when the proper remedy was a Petition for
Relief from Judgment under Rule 38.
Issues

18

In their Comment dated October 29, 2002, respondents argued that (1) the principal
claim of P140,000.00 was within the MTCs jurisdiction; and (2) the records reveal
that it was the petitioners themselves, assisted by their counsel, who proposed the
terms of the settlement, which offer of compromise was accepted in open court by the

Page 2 of 37

Before us, petitioners claim that, first, they correctly resorted to the remedy
of certiorari under Rule 65; second, the RTC gravely erred in dismissing their Petition
for Certiorari and Prohibition, when the matter under consideration was merely the

propriety of the grant of the preliminary injunction; and third, that the SPA did not
validly authorize Cresencia to enter into the Compromise Agreement on behalf of her
co-heirs.

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.

Our Ruling
We deny the petition.
The MTC had jurisdiction over the case.
It bears stressing that the question of the MTCs jurisdiction has not been raised
before this Court; hence, petitioners appear to have admitted that the MTC had
jurisdiction to approve the Compromise Agreement. In any event, it is beyond dispute
that the Judiciary Reorganization Act of 1980, or Batas Pambansa (BP) Blg. 129,28 as
amended by Republic Act No. 7691, 29 fixes the MTCs jurisdiction over cases where
"the demand does not exceed Two hundred thousand pesos (P200,000.00) exclusive
of interest, damages of whatever kind, attorney's fees, litigation expenses, and
costs."30 Thus, respondents initiatory complaint, covering the principal amount
ofP140,000.00, falls squarely within the MTCs jurisdiction.
Petitioners properly resorted to the special civil action of certiorari.
On the first question, the CA held that the proper remedy from the MTCs Order
approving the Compromise Agreement was a Petition for Relief from Judgment under
Rule 38 and not a Petition for Certiorari under Rule 65. We recall that petitioners filed
a verified Motion to Set Aside Decision on May 2, 2002, 31 which was denied by the
MTC on June 28, 2002. This Order of denial was properly the subject of a petition
for certiorari, pursuant to Rule 41, Section 1, of the Rules of Court:

From the express language of Rule 41, therefore, the MTCs denial of petitioners
Motion to Set Aside Decision could not have been appealed. Indeed, a decision
based on a compromise agreement is immediately final and executory and cannot be
the subject of appeal,32 for when parties enter into a compromise agreement and
request a court to render a decision on the basis of their agreement, it is presumed
that such action constitutes a waiver of the right to appeal said decision.33 While there
may have been other remedies available to assail the decision, 34 petitioners were well
within their rights to institute a special civil action under Rule 65.
The Regional Trial Court rightly dismissed the petition for certiorari.
On the second issue, petitioners argue that the RTC, in reconsidering the order
granting the application for writ of preliminary injunction, should not have gone so far
as dismissing the main case filed by the petitioners. They claim that the issue in their
application for writ of preliminary injunction was different from the issues in the main
case forcertiorari, and that the dissolution of the preliminary injunction should have
been without prejudice to the conduct of further proceedings in the main case. They
also claim that the RTC did not have the power to dismiss the case without requiring
the parties to file memoranda.
These assertions are belied, however, by petitioners own submissions.

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.

Their arguments were exactly the same, whether relating to the preliminary or
permanent injunction. Identical matters were at issue the MTCs jurisdiction,
petitioners alleged vitiated consent, and the propriety of enforcing the Compromise
Agreement. The reliefs sought, too, were the same, that is, the grant of an injunction
against the enforcement of the compromise:35

No appeal may be taken from:

WHEREFORE, it is most respectfully prayed that:

xxxx
(e) an order denying a motion to set aside a judgment by consent, confession or
compromise on the ground of fraud, mistake or duress, or any other ground vitiating
consent.

Page 3 of 37

1) A Temporary Restraining Order and/or Preliminary Injunction issue ex

parte directing the respondents to cease and desist from enforcing,
executing, or implementing in any manner the Decision dated April 4, 2002
and acting in Civil Case No. MM-3191 until further orders from this
Honorable Court.

2) After hearing, the temporary restraining order/ex parte injunction be

replaced by a writ of preliminary injunction.
3) After hearing on the merits, judgment be rendered:

necessarily included the power of the attorney-in-fact to compromise the case, and
that Nenitas co-heirs could not belatedly disavow their original authorization. 39 This
ruling is even more significant here, where the co-heirs have not taken any action to
invalidate the Compromise Agreement or assail their SPA.

a. Making the injunction permanent.

Moreover, we note that petitioners never assailed the validity of the SPA

Since the RTC found at the preliminary injunction phase that petitioners were not
entitled to an injunction (whether preliminary or permanent), that petitioners
arguments were insufficient to support the relief sought, and that the MTCs approval
of the Compromise Agreement was not done in a capricious, whimsical, or arbitary
manner, the RTC was not required to engage in unnecessary duplication of
proceedings. As such, it rightly dismissed the petition.

during the pre-trial stage prior to entering the Compromise Agreement. This matter
was never even raised as a ground in petitioners Motion to Set Aside the
compromise, or in the initial Petition before the RTC. It was only months later, in
December 2002, that petitioners rather self-servingly - claimed that the SPA was
insufficient.
The stated interest rate should be reduced.

In addition, nothing in the Rules of Court commands the RTC to require the parties to
file Memoranda. Indeed, Rule 65, Sec. 8 is explicit in that the court "may dismiss the
petition if it finds the same to be patently without merit, prosecuted manifestly for
delay, or that the questions raised therein are too unsubstantial to require
consideration."36
Cresencia was authorized to enter into the Compromise Agreement.
As regards the third issue, petitioners maintain that the SPA was fatally defective
because Cresencia was not specifically authorized to enter into a compromise
agreement. Here, we fully concur with the findings of the CA that:
x x x It is undisputed that Cresencias co-heirs executed a Special Power of Attorney,
dated 6 April 1999, designating the former as their attorney-in-fact and empowering
her to file cases for collection of all the accounts due to Filomena or her estate.
Consequently, Cresencia entered into the subject Compromise Agreement in order to
collect the overdue loan obtained by Pasco from Filomena. In so doing, Cresencia
was merely performing her duty as attorney-in-fact of her co-heirs pursuant to the
Special Power of Attorney given to her.371avvphi1
Our ruling in Trinidad v. Court of Appeals38 is illuminating. In Trinidad, the heirs of
Vicente Trinidad executed a SPA in favor of Nenita Trinidad (Nenita) to be their
representative in litigation involving the sale of real property covered by the
decedents estate. As here, there was no specific authority to enter into a
Compromise Agreement. When a compromise agreement was finally reached, the
heirs later sought to invalidate it, claiming that Nenita was not specifically authorized
to enter into the compromise agreement. We held then, as we do now, that the SPA

Page 4 of 37

Although the petition is unmeritorious, we find the 5% monthly interest rate stipulated
in Clause 4 of the Compromise Agreement to be iniquitous and unconscionable.
Accordingly, the legal interest of 12% per annum must be imposed in lieu of the
excessive interest stipulated in the agreement. As we held in Castro v. Tan:40
In several cases, we have ruled that stipulations authorizing iniquitous or
unconscionable interests are contrary to morals, if not against the law. In Medel v.
Court of Appeals, we annulled a stipulated 5.5% per month or 66% per
annum interest on a P500,000.00 loan and a 6% per month or 72% per
annum interest on a P60,000.00 loan, respectively, for being excessive, iniquitous,
unconscionable and exorbitant. In Ruiz v. Court of Appeals, we declared a 3%
monthly interest imposed on four separate loans to be excessive. In both cases, the
interest rates were reduced to 12% per annum.
In this case, the 5% monthly interest rate, or 60% per annum, compounded monthly,
stipulated in the Kasulatan is even higher than the 3% monthly interest rate imposed
in the Ruiz case. Thus, we similarly hold the 5% monthly interest to be excessive,
iniquitous, unconscionable and exorbitant, contrary to morals, and the law. It is
therefore void ab initio for being violative of Article 1306 of the Civil Code. x x x
(citations omitted)
The proceeds of the loan should be released to Filomenas heirs only upon settlement
of her estate.
Finally, it is true that Filomenas estate has a different juridical personality than that of
the heirs. Nonetheless, her heirs certainly have an interest in the preservation of the

estate and the recovery of its properties,41 for at the moment of Filomenas death, the
heirs start to own the property, subject to the decedent's liabilities. In this connection,
Article 777 of the Civil Code states that "[t]he rights to the succession are transmitted
from the moment of the death of the decedent."42
Unfortunately, the records before us do not show the status of the proceedings for the
settlement of the estate of Filomena, if any. But to allow the release of the funds
directly to the heirs would amount to a distribution of the estate; which distribution and
delivery should be made only after, not before, the payment of all debts, charges,
expenses, and taxes of the estate have been paid. 43 We thus decree that respondent
Cresencia should deposit the amounts received from the petitioners with the MTC of
Bocaue, Bulacan and in turn, the MTC of Bocaue, Bulacan should hold in abeyance
the release of the amounts to Filomenas heirs until after a showing that the proper
procedure for the settlement of Filomenas estate has been followed.
WHEREFORE, the petition is DENIED. The May 13, 2004 Decision of the Court of
Appeals and its October 5, 2004 Resolution are AFFIRMED with
MODIFICATIONS that the interest rate of 5% per month (60% per annum) is ordered
reduced to 12 % per annum. Respondent Cresencia De Guzman-Principe
is DIRECTED to deposit with the Municipal Trial Court of Bocaue, Bulacan the
amounts received from the petitioners. The Municipal Trial Court of Bocaue, Bulacan
is likewise DIRECTED to hold in abeyance the release of any amounts recovered
from the petitioners until after a showing that the procedure for settlement of estates
of Filomena de Guzmans estate has been followed, and after all charges on the
estate have been fully satisfied.
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?

Page 5 of 37

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 2in 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. 5
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

Page 6 of 37

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.

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:

2. The lower court erred in concluding that [petitioner] in good faith

offers to return the money to [private respondents].

WHEREAS, the SELLER is the lawful owner of a

certain parcel of land, which is more particularly
described as follows:

3. The lower court erred in concluding that [petitioner] is not under

estoppel to question the validity of the contract to sell.

xxx xxx xxx

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

Page 7 of 37

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.

The Issue
Petitioner raises only one issue:

Page 8 of 37

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:

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

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

Page 9 of 37

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.
G.R. No. 146006

February 23, 2004

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

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

This is a petition for review under Rule 45 of the Rules of Court seeking to reverse
and set aside the decision1 of the Court of Appeals, First Division, dated July 26,
2000, in CA G.R. 59736, which dismissed the petition for certiorari filed by petitioners
Jose C. Lee and Alma Aggabao (in their capacities as president and secretary,
respectively, of Philippine International Life Insurance Company) and Filipino Loan
Assistance Group.
The antecedent facts follow.
Dr. Juvencio P. Ortaez incorporated the Philippine International Life Insurance
Company, Inc. on July 6, 1956. At the time of the companys incorporation, Dr.
Ortaez owned ninety percent (90%) of the subscribed capital stock.
On July 21, 1980, Dr. Ortaez died. He left behind a wife (Juliana Salgado Ortaez),
three legitimate children (Rafael, Jose and Antonio Ortaez) and five illegitimate
children by Ligaya Novicio (herein private respondent Ma. Divina Ortaez-Enderes
and her siblings Jose, Romeo, Enrico Manuel and Cesar, all surnamed Ortaez).2
On September 24, 1980, Rafael Ortaez filed before the Court of First Instance of
Rizal, Quezon City Branch (now Regional Trial Court of Quezon City) a petition for
letters of administration of the intestate estate of Dr. Ortaez, docketed as SP Proc.
Q-30884 (which petition to date remains pending at Branch 85 thereof).
Private respondent Ma. Divina Ortaez-Enderes and her siblings filed an opposition
to the petition for letters of administration and, in a subsequent urgent motion, prayed
that the intestate court appoint a special administrator.
On March 10, 1982, Judge Ernani Cruz Pao, then presiding judge of Branch 85,
appointed Rafael and Jose Ortaez joint special administrators of their fathers estate.
Hearings continued for the appointment of a regular administrator (up to now no
regular administrator has been appointed).
As ordered by the intestate court, special administrators Rafael and Jose Ortaez
submitted an inventory of the estate of their father which included, among other
properties, 2,0293 shares of stock in Philippine International Life Insurance Company
(hereafter Philinterlife), representing 50.725% of the companys outstanding capital
stock.
On April 15, 1989, the decedents wife, Juliana S. Ortaez, claiming that she owned
1,0144 Philinterlife shares of stock as her conjugal share in the estate, sold said
shares with right to repurchase in favor of herein petitioner Filipino Loan Assistance

Page 10 of 37

Group (FLAG), represented by its president, herein petitioner Jose C. Lee. Juliana
Ortaez failed to repurchase the shares of stock within the stipulated period, thus
ownership thereof was consolidated by petitioner FLAG in its name.
On October 30, 1991, Special Administrator Jose Ortaez, acting in his personal
capacity and claiming that he owned the remaining 1,0115 Philinterlife shares of
stocks as his inheritance share in the estate, sold said shares with right to repurchase
also in favor of herein petitioner FLAG, represented by its president, herein petitioner
Jose C. Lee. After one year, petitioner FLAG consolidated in its name the ownership
of the Philinterlife shares of stock when Jose Ortaez failed to repurchase the same.
It appears that several years before (but already during the pendency of the intestate
proceedings at the Regional Trial Court of Quezon City, Branch 85), Juliana Ortaez
and her two children, Special Administrators Rafael and Jose Ortaez, entered into a
memorandum of agreement dated March 4, 1982 for the extrajudicial settlement of
the estate of Dr. Juvencio Ortaez, partitioning the estate (including the Philinterlife
shares of stock) among themselves. This was the basis of the number of shares
separately sold by Juliana Ortaez on April 15, 1989 (1,014 shares) and by Jose
Ortaez on October 30, 1991 (1,011 shares) in favor of herein petitioner FLAG.
On July 12, 1995, herein private respondent Ma. Divina OrtaezEnderes and her
siblings (hereafter referred to as private respondents Enderes et al.) filed a motion for
appointment of special administrator of Philinterlife shares of stock. This move was
opposed by Special Administrator Jose Ortaez.
On November 8, 1995, the intestate court granted the motion of private respondents
Enderes et al. and appointed private respondent Enderes special administratrix of the
Philinterlife shares of stock.
On December 20, 1995, Special Administratrix Enderes filed an urgent motion to
declare void ab initio the memorandum of agreement dated March 4, 1982. On
January 9, 1996, she filed a motion to declare the partial nullity of the extrajudicial
settlement of the decedents estate. These motions were opposed by Special
Administrator Jose Ortaez.
On March 22, 1996, Special Administratrix Enderes filed an urgent motion to declare
void ab initio the deeds of sale of Philinterlife shares of stock, which move was again
opposed by Special Administrator Jose Ortaez.
On February 4, 1997, Jose Ortaez filed an omnibus motion for (1) the approval of
the deeds of sale of the Philinterlife shares of stock and (2) the release of Ma. Divina

Ortaez-Enderes as special administratrix of the Philinterlife shares of stock on the

ground that there were no longer any shares of stock for her to administer.

Ortaez to FLAG of the shares of stock they invalidly appropriated for themselves,
without approval of the intestate court, was void.8

On August 11, 1997, the intestate court denied the omnibus motion of Special
Administrator Jose Ortaez for the approval of the deeds of sale for the reason that:

Special Administrator Jose Ortaez filed a motion for reconsideration of the Court of
Appeals decision but it was denied. He elevated the case to the Supreme Court via
petition for review under Rule 45 which the Supreme Court dismissed on October 5,
1998, on a technicality. His motion for reconsideration was denied with finality on
January 13, 1999. On February 23, 1999, the resolution of the Supreme Court
dismissing the petition of Special Administrator Jose Ortaez became final and was
subsequently recorded in the book of entries of judgments.

Under the Godoy case, supra, it was held in substance that a sale of a property of the
estate without an Order of the probate court is void and passes no title to the
purchaser. Since the sales in question were entered into by Juliana S. Ortaez and
Jose S. Ortaez in their personal capacity without prior approval of the Court, the
same is not binding upon the Estate.
WHEREFORE, the OMNIBUS MOTION for the approval of the sale of Philinterlife
shares of stock and release of Ma. Divina Ortaez-Enderes as Special Administratrix
is hereby denied.6
On August 29, 1997, the intestate court issued another order granting the motion of
Special Administratrix Enderes for the annulment of the March 4, 1982 memorandum
of agreement or extrajudicial partition of estate. The court reasoned that:
In consonance with the Order of this Court dated August 11, 1997 DENYING the
approval of the sale of Philinterlife shares of stocks and release of Ma. Divina
Ortaez-Enderes as Special Administratrix, the "Urgent Motion to Declare Void Ab
Initio Memorandum of Agreement" dated December 19, 1995. . . is hereby impliedly
partially resolved insofar as the transfer/waiver/renunciation of the Philinterlife shares
of stock are concerned, in particular, No. 5, 9(c), 10(b) and 11(d)(ii) of the
Memorandum of Agreement.
WHEREFORE, this Court hereby declares the Memorandum of Agreement dated
March 4, 1982 executed by Juliana S. Ortaez, Rafael S. Ortaez and Jose S.
Ortaez as partially void ab initio insofar as the transfer/waiver/renunciation of the
Philinterlife shares of stocks are concerned.7
Aggrieved by the above-stated orders of the intestate court, Jose Ortaez filed, on
December 22, 1997, a petition for certiorari in the Court of Appeals. The appellate
court denied his petition, however, ruling that there was no legal justification
whatsoever for the extrajudicial partition of the estate by Jose Ortaez, his brother
Rafael Ortaez and mother Juliana Ortaez during the pendency of the settlement of
the estate of Dr. Ortaez, without the requisite approval of the intestate court, when it
was clear that there were other heirs to the estate who stood to be prejudiced
thereby. Consequently, the sale made by Jose Ortaez and his mother Juliana

Page 11 of 37

Meanwhile, herein petitioners Jose Lee and Alma Aggabao, with the rest of the FLAGcontrolled board of directors, increased the authorized capital stock of Philinterlife,
diluting in the process the 50.725% controlling interest of the decedent, Dr. Juvencio
Ortaez, in the insurance company.9 This became the subject of a separate action at
the Securities and Exchange Commission filed by private respondent-Special
Administratrix Enderes against petitioner Jose Lee and other members of the FLAGcontrolled board of Philinterlife on November 7, 1994. Thereafter, various cases were
filed by Jose Lee as president of Philinterlife and Juliana Ortaez and her sons
against private respondent-Special Administratrix Enderes in the SEC and civil
courts.10 Somehow, all these cases were connected to the core dispute on the legality
of the sale of decedent Dr. Ortaezs Philinterlife shares of stock to petitioner FLAG,
represented by its president, herein petitioner Jose Lee who later became the
president of Philinterlife after the controversial sale.
On May 2, 2000, private respondent-Special Administratrix Enderes and her siblings
filed a motion for execution of the Orders of the intestate court dated August 11 and
August 29, 1997 because the orders of the intestate court nullifying the sale (upheld
by the Court of Appeals and the Supreme Court) had long became final. RespondentSpecial Administratrix Enderes served a copy of the motion to petitioners Jose Lee
and Alma Aggabao as president and secretary, respectively, of Philinterlife, 11 but
petitioners ignored the same.
On July 6, 2000, the intestate court granted the motion for execution, the dispositive
portion of which read:
WHEREFORE, premises considered, let a writ of execution issue as follows:
1. Confirming the nullity of the sale of the 2,029 Philinterlife shares in the
name of the Estate of Dr. Juvencio Ortaez to Filipino Loan Assistance
Group (FLAG);

2. Commanding the President and the Corporate Secretary of Philinterlife to

reinstate in the stock and transfer book of Philinterlife the 2,029 Philinterlife
shares of stock in the name of the Estate of Dr. Juvencio P. Ortaez as the
owner thereof without prejudice to other claims for violation of pre-emptive
rights pertaining to the said 2,029 Philinterlife shares;

intestate court gravely abused its discretion in (1) declaring that the ownership of
FLAG over the Philinterlife shares of stock was null and void; (2) ordering the
execution of its order declaring such nullity and (3) depriving the petitioners of their
right to due process.
On July 26, 2000, the Court of Appeals dismissed the petition outright:

3. Directing the President and the Corporate Secretary of Philinterlife to

issue stock certificates of Philinterlife for 2,029 shares in the name of the
Estate of Dr. Juvencio P. Ortaez as the owner thereof without prejudice to
other claims for violations of pre-emptive rights pertaining to the said 2,029
Philinterlife shares and,
4. Confirming that only the Special Administratrix, Ma. Divina OrtaezEnderes, has the power to exercise all the rights appurtenant to the said
shares, including the right to vote and to receive dividends.
5. Directing Philinterlife and/or any other person or persons claiming to
represent it or otherwise, to acknowledge and allow the said Special
Administratrix to exercise all the aforesaid rights on the said shares and to
refrain from resorting to any action which may tend directly or indirectly to
impede, obstruct or bar the free exercise thereof under pain of contempt.
6. The President, Corporate Secretary, any responsible officer/s of
Philinterlife, or any other person or persons claiming to represent it or
otherwise, are hereby directed to comply with this order within three (3) days
from receipt hereof under pain of contempt.
7. The Deputy Sheriffs Adenauer Rivera and Pedro Borja are hereby
directed to implement the writ of execution with dispatch to forestall any
and/or further damage to the Estate.
SO ORDERED.12
In the several occasions that the sheriff went to the office of petitioners to execute the
writ of execution, he was barred by the security guard upon petitioners instructions.
Thus, private respondent-Special Administratrix Enderes filed a motion to cite herein
petitioners Jose Lee and Alma Aggabao (president and secretary, respectively, of
Philinterlife) in contempt.13
Petitioners Lee and Aggabao subsequently filed before the Court of Appeals a petition
for certiorari, docketed as CA G.R. SP No. 59736. Petitioners alleged that the

Page 12 of 37

We are constrained to DISMISS OUTRIGHT the present petition for certiorari and
prohibition with prayer for a temporary restraining order and/or writ of preliminary
injunction in the light of the following considerations:
1. The assailed Order dated August 11, 1997 of the respondent judge had
long become final and executory;
2. The certification on non-forum shopping is signed by only one (1) of the
three (3) petitioners in violation of the Rules; and
3. Except for the assailed orders and writ of execution, deed of sale with
right to repurchase, deed of sale of shares of stocks and omnibus motion,
the petition is not accompanied by such pleadings, documents and other
material portions of the record as would support the allegations therein in
violation of the second paragraph, Rule 65 of the 1997 Rules of Civil
Procedure, as amended.
Petition is DISMISSED.
SO ORDERED.14
The motion for reconsideration filed by petitioners Lee and Aggabao of the above
decision was denied by the Court of Appeals on October 30, 2000:
This resolves the "urgent motion for reconsideration" filed by the petitioners of our
resolution of July 26, 2000 dismissing outrightly the above-entitled petition for the
reason, among others, that the assailed Order dated August 11, 1997 of the
respondent Judge had long become final and executory.
Dura lex, sed lex.
WHEREFORE, the urgent motion for reconsideration is hereby DENIED, for lack of
merit.

SO ORDERED.15
On December 4, 2000, petitioners elevated the case to the Supreme Court through a
petition for review under Rule 45 but on December 13, 2000, we denied the petition
because there was no showing that the Court of Appeals in CA G.R. SP No. 59736
committed any reversible error to warrant the exercise by the Supreme Court of its
discretionary appellate jurisdiction.16
However, upon motion for reconsideration filed by petitioners Lee and Aggabao, the
Supreme Court granted the motion and reinstated their petition on September 5,
2001. The parties were then required to submit their respective memoranda.
Meanwhile, private respondent-Special Administratrix Enderes, on July 19, 2000, filed
a motion to direct the branch clerk of court in lieu of herein petitioners Lee and
Aggabao to reinstate the name of Dr. Ortaez in the stock and transfer book of
Philinterlife and issue the corresponding stock certificate pursuant to Section 10, Rule
39 of the Rules of Court which provides that "the court may direct the act to be done
at the cost of the disobedient party by some other person appointed by the court and
the act when so done shall have the effect as if done by the party." Petitioners Lee
and Aggabao opposed the motion on the ground that the intestate court should refrain
from acting on the motion because the issues raised therein were directly related to
the issues raised by them in their petition for certiorari at the Court of Appeals
docketed as CA-G.R. SP No. 59736. On October 30, 2000, the intestate court
granted the motion, ruling that there was no prohibition for the intestate court to
execute its orders inasmuch as the appellate court did not issue any TRO or writ of
preliminary injunction.
On December 3, 2000, petitioners Lee and Aggabao filed a petition for certiorari in the
Court of Appeals, docketed as CA-G.R. SP No. 62461, questioning this time the
October 30, 2000 order of the intestate court directing the branch clerk of court to
issue the stock certificates. They also questioned in the Court of Appeals the order of
the intestate court nullifying the sale made in their favor by Juliana Ortaez and Jose
Ortaez. On November 20, 2002, the Court of Appeals denied their petition and
upheld the power of the intestate court to execute its order. Petitioners Lee and
Aggabao then filed motion for reconsideration which at present is still pending
resolution by the Court of Appeals.
Petitioners Jose Lee and Alma Aggabao (president and secretary, respectively, of
Philinterlife) and FLAG now raise the following errors for our consideration:
The Court of Appeals committed grave reversible ERROR:

Page 13 of 37

A. In failing to reconsider its previous resolution denying the petition despite

the fact that the appellate courts mistake in apprehending the facts had
become patent and evident from the motion for reconsideration and the
comment of respondent Enderes which had admitted the factual allegations
of petitioners in the petition as well as in the motion for reconsideration.
Moreover, the resolution of the appellate court denying the motion for
reconsideration was contained in only one page without even touching on
the substantive merits of the exhaustive discussion of facts and supporting
law in the motion for reconsideration in violation of the Rule on
administrative due process;
B. in failing to set aside the void orders of the intestate court on the
erroneous ground that the orders were final and executory with regard to
petitioners even as the latter were never notified of the proceedings or order
canceling its ownership;
C. in not finding that the intestate court committed grave abuse of discretion
amounting to excess of jurisdiction (1) when it issued the Omnibus Order
nullifying the ownership of petitioner FLAG over shares of stock which were
alleged to be part of the estate and (2) when it issued a void writ of
execution against petitioner FLAG as present owner to implement merely
provisional orders, thereby violating FLAGs constitutional right against
deprivation of property without due process;
D. In failing to declare null and void the orders of the intestate court which
nullified the sale of shares of stock between the legitimate heir Jose S.
Ortaez and petitioner FLAG because of settled law and jurisprudence, i.e.,
that an heir has the right to dispose of the decedents property even if the
same is under administration pursuant to Civil Code provision that
possession of hereditary property is transmitted to the heir the moment of
death of the decedent (Acedebo vs. Abesamis, 217 SCRA 194);
E. In disregarding the final decision of the Supreme Court in G.R. No.
128525 dated December 17, 1999 involving substantially the same parties,
to wit, petitioners Jose C. Lee and Alma Aggabao were respondents in that
case while respondent Ma. Divina Enderes was the petitioner therein. That
decision, which can be considered law of the case, ruled that petitioners
cannot be enjoined by respondent Enderes from exercising their power as
directors and officers of Philinterlife and that the intestate court in charge of
the intestate proceedings cannot adjudicate title to properties claimed to be
part of the estate and which are equally CLAIMED BY petitioner FLAG.17

The petition has no merit.

Petitioners Jose Lee and Alma Aggabao, representing Philinterlife and FLAG, assail
before us not only the validity of the writ of execution issued by the intestate court
dated July 7, 2000 but also the validity of the August 11, 1997 order of the intestate
court nullifying the sale of the 2,029 Philinterlife shares of stock made by Juliana
Ortaez and Jose Ortaez, in their personal capacities and without court approval, in
favor of petitioner FLAG.
We cannot allow petitioners to reopen the issue of nullity of the sale of the Philinterlife
shares of stock in their favor because this was already settled a long time ago by the
Court of Appeals in its decision dated June 23, 1998 in CA-G.R. SP No. 46342. This
decision was effectively upheld by us in our resolution dated October 9, 1998 in G.R.
No. 135177 dismissing the petition for review on a technicality and thereafter denying
the motion for reconsideration on January 13, 1999 on the ground that there was no
compelling reason to reconsider said denial. 18 Our decision became final on February
23, 1999 and was accordingly entered in the book of entry of judgments. For all
intents and purposes therefore, the nullity of the sale of the Philinterlife shares of
stock made by Juliana Ortaez and Jose Ortaez in favor of petitioner FLAG is
already a closed case. To reopen said issue would set a bad precedent, opening the
door wide open for dissatisfied parties to relitigate unfavorable decisions no end. This
is completely inimical to the orderly and efficient administration of justice.
The said decision of the Court of Appeals in CA-G.R. SP No. 46342 affirming the
nullity of the sale made by Jose Ortaez and his mother Juliana Ortaez of the
Philinterlife shares of stock read:
Petitioners asseverations relative to said [memorandum] agreement were scuttled
during the hearing before this Court thus:

What can be your legal justification for extrajudicial settlement of a property

subject of intestate proceedings when there is an adverse claim of another
set of heirs, alleged heirs? What would be the legal justification for extrajudicially settling a property under administration without the approval of the
intestate court?
ATTY. CALIMAG:
Well, Your Honor please, in that extra-judicial settlement there is an approval
of the honorable court as to the propertys partition x x x. There were as
mentioned by the respondents counsel, Your Honor.
ATTY. BUYCO:
No
JUSTICE AQUINO:
The point is, there can be no adjudication of a property under intestate
proceedings without the approval of the court. That is basic unless you can
present justification on that. In fact, there are two steps: first, you ask leave
and then execute the document and then ask for approval of the document
executed. Now, is there any legal justification to exclude this particular
transaction from those steps?
ATTY. CALIMAG:
None, Your Honor.

JUSTICE AQUINO:

ATTY. BUYCO:

Counsel for petitioner, when the Memorandum of Agreement was executed,

did the children of Juliana Salgado know already that there was a claim for
share in the inheritance of the children of Novicio?

With that admission that there is no legal justification, Your Honor, we rest
the case for the private respondent. How can the lower court be accused of
abusing its discretion? (pages 33-35, TSN of January 29, 1998).

ATTY. CALIMAG:

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

Your Honor please, at that time, Your Honor, it is already known to them.

What we have here is a situation where some of the heirs of the decedent without
securing court approval have appropriated as their own personal property the
properties of [the] Estate, to the exclusion and the extreme prejudice of the other
claimant/heirs. In other words, these heirs, without court approval, have distributed

JUSTICE AQUINO:

Page 14 of 37

the asset of the estate among themselves and proceeded to dispose the same to
third parties even in the absence of an order of distribution by the Estate Court. As
admitted by petitioners counsel, there was absolutely no legal justification for this
action by the heirs. There being no legal justification, petitioner has no basis for
demanding that public respondent [the intestate court] approve the sale of the
Philinterlife shares of the Estate by Juliana and Jose Ortaez in favor of the Filipino
Loan Assistance Group.

shall have been given their shares.21 This means that an heir may only sell his ideal
or undivided share in the estate, not any specific property therein. In the present
case, Juliana Ortaez and Jose Ortaez sold specific properties of the estate (1,014
and 1,011 shares of stock in Philinterlife) in favor of petitioner FLAG. This they could
not lawfully do pending the final adjudication of the estate by the intestate court
because of the undue prejudice it would cause the other claimants to the estate, as
what happened in the present case.

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

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

Juliana Ortaez and Jose Ortaez sold specific properties of the estate, without court
approval. It is well-settled that court approval is necessary for the validity of any
disposition of the decedents estate. In the early case ofGodoy vs. Orellano,22 we laid
down the rule that the sale of the property of the estate by an administrator without
the order of the probate court is void and passes no title to the purchaser. And in the
case of Dillena vs. Court of Appeals,23 we ruled that:

Given the foregoing facts, and the applicable jurisprudence, public respondent can
never be faulted for not approving. . . the subsequent sale by the petitioner [Jose
Ortaez] and his mother [Juliana Ortaez] of the Philinterlife shares belonging to the
Estate of Dr. Juvencio P. Ortaez." (pages 3-4 of Private Respondents Memorandum;
pages 243-244 of the Rollo)
Amidst the foregoing, We found no grave abuse of discretion amounting to excess or
want of jurisdiction committed by respondent judge.19
From the above decision, it is clear that Juliana Ortaez, and her three sons, Jose,
Rafael and Antonio, all surnamed Ortaez, invalidly entered into a memorandum of
agreement extrajudicially partitioning the intestate estate among themselves, despite
their knowledge that there were other heirs or claimants to the estate and before final
settlement of the estate by the intestate court. Since the appropriation of the estate
properties by Juliana Ortaez and her children (Jose, Rafael and Antonio Ortaez)
was invalid, the subsequent sale thereof by Juliana and Jose to a third party (FLAG),
without court approval, was likewise void.
An heir can sell his right, interest, or participation in the property under administration
under Art. 533 of the Civil Code which provides that possession of hereditary property
is deemed transmitted to the heir without interruption from the moment of death of the
decedent.20 However, an heir can only alienate such portion of the estate that may be
allotted to him in the division of the estate by the probate or intestate court after final
adjudication, that is, after all debtors shall have been paid or the devisees or legatees

Page 15 of 37

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

xxx

xxx

The subject properties therefore are under the jurisdiction of the probate court which
according to our settled jurisprudence has the authority to approve any disposition
regarding properties under administration. . . More emphatic is the declaration We
made in Estate of Olave vs. Reyes (123 SCRA 767) where We stated that when the
estate of the deceased person is already the subject of a testate or intestate
proceeding, the administrator cannot enter into any transaction involving it without
prior approval of the probate court.
Only recently, in Manotok Realty, Inc. vs. Court of Appeals (149 SCRA 174), We held
that the sale of an immovable property belonging to the estate of a decedent, in a
special proceedings, needs court approval. . . This pronouncement finds support in
the previous case of Dolores Vda. De Gil vs. Agustin Cancio (14 SCRA 797) wherein
We emphasized that it is within the jurisdiction of a probate court to approve the sale

of properties of a deceased person by his prospective heirs before final adjudication.

xxx

private respondent-Special Administratrix Enderes to thereafter move for a writ of

execution and for the intestate court to grant it.

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

Petitioners Jose Lee, Alma Aggabao and FLAG, however, contend that the probate
court could not issue a writ of execution with regard to its order nullifying the sale
because said order was merely provisional:

There is hardly any doubt that the probate court can declare null and void the
disposition of the property under administration, made by private respondent, the
same having been effected without authority from said court. It is the probate court
that has the power to authorize and/or approve the sale (Section 4 and 7, Rule 89),
hence, a fortiori, it is said court that can declare it null and void for as long as the
proceedings had not been closed or terminated. To uphold petitioners contention that
the probate court cannot annul the unauthorized sale, would render meaningless the
power pertaining to the said court. (Bonga vs. Soler, 2 SCRA 755). (emphasis ours)
Our jurisprudence is therefore clear that (1) any disposition of estate property by an
administrator or prospective heir pending final adjudication requires court approval
and (2) any unauthorized disposition of estate property can be annulled by the
probate court, there being no need for a separate action to annul the unauthorized
disposition.
The question now is: can the intestate or probate court execute its order nullifying the
invalid sale?
We see no reason why it cannot. The intestate court has the power to execute its
order with regard to the nullity of an unauthorized sale of estate property, otherwise its
power to annul the unauthorized or fraudulent disposition of estate property would be
meaningless. In other words, enforcement is a necessary adjunct of the intestate or
probate courts power to annul unauthorized or fraudulent transactions to prevent the
dissipation of estate property before final adjudication.
Moreover, in this case, the order of the intestate court nullifying the sale was affirmed
by the appellate courts (the Court of Appeals in CA-G.R. SP No. 46342 dated June
23, 1998 and subsequently by the Supreme Court in G.R. No. 135177 dated October
9, 1998). The finality of the decision of the Supreme Court was entered in the book of
entry of judgments on February 23, 1999. Considering the finality of the order of the
intestate court nullifying the sale, as affirmed by the appellate courts, it was correct for

Page 16 of 37

The only authority given by law is for respondent judge to determine provisionally
whether said shares are included or excluded in the inventory In ordering the
execution of the orders, respondent judge acted in excess of his jurisdiction and
grossly violated settled law and jurisprudence, i.e., that the determination by a
probate or intestate court of whether a property is included or excluded in the
inventory of the estate being provisional in nature, cannot be the subject of
execution.24 (emphasis ours)
Petitioners argument is misplaced. There is no question, based on the facts of this
case, that the Philinterlife shares of stock were part of the estate of Dr. Juvencio
Ortaez from the very start as in fact these shares were included in the inventory of
the properties of the estate submitted by Rafael Ortaez after he and his brother,
Jose Ortaez, were appointed special administrators by the intestate court.25
The controversy here actually started when, during the pendency of the settlement of
the estate of Dr. Ortaez, his wife Juliana Ortaez sold the 1,014 Philinterlife shares
of stock in favor petitioner FLAG without the approval of the intestate court. Her son
Jose Ortaez later sold the remaining 1,011 Philinterlife shares also in favor of FLAG
without the approval of the intestate court.
We are not dealing here with the issue of inclusion or exclusion of properties in the
inventory of the estate because there is no question that, from the very start, the
Philinterlife shares of stock were owned by the decedent, Dr. Juvencio
Ortaez. Rather, we are concerned here with the effect of the sale made by the
decedents heirs, Juliana Ortaez and Jose Ortaez, without the required
approval of the intestate court. This being so, the contention of petitioners that the
determination of the intestate court was merely provisional and should have been
threshed out in a separate proceeding is incorrect.
The petitioners Jose Lee and Alma Aggabao next contend that the writ of execution
should not be executed against them because they were not notified, nor they were
aware, of the proceedings nullifying the sale of the shares of stock.
We are not persuaded. The title of the purchaser like herein petitioner FLAG can be
struck down by the intestate court after a clear showing of the nullity of the alienation.

This is the logical consequence of our ruling in Godoyand in several subsequent

cases.26 The sale of any property of the estate by an administrator or
prospective heir without order of the probate or intestate court is void and
passes no title to the purchaser. Thus, in Juan Lao et al. vs. Hon. Melencio
Geneto, G.R. No. 56451, June 19, 1985, we ordered the probate court to cancel the
transfer certificate of title issued to the vendees at the instance of the administrator
after finding that the sale of real property under probate proceedings was made
without the prior approval of the court. The dispositive portion of our decision read:
IN VIEW OF THE FOREGOING CONSIDERATIONS, the assailed Order dated
February 18, 1981 of the respondent Judge approving the questioned Amicable
Settlement is declared NULL and VOID and hereby SET ASIDE. Consequently, the
sale in favor of Sotero Dioniosio III and by the latter to William Go is likewise declared
NULL and VOID. The Transfer Certificate of Title issued to the latter is hereby ordered
cancelled.

damages with prayer for a writ of preliminary injunction and/or temporary restraining
order.27 In said case, Enderes and her mother questioned the sale of the aforesaid
shares of stock to petitioners. The SEC hearing officer in fact, in his resolution dated
March 24, 1995, deferred to the jurisdiction of the intestate court to rule on the validity
of the sale of shares of stock sold to petitioners by Jose Ortaez and Juliana Ortaez:
Petitioners also averred that. . . the Philinterlife shares of Dr. Juvencio Ortaez who
died, in 1980, are part of his estate which is presently the subject matter of an
intestate proceeding of the RTC of Quezon City, Branch 85. Although, private
respondents [Jose Lee et al.] presented the documents of partition whereby the
foregoing share of stocks were allegedly partitioned and conveyed to Jose S. Ortaez
who allegedly assigned the same to the other private respondents, approval of the
Court was not presented. Thus, the assignments to the private respondents [Jose Lee
et al.] of the subject shares of stocks are void.
xxx

It goes without saying that the increase in Philinterlifes authorized capital stock,
approved on the vote of petitioners non-existent shareholdings and obviously
calculated to make it difficult for Dr. Ortaezs estate to reassume its controlling
interest in Philinterlife, was likewise void ab initio.
Petitioners next argue that they were denied due process.
We do not think so.
The facts show that petitioners, for reasons known only to them, did not appeal the
decision of the intestate court nullifying the sale of shares of stock in their favor. Only
the vendor, Jose Ortaez, appealed the case. A careful review of the records shows
that petitioners had actual knowledge of the estate settlement proceedings and that
they knew private respondent Enderes was questioning therein the sale to them of
the Philinterlife shares of stock.
It must be noted that private respondent-Special Administratrix Enderes filed before
the intestate court (RTC of Quezon City, Branch 85) a "Motion to Declare Void Ab
Initio Deeds of Sale of Philinterlife Shares of Stock" on March 22, 1996. But as early
as 1994, petitioners already knew of the pending settlement proceedings and that the
shares they bought were under the administration by the intestate court because
private respondent Ma. Divina Ortaez-Enderes and her mother Ligaya Novicio had
filed a case against them at the Securities and Exchange Commission on November
7, 1994, docketed as SEC No. 11-94-4909, for annulment of transfer of shares of
stock, annulment of sale of corporate properties, annulment of subscriptions on
increased capital stocks, accounting, inspection of corporate books and records and

Page 17 of 37

xxx

xxx

With respect to the alleged extrajudicial partition of the shares of stock owned by the
late Dr. Juvencio Ortaez, we rule that the matter properly belongs to the jurisdiction
of the regular court where the intestate proceedings are currently pending.28
With this resolution of the SEC hearing officer dated as early as March 24, 1995
recognizing the jurisdiction of the intestate court to determine the validity of the
extrajudicial partition of the estate of Dr. Ortaez and the subsequent sale by the
heirs of the decedent of the Philinterlife shares of stock to petitioners, how can
petitioners claim that they were not aware of the intestate proceedings?
Furthermore, when the resolution of the SEC hearing officer reached the Supreme
Court in 1996 (docketed as G.R. 128525), herein petitioners who were respondents
therein filed their answer which contained statements showing that they knew of the
pending intestate proceedings:
[T]he subject matter of the complaint is not within the jurisdiction of the SEC but with
the Regional Trial Court; Ligaya Novicio and children represented themselves to be
the common law wife and illegitimate children of the late Ortaez; that on March 4,
1982, the surviving spouse Juliana Ortaez, on her behalf and for her minor son
Antonio, executed a Memorandum of Agreement with her other sons Rafael and
Jose, both surnamed Ortaez, dividing the estate of the deceased composed of his
one-half (1/2) share in the conjugal properties; that in the said Memorandum of
Agreement, Jose S. Ortaez acquired as his share of the estate the 1,329 shares of
stock in Philinterlife; that on March 4, 1982, Juliana and Rafael assigned their
respective shares of stock in Philinterlife to Jose; that contrary to the contentions of

petitioners, private respondents Jose Lee, Carlos Lee, Benjamin Lee and Alma
Aggabao became stockholders of Philinterlife on March 23, 1983 when Jose S.
Ortaez, the principal stockholder at that time, executed a deed of sale of his shares
of stock to private respondents; and that the right of petitioners to question the
Memorandum of Agreement and the acquisition of shares of stock of private
respondent is barred by prescription.29
Also, private respondent-Special Administratrix Enderes offered additional proof of
actual knowledge of the settlement proceedings by petitioners which petitioners never
denied: (1) that petitioners were represented by Atty. Ricardo Calimag previously
hired by the mother of private respondent Enderes to initiate cases against petitioners
Jose Lee and Alma Aggabao for the nullification of the sale of the shares of stock but
said counsel made a conflicting turn-around and appeared instead as counsel of
petitioners, and (2) that the deeds of sale executed between petitioners and the heirs
of the decedent (vendors Juliana Ortaez and Jose Ortaez) were acknowledged
before Atty. Ramon Carpio who, during the pendency of the settlement proceedings,
filed a motion for the approval of the sale of Philinterlife shares of stock to the Knights
of Columbus Fraternal Association, Inc. (which motion was, however, later
abandoned).30 All this sufficiently proves that petitioners, through their counsels, knew
of the pending settlement proceedings.
Finally, petitioners filed several criminal cases such as libel (Criminal Case No. 977179-81), grave coercion (Criminal Case No. 84624) and robbery (Criminal Case No.
Q-96-67919) against private respondents mother Ligaya Novicio who was a director
of Philinterlife,31 all of which criminal cases were related to the questionable sale to
petitioners of the Philinterlife shares of stock.
Considering these circumstances, we cannot accept petitioners claim of denial of due
process. The essence of due process is the reasonable opportunity to be heard.
Where the opportunity to be heard has been accorded, there is no denial of due
process.32 In this case, petitioners knew of the pending instestate proceedings for the
settlement of Dr. Juvencio Ortaezs estate but for reasons they alone knew, they
never intervened. When the court declared the nullity of the sale, they did not bother
to appeal. And when they were notified of the motion for execution of the Orders of
the intestate court, they ignored the same. Clearly, petitioners alone should bear the
blame.
Petitioners next contend that we are bound by our ruling in G.R. No. 128525
entitled Ma. Divina Ortaez-Enderes vs. Court of Appeals, dated December 17, 1999,
where we allegedly ruled that the intestate court "may not pass upon the title to a
certain property for the purpose of determining whether the same should or should
not be included in the inventory but such determination is not conclusive and is

Page 18 of 37

subject to final decision in a separate action regarding ownership which may be

constituted by the parties."
We are not unaware of our decision in G.R. No. 128525. The issue therein was
whether the Court of Appeals erred in affirming the resolution of the SEC that
Enderes et al. were not entitled to the issuance of the writ of preliminary injunction.
We ruled that the Court of Appeals was correct in affirming the resolution of the SEC
denying the issuance of the writ of preliminary injunction because injunction is not
designed to protect contingent rights. Said case did not rule on the issue of the
validity of the sale of shares of stock belonging to the decedents estate without court
approval nor of the validity of the writ of execution issued by the intestate court. G.R.
No. 128525 clearly involved a different issue and it does not therefore apply to the
present case.
Petitioners and all parties claiming rights under them are hereby warned not to further
delay the execution of the Orders of the intestate court dated August 11 and August
29, 1997.
WHEREFORE, the petition is hereby DENIED. The decision of the Court of Appeals
in CA-G.R. S.P. No. 59736 dated July 26, 2000, dismissing petitioners petition
for certiorari and affirming the July 6, 2000 order of the trial court which ordered the
execution of its (trial courts) August 11 and 29, 1997 orders, is hereby AFFIRMED.
G.R. No. 168970

January 15, 2010

CELESTINO
BALUS, Petitioner,
vs.
SATURNINO BALUS and LEONARDA BALUS VDA. DE CALUNOD, Respondents.
DECISION
PERALTA, J.:
Assailed in the present petition for review on certiorari under Rule 45 of the Rules of
Court is the Decision1 of the Court of Appeals (CA) dated May 31, 2005 in CA-G.R.
CV No. 58041 which set aside the February 7, 1997 Decision of the Regional Trial
Court (RTC) of Lanao del Norte, Branch 4 in Civil Case No. 3263.
The facts of the case are as follows:

Herein petitioner and respondents are the children of the spouses Rufo and
Sebastiana Balus. Sebastiana died on September 6, 1978, while Rufo died on July 6,
1984.
On January 3, 1979, Rufo mortgaged a parcel of land, which he owns, as security for
a loan he obtained from the Rural Bank of Maigo, Lanao del Norte (Bank). The said
property was originally covered by Original Certificate of Title No. P-439(788) and
more particularly described as follows:
A parcel of land with all the improvements thereon, containing an area of 3.0740
hectares, more or less, situated in the Barrio of Lagundang, Bunawan, Iligan City, and
bounded as follows: Bounded on the NE., along line 1-2, by Lot 5122, Csd-292; along
line 2-12, by Dodiongan River; along line 12-13 by Lot 4649, Csd-292; and along line
12-1, by Lot 4661, Csd-292. x x x 2
Rufo failed to pay his loan. As a result, the mortgaged property was foreclosed and
was subsequently sold to the Bank as the sole bidder at a public auction held for that
purpose. On November 20, 1981, a Certificate of Sale3was executed by the sheriff in
favor of the Bank. The property was not redeemed within the period allowed by law.
More than two years after the auction, or on January 25, 1984, the sheriff executed a
Definite Deed of Sale 4 in the Bank's favor. Thereafter, a new title was issued in the
name of the Bank.
On October 10, 1989, herein petitioner and respondents executed an Extrajudicial
Settlement of Estate5adjudicating to each of them a specific one-third portion of the
subject property consisting of 10,246 square meters. The Extrajudicial Settlement
also contained provisions wherein the parties admitted knowledge of the fact that their
father mortgaged the subject property to the Bank and that they intended to redeem
the same at the soonest possible time.
Three years after the execution of the Extrajudicial Settlement, herein respondents
bought the subject property from the Bank. On October 12, 1992, a Deed of Sale of
Registered Land6 was executed by the Bank in favor of respondents. Subsequently,
Transfer Certificate of Title (TCT) No. T-39,484(a.f.) 7 was issued in the name of
respondents. Meanwhile, petitioner continued possession of the subject lot.
On June 27, 1995, respondents filed a Complaint8 for Recovery of Possession and
Damages against petitioner, contending that they had already informed petitioner of
the fact that they were the new owners of the disputed property, but the petitioner still
refused to surrender possession of the same to them. Respondents claimed that they
had exhausted all remedies for the amicable settlement of the case, but to no avail.

Page 19 of 37

On February 7, 1997, the RTC rendered a Decision9 disposing as follows:

WHEREFORE, judgment is hereby rendered, ordering the plaintiffs to execute a
Deed of Sale in favor of the defendant, the one-third share of the property in question,
presently possessed by him, and described in the deed of partition, as follows:
A one-third portion of Transfer Certificate of Title No. T-39,484 (a.f.), formerly Original
Certificate of Title No. P-788, now in the name of Saturnino Balus and Leonarda B.
Vda. de Calunod, situated at Lagundang, Bunawan, Iligan City, bounded on the North
by Lot 5122; East by shares of Saturnino Balus and Leonarda Balus-Calunod; South
by Lot 4649, Dodiongan River; West by Lot 4661, consisting of 10,246 square meters,
including improvements thereon.
and dismissing all other claims of the parties.
The amount of P6,733.33 consigned by the defendant with the Clerk of Court is
hereby ordered delivered to the plaintiffs, as purchase price of the one-third portion of
the land in question.
Plaintiffs are ordered to pay the costs.
SO ORDERED.10
The RTC held that the right of petitioner to purchase from the respondents his share
in the disputed property was recognized by the provisions of the Extrajudicial
Settlement of Estate, which the parties had executed before the respondents bought
the subject lot from the Bank.
Aggrieved by the Decision of the RTC, herein respondents filed an appeal with the
CA.
On May 31, 2005, the CA promulgated the presently assailed Decision, reversing and
setting aside the Decision of the RTC and ordering petitioner to immediately
surrender possession of the subject property to the respondents. The CA ruled that
when petitioner and respondents did not redeem the subject property within the
redemption period and allowed the consolidation of ownership and the issuance of a
new title in the name of the Bank, their co-ownership was extinguished.
Hence, the instant petition raising a sole issue, to wit:

WHETHER OR NOT CO-OWNERSHIP AMONG THE PETITIONER AND THE

RESPONDENTS OVER THE PROPERTY PERSISTED/CONTINUED TO EXIST
(EVEN AFTER THE TRANSFER OF TITLE TO THE BANK) BY VIRTUE OF THE
PARTIES' AGREEMENT PRIOR TO THE REPURCHASE THEREOF BY THE
RESPONDENTS; THUS, WARRANTING THE PETITIONER'S ACT OF ENFORCING
THE AGREEMENT BY REIMBURSING THE RESPONDENTS OF HIS
(PETITIONER'S) JUST SHARE OF THE REPURCHASE PRICE.11
The main issue raised by petitioner is whether co-ownership by him and respondents
over the subject property persisted even after the lot was purchased by the Bank and
title thereto transferred to its name, and even after it was eventually bought back by
the respondents from the Bank.
Petitioner insists that despite respondents' full knowledge of the fact that the title over
the disputed property was already in the name of the Bank, they still proceeded to
execute the subject Extrajudicial Settlement, having in mind the intention of
purchasing back the property together with petitioner and of continuing their coownership thereof.
Petitioner posits that the subject Extrajudicial Settlement is, in and by itself, a contract
between him and respondents, because it contains a provision whereby the parties
agreed to continue their co-ownership of the subject property by "redeeming" or
"repurchasing" the same from the Bank. This agreement, petitioner contends, is the
law between the parties and, as such, binds the respondents. As a result, petitioner
asserts that respondents' act of buying the disputed property from the Bank without
notifying him inures to his benefit as to give him the right to claim his rightful portion of
the property, comprising 1/3 thereof, by reimbursing respondents the equivalent 1/3 of
the sum they paid to the Bank.
The Court is not persuaded.
Petitioner and respondents are arguing on the wrong premise that, at the time of the
execution of the Extrajudicial Settlement, the subject property formed part of the
estate of their deceased father to which they may lay claim as his heirs.
At the outset, it bears to emphasize that there is no dispute with respect to the fact
that the subject property was exclusively owned by petitioner and respondents' father,
Rufo, at the time that it was mortgaged in 1979. This was stipulated by the parties
during the hearing conducted by the trial court on October 28, 1996.12 Evidence
shows that a Definite Deed of Sale13 was issued in favor of the Bank on January 25,
1984, after the period of redemption expired. There is neither any dispute that a new
title was issued in the Bank's name before Rufo died on July 6, 1984. Hence, there is

Page 20 of 37

no question that the Bank acquired exclusive ownership of the contested lot during
the lifetime of Rufo.
The rights to a person's succession are transmitted from the moment of his death.14 In
addition, the inheritance of a person consists of the property and transmissible rights
and obligations existing at the time of his death, as well as those which have accrued
thereto since the opening of the succession.15 In the present case, since Rufo lost
ownership of the subject property during his lifetime, it only follows that at the time of
his death, the disputed parcel of land no longer formed part of his estate to which his
heirs may lay claim. Stated differently, petitioner and respondents never inherited the
subject lot from their father.
Petitioner and respondents, therefore, were wrong in assuming that they became coowners of the subject lot. Thus, any issue arising from the supposed right of petitioner
as co-owner of the contested parcel of land is negated by the fact that, in the eyes of
the law, the disputed lot did not pass into the hands of petitioner and respondents as
compulsory heirs of Rufo at any given point in time.
The foregoing notwithstanding, the Court finds a necessity for a complete
determination of the issues raised in the instant case to look into petitioner's
argument that the Extrajudicial Settlement is an independent contract which gives him
the right to enforce his right to claim a portion of the disputed lot bought by
respondents.1avvphi1
It is true that under Article 1315 of the Civil Code of the Philippines, 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.
Article 1306 of the same Code also provides that the contracting parties may
establish such stipulations, clauses, terms and conditions as they may deem
convenient, provided these are not contrary to law, morals, good customs, public
order or public policy.
In the present case, however, there is nothing in the subject Extrajudicial Settlement
to indicate any express stipulation for petitioner and respondents to continue with
their supposed co-ownership of the contested lot.
On the contrary, a plain reading of the provisions of the Extrajudicial Settlement would
not, in any way, support petitioner's contention that it was his and his sibling's
intention to buy the subject property from the Bank and continue what they believed
to be co-ownership thereof. It is a cardinal rule in the interpretation of contracts that

the intention of the parties shall be accorded primordial consideration.16 It is the duty
of the courts to place a practical and realistic construction upon it, giving due
consideration to the context in which it is negotiated and the purpose which it is
intended to serve.17 Such intention is determined from the express terms of their
agreement, as well as their contemporaneous and subsequent acts. 18 Absurd and
illogical interpretations should also be avoided.19
For petitioner to claim that the Extrajudicial Settlement is an agreement between him
and his siblings to continue what they thought was their ownership of the subject
property, even after the same had been bought by the Bank, is stretching the
interpretation of the said Extrajudicial Settlement too far.
In the first place, as earlier discussed, there is no co-ownership to talk about and no
property to partition, as the disputed lot never formed part of the estate of their
deceased father.
Moreover, petitioner's asseveration of his and respondents' intention of continuing
with their supposed co-ownership is negated by no less than his assertions in the
present petition that on several occasions he had the chance to purchase the subject
property back, but he refused to do so. In fact, he claims that after the Bank acquired
the disputed lot, it offered to re-sell the same to him but he ignored such offer. How
then can petitioner now claim that it was also his intention to purchase the subject
property from the Bank, when he admitted that he refused the Bank's offer to re-sell
the subject property to him?
In addition, it appears from the recitals in the Extrajudicial Settlement that, at the time
of the execution thereof, the parties were not yet aware that the subject property was
already exclusively owned by the Bank. Nonetheless, the lack of knowledge on the
part of petitioner and respondents that the mortgage was already foreclosed and title
to the property was already transferred to the Bank does not give them the right or the
authority to unilaterally declare themselves as co-owners of the disputed property;
otherwise, the disposition of the case would be made to depend on the belief and
conviction of the party-litigants and not on the evidence adduced and the law and
jurisprudence applicable thereto.
Furthermore, petitioner's contention that he and his siblings intended to continue their
supposed co-ownership of the subject property contradicts the provisions of the
subject Extrajudicial Settlement where they clearly manifested their intention of
having the subject property divided or partitioned by assigning to each of the
petitioner and respondents a specific 1/3 portion of the same. Partition calls for the
segregation and conveyance of a determinate portion of the property owned in
common. It seeks a severance of the individual interests of each co-owner, vesting in

Page 21 of 37

each of them a sole estate in a specific property and giving each one a right to enjoy
his estate without supervision or interference from the other.20 In other words, the
purpose of partition is to put an end to co-ownership, 21 an objective which negates
petitioner's claims in the present case.
WHEREFORE, the instant petition is DENIED. The assailed Decision of the Court of
Appeals, dated May 31, 2005 in CA-G.R. CV No. 58041, is AFFIRMED.
G.R. No. 126707 February 25, 1999
BLANQUITA E. DELA MERCED, LUISITO E. DELA MERCED, BLANQUTIA M.
MACATANGAY, MA. OLIVIA M. PAREDES, TERESITA P. RUPISAN, RUBEN M.
ADRIANO, HERMINIO M. ADRIANO, JOSELITO M. ADRIANO, ROGELIO M.
ADRIANO, WILFREDO M. ADRIANO, VICTOR M. ADRIANO, CORAZON A.
ONGOCO, JASMIN A. MENDOZA and CONSTANTINO M. ADRIANO, petitioners,
vs.
JOSELITO P. DELA MERCED, respondent.

PURISIMA, J.:
This is a Petition for Review on Certiorari of the Decision of the Court of Appeals,
dated October 17, 1996, in CA-G.R. CV No. 41283, which reversed the decision,
dated June 10, 1992, of the Regional Trial Court, Branch 67, Pasig City, in Civil Case
No. 59705.
The facts of the case are, as follows:
On March 23, 1987, Evarista M. dela Merced died intestate, without issue. She left
five (5) parcels of land situated in Orambo, Pasig City.
At the time of her death, Evarista was survived by three sets of heirs, viz: (1)
Francisco M. dela Merced, her legitimate brother; (2) Teresita P. Rupisan, her niece
who is the only daughter of Rosa dela Merced-Platon (a sister who died in 1943); and
(3) the legitimate children of Eugenia dela Merced-Adriano (another sister of Evarista
who died in 1965), namely: Herminio, Ruben, Joselito, Rogelio, Wilfredo, Victor and
Constantino, all surnamed Adriano, Corazon Adriano-Ongoco and Jasmin AdrianoMendoza.

Almost a year later or on March 19, 1988, to be precise, Francisco (Evarista's

brother) died. He was survived by his wife Blanquita Errea dela Merced and their
three legitimate children, namely, Luisito E. dela Merced, Blanquita M. Macatangay
and Ma. Olivia M. Paredes.
On April 20, 1989, the three sets of heirs of the decedent, Evarista M. dela Merced,
referring to (1) the abovenamed heirs of Francisco; (2) Teresita P. Rupisan and (3) the
nine [9] legitimate children of Eugenia, executed an extrajudicial settlement, entitled
"Extrajudicial Settlement of the Estate of the Deceased Evarista M. dela Merced"
adjudicating the properties of Evarista to them, each set with a share of one-third
(1/3) pro-indiviso.
On July 26, 1990, private respondent Joselito P. Dela Merced, illegitimate son of the
late Francisco de la Merced, filed a "Petition for Annulment of the Extrajudicial
Settlement of the Estate of the Deceased Evarista M. Dela Merced with Prayer for a
Temporary Restraining Order", alleging that he was fraudulently omitted from the said
settlement made by petitioners, who were fully aware of his relation to the late
Francisco. Claiming successional rights, private respondent Joselito prayed that he
be included as one of the beneficiaries, to share in the one-third (1/3) pro-indiviso
share in the estate of the deceased Evarista, corresponding to the heirs of Francisco.
On August 3, 1990, the trial court issued the temporary restraining order prayed for by
private respondent Joselito, enjoining the sale of any of the real properties of the
deceased Evarista.
After trial, however, or on June 10, 1992, to be definite, the trial court dismissed the
petition, lifted the temporary restraining order earlier issued, and cancelled the notice
of lis pendens on the certificates of title covering the real properties of the deceased
Evarista.
In dismissing the petition, the trial court stated:
The factual setting of the instant motion after considering the
circumstances of the entire case and the other evidentiary facts and
documents presented by the herein parties points only to one issue
which goes into the very skeleton of the controversy, to wit:
"Whether or not the plaintiff may participate in the intestate estate
of the late Evarista M. Dela Merced in his capacity as
representative of his alleged father, Francisdo Dela Merced, brother
of the deceased, whose succession is under consideration.
xxx xxx xxx

Page 22 of 37

It is to be noted that Francisco Dela Merced, alleged father of the

herein plaintiff, is a legitimate child, not an illegitimate. Plaintiff, on
the other hand, is admittedly an illegitimate child of the late
Francisco Dela Merced. Hence, as such, he cannot represent his
alleged father in the succession of the latter in the intestate estate
of the late Evarista Dela Merced, because of the barrier in Art. 992
of the New Civil Code which states that:
An illegitimate child has no right to inherit ab intestato from the
legitimate children and relatives of his father or mother, nor shall
such children or relatives inherit in the same manner from the
illegitimate child.
The application of Art. 992 cannot be ignored in the instant case, it
is clearly worded in such a way that there can be no room for any
doubts and ambiguities. This provision of the law imposes a barrier
between the illegitimate and the legitimate family. . . . (Rollo, p. 8788)
Not satisfied with the dismissal of his petition, the private respondent appealed to the
Court of Appeals.
In its Decision of October 17, 1996, the Court of Appeals reversed the decision of the
trial court of origin and ordered the petitioners to execute an amendatory agreement
which shall form part of the original settlement, so as to include private respondent
Joselito as a co-heir to the estate of Francisco, which estate includes one-third (1/3)
pro indiviso of the latter's inheritance from the deceased Evarista.
The relevant and dispositive part of the Decision of the Court of Appeals, reads:
xxx xxx xxx
It is a basic principle embodied in Article 777, New Civil Code that
the rights to the succession are transmitted from the moment of the
death of the decedent, so that Francisco dela Merced inherited 1/3
of his sister's estate at the moment of the latter's death. Said 1/3 of
Evarista's estate formed part of Francisco's estate which was
subsequently transmitted upon his death on March 23, 1987 to his
legal heirs, among whom is appellant as his illegitimate child.
Appellant became entitled to his share in Francisco's estate from
the time of the latter's death in 1987. The extrajudicial settlement
therefore is void insofar as it deprives plaintiff-appellant of his share

in the estate of Francisco M. dela Merced. As a consequence, the

cancellation of the notice of lis pendens is not in order because the
property is directly affected. Appellant has the right to demand a
partition of his father's estate which includes 1/3 of the property
inherited from Evarista dela Merced.
WHEREFORE, premises considered, the appealed decision is
hereby REVERSED and SET ASIDE. Defendants-appellees are
hereby ordered to execute an amendatory agreement/settlement to
include herein plaintiff-appellant Joselito dela Merced as co-heir to
the estate of Francisco dela Merced which includes 1/3 of the
estate subject of the questioned Deed of Extrajudicial Settlement of
the Estate of Evarista M. dela Merced dated April 20, 1989. The
amendatory agreement/settlement shall form part of the original
Extrajudicial Settlement. With costs against defendants-appellees.

Petitioners argue that if Joselito desires to assert successional rights to the intestate
estate of his father, the proper forum should be in the settlement of his own father's
intestate estate, as this Court held in the case of Gutierrez vs. Macandog (150 SCRA
422 [1987])
Petitioners' reliance on the case of Gutierrez vs. Macandog (supra) is misplaced. The
said case involved a claim for support filed by one Elpedia Gutierrez against the
estate of the decedent, Agustin Gutierrez, Sr., when she was not even an heir to the
estate in question, at the time, and the decedent had no obligation whatsoever to give
her support. Thus, this Court ruled that Elpedia should have asked for support
pendente lite before the Juvenile and Domestic Relations Court in which court her
husband (one of the legal heirs of the decedent) had instituted a case for legal
separation against her on the ground of an attempt against his life. When Mauricio
(her husband) died, she should have commenced an action for the settlement of the
estate of her husband, in which case she could receive whatever allowance the
intestate court would grant her.

SO ORDERED. (Rollo, p. 41)

In the Petition under consideration, petitioners insist that being an illegitimate child,
private respondent Joselito isbarred from inheriting from Evarista because of the
provision of Article 992 of the New Civil Code, which lays down an impassable barrier
between the legitimate and illegitimate families.
The Petition is devoid of merit.
Article 992 of the New Civil Code is not applicable because involved here is not a
situation where an illegitimate child would inherit ab intestato from a legitimate sister
of his father, which is prohibited by the aforesaid provision of law. Rather, it is a
scenario where an illegitimate child inherits from his father, the latter's share in or
portion of, what the latter already inherited from the deceased sister, Evarista.
As opined by the Court of Appeals, the law in point in the present case is Article 777
of the New Civil Code which provides that the rights to succession are transmitted
from the moment of death of the decedent.
Since Evarista died ahead of her brother Francisco, the latter inherited a portion of
the estate of the former as one of her heirs. Subsequently, when Francisco died, his
heirs, namely: his spouse, legitimate children, and the private respondent, Joselito, an
illegitimate child, inherited his (Francisco's) share in the estate of Evarista. It bears
stressing that Joselito does not claim to be an heir of Evarista by right of
representation but participates in his own right, as an heir of the late Francisco, in the
latter's share (or portion thereof) in the estate of Evarista.

Page 23 of 37

The present case, however, relates to the rightful and undisputed right of an heir to
the share of his late father in the estate of the decedent Evarista, ownership of which
had been transmitted to his father upon the death of Evarista. There is no legal
obstacle for private respondent Joselito, admittedly the son of the late Francisco, to
inherit in his own right as an heir to his father's estate, which estate includes a onethird (1/3) undivided share in the estate of Evarista.
WHEREFORE, for lack of merit, the Petition is hereby DENIED and the Appealed
Decision of the Court of Appeals AFFIRMED in toto.
G.R. No. 103577 October 7, 1996
ROMULO A. CORONEL, ALARICO A. CORONEL, ANNETTE A. CORONEL,
ANNABELLE C. GONZALES (for herself and on behalf of Florida C. Tupper, as
attorney-in-fact), CIELITO A. CORONEL, FLORAIDA A. ALMONTE, and
CATALINA
BALAIS
MABANAG, petitioners,
vs.
THE COURT OF APPEALS, CONCEPCION D. ALCARAZ, and RAMONA
PATRICIA ALCARAZ, assisted by GLORIA F. NOEL as attorney-infact, respondents.

MELO, J.:p

The petition before us has its roots in a complaint for specific performance to compel
herein petitioners (except the last named, Catalina Balais Mabanag) to consummate
the sale of a parcel of land with its improvements located along Roosevelt Avenue in
Quezon City entered into by the parties sometime in January 1985 for the price of
P1,240,000.00.
The undisputed facts of the case were summarized by respondent court in this wise:
On January 19, 1985, defendants-appellants Romulo Coronel, et al.
(hereinafter referred to as Coronels) executed a document entitled
"Receipt of Down Payment" (Exh. "A") in favor of plaintiff Ramona
Patricia Alcaraz (hereinafter referred to as Ramona) which is
reproduced hereunder:
RECEIPT OF DOWN PAYMENT

Down

payment

Received from Miss Ramona Patricia Alcaraz of 146 Timog,

Quezon City, the sum of Fifty Thousand Pesos purchase price of
our inherited house and lot, covered by TCT No. 119627 of the
Registry of Deeds of Quezon City, in the total amount of
P1,240,000.00.
We bind ourselves to effect the transfer in our names from our
deceased father, Constancio P. Coronel, the transfer certificate of
title immediately upon receipt of the down payment above-stated.
On our presentation of the TCT already in or name, We will
immediately execute the deed of absolute sale of said property and
Miss Ramona Patricia Alcaraz shall immediately pay the balance of
the P1,190,000.00.
Clearly, the conditions appurtenant to the sale are the following:
1. Ramona will make a down payment of Fifty Thousand
(P50,000.00) Pesos upon execution of the document aforestated;

Page 24 of 37

3. Upon the transfer in their names of the subject property, the

Coronels will execute the deed of absolute sale in favor of Ramona
and the latter will pay the former the whole balance of One Million
One Hundred Ninety Thousand (P1,190,000.00) Pesos.
On the same date (January 15, 1985), plaintiff-appellee
Concepcion D. Alcaraz (hereinafter referred to as Concepcion),
mother of Ramona, paid the down payment of Fifty Thousand
(P50,000.00) Pesos (Exh. "B", Exh. "2").
On February 6, 1985, the property originally registered in the name
of the Coronels' father was transferred in their names under TCT
No. 327043 (Exh. "D"; Exh. "4")

P1,240,000.00 Total amount

50,000

P1,190,000.00 Balance

2. The Coronels will cause the transfer in their names of the title of
the property registered in the name of their deceased father upon
receipt of the Fifty Thousand (P50,000.00) Pesos down payment;

On February 18, 1985, the Coronels sold the property covered by

TCT No. 327043 to intervenor-appellant Catalina B. Mabanag
(hereinafter referred to as Catalina) for One Million Five Hundred
Eighty Thousand (P1,580,000.00) Pesos after the latter has paid
Three Hundred Thousand (P300,000.00) Pesos (Exhs. "F-3"; Exh.
"6-C")
For this reason, Coronels canceled and rescinded the contract
(Exh. "A") with Ramona by depositing the down payment paid by
Concepcion in the bank in trust for Ramona Patricia Alcaraz.
On February 22, 1985, Concepcion, et al., filed a complaint for
specific performance against the Coronels and caused the
annotation of a notice of lis pendens at the back of TCT No. 327403
(Exh. "E"; Exh. "5").
On April 2, 1985, Catalina caused the annotation of a notice of
adverse claim covering the same property with the Registry of
Deeds of Quezon City (Exh. "F"; Exh. "6").
On April 25, 1985, the Coronels executed a Deed of Absolute Sale
over the subject property in favor of Catalina (Exh. "G"; Exh. "7").

On June 5, 1985, a new title over the subject property was issued
in the name of Catalina under TCT No. 351582 (Exh. "H"; Exh. "8").

No pronouncement as to costs.
So Ordered.

(Rollo, pp. 134-136)

Macabebe, Pampanga for Quezon City, March 1, 1989.
In the course of the proceedings before the trial court (Branch 83, RTC, Quezon City)
the parties agreed to submit the case for decision solely on the basis of documentary
exhibits. Thus, plaintiffs therein (now private respondents) proffered their
documentary evidence accordingly marked as Exhibits "A" through "J", inclusive of
their corresponding submarkings. Adopting these same exhibits as their own, then
defendants (now petitioners) accordingly offered and marked them as Exhibits "1"
through "10", likewise inclusive of their corresponding submarkings. Upon motion of
the parties, the trial court gave them thirty (30) days within which to simultaneously
submit their respective memoranda, and an additional 15 days within which to submit
their corresponding comment or reply thereof, after which, the case would be deemed
submitted for resolution.
On April 14, 1988, the case was submitted for resolution before Judge Reynaldo
Roura, who was then temporarily detailed to preside over Branch 82 of the RTC of
Quezon City. On March 1, 1989, judgment was handed down by Judge Roura from
his regular bench at Macabebe, Pampanga for the Quezon City branch, disposing as
follows:
WHEREFORE, judgment for specific performance is hereby
rendered ordering defendant to execute in favor of plaintiffs a deed
of absolute sale covering that parcel of land embraced in and
covered by Transfer Certificate of Title No. 327403 (now TCT No.
331582) of the Registry of Deeds for Quezon City, together with all
the improvements existing thereon free from all liens and
encumbrances, and once accomplished, to immediately deliver the
said document of sale to plaintiffs and upon receipt thereof, the said
document of sale to plaintiffs and upon receipt thereof, the plaintiffs
are ordered to pay defendants the whole balance of the purchase
price amounting to P1,190,000.00 in cash. Transfer Certificate of
Title No. 331582 of the Registry of Deeds for Quezon City in the
name of intervenor is hereby canceled and declared to be without
force and effect. Defendants and intervenor and all other persons
claiming under them are hereby ordered to vacate the subject
property and deliver possession thereof to plaintiffs. Plaintiffs' claim
for damages and attorney's fees, as well as the counterclaims of
defendants and intervenors are hereby dismissed.

Page 25 of 37

(Rollo, p. 106)
A motion for reconsideration was filed by petitioner before the new presiding judge of
the Quezon City RTC but the same was denied by Judge Estrella T. Estrada, thusly:
The prayer contained in the instant motion, i.e., to annul the
decision and to render anew decision by the undersigned Presiding
Judge should be denied for the following reasons: (1) The instant
case became submitted for decision as of April 14, 1988 when the
parties terminated the presentation of their respective documentary
evidence and when the Presiding Judge at that time was Judge
Reynaldo Roura. The fact that they were allowed to file memoranda
at some future date did not change the fact that the hearing of the
case was terminated before Judge Roura and therefore the same
should be submitted to him for decision; (2) When the defendants
and intervenor did not object to the authority of Judge Reynaldo
Roura to decide the case prior to the rendition of the decision, when
they met for the first time before the undersigned Presiding Judge
at the hearing of a pending incident in Civil Case No. Q-46145 on
November 11, 1988, they were deemed to have acquiesced thereto
and they are now estopped from questioning said authority of
Judge Roura after they received the decision in question which
happens to be adverse to them; (3) While it is true that Judge
Reynaldo Roura was merely a Judge-on-detail at this Branch of the
Court, he was in all respects the Presiding Judge with full authority
to act on any pending incident submitted before this Court during
his incumbency. When he returned to his Official Station at
Macabebe, Pampanga, he did not lose his authority to decide or
resolve such cases submitted to him for decision or resolution
because he continued as Judge of the Regional Trial Court and is
of co-equal rank with the undersigned Presiding Judge. The
standing rule and supported by jurisprudence is that a Judge to
whom a case is submitted for decision has the authority to decide
the case notwithstanding his transfer to another branch or region of
the same court (Sec. 9, Rule 135, Rule of Court).

Coming now to the twin prayer for reconsideration of the Decision

dated March 1, 1989 rendered in the instant case, resolution of
which now pertains to the undersigned Presiding Judge, after a
meticulous examination of the documentary evidence presented by
the parties, she is convinced that the Decision of March 1, 1989 is
supported by evidence and, therefore, should not be disturbed.
IN VIEW OF THE FOREGOING, the "Motion for Reconsideration
and/or to Annul Decision and Render Anew Decision by the
Incumbent Presiding Judge" dated March 20, 1989 is hereby
DENIED.
SO ORDERED.
Quezon City, Philippines, July 12, 1989.
(Rollo, pp. 108-109)
Petitioners thereupon interposed an appeal, but on December 16, 1991, the Court of
Appeals (Buena, Gonzaga-Reyes, Abad Santos (P), JJ.) rendered its decision fully
agreeing with the trial court.
Hence, the instant petition which was filed on March 5, 1992. The last pleading,
private respondents' Reply Memorandum, was filed on September 15, 1993. The
case was, however, re-raffled to undersigned ponente only on August 28, 1996, due
to the voluntary inhibition of the Justice to whom the case was last assigned.
While we deem it necessary to introduce certain refinements in the disquisition of
respondent court in the affirmance of the trial court's decision, we definitely find the
instant petition bereft of merit.
The heart of the controversy which is the ultimate key in the resolution of the other
issues in the case at bar is the precise determination of the legal significance of the
document entitled "Receipt of Down Payment" which was offered in evidence by both
parties. There is no dispute as to the fact that said document embodied the binding
contract between Ramona Patricia Alcaraz on the one hand, and the heirs of
Constancio P. Coronel on the other, pertaining to a particular house and lot covered
by TCT No. 119627, as defined in Article 1305 of the Civil Code of the Philippines
which reads as follows:

Page 26 of 37

Art. 1305. A contract is a meeting of minds between two persons

whereby one binds himself, with respect to the other, to give
something or to render some service.
While, it is the position of private respondents that the "Receipt of Down Payment"
embodied a perfected contract of sale, which perforce, they seek to enforce by means
of an action for specific performance, petitioners on their part insist that what the
document signified was a mere executory contract to sell, subject to certain
suspensive conditions, and because of the absence of Ramona P. Alcaraz, who left
for the United States of America, said contract could not possibly ripen into a contract
absolute sale.
Plainly, such variance in the contending parties' contentions is brought about by the
way each interprets the terms and/or conditions set forth in said private instrument.
Withal, based on whatever relevant and admissible evidence may be available on
record, this, Court, as were the courts below, is now called upon to adjudge what the
real intent of the parties was at the time the said document was executed.
The Civil Code defines a contract of sale, thus:
Art. 1458. By the contract of sale one of the contracting parties
obligates himself to transfer the ownership of and to deliver a
determinate thing, and the other to pay therefor a price certain in
money or its equivalent.
Sale, by its very nature, is a consensual contract because it is perfected by mere
consent. The essential elements of a contract of sale are the following:
a) Consent or meeting of the minds, that is, consent to transfer
ownership in exchange for the price;
b) Determinate subject matter; and
c) Price certain in money or its equivalent.
Under this definition, a Contract to Sell may not be considered as a Contract of Sale
because the first essential element is lacking. In a contract to sell, the prospective
seller explicity reserves the transfer of title to the prospective buyer, meaning, the
prospective seller does not as yet agree or consent to transfer ownership of the
property subject of the contract to sell until the happening of an event, which for
present purposes we shall take as the full payment of the purchase price. What the

seller agrees or obliges himself to do is to fulfill is promise to sell the subject property
when the entire amount of the purchase price is delivered to him. In other words the
full payment of the purchase price partakes of a suspensive condition, the nonfulfillment of which prevents the obligation to sell from arising and thus, ownership is
retained by the prospective seller without further remedies by the prospective buyer.
In Roque vs. Lapuz (96 SCRA 741 [1980]), this Court had occasion to rule:
Hence, We hold that the contract between the petitioner and the
respondent was a contract to sell where the ownership or title is
retained by the seller and is not to pass until the full payment of the
price, such payment being a positive suspensive condition and
failure of which is not a breach, casual or serious, but simply an
event that prevented the obligation of the vendor to convey title
from acquiring binding force.
Stated positively, upon the fulfillment of the suspensive condition which is the full
payment of the purchase price, the prospective seller's obligation to sell the subject
property by entering into a contract of sale with the prospective buyer becomes
demandable as provided in Article 1479 of the Civil Code which states:
Art. 1479. A promise to buy and sell a determinate thing for a price
certain is reciprocally demandable.
An accepted unilateral promise to buy or to sell a determinate thing
for a price certain is binding upon the promissor if the promise is
supported by a consideration distinct from the price.
A contract to sell may thus be defined as a bilateral contract whereby the prospective
seller, while expressly reserving the ownership of the subject property despite delivery
thereof to the prospective buyer, binds himself to sell the said property exclusively to
the prospective buyer upon fulfillment of the condition agreed upon, that is, full
payment of the purchase price.
A contract to sell as defined hereinabove, may not even be considered as a
conditional contract of sale where the seller may likewise reserve title to the property
subject of the sale until the fulfillment of a suspensive condition, because in a
conditional contract of sale, the first element of consent is present, although it is
conditioned upon the happening of a contingent event which may or may not occur. If
the suspensive condition is not fulfilled, the perfection of the contract of sale is
completely abated (cf. Homesite and housing Corp. vs. Court of Appeals, 133 SCRA
777 [1984]). However, if the suspensive condition is fulfilled, the contract of sale is
thereby perfected, such that if there had already been previous delivery of the

Page 27 of 37

property subject of the sale to the buyer, ownership thereto automatically transfers to
the buyer by operation of law without any further act having to be performed by the
seller.
In a contract to sell, upon the fulfillment of the suspensive condition which is the full
payment of the purchase price, ownership will not automatically transfer to the buyer
although the property may have been previously delivered to him. The prospective
seller still has to convey title to the prospective buyer by entering into a contract of
absolute sale.
It is essential to distinguish between a contract to sell and a conditional contract of
sale specially in cases where the subject property is sold by the owner not to the
party the seller contracted with, but to a third person, as in the case at bench. In a
contract to sell, there being no previous sale of the property, a third person buying
such property despite the fulfillment of the suspensive condition such as the full
payment of the purchase price, for instance, cannot be deemed a buyer in bad faith
and the prospective buyer cannot seek the relief of reconveyance of the property.
There is no double sale in such case. Title to the property will transfer to the buyer
after registration because there is no defect in the owner-seller's title per se, but the
latter, of course, may be used for damages by the intending buyer.
In a conditional contract of sale, however, upon the fulfillment of the suspensive
condition, the sale becomes absolute and this will definitely affect the seller's title
thereto. In fact, if there had been previous delivery of the subject property, the seller's
ownership or title to the property is automatically transferred to the buyer such that,
the seller will no longer have any title to transfer to any third person. Applying Article
1544 of the Civil Code, such second buyer of the property who may have had actual
or constructive knowledge of such defect in the seller's title, or at least was charged
with the obligation to discover such defect, cannot be a registrant in good faith. Such
second buyer cannot defeat the first buyer's title. In case a title is issued to the
second buyer, the first buyer may seek reconveyance of the property subject of the
sale.
With the above postulates as guidelines, we now proceed to the task of deciphering
the real nature of the contract entered into by petitioners and private respondents.
It is a canon in the interpretation of contracts that the words used therein should be
given their natural and ordinary meaning unless a technical meaning was intended
(Tan vs. Court of Appeals, 212 SCRA 586 [1992]). Thus, when petitioners declared in
the said "Receipt of Down Payment" that they

Received from Miss Ramona Patricia Alcaraz of 146 Timog,

Quezon City, the sum of Fifty Thousand Pesos purchase price of
our inherited house and lot, covered by TCT No. 1199627 of the
Registry of Deeds of Quezon City, in the total amount of
P1,240,000.00.
without any reservation of title until full payment of the entire purchase price,
the natural and ordinary idea conveyed is that they sold their property.
When the "Receipt of Down Payment" is considered in its entirety, it becomes more
manifest that there was a clear intent on the part of petitioners to transfer title to the
buyer, but since the transfer certificate of title was still in the name of petitioner's
father, they could not fully effect such transfer although the buyer was then willing and
able to immediately pay the purchase price. Therefore, petitioners-sellers undertook
upon receipt of the down payment from private respondent Ramona P. Alcaraz, to
cause the issuance of a new certificate of title in their names from that of their father,
after which, they promised to present said title, now in their names, to the latter and to
execute the deed of absolute sale whereupon, the latter shall, in turn, pay the entire
balance of the purchase price.
The agreement could not have been a contract to sell because the sellers herein
made no express reservation of ownership or title to the subject parcel of land.
Furthermore, the circumstance which prevented the parties from entering into an
absolute contract of sale pertained to the sellers themselves (the certificate of title
was not in their names) and not the full payment of the purchase price. Under the
established facts and circumstances of the case, the Court may safely presume that,
had the certificate of title been in the names of petitioners-sellers at that time, there
would have been no reason why an absolute contract of sale could not have been
executed and consummated right there and then.
Moreover, unlike in a contract to sell, petitioners in the case at bar did not merely
promise to sell the properly to private respondent upon the fulfillment of the
suspensive condition. On the contrary, having already agreed to sell the subject
property, they undertook to have the certificate of title changed to their names and
immediately thereafter, to execute the written deed of absolute sale.
Thus, the parties did not merely enter into a contract to sell where the sellers, after
compliance by the buyer with certain terms and conditions, promised to sell the
property to the latter. What may be perceived from the respective undertakings of the
parties to the contract is that petitioners had already agreed to sell the house and lot
they inherited from their father, completely willing to transfer full ownership of the
subject house and lot to the buyer if the documents were then in order. It just

Page 28 of 37

happened, however, that the transfer certificate of title was then still in the name of
their father. It was more expedient to first effect the change in the certificate of title so
as to bear their names. That is why they undertook to cause the issuance of a new
transfer of the certificate of title in their names upon receipt of the down payment in
the amount of P50,000.00. As soon as the new certificate of title is issued in their
names, petitioners were committed to immediately execute the deed of absolute sale.
Only then will the obligation of the buyer to pay the remainder of the purchase price
arise.
There is no doubt that unlike in a contract to sell which is most commonly entered into
so as to protect the seller against a buyer who intends to buy the property in
installment by withholding ownership over the property until the buyer effects full
payment therefor, in the contract entered into in the case at bar, the sellers were the
one who were unable to enter into a contract of absolute sale by reason of the fact
that the certificate of title to the property was still in the name of their father. It was the
sellers in this case who, as it were, had the impediment which prevented, so to speak,
the execution of an contract of absolute sale.
What is clearly established by the plain language of the subject document is that
when the said "Receipt of Down Payment" was prepared and signed by petitioners
Romeo A. Coronel, et al., the parties had agreed to a conditional contract of sale,
consummation of which is subject only to the successful transfer of the certificate of
title from the name of petitioners' father, Constancio P. Coronel, to their names.
The Court significantly notes this suspensive condition was, in fact, fulfilled on
February 6, 1985 (Exh. "D"; Exh. "4"). Thus, on said date, the conditional contract of
sale between petitioners and private respondent Ramona P. Alcaraz became
obligatory, the only act required for the consummation thereof being the delivery of
the property by means of the execution of the deed of absolute sale in a public
instrument, which petitioners unequivocally committed themselves to do as evidenced
by the "Receipt of Down Payment."
Article 1475, in correlation with Article 1181, both of the Civil Code, plainly applies to
the case at bench. Thus,
Art. 1475. The contract of sale is perfected at the moment there is a
meeting of minds upon the thing which is the object of the contract
and upon the price.
From the moment, the parties may reciprocally demand
performance, subject to the provisions of the law governing the
form of contracts.

Art. 1181. In conditional obligations, the acquisition of rights, as well

as the extinguishment or loss of those already acquired, shall
depend upon the happening of the event which constitutes the
condition.
Since the condition contemplated by the parties which is the issuance of a certificate
of title in petitioners' names was fulfilled on February 6, 1985, the respective
obligations of the parties under the contract of sale became mutually demandable,
that is, petitioners, as sellers, were obliged to present the transfer certificate of title
already in their names to private respondent Ramona P. Alcaraz, the buyer, and to
immediately execute the deed of absolute sale, while the buyer on her part, was
obliged to forthwith pay the balance of the purchase price amounting to
P1,190,000.00.
It is also significant to note that in the first paragraph in page 9 of their petition,
petitioners conclusively admitted that:
3. The petitioners-sellers Coronel bound themselves "to effect the
transfer in our names from our deceased father Constancio P.
Coronel, the transfer certificate of title immediately upon receipt of
the downpayment above-stated". The sale was still subject to this
suspensive condition. (Emphasis supplied.)
(Rollo, p. 16)
Petitioners themselves recognized that they entered into a contract of sale subject to
a suspensive condition. Only, they contend, continuing in the same paragraph, that:
. . . Had petitioners-sellers not complied with this condition of first
transferring the title to the property under their names, there could
be no perfected contract of sale. (Emphasis supplied.)
(Ibid.)
not aware that they set their own trap for themselves, for Article 1186 of the
Civil Code expressly provides that:
Art. 1186. The condition shall be deemed fulfilled when the obligor
voluntarily prevents its fulfillment.

Page 29 of 37

Besides, it should be stressed and emphasized that what is more controlling than
these mere hypothetical arguments is the fact that the condition herein referred to
was actually and indisputably fulfilled on February 6, 1985, when a new title was
issued in the names of petitioners as evidenced by TCT No. 327403 (Exh. "D"; Exh.
"4").
The inevitable conclusion is that on January 19, 1985, as evidenced by the document
denominated as "Receipt of Down Payment" (Exh. "A"; Exh. "1"), the parties entered
into a contract of sale subject only to the suspensive condition that the sellers shall
effect the issuance of new certificate title from that of their father's name to their
names and that, on February 6, 1985, this condition was fulfilled (Exh. "D"; Exh. "4").
We, therefore, hold that, in accordance with Article 1187 which pertinently provides
Art. 1187. The effects of conditional obligation to give, once the
condition has been fulfilled, shall retroact to the day of the
constitution of the obligation . . .
In obligation to do or not to do, the courts shall determine, in each
case, the retroactive effect of the condition that has been complied
with.
the rights and obligations of the parties with respect to the perfected contract
of sale became mutually due and demandable as of the time of fulfillment or
occurrence of the suspensive condition on February 6, 1985. As of that point
in time, reciprocal obligations of both seller and buyer arose.
Petitioners also argue there could been no perfected contract on January 19, 1985
because they were then not yet the absolute owners of the inherited property.
We cannot sustain this argument.
Article 774 of the Civil Code defines Succession as a mode of transferring ownership
as follows:
Art. 774. Succession is a mode of acquisition by virtue of which the
property, rights and obligations to be extent and value of the
inheritance of a person are transmitted through his death to another
or others by his will or by operation of law.

Petitioners-sellers in the case at bar being the sons and daughters of the
decedent Constancio P. Coronel are compulsory heirs who were called to
succession by operation of law. Thus, at the point their father drew his last
breath, petitioners stepped into his shoes insofar as the subject property is
concerned, such that any rights or obligations pertaining thereto became
binding and enforceable upon them. It is expressly provided that rights to the
succession are transmitted from the moment of death of the decedent
(Article 777, Civil Code; Cuison vs. Villanueva, 90 Phil. 850 [1952]).

Ng Diong, 110 Phil. 882 [1961]; Recaro vs. Embisan, 2 SCRA 598 [1961]. Mere
allegation is not an evidence (Lagasca vs. De Vera, 79 Phil. 376 [1947]).

Be it also noted that petitioners' claim that succession may not be declared unless the
creditors have been paid is rendered moot by the fact that they were able to effect the
transfer of the title to the property from the decedent's name to their names on
February 6, 1985.

Moreover, petitioners are estopped from raising the alleged absence of Ramona P.
Alcaraz because although the evidence on record shows that the sale was in the
name of Ramona P. Alcaraz as the buyer, the sellers had been dealing with
Concepcion D. Alcaraz, Ramona's mother, who had acted for and in behalf of her
daughter, if not also in her own behalf. Indeed, the down payment was made by
Concepcion D. Alcaraz with her own personal check (Exh. "B"; Exh. "2") for and in
behalf of Ramona P. Alcaraz. There is no evidence showing that petitioners ever
questioned Concepcion's authority to represent Ramona P. Alcaraz when they
accepted her personal check. Neither did they raise any objection as regards
payment being effected by a third person. Accordingly, as far as petitioners are
concerned, the physical absence of Ramona P. Alcaraz is not a ground to rescind the
contract of sale.

Aside from this, petitioners are precluded from raising their supposed lack of capacity
to enter into an agreement at that time and they cannot be allowed to now take a
posture contrary to that which they took when they entered into the agreement with
private respondent Ramona P. Alcaraz. The Civil Code expressly states that:
Art. 1431. Through estoppel an admission or representation is
rendered conclusive upon the person making it, and cannot be
denied or disproved as against the person relying thereon.
Having represented themselves as the true owners of the subject property at
the time of sale, petitioners cannot claim now that they were not yet the
absolute owners thereof at that time.
Petitioners also contend that although there was in fact a perfected contract of sale
between them and Ramona P. Alcaraz, the latter breached her reciprocal obligation
when she rendered impossible the consummation thereof by going to the United
States of America, without leaving her address, telephone number, and Special
Power of Attorney (Paragraphs 14 and 15, Answer with Compulsory Counterclaim to
the Amended Complaint, p. 2; Rollo, p. 43), for which reason, so petitioners conclude,
they were correct in unilaterally rescinding rescinding the contract of sale.
We do not agree with petitioners that there was a valid rescission of the contract of
sale in the instant case. We note that these supposed grounds for petitioners'
rescission, are mere allegations found only in their responsive pleadings, which by
express provision of the rules, are deemed controverted even if no reply is filed by the
plaintiffs (Sec. 11, Rule 6, Revised Rules of Court). The records are absolutely bereft
of any supporting evidence to substantiate petitioners' allegations. We have stressed
time and again that allegations must be proven by sufficient evidence (Ng Cho Cio vs.

Page 30 of 37

Even assuming arguendo that Ramona P. Alcaraz was in the United States of
America on February 6, 1985, we cannot justify petitioner-sellers' act of unilaterally
and extradicially rescinding the contract of sale, there being no express stipulation
authorizing the sellers to extarjudicially rescind the contract of sale. (cf. Dignos vs.
CA, 158 SCRA 375 [1988]; Taguba vs. Vda. de Leon, 132 SCRA 722 [1984])

Corollarily, Ramona P. Alcaraz cannot even be deemed to be in default, insofar as her

obligation to pay the full purchase price is concerned. Petitioners who are precluded
from setting up the defense of the physical absence of Ramona P. Alcaraz as aboveexplained offered no proof whatsoever to show that they actually presented the new
transfer certificate of title in their names and signified their willingness and readiness
to execute the deed of absolute sale in accordance with their agreement. Ramona's
corresponding obligation to pay the balance of the purchase price in the amount of
P1,190,000.00 (as buyer) never became due and demandable and, therefore, she
cannot be deemed to have been in default.
Article 1169 of the Civil Code defines when a party in a contract involving reciprocal
obligations may be considered in default, to wit:
Art. 1169. Those obliged to deliver or to do something, incur in
delay from the time the obligee judicially or extrajudicially demands
from them the fulfillment of their obligation.
xxx xxx xxx

In reciprocal obligations, neither party incurs in delay if the other

does not comply or is not ready to comply in a proper manner with
what is incumbent upon him. From the moment one of the parties
fulfill his obligation, delay by the other begins. (Emphasis supplied.)
There is thus neither factual nor legal basis to rescind the contract of sale between
petitioners and respondents.
With the foregoing conclusions, the sale to the other petitioner, Catalina B. Mabanag,
gave rise to a case of double sale where Article 1544 of the Civil Code will apply, to
wit:
Art. 1544. If the same thing should have been sold to different
vendees, the ownership shall be transferred to the person who may
have first taken possession thereof in good faith, if it should be
movable property.
Should if be immovable property, the ownership shall belong to the
person acquiring it who in good faith first recorded it in Registry of
Property.
Should there be no inscription, the ownership shall pertain to the
person who in good faith was first in the possession; and, in the
absence thereof to the person who presents the oldest title,
provided there is good faith.
The record of the case shows that the Deed of Absolute Sale dated April 25, 1985 as
proof of the second contract of sale was registered with the Registry of Deeds of
Quezon City giving rise to the issuance of a new certificate of title in the name of
Catalina B. Mabanag on June 5, 1985. Thus, the second paragraph of Article 1544
shall apply.
The above-cited provision on double sale presumes title or ownership to pass to the
first buyer, the exceptions being: (a) when the second buyer, in good faith, registers
the sale ahead of the first buyer, and (b) should there be no inscription by either of the
two buyers, when the second buyer, in good faith, acquires possession of the
property ahead of the first buyer. Unless, the second buyer satisfies these
requirements, title or ownership will not transfer to him to the prejudice of the first
buyer.

Page 31 of 37

In his commentaries on the Civil Code, an accepted authority on the subject, now a
distinguished member of the Court, Justice Jose C. Vitug, explains:
The governing principle is prius tempore, potior jure (first in time,
stronger in right). Knowledge by the first buyer of the second sale
cannot defeat the first buyer's rights except when the second buyer
first registers in good faith the second sale (Olivares vs. Gonzales,
159 SCRA 33). Conversely, knowledge gained by the second buyer
of the first sale defeats his rights even if he is first to register, since
knowledge taints his registration with bad faith (see also Astorga vs.
Court of Appeals, G.R. No. 58530, 26 December 1984). In Cruz
vs. Cabana (G.R. No. 56232, 22 June 1984, 129 SCRA 656), it has
held that it is essential, to merit the protection of Art. 1544, second
paragraph, that the second realty buyer must act in good faith in
registering his deed of sale (citing Carbonell vs. Court of Appeals,
69 SCRA 99, Crisostomo vs. CA, G.R. No. 95843, 02 September
1992).
(J. Vitug Compendium of Civil Law and Jurisprudence, 1993
Edition, p. 604).
Petitioner point out that the notice of lis pendens in the case at bar was annoted on
the title of the subject property only on February 22, 1985, whereas, the second sale
between petitioners Coronels and petitioner Mabanag was supposedly perfected prior
thereto or on February 18, 1985. The idea conveyed is that at the time petitioner
Mabanag, the second buyer, bought the property under a clean title, she was
unaware of any adverse claim or previous sale, for which reason she is buyer in good
faith.
We are not persuaded by such argument.
In a case of double sale, what finds relevance and materiality is not whether or not
the second buyer was a buyer in good faith but whether or not said second buyer
registers such second sale in good faith, that is, without knowledge of any defect in
the title of the property sold.
As clearly borne out by the evidence in this case, petitioner Mabanag could not have
in good faith, registered the sale entered into on February 18, 1985 because as early
as February 22, 1985, a notice of lis pendens had been annotated on the transfer
certificate of title in the names of petitioners, whereas petitioner Mabanag registered
the said sale sometime in April, 1985. At the time of registration, therefore, petitioner
Mabanag knew that the same property had already been previously sold to private
respondents, or, at least, she was charged with knowledge that a previous buyer is

claiming title to the same property. Petitioner Mabanag cannot close her eyes to the
defect in petitioners' title to the property at the time of the registration of the property.
This Court had occasions to rule that:
If a vendee in a double sale registers that sale after he has
acquired knowledge that there was a previous sale of the same
property to a third party or that another person claims said property
in a pervious sale, the registration will constitute a registration in
bad faith and will not confer upon him any right. (Salvoro vs.
Tanega, 87 SCRA 349 [1978]; citing Palarca vs. Director of Land,
43 Phil. 146; Cagaoan vs. Cagaoan, 43 Phil. 554; Fernandez vs.
Mercader, 43 Phil. 581.)
Thus, the sale of the subject parcel of land between petitioners and Ramona P.
Alcaraz, perfected on February 6, 1985, prior to that between petitioners and Catalina
B. Mabanag on February 18, 1985, was correctly upheld by both the courts below.
Although there may be ample indications that there was in fact an agency between
Ramona as principal and Concepcion, her mother, as agent insofar as the subject
contract of sale is concerned, the issue of whether or not Concepcion was also acting
in her own behalf as a co-buyer is not squarely raised in the instant petition, nor in
such assumption disputed between mother and daughter. Thus, We will not touch this
issue and no longer disturb the lower courts' ruling on this point.
WHEREFORE, premises considered, the instant petition is hereby DISMISSED and
the appealed judgment AFFIRMED.
G.R. No. 61584 November 25, 1992
DONATO
S.
PAULMITAN,
JULIANA
P. FANESA and
RODOLFO
FANESA, petitioners,
vs.
COURT OF APPEALS, ALICIO PAULMITAN, ELENA PAULMITAN, ABELINO
PAULMITAN, ANITA PAULMITAN, BAKING PAULMITAN, ADELINA PAULMITAN
and ANITO PAULMITAN, respondents.

ROMERO, J.:

Page 32 of 37

This is a petition for review on certiorari seeking the reversal of the decision 1 of the
Court of Appeals, dated July 14, 1982 in CA-G.R. No. 62255-R entitled "Alicio
Paulmitan, et al. v. Donato Sagario Paulmitan, et al." which affirmed the decision 2 of
the then Court of First Instance (now RTC) of Negros Occidental, 12th Judicial
District, Branch IV, Bacolod City, in Civil Case No. 11770.
The antecedent facts are as follows:
Agatona Sagario Paulmitan, who died sometime in 1953, 3 left the two following
parcels of land located in the Province of Negros Occidental: (1) Lot No. 757 with an
area of 1,946 square meters covered by Original Certificate of Title (OCT) No. RO8376; and (2) Lot No. 1091 with an area of 69,080 square meters and covered by
OCT No. RO-11653. From her marriage with Ciriaco Paulmitan, who is also now
deceased, Agatona begot two legitimate children, namely: Pascual Paulmitan, who
also died in 1953, 4 apparently shortly after his mother passed away, and Donato
Paulmitan, who is one of the petitioners. Petitioner Juliana P. Fanesa is Donato's
daughter while the third petitioner, Rodolfo Fanes, is Juliana's husband. Pascual
Paulmitan, the other son of Agatona Sagario, is survived by the respondents, who are
his children, name: Alicio, Elena, Abelino, Adelina, Anita, Baking and Anito, all
surnamed Paulmitan.
Until 1963, the estate of Agatona Sagario Paulmitan remained unsettled and the titles
to the two lots mentioned above remained in the name of Agatona. However, on
August 11, 1963, petitioner Donato Paulmitan executed an Affidavit of Declaration of
Heirship, extrajudicially adjudicating unto himself Lot No. 757 based on the claim that
he is the only surviving heir of Agatona Sagario. The affidavit was filed with the
Register of Deeds of Negros Occidental on August 20, 1963, cancelled OCT No. RO8376 in the name of Agatona Sagario and issued Transfer Certificate of Title (TCT)
No. 35979 in Donato's name.
As regards Lot No. 1091, Donato executed on May 28, 1974 a Deed of Sale over the
same in favor of petitioner Juliana P. Fanesa, his daughter. 5
In the meantime, sometime in 1952, for non-payment of taxes, Lot No. 1091 was
forfeited and sold at a public auction, with the Provincial Government of Negros
Occidental being the buyer. A Certificate of Sale over the land was executed by the
Provincial Treasurer in favor of the Provincial Board of Negros Occidental. 6
On May 29, 1974, Juliana P. Fanesa redeemed the property from the Provincial
Government of Negros Occidental for the amount of P2,959.09. 7

On learning of these transactions, respondents children of the late Pascual Paulmitan

filed on January 18, 1975 with the Court of First Instance of Negros Occidental a
Complaint against petitioners to partition the properties plus damages.
Petitioners set up the defense of prescription with respect to Lot No. 757 as an
affirmative defense, contending that the Complaint was filed more than eleven years
after the issuance of a transfer certificate of title to Donato Paulmitan over the land as
consequence of the registration with the Register of Deeds, of Donato's affidavit
extrajudicially adjudicating unto himself Lot No. 757. As regards Lot No. 1091,
petitioner Juliana P. Fanesa claimed in her Answer to the Complaint that she acquired
exclusive ownership thereof not only by means of a deed of sale executed in her
favor by her father, petitioner Donato Paulmitan, but also by way of redemption from
the Provincial Government of Negros Occidental.
Acting on the petitioners' affirmative defense of prescription with respect to Lot No.
757, the trial court issued an order dated April 22, 1976 dismissing the complaint as to
the said property upon finding merit in petitioners' affirmative defense. This order,
which is not the object of the present petition, has become final after respondents'
failure to appeal therefrom.
Trial proceeded with respect to Lot No. 1091. In a decision dated May 20, 1977, the
trial court decided in favor of respondents as to Lot No. 1091. According to the trial
court, the respondents, as descendants of Agatona Sagario Paulmitan were entitled
to one-half (1/2) of Lot No. 1091, pro indiviso. The sale by petitioner Donato
Paulmitan to his daughter, petitioner Juliana P. Fanesa, did not prejudice their rights.
And the repurchase by Juliana P. Fanesa of the land from the Provincial Government
of Negros Occidental did not vest in Juliana exclusive ownership over the entire land
but only gave her the right to be reimbursed for the amount paid to redeem the
property. The trial court ordered the partition of the land and directed petitioners
Donato Paulmitan and Juliana P. Fanesa to pay private respondents certain amounts
representing the latter's share in the fruits of the land. On the other hand,
respondents were directed to pay P1,479.55 to Juliana P. Fanesa as their share in the
redemption price paid by Fanesa to the Provincial Government of Negros Occidental.
The dispositive portion of the trial court's decision reads:
WHEREFORE, judgment is hereby rendered on the second cause
of action pleaded in the complain as follows:

Page 33 of 37

1. The deed of sale (Exh. "F") dated May 28, 1974 is valid insofar
as the one-half undivided portion of Lot 1091 is concerned as to
vest ownership over said half portion in favor of defendant Juliana
Fanesa and her husband Rodolfo Fanesa, while the remaining half
shall belong to plaintiffs, pro-indiviso;
2. Lot 1091, Cadastral Survey of Pontevedra, Province of Negros
Occidental, now covered by TCT No. RO-11653 (N.A.), is ordered
partitioned. The parties must proceed to an actual partition by
property instrument of partition, submitting the corresponding
subdivision within sixty (60) days from finality of this decision, and
should they fail to agree, commissioners of partition may be
appointed by the Court;
3. Pending the physical partition, the Register of Deeds of Negros
Occidental is ordered to cancel Original Certificate of Title No. RO11653 (N.A.) covering Lot 1091, Pontevedra Cadastre, and to issue
in lieu thereof a new certificate of title in the name of plaintiffs and
defendants, one-half portion each,pro-indiviso, as indicated in
paragraph 1 above;
4. Plaintiffs are ordered to pay, jointly and severally, defendant
Juliana Fanesa the amount of P1,479.55 with interest at the legal
rate from May 28, 1974 until paid;
5 Defendants Donato Sagario Paulmitan and Juliana Paulmitan
Fanesa are ordered to account to plaintiffs and to pay them, jointly
and severally, the value of the produce from Lot 1091 representing
plaintiffs' share in the amount of P5,000.00 per year from 1966 up
to the time of actual partition of the property, and to pay them the
sum of P2,000.00 as attorney's fees as well as the costs of the suit.
xxx xxx xxx
On appeal, the Court of Appeals affirmed the trial court's decision. Hence this petition.
To determine the rights and obligations of the parties to the land in question, it is well
to review, initially, the relatives who survived the decedent Agatona Sagario
Paulmitan. When Agatona died in 1953, she was survived by two (2) sons, Donato
and Pascual. A few months later in the same year, Pascual died, leaving seven
children, the private respondents. On the other had, Donato's sole offspring was
petitioner Juliana P. Fanesa.

At the time of the relevant transactions over the properties of decedent Agatona
Sagario Paulmitan, her son Pascual had died, survived by respondents, his children.
It is, thus, tempting to apply the principles pertaining to the right of representation as
regards respondents. It must, however, be borne in mind that Pascual did no
predecease his mother, 8 thus precluding the operation of the provisions in the Civil
Code on the right of representation 9 with respect to his children, the respondents.
When Agatona Sagario Paulmitan died intestate in 1952, her two (2) sons Donato and
Pascual were still alive. Since it is well-settled by virtue of Article 777 of the Civil Code
that "[t]he rights to the succession are transmitted from the moment of the death of
the decedent," 10 the right of ownership, not only of Donato but also of Pascual, over
their respective shares in the inheritance was automatically and by operation of law
vested in them in 1953 when their mother died intestate. At that stage, the children of
Donato and Pascual did not yet have any right over the inheritance since "[i]n every
inheritance, the relative nearest in degree excludes the more distant
ones." 11 Donato and Pascual excluded their children as to the right to inherit from
Agatona Sagario Paulmitan, their mother.
From the time of the death of Agatona Sagario Paulmitan to the subsequent passing
away of her son Pascual in 1953, the estate remained unpartitioned. Article 1078 of
the Civil Code provides: "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." 12 Donato and Pascual Paulmitan were, therefore,
co-owners of the estate left by their mother as no partition was ever made.
When Pascual Paulmitan died intestate in 1953, his children, the respondents,
succeeded him in the co-ownership of the disputed property. Pascual Paulmitan's
right of ownership over an undivided portion of the property passed on to his children,
who, from the time of Pascual's death, became co-owners with their uncle Donato
over the disputed decedent estate.
Petitioner Juliana P. Fanesa claims ownership over Lot No. 1091 by virtue of two
transactions, namely: (a) the sale made in her favor by her father Donato Paulmitan;
and (b) her redemption of the land from the Provincial of Negros Occidental after it
was forfeited for non-payment of taxes.
When Donato Paulmitan sold on May 28, 1974 Lot No. 1091 to his daughter Juliana
P. Fanesa, he was only a co-owner with respondents and as such, he could only sell
that portion which may be allotted to him upon termination of the co-ownership. 13 The
sale did not prejudice the rights of respondents to one half (1/2) undivided share of
the land which they inherited from their father. It did not vest ownership in the entire
land with the buyer but transferred only the seller's pro-indiviso share in the
property 14 and consequently made the buyer a co-owner of the land until it is

Page 34 of 37

partitioned. InBailon-Casilao v. Court of Appeals, 15 the Court, through Justice Irene

R. Cortes, outlined the effects of a sale by one co-owner without the consent of all the
co-owners, thus:
The rights of a co-owner of a certain property are clearly specified
in Article 493 of the Civil Code, Thus:
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 its enjoyment, except when personal rights are
involved. But the effect of the alienation or 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. [Emphasis supplied.]
As early as 1923, this Court has ruled that even if a co-owner sells
the whole property as his, the sale will affect only his own share but
not those of the other co-owners who did not consent to the sale
[Punsalan v. Boon Liat, 44 Phil. 320 (1923)]. This is because under
the aforementioned codal provision, the sale or other disposition
affects only his undivided share and the transferee gets only what
would correspond to his grantor in the partition of the thing owned
in common [Ramirez v. Bautista, 14 Phil. 528 (1909)].
Consequently, by virtue of the sales made by Rosalia and
Gaudencio Bailon which are valid with respect to their proportionate
shares, and the subsequent transfers which culminated in the sale
to private respondent Celestino Afable, the said Afable thereby
became a co-owner of the disputed parcel of land as correctly held
by the lower court since the sales produced the effect of
substituting the buyers in the enjoyment thereof [Mainit v. Bandoy,
14 Phil. 730 (1910)].
From the foregoing, it may be deduced that since a co-owner is
entitled to sell his undivided share, a sale of the entire property by
one co-owner without the consent of the other co-owners is not null
and void. However, only the rights of the co-owner-seller are
transferred, thereby making the buyer a co-owner of the property.
Applying this principle to the case at bar, the sale by petitioner Donato Paulmitan of
the land to his daughter, petitioner Juliana P. Fanesa, did not give to the latter
ownership over the entire land but merely transferred to her the one half (1/2)

undivided share of her father, thus making her the co-owner of the land in question
with the respondents, her first cousins.

Art. 488. Each co-owner shall have a right to compel the other coowners to contribute to the expenses of preservation of the thing or
right owned in common and to the taxes. Any one of the latter may
exempt himself from this obligation by renouncing so much of his
undivided interest as may be equivalent to his share of the
expenses and taxes. No such waiver shall be made if it is
prejudicial to the co-ownership.

Petitioner Juliana P. Fanesa also claims ownership of the entire property by virtue of
the fact that when the Provincial Government of Negros Occidental bought the land
after it was forfeited for non-payment of taxes, she redeemed it.
The contention is without merit.

The result is that the property remains to be in a condition of coownership. While a vendee a retro, under Article 1613 of the Code,
"may not be compelled to consent to a partial redemption," the
redemption by one co-heir or co-owner of the property in its totality
does not vest in him ownership over it. Failure on the part of all the
co-owners to redeem it entitles the vendee a retro to retain the
property and consolidate title thereto in his name (Supra, art. 1607).
But the provision does not give to the redeeming co-owner the right
to the entire property. It does not provide for a mode of terminating
a co-ownership.

The redemption of the land made by Fanesa did not terminate the co-ownership nor
give her title to the entire land subject of the co-ownership. Speaking on the same
issue raised by petitioners, the Court, in Adille v. Court of Appeals, 16 resolved the
same with the following pronouncements:
The petition raises a purely legal issue: May a co-owner acquire
exclusive ownership over the property held in common?
Essentially, it is the petitioners' contention that the property subject
of dispute devolved upon him upon the failure of his co-heirs to join
him in its redemption within the period required by law. He relies on
the provisions of Article 1515 of the old Civil Code, Article 1613 of
the present Code, giving the vendee a retro the right to demand
redemption of the entire property.
There is no merit in this petition.
The right of repurchase may be exercised by co-owner with respect
to his share alone (CIVIL CODE, art. 1612, CIVIL CODE (1889),
art. (1514.). While the records show that petitioner redeemed the
property in its entirety, shouldering the expenses therefor, that did
not make him the owner of all of it. In other words, it did not put to
end the existing state of co-ownership (Supra, Art. 489). There is
no doubt that redemption of property entails a necessary expense.
Under the Civil Code:

Although petitioner Fanesa did not acquire ownership over the entire lot by virtue of
the redemption she made, nevertheless, she did acquire the right to reimbursed for
half of the redemption price she paid to the Provincial Government of Negros
Occidental on behalf of her co-owners. Until reimbursed, Fanesa hold a lien upon the
subject property for the amount due her. 17
Finally, petitioners dispute the order of the trial court, which the Court of Appeals
affirmed, for them to pay private respondents P5,000.00 per year from 1966 until the
partition of the estate which represents the share of private respondents in the fruits
of the land. According to petitioners, the land is being leased for P2,000.00 per year
only. This assigned error, however raises a factual question. The settled rule is that
only questions of law may be raised in a petition for review. As a general rule, findings
of fact made by the trial court and the Court of Appeals are final and conclusive and
cannot be reviewed on appeal. 18
WHEREFORE, the petition is DENIED and the decision of the Court of Appeals
AFFIRMED.
G.R. No. 129008

January 13, 2004

TEODORA A. RIOFERIO, VERONICA O. EVANGELISTA assisted by her husband

ZALDY EVANGELISTA, ALBERTO ORFINADA, and ROWENA O. UNGOS,
assisted
by
her
husband
BEDA
UNGOS, petitioners,

Page 35 of 37

vs.
COURT OF APPEALS, ESPERANZA P. ORFINADA, LOURDES P. ORFINADA,
ALFONSO ORFINADA, NANCY P. ORFINADA, ALFONSO JAMES P. ORFINADA,
CHRISTOPHER P. ORFINADA and ANGELO P. ORFINADA,respondents.

On December 1, 1995, respondent Alfonso "Clyde" P. Orfinada III filed a Petition for
Letters of Administrationdocketed as S.P. Case No. 5118 before the Regional Trial
Court of Angeles City, praying that letters of administration encompassing the estate
of Alfonso P. Orfinada, Jr. be issued to him.8

DECISION

On December 4, 1995, 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.9

TINGA, J.:
Whether the heirs may bring suit to recover property of the estate pending the
appointment of an administrator is the issue in this case.
This Petition for Review on Certiorari, under Rule 45 of the Rules of Court, seeks to
set aside the Decision1 of the Court of Appeals in CA-G.R. SP No. 42053 dated
January 31, 1997, as well as its Resolution2 dated March 26, 1997, denying
petitioners motion for reconsideration.
On May 13, 1995, Alfonso P. Orfinada, Jr. died without a will in Angeles City leaving
several personal and real properties located in Angeles City, Dagupan City and
Kalookan City.3 He also left a widow, respondent Esperanza P. Orfinada, whom he
married on July 11, 1960 and with whom he had seven children who are the herein
respondents, namely: Lourdes P. Orfinada, Alfonso "Clyde" P. Orfinada, Nancy P.
Orfinada-Happenden, Alfonso James P. Orfinada, Christopher P. Orfinada, Alfonso
Mike P. Orfinada (deceased) and Angelo P. Orfinada.4
Apart from the respondents, the demise of the decedent left in mourning his paramour
and their children. They are petitioner Teodora Riofero, who became a part of his life
when he entered into an extra-marital relationship with her during the subsistence of
his marriage to Esperanza sometime in 1965, and co-petitioners Veronica 5, Alberto
and Rowena.6
On November 14, 1995, respondents Alfonso James and Lourdes Orfinada
discovered that on June 29, 1995, 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 and that accordingly, the Registry of Deeds in Dagupan issued Certificates of
Titles Nos. 63983, 63984 and 63985 in favor of petitioners Teodora Rioferio, Veronica
Orfinada-Evangelista, Alberto Orfinada and Rowena Orfinada-Ungos. 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.7

Page 36 of 37

On February 5, 1996, petitioners filed their Answer to the aforesaid complaint

interposing the defense that the property subject of the contested deed of extrajudicial settlement pertained to the properties originally belonging to the parents of
Teodora Riofero10 and that the titles thereof were delivered to her as an advance
inheritance but the decedent had managed to register them in his name. 11 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.12 On April 29, 1996, petitioners filed a Motion to Set
Affirmative Defenses for Hearing13 on the aforesaid ground.
The lower court denied the motion in its Order14 dated June 27, 1996, on the ground
that respondents, as heirs, are the real parties-in-interest especially in the absence of
an administrator who is yet to be appointed in S.P. Case No. 5118. Petitioners moved
for its reconsideration15 but the motion was likewise denied.16
This prompted petitioners to file before the Court of Appeals their Petition for
Certiorari under Rule 65 of the Rules of Court docketed as CA G.R. S.P. No.
42053.17 Petitioners averred that the RTC committed grave abuse of discretion in
issuing the assailed order which denied the dismissal of the case on the ground that
the proper party to file the complaint for the annulment of the extrajudicial settlement
of the estate of the deceased is the estate of the decedent and not the respondents.18
The Court of Appeals rendered the assailed Decision19 dated January 31, 1997,
stating that it discerned no grave abuse of discretion amounting to lack or excess of
jurisdiction by the public respondent judge when he denied petitioners motion to set
affirmative defenses for hearing in view of its discretionary nature.
A Motion for Reconsideration was filed by petitioners but it was denied. 20 Hence, the
petition before this Court.

The issue presented by the petitioners before this Court is whether the heirs have
legal standing to prosecute the rights belonging to the deceased subsequent to the
commencement of the administration proceedings.21

Court. In fact, in the case of Gochan v. Young,28 this Court recognized the legal
standing of the heirs to represent the rights and properties of the decedent under
administration pending the appointment of an administrator. Thus:

Petitioners vehemently fault the lower court for denying their motion to set the case
for preliminary hearing on their affirmative defense that the proper party to bring the
action is the estate of the decedent and not the respondents. It must be stressed that
the holding of a preliminary hearing on an affirmative defense lies in the discretion of
the court. This is clear from the Rules of Court, thus:

The above-quoted rules,29 while permitting an executor or administrator to

represent or to bring suits on behalf of the deceased, do not prohibit the
heirs from representing the deceased. These rules are easily applicable to
cases in which an administrator has already been appointed. But no
rule categorically addresses the situation in which special proceedings
for the settlement of an estate have already been instituted, yet no
administrator has been appointed. In such instances, the heirs cannot be
expected to wait for the appointment of an administrator; then wait further to
see if the administrator appointed would care enough to file a suit to protect
the rights and the interests of the deceased; and in the meantime do nothing
while the rights and the properties of the decedent are violated or dissipated.

SEC. 5. Pleadings grounds as affirmative defenses.- Any of the grounds for

dismissal provided for in this rule, except improper venue, may be pleaded
as an affirmative defense, and a preliminary hearing may be had thereon as
if a motion to dismiss had been filed.22 (Emphasis supplied.)
Certainly, the incorporation of the word "may" in the provision is clearly indicative of
the optional character of the preliminary hearing. The word denotes discretion and
cannot be construed as having a mandatory effect.23Subsequently, the electivity of the
proceeding was firmed up beyond cavil by the 1997 Rules of Civil Procedure with the
inclusion of the phrase "in the discretion of the Court", apart from the retention of the
word "may" in Section 6,24 in Rule 16 thereof.
Just as no blame of abuse of discretion can be laid on the lower courts doorstep for
not hearing petitioners affirmative defense, it cannot likewise be faulted for
recognizing the legal standing of the respondents as heirs to bring the suit.
Pending the filing of administration proceedings, the heirs without doubt have legal
personality to bring suit in behalf of the estate of the decedent in accordance with the
provision of Article 777 of the New Civil Code "that (t)he rights to succession are
transmitted from the moment of the death of the decedent." The provision in turn is
the foundation of the principle that the property, rights and obligations to the extent
and value of the inheritance of a person are transmitted through his death to another
or others by his will or by operation of law.25
Even if administration proceedings have already been commenced, the heirs may still
bring the suit if an administrator has not yet been appointed. This is the proper
modality despite the total lack of advertence to the heirs in the rules on party
representation, namely Section 3, Rule 326 and Section 2, Rule 87 27 of the Rules of

Page 37 of 37

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;30 and (2) when the administrator is alleged to have participated in the act
complained of31 and he is made a party defendant.32 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. The assailed decision and
resolution of the Court of Appeals are hereby AFFIRMED. No costs.