G.R. No.

133743 February 6, 2007

EDGAR SAN LUIS, Petitioner,
vs.
FELICIDAD SAN LUIS, Respondent.
x ---------------------------------------------------- x
G.R. No. 134029 February 6, 2007
RODOLFO SAN LUIS, Petitioner,
vs.
FELICIDAD SAGALONGOS alias FELICIDAD SAN LUIS, Respondent.

DECISION
YNARES-SANTIAGO, J.:

Before us are consolidated petitions for review assailing the February 4, 1998 Decision 1 of the Court of Appeals
in CA-G.R. CV No. 52647, which reversed and set aside the September 12, 1995 2 and January 31,
1996 3Resolutions of the Regional Trial Court of Makati City, Branch 134 in SP. Proc. No. M-3708; and its May
15, 1998 Resolution 4 denying petitioners motion for reconsideration.

The instant case involves the settlement of the estate of Felicisimo T. San Luis (Felicisimo), who was the former
governor of the Province of Laguna. During his lifetime, Felicisimo contracted three marriages. His first marriage
was with Virginia Sulit on March 17, 1942 out of which were born six children, namely: Rodolfo, Mila, Edgar,
Linda, Emilita and Manuel. On August 11, 1963, Virginia predeceased Felicisimo.

Five years later, on May 1, 1968, Felicisimo married Merry Lee Corwin, with whom he had a son, Tobias.
However, on October 15, 1971, Merry Lee, an American citizen, filed a Complaint for Divorce 5 before the Family
Court of the First Circuit, State of Hawaii, United States of America (U.S.A.), which issued a Decree Granting
Absolute Divorce and Awarding Child Custody on December 14, 1973. 6

On June 20, 1974, Felicisimo married respondent Felicidad San Luis, then surnamed Sagalongos, before Rev. Fr.
William Meyer, Minister of the United Presbyterian at Wilshire Boulevard, Los Angeles, California, U.S.A. 7 He
had no children with respondent but lived with her for 18 years from the time of their marriage up to his death
on December 18, 1992.

Thereafter, respondent sought the dissolution of their conjugal partnership assets and the settlement of
Felicisimos estate. On December 17, 1993, she filed a petition for letters of administration 8 before the Regional
Trial Court of Makati City, docketed as SP. Proc. No. M-3708 which was raffled to Branch 146 thereof.

Respondent alleged that she is the widow of Felicisimo; that, at the time of his death, the decedent was residing
at 100 San Juanico Street, New Alabang Village, Alabang, Metro Manila; that the decedents surviving heirs are
respondent as legal spouse, his six children by his first marriage, and son by his second marriage; that the
decedent left real properties, both conjugal and exclusive, valued at P30,304,178.00 more or less; that the
decedent does not have any unpaid debts. Respondent prayed that the conjugal partnership assets be liquidated
and that letters of administration be issued to her.

On February 4, 1994, petitioner Rodolfo San Luis, one of the children of Felicisimo by his first marriage, filed a
motion to dismiss 9 on the grounds of improper venue and failure to state a cause of action. Rodolfo claimed
that the petition for letters of administration should have been filed in the Province of Laguna because this was
Felicisimos place of residence prior to his death. He further claimed that respondent has no legal personality to
file the petition because she was only a mistress of Felicisimo since the latter, at the time of his death, was still
legally married to Merry Lee.

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On February 15, 1994, Linda invoked the same grounds and joined her brother Rodolfo in seeking the
dismissal10 of the petition. On February 28, 1994, the trial court issued an Order 11 denying the two motions to
dismiss.

Unaware of the denial of the motions to dismiss, respondent filed on March 5, 1994 her opposition 12 thereto.
She submitted documentary evidence showing that while Felicisimo exercised the powers of his public office in
Laguna, he regularly went home to their house in New Alabang Village, Alabang, Metro Manila which they
bought sometime in 1982. Further, she presented the decree of absolute divorce issued by the Family Court of
the First Circuit, State of Hawaii to prove that the marriage of Felicisimo to Merry Lee had already been
dissolved. Thus, she claimed that Felicisimo had the legal capacity to marry her by virtue of paragraph
2, 13 Article 26 of the Family Code and the doctrine laid down in Van Dorn v. Romillo, Jr. 14

Thereafter, Linda, Rodolfo and herein petitioner Edgar San Luis, separately filed motions for reconsideration
from the Order denying their motions to dismiss. 15 They asserted that paragraph 2, Article 26 of the Family
Code cannot be given retroactive effect to validate respondents bigamous marriage with Felicisimo because
this would impair vested rights in derogation of Article 256 16 of the Family Code.

On April 21, 1994, Mila, another daughter of Felicisimo from his first marriage, filed a motion to disqualify Acting
Presiding Judge Anthony E. Santos from hearing the case.

On October 24, 1994, the trial court issued an Order 17 denying the motions for reconsideration. It ruled that
respondent, as widow of the decedent, possessed the legal standing to file the petition and that venue was
properly laid. Meanwhile, the motion for disqualification was deemed moot and academic 18 because then
Acting Presiding Judge Santos was substituted by Judge Salvador S. Tensuan pending the resolution of said
motion.

Mila filed a motion for inhibition 19 against Judge Tensuan on November 16, 1994. On even date, Edgar also filed
a motion for reconsideration 20 from the Order denying their motion for reconsideration arguing that it does
not state the facts and law on which it was based.

On November 25, 1994, Judge Tensuan issued an Order 21 granting the motion for inhibition. The case was re-
raffled to Branch 134 presided by Judge Paul T. Arcangel.

On April 24, 1995, 22 the trial court required the parties to submit their respective position papers on the twin
issues of venue and legal capacity of respondent to file the petition. On May 5, 1995, Edgar manifested 23 that
he is adopting the arguments and evidence set forth in his previous motion for reconsideration as his position
paper. Respondent and Rodolfo filed their position papers on June 14, 24 and June 20, 25 1995, respectively.

On September 12, 1995, the trial court dismissed the petition for letters of administration. It held that, at the
time of his death, Felicisimo was the duly elected governor and a resident of the Province of Laguna. Hence, the
petition should have been filed in Sta. Cruz, Laguna and not in Makati City. It also ruled that respondent was
without legal capacity to file the petition for letters of administration because her marriage with Felicisimo was
bigamous, thus, void ab initio. It found that the decree of absolute divorce dissolving Felicisimos marriage to
Merry Lee was not valid in the Philippines and did not bind Felicisimo who was a Filipino citizen. It also ruled
that paragraph 2, Article 26 of the Family Code cannot be retroactively applied because it would impair the
vested rights of Felicisimos legitimate children.

Respondent moved for reconsideration 26 and for the disqualification 27 of Judge Arcangel but said motions were
denied. 28

2
Respondent appealed to the Court of Appeals which reversed and set aside the orders of the trial court in its
assailed Decision dated February 4, 1998, the dispositive portion of which states:

WHEREFORE, the Orders dated September 12, 1995 and January 31, 1996 are hereby REVERSED and SET ASIDE;
the Orders dated February 28 and October 24, 1994 are REINSTATED; and the records of the case is REMANDED
to the trial court for further proceedings. 29

The appellante court ruled that under Section 1, Rule 73 of the Rules of Court, the term "place of residence" of
the decedent, for purposes of fixing the venue of the settlement of his estate, refers to the personal, actual or
physical habitation, or actual residence or place of abode of a person as distinguished from legal residence or
domicile. It noted that although Felicisimo discharged his functions as governor in Laguna, he actually resided
in Alabang, Muntinlupa. Thus, the petition for letters of administration was properly filed in Makati City.

The Court of Appeals also held that Felicisimo had legal capacity to marry respondent by virtue of paragraph 2,
Article 26 of the Family Code and the rulings in Van Dorn v. Romillo, Jr. 30 and Pilapil v. Ibay-Somera. 31 It found
that the marriage between Felicisimo and Merry Lee was validly dissolved by virtue of the decree of absolute
divorce issued by the Family Court of the First Circuit, State of Hawaii. As a result, under paragraph 2, Article 26,
Felicisimo was capacitated to contract a subsequent marriage with respondent. Thus

With the well-known rule express mandate of paragraph 2, Article 26, of the Family Code of the
Philippines, the doctrines in Van Dorn, Pilapil, and the reason and philosophy behind the enactment of
E.O. No. 227, there is no justiciable reason to sustain the individual view sweeping statement of
Judge Arc[h]angel, that "Article 26, par. 2 of the Family Code, contravenes the basic policy of our state
against divorce in any form whatsoever." Indeed, courts cannot deny what the law grants. All that the
courts should do is to give force and effect to the express mandate of the law. The foreign divorce having
been obtained by the Foreigner on December 14, 1992,32 the Filipino divorcee, "shall x x x have capacity
to remarry under Philippine laws". For this reason, the marriage between the deceased and petitioner
should not be denominated as "a bigamous marriage.

Therefore, under Article 130 of the Family Code, the petitioner as the surviving spouse can institute the judicial
proceeding for the settlement of the estate of the deceased. x x x 33

Edgar, Linda, and Rodolfo filed separate motions for reconsideration 34 which were denied by the Court of
Appeals.

On July 2, 1998, Edgar appealed to this Court via the instant petition for review on certiorari. 35 Rodolfo later
filed a manifestation and motion to adopt the said petition which was granted. 36

In the instant consolidated petitions, Edgar and Rodolfo insist that the venue of the subject petition for letters
of administration was improperly laid because at the time of his death, Felicisimo was a resident of Sta. Cruz,
Laguna. They contend that pursuant to our rulings in Nuval v. Guray 37 and Romualdez v. RTC, Br. 7, Tacloban
City, 38 "residence" is synonymous with "domicile" which denotes a fixed permanent residence to which when
absent, one intends to return. They claim that a person can only have one domicile at any given time. Since
Felicisimo never changed his domicile, the petition for letters of administration should have been filed in Sta.
Cruz, Laguna.

Petitioners also contend that respondents marriage to Felicisimo was void and bigamous because it was
performed during the subsistence of the latters marriage to Merry Lee. They argue that paragraph 2, Article 26
cannot be retroactively applied because it would impair vested rights and ratify the void bigamous marriage. As

3
such, respondent cannot be considered the surviving wife of Felicisimo; hence, she has no legal capacity to file
the petition for letters of administration.

The issues for resolution: (1) whether venue was properly laid, and (2) whether respondent has legal capacity
to file the subject petition for letters of administration.

The petition lacks merit.

Under Section 1, 39 Rule 73 of the Rules of Court, the petition for letters of administration of the estate of
Felicisimo should be filed in the Regional Trial Court of the province "in which he resides at the time of his
death." In the case of Garcia Fule v. Court of Appeals, 40 we laid down the doctrinal rule for determining the
residence as contradistinguished from domicile of the decedent for purposes of fixing the venue of the
settlement of his estate:

[T]he term "resides" connotes ex vi termini "actual residence" as distinguished from "legal residence or
domicile." This term "resides," like the terms "residing" and "residence," is elastic and should be interpreted in
the light of the object or purpose of the statute or rule in which it is employed. In the application of venue
statutes and rules Section 1, Rule 73 of the Revised Rules of Court is of such nature residence rather than
domicile is the significant factor. Even where the statute uses the word "domicile" still it is construed as meaning
residence and not domicile in the technical sense. Some cases make a distinction between the terms "residence"
and "domicile" but as generally used in statutes fixing venue, the terms are synonymous, and convey the same
meaning as the term "inhabitant." In other words, "resides" should be viewed or understood in its popular
sense, meaning, the personal, actual or physical habitation of a person, actual residence or place of abode. It
signifies physical presence in a place and actual stay thereat. In this popular sense, the term means merely
residence, that is, personal residence, not legal residence or domicile. Residence simply requires bodily presence
as an inhabitant in a given place, while domicile requires bodily presence in that place and also an intention to
make it ones domicile. No particular length of time of residence is required though; however, the residence
must be more than temporary. 41 (Emphasis supplied)

It is incorrect for petitioners to argue that "residence," for purposes of fixing the venue of the settlement of the
estate of Felicisimo, is synonymous with "domicile." The rulings in Nuval and Romualdez are inapplicable to the
instant case because they involve election cases. Needless to say, there is a distinction between "residence" for
purposes of election laws and "residence" for purposes of fixing the venue of actions. In election cases,
"residence" and "domicile" are treated as synonymous terms, that is, the fixed permanent residence to which
when absent, one has the intention of returning. 42 However, for purposes of fixing venue under the Rules of
Court, the "residence" of a person is his personal, actual or physical habitation, or actual residence or place of
abode, which may not necessarily be his legal residence or domicile provided he resides therein with continuity
and consistency. 43 Hence, it is possible that a person may have his residence in one place and domicile in
another.

In the instant case, while petitioners established that Felicisimo was domiciled in Sta. Cruz, Laguna, respondent
proved that he also maintained a residence in Alabang, Muntinlupa from 1982 up to the time of his death.
Respondent submitted in evidence the Deed of Absolute Sale 44 dated January 5, 1983 showing that the
deceased purchased the aforesaid property. She also presented billing statements 45 from the Philippine Heart
Center and Chinese General Hospital for the period August to December 1992 indicating the address of
Felicisimo at "100 San Juanico, Ayala Alabang, Muntinlupa." Respondent also presented proof of membership
of the deceased in the Ayala Alabang Village Association 46 and Ayala Country Club, Inc., 47 letter-
envelopes 48from 1988 to 1990 sent by the deceaseds children to him at his Alabang address, and the
deceaseds calling cards 49 stating that his home/city address is at "100 San Juanico, Ayala Alabang Village,
Muntinlupa" while his office/provincial address is in "Provincial Capitol, Sta. Cruz, Laguna."
4
From the foregoing, we find that Felicisimo was a resident of Alabang, Muntinlupa for purposes of fixing the
venue of the settlement of his estate. Consequently, the subject petition for letters of administration was validly
filed in the Regional Trial Court 50 which has territorial jurisdiction over Alabang, Muntinlupa. The subject
petition was filed on December 17, 1993. At that time, Muntinlupa was still a municipality and the branches of
the Regional Trial Court of the National Capital Judicial Region which had territorial jurisdiction over Muntinlupa
were then seated in Makati City as per Supreme Court Administrative Order No. 3. 51 Thus, the subject petition
was validly filed before the Regional Trial Court of Makati City.

Anent the issue of respondent Felicidads legal personality to file the petition for letters of administration, we
must first resolve the issue of whether a Filipino who is divorced by his alien spouse abroad may validly remarry
under the Civil Code, considering that Felicidads marriage to Felicisimo was solemnized on June 20, 1974, or
before the Family Code took effect on August 3, 1988. In resolving this issue, we need not retroactively apply
the provisions of the Family Code, particularly Art. 26, par. (2) considering that there is sufficient jurisprudential
basis allowing us to rule in the affirmative.

The case of Van Dorn v. Romillo, Jr. 52 involved a marriage between a foreigner and his Filipino wife, which
marriage was subsequently dissolved through a divorce obtained abroad by the latter. Claiming that the divorce
was not valid under Philippine law, the alien spouse alleged that his interest in the properties from their conjugal
partnership should be protected. The Court, however, recognized the validity of the divorce and held that the
alien spouse had no interest in the properties acquired by the Filipino wife after the divorce. Thus:

In this case, the divorce in Nevada released private respondent from the marriage from the standards of
American law, under which divorce dissolves the marriage. As stated by the Federal Supreme Court of the United
States in Atherton vs. Atherton, 45 L. Ed. 794, 799:

"The purpose and effect of a decree of divorce from the bond of matrimony by a competent jurisdiction are to
change the existing status or domestic relation of husband and wife, and to free them both from the bond. The
marriage tie, when thus severed as to one party, ceases to bind either. A husband without a wife, or a wife
without a husband, is unknown to the law. When the law provides, in the nature of a penalty, that the guilty
party shall not marry again, that party, as well as the other, is still absolutely freed from the bond of the former
marriage."

Thus, pursuant to his national law, private respondent is no longer the husband of petitioner. He would have no
standing to sue in the case below as petitioners husband entitled to exercise control over conjugal assets. As
he is bound by the Decision of his own countrys Court, which validly exercised jurisdiction over him, and whose
decision he does not repudiate, he is estopped by his own representation before said Court from asserting his
right over the alleged conjugal property. 53

As to the effect of the divorce on the Filipino wife, the Court ruled that she should no longer be considered
married to the alien spouse. Further, she should not be required to perform her marital duties and obligations.
It held:

To maintain, as private respondent does, that, under our laws, petitioner has to be considered still married to
private respondent and still subject to a wife's obligations under Article 109, et. seq. of the Civil Code cannot
be just. Petitioner should not be obliged to live together with, observe respect and fidelity, and render support
to private respondent. The latter should not continue to be one of her heirs with possible rights to conjugal
property. She should not be discriminated against in her own country if the ends of justice are to be
served. 54 (Emphasis added)

5
This principle was thereafter applied in Pilapil v. Ibay-Somera 55 where the Court recognized the validity of a
divorce obtained abroad. In the said case, it was held that the alien spouse is not a proper party in filing the
adultery suit against his Filipino wife. The Court stated that "the severance of the marital bond had the effect of
dissociating the former spouses from each other, hence the actuations of one would not affect or cast obloquy
on the other." 56

Likewise, in Quita v. Court of Appeals, 57 the Court stated that where a Filipino is divorced by his naturalized
foreign spouse, the ruling in Van Dorn applies. 58 Although decided on December 22, 1998, the divorce in the
said case was obtained in 1954 when the Civil Code provisions were still in effect.

The significance of the Van Dorn case to the development of limited recognition of divorce in the Philippines
cannot be denied. The ruling has long been interpreted as severing marital ties between parties in a mixed
marriage and capacitating the Filipino spouse to remarry as a necessary consequence of upholding the validity
of a divorce obtained abroad by the alien spouse. In his treatise, Dr. Arturo M. Tolentino cited Van Dorn stating
that "if the foreigner obtains a valid foreign divorce, the Filipino spouse shall have capacity to remarry under
Philippine law." 59 In Garcia v. Recio, 60 the Court likewise cited the aforementioned case in relation to Article
26. 61

In the recent case of Republic v. Orbecido III, 62 the historical background and legislative intent behind paragraph
2, Article 26 of the Family Code were discussed, to wit:

Brief Historical Background

On July 6, 1987, then President Corazon Aquino signed into law Executive Order No. 209, otherwise known as
the "Family Code," which took effect on August 3, 1988. Article 26 thereof states:

All marriages solemnized outside the Philippines in accordance with the laws in force in the country where they
were solemnized, and valid there as such, shall also be valid in this country, except those prohibited under
Articles 35, 37, and 38.

On July 17, 1987, shortly after the signing of the original Family Code, Executive Order No. 227 was likewise
signed into law, amending Articles 26, 36, and 39 of the Family Code. A second paragraph was added to Article
26. As so amended, it now provides:

ART. 26. All marriages solemnized outside the Philippines in accordance with the laws in force in the country
where they were solemnized, and valid there as such, shall also be valid in this country, except those prohibited
under Articles 35(1), (4), (5) and (6), 36, 37 and 38.

Where a marriage between a Filipino citizen and a foreigner is validly celebrated and a divorce is thereafter
validly obtained abroad by the alien spouse capacitating him or her to remarry, the Filipino spouse shall have
capacity to remarry under Philippine law. (Emphasis supplied)

xxxx

Legislative Intent

Records of the proceedings of the Family Code deliberations showed that the intent of Paragraph 2 of Article
26, according to Judge Alicia Sempio-Diy, a member of the Civil Code Revision Committee, is to avoid the absurd
situation where the Filipino spouse remains married to the alien spouse who, after obtaining a divorce, is no
longer married to the Filipino spouse.

6
Interestingly, Paragraph 2 of Article 26 traces its origin to the 1985 case of Van Dorn v. Romillo, Jr. The Van
Dorn case involved a marriage between a Filipino citizen and a foreigner. The Court held therein that a divorce
decree validly obtained by the alien spouse is valid in the Philippines, and consequently, the Filipino spouse
is capacitated to remarry under Philippine law. 63 (Emphasis added)

As such, the Van Dorn case is sufficient basis in resolving a situation where a divorce is validly obtained abroad
by the alien spouse. With the enactment of the Family Code and paragraph 2, Article 26 thereof, our lawmakers
codified the law already established through judicial precedent.

Indeed, when the object of a marriage is defeated by rendering its continuance intolerable to one of the parties
and productive of no possible good to the community, relief in some way should be obtainable. 64 Marriage,
being a mutual and shared commitment between two parties, cannot possibly be productive of any good to the
society where one is considered released from the marital bond while the other remains bound to it. Such is the
state of affairs where the alien spouse obtains a valid divorce abroad against the Filipino spouse, as in this case.

Petitioners cite Articles 15 65 and 17 66 of the Civil Code in stating that the divorce is void under Philippine law
insofar as Filipinos are concerned. However, in light of this Courts rulings in the cases discussed above, the
Filipino spouse should not be discriminated against in his own country if the ends of justice are to be served. 67 In
Alonzo v. Intermediate Appellate Court, 68 the Court stated:

But as has also been aptly observed, we test a law by its results; and likewise, we may add, by its purposes. It is
a cardinal rule that, in seeking the meaning of the law, the first concern of the judge should be to discover in its
provisions the intent of the lawmaker. Unquestionably, the law should never be interpreted in such a way as to
cause injustice as this is never within the legislative intent. An indispensable part of that intent, in fact, for we
presume the good motives of the legislature, is to render justice.

Thus, we interpret and apply the law not independently of but in consonance with justice. Law and justice are
inseparable, and we must keep them so. To be sure, there are some laws that, while generally valid, may seem
arbitrary when applied in a particular case because of its peculiar circumstances. In such a situation, we are not
bound, because only of our nature and functions, to apply them just the same, in slavish obedience to their
language. What we do instead is find a balance between the word and the will, that justice may be done even
as the law is obeyed.

As judges, we are not automatons. We do not and must not unfeelingly apply the law as it is worded, yielding
like robots to the literal command without regard to its cause and consequence. "Courts are apt to err by sticking
too closely to the words of a law," so we are warned, by Justice Holmes again, "where these words import a
policy that goes beyond them."

xxxx

More than twenty centuries ago, Justinian defined justice "as the constant and perpetual wish to render every
one his due." That wish continues to motivate this Court when it assesses the facts and the law in every case
brought to it for decision. Justice is always an essential ingredient of its decisions. Thus when the facts warrants,
we interpret the law in a way that will render justice, presuming that it was the intention of the lawmaker, to
begin with, that the law be dispensed with justice. 69

Applying the above doctrine in the instant case, the divorce decree allegedly obtained by Merry Lee which
absolutely allowed Felicisimo to remarry, would have vested Felicidad with the legal personality to file the
present petition as Felicisimos surviving spouse. However, the records show that there is insufficient evidence
to prove the validity of the divorce obtained by Merry Lee as well as the marriage of respondent and Felicisimo

7
under the laws of the U.S.A. In Garcia v. Recio, 70 the Court laid down the specific guidelines for pleading and
proving foreign law and divorce judgments. It held that presentation solely of the divorce decree is insufficient
and that proof of its authenticity and due execution must be presented. Under Sections 24 and 25 of Rule 132,
a writing or document may be proven as a public or official record of a foreign country by either (1) an official
publication or (2) a copy thereof attested by the officer having legal custody of the document. If the record is
not kept in the Philippines, such copy must be (a) accompanied by a certificate issued by the proper diplomatic
or consular officer in the Philippine foreign service stationed in the foreign country in which the record is kept
and (b) authenticated by the seal of his office. 71

With regard to respondents marriage to Felicisimo allegedly solemnized in California, U.S.A., she submitted
photocopies of the Marriage Certificate and the annotated text 72 of the Family Law Act of California which
purportedly show that their marriage was done in accordance with the said law. As stated in Garcia, however,
the Court cannot take judicial notice of foreign laws as they must be alleged and proved. 73

Therefore, this case should be remanded to the trial court for further reception of evidence on the divorce
decree obtained by Merry Lee and the marriage of respondent and Felicisimo.

Even assuming that Felicisimo was not capacitated to marry respondent in 1974, nevertheless, we find that the
latter has the legal personality to file the subject petition for letters of administration, as she may be considered
the co-owner of Felicisimo as regards the properties that were acquired through their joint efforts during their
cohabitation.

Section 6, 74 Rule 78 of the Rules of Court states that letters of administration may be granted to the surviving
spouse of the decedent. However, Section 2, Rule 79 thereof also provides in part:

SEC. 2. Contents of petition for letters of administration. A petition for letters of administration must be filed
by an interested person and must show, as far as known to the petitioner: x x x.

An "interested person" has been defined as one who would be benefited by the estate, such as an heir, or one
who has a claim against the estate, such as a creditor. The interest must be material and direct, and not merely
indirect or contingent. 75

In the instant case, respondent would qualify as an interested person who has a direct interest in the estate of
Felicisimo by virtue of their cohabitation, the existence of which was not denied by petitioners. If she proves
the validity of the divorce and Felicisimos capacity to remarry, but fails to prove that her marriage with him was
validly performed under the laws of the U.S.A., then she may be considered as a co-owner under Article 144 76 of
the Civil Code. This provision governs the property relations between parties who live together as husband and
wife without the benefit of marriage, or their marriage is void from the beginning. It provides that the property
acquired by either or both of them through their work or industry or their wages and salaries shall be governed
by the rules on co-ownership. In a co-ownership, it is not necessary that the property be acquired through their
joint labor, efforts and industry. Any property acquired during the union is prima facie presumed to have been
obtained through their joint efforts. Hence, the portions belonging to the co-owners shall be presumed equal,
unless the contrary is proven. 77

Meanwhile, if respondent fails to prove the validity of both the divorce and the marriage, the applicable
provision would be Article 148 of the Family Code which has filled the hiatus in Article 144 of the Civil Code by
expressly regulating the property relations of couples living together as husband and wife but are incapacitated
to marry. 78In Saguid v. Court of Appeals, 79 we held that even if the cohabitation or the acquisition of property
occurred before the Family Code took effect, Article 148 governs. 80 The Court described the property regime
under this provision as follows:

8
The regime of limited co-ownership of property governing the union of parties who are not legally capacitated
to marry each other, but who nonetheless live together as husband and wife, applies to properties acquired
during said cohabitation in proportion to their respective contributions. Co-ownership will only be up to the
extent of the proven actual contribution of money, property or industry. Absent proof of the extent thereof,
their contributions and corresponding shares shall be presumed to be equal.

xxxx

In the cases of Agapay v. Palang, and Tumlos v. Fernandez, which involved the issue of co-ownership of
properties acquired by the parties to a bigamous marriage and an adulterous relationship, respectively, we ruled
that proof of actual contribution in the acquisition of the property is essential. x x x

As in other civil cases, the burden of proof rests upon the party who, as determined by the pleadings or the
nature of the case, asserts an affirmative issue. Contentions must be proved by competent evidence and reliance
must be had on the strength of the partys own evidence and not upon the weakness of the opponents defense.
x x x81

In view of the foregoing, we find that respondents legal capacity to file the subject petition for letters of
administration may arise from her status as the surviving wife of Felicisimo or as his co-owner under Article 144
of the Civil Code or Article 148 of the Family Code.

WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals reinstating and affirming the February
28, 1994 Order of the Regional Trial Court which denied petitioners motion to dismiss and its October 24, 1994
Order which dismissed petitioners motion for reconsideration is AFFIRMED. Let this case be REMANDED to the
trial court for further proceedings.

SO ORDERED.

CONSUELO YNARES-SANTIAGO

Associate Justice

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G.R. No. 189121 July 31, 2013
AMELIA GARCIA-QUIAZON, JENNETH QUIAZON and MARIA JENNIFER QUIAZON, Petitioners,
vs.
MA. LOURDES BELEN, for and in behalf of MARIA LOURDES ELISE QUIAZON, Respondent.

DECISION

PEREZ, J.:

This is a Petition for Review on Certiorari filed pursuant to Rule 45 of the Revised Rules of Court, primarily
assailing the 28 November 2008 Decision rendered by the Ninth Division of the Court of Appeals in CA-G.R. CV
No. 88589,1 the decretal portion of which states:

WHEREFORE, premises considered, the appeal is hereby DENIED. The assailed Decision dated March 11, 2005,
and the Order dated March 24, 2006 of the Regional Trial Court, Branch 275, Las Pias City are AFFIRMED in
toto.2

The Facts

This case started as a Petition for Letters of Administration of the Estate of Eliseo Quiazon (Eliseo), filed by herein
respondents who are Eliseos common-law wife and daughter. The petition was opposed by herein petitioners
Amelia Garcia-Quaizon (Amelia) to whom Eliseo was married. Amelia was joined by her children, Jenneth
Quiazon (Jenneth) and Maria Jennifer Quiazon (Jennifer).

Eliseo died intestate on 12 December 1992.

On 12 September 1994, Maria Lourdes Elise Quiazon (Elise), represented by her mother, Ma. Lourdes Belen
(Lourdes), filed a Petition for Letters of Administration before the Regional Trial Court (RTC) of Las Pias City.3 In
her Petition docketed as SP Proc. No. M-3957, Elise claims that she is the natural child of Eliseo having been
conceived and born at the time when her parents were both capacitated to marry each other. Insisting on the
legal capacity of Eliseo and Lourdes to marry, Elise impugned the validity of Eliseos marriage to Amelia by
claiming that it was bigamous for having been contracted during the subsistence of the latters marriage with
one Filipito Sandico (Filipito). To prove her filiation to the decedent, Elise, among others, attached to the Petition
for Letters of Administration her Certificate of Live Birth4 signed by Eliseo as her father. In the same petition, it
was alleged that Eliseo left real properties worth P2,040,000.00 and personal properties worth P2,100,000.00.
In order to preserve the estate of Eliseo and to prevent the dissipation of its value, Elise sought her appointment
as administratrix of her late fathers estate.

Claiming that the venue of the petition was improperly laid, Amelia, together with her children, Jenneth and
Jennifer, opposed the issuance of the letters of administration by filing an Opposition/Motion to Dismiss.5 The
petitioners asserted that as shown by his Death Certificate, 6 Eliseo was a resident of Capas, Tarlac and not of
Las Pias City, at the time of his death. Pursuant to Section 1, Rule 73 of the Revised Rules of Court,7 the petition
for settlement of decedents estate should have been filed in Capas, Tarlac and not in Las Pias City. In addition
to their claim of improper venue, the petitioners averred that there are no factual and legal bases for Elise to
be appointed administratix of Eliseos estate.

In a Decision8 dated 11 March 2005, the RTC directed the issuance of Letters of Administration to Elise upon
posting the necessary bond. The lower court ruled that the venue of the petition was properly laid in Las Pias
City, thereby discrediting the position taken by the petitioners that Eliseos last residence was in Capas, Tarlac,
as hearsay. The dispositive of the RTC decision reads:

10
Having attained legal age at this time and there being no showing of any disqualification or incompetence to
serve as administrator, let letters of administration over the estate of the decedent Eliseo Quiazon, therefore,
be issued to petitioner, Ma. Lourdes Elise Quiazon, after the approval by this Court of a bond in the amount
of P100,000.00 to be posted by her.9

On appeal, the decision of the trial court was affirmed in toto in the 28 November 2008 Decision10 rendered by
the Court of Appeals in CA-G.R.CV No. 88589. In validating the findings of the RTC, the Court of Appeals held
that Elise was able to prove that Eliseo and Lourdes lived together as husband and wife by establishing a
common residence at No. 26 Everlasting Road, Phase 5, Pilar Village, Las Pias City, from 1975 up to the time of
Eliseos death in 1992. For purposes of fixing the venue of the settlement of Eliseos estate, the Court of Appeals
upheld the conclusion reached by the RTC that the decedent was a resident of Las Pias City. The petitioners
Motion for Reconsideration was denied by the Court of Appeals in its Resolution11 dated 7 August 2009.

The Issues

The petitioners now urge Us to reverse the assailed Court of Appeals Decision and Resolution on the following
grounds:

I. THE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THAT ELISEO QUIAZON WAS A RESIDENT OF
LAS PIAS AND THEREFORE, THE PETITION FOR LETTERS OF ADMINISTRATION WAS PROPERLY FILED
WITH THE RTC OF LAS PIAS;

II. THE COURT OF APPEALS GRAVELY ERRED IN DECLARING THAT AMELIA GARCIA-QUIAZON WAS NOT
LEGALLY MARRIED TO ELISEO QUIAZON DUE TO PREEXISTING MARRIAGE; AND

III. THE COURT OF APPEALS OVERLOOKED THE FACT THAT ELISE QUIAZON HAS NOT SHOWN ANY
INTEREST IN THE PETITION FOR LETTERS OF ADMINISTRATION.12

The Courts Ruling

We find the petition bereft of merit.

Under Section 1, Rule 73 of the Rules of Court, the petition for letters of administration of the estate of a
decedent should be filed in the RTC of the province where the decedent resides at the time of his death:

Sec. 1. Where estate of deceased persons settled. If the decedent is an inhabitant of the Philippines at the
time of his death, whether a citizen or an alien, his will shall be proved, or letters of administration granted, and
his estate settled, in the Court of First Instance now Regional Trial Court in the province in which he resides at
the time of his death, and if he is an inhabitant of a foreign country, the Court of First Instance now Regional
Trial Court of any province in which he had estate. The court first taking cognizance of the settlement of the
estate of a decedent, shall exercise jurisdiction to the exclusion of all other courts. The jurisdiction assumed by
a court, so far as it depends on the place of residence of the decedent, or of the location of his estate, shall not
be contested in a suit or proceeding, except in an appeal from that court, in the original case, or when the want
of jurisdiction appears on the record. (Emphasis supplied).

The term "resides" connotes ex vi termini "actual residence" as distinguished from "legal residence or domicile."
This term "resides," like the terms "residing" and "residence," is elastic and should be interpreted in the light of
the object or purpose of the statute or rule in which it is employed. In the application of venue statutes and
rules Section 1, Rule 73 of the Revised Rules of Court is of such nature residence rather than domicile is the
significant factor.13 Even where the statute uses word "domicile" still it is construed as meaning residence and
not domicile in the technical sense.14 Some cases make a distinction between the terms "residence" and
11
"domicile" but as generally used in statutes fixing venue, the terms are synonymous, and convey the same
meaning as the term "inhabitant."15 In other words, "resides" should be viewed or understood in its popular
sense, meaning, the personal, actual or physical habitation of a person, actual residence or place of abode. 16 It
signifies physical presence in a place and actual stay thereat.17 Venue for ordinary civil actions and that for
special proceedings have one and the same meaning.18 As thus defined, "residence," in the context of venue
provisions, means nothing more than a persons actual residence or place of abode, provided he resides therein
with continuity and consistency.19

Viewed in light of the foregoing principles, the Court of Appeals cannot be faulted for affirming the ruling of the
RTC that the venue for the settlement of the estate of Eliseo was properly laid in Las Pias City. It is evident from
the records that during his lifetime, Eliseo resided at No. 26 Everlasting Road, Phase 5, Pilar Village, Las Pias
City. For this reason, the venue for the settlement of his estate may be laid in the said city.

In opposing the issuance of letters of administration, the petitioners harp on the entry in Eliseos Death
Certificate that he is a resident of Capas, Tarlac where they insist his estate should be settled. While the recitals
in death certificates can be considered proofs of a decedents residence at the time of his death, the contents
thereof, however, is not binding on the courts. Both the RTC and the Court of Appeals found that Eliseo had
been living with Lourdes, deporting themselves as husband and wife, from 1972 up to the time of his death in
1995. This finding is consistent with the fact that in 1985, Eliseo filed an action for judicial partition of properties
against Amelia before the RTC of Quezon City, Branch 106, on the ground that their marriage is void for being
bigamous.20 That Eliseo went to the extent of taking his marital feud with Amelia before the courts of law
renders untenable petitioners position that Eliseo spent the final days of his life in Tarlac with Amelia and her
children. It disproves rather than supports petitioners submission that the lower courts findings arose from an
erroneous appreciation of the evidence on record. Factual findings of the trial court, when affirmed by the
appellate court, must be held to be conclusive and binding upon this Court.21

Likewise unmeritorious is petitioners contention that the Court of Appeals erred in declaring Amelias marriage
to Eliseo as void ab initio. In a void marriage, it was though no marriage has taken place, thus, it cannot be the
source of rights. Any interested party may attack the marriage directly or collaterally. A void marriage can be
questioned even beyond the lifetime of the parties to the marriage.22 It must be pointed out that at the time of
the celebration of the marriage of Eliseo and Amelia, the law in effect was the Civil Code, and not the Family
Code, making the ruling in Nial v. Bayadog23 applicable four-square to the case at hand. In Nial, the Court, in
no uncertain terms, allowed therein petitioners to file a petition for the declaration of nullity of their fathers
marriage to therein respondent after the death of their father, by contradistinguishing void from voidable
marriages, to wit:

Consequently, void marriages can be questioned even after the death of either party but voidable marriages
can be assailed only during the lifetime of the parties and not after death of either, in which case the parties
and their offspring will be left as if the marriage had been perfectly valid. That is why the action or defense for
nullity is imprescriptible, unlike voidable marriages where the action prescribes. Only the parties to a voidable
marriage can assail it but any proper interested party may attack a void marriage.24

It was emphasized in Nial that in a void marriage, no marriage has taken place and it cannot be the source of
rights, such that any interested party may attack the marriage directly or collaterally without prescription, which
may be filed even beyond the lifetime of the parties to the marriage.25

Relevant to the foregoing, there is no doubt that Elise, whose successional rights would be prejudiced by her
fathers marriage to Amelia, may impugn the existence of such marriage even after the death of her father. The
said marriage may be questioned directly by filing an action attacking the validity thereof, or collaterally by
raising it as an issue in a proceeding for the settlement of the estate of the deceased spouse, such as in the case
12
at bar. Ineluctably, Elise, as a compulsory heir,26 has a cause of action for the declaration of the absolute nullity
of the void marriage of Eliseo and Amelia, and the death of either party to the said marriage does not extinguish
such cause of action.

Having established the right of Elise to impugn Eliseos marriage to Amelia, we now proceed to determine
whether or not the decedents marriage to Amelia is void for being bigamous.

Contrary to the position taken by the petitioners, the existence of a previous marriage between Amelia and
Filipito was sufficiently established by no less than the Certificate of Marriage issued by the Diocese of Tarlac
and signed by the officiating priest of the Parish of San Nicolas de Tolentino in Capas, Tarlac. The said marriage
certificate is a competent evidence of marriage and the certification from the National Archive that no
information relative to the said marriage exists does not diminish the probative value of the entries therein. We
take judicial notice of the fact that the first marriage was celebrated more than 50 years ago, thus, the possibility
that a record of marriage can no longer be found in the National Archive, given the interval of time, is not
completely remote. Consequently, in the absence of any showing that such marriage had been dissolved at the
time Amelia and Eliseos marriage was solemnized, the inescapable conclusion is that the latter marriage is
bigamous and, therefore, void ab initio.27

Neither are we inclined to lend credence to the petitioners contention that Elise has not shown any interest in
the Petition for Letters of Administration.

Section 6, Rule 78 of the Revised Rules of Court lays down the preferred persons who are entitled to the issuance
of letters of administration, thus:

Sec. 6. When and to whom letters of administration granted. If no executor is named in the will, or the
executor or executors are incompetent, refuse the trust, or fail to give bond, or a person dies intestate,
administration shall be granted:

(a) To the surviving husband or wife, as the case may be, or next of kin, or both, in the discretion of the
court, or to such person as such surviving husband or wife, or next of kin, requests to have appointed, if
competent and willing to serve;

(b) If such surviving husband or wife, as the case may be, or next of kin, or the person selected by them,
be incompetent or unwilling, or if the husband or widow, or next of kin, neglects for thirty (30) days after
the death of the person to apply for administration or to request that administration be granted to some
other person, it may be granted to one or more of the principal creditors, if competent and willing to
serve;

(c) If there is no such creditor competent and willing to serve, it may be granted to such other person as
the court may select.

Upon the other hand, Section 2 of Rule 79 provides that a petition for Letters of Administration must be filed by
an interested person, thus:

Sec. 2. Contents of petition for letters of administration. A petition for letters of administration must be filed
by an interested person and must show, so far as known to the petitioner:

(a) The jurisdictional facts;

(b) The names, ages, and residences of the heirs, and the names and residences of the creditors, of the
decedent;
13
 (c) The probable value and character of the property of the estate;

(d) The name of the person for whom letters of administration are prayed.

But no defect in the petition shall render void the issuance of letters of administration.

An "interested party," in estate proceedings, is one who would be benefited in the estate, such as an heir, or
one who has a claim against the estate, such as a creditor. Also, in estate proceedings, the phrase "next of kin"
refers to those whose relationship with the decedent Is such that they are entitled to share in the estate as
distributees.28

In the instant case, Elise, as a compulsory heir who stands to be benefited by the distribution of Eliseos estate,
is deemed to be an interested party. With the overwhelming evidence on record produced by Elise to prove her
filiation to Eliseo, the petitioners pounding on her lack of interest in the administration of the decedents estate,
is just a desperate attempt to sway this Court to reverse the findings of the Court of Appeals. Certainly, the right
of Elise to be appointed administratix of the estate of Eliseo is on good grounds. It is founded on her right as a
compulsory heir, who, under the law, is entitled to her legitimate after the debts of the estate are
satisfied.29Having a vested right in the distribution of Eliseos estate as one of his natural children, Elise can
rightfully be considered as an interested party within the purview of the law.

WHEREFORE, premises considered, the petition is DENIED for lack of merit. Accordingly, the Court of Appeals
assailed 28 November 2008 Decision and 7 August 2009 Resolution, arc AFFIRMED in toto.

SO ORDERED.

JOSE PORTUGAL PEREZ

Associate Justice

14
G.R. No. 177099 June 8, 2011
EDUARDO G. AGTARAP, Petitioner,
vs.
SEBASTIAN AGTARAP, JOSEPH AGTARAP, TERESA AGTARAP, WALTER DE SANTOS, and ABELARDO
DAGORO, Respondents.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 177192
SEBASTIAN G. AGTARAP, Petitioner,
vs.
EDUARDO G. AGTARAP, JOSEPH AGTARAP, TERESA AGTARAP, WALTER DE SANTOS, and ABELARDO
DAGORO, Respondents.
DECISION

NACHURA, J.:

Before us are the consolidated petitions for review on certiorari of petitioners Sebastian G. Agtarap
(Sebastian)1and Eduardo G. Agtarap (Eduardo),2 assailing the Decision dated November 21, 20063 and the
Resolution dated March 27, 20074 of the Court of Appeals (CA) in CA-G.R. CV No. 73916.

The antecedent facts and proceedings

On September 15, 1994, Eduardo filed with the Regional Trial Court (RTC), Branch 114, Pasay City, a verified
petition for the judicial settlement of the estate of his deceased father Joaquin Agtarap (Joaquin). It was
docketed as Special Proceedings No. 94-4055.

The petition alleged that Joaquin died intestate on November 21, 1964 in Pasay City without any known debts
or obligations. During his lifetime, Joaquin contracted two marriages, first with Lucia Garcia (Lucia),5 and second
with Caridad Garcia (Caridad). Lucia died on April 24, 1924. Joaquin and Lucia had three childrenJesus (died
without issue), Milagros, and Jose (survived by three children, namely, Gloria,6 Joseph, and Teresa7). Joaquin
married Caridad on February 9, 1926. They also had three childrenEduardo, Sebastian, and Mercedes
(survived by her daughter Cecile). At the time of his death, Joaquin left two parcels of land with improvements
in Pasay City, covered by Transfer Certificates of Title (TCT) Nos. 873-(38254) and 874-(38255). Joseph, a
grandson of Joaquin, had been leasing and improving the said realties and had been appropriating for
himself P26,000.00 per month since April 1994.

Eduardo further alleged that there was an imperative need to appoint him as special administrator to take
possession and charge of the estate assets and their civil fruits, pending the appointment of a regular
administrator. In addition, he prayed that an order be issued (a) confirming and declaring the named compulsory
heirs of Joaquin who would be entitled to participate in the estate; (b) apportioning and allocating unto the
named heirs their aliquot shares in the estate in accordance with law; and (c) entitling the distributees the right
to receive and enter into possession those parts of the estate individually awarded to them.

On September 26, 1994, the RTC issued an order setting the petition for initial hearing and directing Eduardo to
cause its publication.

On December 28, 1994, Sebastian filed his comment, generally admitting the allegations in the petition, and
conceding to the appointment of Eduardo as special administrator.

Joseph, Gloria, and Teresa filed their answer/opposition. They alleged that the two subject lots belong to the
conjugal partnership of Joaquin with Lucia, and that, upon Lucias death in April 1924, they became the pro
15
indiviso owners of the subject properties. They said that their residence was built with the exclusive money of
their late father Jose, and the expenses of the extensions to the house were shouldered by Gloria and Teresa,
while the restaurant (Manongs Restaurant) was built with the exclusive money of Joseph and his business
partner. They opposed the appointment of Eduardo as administrator on the following grounds: (1) he is not
physically and mentally fit to do so; (2) his interest in the lots is minimal; and (3) he does not possess the desire
to earn. They claimed that the best interests of the estate dictate that Joseph be appointed as special or regular
administrator.

On February 16, 1995, the RTC issued a resolution appointing Eduardo as regular administrator of Joaquins
estate. Consequently, it issued him letters of administration.

On September 16, 1995, Abelardo Dagoro filed an answer in intervention, alleging that Mercedes is survived not
only by her daughter Cecile, but also by him as her husband. He also averred that there is a need to appoint a
special administrator to the estate, but claimed that Eduardo is not the person best qualified for the task.

After the parties were given the opportunity to be heard and to submit their respective proposed projects of
partition, the RTC, on October 23, 2000, issued an Order of Partition,8 with the following disposition

In the light of the filing by the heirs of their respective proposed projects of partition and the payment of
inheritance taxes due the estate as early as 1965, and there being no claim in Court against the estate of the
deceased, the estate of JOAQUIN AGTARAP is now consequently ripe for distribution among the heirs minus
the surviving spouse Caridad Garcia who died on August 25, 1999.

Considering that the bulk of the estate property were acquired during the existence of the second marriage as
shown by TCT No. (38254) and TCT No. (38255) which showed on its face that decedent was married to Caridad
Garcia, which fact oppositors failed to contradict by evidence other than their negative allegations, the greater
part of the estate is perforce accounted by the second marriage and the compulsory heirs thereunder.

The Administrator, Eduardo Agtarap rendered a true and just accounting of his administration from his date of
assumption up to the year ending December 31, 1996 per Financial and Accounting Report dated June 2, 1997
which was approved by the Court. The accounting report included the income earned and received for the
period and the expenses incurred in the administration, sustenance and allowance of the widow. In accordance
with said Financial and Accounting Report which was duly approved by this Court in its Resolution dated July 28,
1998 the deceased JOAQUIN AGTARAP left real properties consisting of the following:

I LAND:

Two lots and two buildings with one garage quarter located at #3030 Agtarap St., Pasay City, covered by Transfer
Certificate of Title Nos. 38254 and 38255 and registered with the Registry of Deeds of Pasay City, Metro Manila,
described as follows:

TCT NO. LOT NO. AREA/SQ.M. ZONAL VALUE AMOUNT

38254 745-B-1 1,335 sq. m. P5,000.00 P6,675,000.00
38255 745-B-2 1,331 sq. m. P5,000.00 P6,655,000.00

TOTAL------------------------------------------------------------- P13,330,000.00
II BUILDINGS AND IMPROVEMENTS:

16
 BUILDING I (Lot # 745-B-1) ------------------------------ P350,000.00
BUILDING II (Lot # 745-B-2) ----------------------------- 320,000.00
Building Improvements -------------------------------------- 97,500.00
Restaurant ------------------------------------------------------ 80,000.00

TOTAL --------------------------------------------------------- P847,500.00

TOTAL NET WORTH ----------------------------------------- P14,177,500.00
WHEREFORE, the net assets of the estate of the late JOAQUIN AGTARAP with a total value of P14,177,500.00,
together with whatever interest from bank deposits and all other incomes or increments thereof accruing after
the Accounting Report of December 31, 1996, after deducting therefrom the compensation of the administrator
and other expenses allowed by the Court, are hereby ordered distributed as follows:

TOTAL ESTATE P14,177,500.00

CARIDAD AGTARAP of the estate as her conjugal share P7,088,750.00, the other half of P7,088,750.00
to be divided among the compulsory heirs as follows:

1) JOSE (deceased) - P1,181,548.30

2) MILAGROS (deceased) - P1,181,548.30
3) MERCEDES (deceased) - P1,181,548.30
4) SEBASTIAN - P1,181,548.30
5) EDUARDO - P1,181,548.30
6) CARIDAD - P1,181,548.30
The share of Milagros Agtarap as compulsory heir in the amount of P1,181,548.30 and who died in 1996 will go
to Teresa Agtarap and Joseph Agtarap, Walter de Santos and half brothers Eduardo and Sebastian Agtarap in
equal proportions.

TERESA AGTARAP - P236,291.66

JOSEPH AGTARAP - P236,291.66
WALTER DE SANTOS - P236,291.66
SEBASTIAN AGTARAP - P236,291.66
EDUARDO AGTARAP - P236,291.66

17
Jose Agtarap died in 1967. His compulsory heirs are as follows:

COMPULSORY HEIRS:

1) GLORIA (deceased) represented by Walter de Santos

- P295,364.57
2) JOSEPH AGTARAP - P295,364.57
3) TERESA AGTARAP - P295,364.57
4) PRISCILLA AGTARAP - P295,364.57
Hence, Priscilla Agtarap will inherit P295,364.57.

Adding their share from Milagros Agtarap, the following heirs of the first marriage stand to receive the total
amount of:

HEIRS OF THE FIRST MARRIAGE:

1) JOSEPH AGTARAP - P236,291.66 share from Milagros Agtarap

P295,364.57 as compulsory heir of
P531,656.23 Jose Agtarap
2) TERESA AGTARAP - P236,291.66 share from Milagros Agtarap
P295,364.57 as compulsory heir of
P531,656.23 Jose Agtarap
3) WALTER DE SANTOS - P236,291.66 share from Milagros Agtarap
P295,364.57 as compulsory heir of
P531,656.23 Jose Agtarap
HEIRS OF THE SECOND MARRIAGE:

a) CARIDAD AGTARAP - died on August 25, 1999

P7,088,750.00 - as conjugal share
P1,181,458.30 - as compulsory heir
Total of P8,270,208.30
b) SEBASTIAN AGTARAP - P1,181,458.38 as compulsory heir
P 236,291.66 share from Milagros
c) EDUARDO AGTARAP - P1,181,458.38 as compulsory heir
P 236,291.66 share from Milagros
d) MERCEDES - as represented by Abelardo Dagoro as the
surviving spouse of a compulsory heir
P1,181,458.38

18
REMAINING HEIRS OF CARIDAD AGTARAP:

1) SEBASTIAN AGTARAP

2) EDUARDO AGTARAP MERCEDES AGTARAP (Predeceased Caridad Agtarap)

In sum, Sebastian Agtarap and Eduardo Agtarap stand to inherit:

SEBASTIAN P4,135,104.10 share from Caridad Garcia

P1,181,458.30 - as compulsory heir
P 236,291.66 - share from Milagros

P5,522,854.06
EDUARDO P4,135,104.10 share from Caridad Garcia
P1,181,458.30 as compulsory heir
P 236,291.66 share from Milagros

P5,522,854.06
9
SO ORDERED.

Eduardo, Sebastian, and oppositors Joseph and Teresa filed their respective motions for reconsideration.

On August 27, 2001, the RTC issued a resolution10 denying the motions for reconsideration of Eduardo and
Sebastian, and granting that of Joseph and Teresa. It also declared that the real estate properties belonged to
the conjugal partnership of Joaquin and Lucia. It also directed the modification of the October 23, 2000 Order
of Partition to reflect the correct sharing of the heirs. However, before the RTC could issue a new order of
partition, Eduardo and Sebastian both appealed to the CA.

On November 21, 2006, the CA rendered its Decision, the dispositive portion of which reads

WHEREFORE, premises considered, the instant appeals are DISMISSED for lack of merit. The assailed Resolution
dated August 27, 2001 is AFFIRMED and pursuant thereto, the subject properties (Lot No. 745-B-1 [TCT No.
38254] and Lot No. 745-B-2 [TCT No. 38255]) and the estate of the late Joaquin Agtarap are hereby partitioned
as follows:

The two (2) properties, together with their improvements, embraced by TCT No. 38254 and TCT No. 38255,
respectively, are first to be distributed among the following:

Lucia Mendietta - of the property. But since she is deceased, her share shall be inherited by Joaquin, Jesus,
Milagros and Jose in equal shares.

Joaquin Agtarap - of the property and of the other half of the property which pertains to Lucia Mendiettas
share.

Jesus Agtarap - of Lucia Mendiettas share. But since he is already deceased (and died without issue), his
inheritance shall, in turn, be acquired by Joaquin Agtarap.

Milagros Agtarap - of Lucia Mendiettas share. But since she died in 1996 without issue, 5/8 of her inheritance
shall be inherited by Gloria (represented by her husband Walter de Santos and her daughter Samantha), Joseph
Agtarap and Teresa Agtarap, (in representation of Milagros brother Jose Agtarap) and 1/8 each shall be
19
inherited by Mercedes (represented by her husband Abelardo Dagoro and her daughter Cecile), Sebastian
Eduardo, all surnamed Agtarap.

Jose Agtarap - of Lucia Mendiettas share. But since he died in 1967, his inheritance shall be acquired by his
wife Priscilla, and children Gloria (represented by her husband Walter de Santos and her daughter Samantha),
Joseph Agtarap and Teresa in equal shares.

Then, Joaquin Agtaraps estate, comprising three-fourths (3/4) of the subject properties and its improvements,
shall be distributed as follows:

Caridad Garcia - 1/6 of the estate. But since she died in 1999, her share shall be inherited by her children namely
Mercedes Agtarap (represented by her husband Abelardo Dagoro and her daughter Cecilia), Sebastian Agtarap
and Eduardo Agtarap in their own right, dividing the inheritance in equal shares.

Milagros Agtarap - 1/6 of the estate. But since she died in 1996 without issue, 5/8 of her inheritance shall be
inherited by Gloria (represented by her husband Walter de Santos and her daughter Samantha), Joseph Agtarap
and Teresa Agtarap, (in representation of Milagros brother Jose Agtarap) and 1/8 each shall be inherited by
Mercedes (represented by her husband Abelardo Dagoro and her daughter Cecile), Sebastian and Eduardo, all
surnamed Agtarap.

Jose Agtarap - 1/6 of the estate. But since he died in 1967, his inheritance shall be acquired by his wife Priscilla,
and children Gloria (represented by her husband Walter de Santos and her daughter Samantha), Joseph Agtarap
and Teresa Agtarap in equal shares.

Mercedes Agtarap - 1/6 of the estate. But since she died in 1984, her inheritance shall be acquired by her
husband Abelardo Dagoro and her daughter Cecile in equal shares.

Sebastian Agtarap - 1/6 of the estate.

Eduardo Agtarap - 1/6 of the estate.

SO ORDERED.11

Aggrieved, Sebastian and Eduardo filed their respective motions for reconsideration.

In its Resolution dated March 27, 2007, the CA denied both motions. Hence, these petitions ascribing to the
appellate court the following errors:

G.R. No. 177192

1. The Court of Appeals erred in not considering the aforementioned important facts12 which alter its
Decision;

2. The Court of Appeals erred in not considering the necessity of hearing the issue of legitimacy of
respondents as heirs;

3. The Court of Appeals erred in allowing violation of the law and in not applying the doctrines of
collateral attack, estoppel, and res judicata.13

20
G.R. No. 177099

THE COURT OF APPEALS (FORMER TWELFTH DIVISION) DID NOT ACQUIRE JURISDICTION OVER THE ESTATE OF
MILAGROS G. AGTARAP AND ERRED IN DISTRIBUTING HER INHERITANCE FROM THE ESTATE OF JOAQUIN
AGTARAP NOTWITHSTANDING THE EXISTENCE OF HER LAST WILL AND TESTAMENT IN VIOLATION OF THE
DOCTRINE OF PRECEDENCE OF TESTATE PROCEEDINGS OVER INTESTATE PROCEEDINGS.

II.

THE COURT OF APPEALS (FORMER TWELFTH DIVISION) ERRED IN DISMISSING THE DECISION APPEALED FROM
FOR LACK OF MERIT AND IN AFFIRMING THE ASSAILED RESOLUTION DATED AUGUST 27, 2001 OF THE LOWER
COURT HOLDING THAT THE PARCELS OF LAND COVERED BY TCT NO. 38254 AND TCT (NO.) 38255 OF THE
REGISTRY OF DEEDS FOR THE CITY OF PASAY BELONG TO THE CONJUGAL PARTNERSHIP OF JOAQUIN AGTARAP
MARRIED TO LUCIA GARCIA MENDIETTA NOTWITHSTANDING THEIR REGISTRATION UNDER THEIR EXISTING
CERTIFICATES OF TITLE AS REGISTERED IN THE NAME OF JOAQUIN AGTARAP, CASADO CON CARIDAD GARCIA.
UNDER EXISTING JURISPRUDENCE, THE PROBATE COURT HAS NO POWER TO DETERMINE THE OWNERSHIP OF
THE PROPERTY DESCRIBED IN THESE CERTIFICATES OF TITLE WHICH SHOULD BE RESOLVED IN AN APPROPRIATE
SEPARATE ACTION FOR A TORRENS TITLE UNDER THE LAW IS ENDOWED WITH INCONTESTABILITY UNTIL IT HAS
BEEN SET ASIDE IN THE MANNER INDICATED IN THE LAW ITSELF.14

As regards his first and second assignments of error, Sebastian contends that Joseph and Teresa failed to
establish by competent evidence that they are the legitimate heirs of their father Jose, and thus of their
grandfather Joaquin. He draws attention to the certificate of title (TCT No. 8026) they submitted, stating that
the wife of their father Jose is Presentacion Garcia, while they claim that their mother is Priscilla. He avers that
the marriage contracts proffered by Joseph and Teresa do not qualify as the best evidence of Joses marriage
with Priscilla, inasmuch as they were not authenticated and formally offered in evidence. Sebastian also
asseverates that he actually questioned the legitimacy of Joseph and Teresa as heirs of Joaquin in his motion to
exclude them as heirs, and in his reply to their opposition to the said motion. He further claims that the failure
of Abelardo Dagoro and Walter de Santos to oppose his motion to exclude them as heirs had the effect of
admitting the allegations therein. He points out that his motion was denied by the RTC without a hearing.

With respect to his third assigned error, Sebastian maintains that the certificates of title of real estate properties
subject of the controversy are in the name of Joaquin Agtarap, married to Caridad Garcia, and as such are
conclusive proof of their ownership thereof, and thus, they are not subject to collateral attack, but should be
threshed out in a separate proceeding for that purpose. He likewise argues that estoppel applies against the
children of the first marriage, since none of them registered any objection to the issuance of the TCTs in the
name of Caridad and Joaquin only. He avers that the estate must have already been settled in light of the
payment of the estate and inheritance tax by Milagros, Joseph, and Teresa, resulting to the issuance of TCT No.
8925 in Milagros name and of TCT No. 8026 in the names of Milagros and Jose. He also alleges that res judicata
is applicable as the court order directing the deletion of the name of Lucia, and replacing it with the name of
Caridad, in the TCTs had long become final and executory.

In his own petition, with respect to his first assignment of error, Eduardo alleges that the CA erroneously settled,
together with the settlement of the estate of Joaquin, the estates of Lucia, Jesus, Jose, Mercedes, Gloria, and
Milagros, in contravention of the principle of settling only one estate in one proceeding. He particularly
questions the distribution of the estate of Milagros in the intestate proceedings despite the fact that a
proceeding was conducted in another court for the probate of the will of Milagros, bequeathing all to Eduardo
whatever share that she would receive from Joaquins estate. He states that this violated the rule on precedence
of testate over intestate proceedings.

21
Anent his second assignment of error, Eduardo contends that the CA gravely erred when it affirmed that the
bulk of the realties subject of this case belong to the first marriage of Joaquin to Lucia, notwithstanding that the
certificates of title were registered in the name of Joaquin Agtarap casado con ("married to") Caridad Garcia.
According to him, the RTC, acting as an intestate court with limited jurisdiction, was not vested with the power
and authority to determine questions of ownership, which properly belongs to another court with general
jurisdiction.

The Courts Ruling

As to Sebastians and Eduardos common issue on the ownership of the subject real properties, we hold that
the RTC, as an intestate court, had jurisdiction to resolve the same.

The general rule is that the jurisdiction of the trial court, either as a probate or an intestate court, relates only
to matters having to do with the probate of the will and/or settlement of the estate of deceased persons, but
does not extend to the determination of questions of ownership that arise during the proceedings.15 The patent
rationale for this rule is that such court merely exercises special and limited jurisdiction.16 As held in several
cases,17 a probate court or one in charge of estate proceedings, whether testate or intestate, cannot adjudicate
or determine title to properties claimed to be a part of the estate and which are claimed to belong to outside
parties, not by virtue of any right of inheritance from the deceased but by title adverse to that of the deceased
and his estate. All that the said court could do as regards said properties is to determine whether or not they
should be included in the inventory of properties to be administered by the administrator. If there is no dispute,
there poses no problem, but if there is, then the parties, the administrator, and the opposing parties have to
resort to an ordinary action before a court exercising general jurisdiction for a final determination of the
conflicting claims of title.

However, this general rule is subject to exceptions as justified by expediency and convenience.

First, the probate court may provisionally pass upon in an intestate or a testate proceeding the question of
inclusion in, or exclusion from, the inventory of a piece of property without prejudice to the final determination
of ownership in a separate action.18 Second, if the interested parties are all heirs to the estate, or the question
is one of collation or advancement, or the parties consent to the assumption of jurisdiction by the probate court
and the rights of third parties are not impaired, then the probate court is competent to resolve issues on
ownership.19Verily, its jurisdiction extends to matters incidental or collateral to the settlement and distribution
of the estate, such as the determination of the status of each heir and whether the property in the inventory is
conjugal or exclusive property of the deceased spouse.20

We hold that the general rule does not apply to the instant case considering that the parties are all heirs of
Joaquin and that no rights of third parties will be impaired by the resolution of the ownership issue. More
importantly, the determination of whether the subject properties are conjugal is but collateral to the probate
courts jurisdiction to settle the estate of Joaquin.

It should be remembered that when Eduardo filed his verified petition for judicial settlement of Joaquins estate,
he alleged that the subject properties were owned by Joaquin and Caridad since the TCTs state that the lots
were registered in the name of Joaquin Agtarap, married to Caridad Garcia. He also admitted in his petition that
Joaquin, prior to contracting marriage with Caridad, contracted a first marriage with Lucia. Oppositors to the
petition, Joseph and Teresa, however, were able to present proof before the RTC that TCT Nos. 38254 and 38255
were derived from a mother title, TCT No. 5239, dated March 17, 1920, in the name of FRANCISCO VICTOR
BARNES Y JOAQUIN AGTARAP, el primero casado con Emilia Muscat, y el Segundo con Lucia Garcia Mendietta
(FRANCISCO VICTOR BARNES y JOAQUIN AGTARAP, the first married to Emilia Muscat, and the second married
to Lucia Garcia Mendietta).21 When TCT No. 5239 was divided between Francisco Barnes and Joaquin Agtarap,
22
TCT No. 10864, in the name of Joaquin Agtarap, married to Lucia Garcia Mendietta, was issued for a parcel of
land, identified as Lot No. 745 of the Cadastral Survey of Pasay, Cadastral Case No. 23, G.L.R.O. Cadastral Record
No. 1368, consisting of 8,872 square meters. This same lot was covered by TCT No. 5577 (32184)22 issued on
April 23, 1937, also in the name of Joaquin Agtarap, married to Lucia Garcia Mendietta.

The findings of the RTC and the CA show that Lucia died on April 24, 1924, and subsequently, on February 9,
1926, Joaquin married Caridad. It is worthy to note that TCT No. 5577 (32184) contained an annotation, which
reads

Ap-4966 NOTA: Se ha enmendado el presente certificado de titulo, tal como aparece, tanchando las palabras
"con Lucia Garcia Mendiet[t]a" y poniendo en su lugar, entre lineas y en tinta encarnada, las palabras "en
segundas nupcias con Caridad Garcia", en complimiento de un orden de fecha 28 de abril de 1937, dictada por
el Hon. Sixto de la Costa, juez del Juzgado de Primera Instancia de Rizal, en el expediente cadastal No. 23,
G.L.R.O. Cad. Record No. 1368; copia de cual orden has sido presentada con el No. 4966 del Libro Diario, Tomo
6.0 y, archivada en el Legajo T-No. 32184.

Pasig, Rizal, a 29 abril de 1937.23

Thus, per the order dated April 28, 1937 of Hon. Sixto de la Costa, presiding judge of the Court of First Instance
of Rizal, the phrase con Lucia Garcia Mendiet[t]a was crossed out and replaced by en segundas nuptias con
Caridad Garcia, referring to the second marriage of Joaquin to Caridad. It cannot be gainsaid, therefore, that
prior to the replacement of Caridads name in TCT No. 32184, Lucia, upon her demise, already left, as her estate,
one-half (1/2) conjugal share in TCT No. 32184. Lucias share in the property covered by the said TCT was carried
over to the properties covered by the certificates of title derivative of TCT No. 32184, now TCT Nos. 38254 and
38255. And as found by both the RTC and the CA, Lucia was survived by her compulsory heirs Joaquin, Jesus,
Milagros, and Jose.

Section 2, Rule 73 of the Rules of Court provides that when the marriage is dissolved by the death of the husband
or the wife, the community property shall be inventoried, administered, and liquidated, and the debts thereof
paid; in the testate or intestate proceedings of the deceased spouse, and if both spouses have died, the conjugal
partnership shall be liquidated in the testate or intestate proceedings of either. Thus, the RTC had jurisdiction
to determine whether the properties are conjugal as it had to liquidate the conjugal partnership to determine
the estate of the decedent. In fact, should Joseph and Teresa institute a settlement proceeding for the intestate
estate of Lucia, the same should be consolidated with the settlement proceedings of Joaquin, being Lucias
spouse.24 Accordingly, the CA correctly distributed the estate of Lucia, with respect to the properties covered
by TCT Nos. 38254 and 38255 subject of this case, to her compulsory heirs.

Therefore, in light of the foregoing evidence, as correctly found by the RTC and the CA, the claim of Sebastian
and Eduardo that TCT Nos. 38254 and 38255 conclusively show that the owners of the properties covered
therein were Joaquin and Caridad by virtue of the registration in the name of Joaquin Agtarap casado con
(married to) Caridad Garcia, deserves scant consideration. This cannot be said to be a collateral attack on the
said TCTs. Indeed, simple possession of a certificate of title is not necessarily conclusive of a holders true
ownership of property.25 A certificate of title under the Torrens system aims to protect dominion; it cannot be
used as an instrument for the deprivation of ownership.26 Thus, the fact that the properties were registered in
the name of Joaquin Agtarap, married to Caridad Garcia, is not sufficient proof that the properties were acquired
during the spouses coverture.27 The phrase "married to Caridad Garcia" in the TCTs is merely descriptive of the
civil status of Joaquin as the registered owner, and does not necessarily prove that the realties are their conjugal
properties.28

23
Neither can Sebastians claim that Joaquins estate could have already been settled in 1965 after the payment
of the inheritance tax be upheld. Payment of the inheritance tax, per se, does not settle the estate of a deceased
person. As provided in Section 1, Rule 90 of the Rules of Court

SECTION 1. When order for distribution of residue made. -- When the debts, funeral charges, and expenses of
administration, the allowance to the widow, and inheritance tax, if any, chargeable to the estate in accordance
with law, have been paid, the court, on the application of the executor or administrator, or of a person
interested in the estate, and after hearing upon notice, shall assign the residue of the estate to the persons
entitled to the same, naming them and the proportions, or parts, to which each is entitled, and such persons
may demand and recover their respective shares from the executor or administrator, or any other person having
the same in his possession. If there is a controversy before the court as to who are the lawful heirs of the
deceased person or as to the distributive share to which each person is entitled under the law, the controversy
shall be heard and decided as in ordinary cases.

No distribution shall be allowed until the payment of the obligations above mentioned has been made or
provided for, unless the distributees, or any of them, give a bond, in a sum to be fixed by the court, conditioned
for the payment of said obligations within such time as the court directs.

Thus, an estate is settled and distributed among the heirs only after the payment of the debts of the estate,
funeral charges, expenses of administration, allowance to the widow, and inheritance tax. The records of these
cases do not show that these were complied with in 1965.

As regards the issue raised by Sebastian on the legitimacy of Joseph and Teresa, suffice it to say that both the
RTC and the CA found them to be the legitimate children of Jose. The RTC found that Sebastian did not present
clear and convincing evidence to support his averments in his motion to exclude them as heirs of Joaquin, aside
from his negative allegations. The RTC also noted the fact of Joseph and Teresa being the children of Jose was
never questioned by Sebastian and Eduardo, and the latter two even admitted this in their petitions, as well as
in the stipulation of facts in the August 21, 1995 hearing.29 Furthermore, the CA affirmed this finding of fact in
its November 21, 2006 Decision.30

Also, Sebastians insistence that Abelardo Dagoro and Walter de Santos are not heirs to the estate of Joaquin
cannot be sustained. Per its October 23, 2000 Order of Partition, the RTC found that Gloria Agtarap de Santos
died on May 4, 1995, and was later substituted in the proceedings below by her husband Walter de Santos.
Gloria begot a daughter with Walter de Santos, Georgina Samantha de Santos. The RTC likewise noted that, on
September 16, 1995, Abelardo Dagoro filed a motion for leave of court to intervene, alleging that he is the
surviving spouse of Mercedes Agtarap and the father of Cecilia Agtarap Dagoro, and his answer in intervention.
The RTC later granted the motion, thereby admitting his answer on October 18, 1995.31 The CA also noted that,
during the hearing of the motion to intervene on October 18, 1995, Sebastian and Eduardo did not interpose
any objection when the intervention was submitted to the RTC for resolution.32

Indeed, this Court is not a trier of facts, and there appears no compelling reason to hold that both courts erred
in ruling that Joseph, Teresa, Walter de Santos, and Abelardo Dagoro rightfully participated in the estate of
Joaquin. It was incumbent upon Sebastian to present competent evidence to refute his and Eduardos
admissions that Joseph and Teresa were heirs of Jose, and thus rightful heirs of Joaquin, and to timely object to
the participation of Walter de Santos and Abelardo Dagoro. Unfortunately, Sebastian failed to do so.
Nevertheless, Walter de Santos and Abelardo Dagoro had the right to participate in the estate in representation
of the Joaquins compulsory heirs, Gloria and Mercedes, respectively.33

This Court also differs from Eduardos asseveration that the CA erred in settling, together with Joaquins estate,
the respective estates of Lucia, Jesus, Jose, Mercedes, and Gloria. A perusal of the November 21, 2006 CA
24
Decision would readily show that the disposition of the properties related only to the settlement of the estate
of Joaquin. Pursuant to Section 1, Rule 90 of the Rules of Court, as cited above, the RTC was specifically granted
jurisdiction to determine who are the lawful heirs of Joaquin, as well as their respective shares after the payment
of the obligations of the estate, as enumerated in the said provision. The inclusion of Lucia, Jesus, Jose,
Mercedes, and Gloria in the distribution of the shares was merely a necessary consequence of the settlement
of Joaquins estate, they being his legal heirs.

However, we agree with Eduardos position that the CA erred in distributing Joaquins estate pertinent to the
share allotted in favor of Milagros. Eduardo was able to show that a separate proceeding was instituted for the
probate of the will allegedly executed by Milagros before the RTC, Branch 108, Pasay City.34 While there has
been no showing that the alleged will of Milagros, bequeathing all of her share from Joaquins estate in favor of
Eduardo, has already been probated and approved, prudence dictates that this Court refrain from distributing
Milagros share in Joaquins estate.

It is also worthy to mention that Sebastian died on January 15, 2010, per his Certificate of Death.35 He is survived
by his wife Teresita B. Agtarap (Teresita) and his children Joaquin Julian B. Agtarap (Joaquin Julian) and Ana Ma.
Agtarap Panlilio (Ana Ma.).

Henceforth, in light of the foregoing, the assailed November 21, 2006 Decision and the March 27, 2007
Resolution of the CA should be affirmed with modifications such that the share of Milagros shall not yet be
distributed until after the final determination of the probate of her purported will, and that Sebastian shall be
represented by his compulsory heirs.

WHEREFORE, the petition in G.R. No. 177192 is DENIED for lack of merit, while the petition in G.R. No. 177099
is PARTIALLY GRANTED, such that the Decision dated November 21, 2006 and the Resolution dated March 27,
2007 of the Court of Appeals are AFFIRMED with the following MODIFICATIONS: that the share awarded in favor
of Milagros Agtarap shall not be distributed until the final determination of the probate of her will, and that
petitioner Sebastian G. Agtarap, in view of his demise on January 15, 2010, shall be represented by his wife
Teresita B. Agtarap and his children Joaquin Julian B. Agtarap and Ana Ma. Agtarap Panlilio.

These cases are hereby remanded to the Regional Trial Court, Branch 114, Pasay City, for further proceedings in
the settlement of the estate of Joaquin Agtarap. No pronouncement as to costs.

SO ORDERED.

ANTONIO EDUARDO B. NACHURA

Associate Justice

25
G.R. No. 183053 October 10, 2012
EMILIO A.M. SUNTAY III, Petitioner,
vs.
ISABEL COJUANGCO-SUNTAY, Respondent.

RESOLUTION

PEREZ, J.:

The now overly prolonged, all-too familiar and too-much-stretched imbroglio over the estate of Cristina
Aguinaldo-Suntay has continued. We issued a Decision in the dispute as in Inter Caetera.1 We now find a need
to replace the decision.

Before us is a Motion for Reconsideration filed by respondent Isabel Cojuangco-Suntay (respondent Isabel) of
our Decision2 in G.R. No. 183053 dated 16 June 2010, directing the issuance of joint letters of administration to
both petitioner Emilio A.M. Suntay III (Emilio III) and respondent. The dispositive portion thereof reads:

WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals in CA-G.R. CV No. 74949 is
REVERSED and SET ASIDE. Letters of Administration over the estate of decedent Cristina Aguinaldo-Suntay shall
issue to both petitioner Emilio A.M. Suntay III and respondent Isabel Cojuangco-Suntay upon payment by each
of a bond to be set by the Regional Trial Court, Branch 78, Malolos, Bulacan, in Special Proceeding Case No. 117-
M-95. The Regional Trial Court, Branch 78, Malolos, Bulacan is likewise directed to make a determination and
to declare the heirs of decedent Cristina Aguinaldo-Suntay according to the actual factual milieu as proven by
the parties, and all other persons with legal interest in the subject estate. It is further directed to settle the
estate of decedent Cristina Aguinaldo-Suntay with dispatch. No costs.3

We are moved to trace to its roots the controversy between the parties.

The decedent Cristina Aguinaldo-Suntay (Cristina) died intestate on 4 June 1990. Cristina was survived by her
spouse, Dr. Federico Suntay (Federico) and five grandchildren: three legitimate grandchildren, including herein
respondent, Isabel; and two illegitimate grandchildren, including petitioner Emilio III, all by Federicos and
Cristinas only child, Emilio A. Suntay (Emilio I), who predeceased his parents.

The illegitimate grandchildren, Emilio III and Nenita, were both reared from infancy by the spouses Federico and
Cristina. Their legitimate grandchildren, Isabel and her siblings, Margarita and Emilio II, lived with their mother
Isabel Cojuangco, following the separation of Isabels parents, Emilio I and Isabel Cojuangco. Isabels parents,
along with her paternal grandparents, were involved in domestic relations cases, including a case for parricide
filed by Isabel Cojuangco against Emilio I. Emilio I was eventually acquitted.

In retaliation, Emilio I filed a complaint for legal separation against his wife, charging her among others with
infidelity. The trial court declared as null and void and of no effect the marriage of Emilio I and Isabel Cojuangco
on the finding that:

From February 1965 thru December 1965 plaintiff was confined in the Veterans memorial Hospital. Although at
the time of the trial of parricide case (September 8, 1967) the patient was already out of the hospital, he
continued to be under observation and treatment.

It is the opinion of Dr. Aramil that the symptoms of the plaintiffs mental aberration classified as schizophernia
(sic) had made themselves manifest even as early as 1955; that the disease worsened with time, until 1965
when he was actually placed under expert neuro-psychiatrist (sic) treatment; that even if the subject has shown
marked progress, the remains bereft of adequate understanding of right and wrong.
26
There is no controversy that the marriage between the parties was effected on July 9, 1958, years after plaintiffs
mental illness had set in. This fact would justify a declaration of nullity of the marriage under Article 85 of the
Civil Code which provides:

Art. 95. (sic) A marriage may be annulled for any of the following causes after (sic) existing at the time of the
marriage:

xxxx

(3) That either party was of unsound mind, unless such party, after coming to reason, freely cohabited with the
other as husband or wife.

There is a dearth of proof at the time of the marriage defendant knew about the mental condition of plaintiff;
and there is proof that plaintiff continues to be without sound reason. The charges in this very complaint add
emphasis to the findings of the neuro-psychiatrist handling the patient, that plaintiff really lives more in fancy
than in reality, a strong indication of schizophernia (sic).4

Intent on maintaining a relationship with their grandchildren, Federico and Isabel filed a complaint for visitation
rights to spend time with Margarita, Emilio II, and Isabel in the same special lower court. The Juvenile Domestic
Relations Court in Quezon City (JDRC-QC) granted their prayer for one hour a month of visitation rights which
was subsequently reduced to thirty minutes, and ultimately stopped, because of respondent Isabels testimony
in court that her grandparents visits caused her and her siblings stress and anxiety.5

On 27 September 1993, more than three years after Cristinas death, Federico adopted his illegitimate
grandchildren, Emilio III and Nenita.

On 26 October 1995, respondent Isabel, filed before the Regional Trial Court (RTC), Malolos, Bulacan, a petition
for the issuance of letters of administration over Cristinas estate docketed as Special Proceeding Case No. 117-
M-95. Federico, opposed the petition, pointing out that: (1) as the surviving spouse of the decedent, he should
be appointed administrator of the decedents estate; (2) as part owner of the mass of conjugal properties left
by the decedent, he must be accorded preference in the administration thereof; (3) Isabel and her siblings had
been alienated from their grandparents for more than thirty (30) years; (4) the enumeration of heirs in the
petition was incomplete as it did not mention the other children of his son, Emilio III and Nenita; (5) even before
the death of his wife, Federico had administered their conjugal properties, and thus, is better situated to protect
the integrity of the decedents estate; (6) the probable value of the estate as stated in the petition was grossly
overstated; and (7) Isabels allegation that some of the properties are in the hands of usurpers is untrue.

Federico filed a Motion to Dismiss Isabels petition for letters of administration on the ground that Isabel had
no right of representation to the estate of Cristina, she being an illegitimate grandchild of the latter as a result
of Isabels parents marriage being declared null and void. However, in Suntay v. Cojuangco-Suntay, we
categorically declared that Isabel and her siblings, having been born of a voidable marriage as opposed to a void
marriage based on paragraph 3, Article 85 of the Civil Code, were legitimate children of Emilio I, who can all
represent him in the estate of their legitimate grandmother, the decedent, Cristina.

Undaunted by the set back, Federico nominated Emilio III to administer the decedents estate on his behalf in
the event letters of administration issues to Federico. Consequently, Emilio III filed an Opposition-In-
Intervention, echoing the allegations in his grandfathers opposition, alleging that Federico, or in his stead,
Emilio III, was better equipped than respondent to administer and manage the estate of the decedent, Cristina.

On 13 November 2000, Federico died.

27
Almost a year thereafter or on 9 November 2001, the trial court rendered a decision appointing Emilio III as
administrator of decedent Cristinas intestate estate:

WHEREFORE, the petition of Isabel Cojuangco-Suntay is DENIED and the Opposition-in-Intervention is GRANTED.

Accordingly, the Intervenor, Emilio A.M. Suntay, III (sic) is hereby appointed administrator of the estate of the
decedent Cristina Aguinaldo Suntay, who shall enter upon the execution of his trust upon the filing of a bond in
the amount of P 200,000.00, conditioned as follows:

(1) To make and return within three (3) months, a true and complete inventory;

(2) To administer the estate and to pay and discharge all debts, legatees, and charge on the same, or dividends
thereon;

(3) To render a true and just account within one (1) year, and at any other time when required by the court, and

(4) To perform all orders of the Court.

Once the said bond is approved by the court, let Letters of Administration be issued in his favor.6

On appeal, the Court of Appeals reversed and set aside the decision of the RTC, revoked the Letters of
Administration issued to Emilio III, and appointed respondent as administratrix of the subject estate:

WHEREFORE, in view of all the foregoing, the assailed decision dated November 9, 2001 of Branch 78, Regional
Trial Court of Malolos, Bulacan in SPC No. 117-M-95 is REVERSED and SET ASIDE and the letters of administration
issued by the said court to Emilio A.M. Suntay III, if any, are consequently revoked. Petitioner Isabel Cojuangco-
Suntay is hereby appointed administratrix of the intestate estate of Cristina Aguinaldo Suntay. Let letters of
administration be issued in her favor upon her filing of a bond in the amount of Two Hundred Thousand
(P 200,000.00) Pesos.7

As previously adverted to, on appeal by certiorari, we reversed and set aside the ruling of the appellate court.
We decided to include Emilio III as co-administrator of Cristinas estate, giving weight to his interest in Federicos
estate. In ruling for co-administration between Emilio III and

Isabel, we considered that:

1. Emilio III was reared from infancy by the decedent, Cristina, and her husband, Federico, who both
acknowledged him as their grandchild;

2. Federico claimed half of the properties included in the estate of the decedent, Cristina, as forming
part of their conjugal partnership of gains during the subsistence of their marriage;

3. Cristinas properties, forming part of her estate, are still commingled with those of her husband,
Federico, because her share in the conjugal partnership remains undetermined and unliquidated; and

4. Emilio III is a legally adopted child of Federico, entitled to share in the distribution of the latters estate
as a direct heir, one degree from Federico, and not simply in representation of his deceased illegitimate
father, Emilio I.

In this motion, Isabel pleads for total affirmance of the Court of Appeals Decision in favor of her sole
administratorship based on her status as a legitimate grandchild of Cristina, whose estate she seeks to
administer.
28
Isabel contends that the explicit provisions of Section 6, Rule 78 of the Rules of Court on the order of preference
for the issuance of letters of administration cannot be ignored and that Article 992 of the Civil Code must be
followed. Isabel further asserts that Emilio III had demonstrated adverse interests and disloyalty to the estate,
thus, he does not deserve to become a co-administrator thereof.

Specifically, Isabel bewails that: (1) Emilio III is an illegitimate grandchild and therefore, not an heir of the
decedent; (2) corollary thereto, Emilio III, not being a "next of kin" of the decedent, has no interest in the estate
to justify his appointment as administrator thereof; (3) Emilio IIIs actuations since his appointment as
administrator by the RTC on 9 November 2001 emphatically demonstrate the validity and wisdom of the order
of preference in Section 6, Rule 78 of the Rules of Court; and (4) there is no basis for joint administration as
there are no "opposing parties or factions to be represented."

To begin with, the case at bar reached us on the issue of who, as between Emilio III and Isabel, is better qualified
to act as administrator of the decedents estate. We did not choose. Considering merely his demonstrable
interest in the subject estate, we ruled that Emilio III should likewise administer the estate of his illegitimate
grandmother, Cristina, as a co-administrator. In the context of this case, we have to make a choice and
therefore, reconsider our decision of 16 June 2010.

The general rule in the appointment of administrator of the estate of a decedent is laid down in Section 6, Rule
78 of the Rules of Court:

SEC. 6. When and to whom letters of administration granted. If no executor is named in the will, or the
executor or executors are incompetent, refuse the trust, or fail to give bond, or a person dies intestate,
administration shall be granted:

(a) To the surviving husband or wife, as the case may be, or next of kin, or both, in the discretion of the court,
or to such person as such surviving husband or wife, or next of kin, requests to have appointed, if competent
and willing to serve;

(b) If such surviving husband or wife, as the case may be, or next of kin, or the person selected by them, be
incompetent or unwilling, or if the husband or widow, or next of kin, neglects for thirty (30) days after the death
of the person to apply for administration or to request that administration be granted to some other person, it
may be granted to one or more of the principal creditors, if competent and willing to serve;

(c) If there is not such creditor competent and willing to serve, it may be granted to such other person as the
court may select.

Textually, the rule lists a sequence to be observed, an order of preference, in the appointment of an
administrator. This order of preference, which categorically seeks out the surviving spouse, the next of kin and
the creditors in the appointment of an administrator, has been reinforced in jurisprudence.8

The paramount consideration in the appointment of an administrator over the estate of a decedent is the
prospective administrators interest in the estate.9 This is the same consideration which Section 6, Rule 78 takes
into account in establishing the order of preference in the appointment of administrator for the estate. The
rationale behind the rule is that those who will reap the benefit of a wise, speedy and economical administration
of the estate, or, in the alternative, suffer the consequences of waste, improvidence or mismanagement, have
the highest interest and most influential motive to administer the estate correctly.10 In all, given that the rule
speaks of an order of preference, the person to be appointed administrator of a decedents estate must
demonstrate not only an interest in the estate, but an interest therein greater than any other candidate.

29
To illustrate, the preference bestowed by law to the surviving spouse in the administration of a decedents
estate presupposes the surviving spouses interest in the conjugal partnership or community property forming
part of the decedents estate.11 Likewise, a surviving spouse is a compulsory heir of a decedent12 which evinces
as much, if not more, interest in administering the entire estate of a decedent, aside from her share in the
conjugal partnership or absolute community property.

It is to this requirement of observation of the order of preference in the appointment of administrator of a

decedents estate, that the appointment of co-administrators has been allowed, but as an exception. We again
refer to Section 6(a) of Rule 78 of the Rules of Court which specifically states that letters of administration may
be issued to both the surviving spouse and the next of kin. In addition and impliedly, we can refer to Section 2
of Rule 82 of the Rules of Court which say that "x x x when an executor or administrator dies, resigns, or is
removed, the remaining executor or administrator may administer the trust alone, x x x."

In a number of cases, we have sanctioned the appointment of more than one administrator for the benefit of
the estate and those interested therein.13 We recognized that the appointment of administrator of the estate
of a decedent or the determination of a persons suitability for the office of judicial administrator rests, to a
great extent, in the sound judgment of the court exercising the power of appointment.14

Under certain circumstances and for various reasons well-settled in Philippine and American jurisprudence, we
have upheld the appointment of co-administrators: (1) to have the benefits of their judgment and perhaps at
all times to have different interests represented;15 (2) where justice and equity demand that opposing parties
or factions be represented in the management of the estate of the deceased; (3) where the estate is large or,
from any cause, an intricate and perplexing one to settle;16 (4) to have all interested persons satisfied and the
representatives to work in harmony for the best interests of the estate;17 and when a person entitled to the
administration of an estate desires to have another competent person associated with him in the office.18

In the frequently cited Matias v. Gonzales, we dwelt on the appointment of special co-administrators during the
pendency of the appeal for the probate of the decedents will. Pending the probate thereof, we recognized
Matias special interest in the decedents estate as universal heir and executrix designated in the instrument
who should not be excluded in the administration thereof. Thus, we held that justice and equity demands that
the two (2) factions among the non-compulsory heirs of the decedent, consisting of an instituted heir (Matias)
and intestate heirs (respondents thereat), should be represented in the management of the decedents estate.19

Another oft-cited case is Vda. de Dayrit v. Ramolete, where we held that "inasmuch as petitioner-wife owns
one-half of the conjugal properties and that she, too, is a compulsory heir of her husband, to deprive her of any
hand in the administration of the estate prior to the probate of the will would be unfair to her proprietary
interests."20

Hewing closely to the aforementioned cases is our ruling in Ventura v. Ventura21 where we allowed the
appointment of the surviving spouse and legitimate children of the decedent as co-administrators. However,
we drew a distinction between the heirs categorized as next of kin, the nearest of kin in the category being
preferred, thus:

In the case at bar, the surviving spouse of the deceased Gregorio Ventura is Juana Cardona while the next of kin
are: Mercedes and Gregoria Ventura and Maria and Miguel Ventura. The "next of kin" has been defined as those
persons who are entitled under the statute of distribution to the decedents property (citations omitted). It is
generally said that "the nearest of kin, whose interest in the estate is more preponderant, is preferred in the
choice of administrator. Among members of a class the strongest ground for preference is the amount or
preponderance of interest. As between next of kin, the nearest of kin is to be preferred." (citations omitted)

30
As decided by the lower court and sustained by the Supreme Court, Mercedes and Gregoria Ventura are the
legitimate children of Gregorio Ventura and his wife, the late Paulina Simpliciano. Therefore, as the nearest of
kin of Gregorio Ventura, they are entitled to preference over the illegitimate children of Gregorio Ventura,
namely: Maria and Miguel Ventura. Hence, under the aforestated preference provided in Section 6 of Rule 78,
the person or persons to be appointed administrator are Juana Cardona, as the surviving spouse, or Mercedes
and Gregoria Ventura as nearest of kin, or Juana Cardona and Mercedes and Gregoria Ventura in the discretion
of the Court, in order to represent both interests.22 (Emphasis supplied)

In Silverio, Sr. v. Court of Appeals,23 we maintained that the order of preference in the appointment of an
administrator depends on the attendant facts and circumstances. In that case, we affirmed the legitimate childs
appointment as special administrator, and eventually as regular administrator, of the decedents estate as
against the surviving spouse who the lower court found unsuitable. Reiterating Sioca v. Garcia24 as good law,
we pointed out that unsuitableness for appointment as administrator may consist in adverse interest of some
kind or hostility to those immediately interested in the estate.

In Valarao v. Pascual,25 we see another story with a running theme of heirs squabbling over the estate of a
decedent. We found no reason to set aside the probate courts refusal to appoint as special co-administrator
Diaz, even if he had a demonstrable interest in the estate of the decedent and represented one of the factions
of heirs, because the evidence weighed by the probate court pointed to Diazs being remiss in his previous duty
as co-administrator of the estatein the early part of his administration. Surveying the previously discussed cases
of Matias, Corona, and Vda. de Dayrit, we clarified, thus:

Respondents cannot take comfort in the cases of Matias v. Gonzales, Corona v. Court of Appeals, and Vda. de
Dayrit v. Ramolete, cited in the assailed Decision. Contrary to their claim, these cases do not establish an
absolute right demandable from the probate court to appoint special co-administrators who would represent
the respective interests of squabbling heirs. Rather, the cases constitute precedents for the authority of the
probate court to designate not just one but also two or more special co-administrators for a single estate. Now
whether the probate court exercises such prerogative when the heirs are fighting among themselves is a matter
left entirely to its sound discretion.

Furthermore, the cases of Matias, Corona and Vda. de Dayrit hinge upon factual circumstances other than the
incompatible interests of the heirs which are glaringly absent from the instant case. In Matias this Court ordered
the appointment of a special co-administrator because of the applicant's status as the universal heir and
executrix designated in the will, which we considered to be a "special interest" deserving protection during the
pendency of the appeal. Quite significantly, since the lower court in Matias had already deemed it best to
appoint more than one special administrator, we found grave abuse of discretion in the act of the lower court
in ignoring the applicant's distinctive status in the selection of another special administrator.

In Corona we gave "highest consideration" to the "executrix's choice of Special Administrator, considering her
own inability to serve and the wide latitude of discretion given her by the testatrix in her will," for this Court to
compel her appointment as special co-administrator. It is also manifest from the decision in Corona that the
presence of conflicting interests among the heirs therein was not per se the key factor in the designation of a
second special administrator as this fact was taken into account only to disregard or, in the words of Corona, to
"overshadow" the objections to the appointment on grounds of "impracticality and lack of kinship."

Finally in Vda. de Dayrit we justified the designation of the wife of the decedent as special co-administrator
because it was "our considered opinion that inasmuch as petitioner-wife owns one-half of the conjugal
properties and that she, too, is a compulsory heir of her husband, to deprive her of any hand in the
administration of the estate prior to the probate of the will would be unfair to her proprietary interests." The
special status of a surviving spouse in the special administration of an estate was also emphasized in Fule v.
31
Court of Appeals where we held that the widow would have more interest than any other next of kin in the
proper administration of the entire estate since she possesses not only the right of succession over a portion of
the exclusive property of the decedent but also a share in the conjugal partnership for which the good or bad
administration of the estate may affect not just the fruits but more critically the naked ownership thereof. And
in Gabriel v. Court of Appeals we recognized the distinctive status of a surviving spouse applying as regular
administrator of the deceased spouse's estate when we counseled the probate court that "there must be a very
strong case to justify the exclusion of the widow from the administration."

Clearly, the selection of a special co-administrator in Matias, Corona and Vda. de Dayrit was based upon the
independent proprietary interests and moral circumstances of the appointee that were not necessarily related
to the demand for representation being repeatedly urged by respondents.26(Emphasis supplied)

In Gabriel v. Court of Appeals, we unequivocally declared the mandatory character of the rule on the order of
preference for the issuance of letters of administration:

Evidently, the foregoing provision of the Rules prescribes the order of preference in the issuance of letters of
administration, it categorically seeks out the surviving spouse, the next of kin and the creditors, and requires
that sequence to be observed in appointing an administrator. It would be a grave abuse of discretion for the
probate court to imperiously set aside and insouciantly ignore that directive without any valid and sufficient
reason therefor.27

Subsequently, in Angeles v. Angeles-Maglaya,28 we expounded on the legal contemplation of a "next of kin,"

thus:

Finally, it should be noted that on the matter of appointment of administrator of the estate of the deceased,
the surviving spouse is preferred over the next of kin of the decedent. When the law speaks of "next of kin," the
reference is to those who are entitled, under the statute of distribution, to the decedent's property; one whose
relationship is such that he is entitled to share in the estate as distributed, or, in short, an heir. In resolving,
therefore, the issue of whether an applicant for letters of administration is a next of kin or an heir of the
decedent, the probate court perforce has to determine and pass upon the issue of filiation. A separate action
will only result in a multiplicity of suits. Upon this consideration, the trial court acted within bounds when it
looked into and passed upon the claimed relationship of respondent to the late Francisco Angeles.29

Finally, in Uy v. Court of Appeals,30 we took into consideration the size of, and benefits to, the estate should
respondent therein be appointed as co-administrator. We emphasized that where the estate is large or, from
any cause, an intricate and perplexing one to settle, the appointment of co-administrators may be sanctioned
by law.

In our Decision under consideration, we zeroed in on Emilio IIIs demonstrable interest in the estate and glossed
over the order of preference set forth in the Rules. We gave weight to Emilio IIIs demonstrable interest in
Cristinas estate and without a closer scrutiny of the attendant facts and circumstances, directed co-
administration thereof. We are led to a review of such position by the foregoing survey of cases.

The collected teaching is that mere demonstration of interest in the estate to be settled does not ipso facto
entitle an interested person to co-administration thereof. Neither does squabbling among the heirs nor adverse
interests necessitate the discounting of the order of preference set forth in Section 6, Rule 78. Indeed, in the
appointment of administrator of the estate of a deceased person, the principal consideration reckoned with is
the interest in said estate of the one to be appointed as administrator.31 Given Isabels unassailable interest in
the estate as one of the decedents legitimate grandchildren and undoubted nearest "next of kin," the
appointment of Emilio III as co-administrator of the same estate, cannot be a demandable right. It is a matter

32
left entirely to the sound discretion of the Court32 and depends on the facts and the attendant circumstances of
the case.33

Thus, we proceed to scrutinize the attendant facts and circumstances of this case even as we reiterate Isabels
and her siblings apparent greater interest in the estate of Cristina.

These considerations do not warrant the setting aside of the order of preference mapped out in Section 6, Rule
78 of the Rules of Court. They compel that a choice be made of one over the other.

1. The bitter estrangement and long-standing animosity between Isabel, on the one hand, and Emilio III,
on the other, traced back from the time their paternal grandparents were alive, which can be
characterized as adverse interest of some kind by, or hostility of, Emilio III to Isabel who is immediately
interested in the estate;

2. Corollary thereto, the seeming impossibility of Isabel and Emilio III working harmoniously as co-
administrators may result in prejudice to the decedents estate, ultimately delaying settlement thereof;
and

3. Emilio III, for all his claims of knowledge in the management of Cristinas estate, has not looked after
the estates welfare and has acted to the damage and prejudice thereof.

Contrary to the assumption made in the Decision that Emilio IIIs demonstrable interest in the estate makes him
a suitable co-administrator thereof, the evidence reveals that Emilio III has turned out to be an unsuitable
administrator of the estate. Respondent Isabel points out that after Emilio IIIs appointment as administrator of
the subject estate in 2001, he has not looked after the welfare of the subject estate and has actually acted to
the damage and prejudice thereof as evidenced by the following:

1. Emilio III, despite several orders from the probate court for a complete inventory, omitted in the
partial inventories34 he filed therewith properties of the estate35 including several parcels of land, cash,
bank deposits, jewelry, shares of stock, motor vehicles, and other personal properties, contrary to
Section 1,36paragraph a, Rule 81 of the Rules of Court.

2. Emilio III did not take action on both occasions against Federicos settlement of the decedents estate
which adjudicated to himself a number of properties properly belonging to said estate (whether wholly
or partially), and which contained a declaration that the decedent did not leave any descendants or heirs,
except for Federico, entitled to succeed to her estate.37

In compliance to our Resolution dated 18 April 2012 requiring Emilio III to respond to the following imputations
of Isabel that:

1. Emilio III did not file an inventory of the assets until November 14, 2002;

2. The inventory Emilio III submitted did not include several properties of the decedent;

3. That properties belonging to the decedent have found their way to different individuals or persons; several
properties to Federico Suntay himself; and

4. While some properties have found their way to Emilio III, by reason of falsified documents;38

Emilio III refutes Isabels imputations that he was lackadaisical in assuming and performing the functions of
administrator of Cristinas estate:

33
 1. From the time of the RTCs Order appointing Emilio III as administrator, Isabel, in her pleadings before
the RTC, had vigorously opposed Emilio IIIs assumption of that office, arguing that "the decision of the
RTC dated 9 November 2001 is not among the judgments authorized by the Rules of Court which may
be immediately implemented or executed;"

2. The delay in Emilio IIIs filing of an inventory was due to Isabels vociferous objections to Emilio IIIs
attempts to act as administrator while the RTC decision was under appeal to the Court of Appeals;

3. The complained partial inventory is only initiatory, inherent in the nature thereof, and one of the first
steps in the lengthy process of settlement of a decedents estate, such that it cannot constitute a
complete and total listing of the decedents properties; and

4. The criminal cases adverted to are trumped-up charges where Isabel, as private complainant, has been
unwilling to appear and testify, leading the Judge of the Regional Trial Court, Branch 44 of Mamburao,
Occidental Mindoro, to warn the prosecutor of a possible motu propio dismissal of the cases.

While we can subscribe to Emilio IIIs counsels explanation for the blamed delay in the filing of an inventory
and his exposition on the nature thereof, partial as opposed to complete, in the course of the settlement of a
decedents estate, we do not find any clarification on Isabels accusation that Emilio III had deliberately omitted
properties in the inventory, which properties of Cristina he knew existed and which he claims to be
knowledgeable about.

The general denial made by Emilio III does not erase his unsuitability as administrator rooted in his failure to
"make and return x x x a true and complete inventory" which became proven fact when he actually filed partial
inventories before the probate court and by his inaction on two occasions of Federicos exclusion of Cristinas
other compulsory heirs, herein Isabel and her siblings, from the list of heirs.

As administrator, Emilio III enters into the office, posts a bond and executes an oath to faithfully discharge the
duties of settling the decedents estate with the end in view of distribution to the heirs, if any. This he failed to
do. The foregoing circumstances of Emilio IIIs omission and inaction become even more significant and speak
volume of his unsuitability as administrator as it demonstrates his interest adverse to those immediately
interested in the estate of the decedent, Cristina.

In this case, palpable from the evidence on record, the pleadings, and the protracted litigation, is the inescapable
fact that Emilio III and respondent Isabel have a deep aversion for each other. p++i1 To our mind, it becomes
highly impractical, nay, improbable, for the two to work as co-administrators of their grandmothers estate. The
allegations of Emilio III, the testimony of Federico and the other witnesses for Federico and Emilio III that Isabel
and her siblings were estranged from their grandparents further drive home the point that Emilio III bears
hostility towards Isabel. More importantly, it appears detrimental to the decedents estate to appoint a co-
administrator (Emilio III) who has shown an adverse interest of some kind or hostility to those, such as herein
respondent Isabel, immediately interested in the said estate.

Bearing in mind that the issuance of letters of administration is simply a preliminary order to facilitate the
settlement of a decedents estate, we here point out that Emilio III is not without remedies to protect his
interests in the estate of the decedent. In Hilado v. Court of Appeals,39 we mapped out as among the allowable
participation of "any interested persons" or "any persons interested in the estate" in either testate or intestate
proceedings:

xxxx

34
4. Section 640 of Rule 87, which allows an individual interested in the estate of the deceased "to complain to the
court of the concealment, embezzlement, or conveyance of any asset of the decedent, or of evidence of the
decedents title or interest therein;"

5. Section 1041 of Rule 85, which requires notice of the time and place of the examination and allowance of the
Administrators account "to persons interested;"

6. Section 7(b)42 of Rule 89, which requires the court to give notice "to the persons interested" before it may
hear and grant a petition seeking the disposition or encumbrance of the properties of the estate; and

7. Section 1,43 Rule 90, which allows "any person interested in the estate" to petition for an order for the
distribution of the residue of the estate of the decedent, after all obligations are either satisfied or provided
for.44

In addition to the foregoing, Emilio III may likewise avail of the remedy found in Section 2, Rule 82 of the Rules
of Court, to wit:

Sec. 2. Court may remove or accept resignation of executor or administrator. Proceedings upon death,
resignation, or removal. If an executor or administrator neglects to render his account and settle the estate
according to law, or to perform an order or judgment of the court, or a duty expressly provided by these rules,
or absconds, or becomes insane, or otherwise incapable or unsuitable to discharge the trust, the court may
remove him, or, in its discretion, may permit him to resign. When an executor or administrator dies, resigns, or
is removed, the remaining executor or administrator may administer the trust alone, unless the court grants
letters to someone to act with him. If there is no remaining executor or administrator, administration may be
granted to any suitable person.

Once again, as we have done in the Decision, we exercise judicial restraint: we uphold that the question of who
are the heirs of the decedent Cristina is not yet upon us. Article 992 of the Civil Code or the curtain bar rule is
inapplicable in resolving the issue of who is better qualified to administer the estate of the decedent.

Thus, our disquisition in the assailed Decision:

Nonetheless, it must be pointed out that judicial restraint impels us to refrain from making a final declaration
of heirship and distributing the presumptive shares of the parties in the estates of Cristina and Federico,
considering that the question on who will administer the properties of the long deceased couple has yet to be
settled.

Our holding in Capistrano v. Nadurata on the same issue remains good law:

The declaration of heirs made by the lower court is premature, although the evidence sufficiently shows who
are entitled to succeed the deceased. The estate had hardly been judicially opened, and the proceeding has not
as yet reached the stage of distribution of the estate which must come after the inheritance is liquidated.

Section 1, Rule 90 of the Rules of Court does not depart from the foregoing admonition:

Sec. 1. When order for distribution of residue is made. - x x x. If there is a controversy before the court as to who
are the lawful heirs of the deceased person or as to the distributive shares to which each person is entitled
under the law, the controversy shall be heard and decided as in ordinary cases.

35
No distribution shall be allowed until the payment of the obligations above mentioned has been made or
provided for, unless the distributees, or any of them, give a bond, in a sum to be fixed by the court, conditioned
for the payment of said obligations within such time as the court directs.45

Lastly, we dispose of a peripheral issue raised in the Supplemental Comment46 of Emilio III questioning the
Special Second Division which issued the 18 April 2012 Resolution. Emilio III asseverates that "the operation of
the Special Second Division in Baguio is unconstitutional and void" as the Second Division in Manila had already
promulgated its Decision on 16 June 2010 on the petition filed by him:

7. The question is: who created the Special Second Division in Baguio, acting separately from the Second Division
of the Supreme Court in Manila? There will then be two Second Divisions of the Supreme Court: one acting with
the Supreme Court in Manila, and another Special Second Division acting independently of the Second Division
of the Supreme Court in Manila.47

For Emilio IIIs counsels edification, the Special Second Division in Baguio is not a different division created by
the Supreme Court.

The Second Division which promulgated its Decision on this case on 16 June 2010, penned by Justice Antonio
Eduardo B. Nachura, now has a different composition, with the advent of Justice Nachuras retirement on 13
June 2011. Section 7, Rule 2 of the Internal Rules of the Supreme Court provides:

Sec. 7. Resolutions of motions for reconsideration or clarification of decisions or signed resolutions and all other
motions and incidents subsequently filed; creation of a Special Division. Motions for reconsideration or
clarification of a decision or of a signed resolution and all other motions and incidents subsequently filed in the
case shall be acted upon by the ponente and the other Members of the Division who participated in the
rendition of the decision or signed resolution.

If the ponente has retired, is no longer a Member of the Court, is disqualified, or has inhibited himself or herself
from acting on the motion for reconsideration or clarification, he or she shall be replaced through raffle by a
new ponente who shall be chosen among the new Members of the Division who participated in the rendition of
the decision or signed resolution and who concurred therein. If only one Member of the Court who participated
and concurred in the rendition of the decision or signed resolution remains, he or she shall be designated as the
new ponente.

If a Member (not the ponente) of the Division which rendered the decision or signed resolution has retired, is
no longer a Member of the Court, is disqualified, or has inhibited himself or herself from acting on the motion
for reconsideration or clarification, he or she shall be replaced through raffle by a replacement Member who
shall be chosen from the other Divisions until a new Justice is appointed as replacement for the retired Justice.
Upon the appointment of a new Justice, he or she shall replace the designated Justice as replacement Member
of the Special Division.

Any vacancy or vacancies in the Special Division shall be filled by raffle from among the other Members of the
Court to constitute a Special Division of five (5) Members.

If the ponente and all the Members of the Division that rendered the Decision or signed Resolution are no longer
Members of the Court, the case shall be raffled to any Member of the Court and the motion shall be acted upon
by him or her with the participation of the other Members of the Division to which he or she belongs.

If there are pleadings, motions or incidents subsequent to the denial of the motion for reconsideration or
clarification, the case shall be acted upon by the ponente on record with the participation of the other Members

36
of the Division to which he or she belongs at the time said pleading, motion or incident is to be taken up by the
Court. (Emphasis supplied)

As regards the operation thereof in Baguio City, such is simply a change in venue for the Supreme Court's
summer session held last April.48

WHEREFORE, the Motion for Reconsideration is PARTIALLY GRANTED. Our Decision in G.R. No. 183053 dated
16 June 2010 is MODIFIED. Letters of Administration over the estate of decedent Cristina Aguinaldo-Suntay shall
solely issue to respondent Isabel Cojuangco-Suntay upon payment of a bond to be set by the Regional Trial
Court, Branch 78, Malolos, Bulacan, in Special Proceeding Case No. 117-M-95. The Regional Trial Court, Branch
78, Malolos, Bulacan is likewise directed to settle the estate of decedent Cristina Aguinaldo-Suntay with
dispatch. No costs.

SO ORDERED.

JOSE PORTUGAL PEREZ

Associate Justice

37
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 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.

38
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.

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:

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
39
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 Ortaez
to FLAG of the shares of stock they invalidly appropriated for themselves, without approval of the intestate
court, was void.8

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.

Meanwhile, herein petitioners Jose Lee and Alma Aggabao, with the rest of the FLAG-controlled 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 FLAG-controlled 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.
Respondent-Special 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.

40
 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;

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 Ortaez-Enderes, 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 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:

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.

41
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:

42
 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.

43
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:

JUSTICE AQUINO:

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?

ATTY. CALIMAG:

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

JUSTICE AQUINO:

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 extra-judicially 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.

ATTY. BUYCO:

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).

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

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

44
prejudice of the other claimant/heirs. In other words, these heirs, without court approval, have distributed 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.

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

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 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.

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
of Godoy 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:

[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.
45
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. x x x

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.

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

46
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 private respondent-Special
Administratrix Enderes to thereafter move for a writ of execution and for the intestate court to grant it.

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:

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 Godoy and 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.

47
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 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 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:

48
[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. 97-7179-81), 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 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.
49
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.

SO ORDERED.

Vitug, (Chairman), and Carpio-Morales, JJ., concur.

Sandoval-Gutierrez, J., no part.

50
G.R. No. 118671 January 29, 1996
THE ESTATE OF HILARIO M. RUIZ, EDMOND RUIZ, Executor, petitioner,
vs.
THE COURT OF APPEALS (Former Special Sixth Division), MARIA PILAR RUIZ-MONTES, MARIA CATHRYN RUIZ,
CANDICE ALBERTINE RUIZ, MARIA ANGELINE RUIZ and THE PRESIDING JUDGE OF THE REGIONAL TRIAL COURT
OF PASIG, respondents.

DECISION

PUNO, J.:

This petition for review on certiorari seeks to annul and set aside the decision dated November 10, 1994 and
the resolution dated January 5, 1995 of the Court of Appeals in CA-G.R. SP No. 33045.

The facts show that on June 27, 1987, Hilario M. Ruiz1 executed a holographic will naming as his heirs his only
son, Edmond Ruiz, his adopted daughter, private respondent Maria Pilar Ruiz Montes, and his three
granddaughters, private respondents Maria Cathryn, Candice Albertine and Maria Angeline, all children of
Edmond Ruiz. The testator bequeathed to his heirs substantial cash, personal and real properties and named
Edmond Ruiz executor of his estate.2

On April 12, 1988, Hilario Ruiz died. Immediately thereafter, the cash component of his estate was distributed
among Edmond Ruiz and private respondents in accordance with the decedent's will. For unbeknown reasons,
Edmond, the named executor, did not take any action for the probate of his father's holographic will.

On June 29, 1992, four years after the testator's death, it was private respondent Maria Pilar Ruiz Montes who
filed before the Regional Trial Court, Branch 156, Pasig, a petition for the probate and approval of Hilario Ruiz's
will and for the issuance of letters testamentary to Edmond Ruiz,3 Surprisingly, Edmond opposed the petition
on the ground that the will was executed under undue influence.

On November 2, 1992, one of the properties of the estate the house and lot at No. 2 Oliva Street, Valle Verde
IV, Pasig which the testator bequeathed to Maria Cathryn, Candice Albertine and Maria Angeline4 was leased
out by Edmond Ruiz to third persons.

On January 19, 1993, the probate court ordered Edmond to deposit with the Branch Clerk of Court the rental
deposit and payments totalling P540,000.00 representing the one-year lease of the Valle Verde property. In
compliance, on January 25, 1993, Edmond turned over the amount of P348,583.56, representing the balance of
the rent after deducting P191,416.14 for repair and maintenance expenses on the estate.5

In March 1993, Edmond moved for the release of P50,000.00 to pay the real estate taxes on the real properties
of the estate. The probate court approved the release of P7,722.00.6

On May 14, 1993, Edmond withdrew his opposition to the probate of the will. Consequently, the probate court,
on May 18, 1993, admitted the will to probate and ordered the issuance of letters testamentary to Edmond
conditioned upon the filing of a bond in the amount of P50,000.00. The letters testamentary were issued on
June 23, 1993.

On July 28, 1993, petitioner Testate Estate of Hilario Ruiz, with Edmond Ruiz as executor, filed an "Ex-Parte
Motion for Release of Funds." It prayed for the release of the rent payments deposited with the Branch Clerk of
Court. Respondent Montes opposed the motion and concurrently filed a "Motion for Release of Funds to Certain
Heirs" and "Motion for Issuance of Certificate of Allowance of Probate Will." Montes prayed for the release of
the said rent payments to Maria Cathryn, Candice Albertine and Maria Angeline and for the distribution of the
51
testator's properties, specifically the Valle Verde property and the Blue Ridge apartments, in accordance with
the provisions of the holographic will.

On August 26, 1993, the probate court denied petitioner's motion for release of funds but granted respondent
Montes' motion in view of petitioner's lack of opposition. It thus ordered the release of the rent payments to
the decedent's three granddaughters. It further ordered the delivery of the titles to and possession of the
properties bequeathed to the three granddaughters and respondent Montes upon the filing of a bond of
P50,000.00.

Petitioner moved for reconsideration alleging that he actually filed his opposition to respondent Montes's
motion for release of rent payments which opposition the court failed to consider. Petitioner likewise reiterated
his previous motion for release of funds.

On November 23, 1993, petitioner, through counsel, manifested that he was withdrawing his motion for release
of funds in view of the fact that the lease contract over the Valle Verde property had been renewed for another
year.7

Despite petitioner's manifestation, the probate court, on December 22, 1993, ordered the release of the funds
to Edmond but only "such amount as may be necessary to cover the expenses of administration and allowances
for support" of the testator's three granddaughters subject to collation and deductible from their share in the
inheritance. The court, however, held in abeyance the release of the titles to respondent Montes and the three
granddaughters until the lapse of six months from the date of first publication of the notice to creditors.8 The
court stated thus:

xxx xxx xxx

After consideration of the arguments set forth thereon by the parties the court resolves to allow
Administrator Edmond M. Ruiz to take possession of the rental payments deposited with the Clerk of
Court, Pasig Regional Trial Court, but only such amount as may be necessary to cover the expenses of
administration and allowances for support of Maria Cathryn Veronique, Candice Albertine and Maria
Angeli, which are subject to collation and deductible from the share in the inheritance of said heirs and
insofar as they exceed the fruits or rents pertaining to them.

As to the release of the titles bequeathed to petitioner Maria Pilar Ruiz-Montes and the above-named
heirs, the same is hereby reconsidered and held in abeyance until the lapse of six (6) months from the
date of first publication of Notice to Creditors.

WHEREFORE, Administrator Edmond M. Ruiz is hereby ordered to submit an accounting of the expenses
necessary for administration including provisions for the support Of Maria Cathryn Veronique Ruiz,
Candice Albertine Ruiz and Maria Angeli Ruiz before the amount required can be withdrawn and cause
the publication of the notice to creditors with reasonable dispatch.9

Petitioner assailed this order before the Court of Appeals. Finding no grave abuse of discretion on the part of
respondent judge, the appellate court dismissed the petition and sustained the probate court's order in a
decision dated November 10, 199410 and a resolution dated January 5, 1995.11

Hence, this petition.

Petitioner claims that:

52
 THE PUBLIC RESPONDENT COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING
TO LACK OR EXCESS OF JURISDICTION IN AFFIRMING AND CONFIRMING THE ORDER OF RESPONDENT
REGIONAL TRIAL COURT OF PASIG, BRANCH 156, DATED DECEMBER 22, 1993, WHICH WHEN GIVEN DUE
COURSE AND IS EFFECTED WOULD: (1) DISALLOW THE EXECUTOR/ADMINISTRATOR OF THE ESTATE OF
THE LATE HILARIO M. RUIZ TO TAKE POSSESSION OF ALL THE REAL AND PERSONAL PROPERTIES OF THE
ESTATE; (2) GRANT SUPPORT, DURING THE PENDENCY OF THE SETTLEMENT OF AN ESTATE, TO CERTAIN
PERSONS NOT ENTITLED THERETO; AND (3) PREMATURELY PARTITION AND DISTRIBUTE THE ESTATE
PURSUANT TO THE PROVISIONS OF THE HOLOGRAPHIC WILL EVEN BEFORE ITS INTRINSIC VALIDITY HAS
BEEN DETERMINED, AND DESPITE THE EXISTENCE OF UNPAID DEBTS AND OBLIGATIONS OF THE
ESTATE.12

The issue for resolution is whether the probate court, after admitting the will to probate but before payment of
the estate's debts and obligations, has the authority: (1) to grant an allowance from the funds of the estate for
the support of the testator's grandchildren; (2) to order the release of the titles to certain heirs; and (3) to grant
possession of all properties of the estate to the executor of the will.

On the matter of allowance, Section 3 of Rule 83 of the Revised Rules of Court provides:

Sec. 3. Allowance to widow and family. The widow and minor or incapacitated children of a deceased
person, during the settlement of the estate, shall receive therefrom under the direction of the court,
such allowance as are provided by law.

Petitioner alleges that this provision only gives the widow and the minor or incapacitated children of the
deceased the right to receive allowances for support during the settlement of estate proceedings. He contends
that the testator's three granddaughters do not qualify for an allowance because they are not incapacitated and
are no longer minors but of legal age, married and gainfully employed. In addition, the provision expressly states
"children" of the deceased which excludes the latter's grandchildren.

It is settled that allowances for support under Section 3 of Rule 83 should not be limited to the "minor or
incapacitated" children of the deceased. Article 18813 of the Civil Code of the Philippines, the substantive law in
force at the time of the testator's death, provides that during the liquidation of the conjugal partnership, the
deceased's legitimate spouse and children, regardless of their age, civil status or gainful employment, are
entitled to provisional support from the funds of the estate.14 The law is rooted on the fact that the right and
duty to support, especially the right to education, subsist even beyond the age of majority.15

Be that as it may, grandchildren are not entitled to provisional support from the funds of the decedent's estate.
The law clearly limits the allowance to "widow and children" and does not extend it to the deceased's
grandchildren, regardless of their minority or incapacity.16 It was error, therefore, for the appellate court to
sustain the probate court's order granting an allowance to the grandchildren of the testator pending settlement
of his estate.

Respondent courts also erred when they ordered the release of the titles of the bequeathed properties to
private respondents six months after the date of first publication of notice to creditors. An order releasing titles
to properties of the estate amounts to an advance distribution of the estate which is allowed only under the
following conditions:

Sec. 2. Advance distribution in special proceedings. Nothwithstanding a pending controversy or appeal

in proceedings to settle the estate of a decedent, the court may, in its discretion and upon such terms
as it may deem proper and just, permit that such part of the estate as may not be affected by the

53
 controversy or appeal be distributed among the heirs or legatees, upon compliance with the conditions
set forth in Rule 90 of these Rules.17

And Rule 90 provides that:

Sec. 1. When order for distribution of residue made. When the debts, funeral charges, and expenses
of administration the allowance to the widow, and inheritance tax if any, chargeable to the estate in
accordance with law, have been paid, the court, on the application of the executor or administrator, or
of a person interested in the estate, and after hearing upon notice shall assign the residue of the estate
to the persons entitled to the same, naming them and the proportions or parts, to which each is entitled,
and such persons may demand and recover their respective shares from the executor or administrator,
or any other person having the same in his possession. If there is a controversy before the court as to
who are the lawful heirs of the deceased person or as to the distributive shares to which each person is
entitled under the law, the controversy shall be heard and decided as in ordinary cases.

No distribution shall be allowed until the payment of the obligations above-mentioned has been made
or provided for, unless the distributees, or any of them, give a bond, in a sum to be fixed by the court,
conditioned for the payment of said obligations within such time as the court directs.18

In settlement of estate proceedings, the distribution of the estate properties can only be made: (1) after all the
debts, funeral charges, expenses of administration, allowance to the widow, and estate tax have been paid; or
(2) before payment of said obligations only if the distributees or any of them gives a bond in a sum fixed by the
court conditioned upon the payment of said obligations within such time as the court directs, or when provision
is made to meet those obligations.19

In the case at bar, the probate court ordered the release of the titles to the Valle Verde property and the Blue
Ridge apartments to the private respondents after the lapse of six months from the date of first publication of
the notice to creditors. The questioned order speaks of "notice" to creditors, not payment of debts and
obligations. Hilario Ruiz allegedly left no debts when he died but the taxes on his estate had not hitherto been
paid, much less ascertained. The estate tax is one of those obligations that must be paid before distribution of
the estate. If not yet paid, the rule requires that the distributees post a bond or make such provisions as to meet
the said tax obligation in proportion to their respective shares in the inheritance.20 Notably, at the time the
order was issued the properties of the estate had not yet been inventoried and appraised.

It was also too early in the day for the probate court to order the release of the titles six months after admitting
the will to probate. The probate of a will is conclusive as to its due execution and extrinsic validity21 and settles
only the question of whether the testator, being of sound mind, freely executed it in accordance with the
formalities prescribed by law.22 Questions as to the intrinsic validity and efficacy of the provisions of the will,
the legality of any devise or legacy may be raised even after the will has been authenticated.23

The intrinsic validity of Hilario's holographic will was controverted by petitioner before the probate court in his
Reply to Montes' Opposition to his motion for release of funds24 and his motion for reconsideration of the
August 26, 1993 order of the said court.25 Therein, petitioner assailed the distributive shares of the devisees and
legatees inasmuch as his father's will included the estate of his mother and allegedly impaired his legitime as an
intestate heir of his mother. The Rules provide that if there is a controversy as to who are the lawful heirs of the
decedent and their distributive shares in his estate, the probate court shall proceed to hear and decide the same
as in ordinary cases.26

Still and all, petitioner cannot correctly claim that the assailed order deprived him of his right to take possession
of all the real and personal properties of the estate. The right of an executor or administrator to the possession

54
and management of the real and personal properties of the deceased is not absolute and can only be exercised
"so long as it is necessary for the payment of the debts and expenses of administration,"27 Section 3 of Rule 84
of the Revised Rules of Court explicitly provides:

Sec. 3. Executor or administrator to retain whole estate to pay debts, and to administer estate not willed.
An executor or administrator shall have the right to the possession and management of the real as
well as the personal estate of the deceased so long as it is necessary for the payment of the debts and
expenses for administration.28

When petitioner moved for further release of the funds deposited with the clerk of court, he had been
previously granted by the probate court certain amounts for repair and maintenance expenses on the properties
of the estate, and payment of the real estate taxes thereon. But petitioner moved again for the release of
additional funds for the same reasons he previously cited. It was correct for the probate court to require him to
submit an accounting of the necessary expenses for administration before releasing any further money in his
favor.

It was relevantly noted by the probate court that petitioner had deposited with it only a portion of the one-year
rental income from the Valle Verde property. Petitioner did not deposit its succeeding rents after renewal of
the lease.29 Neither did he render an accounting of such funds.

Petitioner must be reminded that his right of ownership over the properties of his father is merely inchoate as
long as the estate has not been fully settled and partitioned.30 As executor, he is a mere trustee of his father's
estate. The funds of the estate in his hands are trust funds and he is held to the duties and responsibilities of a
trustee of the highest order.31 He cannot unilaterally assign to himself and possess all his parents' properties
and the fruits thereof without first submitting an inventory and appraisal of all real and personal properties of
the deceased, rendering a true account of his administration, the expenses of administration, the amount of the
obligations and estate tax, all of which are subject to a determination by the court as to their veracity, propriety
and justness.32

IN VIEW WHEREOF, the decision and resolution of the Court of Appeals in CA-G.R. SP No. 33045 affirming the
order dated December 22, 1993 of the Regional Trial Court, Branch 156, Pasig in SP Proc. No. 10259 are affirmed
with the modification that those portions of the order granting an allowance to the testator's grandchildren and
ordering the release of the titles to the private respondents upon notice to creditors are annulled and set aside.

Respondent judge is ordered to proceed with dispatch in the proceedings below.

SO ORDERED.

Regalado, Romero and Mendoza, JJ., concur.

55
G.R. No. 149926 February 23, 2005
UNION BANK OF THE PHILIPPINES, petitioner,
vs.
EDMUND SANTIBAEZ and FLORENCE SANTIBAEZ ARIOLA, respondents.

DECISION

CALLEJO, SR., J.:

Before us is a petition for review on certiorari under Rule 45 of the Revised Rules of Court which seeks the
reversal of the Decision1 of the Court of Appeals dated May 30, 2001 in CA-G.R. CV No. 48831 affirming the
dismissal2 of the petitioners complaint in Civil Case No. 18909 by the Regional Trial Court (RTC) of Makati City,
Branch 63.

The antecedent facts are as follows:

On May 31, 1980, the First Countryside Credit Corporation (FCCC) and Efraim M. Santibaez entered into a loan
agreement3 in the amount of P128,000.00. The amount was intended for the payment of the purchase price of
one (1) unit Ford 6600 Agricultural All-Purpose Diesel Tractor. In view thereof, Efraim and his son, Edmund,
executed a promissory note in favor of the FCCC, the principal sum payable in five equal annual amortizations
of P43,745.96 due on May 31, 1981 and every May 31st thereafter up to May 31, 1985.

On December 13, 1980, the FCCC and Efraim entered into another loan agreement,4 this time in the amount
of P123,156.00. It was intended to pay the balance of the purchase price of another unit of Ford 6600
Agricultural All-Purpose Diesel Tractor, with accessories, and one (1) unit Howard Rotamotor Model AR 60K.
Again, Efraim and his son, Edmund, executed a promissory note for the said amount in favor of the FCCC. Aside
from such promissory note, they also signed a Continuing Guaranty Agreement5 for the loan dated December
13, 1980.

Sometime in February 1981, Efraim died, leaving a holographic will.6 Subsequently in March 1981, testate
proceedings commenced before the RTC of Iloilo City, Branch 7, docketed as Special Proceedings No. 2706. On
April 9, 1981, Edmund, as one of the heirs, was appointed as the special administrator of the estate of the
decedent.7 During the pendency of the testate proceedings, the surviving heirs, Edmund and his sister Florence
Santibaez Ariola, executed a Joint Agreement8 dated July 22, 1981, wherein they agreed to divide between
themselves and take possession of the three (3) tractors; that is, two (2) tractors for Edmund and one (1) tractor
for Florence. Each of them was to assume the indebtedness of their late father to FCCC, corresponding to the
tractor respectively taken by them.

On August 20, 1981, a Deed of Assignment with Assumption of Liabilities9 was executed by and between FCCC
and Union Savings and Mortgage Bank, wherein the FCCC as the assignor, among others, assigned all its assets
and liabilities to Union Savings and Mortgage Bank.

Demand letters10 for the settlement of his account were sent by petitioner Union Bank of the Philippines (UBP)
to Edmund, but the latter failed to heed the same and refused to pay. Thus, on February 5, 1988, the petitioner
filed a Complaint11 for sum of money against the heirs of Efraim Santibaez, Edmund and Florence, before the
RTC of Makati City, Branch 150, docketed as Civil Case No. 18909. Summonses were issued against both, but the
one intended for Edmund was not served since he was in the United States and there was no information on his
address or the date of his return to the Philippines.12 Accordingly, the complaint was narrowed down to
respondent Florence S. Ariola.

56
On December 7, 1988, respondent Florence S. Ariola filed her Answer13 and alleged that the loan documents
did not bind her since she was not a party thereto. Considering that the joint agreement signed by her and her
brother Edmund was not approved by the probate court, it was null and void; hence, she was not liable to the
petitioner under the joint agreement.

On January 29, 1990, the case was unloaded and re-raffled to the RTC of Makati City, Branch 63.14Consequently,
trial on the merits ensued and a decision was subsequently rendered by the court dismissing the complaint for
lack of merit. The decretal portion of the RTC decision reads:

WHEREFORE, judgment is hereby rendered DISMISSING the complaint for lack of merit.15

The trial court found that the claim of the petitioner should have been filed with the probate court before which
the testate estate of the late Efraim Santibaez was pending, as the sum of money being claimed was an
obligation incurred by the said decedent. The trial court also found that the Joint Agreement apparently
executed by his heirs, Edmund and Florence, on July 22, 1981, was, in effect, a partition of the estate of the
decedent. However, the said agreement was void, considering that it had not been approved by the probate
court, and that there can be no valid partition until after the will has been probated. The trial court further
declared that petitioner failed to prove that it was the now defunct Union Savings and Mortgage Bank to which
the FCCC had assigned its assets and liabilities. The court also agreed to the contention of respondent Florence
S. Ariola that the list of assets and liabilities of the FCCC assigned to Union Savings and Mortgage Bank did not
clearly refer to the decedents account. Ruling that the joint agreement executed by the heirs was null and void,
the trial court held that the petitioners cause of action against respondent Florence S. Ariola must necessarily
fail.

The petitioner appealed from the RTC decision and elevated its case to the Court of Appeals (CA), assigning the
following as errors of the trial court:

1. THE COURT A QUO ERRED IN FINDING THAT THE JOINT AGREEMENT (EXHIBIT A) SHOULD BE
APPROVED BY THE PROBATE COURT.

2. THE COURT A QUO ERRED IN FINDING THAT THERE CAN BE NO VALID PARTITION AMONG THE HEIRS
UNTIL AFTER THE WILL HAS BEEN PROBATED.

3. THE COURT A QUO ERRED IN NOT FINDING THAT THE DEFENDANT HAD WAIVED HER RIGHT TO HAVE
THE CLAIM RE-LITIGATED IN THE ESTATE PROCEEDING.16

The petitioner asserted before the CA that the obligation of the deceased had passed to his legitimate children
and heirs, in this case, Edmund and Florence; the unconditional signing of the joint agreement marked as Exhibit
"A" estopped respondent Florence S. Ariola, and that she cannot deny her liability under the said document; as
the agreement had been signed by both heirs in their personal capacity, it was no longer necessary to present
the same before the probate court for approval; the property partitioned in the agreement was not one of those
enumerated in the holographic will made by the deceased; and the active participation of the heirs, particularly
respondent Florence S. Ariola, in the present ordinary civil action was tantamount to a waiver to re-litigate the
claim in the estate proceedings.

On the other hand, respondent Florence S. Ariola maintained that the money claim of the petitioner should
have been presented before the probate court.17

The appellate court found that the appeal was not meritorious and held that the petitioner should have filed its
claim with the probate court as provided under Sections 1 and 5, Rule 86 of the Rules of Court. It further held

57
that the partition made in the agreement was null and void, since no valid partition may be had until after the
will has been probated. According to the CA, page 2, paragraph (e) of the holographic will covered the subject
properties (tractors) in generic terms when the deceased referred to them as "all other properties." Moreover,
the active participation of respondent Florence S. Ariola in the case did not amount to a waiver. Thus, the CA
affirmed the RTC decision, viz.:

WHEREFORE, premises considered, the appealed Decision of the Regional Trial Court of Makati City, Branch 63,
is hereby AFFIRMED in toto.

SO ORDERED.18

In the present recourse, the petitioner ascribes the following errors to the CA:

I.

THE HONORABLE COURT OF APPEALS ERRED IN FINDING THAT THE JOINT AGREEMENT SHOULD BE APPROVED
BY THE PROBATE COURT.

II.

THE COURT OF APPEALS ERRED IN FINDING THAT THERE CAN BE NO VALID PARTITION AMONG THE HEIRS OF
THE LATE EFRAIM SANTIBAEZ UNTIL AFTER THE WILL HAS BEEN PROBATED.

III.

THE COURT OF APPEALS ERRED IN NOT FINDING THAT THE RESPONDENT HAD WAIVED HER RIGHT TO HAVE THE
CLAIM RE-LITIGATED IN THE ESTATE PROCEEDING.

IV.

RESPONDENTS CAN, IN FACT, BE HELD JOINTLY AND SEVERALLY LIABLE WITH THE PRINCIPAL DEBTOR THE LATE
EFRAIM SANTIBAEZ ON THE STRENGTH OF THE CONTINUING GUARANTY AGREEMENT EXECUTED IN FAVOR
OF PETITIONER-APPELLANT UNION BANK.

V.

THE PROMISSORY NOTES DATED MAY 31, 1980 IN THE SUM OF P128,000.00 AND DECEMBER 13, 1980 IN THE
AMOUNT OF P123,000.00 CATEGORICALLY ESTABLISHED THE FACT THAT THE RESPONDENTS BOUND
THEMSELVES JOINTLY AND SEVERALLY LIABLE WITH THE LATE DEBTOR EFRAIM SANTIBAEZ IN FAVOR OF
PETITIONER UNION BANK.19

The petitioner claims that the obligations of the deceased were transmitted to the heirs as provided in Article
774 of the Civil Code; there was thus no need for the probate court to approve the joint agreement where the
heirs partitioned the tractors owned by the deceased and assumed the obligations related thereto. Since
respondent Florence S. Ariola signed the joint agreement without any condition, she is now estopped from
asserting any position contrary thereto. The petitioner also points out that the holographic will of the deceased
did not include nor mention any of the tractors subject of the complaint, and, as such was beyond the ambit of
the said will. The active participation and resistance of respondent Florence S. Ariola in the ordinary civil action
against the petitioners claim amounts to a waiver of the right to have the claim presented in the probate
proceedings, and to allow any one of the heirs who executed the joint agreement to escape liability to pay the

58
value of the tractors under consideration would be equivalent to allowing the said heirs to enrich themselves to
the damage and prejudice of the petitioner.

The petitioner, likewise, avers that the decisions of both the trial and appellate courts failed to consider the fact
that respondent Florence S. Ariola and her brother Edmund executed loan documents, all establishing
the vinculum juris or the legal bond between the late Efraim Santibaez and his heirs to be in the nature of a
solidary obligation. Furthermore, the Promissory Notes dated May 31, 1980 and December 13, 1980 executed
by the late Efraim Santibaez, together with his heirs, Edmund and respondent Florence, made the obligation
solidary as far as the said heirs are concerned. The petitioner also proffers that, considering the express
provisions of the continuing guaranty agreement and the promissory notes executed by the named
respondents, the latter must be held liable jointly and severally liable thereon. Thus, there was no need for the
petitioner to file its money claim before the probate court. Finally, the petitioner stresses that both surviving
heirs are being sued in their respective personal capacities, not as heirs of the deceased.

In her comment to the petition, respondent Florence S. Ariola maintains that the petitioner is trying to recover
a sum of money from the deceased Efraim Santibaez; thus the claim should have been filed with the probate
court. She points out that at the time of the execution of the joint agreement there was already an existing
probate proceedings of which the petitioner knew about. However, to avoid a claim in the probate court which
might delay payment of the obligation, the petitioner opted to require them to execute the said agreement.

According to the respondent, the trial court and the CA did not err in declaring that the agreement was null and
void. She asserts that even if the agreement was voluntarily executed by her and her brother Edmund, it should
still have been subjected to the approval of the court as it may prejudice the estate, the heirs or third parties.
Furthermore, she had not waived any rights, as she even stated in her answer in the court a quo that the claim
should be filed with the probate court. Thus, the petitioner could not invoke or claim that she is in estoppel.

Respondent Florence S. Ariola further asserts that she had not signed any continuing guaranty agreement, nor
was there any document presented as evidence to show that she had caused herself to be bound by the
obligation of her late father.

The petition is bereft of merit.

The Court is posed to resolve the following issues: a) whether or not the partition in the Agreement executed
by the heirs is valid; b) whether or not the heirs assumption of the indebtedness of the deceased is valid; and
c) whether the petitioner can hold the heirs liable on the obligation of the deceased.

At the outset, well-settled is the rule that a probate court has the jurisdiction to determine all the properties of
the deceased, to determine whether they should or should not be included in the inventory or list of properties
to be administered.20 The said court is primarily concerned with the administration, liquidation and distribution
of the estate.21

In our jurisdiction, the rule is that there can be no valid partition among the heirs until after the will has been
probated:

In testate succession, there can be no valid partition among the heirs until after the will has been probated. The
law enjoins the probate of a will and the public requires it, because unless a will is probated and notice thereof
given to the whole world, the right of a person to dispose of his property by will may be rendered nugatory. The
authentication of a will decides no other question than such as touch upon the capacity of the testator and the
compliance with those requirements or solemnities which the law prescribes for the validity of a will.22

59
This, of course, presupposes that the properties to be partitioned are the same properties embraced in the
will.23In the present case, the deceased, Efraim Santibaez, left a holographic will24 which contained, inter alia,
the provision which reads as follows:

(e) All other properties, real or personal, which I own and may be discovered later after my demise, shall be
distributed in the proportion indicated in the immediately preceding paragraph in favor of Edmund and
Florence, my children.

We agree with the appellate court that the above-quoted is an all-encompassing provision embracing all the
properties left by the decedent which might have escaped his mind at that time he was making his will, and
other properties he may acquire thereafter. Included therein are the three (3) subject tractors. This being so,
any partition involving the said tractors among the heirs is not valid. The joint agreement25 executed by Edmund
and Florence, partitioning the tractors among themselves, is invalid, specially so since at the time of its
execution, there was already a pending proceeding for the probate of their late fathers holographic will
covering the said tractors.

It must be stressed that the probate proceeding had already acquired jurisdiction over all the properties of the
deceased, including the three (3) tractors. To dispose of them in any way without the probate courts approval
is tantamount to divesting it with jurisdiction which the Court cannot allow.26 Every act intended to put an end
to indivision among co-heirs and legatees or devisees is deemed to be a partition, although it should purport to
be a sale, an exchange, a compromise, or any other transaction.27 Thus, in executing any joint agreement which
appears to be in the nature of an extra-judicial partition, as in the case at bar, court approval is imperative, and
the heirs cannot just divest the court of its jurisdiction over that part of the estate. Moreover, it is within the
jurisdiction of the probate court to determine the identity of the heirs of the decedent.28 In the instant case,
there is no showing that the signatories in the joint agreement were the only heirs of the decedent. When it
was executed, the probate of the will was still pending before the court and the latter had yet to determine who
the heirs of the decedent were. Thus, for Edmund and respondent Florence S. Ariola to adjudicate unto
themselves the three (3) tractors was a premature act, and prejudicial to the other possible heirs and creditors
who may have a valid claim against the estate of the deceased.

The question that now comes to fore is whether the heirs assumption of the indebtedness of the decedent is
binding. We rule in the negative. Perusing the joint agreement, it provides that the heirs as parties thereto "have
agreed to divide between themselves and take possession and use the above-described chattel and each of them
to assume the indebtedness corresponding to the chattel taken as herein after stated which is in favor of First
Countryside Credit Corp."29 The assumption of liability was conditioned upon the happening of an event, that is,
that each heir shall take possession and use of their respective share under the agreement. It was made
dependent on the validity of the partition, and that they were to assume the indebtedness corresponding to the
chattel that they were each to receive. The partition being invalid as earlier discussed, the heirs in effect did not
receive any such tractor. It follows then that the assumption of liability cannot be given any force and effect.

The Court notes that the loan was contracted by the decedent. The petitioner, purportedly a creditor of the late
Efraim Santibaez, should have thus filed its money claim with the probate court in accordance with Section 5,
Rule 86 of the Revised Rules of Court, which provides:

Section 5. Claims which must be filed under the notice. If not filed barred; exceptions. All claims for money
against the decedent, arising from contract, express or implied, whether the same be due, not due, or
contingent, all claims for funeral expenses for the last sickness of the decedent, and judgment for money against
the decedent, must be filed within the time limited in the notice; otherwise they are barred forever, except that
they may be set forth as counterclaims in any action that the executor or administrator may bring against the
claimants. Where an executor or administrator commences an action, or prosecutes an action already
60
commenced by the deceased in his lifetime, the debtor may set forth by answer the claims he has against the
decedent, instead of presenting them independently to the court as herein provided, and mutual claims may be
set off against each other in such action; and if final judgment is rendered in favor of the defendant, the amount
so determined shall be considered the true balance against the estate, as though the claim had been presented
directly before the court in the administration proceedings. Claims not yet due, or contingent, may be approved
at their present value.

The filing of a money claim against the decedents estate in the probate court is mandatory.30 As we held in the
vintage case of Py Eng Chong v. Herrera:31

This requirement is for the purpose of protecting the estate of the deceased by informing the executor or
administrator of the claims against it, thus enabling him to examine each claim and to determine whether it is
a proper one which should be allowed. The plain and obvious design of the rule is the speedy settlement of the
affairs of the deceased and the early delivery of the property to the distributees, legatees, or heirs. `The law
strictly requires the prompt presentation and disposition of the claims against the decedent's estate in order to
settle the affairs of the estate as soon as possible, pay off its debts and distribute the residue.32

Perusing the records of the case, nothing therein could hold private respondent Florence S. Ariola accountable
for any liability incurred by her late father. The documentary evidence presented, particularly the promissory
notes and the continuing guaranty agreement, were executed and signed only by the late Efraim Santibaez
and his son Edmund. As the petitioner failed to file its money claim with the probate court, at most, it may only
go after Edmund as co-maker of the decedent under the said promissory notes and continuing guaranty, of
course, subject to any defenses Edmund may have as against the petitioner. As the court had not acquired
jurisdiction over the person of Edmund, we find it unnecessary to delve into the matter further.

We agree with the finding of the trial court that the petitioner had not sufficiently shown that it is the successor-
in-interest of the Union Savings and Mortgage Bank to which the FCCC assigned its assets and liabilities.33 The
petitioner in its complaint alleged that "by virtue of the Deed of Assignment dated August 20, 1981 executed by
and between First Countryside Credit Corporation and Union Bank of the Philippines"34 However, the
documentary evidence35 clearly reflects that the parties in the deed of assignment with assumption of liabilities
were the FCCC, and the Union Savings and Mortgage Bank, with the conformity of Bancom Philippine Holdings,
Inc. Nowhere can the petitioners participation therein as a party be found. Furthermore, no documentary or
testimonial evidence was presented during trial to show that Union Savings and Mortgage Bank is now, in fact,
petitioner Union Bank of the Philippines. As the trial court declared in its decision:

[T]he court also finds merit to the contention of defendant that plaintiff failed to prove or did not present
evidence to prove that Union Savings and Mortgage Bank is now the Union Bank of the Philippines. Judicial
notice does not apply here. "The power to take judicial notice is to [be] exercised by the courts with caution;
care must be taken that the requisite notoriety exists; and every reasonable doubt upon the subject should be
promptly resolved in the negative." (Republic vs. Court of Appeals, 107 SCRA 504).36

This being the case, the petitioners personality to file the complaint is wanting. Consequently, it failed to
establish its cause of action. Thus, the trial court did not err in dismissing the complaint, and the CA in affirming
the same.

IN LIGHT OF ALL THE FOREGOING, the petition is hereby DENIED. The assailed Court of Appeals Decision is
AFFIRMED. No costs.

SO ORDERED. Puno, (Chairman), Austria-Martinez, Tinga, and Chico-Nazario, JJ., concur.

61
G.R. No. 171206 September 23, 2013
HEIRS OF THE LATE SPOUSES FLA VIANO MAGLASANG and SALUD ADAZA-MAGLASANG, namely, OSCAR A.
MAGLASANG, EDGAR A. MAGLASANG, CONCEPCION CHONA A. MAGLASANG, GLENDA A. MAGLASANG-
ARNAIZ, LERMA A. MAGLASANG, FELMA A. MAGLASANG, FE DORIS A. MAGLASANG, LEOLINO A.
MAGLASANG, MARGIE LEILA A. MAGLASANG, MA. MILALIE A. MAGLASANG, SALUD A. MAGLASANG, and MA.
FLASALIE A. MAGLASANG, REPRESENTING THE ESTATES OF THEIR AFORE-NAMEDDECEASED
PARENTS, Petitioners,
vs.
MANILA BANKING CORPORATION, now substituted by FIRST SOVEREIGN ASSET MANAGEMENT SPV-AMC,
INC. FSAMI, Respondent.

DECISION

PERLAS-BERNABE, J.:

Assailed in this petition for review on certiorari1 are the Decision2 dated July 20, 2005 and Resolution3 dated
January 4, 2006 of the Court of Appeals (CA) in CA-G.R. CV No. 50410 which dismissed petitioners appeal and
affirmed the Decision4 dated April 6, 1987 of the Regional Trial Court of Ormoc City, Branch 12 (RTC) directing
petitioners to jointly and severally pay respondent Manila Banking Corporation the amount of P434,742.36, with
applicable interests, representing the deficiency of the formers total loan obligation to the latter after the extra-
judicial foreclosure of the real estate mortgage subject of this case, including attorneys fees and costs of suit.

The Facts

On June 16, 1975, spouses Flaviano and Salud Maglasang (Sps.Maglasang) obtained a credit line from
respondent5 in the amount of P350,000.00 which was secured by a real estate mortgage6 executed over seven
of their properties7 located in Ormoc City and the Municipality of Kananga, Province of Leyte.8 They availed of
their credit line by securing loans in the amounts of P209,790.50 and P139,805.83 on October 24, 1975and
March 15, 1976, respectively,9 both of which becoming due and demandable within a period of one year.
Further, the parties agreed that the said loans would earn interest at 12% per annum (p.a.) and an additional
4% penalty would be charged upon default.10

After Flaviano Maglasang (Flaviano) died intestate on February 14,1977, his widow Salud Maglasang (Salud) and
their surviving children, herein petitioners Oscar (Oscar), Concepcion Chona, Lerma, Felma, FeDoris, Leolino,
Margie Leila, Ma. Milalie, Salud and Ma. Flasalie, all surnamed Maglasang, and Glenda Maglasang-Arnaiz,
appointed11 their brother petitioner Edgar Maglasang (Edgar) as their attorney-in-fact.12 Thus, on March 30,
1977, Edgar filed a verified petition for letters of administration of the intestate estate of Flaviano before the
then Court of First Instance of Leyte, Ormoc City, Branch 5 (probate court), docketed as Sp. Proc. No. 1604-
0.13 On August 9, 1977, the probate court issued an Order14 granting the petition, thereby appointing Edgar as
the administrator15 of Flavianos estate.

In view of the issuance of letters of administration, the probate court, on August 30, 1977, issued a Notice to
Creditors16 for the filing of money claims against Flavianos estate. Accordingly, as one of the creditors of
Flaviano, respondent notified17 the probate court of its claim in the amount of P382,753.19 as of October 11,
1978, exclusive of interests and charges.

During the pendency of the intestate proceedings, Edgar and Oscar were able to obtain several loans from
respondent, secured by promissory notes18 which they signed.

62
In an Order19 dated December 14, 1978 (December 14, 1978 Order),the probate court terminated the
proceedings with the surviving heirs executing an extra-judicial partition of the properties of Flavianos estate.
The loan obligations owed by the estate to respondent, however, remained unsatisfied due to respondents
certification that Flavianos account was undergoing a restructuring. Nonetheless, the probate court expressly
recognized the rights of respondent under the mortgage and promissory notes executed by the Sps. Maglasang,
specifically, its "right to foreclose the same within the statutory period."20

In this light, respondent proceeded to extra-judicially foreclose the mortgage covering the Sps. Maglasangs
properties and emerged as the highest bidder at the public auction for the amount of P350,000.00.21 There,
however, remained a deficiency on Sps. Maglasangs obligation to respondent. Thus, on June 24, 1981,
respondent filed a suit to recover the deficiency amount of P250,601.05 as of May 31, 1981 against the estate
of Flaviano, his widow Salud and petitioners, docketed as Civil Case No. 1998-0.22

The RTC Ruling and Subsequent Proceedings

After trial on the merits, the RTC (formerly, the probate court)23 rendered a Decision24 on April 6, 1987 directing
the petitioners to pay respondent, jointly and severally, the amount of P434,742.36 with interest at the rate of
12% p.a., plus a 4% penalty charge, reckoned from September 5,1984 until fully paid.25 The RTC found that it
was shown, by a preponderance of evidence, that petitioners, after the extra-judicial foreclosure of all the
properties mortgaged, still have an outstanding obligation in the amount and as of the date as above-stated.
The RTC also found in order the payment of interests and penalty charges as above-mentioned as well as
attorneys fees equivalent to 10% of the outstanding obligation.26

Dissatisfied, petitioners elevated the case to the CA on appeal, contending,27 inter alia, that the remedies
available to respondent under Section 7, Rule 86 of the Rules of Court (Rules) are alternative and exclusive, such
that the election of one operates as a waiver or abandonment of the others. Thus, when respondent filed its
claim against the estate of Flaviano in the proceedings before the probate court, it effectively abandoned its
right to foreclose on the mortgage. Moreover, even on the assumption that it has not so waived its right to
foreclose, it is nonetheless barred from filing any claim for any deficiency amount.

During the pendency of the appeal, Flavianos widow, Salud, passed away on July 25, 1997.28

The CA Ruling

In a Decision29 dated July 20, 2005, the CA denied the petitioners appeal and affirmed the RTCs Decision. At
the outset, it pointed out that the probate court erred when it, through the December 14, 1978 Order, closed
and terminated the proceedings in Sp. Proc. No. 1604-0 without first satisfying the claims of the creditors of the
estate in particular, respondent in violation of Section 1, Rule 90 of the Rules.30 As a consequence,
respondent was not able to collect from the petitioners and thereby was left with the option of foreclosing the
real estate mortgage.31 Further, the CA held that Section 7, Rule 86 of the Rules does not apply to the present
case since the same does not involve a mortgage made by the administrator over any property belonging to the
estate of the decedent.32 According to the CA, what should apply is Act No. 313533 which entitles respondent to
claim the deficiency amount after the extra-judicial foreclosure of the real estate mortgage of Sps. Maglasangs
properties.34

Petitioners motion for reconsideration was subsequently denied in a Resolution35 dated January 4, 2006.
Hence, the present recourse.

63
The Issue Before the Court

The essential issue in this case is whether or not the CA erred in affirming the RTCs award of the deficiency
amount in favor of respondent.

Petitioners assert36 that it is not Act No. 3135 but Section 7, Rule 86of the Rules which applies in this case. The
latter provision provides alternative and exclusive remedies for the satisfaction of respondents claim against
the estate of Flaviano.37 Corollarily, having filed its claim against the estate during the intestate proceedings,
petitioners argue that respondent had effectively waived the remedy of foreclosure and, even assuming that it
still had the right to do so, it was precluded from filing a suit for the recovery of the deficiency obligation.38

Likewise, petitioners maintain that the extra-judicial foreclosure of the subject properties was null and void, not
having been conducted in the capital of the Province of Leyte in violation of the stipulations in the real estate
mortgage contract.39 They likewise deny any personal liability for the loans taken by their deceased parents.40

The Courts Ruling

The petition is partly meritorious.

Claims against deceased persons should be filed during the settlement proceedings of their estate.41 Such
proceedings are primarily governed by special rules found under Rules 73 to 90 of the Rules, although rules
governing ordinary actions may, as far as practicable, apply suppletorily.42 Among these special rules, Section 7,
Rule 86 of the Rules (Section 7, Rule86) provides the rule in dealing with secured claims against the estate:

SEC. 7. Mortgage debt due from estate. A creditor holding a claim against the deceased secured by a mortgage
or other collateral security, may abandon the security and prosecute his claim in the manner provided in this
rule, and share in the general distribution of the assets of the estate; or he may foreclose his mortgage or realize
upon his security, by action in court, making the executor or administrator a party defendant, and if there is a
judgment for a deficiency, after the sale of the mortgaged premises, or the property pledged, in the foreclosure
or other proceeding to realize upon the security, he may claim his deficiency judgment in the manner provided
in the preceding section; or he may rely upon his mortgage or other security alone, and foreclose the same at
any time within the period of the statute of limitations, and in that event he shall not be admitted as a creditor,
and shall receive no share in the distribution of the other assets of the estate; but nothing herein contained
shall prohibit the executor or administrator from redeeming the property mortgaged or pledged, by paying the
debt for which it is held as security, under the direction of the court, if the court shall adjudged it to be for the
best interest of the estate that such redemption shall be made. (Emphasis and underscoring supplied)

As the foregoing generally speaks of "a creditor holding a claim against the deceased secured by a mortgage or
other collateral security" as above-highlighted, it may be reasonably concluded that the aforementioned section
covers all secured claims, whether by mortgage or any other form of collateral, which a creditor may enforce
against the estate of the deceased debtor. On the contrary, nowhere from its language can it be fairly deducible
that the said section would as the CA interpreted narrowly apply only to mortgages made by the
administrator over any property belonging to the estate of the decedent. To note, mortgages of estate property
executed by the administrator, are also governed by Rule 89 of the Rules, captioned as "Sales, Mortgages, and
Other Encumbrances of Property of Decedent."

In this accord, it bears to stress that the CAs reliance on Philippine National Bank v. CA43 (PNB) was misplaced
as the said case did not, in any manner, limit the scope of Section 7, Rule 86. It only stated that the aforesaid
section equally applies to cases where the administrator mortgages the property of the estate to secure the
loan he obtained.44 Clearly, the pronouncement was a ruling of inclusion and not one which created a

64
distinction. It cannot, therefore, be doubted that it is Section 7, Rule 86which remains applicable in dealing with
a creditors claim against the mortgaged property of the deceased debtor, as in this case, as well as mortgages
made by the administrator, as that in the PNB case.

Jurisprudence breaks down the rule under Section 7, Rule 86 and explains that the secured creditor has three
remedies/options that he may alternatively adopt for the satisfaction of his indebtedness. In particular, he may
choose to: (a) waive the mortgage and claim the entire debt from the estate of the mortgagor as an ordinary
claim; (b) foreclose the mortgage judicially and prove the deficiency as an ordinary claim; and (c) rely on the
mortgage exclusively, or other security and foreclose the same before it is barred by prescription, without the
right to file a claim for any deficiency.45 It must, however, be emphasized that these remedies are distinct,
independent and mutually exclusive from each other; thus, the election of one effectively bars the exercise of
the others. With respect to real properties, the Court in Bank of America v. American Realty
Corporation46 pronounced:

In our jurisdiction, the remedies available to the mortgage creditor are deemed alternative and not cumulative.
Notably, an election of one remedy operates as a waiver of the other. For this purpose, a remedy is deemed
chosen upon the filing of the suit for collection or upon the filing of the complaint in an action for foreclosure
of mortgage, pursuant to the provision of Rule 68 of the 1997 Rules of Civil Procedure. As to extrajudicial
foreclosure, such remedy is deemed elected by the mortgage creditor upon filing of the petition not with any
court of justice but with the Office of the Sheriff of the province where the sale is to be made, in accordance
with the provisions of Act No. 3135, as amended by Act No.4118.47 (Emphasis supplied)

Anent the third remedy, it must be mentioned that the same includes the option of extra-judicially foreclosing
the mortgage under Act No. 3135, as availed of by respondent in this case. However, the plain result of adopting
the last mode of foreclosure is that the creditor waives his right to recover any deficiency from the
estate.48 These precepts were discussed in the PNB case, citing Perez v. Philippine National Bank49 which
overturned the earlier Pasno v. Ravina ruling:50

Case law now holds that this rule grants to the mortgagee three distinct, independent and mutually exclusive
remedies that can be alternatively pursued by the mortgage creditor for the satisfaction of his credit in case the
mortgagor dies, among them:

(1) to waive the mortgage and claim the entire debt from the estate of the mortgagor as an ordinary
claim;

(2) to foreclose the mortgage judicially and prove any deficiency as an ordinary claim; and

(3) to rely on the mortgage exclusively, foreclosing the same at anytime before it is barred by prescription
without right to file a claim for any deficiency

In Perez v. Philippine National Bank, reversing Pasno vs. Ravina, we held:

The ruling in Pasno v. Ravina not having been reiterated in any other case, we have carefully reexamined the
same, and after mature deliberation have reached the conclusion that the dissenting opinion is more in
conformity with reason and law. Of the three alternative courses that section 7, Rule 87 (now Rule 86), offers
the mortgage creditor, to wit, (1) to waive the mortgage and claim the entire debt from the estate of the
mortgagor as an ordinary claim; (2) foreclose the mortgage judicially and prove any deficiency as an ordinary
claim; and (3) to rely on the mortgage exclusively, foreclosing the same at any time before it is barred by
prescription, without right to file a claim for any deficiency, the majority opinion in Pasno v. Ravina, in requiring

65
a judicial foreclosure, virtually wipes out the third alternative conceded by the Rules to the mortgage creditor,
and which would precisely include extra-judicial foreclosures by contrast with the second alternative.

The plain result of adopting the last mode of foreclosure is that the creditor waives his right to recover any
deficiency from the estate. Following the Perez ruling that the third mode includes

extrajudicial foreclosure sales, the result of extrajudicial foreclosure is that the creditor waives any further
deficiency claim. x x x.51 (Emphases and underscoring supplied; italics in the original)

To obviate any confusion, the Court observes that the operation of Act No. 3135 does not entirely discount the
application of Section 7, Rule 86, or vice-versa. Rather, the two complement each other within their respective
spheres of operation. On the one hand, Section 7, Rule 86 lays down the options for the secured creditor to
claim against the estate and, according to jurisprudence, the availment of the third option bars him from
claiming any deficiency amount. On the other hand, after the third option is chosen, the procedure governing
the manner in which the extra-judicial foreclosure should proceed would still be governed by the provisions of
Act No. 3135.Simply put, Section 7, Rule 86 governs the parameters and the extent to which a claim may be
advanced against the estate, whereas Act No. 3135sets out the specific procedure to be followed when the
creditor subsequently chooses the third option specifically, that of extra-judicially foreclosing real property
belonging to the estate. The application of the procedure under Act No. 3135 must be concordant with Section
7, Rule 86 as the latter is a special rule applicable to claims against the estate, and at the same time, since
Section 7, Rule 86 does not detail the procedure for extra-judicial foreclosures, the formalities governing the
manner of availing of the third option such as the place where the application for extra-judicial foreclosure is
filed, the requirements of publication and posting and the place of sale must be governed by Act No. 3135.

In this case, respondent sought to extra-judicially foreclose the mortgage of the properties previously belonging
to Sps. Maglasang (and now, their estates) and, therefore, availed of the third option. Lest it be misunderstood,
it did not exercise the first option of directly filing a claim against the estate, as petitioners assert, since it merely
notified52 the probate court of the outstanding amount of its claim against the estate of Flaviano and that it was
currently restructuring the account.53 Thus, having unequivocally opted to exercise the third option of extra-
judicial foreclosure under Section 7, Rule 86, respondent is now precluded from filing a suit to recover any
deficiency amount as earlier discussed.

As a final point, petitioners maintain that the extra-judicial foreclosure of the subject properties was null and
void since the same was conducted in violation of the stipulation in the real estate mortgage contract stating
that the auction sale should be held in the capital of the province where the properties are located, i.e., the
Province of Leyte.

The Court disagrees.

As may be gleaned from the records, the stipulation under the real estate mortgage54 executed by Sps.
Maglasang which fixed the place of the foreclosure sale at Tacloban City lacks words of exclusivity which would
bar any other acceptable for a wherein the said sale may be conducted, to wit:

It is hereby agreed that in case of foreclosure of this mortgage under Act 3135, the auction sale shall be held at
the capital of the province if the property is within the territorial jurisdiction of the province concerned, or shall
be held in the city if the property is within the territorial jurisdiction of the city concerned; x x x.55

Case law states that absent such qualifying or restrictive words to indicate the exclusivity of the agreed forum,
the stipulated place should only be as an additional, not a limiting venue.56 As a consequence, the stipulated
venue and that provided under Act No. 3135 can be applied alternatively.

66
In particular, Section 2 of Act No. 3135 allows the foreclosure sale to be done within the province where the
property to be sold is situated, viz.:

SEC. 2. Said sale cannot be made legally outside of the province which the property sold is situated; and in case
the place within said province in which the sale is to be made is subject to stipulation, such sale shall be made
in said place or in the municipal building of the municipality in which the property or part thereof is situated.
(Italics supplied) ..

In this regard, since the auction sale was conducted in Ormoc City, which is within the territorial jurisdiction of
the Province of Leyte, then the Court finds sufficient compliance with the above-cited requirement.

All told, finding that the extra-judicial foreclosure subject of this case was properly conducted in accordance
with the formalities of Act No. 3135, the Court upholds the same as a valid exercise of respondent's third option
under Section 7, Rule 86. To reiterate, respondent cannot, however, file any suit to recover any deficiency
amount since it effectively waived its right thereto when it chose to avail of extra-judicial foreclosure as
jurisprudence instructs.

WHEREFORE, the petition is PARTLY GRANTED. The complaint for the recovery of the deficiency amount after
extra-judicial foreclosure filed by respondent Manila Banking Corporation is hereby DISMISSED. The extra-
judicial foreclosure of the mortgaged properties, however, stands.

SO ORDERED.

ESTELA M. PERLAS-BERNABE

Associate Justice

67
G.R. No. 150175 February 5, 2007
ERLINDA PILAPIL and HEIRS OF DONATA ORTIZ BRIONES, namely: ESTELA, ERIBERTO AND VIRGILIO SANTOS,
ANA SANTOS CULTURA, ELVIRA SANTOS INOCENTES, ERNESTO MENDOZA, RIZALINA SANTOS, ADOLFO
MENDOZA and PACITA MENDOZA, Petitioners,
vs.
HEIRS OF MAXIMINO R. BRIONES, namely: SILVERIO S. BRIONES, PETRA BRIONES, BONIFACIO CABAHUG, JR.,
ANITA TRASMONTE, CIRILITA FORTUNA, CRESENCIA BRIONES, FUGURACION MEDALLE and MERCEDES
LAGBAS, Respondents.

RESOLUTION

CHICO-NAZARIO, J.:

On 10 March 2006, this Court promulgated its Decision1 in the above-entitled case, ruling in favor of the
petitioners. The dispositive portion2 reads as follows:

IN VIEW OF THE FOREGOING, the assailed Decision of the Court of Appeals in CA-GR CV No. 55194, dated 31
August 2001, affirming the Decision of the Cebu City RTC in Civil Case No. CEB-5794, dated 28 September 1986,
is hereby REVERSED and SET ASIDE; and the Complaint for partition, annulment, and recovery of possession
filed by the heirs of Maximino in Civil Case No. CEB-5794 is hereby DISMISSED.

On 10 May 2006, a Motion for Reconsideration3 of the foregoing Decision was filed by Atty. Celso C. Reales of
the Reales Law Office on behalf of the respondents, heirs of Maximino R. Briones. On 19 May 2006, petitioners
Erlinda Pilapil and the other co-heirs of Donata Ortiz Vda. de Briones, through counsel, filed an Opposition to
Respondents Motion for Reconsideration,4 to which the respondents filed a Rejoinder5 on 23 May 2006.
Thereafter, Atty. Amador F. Brioso, Jr. of the Canto Brioso Arnedo Law Office entered his appearance as
collaborating counsel for the respondents.6 Atty. Brioso then filed on 11 June 2006 and 16 June 2006,
respectively, a Reply7 and Supplemental Reply8 to the petitioners Opposition to respondents Motion for
Reconsideration. Finally, petitioners filed a Rejoinder9 to the respondents Reply and Supplemental Reply on 5
July 2006.

The facts of the case, as recounted in the Decision,10 are as follows

Petitioners are the heirs of the late Donata Ortiz-Briones (Donata), consisting of her surviving sister, Rizalina
Ortiz-Aguila (Rizalina); Rizalinas daughter, Erlinda Pilapil (Erlinda); and the other nephews and nieces of Donata,
in representation of her two other sisters who had also passed away. Respondents, on the other hand, are the
heirs of the late Maximino Briones (Maximino), composed of his nephews and nieces, and grandnephews and
grandnieces, in representation of the deceased siblings of Maximino.

xxxx

Maximino was married to Donata but their union did not produce any children. When Maximino died on 1 May
1952, Donata instituted intestate proceedings to settle her husbands estate with the Cebu City Court of First
Instance (CFI), 14th Judicial District, designated as Special Proceedings No. 928-R. On 8 July 1952, the CFI issued
Letters of Administration appointing Donata as the administratrix of Maximinos estate. She submitted an
Inventory of Maximinos properties, which included, among other things, the following parcels of land x x x.

xxxx

The CFI would subsequently issue an Order, dated 2 October 1952, awarding ownership of the aforementioned
real properties to Donata. On 27 June 1960, Donata had the said CFI Order recorded in the Primary Entry Book
68
of the Register of Deeds, and by virtue thereof, received new TCTs, covering the said properties, now in her
name.

Donata died on 1 November 1977. Erlinda, one of Donatas nieces, instituted with the RTC a petition for the
administration of the intestate estate of Donata. Erlinda and her husband, Gregorio, were appointed by the RTC
as administrators of Donatas intestate estate. Controversy arose among Donatas heirs when Erlinda claimed
exclusive ownership of three parcels of land, covered by TCTs No. 21542, 21545, and 58684, based on two Deeds
of Donation, both dated 15 September 1977, allegedly executed in her favor by her aunt Donata. The other heirs
of Donata opposed Erlindas claim. This Court, however, was no longer informed of the subsequent
development in the intestate proceedings of the estate of Donata; and as far as this Petition is concerned, all
the heirs of Donata, including Erlinda, appear to be on the same side.

On 21 January 1985, Silverio Briones (Silverio), a nephew of Maximino, filed a Petition with the RTC for Letters
of Administration for the intestate estate of Maximino, which was initially granted by the RTC. The RTC also
issued an Order, dated 5 December 1985, allowing Silverio to collect rentals from Maximinos properties. But
then, Gregorio filed with the RTC a Motion to Set Aside the Order, dated 5 December 1985, claiming that the
said properties were already under his and his wifes administration as part of the intestate estate of Donata.
Silverios Letters of Administration for the intestate estate of Maximino was subsequently set aside by the RTC.

On 3 March 1987, the heirs of Maximino filed a Complaint with the RTC against the heirs of Donata for the
partition, annulment, and recovery of possession of real property, docketed as Civil Case No. CEB-5794. They
later filed an Amended Complaint, on 11 December 1992. They alleged that Donata, as administratrix of the
estate of Maximino, through fraud and misrepresentation, in breach of trust, and without the knowledge of the
other heirs, succeeded in registering in her name the real properties belonging to the intestate estate of
Maximino.

xxxx

After trial in due course, the RTC rendered its Decision, dated 8 April 1986, in favor of the heirs of Maximino x x
x.

xxxx

x x x[T]he RTC declared that the heirs of Maximino were entitled to of the real properties covered by TCTs No.
21542, 21543, 21544, 21545, 21546, and 58684. It also ordered Erlinda to reconvey to the heirs of Maximino
the said properties and to render an accounting of the fruits thereof.

The heirs of Donata appealed the RTC Decision, dated 8 April 1986, to the Court of Appeals. The Court of
Appeals, in its Decision, promulgated on 31 August 2001, affirmed the RTC Decision, x x x.

xxxx

Unsatisfied with the afore-quoted Decision of the Court of Appeals, the heirs of Donata filed the present
Petition, x x x.

In its Decision, dated 10 March 2006, this Court found the Petition meritorious and, reversing the Decisions of
the Court of Appeals and the Regional Trial Court (RTC), dismissed the Complaint for partition, annulment, and
recovery of possession of real property filed by the heirs of Maximino in Civil Case No. CEB-5794. This Court
summed up its findings,11 thus

69
In summary, the heirs of Maximino failed to prove by clear and convincing evidence that Donata managed,
through fraud, to have the real properties, belonging to the intestate estate of Maximino, registered in her
name. In the absence of fraud, no implied trust was established between Donata and the heirs of Maximino
under Article 1456 of the New Civil Code. Donata was able to register the real properties in her name, not
through fraud or mistake, but pursuant to an Order, dated 2 October 1952, issued by the CFI in Special
Proceedings No. 928-R. The CFI Order, presumed to be fairly and regularly issued, declared Donata as the sole,
absolute, and exclusive heir of Maximino; hence, making Donata the singular owner of the entire estate of
Maximino, including the real properties, and not merely a co-owner with the other heirs of her deceased
husband. There being no basis for the Complaint of the heirs of Maximino in Civil Case No. CEB-5794, the same
should have been dismissed.

Respondents move for the reconsideration of the Decision of this Court raising still the arguments that Donata
committed fraud in securing the Court of First Instance Order, dated 2 October 1952, which declared her as the
sole heir of her deceased husband Maximino and authorized her to have Maximinos properties registered
exclusively in her name; that respondents right to succession to the disputed properties was transmitted or
vested from the moment of Maximinos death and which they could no longer be deprived of; that Donata
merely possessed and held the properties in trust for her co-heirs/owners; and that, by virtue of this Courts
ruling in Quion v. Claridad12 and Sevilla, et al. v. De Los Angeles,13 respondents action to recover title to and
possession of their shares in Maximinos estate, held in trust for their benefit by Donata, and eventually, by
petitioners as the latters successors-in-interest, is imprescriptible. Respondents also advance a fresh contention
that the CFI Order, dated 2 October 1952, being based on the fraudulent misrepresentation of Donata that she
was Maximinos sole heir, was a void order, which produced no legal effect. Lastly, respondents asseverate that,
by relying on certain procedural presumptions in its Decision, dated 10 March 2006, this Court has sacrificed
their substantive right to succession, thus, making justice "subservient to the dictates of mere procedural
fiats."14

While this Court is persuaded to reexamine and clarify some points in its previous Decision in this case, it does
not find any new evidence or argument that would adequately justify a change in its previous position.

On the finding of fraud

As this Court declared in its Decision, the existence of any trust relations between petitioners and respondents
shall be examined in the light of Article 1456 of the New Civil Code, which provides that, "[i]f property is acquired
through mistake or fraud, the person obtaining it is, by force of law, considered a trustee of an implied trust for
the benefit of the person from whom the property comes." Hence, the foremost question to be answered is still
whether an implied trust under Article 1456 of the New Civil Code had been sufficiently established in the
present case.

In the Decision, this Court ruled in the negative, since there was insufficient evidence to establish that Donata
committed fraud. It should be remembered that Donata was able to secure certificates of title to the disputed
properties by virtue of the CFI Order in Special Proceedings No. 928-R (the proceedings she instituted to settle
Maximinos intestate estate), which declared her as Maximinos sole heir. In the absence of proof to the
contrary, the Court accorded to Special Proceedings No. 928-R the presumptions of regularity and validity.
Reproduced below are the relevant portions15 of the Decision

At the onset, it should be emphasized that Donata was able to secure the TCTs covering the real properties
belonging to the estate of Maximino by virtue of a CFI Order, dated 2 October 1952. It is undisputed that the
said CFI Order was issued by the CFI in Special Proceedings No. 928-R, instituted by Donata herself, to settle the
intestate estate of Maximino. The petitioners, heirs of Donata, were unable to present a copy of the CFI Order,
but this is not surprising considering that it was issued 35 years prior to the filing by the heirs of Maximino of
70
their Complaint in Civil Case No. CEB-5794 on 3 March 1987. The existence of such CFI Order, nonetheless,
cannot be denied. It was recorded in the Primary Entry Book of the Register of Deeds on 27 June 1960, at 1:10
p.m., as Entry No. 1714. It was annotated on the TCTs covering the real properties as having declared Donata
the sole, absolute, and exclusive heir of Maximino. The non-presentation of the actual CFI Order was not fatal
to the cause of the heirs of Donata considering that its authenticity and contents were never questioned. The
allegation of fraud by the heirs of Maximino did not pertain to the CFI Order, but to the manner or procedure
by which it was issued in favor of Donata. Moreover, the non-presentation of the CFI Order, contrary to the
declaration by the RTC, does not amount to a willful suppression of evidence that would give rise to the
presumption that it would be adverse to the heirs of Donata if produced. x x x.

xxxx

The CFI Order, dated 2 October 1952, issued in Special Proceedings No. 928-R, effectively settled the intestate
estate of Maximino by declaring Donata as the sole, absolute, and exclusive heir of her deceased husband. The
issuance by the CFI of the said Order, as well as its conduct of the entire Special Proceedings No. 928-R, enjoy
the presumption of validity pursuant to the Section 3(m) and (n) of Rule 131 of the Revised Rules of Court,
reproduced below

SEC. 3. Disputable presumptions. The following presumptions are satisfactory if uncontradicted, but may be
contradicted and overcome by other evidence:

xxxx

(m) That official duty has been regularly performed;

(n) That a court, or judge acting as such, whether in the Philippines or elsewhere, was acting in the lawful
exercise of jurisdiction.

By reason of the foregoing provisions, this Court must presume, in the absence of any clear and convincing proof
to the contrary, that the CFI in Special Proceedings No. 928-R had jurisdiction of the subject matter and the
parties, and to have rendered a judgment valid in every respect; and it could not give credence to the following
statements made by the Court of Appeals in its Decision.

xxxx

There was totally no evidentiary basis for the foregoing pronouncements. First of all, the Petition filed by Donata
for Letters of Administration in Special Proceedings No. 928-R before the CFI was not even referred to nor
presented during the course of the trial of Civil Case No. CEB-5794 before the RTC. How then could the Court of
Appeals make a finding that Donata willfully excluded from the said Petition the names, ages, and residences of
the other heirs of Maximino? Second, there was also no evidence showing that the CFI actually failed to send
notices of Special Proceedings No. 928-R to the heirs of Maximino or that it did not require presentation of proof
of service of such notices. It should be remembered that there stands a presumption that the CFI Judge had
regularly performed his duties in Special Proceedings No. 928-R, which included sending out of notices and
requiring the presentation of proof of service of such notices; and, the heirs of Maximino did not propound
sufficient evidence to debunk such presumption. They only made a general denial of knowledge of Special
Proceedings No. 928-R, at least until 1985. There was no testimony or document presented in which the heirs
of Maximino categorically denied receipt of notice from the CFI of the pendency of Special Proceedings No. 928-
R. The only evidence on record in reference to the absence of notice of such proceedings was the testimony of
Aurelia Briones (Aurelia), one of the heirs of Maximino, x x x.

71
Aurelias testimony deserves scant credit considering that she was not testifying on matters within her personal
knowledge. The phrase "I dont think" is a clear indication that she is merely voicing out her opinion on how she
believed her uncles and aunts would have acted had they received notice of Special Proceedings No. 928-R.

It is worth noting that, in its foregoing ratiocination, the Court was proceeding from an evaluation of the
evidence on record, which did not include an actual copy of the CFI Order in Special Proceedings No. 928-R.
Respondents only submitted a certified true copy thereof on 15 June 2006, annexed to their Supplemental Reply
to petitioners opposition to their motion for reconsideration of this Courts Decision. Respondents did not offer
any explanation as to why they belatedly produced a copy of the said Order, but merely claimed to have been
"fortunate enough to obtain a copy" thereof from the Register of Deeds of Cebu.16

Respondents should be taken to task for springing new evidence so late into the proceedings of this case. Parties
should present all their available evidence at the courts below so as to give the opposing party the opportunity
to scrutinize and challenge such evidence during the course of the trial. However, given that the existence of
the CFI Order in Special Proceedings No. 928-R was never in issue and was, in fact, admitted by the petitioners;
that the copy submitted is a certified true copy of the said Order; and that the said Order may provide new
information vital to a just resolution of the present case, this Court is compelled to consider the same as part of
the evidence on record.

The CFI Order17 in question reads in full as

ORDER

This is with reference to the Motion of the Administratrix, dated January 5, 1960, that she be declared the sole
heir of her deceased husband, Maximino Suico Briones, the latter having died without any legitimate ascendant
nor descendant, nor any legitimate brother or sister, nephews or nieces.

At the hearing of this incident today, nobody appeared to resist the motion, and based on the uncontradicted
testimony of Donata G. Ortiz that she was the nearest surviving relative of the deceased Maximino Suico Briones
at the time of the latters death, and pursuant to the pertinent provisions of the new Civil Code of the
Philippines, the Court hereby declares the aforesaid Donata G. Ortiz the sole, absolute and exclusive heir of the
estate of the deceased Maximino Suico Briones, and she is hereby entitled to inherit all the residue of this estate
after paying all the obligations thereof, which properties are those contained in the Inventory, dated October
2, 1952.

Cebu City, January 15, 1960.

From the contents of the afore-quoted Order, this Court is able to deduce that the CFI Order was in fact issued
on 15 January 1960 and not 2 October 1952, as earlier stated in the Decision. It was the inventory of properties,
submitted by Donata as administratrix of Maximinos intestate estate, which was dated 2 October 1952.18 Other
than such observation, this Court finds nothing in the CFI Order which could change its original position in the
Decision under consideration.

While it is true that since the CFI was not informed that Maximino still had surviving siblings and so the court
was not able to order that these siblings be given personal notices of the intestate proceedings, it should be
borne in mind that the settlement of estate, whether testate or intestate, is a proceeding in rem,19 and that the
publication in the newspapers of the filing of the application and of the date set for the hearing of the same, in
the manner prescribed by law, is a notice to the whole world of the existence of the proceedings and of the
hearing on the date and time indicated in the publication. The publication requirement of the notice in
newspapers is precisely for the purpose of informing all interested parties in the estate of the deceased of the

72
existence of the settlement proceedings, most especially those who were not named as heirs or creditors in the
petition, regardless of whether such omission was voluntarily or involuntarily made.

This Court cannot stress enough that the CFI Order was the result of the intestate proceedings instituted by
Donata before the trial court. As this Court pointed out in its earlier Decision, the manner by which the CFI judge
conducted the proceedings enjoys the presumption of regularity, and encompassed in such presumption is the
order of publication of the notice of the intestate proceedings. A review of the records fails to show any
allegation or concrete proof that the CFI also failed to order the publication in newspapers of the notice of the
intestate proceedings and to require proof from Donata of compliance therewith. Neither can this Court find
any reason or explanation as to why Maximinos siblings could have missed the published notice of the intestate
proceedings of their brother.

In relying on the presumptions of the regular performance of official duty and lawful exercise of jurisdiction by
the CFI in rendering the questioned Order, dated 15 January 1960, this Court is not, as counsel for respondents
allege, sacrificing the substantive right of respondents to their share in the inheritance in favor of mere
procedural fiats. There is a rationale for the establishment of rules of procedure, as amply explained by this
Court in De Dios v. Court of Appeals20

Procedural rules are designed to insure the orderly and expeditious administration of justice by providing for a
practical system by which the parties to a litigation may be accorded a full and fair opportunity to present their
respective positions and refute each other's submissions under the prescribed requirements, conditions and
limitations. Adjective law is not the counterfoil of substantive law. In fact, there is a symbiotic relationship
between them. By complying faithfully with the Rules of Court, the bench and the bar are better able to discuss,
analyze and understand substantive rights and duties and consequently to more effectively protect and enforce
them. The other alternative is judicial anarchy.

Thus, compliance with the procedural rules is the general rule, and abandonment thereof should only be done
in the most exceptional circumstances. The presumptions relied upon by this Court in the instant case are
disputable presumptions, which are satisfactory, unless contradicted or overcome by evidence. This Court finds
that the evidence presented by respondents failed to overcome the given presumptions.

Although Donata may have alleged before the CFI that she was her husbands sole heir, it was not established
that she did so knowingly, maliciously and in bad faith, so as for this Court to conclude that she indeed
committed fraud. This Court again brings to the fore the delay by which respondents filed the present case,
when the principal actors involved, particularly, Donata and Maximinos siblings, have already passed away and
their lips forever sealed as to what truly transpired between them. On the other hand, Special Proceedings No.
928-R took place when all these principal actors were still alive and each would have been capable to act to
protect his or her own right to Maximinos estate. Letters of Administration of Maximinos estate were issued
in favor of Donata as early as 8 July 1952, and the CFI Order in question was issued only on 15 January 1960.
The intestate proceedings for the settlement of Maximinos estate were thus pending for almost eight years,
and it is the burden of the respondents to establish that their parents or grandparents, Maximinos surviving
siblings, had absolutely no knowledge of the said proceedings all these years. As established in Ramos v.
Ramos,21 the degree of proof to establish fraud in a case where the principal actors to the transaction have
already passed away is proof beyond reasonable doubt, to wit

"x x x But length of time necessarily obscures all human evidence; and as it thus removes from the parties all
the immediate means to verify the nature of the original transactions, it operates by way of presumption, in
favor of innocence, and against imputation of fraud. It would be unreasonable, after a great length of time, to
require exact proof of all the minute circumstances of any transaction, or to expect a satisfactory explanation
of every difficulty, real or apparent, with which it may be encumbered. The most that can fairly be expected, in
73
such cases, if the parties are living, from the frailty of memory, and human infirmity, is, that the material facts
can be given with certainty to a common intent; and, if the parties are dead, and the cases rest in confidence,
and in parol agreements, the most that we can hope is to arrive at probable conjectures, and to substitute
general presumptions of law, for exact knowledge. Fraud, or breach of trust, ought not lightly to be imputed
to the living; for, the legal presumption is the other way; as to the dead, who are not here to answer for
themselves, it would be the height of injustice and cruelty, to disturb their ashes, and violate the sanctity of
the grave, unless the evidence of fraud be clear, beyond a reasonable doubt (Prevost vs. Gratz, 6 Wheat. [U.S.],
481, 498).

Moreover, even if Donatas allegation that she was Maximinos sole heir does constitute fraud, it is insufficient
to justify abandonment of the CFI Order, dated 15 January 1960,22 considering the nature of intestate
proceedings as being in rem and the disputable presumptions of the regular performance of official duty and
lawful exercise of jurisdiction by the CFI in rendering the questioned Order, dated 15 January 1960, in Special
Proceedings No. 928-R.

On prescription of the right to recover based on implied trust

Assuming, for the sake of argument, that Donatas misrepresentation constitutes fraud that would impose upon
her the implied trust provided in Article 1456 of the Civil Code, this Court still cannot sustain respondents
contention that their right to recover their shares in Maximinos estate is imprescriptible. It is already settled in
jurisprudence that an implied trust, as opposed to an express trust, is subject to prescription and laches.

The case of Ramos v. Ramos23 already provides an elucidating discourse on the matter, to wit

"Trusts are either express or implied. Express trusts are created by the intention of the trustor or of the parties.
Implied trusts come into being by operation of law" (Art. 1441, Civil Code). "No express trusts concerning an
immovable or any interest therein may be proven by oral evidence. An implied trust may be proven by oral
evidence" (Ibid; Arts. 1443 and 1457).

"No particular words are required for the creation of an express trust, it being sufficient that a trust is clearly
intended" (Ibid; Art. 1444; Tuason de Perez vs. Caluag, 96 Phil. 981; Julio vs. Dalandan, L-19012, October 30,
1967, 21 SCRA 543, 546). "Express trusts are those which are created by the direct and positive acts of the
parties, by some writing or deed, or will, or by words either expressly or impliedly evincing an intention to create
a trust" (89 C.J. S. 122).

"Implied trusts are those which, without being expressed, are deducible from the nature of the transaction as
matters of intent, or which are superinduced on the transaction by operation of law as matters of equity,
independently of the particular intention of the parties" (89 C.J.S. 724). They are ordinarily subdivided into
resulting and constructive trusts (89 C.J.S. 722).

"A resulting trust is broadly defined as a trust which is raised or created by the act or construction of law, but in
its more restricted sense it is a trust raised by implication of law and presumed always to have been
contemplated by the parties, the intention as to which is to be found in the nature of their transaction, but not
expressed in the deed or instrument of conveyance" (89 C.J.S. 725). Examples of resulting trusts are found in
Article 1448 to 1455 of the Civil Code. See Padilla vs. Court of Appeals, L-31569, September 28, 1973, 53 SCRA
168, 179).

On the other hand, a constructive trust is a trust "raised by construction of law, or arising by operation of law."
In a more restricted sense and as contradistinguished from a resulting trust, a constructive trust is "a trust not
created by any words, either expressly or impliedly evincing a direct intention to create a trust, but by the

74
construction of equity in order to satisfy the demands of justice. It does not arise by agreement or intention but
by operation of law." (89 C.J.S. 726-727). "If a person obtains legal title to property by fraud or concealment,
courts of equity will impress upon the title a so-called constructive trust in favor of the defrauded party." A
constructive trust is not a trust in the technical sense (Gayondato vs. Treasurer of the P.I., 49 Phil. 244; See Art.
1456, Civil Code).

There is a rule that a trustee cannot acquire by prescription the ownership of property entrusted to him (Palma
vs. Cristobal, 77 Phil. 712), or that an action to compel a trustee to convey property registered in his name in
trust for the benefit of the cestui qui trust does not prescribe (Manalang vs. Canlas, 94 Phil. 776; Cristobal vs.
Gomez, 50 Phil. 810), or that the defense of prescription cannot be set up in an action to recover property held
by a person in trust for the benefit of another (Sevilla vs. De los Angeles, 97 Phil. 875), or that property held in
trust can be recovered by the beneficiary regardless of the lapse of time (Marabilles vs. Quito, 100 Phil. 64;
Bancairen vs. Diones, 98 Phil. 122, 126; Juan vs. Zuiga, 62 O.G. 1351; 4 SCRA 1221; Jacinto vs. Jacinto, L-17957,
May 31, 1962. See Tamayo vs. Callejo, 147 Phil. 31, 37).

That rule applies squarely to express trusts. The basis of the rule is that the possession of a trustee is not adverse.
Not being adverse, he does not acquire by prescription the property held in trust. Thus, Section 38 of Act 190
provides that the law of prescription does not apply "in the case of a continuing and subsisting trust" (Diaz vs.
Gorricho and Aguado, 103 Phil. 261, 266; Laguna vs. Levantino, 71 Phil. 566; Sumira vs. Vistan, 74 Phil. 138;
Golfeo vs. Court of Appeals, 63 O.G. 4895, 12 SCRA 199; Caladiao vs. Santos, 63 O.G. 1956, 10 SCRA 691).

The rule of imprescriptibility of the action to recover property held in trust may possibly apply to resulting trusts
as long as the trustee has not repudiated the trust (Heirs of Candelaria vs. Romero, 109 Phil. 500, 502-3;
Martinez vs. Grao, 42 Phil. 35; Buencamino vs. Matias, 63 O. G. 11033, 16 SCRA 849).

The rule of imprescriptibility was misapplied to constructive trusts (Geronimo and Isidoro vs. Nava and Aquino,
105 Phil. 145, 153. Compare with Cuison vs. Fernandez and Bengzon, 105 Phil. 135, 139; De Pasion vs. De Pasion,
112 Phil. 403, 407).

Acquisitive prescription may bar the action of the beneficiary against the trustee in an express trust for the
recovery of the property held in trust where (a) the trustee has performed unequivocal acts of repudiation
amounting to an ouster of the cestui qui trust; (b) such positive acts of repudiation have been made known to
the cestui qui trust and (c) the evidence thereon is clear and conclusive (Laguna vs. Levantino, supra; Salinas vs.
Tuason, 55 Phil. 729. Compare with the rule regarding co-owners found in the last paragraph of Article 494, Civil
Code; Casaas vs. Rosello, 50 Phil. 97; Gerona vs. De Guzman, L-19060, May 29, 1964, 11 SCRA 153, 157).

With respect to constructive trusts, the rule is different. The prescriptibility of an action for reconveyance based
on constructive trust is now settled (Alzona vs. Capunitan, L-10228, February 28, 1962, 4 SCRA 450; Gerona vs.
De Guzman, supra; Claridad vs. Henares, 97 Phil. 973; Gonzales vs. Jimenez, L-19073, January 30, 1965, 13 SCRA
80; Boaga vs. Soler, 112 Phil. 651; J. M. Tuason & Co., vs. Magdangal, L-15539, January 30, 1962, 4 SCRA
84). Prescription may supervene in an implied trust (Bueno vs. Reyes, L-22587, April 28, 1969, 27 SCRA 1179;
Fabian vs. Fabian, L-20449, January 29, 1968; Jacinto vs. Jacinto, L-17957, May 31, 1962, 5 SCRA 371).

And whether the trust is resulting or constructive, its enforcement may be barred by laches (90 C.J.S. 887-889;
54 Am Jur. 449-450; Diaz vs. Gorricho and Aguado, supra; Compare with Mejia vs. Gampona, 100 Phil. 277).
[Emphases supplied.]

A present reading of the Quion24 and Sevilla25 cases, invoked by respondents, must be made in conjunction with
and guided accordingly by the principles established in the afore-quoted case. Thus, while respondents right to

75
inheritance was transferred or vested upon them at the time of Maximinos death, their enforcement of said
right by appropriate legal action may be barred by the prescription of the action.

Prescription of the action for reconveyance of the disputed properties based on implied trust is governed by
Article 1144 of the New Civil Code, which reads

ART. 1144. The following actions must be brought within ten years from the time the right of action accrues:
(1) Upon a written contract;
(2) Upon an obligation created by law;
(3) Upon a judgment.

Since an implied trust is an obligation created by law (specifically, in this case, by Article 1456 of the New Civil
Code), then respondents had 10 years within which to bring an action for reconveyance of their shares in
Maximinos properties. The next question now is when should the ten-year prescriptive period be reckoned
from. The general rule is that an action for reconveyance of real property based on implied trust prescribes ten
years from registration and/or issuance of the title to the property,26 not only because registration under the
Torrens system is a constructive notice of title,27 but also because by registering the disputed properties
exclusively in her name, Donata had already unequivocally repudiated any other claim to the same.

By virtue of the CFI Order, dated 15 January 1960, in Special Proceedings No. 928-R, Donata was able to register
and secure certificates of title over the disputed properties in her name on 27 June 1960. The respondents filed
with the RTC their Complaint for partition, annulment, and recovery of possession of the disputed real
properties, docketed as Civil Case No. CEB-5794, only on 3 March 1987, almost 27 years after the registration
of the said properties in the name of Donata. Therefore, respondents action for recovery of possession of the
disputed properties had clearly prescribed.

Moreover, even though respondents Complaint before the RTC in Civil Case No. CEB-5794 also prays for
partition of the disputed properties, it does not make their action to enforce their right to the said properties
imprescriptible. While as a general rule, the action for partition among co-owners does not prescribe so long as
the co-ownership is expressly or impliedly recognized, as provided for in Article 494, of the New Civil Code, it
bears to emphasize that Donata had never recognized respondents as co-owners or co-heirs, either expressly
or impliedly.28 Her assertion before the CFI in Special Proceedings No. 928-R that she was Maximinos sole heir
necessarily excludes recognition of some other co-owner or co-heir to the inherited properties; Consequently,
the rule on non-prescription of action for partition of property owned in common does not apply to the case at
bar.

On laches as bar to recovery

Other than prescription of action, respondents right to recover possession of the disputed properties, based on
implied trust, is also barred by laches. The defense of laches, which is a question of inequity in permitting a claim
to be enforced, applies independently of prescription, which is a question of time. Prescription is statutory;
laches is equitable.29

Laches is defined as the failure to assert a right for an unreasonable and unexplained length of time, warranting
a presumption that the party entitled to assert it has either abandoned or declined to assert it. This equitable
defense is based upon grounds of public policy, which requires the discouragement of stale claims for the peace
of society.30

This Court has already thoroughly discussed in its Decision the basis for barring respondents action for recovery
of the disputed properties because of laches. This Court pointed out therein31 that

76
In further support of their contention of fraud by Donata, the heirs of Maximino even emphasized that Donata
lived along the same street as some of the siblings of Maximino and, yet, she failed to inform them of the CFI
Order, dated [15 January 1960], in Special Proceedings No. 928-R, and the issuance in her name of new TCTs
covering the real properties which belonged to the estate of Maximino. This Court, however, appreciates such
information differently. It actually works against the heirs of Maximino. Since they only lived nearby, Maximinos
siblings had ample opportunity to inquire or discuss with Donata the status of the estate of their deceased
brother. Some of the real properties, which belonged to the estate of Maximino, were also located within the
same area as their residences in Cebu City, and Maximinos siblings could have regularly observed the actions
and behavior of Donata with regard to the said real properties. It is uncontested that from the time of
Maximinos death on 1 May 1952, Donata had possession of the real properties. She managed the real
properties and even collected rental fees on some of them until her own death on 1 November 1977. After
Donatas death, Erlinda took possession of the real properties, and continued to manage the same and collect
the rental fees thereon. Donata and, subsequently, Erlinda, were so obviously exercising rights of ownership
over the real properties, in exclusion of all others, which must have already put the heirs of Maximino on guard
if they truly believed that they still had rights thereto.

The heirs of Maximino knew he died on 1 May 1952. They even attended his wake. They did not offer any
explanation as to why they had waited 33 years from Maximinos death before one of them, Silverio, filed a
Petition for Letters of Administration for the intestate estate of Maximino on 21 January 1985. After learning
that the intestate estate of Maximino was already settled in Special Proceedings No. 928-R, they waited another
two years, before instituting, on 3 March 1987, Civil Case No. CEB-5794, the Complaint for partition, annulment
and recovery of the real property belonging to the estate of Maximino. x x x

Considering the circumstances in the afore-quoted paragraphs, as well as respondents conduct before this
Court, particularly the belated submission of evidence and argument of new issues, respondents are consistently
displaying a penchant for delayed action, without any proffered reason or justification for such delay.

It is well established that the law serves those who are vigilant and diligent and not those who sleep when the
law requires them to act. The law does not encourage laches, indifference, negligence or ignorance. On the
contrary, for a party to deserve the considerations of the courts, he must show that he is not guilty of any of the
aforesaid failings.32

On void judgment or order

Respondents presented only in their Reply and Supplemental Reply to the petitioners Opposition to their
Motion for Reconsideration the argument that the CFI Order, dated 15 January 1960, in Special Proceedings No.
928-R is void and, thus, it cannot have any legal effect. Consequently, the registration of the disputed properties
in the name of Donata pursuant to such Order was likewise void.

This Court is unconvinced.

In the jurisprudence referred to by the respondents,33 an order or judgment is considered void when rendered
by the court without or in excess of its jurisdiction or in violation of a mandatory duty, circumstances which are
not present in the case at bar.

Distinction must be made between a void judgment and a voidable one, thus

"* * * A voidable judgment is one which, though not a mere nullity, is liable to be made void when a person who
has a right to proceed in the matter takes the proper steps to have its invalidity declared. It always contains
some defect which may become fatal. It carries within it the means of its own overthrow. But unless and until

77
it is duly annulled, it is attended with all the ordinary consequences of a legal judgment. The party against whom
it is given may escape its effect as a bar or an obligation, but only by a proper application to have it vacated or
reversed. Until that is done, it will be efficacious as a claim, an estoppel, or a source of title. If no proceedings
are ever taken against it, it will continue throughout its life to all intents a valid sentence. If emanating from a
court of general jurisdiction, it will be sustained by the ordinary presumptions of regularity, and it is not open
to impeachment in any collateral action. * * *"

But it is otherwise when the judgment is void. "A void judgment is in legal effect no judgment. By it no rights are
divested. From it no rights can be obtained. Being worthless in itself, all proceedings founded upon it are equally
worthless. It neither binds nor bars any one. All acts performed under it and all claims flowing out of it are void.
The parties attempting to enforce it may be responsible as trespassers. The purchaser at a sale by virtue of its
authority finds himself without title and without redress." (Freeman on Judgments, sec. 117, citing Campbell vs.
McCahan, 41 Ill., 45; Roberts vs. Stowers, 7 Bush, 295, Huls vs. Buntin, 47 Ill., 396; Sherrell vs. Goodrum, 3
Humph., 418; Andrews vs. State, 2 Sneed, 549; Hollingsworth vs. Bagley, 35 Tex., 345; Morton vs. Root, 2 Dill.,
312; Commercial Bank of Manchester vs. Martin, 9 Smedes & M., 613; Hargis vs. Morse, 7 Kan., 259. See also
Cornell vs. Barnes, 7 Hill, 35; Dawson and Another vs. Wells, 3 Ind., 399; Meyer vs. Mintonye, 106 Ill., 414; Olson
vs. Nunnally, 47 Kan., 391; White vs. Foote L. & M. Co., 29 W. Va., 385.)

It is not always easy to draw the line of demarcation between a void judgment and a voidable one, but all
authorities agree that jurisdiction over the subject-matter is essential to the validity of a judgment and that
want of such jurisdiction renders it void and a mere nullity. In the eye of the law it is non-existent. (Fisher vs.
Harnden, 1 Paine, 55; Towns vs. Springer, 9 Ga., 130; Mobley vs. Mobley, 9 Ga., 247; Beverly and McBride vs.
Burke, 9 Ga., 440; Central Bank of Georgia vs. Gibson, 11 Ga., 453; Johnson vs. Johnson, 30 Ill., 215; St. Louis and
Sandoval Coal and Mining Co. vs. Sandoval Coal and Mining Co., 111 Ill., 32; Swiggart vs. Harber, 4 Scam., 364;
Miller vs. Snyder, 6 Ind., 1; Seely vs. Reid, 3 Greene [Iowa], 374.)34

The fraud and misrepresentation fostered by Donata on the CFI in Special Proceedings No. 928-R did not deprive
the trial court of jurisdiction over the subject-matter of the case, namely, the intestate estate of Maximino.
Donatas fraud and misrepresentation may have rendered the CFI Order, dated 15 January 1960, voidable, but
not void on its face. Hence, the said Order, which already became final and executory, can only be set aside by
direct action to annul and enjoin its enforcement.35 It cannot be the subject of a collateral attack as is being
done in this case. Note that respondents Complaint before the RTC in Civil Case No. CEB-5794 was one for
partition, annulment, and recovery of possession of the disputed properties. The annulment sought in the
Complaint was not that of the CFI Order, dated 15 January 1960, but of the certificates of title over the
properties issued in Donatas name. So until and unless respondents bring a direct action to nullify the CFI Order,
dated 15 January 1960, in Special Proceedings No. 928-R, and attain a favorable judgment therein, the assailed
Order remains valid and binding.
Nonetheless, this Court also points out that an action to annul an order or judgment based on fraud must be
brought within four years from the discovery of the fraud.36 If it is conceded that the respondents came to
know of Donatas fraudulent acts only in 1985, during the course of the RTC proceedings which they instituted
for the settlement of Maximinos estate, then their right to file an action to annul the CFI Order, dated 15 January
1960, in Special Proceedings No. 928-R (earlier instituted by Donata for the settlement of Maximinos estate),
has likewise prescribed by present time.
In view of the foregoing, the Motion for Reconsideration is DENIED.
SO ORDERED.
MINITA V. CHICO-NAZARIO Associate Justice
78
A.M. No. P-01-1448 June 25, 2013 (Formerly OCA IPI No. 99-664-P)
RODOLFO C. SABIDONG, Complainant,
vs.
NICOLASITO S. SOLAS (Clerk of Court IV), Respondent.

DECISION

VILLARAMA, JR., J.:

The present administrative case stemmed from a sworn letter-complaint1 dated May 29, 1999 filed before this
Court by Rodolfo C. Sabidong (complainant) charging respondent Nicolasito S. Solas, Clerk of Court IV, Municipal
Trial Court in Cities (MTCC), Iloilo City with grave and serious misconduct, dishonesty, oppression and abuse of
authority.

The Facts

Trinidad Sabidong, complainants mother, is one of the longtime occupants of a parcel of land, designated as
Lot 11 (Lot 1280-D-4-11 of consolidation-subdivision plan [LRC] Pcs-483) originally registered in the name of C.
N. Hodges and situated at Barangay San Vicente, Jaro, Iloilo City.2 The Sabidongs are in possession of one-half
portion of Lot 11 of the said Estate (Hodges Estate), as the other half-portion was occupied by Priscila Saplagio.
Lot 11 was the subject of an ejectment suit filed by the Hodges Estate, docketed as Civil Case No. 14706 of the
MTCC Iloilo City, Branch 4 ("Rosita R. Natividad in her capacity as Administratrix of C.N. Hodges Estate, plaintiff
vs. Priscila Saplagio, defendant"). On May 31, 1983, a decision was rendered in said case ordering the defendant
to immediately vacate the portion of Lot 11 leased to her and to pay the plaintiff rentals due, attorneys fees,
expenses and costs.3 At the time, respondent was the Clerk of Court III of MTCC, Branch 3, Iloilo City.

Sometime in October 1984, respondent submitted an Offer to Purchase on installment Lots 11 and 12. In a letter
dated January 7, 1986, the Administratrix of the Hodges Estate rejected respondents offer in view of an
application to purchase already filed by the actual occupant of Lot 12, "in line with the policy of the Probate
Court to give priority to the actual occupants in awarding approval of Offers". While the check for initial down
payment tendered by respondent was returned to him, he was nevertheless informed that he may file an offer
to purchase Lot 11 and that if he could put up a sufficient down payment, the Estate could immediately endorse
it for approval of the Probate Court so that the property can be awarded to him "should the occupant fail to
avail of the priority given to them."4

The following day, January 8, 1986, respondent again submitted an Offer to Purchase Lot 11 with an area of 234
square meters for the amount of P35,100. Under the Order dated November 18, 1986 issued by the probate
court (Regional Trial Court of Iloilo, Branch 27) in Special Proceedings No. 1672 ("Testate Estate of the Late
Charles Newton Hodges, Rosita R. Natividad, Administratrix"), respondents Offer to Purchase Lot 11 was
approved upon the courts observation that the occupants of the subject lots "have not manifested their desire
to purchase the lots they are occupying up to this date and considering time restraint and considering further,
that the sales in favor of the x x x offerors are most beneficial to the estate x x x". On January 21, 1987, the
probate court issued another Order granting respondents motion for issuance of a writ of possession in his
favor. The writ of possession over Lot 11 was eventually issued on June 27, 1989.5

On November 21, 1994, a Deed of Sale With Mortgage covering Lot 11 was executed between respondent and
the Hodges Estate represented by its Administratrix, Mrs. Ruth R. Diocares. Lot 11 was thereby conveyed to
respondent on installment for the total purchase price of P50,000.

79
Consequently, Transfer Certificate of Title (TCT) No. T-11836 in the name of C. N. Hodges was cancelled and a
new certificate of title, TCT No. T-107519 in the name of respondent was issued on December 5, 1994. Lot 11
was later subdivided into two lots, Lots 11-A and 11-B for which the corresponding titles (TCT Nos. T-116467
and T-116468), also in the name of respondent, were issued on February 28, 1997.6

On motion of Ernesto Pe Benito, Administrator of the Hodges Estate, a writ of demolition was issued on March
3, 1998 by the probate court in favor of respondent and against all adverse occupants of Lot 11.7

On June 14, 1999, this Court received the sworn letter-complaint asserting that as court employee respondent
cannot buy property in litigation (consequently he is not a buyer in good faith), commit deception, dishonesty,
oppression and grave abuse of authority. Complainant specifically alleged the following:

3. Complainant and his siblings, are possessors and occupants of a parcel of land situated at Brgy. San
Vicente, Jaro, Iloilo City, then identified as Lot No. 1280-D-4-11, later consolidated and subdivided and
became known as Lot 11, then registered and titled in the name of Charles Newton Hodges. The
Sabidong family started occupying this lot in 1948 and paid their monthly rentals until sometime in 1979
when the Estate of Hodges stopped accepting rentals. x x x

4. Upon knowing sometime in 1987 that the property over which their house is standing, was being
offered for sale by the Estate, the mother of complainant, TRINIDAD CLAVERIO SABIDONG (now
deceased), took interest in buying said property, Lot 11;

5. TRINIDAD CLAVERIO SABIDONG, was then an ordinary housekeeper and a laundrywoman, who never
received any formal education, and did not even know how to read and write. When Trinidad Claverio
Sabidong, together with her children and the complainant in this case, tried to negotiate with the Estate
for the sale of the subject property, they were informed that all papers for transaction must pass through
the respondent in this case, Nicolasito Solas. This is unusual, so they made inquiries and they learned
that, Nicolasito Solas was then the Clerk of Court 111, Branch 3, Municipal Trial Court in Cities, Iloilo City
and presently, the City Sheriff of Iloilo City;

6. The respondent Nicolasito Solas, then Clerk of Court III, MTCC, Iloilo City, has knowledge, by reason of
his position that in 1983 Hodges Estate was ejecting occupants of its land. x x x Taking advantage of this
inside information that the land subject of an ejectment case in the Municipal Trial Court in Cities, Iloilo
City, whom respondent is a Clerk of Court III, the respondent surreptitiously offered to buy the said lot
in litigation. x x x

7. Complainant nor any member of his family did not know that as early as 1984, the respondent had
offered to purchase the subject lot from the estate x x x. After receiving the notice of denial of his offer
to purchase, dated January 7, 1986, respondent made a second offer to purchase the subject property
the following day, January 8, 1986, knowing fully well that the subject property was being occupied. x x
x

8. Because of this denial, respondent met with the family of the complainant and negotiated for the sale
of the property and transfer of the title in favor of the latter. Respondent made the complainant and his
family believed that he is the representative of the estate and that he needed a downpayment right
away. All the while, the Sabidong family (who were carpenters, laundrywomen, a janitor, persons who
belong to the underprivileged) relied on the representations of the respondent that he was authorized
to facilitate the sale, with more reason that respondent represented himself as the City Sheriff;

80
9. That between 1992-1993, a sister of the complainant who was fortunate to have worked abroad, sent
the amount of Ten Thousand (P10,000.00) Pesos to complainants mother, to be given to respondent
Nicolasito Solas. x x x After receiving the money, respondent assured the Sabidong family that they will
not be ejected from the lot, he being the City Sheriff will take care of everything, and taking advantage
of the illiteracy of Trinidad Claverio Sabidong, he did not issue any receipt;

10. True enough, they were not ejected instead it took the respondent some time to see them again and
demanded additional payment. In the meanwhile, the complainant waited for the papers of the
supposed sale and transfer of title, which respondent had promised after receiving the downpayment
of P10,000.00;

11. That sometime again in 1995, respondent again received from the mother of complainant the
amount of Two Thousand (P2,000.00) Pesos, allegedly for the expenses of the documentation of sale
and transfer of title, and again respondent promised that the Sabidong family will not be ejected;

12. To the prejudice and surprise of the complainant and his family, respondent was able to secure an
order for the approval of his offer to purchase x x x in Special Proceedings No. 1672 x x x;

13. Worse, respondent moved for the issuance of a Writ of Possession in his favor, which the probate
court acted favorably x x x. A writ of possession was issued on June 27, 1989 x x x;

14. x x x respondent took advantage of the trust and confidence which the Sabidong family has shown,
considering that respondent was an officer of the court and a City Sheriff at that. The complainant and
his family thought that respondent, being a City Sheriff, could help them in the transfer of the title in
their favor. Never had they ever imagined that while respondent had been receiving from them hard-
earned monies purportedly for the sale of the subject property, respondent was also exercising acts of
ownership adverse to the interest of the complainant and his family;

15. Being an officer of the court and supposed to be an embodiment of fairness and justice, respondent
acted with malice, with grave abuse of confidence and deceit when he represented that he can facilitate
the sale and titling of the subject property in favor of the complainant and his family;

16. That when several thousands of pesos were given to the respondent as payment for the same and
incidental expenses relative thereto, he was able to cause the transfer of the title in his favor. x x x;

17. After the death of Trinidad Claverio Sabidong x x x the respondent received from the complainant
the amount of Five Thousand (P5,000.00) Pesos x x x When a receipt was demanded, respondent refused
to issue one, and instead promised and assured the complainant that they will not be ejected;

xxxx

19. The complainant again, through his sister-in-law, Socorro Sabidong, delivered and gave to the
respondent the amount of Three Thousand (P3,000.00) Pesos as expenses for the subdivision of the
subject lot. The respondent facilitated the subdivision and after the same was approved, the
complainant did not know that two (2) titles were issued in the name of the respondent. x x x;

20. Meanwhile, respondent prepared a Contract to Sell, for the complainant and his neighbor Norberto
Saplagio to affix their signatures, pursuant to their previous agreement for the buyers to avail of a
housing loan with the Home Development Mutual Fund (PAG-IBIG). Complainant attended the seminar
of the HDMF for seven (7) times, in his desire to consummate the sale. However, when the complainant
affixed his signature in the contract, he was surprised that the owner of the subject property was the
81
 respondent. When complainant raised a question about this, respondent assured complainant that
everything was alright and that sooner complainant will be the owner of the property. Complainant and
his family, all these years, had believed and continued to believe that the owner was the estate of Hodges
and that respondent was only the representative of the estate;

21. The Contract to Sell, appeared to have been notarized on June 3, 1996, however, no copy thereof
was given to the complainant by the respondent. Respondent then, took the papers and documents
required by the HDMF to be completed, from the complainant allegedly for the purpose of personally
filing the same with the HDMF. Complainant freely and voluntarily delivered all pertinent documents to
the respondent, thinking that respondent was helping in the fast and easy release of the loan. While the
said documents were in the possession of the respondent, he never made any transaction with the
HDMF, worse, when complainant tried to secure a copy of the Contract to Sell, the copy given was not
signed by the Notary Public, x x x;

22. The complainant [was] shocked to learn that respondent had canceled the sale and that respondent
refused to return the documents required by the HDMF. Respondent claimed that as Sheriff, he can
cause the demolition of the house of the complainant and of his family. Respondent threatened the
complainant and he is capable of pursuing a demolition order and serve the same with the assistance of
the military. x x x;

23. After learning of the demolition order, complainant attempted to settle the matter with the
respondent, however, the same proved futile as respondent boasted that the property would now cost
at Four Thousand Five Hundred (P4,500.00) Pesos;

24. The threats of demolition is imminent. Clearly, complainant and his family were duped by the
respondent and are helpless victims of an officer of the court who took advantage of their good faith
and trust. Complainant later was informed that the subject property was awarded to the respondent as
his Sheriffs Fees, considering that respondent executed the decisions in ejectment cases filed by the
Hodges estate against the adverse occupants of its vast properties;

25. A civil case for the Annulment of Title of the respondent over the subject property is pending before
the Regional Trial Court of Iloilo, Branch 37 and a criminal complaint for Estafa is also pending preliminary
investigation before the Office of the City Prosecutor of Iloilo City, known as I.S. No. 1559-99, both filed
[by] the complainant against the respondent.8

Acting on the complaint, Court Administrator Alfredo L. Benipayo issued a 1st Indorsement9 dated July 8, 1999,
requiring respondent to file his comment on the Complaint dated May 29, 1999. On October 21, 1999,
respondent submitted his Comment.10

In a Resolution11 dated July 19, 1999, Public Prosecutor Constantino C. Tubilleja dismissed the Estafa charge
against respondent for insufficiency of evidence.

On November 29, 2000, Court Administrator Benipayo issued an Evaluation and Recommendation12 finding
respondent guilty of violating Article 149113 of the Civil Code. Said rule prohibits the purchase by certain court
officers of property and rights in litigation within their jurisdiction. Court Administrator Benipayo recommended
that:

82
 1. this administrative complaint be treated as an administrative matter;

2. respondent Nicolasito S. Solas, Clerk of Court IV, OCC, MTCC, Iloilo City be SUSPENDED for six (6)
months, with warning that a repetition of the same offense in the future will be dealt with more severely;

3. inasmuch as there are factual issues regarding the delivery of substantial amounts which complainant
alleged and which defendant denied, this issue should be investigated and the Executive Judge of the
Regional Trial Court of Iloilo City should be designated to hear the evidence and to make a report and
recommendation within sixty (60) days from receipt.14

In a Resolution15 dated January 22, 2001, this Court adopted the recommendation of the Court Administrator
to treat the present administrative action as a regular administrative matter and to designate the Executive
Judge of the RTC of Iloilo City to hear the evidence of the parties.

The Court, however, noted without action the Court Administrators recommendation to suspend respondent
for six months.

On March 13, 2001, Acting Court Administrator Zenaida N. Elepao forwarded the records of this case to
Executive Judge Tito G. Gustilo of the Iloilo City RTC.16 In a Resolution17 dated July 18, 2001, the Court referred
this case to the Executive Judge of the RTC of Iloilo City for investigation, report and recommendation within 60
days from notice. By Order18 dated August 30, 2001, Executive Judge Gustilo set the case for reception of
evidence.

On March 19, 2004, the RTC of Iloilo, Branch 37, dismissed the case for annulment of title, damages and
injunction against respondent for lack of merit.19

In a Resolution20 dated June 15, 2005, the Court resolved to reassign the instant administrative case to Executive
Judge Rene S. Hortillo for investigation, report and recommendation within 60 days from notice. In a
Letter21dated September 15, 2005, Executive Judge Hortillo informed the Court that per the records, the parties
have presented their testimonial and documentary evidence before retired Executive Judge Tito G. Gustilo.

On September 12, 2005, Executive Judge Hortillo required the parties to file their respective memoranda within
60 days from notice, upon submission of which the case shall be deemed submitted for resolution.22

In his Memorandum,23 respondent maintained that his purchase of the subject land is not covered by the
prohibition in paragraph 5, Article 1491 of the Civil Code. He pointed out that he bought Lot 11-A a decade after
the MTCC of Iloilo, Branch 3, had ordered the ejectment of Priscila Saplagio and Trinidad Sabidong from the
subject lot. He insisted that public trust was observed when complainant was accorded his right of first refusal
in the purchase of Lot 11-A, albeit the latter failed to avail said right. Asserting that he is a buyer in good faith
and for value, respondent cited the dismissal of the cases for Estafa and annulment of title and damages which
complainant filed against him.

On September 10, 2007, respondent compulsorily retired from service. Prior to this, he wrote then Senior
Deputy Court Administrator Zenaida N. Elepao, requesting for the release of his retirement benefits pending
resolution of the administrative cases against him.24 In a Memorandum25 dated September 24, 2007, Senior
Deputy Court Administrator Elepao made the following recommendations:

83
 a) The request of Nicolasito S. Solas, former Clerk of Court, MTCC, Iloilo City for partial release of his
retirement benefits be GRANTED; and

b) Atty. Lilian Barribal Co, Chief, Financial Management Office, Office of the Court Administrator be
DIRECTED to (1) WITHHOLD the amount of Two Hundred Thousand Pesos (P200,000.00) from the
retirement benefits of Nicolasito S. Solas to answer for any administrative liability that the Court may
find against him in A.M. No. P-01-1448 (Formerly Administrative Matter OCA IPI No. 99-664-P); OCA IPI
No. 99-659-P; OCA IPI No. 99-670-P; and OCA IPI No. 99-753-P; and (2) RELEASE the balance of his
retirement benefits.26

Eventually, the case was assigned to Judge Roger B. Patricio, the new Executive Judge of the Iloilo City RTC for
investigation, report and recommendation.

On June 2, 2008, Judge Patricio submitted his final Report and Recommendation27 finding respondent liable for
grave misconduct and dishonesty under A.M. No. 03-06-13-SC or the Code of Conduct for Court Personnel.
Based on the evidence presented, Judge Patricio concluded that respondent misappropriated the money which
he received for the filing of complainants loan application. Such money could not have been used for the
partition of Lot No. 1280-D-4-11 since the same was already subdivided into Lots 11-A and 11-B when
respondent presented the Contract to Sell to complainant. And despite respondents promise to keep
complainant and his family in peaceful possession of the subject property, respondent caused the issuance of a
writ of demolition against them. Thus, Judge Patricio recommended the forfeiture of respondents salary for six
months to be deducted from his retirement benefits.

In a Resolution28 dated September 29, 2008, the Court noted Judge Patricios Investigation Report and referred
the same to the Office of the Court Administrator (OCA) for evaluation, report and recommendation.

Findings and Recommendation of the OCA

In a Memorandum29 dated January 16, 2009, then Court Administrator Jose P. Perez found respondent liable
for serious and grave misconduct and dishonesty and recommended the forfeiture of respondents salary for
six months, which shall be deducted from his retirement benefits.

The Court Administrator held that by his unilateral acts of extinguishing the contract to sell and forfeiting the
amounts he received from complainant and Saplagio without due notice, respondent failed to act with justice
and equity. He found respondents denial to be anchored merely on the fact that he had not issued receipts
which was belied by his admission that he had asked money for the expenses of partitioning Lot 11 from
complainant and Saplagio. Since their PAG-IBIG loan applications did not materialize, complainant should have
returned the amounts given to him by complainant and Saplagio.

On February 11, 2009, the Court issued a Resolution30 requiring the parties to manifest whether they are willing
to submit the case for decision on the basis of the pleadings and records already filed with the Court. However,
the copy of the Resolution dated February 11, 2009 which was sent to complainant was returned unserved with
the postal carriers notation "RTS-Deceased." Meanwhile, in a Compliance31 dated August 24, 2009, respondent
expressed his willingness to submit the case for decision and prayed for an early resolution of the case.

Our Ruling

Article 1491, paragraph 5 of the Civil Code prohibits court officers such as clerks of court from acquiring property
involved in litigation within the jurisdiction or territory of their courts. Said provision reads:

84
Article 1491. The following persons cannot acquire by purchase, even at a public or judicial auction, either in
person or through the mediation of another:

xxxx

(5) Justices, judges, prosecuting attorneys, clerks of superior and inferior courts, and other officers and
employees connected with the administration of justice, the property and rights in litigation or levied upon an
execution before the court within whose jurisdiction or territory they exercise their respective functions; this
prohibition includes the act of acquiring by assignment and shall apply to lawyers, with respect to the property
and rights which may be the object of any litigation in which they may take part by virtue of their profession.

x x x x (Emphasis supplied.)

The rationale advanced for the prohibition is that public policy disallows the transactions in view of the fiduciary
relationship involved, i.e., the relation of trust and confidence and the peculiar control exercised by these
persons.32 "In so providing, the Code tends to prevent fraud, or more precisely, tends not to give occasion for
fraud, which is what can and must be done."33

For the prohibition to apply, the sale or assignment of the property must take place during the pendency of the
litigation involving the property.34 Where the property is acquired after the termination of the case, no violation
of paragraph 5, Article 1491 of the Civil Code attaches.35

In the case at bar, when respondent purchased Lot 11-A on November 21, 1994, the Decision in Civil Case No.
14706 which was promulgated on May 31, 1983 had long become final. Be that as it may, it can not be said that
the property is no longer "in litigation" at that time considering that it was part of the Hodges Estate then under
settlement proceedings (Sp. Proc. No. 1672).

A thing is said to be in litigation not only if there is some contest or litigation over it in court, but also from the
moment that it becomes subject to the judicial action of the judge.36 A property forming part of the estate under
judicial settlement continues to be subject of litigation until the probate court issues an order declaring the
estate proceedings closed and terminated. The rule is that as long as the order for the distribution of the estate
has not been complied with, the probate proceedings cannot be deemed closed and terminated.37 The probate
court loses jurisdiction of an estate under administration only after the payment of all the debts and the
remaining estate delivered to the heirs entitled to receive the same.38 Since there is no evidence to show that
Sp. Proc. No. 1672 in the RTC of Iloilo, Branch 27, had already been closed and terminated at the time of the
execution of the Deed of Sale With Mortgage dated November 21, 1994, Lot 11 is still deemed to be "in
litigation" subject to the operation of Article 1491 (5) of the Civil Code.

This notwithstanding, we hold that the sale of Lot 11 in favor of respondent did not violate the rule on
disqualification to purchase property because Sp. Proc. No. 1672 was then pending before another court (RTC)
and not MTCC where he was Clerk of Court.

On the charges against the respondent, we find him liable for dishonesty and grave misconduct.

Misconduct is a transgression of some established and definite rule of action, more particularly, unlawful
behavior as well as gross negligence by a public officer. To warrant dismissal from service, the misconduct must
be grave, serious, important, weighty, momentous and not trifling. The misconduct must imply wrongful
intention and not a mere error of judgment. The misconduct must also have a direct relation to and be
connected with the performance of the public officers official duties amounting either to maladministration or
willful, intentional neglect, or failure to discharge the duties of the office.39

85
Dishonesty is the "disposition to lie, cheat, deceive, defraud or betray; untrustworthiness; lack of integrity; lack
of honesty, probity, or integrity in principle; and lack of fairness and straightforwardness."40

In this case, respondent deceived complainants family who were led to believe that he is the legal
representative of the Hodges Estate, or at least possessed of such power to intercede for overstaying occupants
of the estates properties like complainant. Boasting of his position as a court officer, a City Sheriff at that,
complainants family completely relied on his repeated assurance that they will not be ejected from the
premises. Upon learning that the lot they were occupying was for sale and that they had to negotiate for it
through respondent, complainants family readily gave the amounts he demanded and, along with Saplagio,
complied with the requirements for a loan application with PAG-IBIG. All the while and unknown to
complainants family, respondent was actually working to acquire Lot 11 for himself.

Thus, while respondent was negotiating with the Hodges Estate for the sale of the property to him, he collected
as down payment P5,000 from complainants family in July 1986. Four months later, on November 18, 1986, the
probate court approved respondents offer to purchase Lot 11. The latter received further down payment from
complainant in the amount of P10,000 between 1992 and 1993, or before the Deed of Sale with
Mortgage41dated November 21, 1994 could be executed in respondents favor.

Thereafter, respondent demanded P3,000 from complainant supposedly for the subdivision of Lot 11 between
the latter and the Saplagios. Yet, it was not until respondent obtained title over said lot that the same was
subdivided into Lots 11-A and 11-B. The records42 of the case show that the Subdivision Plan dated April 25,
1996, duly approved by the Land Management Services (DENR) subdividing Lot 11 into sublots 11-A and 11-B,
was inscribed on February 28, 1997 two years after TCT No. T-107519 covering Lot 11 was issued in
respondents name on December 5, 1994.

Finally, in 1995, respondent received the amount of P2,000 to defray the expenses for documentation and
transfer of title in complainants name. In the latter instance, while it may be argued that respondent already
had the capacity to sell the subject property, the sum of all the circumstances belie an honest intention on his
part to convey Lot 11-A to complainant. We note the inscription in TCT No. T-1183643 in the name of C.N. Hodges
that respondent executed a Request dated February 19, 1997 "for the issuance of separate titles in the name of
the registered owner."44 Soon after, TCT No. T-11646745 covering Lot 11-A and TCT No. T-11646846 covering Lot
11-B were issued in the name of respondent on February 28, 1997 only eight months after he executed the
Contract to Sell47 in favor of complainant on June 3, 1996.

Respondents bare denials were correctly disregarded by the Court Administrator in the light of his own
admission that he indeed asked money from both complainant and Saplagio. The evidence on record clearly
established that by misrepresenting himself as the estates representative and as a court officer having the
power to protect complainants family from eviction, respondent was able to collect sums totaling P20,000 from
complainants family. Even after the latter realized they were duped since respondent was already the owner
of Lot 11, they still offered to buy the property from him. Respondent, however, changed his mind and no longer
wanted to sell the property after nothing happened to the loan applications of complainant and Saplagio. This
subsequent unilateral cancellation by respondent of the contract to sell with complainant may have been an
afterthought, and plainly unjustified, based merely on his own assumption that complainant could not make full
payment. But it did not negate the deception and fraudulent acts perpetrated against complainants family who
were forced into submission by the constant threat of eviction. Such acts constitute grave misconduct for which
respondent should be held answerable.

In Re: Complaint Filed by Paz De Vera Lazaro Against Edna Magallanes, Court Stenographer III, RTC Br. 28 and
Bonifacio G. Magallanes, Process Server, RTC Br. 30, Bayombong, Nueva Vizcaya,48 the Court stressed that to
preserve decency within the judiciary, court personnel must comply with just contractual obligations, act fairly
86
and adhere to high ethical standards. In that case, we said that court employees are expected to be paragons
of uprightness, fairness and honesty not only in their official conduct but also in their personal dealings,
including business and commercial transactions to avoid becoming the courts albatross of infamy.49

More importantly, Section 4(c) of Republic Act No. 671350 or the Code of Conduct and Ethical Standards for
Public Officials and Employees mandates that public officials and employees shall remain true to the people at
all times. They must act with justness and sincerity and shall not discriminate against anyone, especially the
poor and the underprivileged. They shall at all times respect the rights of others, and shall refrain from doing
acts contrary to law, good morals, good customs, public policy, public order, public safety and public interest.

Under Section 52,51 Rule IV of the Uniform Rules on Administrative Cases in the Civil Service, dishonesty and
grave misconduct are classified as grave offenses with the corresponding penalty of dismissal for the first
offense. Section 58(a) states that the penalty of dismissal shall carry with it the cancellation of eligibility,
forfeiture of retirement benefits, and the perpetual disqualification for reemployment in the government
service.

Section 53 further provides that mitigating circumstances attendant to the commission of the offense should
be considered in the determination of the penalty to be imposed on the erring government employee. However,
no such mitigating circumstance had been shown. On the contrary, respondent had been previously held
administratively liable for irregularities in the performance of his duties as Clerk of Court. In A.M. No. P-01-
1484,52 this Court imposed on respondent a fine of P5,000 for acting imprudently in notarizing documents and
administering oath on matters alien to his official duties. And in A.M. Nos. P-08-2567 (formerly OCA IPI No. 99-
670-P) and P-08-2568 (formerly OCA IPI No. 99-753-P),53 respondent was found liable for simple misconduct
and ordered to pay a fine equivalent to his three (3) months salary to be deducted from his retirement benefits.

Since respondent had compulsorily retired from service on September 10, 2007, for this additional
administrative case he should be fined in an amount equivalent to his salary for six months which shall likewise
be deducted from his retirement benefits.

WHEREFORE, the Court finds respondent Nicolasito S. Solas, retired Clerk of Court IV, Municipal Trial Court in
Cities, Iloilo City, LIABLE FOR GRAVE MISCONDUCT AND DISHONESTY. Respondent is FINED in an amount
equivalent to his salary for six (6) months to be deducted from his retirement benefits.

SO ORDERED.

MARTIN S. VILLARAMA, JR.

Associate Justice

87
G.R. No. 156407 January 15, 2014
THELMA M. ARANAS, Petitioner,
vs.
TERESITA V. MERCADO, FELIMON V. MERCADO, CARMENCITA M. SUTHERLAND, RICHARD V. MERCADO, MA.
TERESITA M. ANDERSON, AND FRANKLIN L. MERCADO, Respondents.

DECISION

BERSAMIN, J.:

The probate court is authorized to determine the issue of ownership of properties for purposes of their inclusion
or exclusion from the inventory to be submitted by the administrator, but its determination shall only be
provisional unless the interested parties are all heirs of the decedent, or the question is one of collation or
advancement, or the parties consent to the assumption of jurisdiction by the probate court and the rights of
third parties are not impaired. Its jurisdiction extends to matters incidental or collateral to the settlement and
distribution of the estate, such as the determination of the status of each heir and whether property included
in the inventory is the conjugal or exclusive property of the deceased spouse.

Antecedents

Emigdio S. Mercado (Emigdio) died intestate on January 12, 1991, survived by his second wife, Teresita V.
Mercado (Teresita), and their five children, namely: Allan V. Mercado, Felimon V. Mercado, Carmencita M.
Sutherland, Richard V. Mercado, and Maria Teresita M. Anderson; and his two children by his first marriage,
namely: respondent Franklin L. Mercado and petitioner Thelma M. Aranas (Thelma).

Emigdio inherited and acquired real properties during his lifetime. He owned corporate shares in Mervir Realty
Corporation (Mervir Realty) and Cebu Emerson Transportation Corporation (Cebu Emerson). He assigned his
real properties in exchange for corporate stocks of Mervir Realty, and sold his real property in Badian, Cebu (Lot
3353 covered by Transfer Certificate of Title No. 3252) to Mervir Realty.

On June 3, 1991, Thelma filed in the Regional Trial Court (RTC) in Cebu City a petition for the appointment of
Teresita as the administrator of Emigdios estate (Special Proceedings No. 3094CEB).1 The RTC granted the
petition considering that there was no opposition. The letters of administration in favor of Teresita were issued
on September 7, 1992.

As the administrator, Teresita submitted an inventory of the estate of Emigdio on December 14, 1992 for the
consideration and approval by the RTC. She indicated in the inventory that at the time of his death, Emigdio had
left no real properties but only personal properties worth P6,675,435.25 in all, consisting of cash of
P32,141.20; furniture and fixtures worth P20,000.00; pieces of jewelry valued at P15,000.00; 44,806 shares of
stock of Mervir Realty worth P6,585,585.80; and 30 shares of stock of Cebu Emerson worth P22,708.25.2

Claiming that Emigdio had owned other properties that were excluded from the inventory, Thelma moved that
the RTC direct Teresita to amend the inventory, and to be examined regarding it. The RTC granted Thelmas
motion through the order of January 8, 1993.

On January 21, 1993, Teresita filed a compliance with the order of January 8, 1993,3 supporting her inventory
with copies of three certificates of stocks covering the 44,806 Mervir Realty shares of stock;4 the deed of
assignment executed by Emigdio on January 10, 1991 involving real properties with the market value of
P4,440,651.10 in exchange for 44,407 Mervir Realty shares of stock with total par value of P4,440,700.00;5 and
the certificate of stock issued on January 30, 1979 for 300 shares of stock of Cebu Emerson worth P30,000.00.6

88
On January 26, 1993, Thelma again moved to require Teresita to be examined under oath on the inventory, and
that she (Thelma) be allowed 30 days within which to file a formal opposition to or comment on the inventory
and the supporting documents Teresita had submitted.

On February 4, 1993, the RTC issued an order expressing the need for the parties to present evidence and for
Teresita to be examined to enable the court to resolve the motion for approval of the inventory.7cralawred

On April 19, 1993, Thelma opposed the approval of the inventory, and asked leave of court to examine Teresita
on the inventory.

With the parties agreeing to submit themselves to the jurisdiction of the court on the issue of what properties
should be included in or excluded from the inventory, the RTC set dates for the hearing on that
issue.8cralawlawlibrary

Ruling of the RTC

After a series of hearings that ran for almost eight years, the RTC issued on March 14, 2001 an order finding and
holding that the inventory submitted by Teresita had excluded properties that should be included, and
accordingly ruled:

WHEREFORE, in view of all the foregoing premises and considerations, the Court hereby denies the
administratrixs motion for approval of inventory. The Court hereby orders the said administratrix to redo the
inventory of properties which are supposed to constitute as the estate of the late Emigdio S. Mercado by
including therein the properties mentioned in the last five immediately preceding paragraphs hereof and then
submit the revised inventory within sixty (60) days from notice of this order.

The Court also directs the said administratrix to render an account of her administration of the estate of the late
Emigdio S. Mercado which had come to her possession. She must render such accounting within sixty (60) days
from notice hereof.

SO ORDERED.9

On March 29, 2001, Teresita, joined by other heirs of Emigdio, timely sought the reconsideration of the order
of March 14, 2001 on the ground that one of the real properties affected, Lot No. 3353 located in Badian, Cebu,
had already been sold to Mervir Realty, and that the parcels of land covered by the deed of assignment had
already come into the possession of and registered in the name of Mervir Realty.10 Thelma opposed the motion.

On May 18, 2001, the RTC denied the motion for reconsideration,11 stating that there was no cogent reason for
the reconsideration, and that the movants agreement as heirs to submit to the RTC the issue of what properties
should be included or excluded from the inventory already estopped them from questioning its jurisdiction to
pass upon the issue.

Decision of the CA

Alleging that the RTC thereby acted with grave abuse of discretion in refusing to approve the inventory, and in
ordering her as administrator to include real properties that had been transferred to Mervir Realty, Teresita,
joined by her four children and her stepson Franklin, assailed the adverse orders of the RTC promulgated on
March 14, 2001 and May 18, 2001 by petition for certiorari, stating:

89
I

THE HONORABLE RESPONDENT JUDGE HAS COMMITTED GRAVE ABUSE OF JURISDICTION (sic) AMOUNTING TO
LACK OR EXCESS OF JURISDICTION IN HOLDING THAT THE REAL PROPERTY WHICH WAS SOLD BY THE LATE
EMIGDIO S. MERCADO DURING HIS LIFETIME TO A PRIVATE CORPORATION (MERVIR REALTY CORPORATION) BE
INCLUDED IN THE INVENTORY OF THE ESTATE OF THE LATE EMIGDIO S. MERCADO.

II

THE HONORABLE RESPONDENT JUDGE HAS COMMITTED GRAVE ABUSE OF JURISDICTION (sic) AMOUNTING TO
LACK OR EXCESS OF JURISDICTION IN HOLDING THAT REAL PROPERTIES WHICH ARE IN THE POSSESSION OF AND
ALREADY REGISTERED IN THE NAME (OF) PRIVATE CORPORATION (MERVIR REALTY CORPORATION) BE
INCLUDED IN THE INVENTORY OF THE ESTATE OF THE LATE EMIGDIO S. MERCADO.

III

THE HONORABLE RESPONDENT JUDGE HAS COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK
OR EXCESS OF JURISDICTION IN HOLDING THAT PETITIONERS ARE NOW ESTOPPED FROM QUESTIONING ITS
JURISDICTION IN PASSING UPON THE ISSUE OF WHAT PROPERTIES SHOULD BE INCLUDED IN THE INVENTORY
OF THE ESTATE OF THE LATE EMIGDIO MERCADO.12

On May 15, 2002, the CA partly granted the petition for certiorari, disposing as follows:13

WHEREFORE, FOREGOING PREMISES CONSIDERED, this petition is GRANTED partially. The assailed Orders
dated March 14, 2001 and May 18, 2001 are hereby reversed and set aside insofar as the inclusion of parcels of
land known as Lot No. 3353 located at Badian, Cebu with an area of 53,301 square meters subject matter of the
Deed of Absolute Sale dated November 9, 1989 and the various parcels of land subject matter of the Deeds of
Assignment dated February 17, 1989 and January 10, 1991 in the revised inventory to be submitted by the
administratrix is concerned and affirmed in all other respects.

SO ORDERED.

The CA opined that Teresita, et al. had properly filed the petition for certiorari because the order of the RTC
directing a new inventory of properties was interlocutory; that pursuant to Article 1477 of the Civil Code, to the
effect that the ownership of the thing sold shall be transferred to the vendee upon its actual and constructive
delivery, and to Article 1498 of the Civil Code, to the effect that the sale made through a public instrument was
equivalent to the delivery of the object of the sale, the sale by Emigdio and Teresita had transferred the
ownership of Lot No. 3353 to Mervir Realty because the deed of absolute sale executed on November 9, 1989
had been notarized; that Emigdio had thereby ceased to have any more interest in Lot 3353; that Emigdio had
assigned the parcels of land to Mervir Realty as early as February 17, 1989 for the purpose of saving, as in
avoiding taxes with the difference that in the Deed of Assignment dated January 10, 1991, additional seven (7)
parcels of land were included; that as to the January 10, 1991 deed of assignment, Mervir Realty had been
even at the losing end considering that such parcels of land, subject matter(s) of the Deed of Assignment dated
February 12, 1989, were again given monetary consideration through shares of stock; that even if the
assignment had been based on the deed of assignment dated January 10, 1991, the parcels of land could not be
included in the inventory considering that there is nothing wrong or objectionable about the estate planning
scheme; that the RTC, as an intestate court, also had no power to take cognizance of and determine the issue
of title to property registered in the name of third persons or corporation; that a property covered by the
Torrens system should be afforded the presumptive conclusiveness of title; that the RTC, by disregarding the
presumption, had transgressed the clear provisions of law and infringed settled jurisprudence on the matter;

90
and that the RTC also gravely abused its discretion in holding that Teresita, et al. were estopped from
questioning its jurisdiction because of their agreement to submit to the RTC the issue of which properties should
be included in the inventory.

The CA further opined as follows:

In the instant case, public respondent court erred when it ruled that petitioners are estopped from questioning
its jurisdiction considering that they have already agreed to submit themselves to its jurisdiction of determining
what properties are to be included in or excluded from the inventory to be submitted by the administratrix,
because actually, a reading of petitioners Motion for Reconsideration dated March 26, 2001 filed before public
respondent court clearly shows that petitioners are not questioning its jurisdiction but the manner in which it
was exercised for which they are not estopped, since that is their right, considering that there is grave abuse of
discretion amounting to lack or in excess of limited jurisdiction when it issued the assailed Order dated March
14, 2001 denying the administratrixs motion for approval of the inventory of properties which were already
titled and in possession of a third person that is, Mervir Realty Corporation, a private corporation, which under
the law possessed a personality distinct and separate from its stockholders, and in the absence of any cogency
to shred the veil of corporate fiction, the presumption of conclusiveness of said titles in favor of Mervir Realty
Corporation should stand undisturbed.

Besides, public respondent court acting as a probate court had no authority to determine the applicability of
the doctrine of piercing the veil of corporate fiction and even if public respondent court was not merely acting
in a limited capacity as a probate court, private respondent nonetheless failed to adjudge competent evidence
that would have justified the court to impale the veil of corporate fiction because to disregard the separate
jurisdictional personality of a corporation, the wrongdoing must be clearly and convincingly established since it
cannot be presumed.14

On November 15, 2002, the CA denied the motion for reconsideration of Teresita, et al.15

Issue - Did the CA properly determine that the RTC committed grave abuse of discretion amounting to lack or
excess of jurisdiction in directing the inclusion of certain properties in the inventory notwithstanding that such
properties had been either transferred by sale or exchanged for corporate shares in Mervir Realty by the
decedent during his lifetime?

Ruling of the Court

The appeal is meritorious.

I - Was certiorari the proper recourse to assail the questioned orders of the RTC?

The first issue to be resolved is procedural. Thelma contends that the resort to the special civil action
for certiorari to assail the orders of the RTC by Teresita and her corespondents was not proper.

Thelmas contention cannot be sustained.

The propriety of the special civil action for certiorari as a remedy depended on whether the assailed orders of
the RTC were final or interlocutory in nature. In PahilaGarrido v. Tortogo,16 the Court distinguished
between final and interlocutory orders as follows:

The distinction between a final order and an interlocutory order is well known. The first disposes of the subject
matter in its entirety or terminates a particular proceeding or action, leaving nothing more to be done except
to enforce by execution what the court has determined, but the latter does not completely dispose of the case
91
but leaves something else to be decided upon. An interlocutory order deals with preliminary matters and the
trial on the merits is yet to be held and the judgment rendered. The test to ascertain whether or not an order
or a judgment is interlocutory or final is: does the order or judgment leave something to be done in the trial court
with respect to the merits of the case? If it does, the order or judgment is interlocutory; otherwise, it is final.
The order dated November 12, 2002, which granted the application for the writ of preliminary injunction, was
an interlocutory, not a final, order, and should not be the subject of an appeal. The reason for disallowing an
appeal from an interlocutory order is to avoid multiplicity of appeals in a single action, which necessarily
suspends the hearing and decision on the merits of the action during the pendency of the appeals. Permitting
multiple appeals will necessarily delay the trial on the merits of the case for a considerable length of time, and
will compel the adverse party to incur unnecessary expenses, for one of the parties may interpose as many
appeals as there are incidental questions raised by him and as there are interlocutory orders rendered or issued
by the lower court. An interlocutory order may be the subject of an appeal, but only after a judgment has been
rendered, with the ground for appealing the order being included in the appeal of the judgment itself.

The remedy against an interlocutory order not subject of an appeal is an appropriate special civil action under
Rule 65, provided that the interlocutory order is rendered without or in excess of jurisdiction or with grave abuse
of discretion. Then is certiorari under Rule 65 allowed to be resorted to.

The assailed order of March 14, 2001 denying Teresitas motion for the approval of the inventory and the order
dated May 18, 2001 denying her motion for reconsideration were interlocutory. This is because the inclusion of
the properties in the inventory was not yet a final determination of their ownership. Hence, the approval of the
inventory and the concomitant determination of the ownership as basis for inclusion or exclusion from the
inventory were provisional and subject to revision at anytime during the course of the administration
proceedings.

In Valero Vda. De Rodriguez v. Court of Appeals,17 the Court, in affirming the decision of the CA to the effect that
the order of the intestate court excluding certain real properties from the inventory was interlocutory and could
be changed or modified at anytime during the course of the administration proceedings, held that the order of
exclusion was not a final but an interlocutory order in the sense that it did not settle once and for all the title
to the San Lorenzo Village lots. The Court observed there that:

The prevailing rule is that for the purpose of determining whether a certain property should or should not be
included in the inventory, the probate court may pass upon the title thereto but such determination is not
conclusive and is subject to the final decision in a separate action regarding ownership which may be
instituted by the parties (3 Morans Comments on the Rules of Court, 1970 Edition, pages 4489 and
473; Lachenal vs. Salas, L42257, June 14, 1976, 71 SCRA 262, 266).18 (Bold emphasis supplied)

To the same effect was De Leon v. Court of Appeals,19 where the Court declared that a probate court, whether
in a testate or intestate proceeding, can only pass upon questions of title provisionally, and reminded,
citing Jimenez v. Court of Appeals, that the patent reason is the probate courts limited jurisdiction and the
principle that questions of title or ownership, which result in inclusion or exclusion from the inventory of the
property, can only be settled in a separate action. Indeed, in the cited case of Jimenez v. Court of Appeals,20 the
Court pointed out:

All that the said court could do as regards the said properties is determine whether they should or should not
be included in the inventory or list of properties to be administered by the administrator. If there is a dispute
as to the ownership, then the opposing parties and the administrator have to resort to an ordinary action for
a final determination of the conflicting claims of title because the probate court cannot do so. (Bold emphasis
supplied)

92
On the other hand, an appeal would not be the correct recourse for Teresita, et al. to take against the assailed
orders. The final judgment rule embodied in the first paragraph of Section 1, Rule 41, Rules of Court,21 which
also governs appeals in special proceedings, stipulates that only the judgments, final orders (and resolutions) of
a court of law that completely disposes of the case, or of a particular matter therein when declared by these
Rules to be appealable may be the subject of an appeal in due course. The same rule states that an interlocutory
order or resolution (interlocutory because it deals with preliminary matters, or that the trial on the merits is yet
to be held and the judgment rendered) is expressly made nonappealable.

Multiple appeals are permitted in special proceedings as a practical recognition of the possibility that material
issues may be finally determined at various stages of the special proceedings. Section 1, Rule 109 of the Rules
of Court enumerates the specific instances in which multiple appeals may be resorted to in special
proceedings, viz:

Section 1. Orders or judgments from which appeals may be taken. An interested person may appeal in special
proceedings from an order or judgment rendered by a Court of First Instance or a Juvenile and Domestic
Relations Court, where such order or judgment:

(a) Allows or disallows a will;

(b) Determines who are the lawful heirs of a deceased person, or the distributive share of the estate to
which such person is entitled;
(c) Allows or disallows, in whole or in part, any claim against the estate of a deceased person, or any
claim presented on behalf of the estate in offset to a claim against it;
(d) Settles the account of an executor, administrator, trustee or guardian;
(e) Constitutes, in proceedings relating to the settlement of the estate of a deceased person, or the
administration of a trustee or guardian, a final determination in the lower court of the rights of the party
appealing, except that no appeal shall be allowed from the appointment of a special administrator; and
(f) Is the final order or judgment rendered in the case, and affects the substantial rights of the person
appealing, unless it be an order granting or denying a motion for a new trial or for reconsideration.

Clearly, the assailed orders of the RTC, being interlocutory, did not come under any of the instances in which
multiple appeals are permitted.

II - Did the RTC commit grave abuse of discretion in directing the inclusion of the properties in the estate of
the decedent?

In its assailed decision, the CA concluded that the RTC committed grave abuse of discretion for including
properties in the inventory notwithstanding their having been transferred to Mervir Realty by Emigdio during
his lifetime, and for disregarding the registration of the properties in the name of Mervir Realty, a third party,
by applying the doctrine of piercing the veil of corporate fiction.

Was the CA correct in its conclusion?

The answer is in the negative. It is unavoidable to find that the CA, in reaching its conclusion, ignored the law
and the facts that had fully warranted the assailed orders of the RTC.

Under Section 6(a), Rule 78 of the Rules of Court, the letters of administration may be granted at the discretion
of the court to the surviving spouse, who is competent and willing to serve when the person dies intestate. Upon
issuing the letters of administration to the surviving spouse, the RTC becomes dutybound to direct the
preparation and submission of the inventory of the properties of the estate, and the surviving spouse, as the

93
administrator, has the duty and responsibility to submit the inventory within three months from the issuance
of letters of administration pursuant to Rule 83 of the Rules of Court, viz:

Section 1. Inventory and appraisal to be returned within three months. Within three (3) months after his
appointment every executor or administrator shall return to the court a true inventory and appraisal of all the
real and personal estate of the deceased which has come into his possession or knowledge. In the
appraisement of such estate, the court may order one or more of the inheritance tax appraisers to give his or
their assistance.

The usage of the word all in Section 1, supra, demands the inclusion of all the real and personal properties of
the decedent in the inventory.22 However, the word all is qualified by the phrase which has come into
his possession or knowledge, which signifies that the properties must be known to the administrator to belong
to the decedent or are in her possession as the administrator. Section 1 allows no exception, for the phrase true
inventory implies that no properties appearing to belong to the decedent can be excluded from the inventory,
regardless of their being in the possession of another person or entity.

The objective of the Rules of Court in requiring the inventory and appraisal of the estate of the decedent is to
aid the court in revising the accounts and determining the liabilities of the executor or the administrator, and in
making a final and equitable distribution (partition) of the estate and otherwise to facilitate the administration
of the estate.23 Hence, the RTC that presides over the administration of an estate is vested with wide discretion
on the question of what properties should be included in the inventory. According to Peralta v. Peralta,24 the
CA cannot impose its judgment in order to supplant that of the RTC on the issue of which properties are to be
included or excluded from the inventory in the absence of positive abuse of discretion, for in the
administration of the estates of deceased persons, the judges enjoy ample discretionary powers and the
appellate courts should not interfere with or attempt to replace the action taken by them, unless it be shown
that there has been a positive abuse of discretion.25 As long as the RTC commits no patently grave abuse of
discretion, its orders must be respected as part of the regular performance of its judicial duty.

There is no dispute that the jurisdiction of the trial court as an intestate court is special and limited. The trial
court cannot adjudicate title to properties claimed to be a part of the estate but are claimed to belong to third
parties by title adverse to that of the decedent and the estate, not by virtue of any right of inheritance from the
decedent. All that the trial court can do regarding said properties is to determine whether or not they should
be included in the inventory of properties to be administered by the administrator. Such determination is
provisional and may be still revised. As the Court said in Agtarap v. Agtarap:26

The general rule is that the jurisdiction of the trial court, either as a probate court or an intestate court, relates
only to matters having to do with the probate of the will and/or settlement of the estate of deceased persons,
but does not extend to the determination of questions of ownership that arise during the proceedings. The
patent rationale for this rule is that such court merely exercises special and limited jurisdiction. As held in several
cases, a probate court or one in charge of estate proceedings, whether testate or intestate, cannot adjudicate
or determine title to properties claimed to be a part of the estate and which are claimed to belong to outside
parties, not by virtue of any right of inheritance from the deceased but by title adverse to that of the deceased
and his estate. All that the said court could do as regards said properties is to determine whether or not they
should be included in the inventory of properties to be administered by the administrator. If there is no dispute,
there poses no problem, but if there is, then the parties, the administrator, and the opposing parties have to
resort to an ordinary action before a court exercising general jurisdiction for a final determination of the
conflicting claims of title.

94
However, this general rule is subject to exceptions as justified by expediency and convenience.

First, the probate court may provisionally pass upon in an intestate or a testate proceeding the question of
inclusion in, or exclusion from, the inventory of a piece of property without prejudice to final determination
of ownership in a separate action. Second, if the interested parties are all heirs to the estate, or the question is
one of collation or advancement, or the parties consent to the assumption of jurisdiction by the probate court
and the rights of third parties are not impaired, then the probate court is competent to resolve issues on
ownership. Verily, its jurisdiction extends to matters incidental or collateral to the settlement and distribution
of the estate, such as the determination of the status of each heir and whether the property in the inventory
is conjugal or exclusive property of the deceased spouse.27 (Italics in the original; bold emphasis supplied)

It is clear to us that the RTC took pains to explain the factual bases for its directive for the inclusion of the
properties in question in its assailed order of March 14, 2001, viz:

In the first place, the administratrix of the estate admitted that Emigdio Mercado was one of the heirs of
Severina Mercado who, upon her death, left several properties as listed in the inventory of properties submitted
in Court in Special Proceedings No. 306R which are supposed to be divided among her heirs. The administratrix
admitted, while being examined in Court by the counsel for the petitioner, that she did not include in the
inventory submitted by her in this case the shares of Emigdio Mercado in the said estate of Severina Mercado.
Certainly, said properties constituting Emigdio Mercados share in the estate of Severina Mercado should be
included in the inventory of properties required to be submitted to the Court in this particular case.

In the second place, the administratrix of the estate of Emigdio Mercado also admitted in Court that she did not
include in the inventory shares of stock of Mervir Realty Corporation which are in her name and which were
paid by her from money derived from the taxicab business which she and her husband had since 1955 as a
conjugal undertaking. As these shares of stock partake of being conjugal in character, onehalf thereof or of the
value thereof should be included in the inventory of the estate of her husband.

In the third place, the administratrix of the estate of Emigdio Mercado admitted, too, in Court that she had a
bank account in her name at Union Bank which she opened when her husband was still alive. Again, the money
in said bank account partakes of being conjugal in character, and so, onehalf thereof should be included in the
inventory of the properties constituting as estate of her husband.

In the fourth place, it has been established during the hearing in this case that Lot No. 3353 of Pls657D located
in Badian, Cebu containing an area of 53,301 square meters as described in and covered by Transfer Certificate
of Title No. 3252 of the Registry of Deeds for the Province of Cebu is still registered in the name of Emigdio S.
Mercado until now. When it was the subject of Civil Case No. CEB12690 which was decided on October 19,
1995, it was the estate of the late Emigdio Mercado which claimed to be the owner thereof. Mervir Realty
Corporation never intervened in the said case in order to be the owner thereof. This fact was admitted by
Richard Mercado himself when he testified in Court. x x x So the said property located in Badian, Cebu should
be included in the inventory in this case.

Fifthly and lastly, it appears that the assignment of several parcels of land by the late Emigdio S. Mercado to
Mervir Realty Corporation on January 10, 1991 by virtue of the Deed of Assignment signed by him on the said
day (Exhibit N for the petitioner and Exhibit 5 for the administratrix) was a transfer in contemplation of death.
It was made two days before he died on January 12, 1991. A transfer made in contemplation of death is one
prompted by the thought that the transferor has not long to live and made in place of a testamentary disposition
(1959 Prentice Hall, p. 3909). Section 78 of the National Internal Revenue Code of 1977 provides that the gross
estate of the decedent shall be determined by including the value at the time of his death of all property to the
extent of any interest therein of which the decedent has at any time made a transfer in contemplation of death.
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So, the inventory to be approved in this case should still include the said properties of Emigdio Mercado which
were transferred by him in contemplation of death. Besides, the said properties actually appeared to be still
registered in the name of Emigdio S. Mercado at least ten (10) months after his death, as shown by the
certification issued by the Cebu City Assessors Office on October 31, 1991 (Exhibit O).28

Thereby, the RTC strictly followed the directives of the Rules of Court and the jurisprudence relevant to the
procedure for preparing the inventory by the administrator. The aforequoted explanations indicated that the
directive to include the properties in question in the inventory rested on good and valid reasons, and thus was
far from whimsical, or arbitrary, or capricious.

Firstly, the shares in the properties inherited by Emigdio from Severina Mercado should be included in the
inventory because Teresita, et al. did not dispute the fact about the shares being inherited by Emigdio.

Secondly, with Emigdio and Teresita having been married prior to the effectivity of the Family Code in August 3,
1988, their property regime was the conjugal partnership of gains.29 For purposes of the settlement of Emigdios
estate, it was unavoidable for Teresita to include his shares in the conjugal partnership of gains. The party
asserting that specific property acquired during that property regime did not pertain to the conjugal partnership
of gains carried the burden of proof, and that party must prove the exclusive ownership by one of them by clear,
categorical, and convincing evidence.30 In the absence of or pending the presentation of such proof, the conjugal
partnership of Emigdio and Teresita must be provisionally liquidated to establish who the real owners of the
affected properties were,31and which of the properties should form part of the estate of Emigdio. The portions
that pertained to the estate of Emigdio must be included in the inventory.

Moreover, although the title over Lot 3353 was already registered in the name of Mervir Realty, the RTC made
findings that put that title in dispute. Civil Case No. CEB12692, a dispute that had involved the ownership of
Lot 3353, was resolved in favor of the estate of Emigdio, and Transfer Certificate of Title No. 3252 covering Lot
3353 was still in Emigdios name. Indeed, the RTC noted in the order of March 14, 2001, or ten years after his
death, that Lot 3353 had remained registered in the name of Emigdio.

Interestingly, Mervir Realty did not intervene at all in Civil Case No. CEB12692. Such lack of interest in Civil Case
No. CEB12692 was susceptible of various interpretations, including one to the effect that the heirs of Emigdio
could have already threshed out their differences with the assistance of the trial court. This interpretation was
probable considering that Mervir Realty, whose business was managed by respondent Richard, was headed by
Teresita herself as its President. In other words, Mervir Realty appeared to be a family corporation.

Also, the fact that the deed of absolute sale executed by Emigdio in favor of Mervir Realty was a notarized
instrument did not sufficiently justify the exclusion from the inventory of the properties involved. A notarized
deed of sale only enjoyed the presumption of regularity in favor of its execution, but its notarization did not per
se guarantee the legal efficacy of the transaction under the deed, and what the contents purported to be. The
presumption of regularity could be rebutted by clear and convincing evidence to the contrary.32 As the Court
has observed in Suntay v. Court of Appeals:33

x x x. Though the notarization of the deed of sale in question vests in its favor the presumption of regularity, it
is not the intention nor the function of the notary public to validate and make binding an instrument never, in
the first place, intended to have any binding legal effect upon the parties thereto. The intention of the parties
still and always is the primary consideration in determining the true nature of a contract. (Bold emphasis
supplied)

It should likewise be pointed out that the exchange of shares of stock of Mervir Realty with the real properties
owned by Emigdio would still have to be inquired into. That Emigdio executed the deed of assignment two days
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prior to his death was a circumstance that should put any interested party on his guard regarding the exchange,
considering that there was a finding about Emigdio having been sick of cancer of the pancreas at the time. 34 In
this regard, whether the CA correctly characterized the exchange as a form of an estate planning scheme
remained to be validated by the facts to be established in court.

The fact that the properties were already covered by Torrens titles in the name of Mervir Realty could not be a
valid basis for immediately excluding them from the inventory in view of the circumstances admittedly
surrounding the execution of the deed of assignment. This is because:

The Torrens system is not a mode of acquiring titles to lands; it is merely a system of registration of titles to
lands. However, justice and equity demand that the titleholder should not be made to bear the unfavorable
effect of the mistake or negligence of the States agents, in the absence of proof of his complicity in a fraud or
of manifest damage to third persons. The real purpose of the Torrens system is to quiet title to land and put a
stop forever to any question as to the legality of the title, except claims that were noted in the certificate at the
time of registration or that may arise subsequent thereto. Otherwise, the integrity of the Torrens system shall
forever be sullied by the ineptitude and inefficiency of land registration officials, who are ordinarily presumed
to have regularly performed their duties.35

Assuming that only seven titled lots were the subject of the deed of assignment of January 10, 1991, such lots
should still be included in the inventory to enable the parties, by themselves, and with the assistance of the RTC
itself, to test and resolve the issue on the validity of the assignment. The limited jurisdiction of the RTC as an
intestate court might have constricted the determination of the rights to the properties arising from that
deed,36 but it does not prevent the RTC as intestate court from ordering the inclusion in the inventory of the
properties subject of that deed. This is because the RTC as intestate court, albeit vested only with special and
limited jurisdiction, was still deemed to have all the necessary powers to exercise such jurisdiction to make it
effective.37

Lastly, the inventory of the estate of Emigdio must be prepared and submitted for the important purpose of
resolving the difficult issues of collation and advancement to the heirs. Article 1061 of the Civil Code required
every compulsory heir and the surviving spouse, herein Teresita herself, to bring into the mass of the estate
any property or right which he (or she) may have received from the decedent, during the lifetime of the latter,
by way of donation, or any other gratuitous title, in order that it may be computed in the determination of the
legitime of each heir, and in the account of the partition. Section 2, Rule 90 of the Rules of Court also provided
that any advancement by the decedent on the legitime of an heir may be heard and determined by the court
having jurisdiction of the estate proceedings, and the final order of the court thereon shall be binding on the
person raising the questions and on the heir. Rule 90 thereby expanded the special and limited jurisdiction of
the RTC as an intestate court about the matters relating to the inventory of the estate of the decedent by
authorizing it to direct the inclusion of properties donated or bestowed by gratuitous title to any compulsory
heir by the decedent.38

The determination of which properties should be excluded from or included in the inventory of estate properties
was well within the authority and discretion of the RTC as an intestate court. In making its determination, the
RTC acted with circumspection, and proceeded under the guiding policy that it was best to include all properties
in the possession of the administrator or were known to the administrator to belong to Emigdio rather than to
exclude properties that could turn out in the end to be actually part of the estate. As long as the RTC commits
no patent grave abuse of discretion, its orders must be respected as part of the regular performance of its
judicial duty. Grave abuse of discretion means either that the judicial or quasijudicial power was exercised in
an arbitrary or despotic manner by reason of passion or personal hostility, or that the respondent judge, tribunal
or board evaded a positive duty, or virtually refused to perform the duty enjoined or to act in contemplation of

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law, such as when such judge, tribunal or board exercising judicial or quasijudicial powers acted in a capricious
or whimsical manner as to be equivalent to lack of jurisdiction.39

In light of the foregoing, the CAs conclusion of grave abuse of discretion on the part of the RTC was unwarranted
and erroneous.

WHEREFORE, the Court GRANTS the petition for review on certiorari; REVERSES and SETS ASIDE the decision
promulgated on May 15, 2002; REINSTATES the orders issued on March 14, 2001 and May 18, 2001 by the
Regional Trial Court in Cebu; DIRECTS the Regional Trial Court in Cebu to proceed with dispatch in Special
Proceedings No. 3094CEB entitled Intestate Estate of the late Emigdio Mercado, Thelma Aranas,
petitioner, and to resolve the case; and ORDERS the respondents to pay the costs of suit.

SO ORDERED.

Sereno, C.J., LeonardoDe Castro, Villarama, Jr., and Reyes, JJ. concur.

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