[G.R. No. 156403.
March 31, 2005] On December 7, 1972, the intestate court issued an order granting Agustins
JOSEPHINE PAHAMOTANG and ELEANOR PAHAMOTANG-BASA,
petitioners, vs. THE PHILIPPINE NATIONAL BANK (PNB) and the HEIRS
OF ARTURO ARGUNA, respondents.
DECISION
GARCIA, J.:
Assailed and sought to be set aside in this appeal by way of a petition for
review on certiorari under Rule 45 of the Rules of Court are the following
issuances of the Court of Appeals in CA-G.R. CV No. 65290, to wit:
1. Decision dated March 20, 2002,[1] granting the appeal and reversing the
appealed August 7, 1998 decision of the Regional Trial Court at Davao City;
and
2. Resolution dated November 20, 2002, denying herein petitioners' motion
for reconsideration.[2]
The factual background:
On July 1, 1972, Melitona Pahamotang died. She was survived by her
husband Agustin Pahamotang, and their eight (8) children, namely: Ana,
Genoveva, Isabelita, Corazon, Susana, Concepcion and herein petitioners
Josephine and Eleonor, all surnamed Pahamotang.
On September 15, 1972, Agustin filed with the then Court of First Instance of
Davao City a petition for issuance of letters administration over the estate of
his deceased wife. The petition, docketed as Special Case No. 1792, was
raffled to Branch VI of said court, hereinafter referred to as the intestate
court.
In his petition, Agustin identified petitioners Josephine and Eleonor as among
the heirs of his deceased spouse. It appears that Agustin was appointed
petitioners' judicial guardian in an earlier case - Special Civil Case No. 1785
also of the CFI of Davao City, Branch VI.
petition.
On July 6, 1973, respondent Philippine National Bank (PNB) and Agustin
executed an Amendment of Real and Chattel Mortgages with
Assumption of Obligation. It appears that earlier, or on December 14,
1972, the intestate court approved the mortgage to PNB of certain assets of
the estate to secure an obligation in the amount of P570,000.00. Agustin
signed the document in behalf of (1) the estate of Melitona; (2) daughters
Ana and Corazon; and (3) a logging company named Pahamotang Logging
Enterprises, Inc. (PLEI) which appeared to have an interest in the properties
of the estate. Offered as securities are twelve (12) parcels of registered land,
ten (10) of which are covered by transfer certificates of title (TCT) No. 2431,
7443, 8035, 11465, 21132, 4038, 24327, 24326, 31226 and 37786, all of the
Registry of Deeds of Davao City, while the remaining two (2) parcels by TCTs
No. (3918) 1081 and (T-2947) 562 of the Registry of Deeds of Davao del
Norte and Davao del Sur, respectively.
On July 16, 1973, Agustin filed with the intestate court a Petition for
Authority To Increase Mortgage on the above mentioned properties of the
estate.
In an Order dated July 18, 1973, the intestate court granted said petition.
On October 5, 1974, Agustin again filed with the intestate court another
petition, Petition for Declaration of Heirs And For Authority To Increase
Indebtedness, whereunder he alleged the necessity for an additional loan
from PNB to capitalize the business of the estate, the additional loan to be
secured by additional collateral in the form of a parcel of land covered by
Original Certificate of Title (OCT) No. P-7131 registered in the name of Heirs
of Melitona Pahamotang. In the same petition, Agustin prayed the intestate
court to declare him and Ana, Genoveva, Isabelita, Corazon, Susana,
Concepcion and herein petitioners Josephine and Eleonor as the only heirs
of Melitona.
In an Order of October 19, 1974, the intestate court granted Agustin
authority to seek additional loan from PNB in an amount not exceeding
P5,000,000.00 to be secured by the land covered by OCT No. P-7131 of the
Registry of Deeds of Davao Oriental, but denied Agustins prayer for
declaration of heirs for being premature.
On October 22, 1974, a real estate mortgage contract for P4,500,000.00 was
executed by PNB and Agustin in his several capacities as: (1) administrator
of the estate of his late wife; (2) general manager of PLEI; (3) attorney-in-fact
of spouses Isabelita Pahamotang and Orlando Ruiz, and spouses Susana
Pahamotang and Octavio Zamora; and (4) guardian of daughters
Concepcion and Genoveva and petitioners Josephine and Eleonor. Offered
as securities for the additional loan are three (3) parcels of registered land
covered by TCTs No. T-21132, 37786 and 43264.
On February 19, 1980, Agustin filed with the intestate court a Petition
(Request for Judicial Authority To Sell Certain Properties of the Estate),
therein praying for authority to sell to Arturo Arguna the properties of the
estate covered by TCTs No. 7443, 8035, 11465, 24326 and 31226 of the
Registry of Deeds of Davao City, and also TCT No. (T-3918) T-1081 of the
Registry of Deeds of Davao del Norte.
On February 27, 1980, Agustin yet filed with the intestate court another
petition, this time a Petition To Sell the Properties of the Estate, more
specifically referring to the property covered by OCT No. P-7131, in favor of
PLEI.
In separate Orders both dated February 25, 1980, the intestate court
granted Agustin authority to sell estate properties, in which orders the court
also required all the heirs of Melitona to give their express conformity to the
disposal of the subject properties of the estate and to sign the deed of sale to
be submitted to the same court. Strangely, the two (2) orders were dated two
(2) days earlier than February 27, 1980, the day Agustin supposedly filed his
petition.
In a motion for reconsideration, Agustin prayed the intestate court for the
amendment of one of its February 25, 1980 Orders by canceling the
requirement of express conformity of the heirs as a condition for the disposal
of the aforesaid properties.
In its Order of January 7, 1981, the intestate court granted Agustins prayer.
Hence, on March 4, 1981, estate properties covered by TCTs No.
7443,11465, 24326, 31226, 8035, (T-2947) 662 and (T-3918) T-1081, were
sold to respondent Arturo Arguna, while the property covered by OCT No.
P-7131 was sold to PLEI. Consequent to such sales, vendees Arguna and
PLEI filed witt the intestate court a motion for the approval of the
corresponding deeds of sale in their favor. And, in an Order dated March 9,
1981, the intestate court granted the motion.
Thereafter, three (3) daughters of Agustin, namely, Ana, Isabelita and
Corazon petitioned the intestate court for the payment of their respective
shares from the sales of estate properties, which was granted by the
intestate court.
Meanwhile, the obligation secured by mortgages on the subject properties of
the estate was never satisfied. Hence, on the basis of the real estate
mortgage contracts dated July 6, 1973 and October 22, 1974, mortgagor
PNB filed a petition for the extrajudicial foreclosure of the mortgage.
Petitioner Josephine filed a motion with the intestate court for the issuance of
an order restraining PNB from extrajudicially foreclosing the mortgage. In its
Order dated August 19, 1983, the intestate court denied Josephines motion.
Hence, PNB was able to foreclose the mortgage in its favor.
Petitioners Josephine and Eleanor, together with their sister Susana
Pahamatong-Zamora, filed motions with the intestate court to set aside its
Orders of December 14, 1972 [Note: the order dated July 18, 1973
contained reference to an order dated December 14, 1972 approving the
mortgage to PNB of certain properties of the estate], July 18, 1973, October
19, 1974 and February 25, 1980.
In an Order dated September 5, 1983, the intestate court denied the motions,
explaining:
"Carefully analyzing the aforesaid motions and the grounds relied upon, as
well as the opposition thereto, the Court holds that the supposed defects
and/or irregularities complained of are mainly formal or procedural and not
substantial, for which reason, the Court is not persuaded to still disturb all the
orders, especially that interests of the parties to the various contracts already
authorized or approved by the Orders sought to be set aside will be
adversely affected.[3]
Such was the state of things when, on March 20, 1984, in the Regional Trial
Court at Davao City, petitioners Josephine and Eleanor, together with their
sister Susana, filed their complaint for Nullification of Mortgage Contracts
and Foreclosure Proceedings and Damages against Agustin, PNB, Arturo
Arguna, PLEI, the Provincial Sheriff of Mati, Davao Oriental, the Provincial
Sheriff of Tagum, Davao del Norte and the City Sheriff of Davao City. In their
complaint, docketed as Civil Case No. 16,802 which was raffled to Branch
12 of the court, the sisters Josephine, Eleanor and Susana prayed for the
following reliefs:
"1.) The real estate mortgage contracts of July 6, 1973 and that of
October 2, 1974, executed by and between defendants PNB AND
PLEI be declared null and void ab initio;
2.) Declaring the foreclosure proceedings conducted by defendants-
sheriffs, insofar as they pertain to the assets of the estate of
Melitona L. Pahamotang, including the auction sales thereto, and
any and all proceedings taken thereunder, as null and void ab
initio;
3.) Declaring the Deed of Absolute Sale, Doc. No. 473; Page No.96;
Book No.VIII, Series of 1981 of the Notarial Registry of Paquito G.
Balasabas of Davao City evidencing the sale/transfer of the real
properties described therein to defendant Arturo S. Arguna, as
null and void ab initio;
4.) Declaring the Deed of Absolute Sale, Doc. No. 474; Page No. 96,
Book No. VIII, series of 1981 of the Notarial Registry of Paquito
G. Balasabas of Davao City, evidencing the sale/transfer of real
properties to PLEI as null and void ab initio;
5.) For defendants to pay plaintiffs moral damages in such sums as may
be found to be just and equitable under the premises;
6.) For defendants to pay plaintiffs, jointly and severally, the expenses
incurred in connection with this litigation;
7.) For defendants to pay plaintiffs, jointly and severally attorney's fees
in an amount to be proven during the trial;
8.) For defendants to pay the costs of the suit.[4]
PNB moved to dismiss the complaint, which the trial court granted in its
Order of January 11, 1985.
However, upon motion of the plaintiffs, the trial court reversed itself and
ordered defendant PNB to file its answer.
Defendant PNB did file its answer with counterclaim, accompanied by a
cross-claim against co-defendants Agustin and PLEI.
During the ensuing pre-trial conference, the parties submitted the following
issues for the resolution of the trial court, to wit:
"1. Whether or not the Real Estate Mortgage contracts executed on July
6, 1973 and October 2, 1974 (sic) by and between defendants
Pahamotang Logging Enterprises, Inc. and the Philippine National
Bank are null and void?
2. Whether or not the foreclosure proceedings conducted by
defendants-Sheriffs, insofar as they affect the assets of the Estate
of Melitona Pahamotang, including the public auction sales thereof,
are null and void?
3. Whether or not the Deed of Absolute Sale in favor of defendant Arturo
Arguna entered as Doc. No. 473; Page No. 96; Book No. VIII,
series of 1981 of the Notarial Register of Notary Public Paquito
Balasabas is null and void?
4. Whether or not the Deed of Absolute Sale in favor of defendant
Pahamotang Logging Enterprises, Inc. entered as Doc. No. 474;
Page No. 96; Book No. VIII, series of 1981 of the Notarial Register
of Notary Public Paquito Balasabas is null and void?
5. On defendant PNB's cross-claim, in the event the mortgage contracts
and the foreclosure proceedings are declared null and void,
whether or not defendant Pahamotang Logging Enterprises, Inc. is
liable to the PNB?
6. Whether or not the defendants are liable to the plaintiffs for
damages?
 7. Whether or not the plaintiffs are liable to the defendants for
damages?[5]
With defendant Arturo Argunas death on October 31, 1990, the trial court
ordered his substitution by his heirs: Heirs of Arturo Alguna.
In a Decision dated August 7, 1998, the trial court in effect rendered
judgment for the plaintiffs. We quote the decisions dispositive portion:
"WHEREFORE, in view of all the foregoing, judgment is hereby rendered as
follows:
1. Declaring the Mortgage Contracts of July 6, 1973 and October 22, 1974,
as well as the foreclosure proceedings, void insofar as it affects the share,
interests and property rights of the plaintiffs in the assets of the estate of
Melitona Pahamotang, but valid with respect to the other parties;
2. Declaring the deeds of sale in favor of defendants Pahamotang Logging
Enterprises, Inc. and Arturo Arguna as void insofar as it affects the shares,
interests and property rights of herein plaintiffs in the assets of the estate of
Melitona Pahamotang but valid with respect to the other parties to the said
deeds of sale.
3. Denying all the other claims of the parties for lack of strong, convincing
and competent evidence.
No pronouncement as to costs.
SO ORDERED.[6]
From the aforementioned decision of the trial court, PNB, PLEI and the Heirs
of Arturo Arguna went on appeal to the Court of Appeals in CA-G.R. CV No.
65290. While the appeal was pending, the CA granted the motion of Susana
Pahamatong-Zamora to withdraw from the case.
As stated at the threshold hereof, the Court of Appeals, in its Decision dated
March 20, 2002,[7] reversed the appealed decision of the trial court and
dismissed the petitioners complaint in Civil Case No. 16,802, thus:
WHEREFORE, the appeal is hereby GRANTED. The assailed August 07,
1998 Decision rendered by the Regional Trial Court of Davao City, Branch
12, is hereby REVERSED and SET ASIDE and a new one is entered
DISMISSING the complaint filed in Civil Case No. 16,802.
SO ORDERED.
The appellate court ruled that petitioners, while ostensibly questioning the
validity of the contracts of mortgage and sale entered into by their father
Agustin, were essentially attacking collaterally the validity of the four (4)
orders of the intestate court in Special Case No. 1792, namely:
1. Order dated July 18, 1973, granting Agustins Petition for Authority to
Increase Mortgage;
2. Order dated October 19, 1974, denying Agustins petition for
declaration of heirs but giving him authority to seek additional loan
from PNB;
3. Order dated February 25, 1980, giving Agustin permission to sell
properties of the estate to Arturo Arguna and PLEI; and
4. Order dated January 7, 1981, canceling the requirement of express
conformity by the heirs as a condition for the disposal of estate
properties.
To the appellate court, petitioners committed a fatal error of mounting a
collateral attack on the foregoing orders instead of initiating a direct action to
annul them. Explains the Court of Appeals:
"A null and void judgment is susceptible to direct as well as collateral attack.
A direct attack against a judgment is made through an action or proceeding
the main object of which is to annul, set aside, or enjoin the enforcement of
such judgment, if not carried into effect; or if the property has been disposed
of, the aggrieved party may sue for recovery. A collateral attack is made
when, in another action to obtain a different relief, an attack on the judgment
is made as an incident in said action. This is proper only when the judgment,
on its fact, is null and void, as where it is patent that the court which rendered
such judgment has no jurisdiction. A judgment void on its face may also be
attacked directly.
 xxx xxx xxx
Perusing the above arguments and comparing them with the settled ruling,
the plaintiffs-appellees [now petitioners], we believe had availed themselves
of the wrong remedy before the trial court. It is clear that they are collaterally
attacking the various orders of the intestate court in an action for the
nullification of the subject mortgages, and foreclosure proceedings in favor of
PNB, and the deeds of sale in favor of Arguna. Most of their arguments
stemmed from their allegations that the various orders of the intestate court
were issued without a notification given to them. An examination, however, of
the July 18, 1973 order shows that the heirs of Melitona have knowledge of
the petition to increase mortgage filed by Agustin, thus:
`The petitioner testified that all his children including those who are of age
have no objection to this petition and, as matter of fact, Ana Pahamotang,
one of the heirs of Melitona Pahamotang, who is the vice-president of the
logging corporation, is the one at present negotiating for the increase of
mortgage with the Philippine National Bank.'
The presumption arising from those statements of the intestate court is that
the heirs were notified of the petition for the increase of mortgage.
The same can be seen in the October 19, 1974 order:
`The records show that all the known heirs, namely Ana, Isabelita, Corazon,
Susana, including the incompetent Genoveva, and the minors Josephine,
Eleanor and Concepcion all surnamed were notified of the hearing of the
petition.'
On the other hand, the February 25, 1980 order required Agustin to obtain
first express conformity from the heirs before the subject property be sold to
Arguna. The fact that this was reconsidered by the intestate court in its
January 07, 1981 is of no moment. The questioned orders are valid having
been issued in accordance with law and procedure. The problem with the
plaintiffs-appellees is that, in trying to nullify the subject mortgages and the
foreclosure proceedings in favor of PNB and the deeds of sale in favor of
Arguna, they are assailing the aforesaid orders of the intestate court and in
attacking the said orders, they attached documents that they believe would
warrant the conclusion that the assailed orders are null and void. This is a
clear collateral attack of the orders of the intestate court which is not void on
its face and which cannot be allowed in the present action. The defects
alleged by the plaintiff-appellees are not apparent on the face of the assailed
orders. Their recourse is to ask for the declaration of nullity of the said
orders, not in a collateral manner, but a direct action to annul the same.[8]
The same court added that petitioners failure to assail said orders at the
most opportune time constitutes laches:
"In their complaint below, plaintiffs, appellees are assailing in their present
action, four orders of the intestate court namely: July 18, 1973, October 19,
1974, February 25, 1980 and January 07, 1981 orders which were then
issued by Judge Martinez. It should be recalled that except for the January
07, 1981 order, Judge Jacinto, upon taking over Sp. No. 1792, denied the
motion of the plaintiffs-appellees to set aside the aforesaid orders. Aside from
their motion before Judge Jacinto, nothing on the records would show that
the plaintiffs-appellees availed of other remedies to set aside the questioned
orders. Further, the records would not show that the plaintiffs-appellees
appealed the order of Judge Jacinto. If an interval of two years, seven
months and ninety nine days were barred by laches, with more reason
should the same doctrine apply to the present case, considering that the
plaintiffs-appellees did not avail of the remedies provided by law in
impugning the various orders of the intestate court. Thus, the questioned
orders of the intestate court, by operation of law became final. It is a
fundamental principle of public policy in every jural system that at the risk of
occasional errors, judgments of courts should become final at some definite
time fixed by law (interest rei publicae ut finis sit litum). The very object of
which the courts were constituted was to put an end to controversies. Once a
judgment or an order of a court has become final, the issues raised therein
should be laid to rest. To date, except as to the present action which we will
later discuss as improper, the plaintiff-appellees have not availed themselves
of other avenues to have the orders issued by Judge Martinez and Judge
Jacinto annulled and set aside. In the present case, when Judge Jacinto
denied the motion of the plaintiffs-appellees, the latter had remedies provided
by the rules to assail such order. The ruling by Judge Jacinto denying
plaintiffs-appellees motion to set aside the questioned orders of Judge
Martinez has long acquired finality. It is well embedded in our jurisprudence,
that judgment properly rendered by a court vested with jurisdiction, like the
RTC, and which has acquired finality becomes immutable and unalterable,
hence, may no longer be modified in any respect except only to correct
clerical errors or mistakes. Litigation must have and always has an end. If
not, judicial function will lose its relevance.
In time, petitioners moved for a reconsideration but their motion was denied
by the appellate court in its Resolution of November 20, 2002.
Hence, petitioners present recourse, basically praying for the reversal of the
CA decision and the reinstatement of that of the trial court.
We find merit in the petition.
It is petitioners posture that the mortgage contracts dated July 6, 1973 and
October 22, 1974 entered into by Agustin with respondent PNB, as well as
his subsequent sale of estate properties to PLEI and Arguna on March 4,
1981, are void because they [petitioners] never consented thereto. They
assert that as heirs of their mother Melitona, they are entitled to notice of
Agustin's several petitions in the intestate court seeking authority to
mortgage and sell estate properties. Without such notice, so they maintain,
the four orders of the intestate court dated July 18, 1973, October 19, 1974,
February 25, 1980 and January 7, 1981, which allowed Agustin to mortgage
and sell estate properties, are void on account of Agustins non-compliance
with the mandatory requirements of Rule 89 of the Rules of Court.
Prescinding from their premise that said orders are completely void and
hence, could not attain finality, petitioners maintain that the same could be
attacked directly or collaterally, anytime and anywhere.
For its part, respondent PNB asserts that petitioners cannot raise as issue in
this proceedings the validity of the subject orders in their desire to invalidate
the contracts of mortgage entered into by Agustin. To PNB, the validity of the
subject orders of the intestate court can only be challenged in a direct action
for such purpose and not in an action to annul contracts, as the petitioners
have done. This respondent adds that the mortgage on the subject properties
is valid because the same was made with the approval of the intestate court
and with the knowledge of the heirs of Melitona, petitioners included.[9]
Upon the other hand, respondent Heirs of Arturo Arguna likewise claim that
petitioners knew of the filing with the intestate court by Agustin of petitions to
mortgage and sell the estate properties. They reecho the CAs ruling that
petitioners are barred by laches in filing Civil Case No. 16,802.[10]
As we see it, the determinative question is whether or not petitioners can
obtain relief from the effects of contracts of sale and mortgage entered into
by Agustin without first initiating a direct action against the orders of the
intestate court authorizing the challenged contracts.
We answer the question in the affirmative.
It bears emphasizing that the action filed by the petitioners before the trial
court in Civil Case No. 16,802 is for the annulment of several contracts
entered into by Agustin for and in behalf of the estate of Melitona, namely: (a)
contract of mortgage in favor of respondent PNB, (b) contract of sale in favor
of Arguna involving seven (7) parcels of land; and (c) contract of sale of a
parcel of land in favor of PLEI.
The trial court acquired jurisdiction over the subject matter of the case upon
the allegations in the complaint that said contracts were entered into despite
lack of notices to the heirs of the petition for the approval of those contracts
by the intestate court.
Contrary to the view of the Court of Appeals, the action which petitioners
lodged with the trial court in Civil Case No. 16,802 is not an action to annul
the orders of the intestate court, which, according to CA, cannot be done
collaterally. It is the validity of the contracts of mortgage and sale which is
directly attacked in the action.
And, in the exercise of its jurisdiction, the trial court made a factual finding in
its decision of August 7, 1998 that petitioners were, in fact, not notified by
their father Agustin of the filing of his petitions for permission to mortgage/sell
the estate properties. The trial court made the correct conclusion of law that
the challenged orders of the intestate court granting Agustins petitions were
null and void for lack of compliance with the mandatory requirements of Rule
89 of the Rules of Court, particularly Sections 2, 4, 7 thereof, which
respectively read:
Sec. 2. When court may authorize sale, mortgage, or other encumbrance of
realty to pay debts and legacies through personalty not exhausted. - When
the personal estate of the deceased is not sufficient to pay the debts,
expenses of administration, and legacies, or where the sale of such personal
estate may injure the business or other interests of those interested in the
estate, and where a testator has not otherwise made sufficient provision for
the payment of such debts, expenses, and legacies, the court, on the
application of the executor or administrator and on written notice to the
heirs, devisees, and legatees residing in the Philippines, may authorize the
executor or administrator to sell, mortgage, or otherwise encumber so much
as may be necessary of the real estate, in lieu of personal estate, for the
purpose of paying such debts, expenses, and legacies, if it clearly appears
that such sale, mortgage, or encumbrance would be beneficial to the persons
interested; and if a part cannot be sold, mortgaged, or otherwise encumbered
without injury to those interested in the remainder, the authority may be for
the sale, mortgage, or other encumbrance of the whole of such real estate, or
so much thereof as is necessary or beneficial under the circumstances.
Sec. 4. When court may authorize sale of estate as beneficial to interested
persons. Disposal of proceeds. - When it appears that the sale of the whole
or a part of the real or personal estate, will be beneficial to the heirs,
devisees, legatees, and other interested persons, the court may, upon
application of the executor or administrator and on written notice to the
heirs, devisees and legatees who are interested in the estate to be sold,
authorize the executor or administrator to sell the whole or a part of said
estate, although not necessary to pay debts, legacies, or expenses of
administration; but such authority shall not be granted if inconsistent with the
provisions of a will. In case of such sale, the proceeds shall be assigned to
the persons entitled to the estate in the proper proportions.
Sec. 7. Regulations for granting authority to sell, mortgage, or otherwise
encumber estate. - The court having jurisdiction of the estate of the
deceased may authorize the executor or administrator to sell personal estate,
or to sell, mortgage, or otherwise encumber real estate; in cases provided by
these rules and when it appears necessary or beneficial, under the following
regulations:
(a) The executor or administrator shall file a written petition setting
forth the debts due from the deceased, the expenses of
administration, the legacies, the value of the personal estate,
the situation of the estate to be sold, mortgaged, or otherwise
encumbered, and such other facts as show that the sale,
mortgage, or other encumbrance is necessary or beneficial;
(b) The court shall thereupon fix a time and place for hearing such
petition, and cause notice stating the nature of the petition,
the reason for the same, and the time and place of hearing, to
be given personally or by mail to the persons interested, and
may cause such further notice to be given, by publication or
otherwise, as it shall deem proper; (Emphasis supplied).
xxx xxx xxx
Settled is the rule in this jurisdiction that when an order authorizing the sale
or encumbrance of real property was issued by the testate or intestate court
without previous notice to the heirs, devisees and legatees as required by the
Rules, it is not only the contract itself which is null and void but also the order
of the court authorizing the same.[11]
Thus, in Maneclang vs. Baun,[12] the previous administrator of the estate
filed a petition with the intestate court seeking authority to sell portion of the
estate, which the court granted despite lack of notice of hearing to the heirs
of the decedent. The new administrator of the estate filed with the Regional
Trial Court an action for the annulment of the sales made by the previous
administrator. After trial, the trial court held that the order of the intestate
court granting authority to sell, as well as the deed of sale, were void. On
appeal directly to this Court, We held that without compliance with Sections
2, 4 and 7 of Rule 89 of the Rules of Court, the authority to sell, the sale itself
and the order approving it would be null and void ab initio.
In Liu vs. Loy, Jr.,[13] while the decedent was still living, his son and
attorney-in-fact sold in behalf of the alleged decedent certain parcels of land
to Frank Liu. After the decedent died, the son sold the same properties to two
persons. Upon an ex parte motion filed by the 2nd set of buyers of estate
properties, the probate court approved the sale to them of said properties.
Consequently, certificates of title covering the estate properties were
cancelled and new titles issued to the 2nd set of buyers. Frank Liu filed a
complaint for reconveyance/ annulment of title with the Regional Trial Court.
The trial court dismissed the complaint and the Court of Appeals affirmed the
dismissal. When the case was appealed to us, we set aside the decision of
the appellate court and declared the probate court's approval of the sale as
completely void due to the failure of the 2nd set of buyers to notify the heir-
administratrix of the motion and hearing for the sale of estate property.
Clearly, the requirements of Rule 89 of the Rules of Court are mandatory and
failure to give notice to the heirs would invalidate the authority granted by the
intestate/probate court to mortgage or sell estate assets.
Here, it appears that petitioners were never notified of the several petitions
filed by Agustin with the intestate court to mortgage and sell the estate
properties of his wife.
According to the trial court, the [P]etition for Authority to Increase
Mortgage and [P]etition for Declaration of Heirs and for Authority to
Increase Indebtedness, filed by Agustin on July 16, 1973 and October 5,
1974, respectively, do not contain information that petitioners were furnished
with copies of said petitions. Also, notices of hearings of those petitions were
not sent to the petitioners.[14] The trial court also found in Civil Case No.
16,802 that Agustin did not notify petitioners of the filing of his petitions for
judicial authority to sell estate properties to Arturo Arguna and PLEI.[15]
As it were, the appellate court offered little explanation on why it did not
believe the trial court in its finding that petitioners were ignorant of Agustins
scheme to mortgage and sell the estate properties.
Aside from merely quoting the orders of July 18, 1973 and October 19,
1974 of the intestate court, the Court of Appeals leaves us in the dark on its
reason for disbelieving the trial court. The appellate court did not publicize its
appraisal of the evidence presented by the parties before the trial court in the
matter regarding the knowledge, or absence thereof, by the petitioners of
Agustins petitions. The appellate court cannot casually set aside the findings
of the trial court without stating clearly the reasons therefor. Findings of the
trial court are entitled to great weight, and absent any indication to believe
otherwise, we simply cannot adopt the conclusion reached by the Court of
Appeals.
Laches is negligence or omission to assert a right within a reasonable time,
warranting the presumption that the party entitled to assert it has either
abandoned or declined the right.[16] The essential elements of laches are:
(1) conduct on the part of the defendant, or of one under whom he claims,
giving rise to the situation of which complaint is made and for which the
complaint seeks a remedy; (2) delay in asserting the complainant's rights, the
complainant having had knowledge or notice of the defendant's conduct and
having been afforded an opportunity to institute a suit; (3) lack of knowledge
or notice on the part of the defendant that the complainant would assert the
right on which he bases his suit; and (4) injury or prejudice to the defendant
in the event relief is accorded to the complainant, or the suit is not held
barred.[17]
In the present case, the appellate court erred in appreciating laches against
petitioners. The element of delay in questioning the subject orders of the
intestate court is sorely lacking. Petitioners were totally unaware of the plan
of Agustin to mortgage and sell the estate properties. There is no indication
that mortgagor PNB and vendee Arguna had notified petitioners of the
contracts they had executed with Agustin. Although petitioners finally
obtained knowledge of the subject petitions filed by their father, and
eventually challenged the July 18, 1973, October 19, 1974, February 25,
1980 and January 7, 1981 orders of the intestate court, it is not clear from the
challenged decision of the appellate court when they (petitioners) actually
learned of the existence of said orders of the intestate court. Absent any
indication of the point in time when petitioners acquired knowledge of those
orders, their alleged delay in impugning the validity thereof certainly cannot
be established. And the Court of Appeals cannot simply impute laches
against them.
WHEREFORE, the assailed issuances of the Court of Appeals are hereby
REVERSED and SET ASIDE and the decision dated August 7, 1998 of the
trial court in its Civil Case No. 16,802 REINSTATED.
SO ORDERED.
RICARDO S. SILVERIO, JR. G.R. No. 178933
versus - COURT OF APPEALS (Fifth Division)
and NELIA S. SILVERIO-DEE,
Respondents. September 16, 2009
x-----------------------------------------------------------------------------------------x
VELASCO, JR., J.:
The Case
 This Petition for Review on Certiorari under Rule 65 seeks the
1 2
reversal of the May 4, 2007 Resolution [1] and July 6, 2007 Decision [2] of
the Court of Appeals (CA) in CA-G.R. SP No. 98764, entitled Nelia S.
Silverio-Dee and Ricardo C. Silverio, Sr. (impleaded as necessary party) v.
Reinato G. Quilala, in his capacity as Presiding Judge of the RTC of Makati,
Branch 57, Ricardo S. Silverio, Jr., Edmundo S. Silverio, represented by
Nestor Dela Merced II, and Sheriff Villamor R. Villegas.
The assailed resolution granted private respondents prayer for the
issuance of a Temporary Restraining Order against public respondent Judge
Quilala. On the other hand, the assailed decision set aside the Writ of
Execution dated April 17, 2007 and the Notice to Vacate dated April 19, 2007
while directing the respondent lower court to give due course to the appeal of
herein private respondent.
The Facts
The instant controversy stemmed from the settlement of estate of the
deceased Beatriz Silverio. After her death, her surviving spouse, Ricardo
Silverio, Sr., filed an intestate proceeding for the settlement of her estate.
The case was docketed as SP. PROC. NO. M-2629 entitled In Re: Estate of
the Late Beatriz D. Silverio, Ricardo C. Silverio, Sr. v. Ricardo S. Silverio Jr.,
et al. pending before the Regional Trial Court (RTC) of Makati City, Branch
57 (RTC).
1 3
2 4
On November 16, 2004, during the pendency of the case, Ricardo
Silverio, Jr. filed a petition to remove Ricardo C. Silverio, Sr. as the
administrator of the subject estate. On November 22, 2004, Edmundo S.
Silverio also filed a comment/opposition for the removal of Ricardo C.
Silverio, Sr. as administrator of the estate and for the appointment of a new
administrator.
On January 3, 2005, the RTC issued an Order granting the petition
and removing Ricardo Silverio, Sr. as administrator of the estate, while
appointing Ricardo Silverio, Jr. as the new administrator.
On January 26, 2005, Nelia S. Silverio-Dee filed a Motion for
Reconsideration of the Order dated January 3, 2005, as well as all other
related orders.
On February 4, 2005, Ricardo Silverio Jr. filed an Urgent Motion for
an Order Prohibiting Any Person to Occupy/Stay/Use Real Estate Properties
Involved in the Intestate Estate of the Late Beatriz Silverio, Without Authority
from this Honorable Court.3[3]
Then, on May 31, 2005, the RTC issued an Omnibus Order 4[4]
affirming its Order dated January 3, 2005 and denying private respondents
motion for reconsideration. In the Omnibus Order, the RTC also authorized
Ricardo Silverio, Jr. to, upon receipt of the order, immediately exercise his
duties as administrator of the subject estate. The Omnibus Order also
directed Nelia S. Silverio-Dee to vacate the property at No. 3, Intsia, Forbes
Park, Makati City within fifteen (15) days from receipt of the order.

Nelia Silverio-Dee received a copy of the Omnibus Order dated May
31, 2005 on June 8, 2005.
On June 16, 2005, private respondent filed a Motion for
Reconsideration dated June 15, 2005 5[5] of the Omnibus Order. This was
later denied by the RTC in an Order dated December 12, 2005, which was
received by private respondent on December 22, 2005.
while the Record on Appeal dated January 20, 2006 9[9] was filed on January
23, 2006.
Thereafter, on October 23, 2006, Ricardo Silverio, Jr. filed a Motion
to Dismiss Appeal and for Issuance of a Writ of Execution 10[10] against the
appeal of Nelia Silverio-Dee on the ground that the Record on Appeal was
filed ten (10) days beyond the reglementary period pursuant to Section 3,
Rule 41 of the Rules of Court.

Notably, the RTC in its Order dated December 12, 2005 6[6] also
recalled its previous order granting Ricardo Silverio, Jr. with letters of
administration over the intestate estate of Beatriz Silverio and reinstating
Ricardo Silverio, Sr. as the administrator.
From the Order dated December 12, 2005, Ricardo Silverio, Jr. filed
a motion for reconsideration which was denied by the RTC in an Order dated
October 31, 2006. In the same order, the RTC also allowed the sale of
various properties of the intestate estate of the late Beatriz Silverio to
partially settle estate taxes, penalties, interests and other charges due
thereon. Among the properties authorized to be sold was the one located at
No. 3 Intsia Road, Forbes Park, Makati City.7[7]
Thus, on April 2, 2007, the RTC issued an Order 11[11] denying the
appeal on the ground that it was not perfected within the reglementary
period. The RTC further issued a writ of execution for the enforcement of the
Order dated May 31, 2005 against private respondent to vacate the premises
of the property located at No. 3, Intsia, Forbes Park, Makati City. The writ of
execution was later issued on April 17, 200712[12] and a Notice to
Vacate13[13] was issued on April 19, 2007 ordering private respondent to
leave the premises of the subject property within ten (10) days.

Meanwhile, on January 6, 2006, Nelia Silverio-Dee filed a Notice of

Appeal dated January 5, 2006 8[8] from the Order dated December 12, 2005 9

5 10

6 11

7 12

8 13
 Consequently, private respondent filed a Petition for Certiorari and
Prohibition (With Prayer for TRO and Writ of Preliminary Injunction) dated
May 2, 200714[14] with the CA.
On May 4, 2007, the CA issued the assailed Resolution granting the
prayer for the issuance of a TRO. In issuing the TRO, the CA ruled that the
Notice of Appeal was filed within the reglementary period provided by the
Rules of Court applying the fresh rule period enunciated by this Court in
Neypes v. Court of Appeals15[15] as reiterated in Sumaway v. Union Bank.16
[16]
Afterwards, on July 6, 2007, the CA issued the assailed decision
granting the petition of private respondent. The dispositive portion reads:
WHEREFORE, in view of the foregoing, the instant
petition is GRANTED and GIVEN DUE COURSE.
Accordingly, the Order, dated April 2, 2007, the writ of
execution, dated April 17, 2007, and the Notice to Vacate,
dated April 19, 2007, are ANNULLED AND SET ASIDE.
Further, the court a quo is hereby directed to give due
course to the appeal of Nelia S. Silverio-Dee.
SO ORDERED.
Hence, the instant petition.
The Issues
14
15
16
-A-
The Omnibus Order dated May 31, 2005 (Annex G of Annex
C) and the Order dated December 12, 2005 are Interlocutory
Orders which are not subject to appeal under Sec. 1 of Rule
41;
-B-
The respondent Court seriously erred and/or
committed grave abuse of discretion amounting to lack of or
excess of jurisdiction, in deliberately failing to decide that the
basis of the occupancy of Nelia S. Silverio-Dee are
fraudulent documents, without any authority from the
Intestate Court;
-C-
The respondent Court seriously erred and/or
committed grave abuse of discretion amounting to lack of or
excess of jurisdiction, in issuing precipitately the temporary
restraining order (TRO) in its Resolution dated May 4, 2007
(Annex A-1);
-D-
The respondent Court seriously erred and/or
committed grave abuse of discretion amounting to lack of or
excess of jurisdiction in annulling the Order dated April 2,
2007, the Writ of Execution dated April 17, 2007, and the
Notice to Vacate dated April 19, 2007 because the
respondent Silverio-Dees occupancy of the Intestate
property located at No. 3 Intsia Road, Forbes Park, Makati
City (Annex N of Annex C) will prevent the sale authorized by
the Order dated October 31, 2006 to secure funds for the
payment of taxes due which are now high and rapidly
increasing payment of which must not be enjoined.17[17]
17

The Courts Ruling
This petition is meritorious.
The May 31, 2005 Order of the RTC Is
an Interlocutory Order, Not Subject to an Appeal
To recapitulate, the relevant facts to the instant issue are as follows:
On May 31, 2005, the RTC issued an Omnibus Order ordering Nelia
Silverio-Dee to vacate the premises of the property located at No. 3, Intsia
Road, Forbes Park, Makati City. She received a copy of the said Order on
June 8, 2005. Instead of filing a Notice of Appeal and Record on Appeal,
private respondent filed a motion for reconsideration of the Order. This
motion for reconsideration was denied in an Order dated December 12,
2005. This Order was received by private respondent on December 22,
2005. On January 6, 2006, private respondent filed her Notice of Appeal
while she filed her Record on Appeal on January 23, 2006.
Thus, in denying due course to the Notice/Record on Appeal, the
RTC, in its Order dated April 2, 2007, ruled:
Verily, the appeal taken by the movant Nelia Silverio-
Dee from the Order of this Court dated December 12, 2005
denying the Motion for Reconsideration is misplaced as no
appeal may be taken from the order denying the motion for
reconsideration (see Section 1, Rule 41 of the 1997 Rules of
Civil Procedure in relation to Section 1(f), Rule 109 of the
Rules of Court). Furthermore, assuming that what said
movant had appealed is the final Order dated May 31, 2005,
still, the appeal cannot be given due course as the Record
on Appeal had been filed beyond the thirty-day period to
appeal (see Section 3 Rule 41 of the Rules of Court)
WHEREFORE, the appeal filed by Nelia Silverio is
hereby DENIED due course.
Let a writ of execution issue to enforce the Order
dated May 31, 2005 against Nelia Silverio-Dee requiring her
to vacate the premises at No. 3 Intsia, Forbes Park, Makati
City.
SO ORDERED.
Thus, the denial of due course by the RTC was based on two (2)
grounds: (1) that Nelia Silverio-Dees appeal was against an order denying a
motion for reconsideration which is disallowed under Sec. 1(a), Rule 41 of
the Rules of Court; and (2) that Nelia Silverio-Dees Record on Appeal was
filed beyond the reglementary period to file an appeal provided under Sec. 3
of Rule 41.
Sec. 1(a), Rule 41 of the Rules of Court provides:
RULE 41
APPEAL FROM THE REGIONAL TRIAL COURTS
SECTION 1. Subject of appeal.An appeal may be
taken from a judgment or final order that completely
disposes of the case, or of a particular matter therein when
declared by these Rules to be appealable.
No appeal may be taken from:
(a) An order denying a motion for new trial or
reconsideration;
xxxx
In all the above instances where the judgment or
final order is not appealable, the aggrieved party may file an
appropriate special civil action under Rule 65.
 Petitioner argues that because private respondent filed a Notice of the final judgment or order and assign such
interlocutory order as an error of the court on appeal.
Appeal from the Order dated December 12, 2005 which denied her motion
for reconsideration of the Omnibus Order dated May 31, 2005, her appeal is The denial of the motion for
reconsideration of an order of dismissal of a
of an order denying a motion for reconsideration. Thus, petitioner alleges that
complaint is not an interlocutory order, however,
private respondent employed the wrong remedy in filing a notice of appeal but a final order as it puts an end to the
particular matter resolved, or settles definitely
and should have filed a petition for certiorari with the CA under Rule 65 of the
the matter therein disposed of, and nothing is
Rules of Court instead. left for the trial court to do other than to execute
the order.

The CA, however, ruled that the filing of the Notice of Appeal in this Not being an interlocutory order, an order
denying a motion for reconsideration of an order of
case was proper saying that the appeal pertained to the earlier Omnibus
dismissal of a complaint is effectively an appeal of
Order dated May 31, 2005. The CA, citing Apuyan v. Haldeman,18[18] argued the order of dismissal itself.
that an order denying a motion for reconsideration may be appealed as such
The reference by petitioner, in his notice of
order is the final order which disposes of the case. In that case, we stated: appeal, to the March 12, 1999 Order denying his
Omnibus MotionMotion for Reconsideration should
thus be deemed to refer to the January 17, 1999
Order which declared him non-suited and
In the recent case of Quelnan v. VHF Philippines,
accordingly dismissed his complaint.
Inc., We held, thus:
If the proscription against appealing an order
[T]his Court finds that the proscription
denying a motion for reconsideration is applied to
against appealing from an order denying a motion
any order, then there would have been no need to
for reconsideration refers to an interlocutory order,
specifically mention in both above-quoted sections of
and not to a final order or judgment. That that was
the Rules final orders or judgments as subject to
the intention of the above-quoted rules is gathered
appeal. In other words, from the entire provisions of
from Pagtakhan v. CIR, 39 SCRA 455 (1971), cited
Rule 39 and 41, there can be no mistaking that what
in above-quoted portion of the decision in Republic,
is proscribed is to appeal from a denial of a motion
in which this Court held that an order denying a
for reconsideration of an interlocutory order.
motion to dismiss an action is interlocutory, hence,
(Emphasis supplied.)
not appealable.

The rationale behind the rule proscribing the

remedy of appeal from an interlocutory order is to Thus, the question posed is whether the Omnibus Order dated May
prevent undue delay, useless appeals and undue
31, 2005 is an interlocutory order.
inconvenience to the appealing party by having to
assail orders as they are promulgated by the court,
when they can be contested in a single appeal. The
On this aspect, the CA ruled that the Omnibus Order dated May 31,
appropriate remedy is thus for the party to wait for
2005 was a final order, to wit:

18
 We note that the Order, dated December 12, 2005,
is an offshoot of the Omnibus Order, dated May 31, 2005. In
the Omnibus Order, the court a quo ruled that the petitioner,
as an heir of the late Beatriz S. Silverio, had no right to use
and occupy the property in question despite authority given
to her by Ricardo Silverio, Sr. when it said, thus:
x x x In the first place, Nelia S. Silverio-Dee
cannot occupy the property in Intsia, Forbes Park,
admittedly belonging to the conjugal estate and
subject to their proceedings without authority of the
Court. Based on the pretenses of Nelia Silverio-Dee
in her memorandum, it is clear that she would use
and maintain the premises in the concept of a
distributee. Under her perception, Section 1 Rule 90
of the Revised Rules of Court is violated. x x x
xxxx
For the property at Intsia, Forbes Park
cannot be occupied or appropriated by, nor
distributed to Nelia S. Silverio-Dee, since no
distribution shall be allowed until the payment of the
obligations mentioned in the aforestated Rule is
made. In fact, the said property may still be sold to
pay the taxes and/or other obligations owned by the
estate, which will be difficult to do if she is allowed to
stay in the property.
Moreover, the alleged authority given by
SILVERIO, SR. for Nelia S. Silverio-Dee to occupy
the property dated May 4, 2004, assuming it is not
even antedated as alleged by SILVERIO, JR., is null
and void since the possession of estate property can
only be given to a purported heir by virtue of an
Order from this Court (see Sec. 1 Rule 90, supra;
and Sec. 2 Rule 84, Revised Rules of Court). In fact,
the Executor or Administrator shall have the right to
the possession and management of the real as well
as the personal estate of the deceased only when it
is necessary for the payment of the debts and
expenses of administration (See Sec. 3 Rule 84,
Revised Rules of Court). With this in mind, it is
without an iota of doubt that the possession by Nelia
S. Silverio-Dee of the property in question has
absolutely no legal basis considering that her
occupancy cannot pay the debts and expenses of
administration, not to mention the fact that it will also
disturb the right of the new Administrator to possess
and manage the property for the purpose of settling
the estates legitimate obligations.
In the belated Memorandum of Nelia
Silverio-Dee, she enclosed a statement of the
expenses she incurred pertaining to the house
renovation covering the period from May 26, 2004 to
February 28, 2005 in the total amount of
Php12,434,749.55, which supports this Courts
conclusion that she is already the final distributee of
the property. Repairs of such magnitude require
notice, hearing of the parties and approval of the
Court under the Rules. Without following this
process, the acts of Nelia Silverio-Dee are
absolutely without legal sanction.
To our mind, the court a quos ruling clearly
constitutes a final determination of the rights of the
petitioner as the appealing party. As such, the Omnibus
Order, dated May 31, 2002 (the predecessor of the Order
dated December 12, 2002) is a final order; hence, the
same may be appealed, for the said matter is clearly
declared by the rules as appealable and the proscription
does not apply.19[19] (Emphasis supplied.)
An interlocutory order, as opposed to a final order, was defined in
Tan v. Republic:20[20]
A final order is one that disposes of the subject
matter in its entirety or terminates a particular proceeding or
action, leaving nothing else to be done but to enforce by
execution what has been determined by the court, while an
interlocutory order is one which does not dispose of the
case completely but leaves something to be decided
upon. (Emphasis supplied.)
19
20
 Although the right of an heir over the property of the
decedent is inchoate as long as the estate has not been fully
Additionally, it is only after a judgment has been rendered in the case
settled and partitioned, the law allows a co-owner to exercise
that the ground for the appeal of the interlocutory order may be included in rights of ownership over such inchoate right. Thus, the Civil
Code provides:
the appeal of the judgment itself. The interlocutory order generally cannot be
appealed separately from the judgment. It is only when such interlocutory Art. 493. Each co-owner shall have the full
ownership of his part and of the fruits and benefits
order was rendered without or in excess of jurisdiction or with grave abuse of
pertaining thereto, and he may therefore alienate,
discretion that certiorari under Rule 65 may be resorted to. 21[21] assign or mortgage it, and even substitute another
person in its enjoyment, except when personal rights
are involved. But the effect of the alienation or the
In the instant case, Nelia Silverio-Dee appealed the May 31, 2005 mortgage, with respect to the co-owners, shall be
limited to the portion which may be allotted to him in
Order of the RTC on the ground that it ordered her to vacate the premises of
the division upon the termination of the co-
the property located at No. 3 Intsia Road, Forbes Park, Makati City. On that ownership.22[22] (Emphasis supplied.)
aspect the order is not a final determination of the case or of the issue of
Additionally, the above provision must be viewed in the context that
distribution of the shares of the heirs in the estate or their rights therein. It
the subject property is part of an estate and subject to intestate proceedings
must be borne in mind that until the estate is partitioned, each heir only has
before the courts. It is, thus, relevant to note that in Rule 84, Sec. 2 of the
an inchoate right to the properties of the estate, such that no heir may lay
Rules of Court, the administrator may only deliver properties of the estate to
claim on a particular property. In Alejandrino v. Court of Appeals, we
the heirs upon order of the Court. Similarly, under Rule 90, Sec. 1 of the
succinctly ruled:
Rules of Court, the properties of the estate shall only be distributed after the
payment of the debts, funeral charges, and other expenses against the
Art. 1078 of the Civil Code provides that where there
are two or more heirs, the whole estate of the decedent is, estate, except when authorized by the Court.
before partition, owned in common by such heirs, subject to
the payment of the debts of the deceased. Under a co-
ownership, the ownership of an undivided thing or right Verily, once an action for the settlement of an estate is filed with the
belongs to different persons. Each co-owner of property
court, the properties included therein are under the control of the intestate
which is held pro indiviso exercises his rights over the whole
property and may use and enjoy the same with no other court. And not even the administrator may take possession of any property
limitation than that he shall not injure the interests of his co-
that is part of the estate without the prior authority of the Court.
owners. The underlying rationale is that until a division is
made, the respective share of each cannot be
determined and every co-owner exercises, together with
In the instant case, the purported authority of Nelia Silverio-Dee,
his co-participants, joint ownership over the pro indiviso
property, in addition to his use and enjoyment of the which she allegedly secured from Ricardo Silverio, Sr., was never approved
same.
by the probate court. She, therefore, never had any real interest in the
specific property located at No. 3 Intsia Road, Forbes Park, Makati City. As

21 22
such, the May 31, 2005 Order of the RTC must be considered as
interlocutory and, therefore, not subject to an appeal.
Thus, private respondent employed the wrong mode of appeal by
filing a Notice of Appeal with the RTC. Hence, for employing the improper
mode of appeal, the case should have been dismissed. 23[23]

The implication of such improper appeal is that the notice of appeal

did not toll the reglementary period for the filing of a petition for certiorari
under Rule 65, the proper remedy in the instant case. This means that
private respondent has now lost her remedy of appeal from the May 31, 2005
Order of the RTC.

Therefore, there is no longer any need to consider the other issues

raised in the petition.

WHEREFORE, the May 4, 2007 Resolution and July 6, 2007

Decision of the CA in CA-G.R. SP No. 98764 are REVERSED and SET
ASIDE. Thus, the Decision dated April 2, 2007 of the RTC denying due
course to the appeal of Nelia Silverio-Dee; the Writ of Execution dated April
17, 2007; and the Notice to Vacate dated April 19, 2007 are hereby
REINSTATED.

No costs.

SO ORDERED.

CORAZON M. GREGORIO, as
administratrix of the estate litigated
in the case below, RAMIRO T.
MADARANG, and the heirs of
CASIMIRO R. MADARANG, JR.,
23 namely: Estrelita L. Madarang,
Consuelo P. Madarang, Casimiro omitted six lots including Lot 829-B-4-B located in Cebu City which is
Madarang IV, and Jane Margaret
covered by Transfer Certificate of Title No. 125429.
Madarang-Crabtree,
Petitioners,
A hearing was thus conducted to determine whether the six lots
- versus - formed part of the estate of the decedent. By Order of April 5, 2002, 26
[3] the
RTC, noting the following:
ATTY. JOSE R. MADARANG and
VICENTE R. MADARANG,
Respondents. x x x The said properties appear to have been acquired by
the spouses after [their marriage on] December 27, 1931
x-------------------------------------------------x and during their marriage or coverture. Article 160 of the
New Civil Code of the Philippines (which is the governing
law in this particular case) is very explicit in providing that all
DECISION properties of the marriage are presumed to belong to the
conjugal partnership. This presumption, to the mind of the
Court, has not been sufficiently rebutted by the special
administratrix. [Dolores] This presumption applies and holds
CARPIO MORALES, J. even if the land is registered under the wifes name as long
Casimiro V. Madarang, Sr. (Casimiro, Sr. or the decedent) died as it was acquired during marriage (De Guinoo vs. Court of
Appeals. G.R. No. L-5541, June 26, 1955) or even if the wife
intestate on June 3, 1995, leaving real and personal properties with an purchased the land alone (Flores, et.al. Vs. Escudero, et.al.,
estimated value of P200,000.00.24[1] He was survived by his wife Dolores G.R. No. L-5302, March 11, 1953).27[4] (underscoring
supplied),
and their five children, namely Casimiro, Jr., Jose, Ramiro, Vicente and
Corazon.
instructed Dolores to revise her Inventory Report to include the six lots.

In the intestate proceedings filed by the couples son Jose which was lodged
before the Regional Trial Court (RTC) of Cebu City, Branch 57, Dolores was Dolores and her children, except Jose who suggested that the former be
appointed as administratrix of the intestate estate of Casimiro, Sr.25[2] referred to as oppositors,28[5] questioned the RTC order of inclusion of the six
lots via motion for reconsideration during the pendency of which motion the
Dolores submitted an Inventory Report listing the properties of the
decedents estate. Jose filed his Comment on the Report, alleging that it
26

24 27

25 28
court appointed herein petitioner Corazon as co-administratrix of her mother
Dolores.
As Dolores and her co-oppositors alleged that the six lots had been
transferred during the lifetime of the decedent, they were ordered to submit
their affidavits, in lieu of oral testimony, to support the allegation. Only herein
respondent Vicente complied. In his Affidavit, Vicente declared that one of
the six lots, Lot 829-B-4-B, was conveyed to him by a Deed of Donation
29
executed in August 1992 by his parents Dolores and Casimiro, Sr. [6]
It appears that petitioners later manifested that they no longer oppose the
provisional inclusion of the six lots, except Lot 829-B-4-B.
The RTC, by Order of January 20, 2003, 30[7] thus modified its April 5,
2002 Order as follows:
Of the six lots directed included in the inventory, Lot
829 B-4-B should be excluded. The administratrix is directed
within sixty (60) days: (1) to submit a revised inventory in
accordance with the Order dated April 5, 2002, as here
modified; and (2) to render an accounting of her
administration of the estate of Casimiro V. Madarang.
(underscoring supplied),
Jose moved to reconsider the RTC January 20, 2003 Order, arguing that
since the title to Lot 829-B-4-B remained registered in the name of his
parents, it should not be excluded from the Inventory; and that the Deed of
Donation in Vicentes favor was not notarized nor registered with the Register
29
30
of Deeds. Joses motion for reconsideration having been denied by Order of
February 5, 2003, he filed a Notice of Appeal.
In his Brief filed before the Court of Appeals, Jose claimed that the
RTC erred in excluding Lot 829-B-4-B from the Inventory as what the lower
court should have done was to . . . maintain the order including said lot in the
inventory of the estate so Vicente can file an ordinary action where its
ownership can be threshed out.
Jose later filed before the appellate court a Motion to Withdraw
Petition which his co-heirs-oppositors-herein petitioners opposed on the
ground that, inter alia, a grant thereof would end the administration
proceedings. The appellate court, by Resolution of January 18, 2008, 31[8]
granted the withdrawal on the ground that it would not prejudice the rights of
the oppositors.
Petitioners motion for reconsideration of the appellate courts grant of
Joses Motion to Withdraw Petition was, by Resolution of November 6,
2008,32[9] denied in this wise:
xxxx
In the instant case, the Probate Court found that the
parties of the case interposed no objection to the non-
inclusion of Lot No. 829-B-4-B in the inventory of the estate
of Casimiro V. Madarang, in effect, they have consented
thereto. x x x
xxxx
31
32
 Moreover, [herein petitioners] in their appeal brief,
ha[ve] extensively argued that . . . Vicente Madarang [to
whom the questioned lot was donated] and his family
have been in continuous, actual and physical
possession of the donated lot for over twenty (20) years,
even before the execution of the so called donation inter
vivos in 1992. . . . Vicente Madarang has his residential
house thereon and that his ownership over the donated lot
has been fully recognized by the entire Madarang Clan,
including all his brothers and sisters, except the much
belated objection by the appellant (Jose), allegedly resorted
to as an act of harassment. 33[10] (emphasis and
underscoring supplied),
thus affirming the RTC order of exclusion of the questioned lot.
Hence, the present petition for review filed by the oppositors-herein
petitioners. Casimiro, Jr. having died during the pendency of the case, he
was substituted by his wife petitioner Estrelita and co-petitioners children
Consuelo, Casimiro IV, and Jane Margaret.
Petitioners contend that since the only issue for consideration by the
appellate court was the merit of Joses Motion to Withdraw Petition, it
exceeded its jurisdiction when it passed upon the merits of Joses appeal
from the RTC order excluding Lot 829-B-4-B from the Inventory.
Petitioners contention does not lie.
In their Motion for Reconsideration of the appellate courts grant of
Joses Motion to Withdraw Petition, petitioners, oddly denying the existence
of a petition, raised the issue of the propriety of the RTC Order excluding Lot
829-B-4-B from the Inventory. Their prayer in their Motion clearly states so:
33
WHEREFORE, premises considered, Oppositors-
Appellees [petitioners] respectfully PRAY for this Honorable
Court to RECONSIDER its questioned Resolution and
rendering [sic], forthwith, a decision resolving the merits of
the Partial Appeal of petitioner-appellant Jose Madarang.34
[11] (capitalization in the original; emphasis supplied)
The appellate court did not thus err in passing on the said issue.
More specifically, petitioners question the appellate courts finding that as the
parties interposed no objection to the non-inclusion of Lot No. 829-B-4-B in
the inventory of the estate of Casimiro V. Madarang, in effect, they have
consented thereto.35[12]
A review of the voluminous records of the case shows that, indeed,
there was no accord among the parties respecting the exclusion of Lot 829-
B-4-B.
While a probate court, being of special and limited jurisdiction, cannot act on
questions of title and ownership, it can, for purposes of inclusion or exclusion
in the inventory of properties of a decedent, make a provisional determination
of ownership, without prejudice to a final determination through a separate
action in a court of general jurisdiction.
The facts obtaining in the present case, however, do not call for the
probate court to make a provisional determination of ownership of Lot 829-B-
4-B. It bears stress that the question is one of collation or advancement by
34
35
the decedent to an heir over which the question of title and ownership can be
36
passed upon by a probate court. [13]
As earlier reflected, Vicentes claim of ownership over Lot 829-B-4-B rests
upon a deed of donation by his father (decedent) and his mother.
WHEREFORE, the petition is GRANTED. The assailed November 6,
2008 Resolution of the Court of Appeals is SET ASIDE. Petitioner Corazon
M. Gregorio and her co-administratrix Dolores Madarang are DIRECTED to
include Lot 829-B-4-B in the Inventory of the properties of the intestate estate
of Casimiro V. Madarang, Sr.

Article 1061 of the Civil Code expressly provides: Let the records of the case be remanded to the court of origin, the
Regional Trial Court of Cebu City, Branch 57, which is DIRECTED to proceed
Article 1061. Every compulsory heir, who succeeds with
with the disposition of the case with dispatch.
other compulsory heirs, must bring into the mass of the
estate any property or right which he may have received
from the decedent, during the lifetime of the latter, by way of
SO ORDERED.
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 partition. (underscoring supplied)

in relation to which, Section 2, Rule 90 of the Rules of Court provides:

Sec. 2. Questions as to advancement to be determined.

Questions as to advancement made, or alleged to have
been made, by the deceased to any heir may be heard and
determined by the court having jurisdiction of the estate
proceedings; and the final order of the court thereon shall
be binding on the person raising the questions and on
the heir. (emphasis and underscoring supplied)

By express provision of law then, Lot 829-B-4-B, which was alleged

to have been donated by the decedent and his wife to their son-respondent
Vicente, should not be excluded from the inventory of the properties of the
decedent.

36
 intestate, leaving to her heirs, among others, three parcels of land, including
ANITA REYESMESUGAS, G.R. No. 174835
Petitioner, a lot covered by Transfer Certificate of Title (TCT) No. 24475.
Present:

CORONA, J., On February 3, 2000, respondent filed a petition for settlement of the
Chairperson,
VELASCO, JR., estate of Lourdes,39[3] praying for his appointment as administrator due to
-versus- NACHURA,
PERALTA and alleged irregularities and fraudulent transactions by the other heirs.
ABAD, JJ.
Petitioner, her father Pedro and Arturo, a sibling of the petitioner, opposed
ALEJANDRO AQUINO REYES,
Respondent. Promulgated: the petition.

March 22, 2010

On August 30, 2000, a compromise agreement 40[4] was entered into by the
x--------------------------------------------------x
parties whereby the estate of Lourdes was partitioned. A decision 41[5] dated
DECISION
September 13, 2000 was rendered by the RTC pursuant to the said
CORONA, J.:
compromise agreement. The compromise agreement with respect to TCT
37
This is a petition for review on certiorari [1] seeking to reverse the
No. 24475 is reproduced below:
June 23, 2006 and September 21, 2006 orders 38[2] of the Regional Trial

Court of Makati (RTC), Branch 62 denying the petitioners motion to cancel a 5. That the parties hereto hereby agree to recognize,
acknowledge and respect:
notice of lis pendens.
5.1. the improvements found on the parcel of land
covered under TCT No. 24475 of the
Petitioner Anita Reyes-Mesugas and respondent Alejandro A. Reyes are the Registry of Deeds of Rizal consisting of two
lots namely Lot 4-A and Lot 4-B of the new
children of Lourdes Aquino Reyes and Pedro N. Reyes. Lourdes died survey with two (2) residential houses
presently occupied and possessed as
owners thereof by Antonio Reyes and Anita
Reyes-Mesugas to constitute part of their

* 39

37 40

38 41
 shares in the estate of Lourdes Aquino
Reyes;
5.2 further, the improvement consisting of a
bakery-store under lease to a third party.
The proceeds thereof shall be shared by
Antonio Reyes and Pedro N. Reyes;
5.3 that the expenses for the partition and titling
of the property between Antonio Reyes and
Anita Reyes-Mesugas shall be equally
shared by them.
On December 7, 2004, petitioner filed a motion to cancel lis pendens
annotation for TCT No. 24475 42[6] in the RTC in view of the finality of
judgment in the settlement of the estate. Petitioner argued that the settlement
of the estate proceeding had terminated; hence, the annotation of lis
pendens could already be cancelled since it had served its purpose.
Respondent opposed the motion and claimed that the parties, in
addition to the compromise agreement, executed side agreements which had
yet to be fulfilled. One such agreement was executed between petitioner 43[7]
and respondent granting respondent a one-meter right of way on the lot
covered by TCT No. 24475. However, petitioner refused to give the right of
way and threatened to build a concrete structure to prevent access. He
argued that, unless petitioner permitted the inscription of the right of way on
42
43
the certificate of title pursuant to their agreement, the notice of lis pendens in
TCT No. 24475 must remain.
In its order44[8] dated January 26, 2006, the RTC denied the motion to cancel
the notice of lis pendens annotation for lack of sufficient merit. It found that
the cancellation of the notice of lis pendens was unnecessary as there were
reasons for maintaining it in view of petitioner's non-compliance with the
alleged right of way agreement between the parties. It stated that:
A careful perusal of the compromise agreement dated
September 13, 2000 revealed that one of the properties
mentioned is a parcel of land with improvements consisting
[of] two hundred nine (209) square meters situated in Makati
covered under TCT No. 24475 of the Registry of Deeds [of]
Rizal in the name of Pedro N. Reyes married to Lourdes
Aquino Reyes and form[s] part of the notarized right of way
agreement on TCT No. 24475, considering that the movant
Anita Reyes is still bound by the right of way agreement, the
same should be complied with before the cancellation of the
subject annotation.45[9] (Citations omitted)
Petitioner filed a notice of appeal. 46[10] Because the denial of a
motion to cancel the notice of lis pendens annotation was an interlocutory
order, the RTC denied the notice of appeal as it could not be appealed until
44
45
46
the judgment on the main case was rendered. 47[11] A motion for such action constitutes an implied waiver of the right to appeal against the

reconsideration was filed by petitioner but the same was also denied. 48[12] said decision.52[16]

Hence, this petition. In this instance, the case filed with the RTC was a special proceeding

for the settlement of the estate of Lourdes. The RTC therefore took
We find for petitioner.
cognizance of the case as a probate court.

A compromise is a contract whereby the parties, by making

Settled is the rule that a probate court is a tribunal of limited
reciprocal concessions, avoid litigation or put an end to one already
jurisdiction. It acts on matters pertaining to the estate but never on the rights
commenced.49[13] Once submitted to the court and stamped with judicial
to property arising from the contract. 53[17] It approves contracts entered into
approval, it becomes more than a mere private contract binding upon the
for and on behalf of the estate or the heirs to it but this is by fiat of the Rules
parties; having the sanction of the court and entered as its determination of
of Court.54[18] It is apparent therefore that when the RTC approved the
50
the controversy, it has the force and effect of any judgment. [14]
compromise agreement on September 13, 2000, the settlement of the estate

Consequently, a judgment rendered in accordance with a compromise proceeding came to an end.

agreement is immediately executory as there is no appeal from such

Moreover, a notice of lis pendens may be cancelled when the
judgment.51[15] When both parties enter into an agreement to end a pending
annotation is not necessary to protect the title of the party who caused it to
litigation and request that a decision be rendered approving said agreement,
be recorded.55[19] The compromise agreement did not mention the grant of a

47 right of way to respondent. Any agreement other than the judicially approved

48 52

49 53

50 54

51 55
compromise agreement between the parties was outside the limited
jurisdiction of the probate court. Thus, any other agreement entered into by
the petitioner and respondent with regard to a grant of a right of way was not
within the jurisdiction of the RTC acting as a probate court. Therefore, there
was no reason for the RTC not to cancel the notice of lis pendens on TCT
No. 24475 as respondent had no right which needed to be protected. Any
alleged right arising from the side agreement on the right of way can be fully
protected by filing an ordinary action for specific performance in a court of
general jurisdiction.
More importantly, the order of the probate court approving the
compromise had the effect of directing the delivery of the residue of the
estate of Lourdes to the persons entitled thereto under the compromise
agreement. As such, it brought to a close the intestate proceedings 56[20] and
the probate court lost jurisdiction over the case, except only as regards to the
compliance and the fulfillment by the parties of their respective obligations
under the compromise agreement.
Having established that the proceedings for the settlement of the
estate of Lourdes came to an end upon the RTCs promulgation of a decision
based on the compromise agreement, Section 4, Rule 90 of the Rules of
Court provides:
56
Sec. 4. Recording the order of partition of estate. - Certified
copies of final orders and judgments of the court relating to
the real estate or the partition thereof shall be recorded in
the registry of deeds of the province where the property is
situated.
In line with the recording of the order for the partition of the estate,
paragraph 2, Section 77 of Presidential Decree (PD) No. 1529 57[21] provides:
Section 77. Cancellation of Lis Pendens xxx xxx
xxx xxx
At any time after final judgment in favor of the
defendant, or other disposition of the action such as to
terminate finally all rights of the plaintiff in and to the
land and/or buildings involved, in any case in which a
memorandum or notice of lis pendens has been registered
as provided in the preceding section, the notice of lis
pendens shall be deemed cancelled upon the registration
of a certificate of the clerk of court in which the action or
proceeding was pending stating the manner of disposal
thereof. (emphasis supplied)
Thus, when the September 13, 2000 decision was recorded in the
Registry of Deeds of Rizal pursuant to Section 4, Rule 90 of the Rules of
Court, the notice of lis pendens inscribed on TCT No. 24475 was deemed
cancelled by virtue of Section 77 of PD No. 1529.
WHEREFORE, the petition is hereby GRANTED. The Orders of the
Regional Trial Court of Makati, Branch 62 dated June 23, 2006 and
September 21, 2006 are SET ASIDE. The notice of lis pendens annotated on
TCT No. 24475 is hereby declared CANCELLED pursuant to Section 77 of
the PD No. 1529 in relation to Section 4, Rule 90 of the Rules of Court
SO ORDERED.
57
 EPUBLIC OF THE PHILIPPINES, represented by G.R. No. 158230 In March 1936, Lee Liong, a Chinese citizen, bought Lot No. 398
he DIRECTOR OF LANDS,
from Vicenta Arcenas, Francisco, Carmen Ramon, Mercedes, Concepcion,
etitioner, Present:
Mariano, Jose, and Manuel, all surnamed Dinglasan. Lot No. 398, with an
PUNO, C.J., Chairperson,
area of 1,574 square meters, is located at the corner of Roxas Avenue and
CARPIO,
CORONA, Pavia Street in Roxas City. In February 1944, Lee Liong died intestate and
AZCUNA, and
was survived by his widow Ang Chia, and his sons Lee Bing Hoo and Lee
versus - LEONARDO-DE CASTRO, JJ.
Bun Ting. On 30 June 1947, the surviving heirs of Lee Liong extrajudicially
settled the estate of the deceased and partitioned among themselves Lot No.
EGISTER OF DEEDS OF ROXAS CITY, 398. When Lee Bing Hoo and Lee Bun Ting died, Lot No. 398 was
LIZABETH LEE, and PACITA YU-LEE,
transferred by succession to their respective wives, Elizabeth Lee (Elizabeth)
Respondents.
Promulgated: and Pacita Yu-Lee (Pacita).

July 16, 2008

In the 1956 case of Dinglasan v. Lee Bun Ting,60[3] involving Lot No.
x--------------------------------------------------x
398, the Court held that even if the sale of the property was null and void for
violating the constitutional prohibition on the sale of land to an alien, still the
doctrine of in pari delicto barred the sellers from recovering the title to the
DECISION
property. Eleven years later, in the case of Lee Bun Ting v. Judge Aligaen,61
[4] the Court ordered the trial court to dismiss the complaint of the
CARPIO, J.:
Dinglasans for the recovery of Lot No. 398. Applying the doctrine of res
judicata, the Court held that the case was a mere relitigation of the same
The Case
issues previously adjudged with finality in the Dinglasan case, involving the
same parties or their privies and concerning the same subject matter.
This is a petition for review58[1] of the Decision59[2] dated 12 July
2002 and the Resolution dated 9 May 2003 of the Court of Appeals in CA-
On 7 September 1993, Elizabeth and Pacita (private respondents)
G.R. CV No. 53890.
filed a petition for reconstitution of title of Lot No. 398 because the records of
the Register of Deeds, Roxas City were burned during the war. On 3 October
The Facts
2001, the Court held that the trial courts order of reconstitution was void for

58 60

59 61
lack of factual support because it was based merely on the plan and
62
technical description approved by the Land Registration Authority. [5]
Meanwhile, on 26 January 1995, petitioner Republic of the Philippines
(petitioner), through the Office of the Solicitor General (OSG), filed with the
Regional Trial Court of Roxas City a Complaint63[6] for Reversion of Title
against private respondents and the Register of Deeds of Roxas City, praying
that (1) the sale of Lot No. 398 to Lee Liong be set aside for being null and
void ab initio; and (2) Lot No. 398 be reverted to the public domain for the
States disposal in accordance with law.
In their Answer, private respondents invoked as affirmative defenses:
(1) prescription; (2) private ownership of Lot No. 398; and (3) Lee Liongs
being a buyer in good faith and for value. Furthermore, private respondents
claimed that as Filipino citizens, they are qualified to acquire Lot No. 398 by
succession.
The Register of Deeds of Roxas City did not file an answer.
On 7 May 1996, the trial court rendered a decision ordering the
reversion of Lot No. 398 to the State.
On appeal, the Court of Appeals rendered its Decision 64[7] dated 12
July 2002, reversing the trial courts decision and declaring private
respondents as the absolute and lawful owners of Lot No. 398. Petitioner
62
63
64
moved for reconsideration, which the Court of Appeals denied in its
Resolution65[8] dated 9 May 2003.
Hence, this petition for review.
The Ruling of the Trial Court
The trial court ordered the reversion of Lot No. 398 to the State. The
trial court held that private respondents could not have acquired a valid title
over Lot No. 398 because the sale of the lot to their predecessor-in-interest
Lee Liong was null and void. Being an innocent purchaser in good faith and
for value did not cure Lee Liongs disqualification as an alien who is
prohibited from acquiring land under the Constitution. The trial court further
held that prescription cannot be invoked against the State as regards an
action for reversion or reconveyance of land to the State.
The Ruling of the Court of Appeals
The Court of Appeals agreed with the trial court that the State is not
barred by prescription. However, the Court of Appeals held that the trial court
erred in ordering the reversion of Lot No. 398 to the State. Although the sale
of Lot No. 398 to Lee Liong violated the constitutional prohibition on aliens
acquiring land, the Court of Appeals noted that Lot No. 398 had already been
acquired by private respondents through succession. The transfer of Lot No.
398 to private respondents, who are Filipino citizens qualified to acquire
lands, can no longer be impugned on the basis of the invalidity of the initial
transfer. The flaw in the original transaction is considered cured and the title
of the transferee is deemed valid considering that the objective of the
65
constitutional proscription against alien ownership of lands, that is to keep
our lands in Filipino hands, has been achieved.
The Issue
Petitioner raises the lone issue that:
THE COURT OF APPEALS GRAVELY ERRED
WHEN IT REVERSED AND SET ASIDE THE APPEALED
DECISION AND DECLARED PRIVATE RESPONDENTS
THE ABSOLUTE AND LAWFUL OWNERS AND
POSSESSORS OF LOT NO. 398 OF ROXAS CITY
CADASTRE CONSIDERING THAT LEE LIONG, WHO IS
AN ALIEN, AND THUS, CONSTITUTIONALLY PROHIBITED
TO OWN REAL PROPERTY IN THE PHILIPPINES,
ACQUIRED NO RIGHT OR TITLE OVER SUBJECT LOT
WHICH HE COULD HAVE TRANSMITTED BY
SUCCESSION TO PRIVATE RESPONDENTS
PREDECESSORS-IN-INTEREST.
The Ruling of the Court
The petition is without merit.
Petitioner argues that since the sale of Lot No. 398 to Lee Liong was
void, Lot No. 398 never became part of the deceased Lee Liongs estate.
Hence, Lot No. 398 could not be transmitted by succession to Lee Liongs
surviving heirs and eventually to private respondents.
We do not subscribe to petitioners position. The circumstances
of this case are similar to the case of De Castro v. Teng Queen Tan,66[9]
wherein a residential lot was sold to a Chinese citizen. Upon the death of the
alien vendee, his heirs entered into an extrajudicial settlement of the estate
66
of the deceased and the subject land was transferred to a son who was a
naturalized Filipino. Subsequently, the vendor of the lot filed a suit for
annulment of sale for alleged violation of the Constitution prohibiting the sale
of land to aliens. Independently of the doctrine of in pari delicto, the Court
sustained the sale, holding that while the vendee was an alien at the time of
the sale, the land has since become the property of a naturalized Filipino
citizen who is constitutionally qualified to own land.
Similarly, in this case, upon the death of the original vendee who was a
Chinese citizen, his widow and two sons extrajudicially settled his estate,
including Lot No. 398. When the two sons died, Lot No. 398 was transferred
by succession to their respective spouses, herein private respondents who
are Filipino citizens.
We now discuss whether reversion proceedings is still viable
considering that Lot No. 398 has already been transfered to Filipino citizens.
In the reconstitution case of Lee v. Republic of the Philippines67[10] involving
Lot No. 398, this Court explained that the OSG may initiate an action for
reversion or escheat of lands which were sold to aliens disqualified from
acquiring lands under the Constitution. However, in the case of Lot No. 398,
the fact that it was already transferred to Filipinos militates against escheat
proceedings, thus:
Although ownership of the land cannot revert to the original
sellers, because of the doctrine of pari delicto, the Solicitor
General may initiate an action for reversion or escheat of the
land to the State, subject to other defenses, as hereafter set
forth.
In this case, subsequent circumstances militate against
escheat proceedings because the land is now in the
hands of Filipinos. The original vendee, Lee Liong, has
67
 since died and the land has been inherited by his heirs
and subsequently their heirs, petitioners herein
[Elizabeth Lee and Pacita Yu Lee]. Petitioners are
Filipino citizens, a fact the Solicitor General does not
dispute.
The constitutional proscription on alien ownership of lands of
the public or private domain was intended to protect lands
from falling in the hands of non-Filipinos. In this case,
however, there would be no more public policy violated since
the land is in the hands of Filipinos qualified to acquire and
own such land. If land is invalidly transferred to an alien who
subsequently becomes a citizen or transfers it to a citizen,
the flaw in the original transaction is considered cured and
the title of the transferee is rendered valid. Thus, the
subsequent transfer of the property to qualified Filipinos may
no longer be impugned on the basis of invalidity of the initial
transfer. The objective of the constitutional provision to keep
our lands in Filipino hands has been achieved.68[11]
(Emphasis supplied)
In this case, the reversion proceedings was initiated only after almost 40
years from the promulgation of the case of Dinglasan v. Lee Bun Ting,69[12]
where the Court held that the sale of Lot No. 398 was null and void for
violating the constitutional prohibition on the sale of land to an alien. If
petitioner had commenced reversion proceedings when Lot No. 398 was still
in the hands of the original vendee who was an alien disqualified to hold title
thereto, then reversion of the land to the State would undoubtedly be
allowed. However, this is not the case here. When petitioner instituted the
action for reversion of title in 1995, Lot No. 398 had already been transferred
by succession to private respondents who are Filipino citizens.
68
69
Since Lot No. 398 has already been transferred to Filipino citizens,
the flaw in the original transaction is considered cured. 70[13] As held in
Chavez v. Public Estates Authority:71[14]
Thus, the Court has ruled consistently that where a Filipino
citizen sells land to an alien who later sells the land to a
Filipino, the invalidity of the first transfer is corrected by the
subsequent sale to a citizen. Similarly, where the alien who
buys the land subsequently acquires Philippine citizenship,
the sale was validated since the purpose of the constitutional
ban to limit land ownership to Filipinos has been achieved. In
short, the law disregards the constitutional
disqualification of the buyer to hold land if the land is
subsequently transferred to a qualified party, or the
buyer himself becomes a qualified party.72[15] (Emphasis
supplied)
Clearly, since Lot No. 398 has already been transferred to private
respondents who are Filipino citizens, the prior invalid sale to Lee Liong can
no longer be assailed. Hence, reversion proceedings will no longer prosper
since the land is now in the hands of Filipino citizens.
WHEREFORE, we DENY the petition. We AFFIRM the Decision
dated 12 July 2002 and the Resolution dated 9 May 2003 of the Court of
Appeals in CA-G.R. CV No. 53890.
SO ORDERED.
70
71
72