IV.

Succession and Administration

MICIANO VS BRIMO

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-22595 November 1, 1927

Testate Estate of Joseph G. Brimo, JUAN MICIANO, administrator, petitioner-appellee,

vs.
ANDRE BRIMO, opponent-appellant.

Ross, Lawrence and Selph for appellant.

Camus and Delgado for appellee.

ROMUALDEZ, J.:

The partition of the estate left by the deceased Joseph G. Brimo is in question in this
case.

The judicial administrator of this estate filed a scheme of partition. Andre Brimo, one of
the brothers of the deceased, opposed it. The court, however, approved it.

The errors which the oppositor-appellant assigns are:

(1) The approval of said scheme of partition; (2) denial of his participation in the
inheritance; (3) the denial of the motion for reconsideration of the order approving the partition;
(4) the approval of the purchase made by the Pietro Lana of the deceased's business and the
deed of transfer of said business; and (5) the declaration that the Turkish laws are impertinent to
this cause, and the failure not to postpone the approval of the scheme of partition and the
delivery of the deceased's business to Pietro Lanza until the receipt of the depositions
requested in reference to the Turkish laws.

The appellant's opposition is based on the fact that the partition in question puts into
effect the provisions of Joseph G. Brimo's will which are not in accordance with the laws of his
Turkish nationality, for which reason they are void as being in violation or article 10 of the Civil
Code which, among other things, provides the following:

Nevertheless, legal and testamentary successions, in respect to the order of

succession as well as to the amount of the successional rights and the intrinsic validity of
their provisions, shall be regulated by the national law of the person whose succession is
 in question, whatever may be the nature of the property or the country in which it may be
situated.

But the fact is that the oppositor did not prove that said testimentary dispositions are not
in accordance with the Turkish laws, inasmuch as he did not present any evidence showing
what the Turkish laws are on the matter, and in the absence of evidence on such laws, they are
presumed to be the same as those of the Philippines. (Lim and Lim vs. Collector of Customs, 36
Phil., 472.)

It has not been proved in these proceedings what the Turkish laws are. He, himself,
acknowledges it when he desires to be given an opportunity to present evidence on this point;
so much so that he assigns as an error of the court in not having deferred the approval of the
scheme of partition until the receipt of certain testimony requested regarding the Turkish laws
on the matter.

The refusal to give the oppositor another opportunity to prove such laws does not
constitute an error. It is discretionary with the trial court, and, taking into consideration that the
oppositor was granted ample opportunity to introduce competent evidence, we find no abuse of
discretion on the part of the court in this particular. There is, therefore, no evidence in the record
that the national law of the testator Joseph G. Brimo was violated in the testamentary
dispositions in question which, not being contrary to our laws in force, must be complied with
and executed. lawphil.net

Therefore, the approval of the scheme of partition in this respect was not erroneous.

In regard to the first assignment of error which deals with the exclusion of the herein
appellant as a legatee, inasmuch as he is one of the persons designated as such in will, it must
be taken into consideration that such exclusion is based on the last part of the second clause of
the will, which says:

Second. I like desire to state that although by law, I am a Turkish citizen, this
citizenship having been conferred upon me by conquest and not by free choice, nor by
nationality and, on the other hand, having resided for a considerable length of time in the
Philippine Islands where I succeeded in acquiring all of the property that I now possess,
it is my wish that the distribution of my property and everything in connection with this,
my will, be made and disposed of in accordance with the laws in force in the Philippine
islands, requesting all of my relatives to respect this wish, otherwise, I annul and cancel
beforehand whatever disposition found in this will favorable to the person or persons
who fail to comply with this request.

The institution of legatees in this will is conditional, and the condition is that the instituted
legatees must respect the testator's will to distribute his property, not in accordance with the
laws of his nationality, but in accordance with the laws of the Philippines.

If this condition as it is expressed were legal and valid, any legatee who fails to comply
with it, as the herein oppositor who, by his attitude in these proceedings has not respected the
will of the testator, as expressed, is prevented from receiving his legacy.

The fact is, however, that the said condition is void, being contrary to law, for article 792
of the civil Code provides the following:
 Impossible conditions and those contrary to law or good morals shall be
considered as not imposed and shall not prejudice the heir or legatee in any manner
whatsoever, even should the testator otherwise provide.

And said condition is contrary to law because it expressly ignores the testator's national
law when, according to article 10 of the civil Code above quoted, such national law of the
testator is the one to govern his testamentary dispositions.

Said condition then, in the light of the legal provisions above cited, is considered
unwritten, and the institution of legatees in said will is unconditional and consequently valid and
effective even as to the herein oppositor.

It results from all this that the second clause of the will regarding the law which shall
govern it, and to the condition imposed upon the legatees, is null and void, being contrary to
law.

All of the remaining clauses of said will with all their dispositions and requests are
perfectly valid and effective it not appearing that said clauses are contrary to the testator's
national law.

Therefore, the orders appealed from are modified and it is directed that the distribution of
this estate be made in such a manner as to include the herein appellant Andre Brimo as one of
the legatees, and the scheme of partition submitted by the judicial administrator is approved in
all other respects, without any pronouncement as to costs.

So ordered.

Street, Malcolm, Avanceña, Villamor and Ostrand, JJ., concur.

PHILIPPINE TRUST CO VS BOHANAN

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-12105 January 30, 1960

TESTATE ESTATE OF C. O. BOHANAN, deceased. PHILIPPINE TRUST CO., executor-

appellee,
vs.
MAGDALENA C. BOHANAN, EDWARD C. BOHANAN, and MARY LYDIA
BOHANAN, oppositors-appellants.

Jose D. Cortes for appellants.

Ohnick, Velilla and Balonkita for appellee.
LABRADOR, J.:

Appeal against an order of the Court of First Instance of Manila, Hon. Ramon San Jose,
presiding, dismissing the objections filed by Magdalena C. Bohanan, Mary Bohanan and
Edward Bohanan to the project of partition submitted by the executor and approving the said
project.

On April 24, 195 0, the Court of First Instance of Manila, Hon. Rafael Amparo, presiding,
admitted to probate a last will and testament of C. O. Bohanan, executed by him on April 23,
1944 in Manila. In the said order, the court made the following findings:

According to the evidence of the opponents the testator was born in Nebraska and
therefore a citizen of that state, or at least a citizen of California where some of his
properties are located. This contention in untenable. Notwithstanding the long residence
of the decedent in the Philippines, his stay here was merely temporary, and he
continued and remained to be a citizen of the United States and of the state of his
pertinent residence to spend the rest of his days in that state. His permanent residence
or domicile in the United States depended upon his personal intent or desire, and he
selected Nevada as his homicide and therefore at the time of his death, he was a citizen
of that state. Nobody can choose his domicile or permanent residence for him. That is
his exclusive personal right.

Wherefore, the court finds that the testator C. O. Bohanan was at the time of his death a
citizen of the United States and of the State of Nevada and declares that his will and
testament, Exhibit A, is fully in accordance with the laws of the state of Nevada and
admits the same to probate. Accordingly, the Philippine Trust Company, named as the
executor of the will, is hereby appointed to such executor and upon the filing of a bond in
the sum of P10,000.00, let letters testamentary be issued and after taking the prescribed
oath, it may enter upon the execution and performance of its trust. (pp. 26-27, R.O.A.).

It does not appear that the order granting probate was ever questions on appeal. The executor
filed a project of partition dated January 24, 1956, making, in accordance with the provisions of
the will, the following adjudications: (1) one-half of the residuary estate, to the Farmers and
Merchants National Bank of Los Angeles, California, U.S.A. in trust only for the benefit of
testator's grandson Edward George Bohanan, which consists of several mining companies; (2)
the other half of the residuary estate to the testator's brother, F.L. Bohanan, and his sister, Mrs.
M. B. Galbraith, share and share alike. This consist in the same amount of cash and of shares
of mining stock similar to those given to testator's grandson; (3) legacies of P6,000 each to his
(testator) son, Edward Gilbert Bohana, and his daughter, Mary Lydia Bohanan, to be paid in
three yearly installments; (4) legacies to Clara Daen, in the amount of P10,000.00; Katherine
Woodward, P2,000; Beulah Fox, P4,000; and Elizabeth Hastings, P2,000;

It will be seen from the above that out of the total estate (after deducting administration
expenses) of P211,639.33 in cash, the testator gave his grandson P90,819.67 and one-half of
all shares of stock of several mining companies and to his brother and sister the same amount.
To his children he gave a legacy of only P6,000 each, or a total of P12,000.

The wife Magadalena C. Bohanan and her two children question the validity of the testamentary
provisions disposing of the estate in the manner above indicated, claiming that they have been
deprived of the legitimate that the laws of the form concede to them.
The first question refers to the share that the wife of the testator, Magdalena C. Bohanan,
should be entitled to received. The will has not given her any share in the estate left by the
testator. It is argued that it was error for the trial court to have recognized the Reno divorce
secured by the testator from his Filipino wife Magdalena C. Bohanan, and that said divorce
should be declared a nullity in this jurisdiction, citing the case of Querubin vs.Querubin, 87 Phil.,
124, 47 Off. Gaz., (Sup, 12) 315, Cousins Hiz vs. Fluemer, 55 Phil., 852, Ramirez vs. Gmur, 42
Phil., 855 and Gorayeb vs. Hashim, 50 Phil., 22. The court below refused to recognize the claim
of the widow on the ground that the laws of Nevada, of which the deceased was a citizen, allow
him to dispose of all of his properties without requiring him to leave any portion of his estate to
his wife. Section 9905 of Nevada Compiled Laws of 1925 provides:

Every person over the age of eighteen years, of sound mind, may, by last will, dispose of
all his or her estate, real and personal, the same being chargeable with the payment of
the testator's debts.

Besides, the right of the former wife of the testator, Magdalena C. Bohanan, to a share in the
testator's estafa had already been passed upon adversely against her in an order dated June
19, 1955, (pp. 155-159, Vol II Records, Court of First Instance), which had become final, as
Magdalena C. Bohanan does not appear to have appealed therefrom to question its validity. On
December 16, 1953, the said former wife filed a motion to withdraw the sum of P20,000 from the
funds of the estate, chargeable against her share in the conjugal property, (See pp. 294-297,
Vol. I, Record, Court of First Instance), and the court in its said error found that there exists no
community property owned by the decedent and his former wife at the time the decree of
divorce was issued. As already and Magdalena C. Bohanan may no longer question the fact
contained therein, i.e. that there was no community property acquired by the testator and
Magdalena C. Bohanan during their converture.

Moreover, the court below had found that the testator and Magdalena C. Bohanan were married
on January 30, 1909, and that divorce was granted to him on May 20, 1922; that sometime in
1925, Magdalena C. Bohanan married Carl Aaron and this marriage was subsisting at the time
of the death of the testator. Since no right to share in the inheritance in favor of a divorced wife
exists in the State of Nevada and since the court below had already found that there was no
conjugal property between the testator and Magdalena C. Bohanan, the latter can now have no
longer claim to pay portion of the estate left by the testator.

The most important issue is the claim of the testator's children, Edward and Mary Lydia, who
had received legacies in the amount of P6,000 each only, and, therefore, have not been given
their shares in the estate which, in accordance with the laws of the forum, should be two-thirds
of the estate left by the testator. Is the failure old the testator to give his children two-thirds of
the estate left by him at the time of his death, in accordance with the laws of the forum valid?

The old Civil Code, which is applicable to this case because the testator died in 1944, expressly
provides that successional rights to personal property are to be earned by the national law of
the person whose succession is in question. Says the law on this point:

Nevertheless, legal and testamentary successions, in respect to the order of succession

as well as to the extent of the successional rights and the intrinsic validity of their
provisions, shall be regulated by the national law of the person whose succession is in
question, whatever may be the nature of the property and the country in which it is
 found. (par. 2, Art. 10, old Civil Code, which is the same as par. 2 Art. 16, new Civil
Code.)

In the proceedings for the probate of the will, it was found out and it was decided that the
testator was a citizen of the State of Nevada because he had selected this as his domicile and
his permanent residence. (See Decision dated April 24, 1950, supra). So the question at issue
is whether the estementary dispositions, especially hose for the children which are short of the
legitime given them by the Civil Code of the Philippines, are valid. It is not disputed that the laws
of Nevada allow a testator to dispose of all his properties by will (Sec. 9905, Complied Nevada
Laws of 1925, supra). It does not appear that at time of the hearing of the project of partition, the
above-quoted provision was introduced in evidence, as it was the executor's duly to do. The law
of Nevada, being a foreign law can only be proved in our courts in the form and manner
provided for by our Rules, which are as follows:

SEC. 41. Proof of public or official record. — An official record or an entry therein, when
admissible for any purpose, may be evidenced by an official publication thereof or by a
copy tested by the officer having the legal custody of he record, or by his deputy, and
accompanied, if the record is not kept in the Philippines, with a certificate that such
officer has the custody. . . . (Rule 123).

We have, however, consulted the records of the case in the court below and we have found that
during the hearing on October 4, 1954 of the motion of Magdalena C. Bohanan for withdrawal of
P20,000 as her share, the foreign law, especially Section 9905, Compiled Nevada Laws. was
introduced in evidence by appellant's (herein) counsel as Exhibits "2" (See pp. 77-79, VOL. II,
and t.s.n. pp. 24-44, Records, Court of First Instance). Again said laws presented by the
counsel for the executor and admitted by the Court as Exhibit "B" during the hearing of the case
on January 23, 1950 before Judge Rafael Amparo (se Records, Court of First Instance, Vol. 1).

In addition, the other appellants, children of the testator, do not dispute the above-quoted
provision of the laws of the State of Nevada. Under all the above circumstances, we are
constrained to hold that the pertinent law of Nevada, especially Section 9905 of the Compiled
Nevada Laws of 1925, can be taken judicial notice of by us, without proof of such law having
been offered at the hearing of the project of partition.

As in accordance with Article 10 of the old Civil Code, the validity of testamentary dispositions
are to be governed by the national law of the testator, and as it has been decided and it is not
disputed that the national law of the testator is that of the State of Nevada, already indicated
above, which allows a testator to dispose of all his property according to his will, as in the case
at bar, the order of the court approving the project of partition made in accordance with the
testamentary provisions, must be, as it is hereby affirmed, with costs against appellants.

Paras, Bengzon, C.J., Padilla, Bautista Angelo and Endencia, JJ., concur.
Barrera, J., concurs in the result.

BELLIS VS BELLIS
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-23678 June 6, 1967

TESTATE ESTATE OF AMOS G. BELLIS, deceased.

PEOPLE'S BANK and TRUST COMPANY, executor.
MARIA CRISTINA BELLIS and MIRIAM PALMA BELLIS, oppositors-appellants,
vs.
EDWARD A. BELLIS, ET AL., heirs-appellees.

Vicente R. Macasaet and Jose D. Villena for oppositors appellants.

Paredes, Poblador, Cruz and Nazareno for heirs-appellees E. A. Bellis, et al.
Quijano and Arroyo for heirs-appellees W. S. Bellis, et al.
J. R. Balonkita for appellee People's Bank & Trust Company.
Ozaeta, Gibbs and Ozaeta for appellee A. B. Allsman.

BENGZON, J.P., J.:

This is a direct appeal to Us, upon a question purely of law, from an order of the Court of First
Instance of Manila dated April 30, 1964, approving the project of partition filed by the executor in
Civil Case No. 37089 therein.1äwphï1.ñët

The facts of the case are as follows:

Amos G. Bellis, born in Texas, was "a citizen of the State of Texas and of the United States." By
his first wife, Mary E. Mallen, whom he divorced, he had five legitimate children: Edward A.
Bellis, George Bellis (who pre-deceased him in infancy), Henry A. Bellis, Alexander Bellis and
Anna Bellis Allsman; by his second wife, Violet Kennedy, who survived him, he had three
legitimate children: Edwin G. Bellis, Walter S. Bellis and Dorothy Bellis; and finally, he had three
illegitimate children: Amos Bellis, Jr., Maria Cristina Bellis and Miriam Palma Bellis.

On August 5, 1952, Amos G. Bellis executed a will in the Philippines, in which he directed that
after all taxes, obligations, and expenses of administration are paid for, his distributable estate
should be divided, in trust, in the following order and manner: (a) $240,000.00 to his first wife,
Mary E. Mallen; (b) P120,000.00 to his three illegitimate children, Amos Bellis, Jr., Maria
Cristina Bellis, Miriam Palma Bellis, or P40,000.00 each and (c) after the foregoing two items
have been satisfied, the remainder shall go to his seven surviving children by his first and
second wives, namely: Edward A. Bellis, Henry A. Bellis, Alexander Bellis and Anna Bellis
Allsman, Edwin G. Bellis, Walter S. Bellis, and Dorothy E. Bellis, in equal shares.1äwphï1.ñët

Subsequently, or on July 8, 1958, Amos G. Bellis died a resident of San Antonio, Texas, U.S.A.
His will was admitted to probate in the Court of First Instance of Manila on September 15, 1958.

The People's Bank and Trust Company, as executor of the will, paid all the bequests therein
including the amount of $240,000.00 in the form of shares of stock to Mary E. Mallen and to the
three (3) illegitimate children, Amos Bellis, Jr., Maria Cristina Bellis and Miriam Palma Bellis,
various amounts totalling P40,000.00 each in satisfaction of their respective legacies, or a total
of P120,000.00, which it released from time to time according as the lower court approved and
allowed the various motions or petitions filed by the latter three requesting partial advances on
account of their respective legacies.

On January 8, 1964, preparatory to closing its administration, the executor submitted and filed
its "Executor's Final Account, Report of Administration and Project of Partition" wherein it
reported, inter alia, the satisfaction of the legacy of Mary E. Mallen by the delivery to her of
shares of stock amounting to $240,000.00, and the legacies of Amos Bellis, Jr., Maria Cristina
Bellis and Miriam Palma Bellis in the amount of P40,000.00 each or a total of P120,000.00. In
the project of partition, the executor — pursuant to the "Twelfth" clause of the testator's Last Will
and Testament — divided the residuary estate into seven equal portions for the benefit of the
testator's seven legitimate children by his first and second marriages.

On January 17, 1964, Maria Cristina Bellis and Miriam Palma Bellis filed their respective
oppositions to the project of partition on the ground that they were deprived of their legitimes as
illegitimate children and, therefore, compulsory heirs of the deceased.

Amos Bellis, Jr. interposed no opposition despite notice to him, proof of service of which is
evidenced by the registry receipt submitted on April 27, 1964 by the executor. 1

After the parties filed their respective memoranda and other pertinent pleadings, the lower court,
on April 30, 1964, issued an order overruling the oppositions and approving the executor's final
account, report and administration and project of partition. Relying upon Art. 16 of the Civil
Code, it applied the national law of the decedent, which in this case is Texas law, which did not
provide for legitimes.

Their respective motions for reconsideration having been denied by the lower court on June 11,
1964, oppositors-appellants appealed to this Court to raise the issue of which law must apply —
Texas law or Philippine law.

In this regard, the parties do not submit the case on, nor even discuss, the doctrine of renvoi,
applied by this Court in Aznar v. Christensen Garcia, L-16749, January 31, 1963. Said doctrine
is usually pertinent where the decedent is a national of one country, and a domicile of another.
In the present case, it is not disputed that the decedent was both a national of Texas and a
domicile thereof at the time of his death. 2 So that even assuming Texas has a conflict of law rule
providing that the domiciliary system (law of the domicile) should govern, the same would not
result in a reference back (renvoi) to Philippine law, but would still refer to Texas law.
Nonetheless, if Texas has a conflicts rule adopting the situs theory (lex rei sitae) calling for the
application of the law of the place where the properties are situated, renvoi would arise, since
the properties here involved are found in the Philippines. In the absence, however, of proof as to
the conflict of law rule of Texas, it should not be presumed different from ours. 3Appellants'
position is therefore not rested on the doctrine of renvoi. As stated, they never invoked nor even
mentioned it in their arguments. Rather, they argue that their case falls under the circumstances
mentioned in the third paragraph of Article 17 in relation to Article 16 of the Civil Code.

Article 16, par. 2, and Art. 1039 of the Civil Code, render applicable the national law of the
decedent, in intestate or testamentary successions, with regard to four items: (a) the order of
succession; (b) the amount of successional rights; (e) the intrinsic validity of the provisions of
the will; and (d) the capacity to succeed. They provide that —
 ART. 16. Real property as well as personal property is subject to the law of the country
where it is situated.

However, intestate and testamentary successions, both with respect to the order of
succession and to the amount of successional rights and to the intrinsic validity of
testamentary provisions, shall be regulated by the national law of the person whose
succession is under consideration, whatever may he the nature of the property and
regardless of the country wherein said property may be found.

ART. 1039. Capacity to succeed is governed by the law of the nation of the decedent.

Appellants would however counter that Art. 17, paragraph three, of the Civil Code, stating that
—

Prohibitive laws concerning persons, their acts or property, and those which have for
their object public order, public policy and good customs shall not be rendered
ineffective by laws or judgments promulgated, or by determinations or conventions
agreed upon in a foreign country.

prevails as the exception to Art. 16, par. 2 of the Civil Code afore-quoted. This is not correct.
Precisely, Congressdeleted the phrase, "notwithstanding the provisions of this and the next
preceding article" when they incorporated Art. 11 of the old Civil Code as Art. 17 of the new Civil
Code, while reproducing without substantial change the second paragraph of Art. 10 of the old
Civil Code as Art. 16 in the new. It must have been their purpose to make the second paragraph
of Art. 16 a specific provision in itself which must be applied in testate and intestate succession.
As further indication of this legislative intent, Congress added a new provision, under Art. 1039,
which decrees that capacity to succeed is to be governed by the national law of the decedent.

It is therefore evident that whatever public policy or good customs may be involved in our
System of legitimes, Congress has not intended to extend the same to the succession of foreign
nationals. For it has specifically chosen to leave, inter alia, the amount of successional rights, to
the decedent's national law. Specific provisions must prevail over general ones.

Appellants would also point out that the decedent executed two wills — one to govern his Texas
estate and the other his Philippine estate — arguing from this that he intended Philippine law to
govern his Philippine estate. Assuming that such was the decedent's intention in executing a
separate Philippine will, it would not alter the law, for as this Court ruled in Miciano v. Brimo, 50
Phil. 867, 870, a provision in a foreigner's will to the effect that his properties shall be distributed
in accordance with Philippine law and not with his national law, is illegal and void, for his
national law cannot be ignored in regard to those matters that Article 10 — now Article 16 — of
the Civil Code states said national law should govern.

The parties admit that the decedent, Amos G. Bellis, was a citizen of the State of Texas, U.S.A.,
and that under the laws of Texas, there are no forced heirs or legitimes. Accordingly, since the
intrinsic validity of the provision of the will and the amount of successional rights are to be
determined under Texas law, the Philippine law on legitimes cannot be applied to the testacy of
Amos G. Bellis.

Wherefore, the order of the probate court is hereby affirmed in toto, with costs against
appellants. So ordered.
Concepcion, C.J., Reyes, J.B.L., Dizon, Regala, Makalintal, Zaldivar, Sanchez and Castro, JJ.,
concur.

Footnotes
1
He later filed a motion praying that as a legal heir he be included in this case as one of
the oppositors-appellants; to file or adopt the opposition of his sisters to the project of
partition; to submit his brief after paying his proportionate share in the expenses incurred
in the printing of the record on appeal; or to allow him to adopt the briefs filed by his
sisters — but this Court resolved to deny the motion.
2
San Antonio, Texas was his legal residence.
3
Lim vs. Collector, 36 Phil. 472; In re Testate Estate of Suntay, 95 Phil. 500.

TAYAG VS BENGUET CONSOLIDATED INC

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-23145 November 29, 1968

TESTATE ESTATE OF IDONAH SLADE PERKINS, deceased. RENATO D. TAYAG, ancillary

administrator-appellee,
vs.
BENGUET CONSOLIDATED, INC., oppositor-appellant.

Cirilo F. Asperillo, Jr., for ancillary administrator-appellee.

Ross, Salcedo, Del Rosario, Bito and Misa for oppositor-appellant.

FERNANDO, J.:

Confronted by an obstinate and adamant refusal of the domiciliary administrator, the County
Trust Company of New York, United States of America, of the estate of the deceased Idonah
Slade Perkins, who died in New York City on March 27, 1960, to surrender to the ancillary
administrator in the Philippines the stock certificates owned by her in a Philippine corporation,
Benguet Consolidated, Inc., to satisfy the legitimate claims of local creditors, the lower court,
then presided by the Honorable Arsenio Santos, now retired, issued on May 18, 1964, an order
of this tenor: "After considering the motion of the ancillary administrator, dated February 11,
1964, as well as the opposition filed by the Benguet Consolidated, Inc., the Court hereby (1)
considers as lost for all purposes in connection with the administration and liquidation of the
Philippine estate of Idonah Slade Perkins the stock certificates covering the 33,002 shares of
stock standing in her name in the books of the Benguet Consolidated, Inc., (2) orders said
certificates cancelled, and (3) directs said corporation to issue new certificates in lieu thereof,
the same to be delivered by said corporation to either the incumbent ancillary administrator or to
the Probate Division of this Court."1

From such an order, an appeal was taken to this Court not by the domiciliary administrator, the
County Trust Company of New York, but by the Philippine corporation, the Benguet
Consolidated, Inc. The appeal cannot possibly prosper. The challenged order represents a
response and expresses a policy, to paraphrase Frankfurter, arising out of a specific problem,
addressed to the attainment of specific ends by the use of specific remedies, with full and ample
support from legal doctrines of weight and significance.

The facts will explain why. As set forth in the brief of appellant Benguet Consolidated, Inc.,
Idonah Slade Perkins, who died on March 27, 1960 in New York City, left among others, two
stock certificates covering 33,002 shares of appellant, the certificates being in the possession of
the County Trust Company of New York, which as noted, is the domiciliary administrator of the
estate of the deceased.2 Then came this portion of the appellant's brief: "On August 12, 1960,
Prospero Sanidad instituted ancillary administration proceedings in the Court of First Instance of
Manila; Lazaro A. Marquez was appointed ancillary administrator, and on January 22, 1963, he
was substituted by the appellee Renato D. Tayag. A dispute arose between the domiciary
administrator in New York and the ancillary administrator in the Philippines as to which of them
was entitled to the possession of the stock certificates in question. On January 27, 1964, the
Court of First Instance of Manila ordered the domiciliary administrator, County Trust Company,
to "produce and deposit" them with the ancillary administrator or with the Clerk of Court. The
domiciliary administrator did not comply with the order, and on February 11, 1964, the ancillary
administrator petitioned the court to "issue an order declaring the certificate or certificates of
stocks covering the 33,002 shares issued in the name of Idonah Slade Perkins by Benguet
Consolidated, Inc., be declared [or] considered as lost." 3

It is to be noted further that appellant Benguet Consolidated, Inc. admits that "it is immaterial" as
far as it is concerned as to "who is entitled to the possession of the stock certificates in question;
appellant opposed the petition of the ancillary administrator because the said stock certificates
are in existence, they are today in the possession of the domiciliary administrator, the County
Trust Company, in New York, U.S.A...."4

It is its view, therefore, that under the circumstances, the stock certificates cannot be declared
or considered as lost. Moreover, it would allege that there was a failure to observe certain
requirements of its by-laws before new stock certificates could be issued. Hence, its appeal.

As was made clear at the outset of this opinion, the appeal lacks merit. The challenged order
constitutes an emphatic affirmation of judicial authority sought to be emasculated by the wilful
conduct of the domiciliary administrator in refusing to accord obedience to a court decree. How,
then, can this order be stigmatized as illegal?

As is true of many problems confronting the judiciary, such a response was called for by the
realities of the situation. What cannot be ignored is that conduct bordering on wilful defiance, if it
had not actually reached it, cannot without undue loss of judicial prestige, be condoned or
tolerated. For the law is not so lacking in flexibility and resourcefulness as to preclude such a
solution, the more so as deeper reflection would make clear its being buttressed by indisputable
principles and supported by the strongest policy considerations.
It can truly be said then that the result arrived at upheld and vindicated the honor of the judiciary
no less than that of the country. Through this challenged order, there is thus dispelled the
atmosphere of contingent frustration brought about by the persistence of the domiciliary
administrator to hold on to the stock certificates after it had, as admitted, voluntarily submitted
itself to the jurisdiction of the lower court by entering its appearance through counsel on June
27, 1963, and filing a petition for relief from a previous order of March 15, 1963.

Thus did the lower court, in the order now on appeal, impart vitality and effectiveness to what
was decreed. For without it, what it had been decided would be set at naught and nullified.
Unless such a blatant disregard by the domiciliary administrator, with residence abroad, of what
was previously ordained by a court order could be thus remedied, it would have entailed, insofar
as this matter was concerned, not a partial but a well-nigh complete paralysis of judicial
authority.

1. Appellant Benguet Consolidated, Inc. did not dispute the power of the appellee ancillary
administrator to gain control and possession of all assets of the decedent within the jurisdiction
of the Philippines. Nor could it. Such a power is inherent in his duty to settle her estate and
satisfy the claims of local creditors.5 As Justice Tuason speaking for this Court made clear, it is
a "general rule universally recognized" that administration, whether principal or ancillary,
certainly "extends to the assets of a decedent found within the state or country where it was
granted," the corollary being "that an administrator appointed in one state or country has no
power over property in another state or country." 6

It is to be noted that the scope of the power of the ancillary administrator was, in an earlier case,
set forth by Justice Malcolm. Thus: "It is often necessary to have more than one administration
of an estate. When a person dies intestate owning property in the country of his domicile as well
as in a foreign country, administration is had in both countries. That which is granted in the
jurisdiction of decedent's last domicile is termed the principal administration, while any other
administration is termed the ancillary administration. The reason for the latter is because a grant
of administration does not ex proprio vigore have any effect beyond the limits of the country in
which it is granted. Hence, an administrator appointed in a foreign state has no authority in the
[Philippines]. The ancillary administration is proper, whenever a person dies, leaving in a
country other than that of his last domicile, property to be administered in the nature of assets of
the deceased liable for his individual debts or to be distributed among his heirs." 7

It would follow then that the authority of the probate court to require that ancillary administrator's
right to "the stock certificates covering the 33,002 shares ... standing in her name in the books
of [appellant] Benguet Consolidated, Inc...." be respected is equally beyond question. For
appellant is a Philippine corporation owing full allegiance and subject to the unrestricted
jurisdiction of local courts. Its shares of stock cannot therefore be considered in any wise as
immune from lawful court orders.

Our holding in Wells Fargo Bank and Union v. Collector of Internal Revenue 8 finds application.
"In the instant case, the actual situs of the shares of stock is in the Philippines, the corporation
being domiciled [here]." To the force of the above undeniable proposition, not even appellant is
insensible. It does not dispute it. Nor could it successfully do so even if it were so minded.

2. In the face of such incontrovertible doctrines that argue in a rather conclusive fashion for the
legality of the challenged order, how does appellant, Benguet Consolidated, Inc. propose to
carry the extremely heavy burden of persuasion of precisely demonstrating the contrary? It
would assign as the basic error allegedly committed by the lower court its "considering as lost
the stock certificates covering 33,002 shares of Benguet belonging to the deceased Idonah
Slade Perkins, ..."9 More specifically, appellant would stress that the "lower court could not
"consider as lost" the stock certificates in question when, as a matter of fact, his Honor the trial
Judge knew, and does know, and it is admitted by the appellee, that the said stock certificates
are in existence and are today in the possession of the domiciliary administrator in New York." 10

There may be an element of fiction in the above view of the lower court. That certainly does not
suffice to call for the reversal of the appealed order. Since there is a refusal, persistently
adhered to by the domiciliary administrator in New York, to deliver the shares of stocks of
appellant corporation owned by the decedent to the ancillary administrator in the Philippines,
there was nothing unreasonable or arbitrary in considering them as lost and requiring the
appellant to issue new certificates in lieu thereof. Thereby, the task incumbent under the law on
the ancillary administrator could be discharged and his responsibility fulfilled.

Any other view would result in the compliance to a valid judicial order being made to depend on
the uncontrolled discretion of the party or entity, in this case domiciled abroad, which thus far
has shown the utmost persistence in refusing to yield obedience. Certainly, appellant would not
be heard to contend in all seriousness that a judicial decree could be treated as a mere scrap of
paper, the court issuing it being powerless to remedy its flagrant disregard.

It may be admitted of course that such alleged loss as found by the lower court did not
correspond exactly with the facts. To be more blunt, the quality of truth may be lacking in such a
conclusion arrived at. It is to be remembered however, again to borrow from Frankfurter, "that
fictions which the law may rely upon in the pursuit of legitimate ends have played an important
part in its development."11

Speaking of the common law in its earlier period, Cardozo could state fictions "were devices to
advance the ends of justice, [even if] clumsy and at times offensive." 12 Some of them have
persisted even to the present, that eminent jurist, noting "the quasi contract, the adopted child,
the constructive trust, all of flourishing vitality, to attest the empire of "as if" today."13 He likewise
noted "a class of fictions of another order, the fiction which is a working tool of thought, but
which at times hides itself from view till reflection and analysis have brought it to the light." 14

What cannot be disputed, therefore, is the at times indispensable role that fictions as such
played in the law. There should be then on the part of the appellant a further refinement in the
catholicity of its condemnation of such judicial technique. If ever an occasion did call for the
employment of a legal fiction to put an end to the anomalous situation of a valid judicial order
being disregarded with apparent impunity, this is it. What is thus most obvious is that this
particular alleged error does not carry persuasion.

3. Appellant Benguet Consolidated, Inc. would seek to bolster the above contention by its
invoking one of the provisions of its by-laws which would set forth the procedure to be followed
in case of a lost, stolen or destroyed stock certificate; it would stress that in the event of a
contest or the pendency of an action regarding ownership of such certificate or certificates of
stock allegedly lost, stolen or destroyed, the issuance of a new certificate or certificates would
await the "final decision by [a] court regarding the ownership [thereof]." 15

Such reliance is misplaced. In the first place, there is no such occasion to apply such by-law. It
is admitted that the foreign domiciliary administrator did not appeal from the order now in
question. Moreover, there is likewise the express admission of appellant that as far as it is
concerned, "it is immaterial ... who is entitled to the possession of the stock certificates ..." Even
if such were not the case, it would be a legal absurdity to impart to such a provision
conclusiveness and finality. Assuming that a contrariety exists between the above by-law and
the command of a court decree, the latter is to be followed.

It is understandable, as Cardozo pointed out, that the Constitution overrides a statute, to which,
however, the judiciary must yield deference, when appropriately invoked and deemed
applicable. It would be most highly unorthodox, however, if a corporate by-law would be
accorded such a high estate in the jural order that a court must not only take note of it but yield
to its alleged controlling force.

The fear of appellant of a contingent liability with which it could be saddled unless the appealed
order be set aside for its inconsistency with one of its by-laws does not impress us. Its
obedience to a lawful court order certainly constitutes a valid defense, assuming that such
apprehension of a possible court action against it could possibly materialize. Thus far, nothing in
the circumstances as they have developed gives substance to such a fear. Gossamer
possibilities of a future prejudice to appellant do not suffice to nullify the lawful exercise of
judicial authority.

4. What is more the view adopted by appellant Benguet Consolidated, Inc. is fraught with
implications at war with the basic postulates of corporate theory.

We start with the undeniable premise that, "a corporation is an artificial being created by
operation of law...."16 It owes its life to the state, its birth being purely dependent on its will. As
Berle so aptly stated: "Classically, a corporation was conceived as an artificial person, owing its
existence through creation by a sovereign power."17As a matter of fact, the statutory language
employed owes much to Chief Justice Marshall, who in the Dartmouth College decision defined
a corporation precisely as "an artificial being, invisible, intangible, and existing only in
contemplation of law."18

The well-known authority Fletcher could summarize the matter thus: "A corporation is not in fact
and in reality a person, but the law treats it as though it were a person by process of fiction, or
by regarding it as an artificial person distinct and separate from its individual stockholders.... It
owes its existence to law. It is an artificial person created by law for certain specific purposes,
the extent of whose existence, powers and liberties is fixed by its charter." 19 Dean Pound's terse
summary, a juristic person, resulting from an association of human beings granted legal
personality by the state, puts the matter neatly. 20

There is thus a rejection of Gierke's genossenchaft theory, the basic theme of which to quote
from Friedmann, "is the reality of the group as a social and legal entity, independent of state
recognition and concession."21 A corporation as known to Philippine jurisprudence is a creature
without any existence until it has received the imprimatur of the state according to law. It is
logically inconceivable therefore that it will have rights and privileges of a higher priority than
that of its creator. More than that, it cannot legitimately refuse to yield obedience to acts of its
state organs, certainly not excluding the judiciary, whenever called upon to do so.

As a matter of fact, a corporation once it comes into being, following American law still of
persuasive authority in our jurisdiction, comes more often within the ken of the judiciary than the
other two coordinate branches. It institutes the appropriate court action to enforce its right.
Correlatively, it is not immune from judicial control in those instances, where a duty under the
law as ascertained in an appropriate legal proceeding is cast upon it.

To assert that it can choose which court order to follow and which to disregard is to confer upon
it not autonomy which may be conceded but license which cannot be tolerated. It is to argue
that it may, when so minded, overrule the state, the source of its very existence; it is to contend
that what any of its governmental organs may lawfully require could be ignored at will. So
extravagant a claim cannot possibly merit approval.

5. One last point. In Viloria v. Administrator of Veterans Affairs, 22 it was shown that in a
guardianship proceedings then pending in a lower court, the United States Veterans
Administration filed a motion for the refund of a certain sum of money paid to the minor under
guardianship, alleging that the lower court had previously granted its petition to consider the
deceased father as not entitled to guerilla benefits according to a determination arrived at by its
main office in the United States. The motion was denied. In seeking a reconsideration of such
order, the Administrator relied on an American federal statute making his decisions "final and
conclusive on all questions of law or fact" precluding any other American official to examine the
matter anew, "except a judge or judges of the United States court." 23 Reconsideration was
denied, and the Administrator appealed.

In an opinion by Justice J.B.L. Reyes, we sustained the lower court. Thus: "We are of the
opinion that the appeal should be rejected. The provisions of the U.S. Code, invoked by the
appellant, make the decisions of the U.S. Veterans' Administrator final and conclusive when
made on claims property submitted to him for resolution; but they are not applicable to the
present case, where the Administrator is not acting as a judge but as a litigant. There is a great
difference between actions against the Administrator (which must be filed strictly in accordance
with the conditions that are imposed by the Veterans' Act, including the exclusive review by
United States courts), and those actions where the Veterans' Administrator seeks a remedy
from our courts and submits to their jurisdiction by filing actions therein. Our attention has not
been called to any law or treaty that would make the findings of the Veterans' Administrator, in
actions where he is a party, conclusive on our courts. That, in effect, would deprive our tribunals
of judicial discretion and render them mere subordinate instrumentalities of the Veterans'
Administrator."

It is bad enough as the Viloria decision made patent for our judiciary to accept as final and
conclusive, determinations made by foreign governmental agencies. It is infinitely worse if
through the absence of any coercive power by our courts over juridical persons within our
jurisdiction, the force and effectivity of their orders could be made to depend on the whim or
caprice of alien entities. It is difficult to imagine of a situation more offensive to the dignity of the
bench or the honor of the country.

Yet that would be the effect, even if unintended, of the proposition to which appellant Benguet
Consolidated seems to be firmly committed as shown by its failure to accept the validity of the
order complained of; it seeks its reversal. Certainly we must at all pains see to it that it does not
succeed. The deplorable consequences attendant on appellant prevailing attest to the necessity
of negative response from us. That is what appellant will get.

That is all then that this case presents. It is obvious why the appeal cannot succeed. It is always
easy to conjure extreme and even oppressive possibilities. That is not decisive. It does not
settle the issue. What carries weight and conviction is the result arrived at, the just solution
obtained, grounded in the soundest of legal doctrines and distinguished by its correspondence
with what a sense of realism requires. For through the appealed order, the imperative
requirement of justice according to law is satisfied and national dignity and honor maintained.

WHEREFORE, the appealed order of the Honorable Arsenio Santos, the Judge of the Court of
First Instance, dated May 18, 1964, is affirmed. With costs against oppositor-appelant Benguet
Consolidated, Inc.

Makalintal, Zaldivar and Capistrano, JJ., concur.

Concepcion, C.J., Reyes, J.B.L., Dizon, Sanchez and Castro, JJ., concur in the result.

Footnotes

1
Statement of the Case and Issues Involved, Brief for the Oppositor-Appellant, p. 2.
2
Ibid, p. 3.
3
Ibid, pp. 3 to 4.
4
Ibid, p. 4.
5
Rule 84, Sec. 3, Rules of Court. Cf. Pavia v. De la Rosa, 8 Phil. 70 (1907); Suiliong and
Co. v. Chio Taysan, 12 Phil. 13 (1908); Malahacan v. Ignacio, 19 Phil. 434 (1911);
McMicking v. Sy Conbieng, 21 Phil. 211 (1912); In re Estate of De Dios, 24 Phil. 573
(1913); Santos v. Manarang, 27 Phil. 209 (1914); Jaucian v. Querol, 38 Phil. 707 (1918);
Buenaventura v. Ramos, 43 Phil. 704 (1922); Roxas v. Pecson, 82 Phil. 407 (1948); De
Borja v. De Boria, 83 Phil. 405 (1949); Barraca v. Zayco, 88 Phil. 774 (1951); Pabilonia
v. Santiago, 93 Phil. 516 (1953); Sison v. Teodoro, 98 Phil. 680 (1956); Ozaeta v.
Palanca, 101 Phil. 976 (1957); Natividad Castelvi de Raquiza v. Castelvi, et al, L-17630,
Oct. 31, 1963; Habana v. Imbo, L-15598 & L-15726, March 31, 1964; Gliceria Liwanag v.
Hon. Luis Reyes, L-19159, Sept. 29, 1964; Ignacio v. Elchico, L-18937, May 16, 1967.
6
Leon and Ghezzi v. Manufacturers Life, Inc. Co., 990 Phil. 459 (1951).
7
Johannes v. Harvey, 43 Phil. 175, 177-178 (1922).
8
70 Phil. 325 (1940). Cf. Perkins v. Dizon, 69 Phil. 186 (1939).
9
Brief for Oppositor-Appellant, p. 5. The Assignment of Error reads: "The lower court
erred in entering its order of May 18, 1964, (1) considering as lost the stock certificates
covering 33,002 shares of Benguet belonging to the deceased Idonah Slade Perkins, (2)
ordering the said certificates cancelled, and (3) ordering appellant to issue new
certificates in lieu thereof and to deliver them to the ancillary administrator of the estate
of the deceased Idonah Slade Perkins or to the probate division of the lower court."
10
Ibid, pp. 5 to 6.
11
Nashville C. St. Louis Ry v. Browning, 310 US 362 (1940).
12
Cardozo, The Paradoxes of Legal Science, 34 (1928).
13
Ibid, p. 34.
14
Ibid, p. 34. The late Professor Gray in his The Nature and Sources of the Law,
distinguished, following Ihering, historic fictions from dogmatic fictions, the former being
devices to allow the addition of new law to old without changing the form of the old law
and the latter being intended to arrange recognized and established doctrines under the
most convenient forms. pp. 30, 36 (1909) Speaking of historic fictions, Gray added:
"Such fictions have had their field of operation largely in the domain of procedure, and
have consisted in pretending that a person or thing was other than which he or it was in
truth (or that an event had occurred which had not in fact occurred) for the purpose of
thereby giving an action at law to or against a person who did not really come within the
class to or against which the old section was confined." Ibid, pp. 30-31. See also Pound,
The Philosophy of Law, pp. 179, 180, 274 (1922).
15
This is what the particular by-law provides: Section 10. Lost, Stolen or Destroyed
Certificates. — Any registered stockholder claiming a certificate or certificates of stock to
be lost, stolen or destroyed shall file an affidavit in triplicate with the Secretary of the
Company, or with one of its Transfer Agents, setting forth, if possible, the circumstances
as to how, when and where said certificate or certificates was or were lost, stolen or
destroyed, the number of shares represented by the certificate or by each of the
certificates, the serial number or numbers of the certificate or certificates, and the name
of this Company. The registered stockholder shall also submit such other information
and evidence which he may deem necessary.

xxx xxx xxx

If a contest is presented to the Company, or if an action is pending in court regarding the

ownership of said certificate or certificates of stock which have been claimed to have
been lost, stolen or destroyed, the issuance of the new certificate or certificates in lieu of
that or those claimed to have been lost, stolen or destroyed, shall be suspended until
final decision by the court regarding the ownership of said certificate or certificates. Brief
for Oppositor-Appelant, pp. 8-10.
16
Sec. 2, Act No. 1459 (1906).
17
Berle, The Theory of Enterprise Entity, 47 Co. Law Rev. 343 (1907).
18
Dartmouth College v. Woodward, 4 Wheat, 518 (1819). Cook would trace such a
concept to Lord Coke. See 1 Cook on Corporations, p. 2 (1923).
19
Fletcher, Cyclopedia Corporations, pp. 19-20 (1931). Chancellor Kent and Chief
Justice Baldwin of Connecticut were likewise cited to the same effect. At pp. 12-13.
20
4 Pound on Jurisprudence, pp. 207-209 (1959).
 21
Friedmann, Legal Theory, pp. 164-168 (1947). See also Holdsworth, English
Corporation Law, 31 Yale Law Journal, 382 (1922).
22
101 Phil. 762 (1957).
23
38 USCA, Sec. 808.

JOHANNES VS HARVEY

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. 18600 March 9, 1922

B. E. JOHANNES, husband of Carmen Theodora Johannes, deceased, as a

administrator;
CARLOS D'ALMEIDA and IDA JOHANNES, with her husband, J. E. JOHANNES, relators,
vs.
Honorable GEORGE R. HARVEY, as judge of First Instance of Manila, ALFREDO
D'ALMEIDA, brother of Carmen Johannes, as administrator, and PHILIPPINE TRUST
COMPANY, as late guardian for a certain cash deposit of Carmen Johannes, respondent.

Amzi B. Kelly for relators.

Fisher & Dewitt and Francis B. Mahoney for respondents.

MALCOLM, J.:

The relevant facts disclosed by this petition for certiorari and the return thereto may be stated as
follows:

Mrs. Carmen Theodora Johannes nee Carmen D'Almeida, died intestate in Singapore, Straits
Settlements, on August 31, 1921. Of her immediate family there remained the husband, B. E.
Johannes, the brothers, Frederick Charles D'Almeida and Alfred D'Almeida, and the sister, Ida
D'Almeida Johannes. Of these, the husband, the brother Frederick, and the sister Ida, were
residents of Singapore, while the brother Alfred was in Manila. The Singapore heirs apparently
joined in asking that letters of administration be granted by the Supreme Court of the Straits
Settlements to B. E. Johannes, the lawful husband of the deceased. At least, on September 19,
1921, the husband of the deceased. At least, on September 19, 1921, the husband was named
the administrator of the property of the deceased wife, which was locally situate within the
jurisdiction of the Supreme Court of the Straits Settlements. (Under the British law [22 & 23
Charles II c 10, 29 Charles II c 3, and James II c 17], it would seem that the husband is entitled
to the whole of the estate of his wife if she die intestate to the exclusive of any other next of kin.)
On October 1, 1921, the brother Alfred D' Almeida was, on his petition, appointed administrator
of the Manila estate of the deceased consisting of P109,732.55. This sum it appears, was on
deposit in the Manila banks under and by virtue of guardianship proceedings for the late
Carmen Theodora Johannes, which were finally terminated by the discharge of the guardian,
the Philippine Trust Company, on January 16, 1922.

The burden of the relator's contention is that the Honorable George R. Harvey, as judge of First
Instance of the City of Manila, has acted in excess of his jurisdiction in appointing Alfred
D'Almeida administrator of the funds of the estate on deposit in the Philippines, and that an
administration in the jurisdiction is unnecessary. Accordingly, relators pray the court to annul the
appointment of Alfred D'Almeida and to issue an order directing the Judge of First Instance to
have placed to the credit of B. E. Johannes as administrator of the estate of Carmen Theodora
Johannes all of the funds of the late Carmen D'Almeida Johannes, now on deposit and subject
to the order of the court, with P5,000 as damages. The respondents, Judge Harvey, and the
administrator Alfred D'Almeida, in compliance with the order to show cause why the writ should
not issue, contend that the respondent judge has not in any manner acted in excess of the
jurisdiction duly conferred upon and exercised by him in the manner provided by law, and that
an order appointing an administrator is a final and appealable order.

Certain general observations may possibly serve to clarify the situation.

It is often necessary to have more than one administration of an estate. When a person dies
intestate owning property in the country of his domicile as well as in a foreign country,
administration is had in both countries. That which is granted in the jurisdiction of decedent's
last domicile is termed the principal administration, while any other administration is termed the
ancillary administration. The reason for the latter is because a grant of administration does
not ex proprio vigore have any effect beyond the limits of the country in which it is granted.
Hence, an administrator appointed in a foreign state has no authority in the United States. The
ancillary administration is proper, whenever a person dies, leaving in a country other than that of
his las domicile, property to be administered in the nature of assets of the decedent, liable for
his individual debts or to be distributed among his heirs. (23 C. J., 1010, et seq.; 24 C. J.,
1109, et seq.; Wilkins vs. Ellett [1882], 108 U. S., 256; Perez vs. Aguerria [1901], 1 Porto Rico
Fed., 443; Vaughn vs. Barret [1833], 5 Vt., 333.)

The principal administration in this instance is that at the domicile of the late Carmen Theodora
Johannes in Singapore, Straits Settlements. What is sought in the Philippine Islands is an
ancillary administration subsidiary to the domiciliary administration, conformable to the
provisions of sections 601, 602, and 603 of the Code of Civil Procedure. The proper course of
procedure would be for the ancillary administrator to pay the claims of creditors, if there be any,
settle the accounts, and remit the surplus to the domiciliary jurisdiction, for distribution among
the next of kin. Such administration appears to be required in this jurisdiction since the
provisions of section 596 of the Code of Civil Procedure, which permit of the settlement of
certain estates without legal proceedings, have not been met. The decision of this court in
Baldemor vs. Malangyaon ([1916]), 34 Phil., 368), on which relators rely, is then not in point
because predicated directly on the provisions of the section last cited.

It is almost a universal rule to give the surviving spouse a preference when an administrator is
to be appointed, unless for strong reasons it is deemed advisable to name someone else. This
preference has particular force under Spanish law precedents. (4 Escriche, Diccionario de
Legislacion y Jurisprudencia, 1085.) However, the Code of Civil Procedure, in section 642, while
naming the surviving husband or wife, as the case may be, as one to whom administration can
be granted, leaves this to the discretion of the court to determine, for it may be found that the
surviving spouse is unsuitable for the responsibility. Moreover, nonresidence is a factor to be
considered in determining the propriety of the appointment, and in this connection, it is to be
noted that the husband of the deceased, the administrator of the principal administration,
resides in Singapore. Undoubtedly, if the husband should come into this jurisdiction, the court
would give consideration to this petition that he be named the ancillary administrator for local
purposes. Ancillary letters should ordinarily be granted to the domicilliary representative, if he
applies therefor, or to his nominee, or attorney; but in the absence of express statutory
requirement the court may in its discretion appoint some other person. (24 C. J., 1114.)

There is still another aspect to the case. This is that pursuant to section 783 of the Code of Civil
Procedure, an order of a Court of First Instance appointing an administration of the estate of a
deceased person constitutes a final determination of the rights of the parties thereunder, within
the meaning of the statute, and is appealable. (Sy Hong Eng vs. Sy Lioc Suy [1907], 8 Phil.,
594.)

As we reach the conclusion that the Court of First Instance has not acted in excess of its
jurisdiction, and as there in an appeal, certiorari will not lie. Accordingly, the writ prayed for
cannot be granted. Costs against the relators. So ordered.

Araullo, C.J., Street, Avanceña, Villamor, Ostrand, Johns and Romualdez, JJ., concur.

SY JOG LIENG VS SY QUIA

Sy Joc Lieng v. Gregorio Sy Quia, 228 U.S. 335 (1913)

Sy Joc Lieng v. Gregorio Sy Quia

No. 177

Argued March 7, 10, 1913

Decided April 14, 1913

228 U.S. 335

Syllabus

Every presumption is in favor of the validity of a marriage where the marital relations have
continued uninterruptedly for over forty years without any question's being raised or right
asserted by anyone claiming under an earlier marriage of one of the parties until more than ten
years after the death, and five years after the distribution of the property, of that party.

The validity of such a marriage should not be impugned except upon clear, strong, and
unequivocal proof; nor, in the absence of such proof, will this Court reverse the judgment of the
lower court sustaining its validity when attacked by those who had opportunity to do so before
the death of both spouses.

16 Phil. 137 affirmed.

The facts, which involve conflicting claims to the estate of a Chinese merchant domiciled in the
Philippine Islands and of the validity of his marriage, are stated in the opinion.

Page 228 U. S. 336

Sy Joc Lieng v. Gregorio Sy Quia, 228 U.S. 335 (1913)

Sy Joc Lieng v. Gregorio Sy Quia

No. 177

Argued March 7, 10, 1913

Decided April 14, 1913

228 U.S. 335

APPEAL FROM THE SUPREME COURT

OF THE PHILIPPINE ISLANDS

Syllabus

Every presumption is in favor of the validity of a marriage where the marital relations have
continued uninterruptedly for over forty years without any question's being raised or right
asserted by anyone claiming under an earlier marriage of one of the parties until more than ten
years after the death, and five years after the distribution of the property, of that party.

The validity of such a marriage should not be impugned except upon clear, strong, and
unequivocal proof; nor, in the absence of such proof, will this Court reverse the judgment of the
lower court sustaining its validity when attacked by those who had opportunity to do so before
the death of both spouses.

16 Phil. 137 affirmed.

The facts, which involve conflicting claims to the estate of a Chinese merchant domiciled in the
Philippine Islands and of the validity of his marriage, are stated in the opinion.

Page 228 U. S. 336

MR. JUSTICE VAN DEVANTER delivered the opinion of the Court.

This appeal brings under review a decree of the Supreme Court of the Philippines in a suit
involving conflicting claims to the estate of a Chinese merchant domiciled in those islands, and
there known as Vicente Romero Sy Quia, who died intestate at Manila in 1894. The appellants,
who were plaintiffs in the court of first instance, claim as descendants of a marriage between the
intestate and Yap Puan Niu, a Chinese woman, said to have been contracted in 1847 at Am
Thau, in the Province of Amoy, China. The appellees claim as the descendants of a marriage
with Petronila Encarnacion, a Filipino woman celebrated in 1853 at Vigan, in the Philippines.
The principal question here, as in the insular courts, is whether the proof sufficiently established
the Chinese marriage. On this, the insular courts differed, the court of first instance finding the
marriage adequately proved and the Supreme Court, one justice dissenting, holding the other
way. 16 Phil. 137. Before coming to the evidence directly addressed to this question, it will be
well to state the facts about which there is no dispute.

Sy Quia was born at Am Thau, China, in 1822, and went to the Philippines at the age of twelve.
At first, he was located in Manila, but at some time before 1852 went to Vigan and entered the
service of a merchant at an annual salary of 200 pesos. During that year, he was converted to
the Catholic faith, and was baptized in the parish church. The next year, he married Petronila,
the banns being regularly published and the marriage publicly solemnized according to the rites
of the church, as a preliminary to which he affirmed under oath, and the civil and ecclesiastical

Page 228 U. S. 337

authorities certified, after inquiry, that he was then unmarried. Shortly after the marriage, he and
Petronila took up their permanent home in Manila. They were then without any particular
property other than 5,000 pesos which she received from her mother and brought into the
conjugal society. He became a merchant, and, through their united efforts, they accumulated
real and personal property amounting at the time of his death to upwards of 600,000 pesos.
They lived in a manner becoming the marital state, and were universally recognized as husband
and wife. Three sons and two daughters were born of the marriage. One of the daughters
married and predeceased her father, leaving a son surviving. The other died after the father,
leaving the mother as her only heir. Following Sy Quia's death, the widow administered the
estate, with the aid of the sons until 1900, when, through appropriate judicial proceedings, the
property was distributed among the widow, sons, and grandson as the persons rightly entitled
thereto. The present suit was brought in 1905, more than half a century after the marriage, and
then for the first time was its validity or its good faith as to either spouse brought in question -- a
fact which is of particular significance first, because Yap Puan Niu, the alleged Chinese wife,
visited in Manila at the home of a brother of Sy Quia twice during the life of the latter, and
second, because two of the plaintiffs were adults living in Manila at the time of Sy Quia's death
and during the eleven years intervening before the suit was brought.
There was testimony, taken by way of depositions in China, tending to show that Sy Quia
returned from the Philippines to Am Thau in 1847, when he was twenty-five years old; that,
during that year, he married Yap Puan Niu, the marriage being properly arranged and
celebrated; that he remained at Am Thau three or four years, during which two sons were born
of this marriage; that he then returned to the Philippines, and Yap Puan Niu continued to reside

Page 228 U. S. 338

at Am Thau, dying there in 1891; that the four plaintiffs are the only living descendants of this
marriage, two being grandsons, one a granddaughter, and one a great-grandson. Six of the
witnesses in China testified directly to the marriage, and their testimony, if standing alone, would
be quite persuasive of its occurrence, notwithstanding some discrepancies in their statements.
But this testimony did not stand alone. It was met and contradicted by that of several Philippino
witnesses, taken mostly by deposition, to the effect that they had known Sy Quia in Vigan for
some years before his marriage to Petronila in 1853, and that he was living there during the
period when, according to the opposing testimony, he married Yap Puan Niu and remained in
China. One of these witnesses was an aged man who testified with certainty that he was a
student at Manila between 1839 and 1845 and knew Sy Quia there; that he, the witness, was
married at Vigan in 1847, and that Sy Quia was living there then. Others of these witnesses give
kindred reasons for their ability to speak with precision concerning Sy Quia's presence at Vigan
during the period in question. Still other witnesses gave testimony more or less corroborative of
these opposing theories, but it was less direct and was also contradictory.

In addition to this conflicting testimony, there was this situation, as before indicated: the
Philippine marriage and the forty years of uninterrupted marital life following it were not only
established, but conceded. While Sy Quia lived, the validity of that marriage passed
unchallenged, and no right was asserted under the one alleged to have occurred in China. More
than this, the right of the widow and children of the Philippine marriage to the property acquired
during its existence went unquestioned for eleven years after his death and for five years after
the judicial distribution of the property.

In these circumstances, every presumption was in favor

Page 228 U. S. 339

of the validity and good faith of the Philippine marriage, and sound reason required that it be not
impugned and discredited through the alleged prior marriage save upon proof so clear, strong,
and unequivocal as to produce a moral conviction of the existence of that impediment. The
conflicting testimony, isolatedly considered, did not measure up to this standard, and clearly it
did not do so if proper regard was had for the probative force of the conduct of all the parties
concerned during the many intervening years. Then too, the lips of Sy Quia and Yap Puan Niu
had been sealed by death, and this, with the long interval of time, gave unusual opportunity for
the use of fabricated testimony the untruth of which it would be difficult to expose.

Giving due effect to these considerations, we cannot say that the Supreme Court of the
Philippines erred in holding that the Chinese marriage was not adequately proved. Indeed, we
regard the evidence as not producing a moral conviction of the existence of that marriage, but
as leaving the issue in serious doubt. The decree is accordingly

Affirmed.

GIBBS VS GOVERNMENT

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-35694 December 23, 1933

ALLISON G. GIBBS, petitioner-appelle,

vs.
THE GOVERNMENT OF THE PHILIPPINE ISLANDS, oppositor-appellant.
THE REGISTER OF DEEDS OF THE CITY OF MANILA, respondent-appellant.

Office of the Solicitor-General Hilado for appellants.

Allison D. Gibbs in his own behalf.

BUTTE, J.:

This is an appeal from a final order of the Court of First Instance of Manila, requiring the register
of deeds of the City of Manila to cancel certificates of title Nos. 20880, 28336 and 28331,
covering lands located in the City of Manila, Philippine Islands, and issue in lieu thereof new
certificates of transfer of title in favor of Allison D. Gibbs without requiring him to present any
document showing that the succession tax due under Article XI of Chapter 40 of the
Administrative Code has been paid.

The said order of the court of March 10, 1931, recites that the parcels of land covered by said
certificates of title formerly belonged to the conjugal partnership of Allison D. Gibbs and Eva
Johnson Gibbs; that the latter died intestate in Palo Alto, California, on November 28, 1929; that
at the time of her death she and her husband were citizens of the State of California and
domiciled therein.

It appears further from said order that Allison D. Gibbs was appointed administrator of the state
of his said deceased wife in case No. 36795 in the same court, entitled "In the Matter of the
Intestate Estate of Eva Johnson Gibbs, Deceased"; that in said intestate proceedings, the said
Allison D. Gibbs, on September 22,1930, filed an ex parte petition in which he alleged "that the
parcels of land hereunder described belong to the conjugal partnership of your petitioner and his
wife, Eva Johnson Gibbs", describing in detail the three facts here involved; and further alleging
that his said wife, a citizen and resident of California, died on November 28,1929; that in
accordance with the law of California, the community property of spouses who are citizens of
California, upon the death of the wife previous to that of the husband, belongs absolutely to the
surviving husband without administration; that the conjugal partnership of Allison D. Gibbs and
Eva Johnson Gibbs, deceased, has no obligations or debts and no one will be prejudiced by
adjucating said parcels of land (and seventeen others not here involved) to be the absolute
property of the said Allison D. Gibbs as sole owner. The court granted said petition and on
September 22, 1930, entered a decree adjucating the said Allison D. Gibbs to be the sole and
absolute owner of said lands, applying section 1401 of the Civil Code of California. Gibbs
presented this decree to the register of deeds of Manila and demanded that the latter issue to
him a "transfer certificate of title".

Section 1547 of Article XI of Chapter 40 of the Administrative Code provides in part that:

Registers of deeds shall not register in the registry of property any document transferring
real property or real rights therein or any chattel mortgage, by way of gifts mortis causa,
legacy or inheritance, unless the payment of the tax fixed in this article and actually due
thereon shall be shown. And they shall immediately notify the Collector of Internal
Revenue or the corresponding provincial treasurer of the non payment of the tax
discovered by them. . . .

Acting upon the authority of said section, the register of deeds of the City of Manila, declined to
accept as binding said decree of court of September 22,1930, and refused to register the
transfer of title of the said conjugal property to Allison D. Gibbs, on the ground that the
corresponding inheritance tax had not been paid. Thereupon, under date of December 26,
1930, Allison D. Gibbs filed in the said court a petition for an order requiring the said register of
deeds "to issue the corresponding titles" to the petitioner without requiring previous payment of
any inheritance tax. After due hearing of the parties, the court reaffirmed said order of
September 22, 1930, and entered the order of March 10, 1931, which is under review on this
appeal.

On January 3, 1933, this court remanded the case to the court of origin for new trial upon
additional evidence in regard to the pertinent law of California in force at the time of the death of
Mrs. Gibbs, also authorizing the introduction of evidence with reference to the dates of the
acquisition of the property involved in this suit and with reference to the California law in force at
the time of such acquisition. The case is now before us with the supplementary evidence.

For the purposes of this case, we shall consider the following facts as established by the
evidence or the admissions of the parties: Allison D. Gibbs has been continuously, since the
year 1902, a citizen of the State of California and domiciled therein; that he and Eva Johnson
Gibbs were married at Columbus, Ohio, in July 1906; that there was no antenuptial marriage
contract between the parties; that during the existence of said marriage the spouses acquired
the following lands, among others, in the Philippine Islands, as conjugal property:lawphil.net

1. A parcel of land in the City of Manila represented by transfer certificate of title No. 20880,
dated March 16, 1920, and registered in the name of "Allison D. Gibbs casado con Eva Johnson
Gibbs".

2. A parcel of land in the City of Manila, represented by transfer certificate of title No. 28336,
dated May 14, 1927, in which it is certified "that spouses Allison D. Gibbs and Eva Johnson
Gibbs are the owners in fee simple" of the land therein described.

3. A parcel of land in the City of Manila, represented by transfer certificate of title No. 28331,
dated April 6, 1927, which it states "that Allison D. Gibbs married to Eva Johnson Gibbs" is the
owner of the land described therein; that said Eva Johnson Gibbs died intestate on November
28, 1929, living surviving her her husband, the appellee, and two sons, Allison J. Gibbs , now
age 25 and Finley J. Gibbs, now aged 22, as her sole heirs of law.

Article XI of Chapter 40 of the Administrative Code entitled "Tax on inheritances, legacies and
other acquisitionsmortis causa" provides in section 1536 that "Every transmission by virtue of
inheritance ... of real property ... shall be subject to the following tax." It results that the question
for determination in this case is as follows: Was Eva Johnson Gibbs at the time of her death the
owner of a descendible interest in the Philippine lands above-mentioned?

The appellee contends that the law of California should determine the nature and extent of the
title, if any, that vested in Eva Johnson Gibbs under the three certificates of title Nos. 20880,
28336 and 28331 above referred to, citing article 9 of the Civil Code. But that, even if the nature
and extent of her title under said certificates be governed by the law of the Philippine Islands,
the laws of California govern the succession to such title, citing the second paragraph of article
10 of the Civil Code.

Article 9 of the Civil Code is as follows:

The laws relating to family rights and duties, or to the status, condition, and legal
capacity of persons, are binding upon Spaniards even though they reside in a foreign
country." It is argued that the conjugal right of the California wife in community real
estate in the Philippine Islands is a personal right and must, therefore, be settled by the
law governing her personal status, that is, the law of California. But our attention has not
been called to any law of California that incapacitates a married woman from acquiring
or holding land in a foreign jurisdiction in accordance with the lex rei sitae. There is not
the slightest doubt that a California married woman can acquire title to land in a common
law jurisdiction like the State of Illinois or the District of Columbia, subject to the
common-law estate by the courtesy which would vest in her husband. Nor is there any
doubt that if a California husband acquired land in such a jurisdiction his wife would be
vested with the common law right of dower, the prerequisite conditions obtaining. Article
9 of the Civil Code treats of purely personal relations and status and capacity for juristic
acts, the rules relating to property, both personal and real, being governed by article 10
of the Civil Code. Furthermore, article 9, by its very terms, is applicable only to
"Spaniards" (now, by construction, to citizens of the Philippine Islands).
 The Organic Act of the Philippine Islands (Act of Congress, August 29, 1916, known as
the "Jones Law") as regards the determination of private rights, grants practical
autonomy to the Government of the Philippine Islands. This Government, therefore, may
apply the principles and rules of private international law (conflicts of laws) on the same
footing as an organized territory or state of the United States. We should, therefore,
resort to the law of California, the nationality and domicile of Mrs. Gibbs, to ascertain the
norm which would be applied here as law were there any question as to her status.

But the appellant's chief argument and the sole basis of the lower court's decision rests upon
the second paragraph of article 10 of the Civil Code which is as follows:

Nevertheless, legal and testamentary successions, in respect to the order of succession

as well as to the amount of the successional rights and the intrinsic validity of their
provisions, shall be regulated by the national law of the person whose succession is in
question, whatever may be the nature of the property or the country in which it may be
situated.

In construing the above language we are met at the outset with some difficulty by the
expression "the national law of the person whose succession is in question", by reason of the
rather anomalous political status of the Philippine Islands. (Cf. Manresa, vol. 1, Codigo Civil, pp.
103, 104.) We encountered no difficulty in applying article 10 in the case of a citizen of Turkey.
(Miciano vs. Brimo, 50 Phil., 867.) Having regard to the practical autonomy of the Philippine
Islands, as above stated, we have concluded that if article 10 is applicable and the estate in
question is that of a deceased American citizen, the succession shall be regulated in
accordance with the norms of the State of his domicile in the United States. (Cf. Babcock
Templeton vs. Rider Babcock, 52 Phil., 130, 137; In re Estate of Johnson, 39 Phil., 156, 166.)

The trial court found that under the law of California, upon the death of the wife, the entire
community property without administration belongs to the surviving husband; that he is the
absolute owner of all the community property from the moment of the death of his wife, not by
virtue of succession or by virtue of her death, but by virtue of the fact that when the death of the
wife precedes that of the husband he acquires the community property, not as an heir or as the
beneficiary of his deceased wife, but because she never had more than an inchoate interest or
expentancy which is extinguished upon her death. Quoting the case of Estate of Klumpke (167
Cal., 415, 419), the court said: "The decisions under this section (1401 Civil Code of California)
are uniform to the effect that the husband does not take the community property upon the death
of the wife by succession, but that he holds it all from the moment of her death as though
required by himself. ... It never belonged to the estate of the deceased wife."

The argument of the appellee apparently leads to this dilemma: If he takes nothing by
succession from his deceased wife, how can the second paragraph of article 10 be invoked?
Can the appellee be heard to say that there is a legal succession under the law of the Philippine
Islands and no legal succession under the law of California? It seems clear that the second
paragraph of article 10 applies only when a legal or testamentary succession has taken place in
the Philippines and in accordance with the law of the Philippine Islands; and the foreign law is
consulted only in regard to the order of succession or the extent of the successional rights; in
other words, the second paragraph of article 10 can be invoked only when the deceased was
vested with a descendible interest in property within the jurisdiction of the Philippine Islands.

In the case of Clarke vs. Clarke (178 U. S., 186, 191; 44 Law ed., 1028, 1031), the court said:
 It is principle firmly established that to the law of the state in which the land is situated
we must look for the rules which govern its descent, alienation, and transfer, and for the
effect and construction of wills and other conveyances. (United States vs. Crosby, 7
Cranch, 115; 3 L. ed., 287; Clark vs. Graham, 6 Wheat., 577; 5 L. ed., 334; McGoon vs.
Scales, 9 Wall., 23; 19 L. ed., 545; Brine vs. Hartford F. Ins. Co., 96 U. S., 627; 24 L.
ed., 858.)" (See also Estate of Lloyd, 175 Cal., 704, 705.) This fundamental principle is
stated in the first paragraph of article 10 of our Civil Code as follows: "Personal property
is subject to the laws of the nation of the owner thereof; real property to the laws of the
country in which it is situated.

It is stated in 5 Cal. Jur., 478:

In accord with the rule that real property is subject to the lex rei sitae, the respective
rights of husband and wife in such property, in the absence of an antenuptial contract,
are determined by the law of the place where the property is situated, irrespective of the
domicile of the parties or to the place where the marriage was celebrated. (See
also Saul vs. His Creditors, 5 Martin [N. S.], 569; 16 Am. Dec., 212 [La.];
Heidenheimervs. Loring, 26 S. W., 99 [Texas].)

Under this broad principle, the nature and extent of the title which vested in Mrs. Gibbs at the
time of the acquisition of the community lands here in question must be determined in
accordance with the lex rei sitae.

It is admitted that the Philippine lands here in question were acquired as community property of
the conjugal partnership of the appellee and his wife. Under the law of the Philippine Islands,
she was vested of a title equal to that of her husband. Article 1407 of the Civil Code provides:

All the property of the spouses shall be deemed partnership property in the absence of
proof that it belongs exclusively to the husband or to the wife. Article 1395 provides:

"The conjugal partnership shall be governed by the rules of law applicable to the contract of
partnership in all matters in which such rules do not conflict with the express provisions of this
chapter." Article 1414 provides that "the husband may dispose by will of his half only of the
property of the conjugal partnership." Article 1426 provides that upon dissolution of the conjugal
partnership and after inventory and liquidation, "the net remainder of the partnership property
shall be divided share and share alike between the husband and wife, or their respective heirs."
Under the provisions of the Civil Code and the jurisprudence prevailing here, the wife, upon the
acquisition of any conjugal property, becomes immediately vested with an interest and title
therein equal to that of her husband, subject to the power of management and disposition which
the law vests in the husband. Immediately upon her death, if there are no obligations of the
decedent, as is true in the present case, her share in the conjugal property is transmitted to her
heirs by succession. (Articles 657, 659, 661, Civil Code; cf. also Coronel vs. Ona, 33 Phil., 456,
469.)

It results that the wife of the appellee was, by the law of the Philippine Islands, vested of a
descendible interest, equal to that of her husband, in the Philippine lands covered by certificates
of title Nos. 20880, 28336 and 28331, from the date of their acquisition to the date of her death.
That appellee himself believed that his wife was vested of such a title and interest in manifest
from the second of said certificates, No. 28336, dated May 14, 1927, introduced by him in
evidence, in which it is certified that "the spouses Allison D. Gibbs and Eva Johnson Gibbs are
the owners in fee simple of the conjugal lands therein described."

The descendible interest of Eva Johnson Gibbs in the lands aforesaid was transmitted to her
heirs by virtue of inheritance and this transmission plainly falls within the language of section
1536 of Article XI of Chapter 40 of the Administrative Code which levies a tax on inheritances.
(Cf. Re Estate of Majot, 199 N. Y., 29; 92 N. E., 402; 29 L. R. A. [N. S.], 780.) It is unnecessary
in this proceeding to determine the "order of succession" or the "extent of the successional
rights" (article 10, Civil Code, supra) which would be regulated by section 1386 of the Civil Code
of California which was in effect at the time of the death of Mrs. Gibbs.

The record does not show what the proper amount of the inheritance tax in this case would be
nor that the appellee (petitioner below) in any way challenged the power of the Government to
levy an inheritance tax or the validity of the statute under which the register of deeds refused to
issue a certificate of transfer reciting that the appellee is the exclusive owner of the Philippine
lands included in the three certificates of title here involved.

The judgment of the court below of March 10, 1931, is reversed with directions to dismiss the
petition, without special pronouncement as to the costs.

Avanceña, C. J., Malcolm, Villa-Real, Abad Santos, Hull, and Vickers, JJ., concur.
Street, J., dissents.

PCIB VS ESCOLIN

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. Nos. L-27860 and L-27896 March 29, 1974

PHILIPPINE COMMERCIAL AND INDUSTRIAL BANK, Administrator of the Testate Estate

of Charles Newton Hodges (Sp. Proc. No. 1672 of the Court of First Instance of
Iloilo), petitioner,
vs.
THE HONORABLE VENICIO ESCOLIN, Presiding Judge of the Court of First Instance of
Iloilo, Branch II, and AVELINA A. MAGNO, respondents.

G.R. Nos. L-27936 & L-27937 March 29, 1974

TESTATE ESTATE OF THE LATE LINNIE JANE HODGES (Sp. Proc. No. 1307). TESTATE
ESTATE OF THE LATE CHARLES NEWTON HODGES (Sp. Proc. No. 1672). PHILIPPINE
COMMERCIAL AND INDUSTRIAL BANK,administrator-appellant,
vs.
LORENZO CARLES, JOSE PABLICO, ALFREDO CATEDRAL, SALVADOR GUZMAN,
BELCESAR CAUSING, FLORENIA BARRIDO, PURIFICACION CORONADO, GRACIANO
LUCERO, ARITEO THOMAS JAMIR, MELQUIADES BATISANAN, PEPITO IYULORES,
ESPERIDION PARTISALA, WINIFREDO ESPADA, ROSARIO ALINGASA, ADELFA
PREMAYLON, SANTIAGO PACAONSIS, and AVELINA A. MAGNO, the last as
Administratrix in Sp. Proc. No. 1307, appellees, WESTERN INSTITUTE OF TECHNOLOGY,
INC., movant-appellee.

San Juan, Africa, Gonzales and San Agustin for Philippine Commercial and Industrial Bank.

Manglapus Law Office, Antonio Law Office and Rizal R. Quimpo for private respondents and
appellees Avelina A. Magno, etc., et al.

BARREDO, J.:p

Certiorari and prohibition with preliminary injunction; certiorari to "declare all acts of the
respondent court in the Testate Estate of Linnie Jane Hodges (Sp. Proc. No. 1307 of the Court
of First Instance of Iloilo) subsequent to the order of December 14, 1957 as null and void for
having been issued without jurisdiction"; prohibition to enjoin the respondent court from
allowing, tolerating, sanctioning, or abetting private respondent Avelina A. Magno to perform or
do any acts of administration, such as those enumerated in the petition, and from exercising any
authority or power as Regular Administratrix of above-named Testate Estate, by entertaining
manifestations, motion and pleadings filed by her and acting on them, and also to enjoin said
court from allowing said private respondent to interfere, meddle or take part in any manner in
the administration of the Testate Estate of Charles Newton Hodges (Sp. Proc. No. 1672 of the
same court and branch); with prayer for preliminary injunction, which was issued by this Court
on August 8, 1967 upon a bond of P5,000; the petition being particularly directed against the
orders of the respondent court of October 12, 1966 denying petitioner's motion of April 22, 1966
and its order of July 18, 1967 denying the motion for reconsideration of said order.

Related to and involving basically the same main issue as the foregoing petition, thirty-three
(33) appeals from different orders of the same respondent court approving or otherwise
sanctioning the acts of administration of the respondent Magno on behalf of the testate Estate of
Mrs. Hodges.

THE FACTS

On May 23, 1957, Linnie Jane Hodges died in Iloilo City leaving a will executed on November
22, 1952 pertinently providing as follows:

FIRST: I direct that all my just debts and funeral expenses be first paid out of my
estate.

SECOND: I give, devise and bequeath all of the rest, residue and remainder of
my estate, both personal and real, wherever situated, or located, to my beloved
husband, Charles Newton Hodges, to have and to hold unto him, my said
husband, during his natural lifetime.
 THIRD: I desire, direct and provide that my husband, Charles Newton Hodges,
shall have the right to manage, control, use and enjoy said estate during his
lifetime, and he is hereby given the right to make any changes in the physical
properties of said estate, by sale or any part thereof which he may think best,
and the purchase of any other or additional property as he may think best; to
execute conveyances with or without general or special warranty, conveying in
fee simple or for any other term or time, any property which he may deem proper
to dispose of; to lease any of the real property for oil, gas and/or other minerals,
and all such deeds or leases shall pass the absolute fee simple title to the
interest so conveyed in such property as he may elect to sell. All rents,
emoluments and income from said estate shall belong to him, and he is further
authorized to use any part of the principal of said estate as he may need or
desire. It is provided herein, however, that he shall not sell or otherwise dispose
of any of the improved property now owned by us located at, in or near the City
of Lubbock, Texas, but he shall have the full right to lease, manage and enjoy the
same during his lifetime, above provided. He shall have the right to subdivide any
farm land and sell lots therein. and may sell unimproved town lots.

FOURTH: At the death of my said husband, Charles Newton Hodges, I give,

devise and bequeath all of the rest, residue and remainder of my estate, both
real and personal, wherever situated or located, to be equally divided among my
brothers and sisters, share and share alike, namely:

Esta Higdon, Emma Howell, Leonard Higdon, Roy Higdon, Saddie Rascoe, Era
Roman and Nimroy Higdon.

FIFTH: In case of the death of any of my brothers and/or sisters named in item
Fourth, above, prior to the death of my husband, Charles Newton Hodges, then it
is my will and bequest that the heirs of such deceased brother or sister shall take
jointly the share which would have gone to such brother or sister had she or he
survived.

SIXTH: I nominate and appoint my said husband, Charles Newton Hodges, to be

executor of this, my last will and testament, and direct that no bond or other
security be required of him as such executor.

SEVENTH: It is my will and bequest that no action be had in the probate court, in
the administration of my estate, other than that necessary to prove and record
this will and to return an inventory and appraisement of my estate and list of
claims. (Pp. 2-4, Petition.)

This will was subsequently probated in aforementioned Special Proceedings No. 1307 of
respondent court on June 28, 1957, with the widower Charles Newton Hodges being appointed
as Executor, pursuant to the provisions thereof.

Previously, on May 27, 1957, the said widower (hereafter to be referred to as Hodges) had been
appointed Special Administrator, in which capacity he filed a motion on the same date as
follows:
 URGENT EX-PARTE MOTION TO ALLOW OR AUTHORIZE PETITIONER TO
CONTINUE THE BUSINESS IN WHICH HE WAS ENGAGED AND TO
PERFORM ACTS WHICH HE HAD BEEN DOING WHILE DECEASED WAS
LIVING

Come petitioner in the above-entitled special proceedings, thru his undersigned attorneys, to the
Hon. Court, most respectfully states:

1. — That Linnie Jane Hodges died leaving her last will and testament, a copy of
which is attached to the petition for probate of the same.

2. — That in said last will and testament herein petitioner Charles Newton
Hodges is directed to have the right to manage, control use and enjoy the estate
of deceased Linnie Jane Hodges, in the same way, a provision was placed in
paragraph two, the following: "I give, devise and bequeath all of the rest, residue
and remainder of my estate, to my beloved husband, Charles Newton Hodges, to
have and (to) hold unto him, my said husband, during his natural lifetime."

3. — That during the lifetime of Linnie Jane Hodges, herein petitioner was
engaged in the business of buying and selling personal and real properties, and
do such acts which petitioner may think best.

4. — That deceased Linnie Jane Hodges died leaving no descendants or

ascendants, except brothers and sisters and herein petitioner as executor
surviving spouse, to inherit the properties of the decedent.

5. — That the present motion is submitted in order not to paralyze the business
of petitioner and the deceased, especially in the purchase and sale of properties.
That proper accounting will be had also in all these transactions.

WHEREFORE, it is most respectfully prayed that, petitioner C. N. Hodges

(Charles Newton Hodges) be allowed or authorized to continue the business in
which he was engaged and to perform acts which he had been doing while
deceased Linnie Jane Hodges was living.

City of Iloilo, May 27, 1957. (Annex "D", Petition.)

which the respondent court immediately granted in the following order:

It appearing in the urgent ex-parte motion filed by petitioner C. N. Hodges, that

the business in which said petitioner and the deceased were engaged will be
paralyzed, unless and until the Executor is named and appointed by the Court,
the said petitioner is allowed or authorized to continue the business in which he
was engaged and to perform acts which he had been doing while the deceased
was living.

SO ORDERED.

City of Iloilo May 27, 1957. (Annex "E", Petition.)

Under date of December 11, 1957, Hodges filed as such Executor another motion thus:

MOTION TO APPROVE ALL SALES, CONVEYANCES, LEASES,

MORTGAGES THAT THE EXECUTOR HAD MADE FURTHER AND
SUBSEQUENT TRANSACTIONS WHICH THE EXECUTOR MAY DO IN
ACCORDANCE WITH THE LAST WISH OF THE DECEASED LINNIE JANE
HODGES.

Comes the Executor in the above-entitled proceedings, thru his undersigned

attorney, to the Hon. Court, most respectfully states:

1. — That according to the last will and testament of the deceased Linnie Jane
Hodges, the executor as the surviving spouse and legatee named in the will of
the deceased; has the right to dispose of all the properties left by the deceased,
portion of which is quoted as follows:

Second: I give, devise and bequeath all of the rest, residue and remainder of my
estate, both personal and real, wherever situated, or located, to my beloved
husband, Charles Newton Hodges, to have and to hold unto him, my said
husband, during his natural lifetime.

Third: I desire, direct and provide that my husband, Charles Newton Hodges,
shall have the right to manage, control, use and enjoy said estate during his
lifetime, and he is hereby given the right to make any changes in the physical
properties of said estate, by sale or any part thereof which he may think best,
and the purchase of any other or additional property as he may think best;
to execute conveyances with or without general or special warranty, conveying in
fee simple or for any other term or time, any property which he may deem proper
to dispose of; to lease any of the real property for oil, gas and/or other minerals,
and all such deeds or leases shall pass the absolute fee simple title to the
interest so conveyed in such property as he may elect to sell. All rents,
emoluments and income from said estate shall belong to him, and he is further
authorized to use any part of the principal of said estate as he may need or
desire. ...

2. — That herein Executor, is not only part owner of the properties left as
conjugal, but also, the successor to all the properties left by the deceased Linnie
Jane Hodges. That during the lifetime of herein Executor, as Legatee has the
right to sell, convey, lease or dispose of the properties in the Philippines. That
inasmuch as C.N. Hodges was and is engaged in the buy and sell of real and
personal properties, even before the death of Linnie Jane Hodges, a motion to
authorize said C.N. Hodges was filed in Court, to allow him to continue in the
business of buy and sell, which motion was favorably granted by the Honorable
Court.

3. — That since the death of Linnie Jane Hodges, Mr. C.N. Hodges had been
buying and selling real and personal properties, in accordance with the wishes of
the late Linnie Jane Hodges.
 4. — That the Register of Deeds for Iloilo, had required of late the herein
Executor to have all the sales, leases, conveyances or mortgages made by him,
approved by the Hon. Court.

5. — That it is respectfully requested, all the sales, conveyances leases and

mortgages executed by the Executor, be approved by the Hon. Court. and
subsequent sales conveyances, leases and mortgages in compliances with the
wishes of the late Linnie Jane Hodges, and within the scope of the terms of the
last will and testament, also be approved;

6. — That the Executor is under obligation to submit his yearly accounts, and the
properties conveyed can also be accounted for, especially the amounts received.

WHEREFORE, it is most respectfully prayed that, all the sales, conveyances,

leases, and mortgages executed by the Executor, be approved by the Hon.
Court, and also the subsequent sales, conveyances, leases, and mortgages in
consonance with the wishes of the deceased contained in her last will and
testament, be with authorization and approval of the Hon. Court.

City of Iloilo, December 11, 1967.

(Annex "G", Petition.)

which again was promptly granted by the respondent court on December 14, 1957 as follows:

ORDER

As prayed for by Attorney Gellada, counsel for the Executor for the reasons
stated in his motion dated December 11, 1957, which the Court considers well
taken all the sales, conveyances, leases and mortgages of all properties left by
the deceased Linnie Jane Hodges executed by the Executor Charles N. Hodges
are hereby APPROVED. The said Executor is further authorized to execute
subsequent sales, conveyances, leases and mortgages of the properties left by
the said deceased Linnie Jane Hodges in consonance with the wishes conveyed
in the last will and testament of the latter.

So ordered.

Iloilo City. December 14, 1957.

(Annex "H", Petition.)

On April 14, 1959, in submitting his first statement of account as Executor for approval, Hodges
alleged:

Pursuant to the provisions of the Rules of Court, herein executor of the

deceased, renders the following account of his administration covering the period
from January 1, 1958 to December 31, 1958, which account may be found in
 detail in the individual income tax return filed for the estate of deceased Linnie
Jane Hodges, to wit:

That a certified public accountant has examined the statement of net worth of the
estate of Linnie Jane Hodges, the assets and liabilities, as well as the income
and expenses, copy of which is hereto attached and made integral part of this
statement of account as Annex "A".

IN VIEW OF THE FOREGOING, it is most respectfully prayed that, the statement

of net worth of the estate of Linnie Jane Hodges, the assets and liabilities,
income and expenses as shown in the individual income tax return for the estate
of the deceased and marked as Annex "A", be approved by the Honorable Court,
as substantial compliance with the requirements of the Rules of Court.

That no person interested in the Philippines of the time and place of examining
the herein accounts be given notice, as herein executor is the only devisee or
legatee of the deceased, in accordance with the last will and testament already
probated by the Honorable court.

City of Iloilo April 14, 1959.

(Annex "I", Petition.)

The respondent court approved this statement of account on April 21, 1959 in its order worded
thus:

Upon petition of Atty. Gellada, in representation of the Executor, the statement of

net worth of the estate of Linnie Jane Hodges, assets and liabilities, income and
expenses as shown in the individual income tax return for the estate of the
deceased and marked as Annex "A" is approved.

SO ORDERED.

City of Iloilo April 21, 1959.

(Annex "J", Petition.)

His accounts for the periods January 1, 1959 to December 31, 1959 and January 1, 1960 to
December 31, 1960 were submitted likewise accompanied by allegations identical mutatis
mutandis to those of April 14, 1959, quoted above; and the respective orders approving the
same, dated July 30, 1960 and May 2, 1961, were substantially identical to the above-quoted
order of April 21, 1959. In connection with the statements of account just mentioned, the
following assertions related thereto made by respondent-appellee Magno in her brief do not
appear from all indications discernible in the record to be disputable:

Under date of April 14, 1959, C.N. Hodges filed his first "Account by the
Executor" of the estate of Linnie Jane Hodges. In the "Statement of Networth of
Mr. C.N. Hodges and the Estate of Linnie Jane Hodges" as of December 31,
1958 annexed thereto, C.N. Hodges reported that the combined conjugal estate
 earned a net income of P328,402.62, divided evenly between him and the estate
of Linnie Jane Hodges. Pursuant to this, he filed an "individual income tax return"
for calendar year 1958 on the estate of Linnie Jane Hodges reporting, under
oath, the said estate as having earned income of P164,201.31, exactly one-half
of the net income of his combined personal assets and that of the estate of Linnie
Jane Hodges. (p. 91, Appellee's Brief.)

xxx xxx xxx

Under date of July 21, 1960, C.N. Hodges filed his second "Annual Statement of
Account by the Executor" of the estate of Linnie Jane Hodges. In the "Statement
of Networth of Mr. C.N. Hodges and the Estate of Linnie Jane Hodges" as of
December 31, 1959 annexed thereto, C.N. Hodges reported that the combined
conjugal estate earned a net income of P270,623.32, divided evenly between
him and the estate of Linnie Jane Hodges. Pursuant to this, he filed an "individual
income tax return" for calendar year 1959 on the estate of Linnie Jane Hodges
reporting, under oath, the said estate as having earned income of P135,311.66,
exactly one-half of the net income of his combined personal assets and that of
the estate of Linnie Jane Hodges. (pp. 91-92. Appellee's Brief.)

xxx xxx xxx

Under date of April 20, 1961, C.N. Hodges filed his third "Annual Statement of
Account by the Executor for the Year 1960" of the estate of Linnie Jane Hodges.
In the "Statement of Net Worth of Mr. C.N. Hodges and the Estate of Linnie Jane
Hodges" as of December 31, 1960 annexed thereto, C.N. Hodges reported that
the combined conjugal estate earned a net income of P314,857.94, divided
evenly between him and the estate of Linnie Jane Hodges. Pursuant to this, he
filed an "individual income tax return" for calendar year 1960 on the estate of
Linnie Jane Hodges reporting, under oath, the said estate as having earned
income of P157,428.97, exactly one-half of the net income of his combined
personal assets and that of the estate of Linnie Jane Hodges. (Pp. 92-93,
Appellee's Brief.)

Likewise the following:

In the petition for probate that he (Hodges) filed, he listed the seven brothers and
sisters of Linnie Jane as her "heirs" (see p. 2, Green ROA). The order of the
court admitting the will to probate unfortunately omitted one of the heirs, Roy
Higdon (see p. 14, Green ROA). Immediately, C.N. Hodges filed a verified motion
to have Roy Higdon's name included as an heir, stating that he wanted to
straighten the records "in order the heirs of deceased Roy Higdon may not think
or believe they were omitted, and that they were really and are interested in the
estate of deceased Linnie Jane Hodges. .

As an executor, he was bound to file tax returns for the estate he was
administering under American law. He did file such as estate tax return on
August 8, 1958. In Schedule "M" of such return, he answered "Yes" to the
question as to whether he was contemplating "renouncing the will". On the
 question as to what property interests passed to him as the surviving spouse, he
answered:

"None, except for purposes of administering the Estate, paying

debts, taxes and other legal charges. It is the intention of the
surviving husband of deceased to distribute the remaining
property and interests of the deceased in their Community estate
to the devisees and legatees named in the will when the debts,
liabilities, taxes and expenses of administration are finally
determined and paid."

Again, on August 9, 1962, barely four months before his death, he executed an
"affidavit" wherein he ratified and confirmed all that he stated in Schedule "M" of
his estate tax returns as to his having renounced what was given him by his
wife's will. 1

As appointed executor, C.N. Hodges filed an "Inventory" dated May 12, 1958. He
listed all the assets of his conjugal partnership with Linnie Jane Hodges on a
separate balance sheet and then stated expressly that her estate which has
come into his possession as executor was "one-half of all the items" listed in said
balance sheet. (Pp. 89-90, Appellee's Brief.)

Parenthetically, it may be stated, at this juncture, that We are taking pains to quote wholly or at
least, extensively from some of the pleadings and orders whenever We feel that it is necessary
to do so for a more comprehensive and clearer view of the important and decisive issues raised
by the parties and a more accurate appraisal of their respective positions in regard thereto.

The records of these cases do not show that anything else was done in the above-mentioned
Special Proceedings No. 1307 until December 26, 1962, when on account of the death of
Hodges the day before, the same lawyer, Atty. Leon P. Gellada, who had been previously acting
as counsel for Hodges in his capacity as Executor of his wife's estate, and as such had filed the
aforequoted motions and manifestations, filed the following:

URGENT EX-PARTE MOTION FOR THE APPOINTMENT OF A

SPECIAL ADMINISTRATRIX

COMES the undersigned attorney for the Executor in the above-entitled

proceedings, to the Honorable Court, most respectfully states:

1. That in accordance with the Last Will and Testament of Linnie Jane Hodges
(deceased), her husband, Charles Newton Hodges was to act as Executor, and
in fact, in an order issued by this Hon. Court dated June 28, 1957, the said
Charles Newton Hodges was appointed Executor and had performed the duties
as such.

2. That last December 22, 1962, the said Charles Newton Hodges was stricken
ill, and brought to the Iloilo Mission Hospital for treatment, but unfortunately, he
died on December 25, 1962, as shown by a copy of the death certificate hereto
attached and marked as Annex "A".
3. That in accordance with the provisions of the last will and testament of Linnie
Jane Hodges, whatever real and personal properties that may remain at the
death of her husband Charles Newton Hodges, the said properties shall be
equally divided among their heirs. That there are real and personal properties left
by Charles Newton Hodges, which need to be administered and taken care of.

4. That the estate of deceased Linnie Jane Hodges, as well as that of Charles
Newton Hodges, have not as yet been determined or ascertained, and there is
necessity for the appointment of a general administrator to liquidate and
distribute the residue of the estate to the heirs and legatees of both spouses.
That in accordance with the provisions of Section 2 of Rule 75 of the Rules of
Court, the conjugal partnership of Linnie Jane Hodges and Charles Newton
Hodges shall be liquidated in the testate proceedings of the wife.

5. That the undersigned counsel, has perfect personal knowledge of the

existence of the last will and testament of Charles Newton Hodges, with similar
provisions as that contained in the last will and testament of Linnie Jane Hodges.
However, said last will and testament of Charles Newton Hodges is kept inside
the vault or iron safe in his office, and will be presented in due time before this
honorable Court.

6. That in the meantime, it is imperative and indispensable that, an Administratrix

be appointed for the estate of Linnie Jane Hodges and a Special Administratrix
for the estate of Charles Newton Hodges, to perform the duties required by law,
to administer, collect, and take charge of the goods, chattels, rights, credits, and
estate of both spouses, Charles Newton Hodges and Linnie Jane Hodges, as
provided for in Section 1 and 2, Rule 81 of the Rules of Court.

7. That there is delay in granting letters testamentary or of administration,

because the last will and testament of deceased, Charles Newton Hodges, is still
kept in his safe or vault, and in the meantime, unless an administratrix (and,) at
the same time, a Special Administratrix is appointed, the estate of both spouses
are in danger of being lost, damaged or go to waste.

8. That the most trusted employee of both spouses Linnie Jane Hodges and C.N.
Hodges, who had been employed for around thirty (30) years, in the person of
Miss Avelina Magno, (should) be appointed Administratrix of the estate of Linnie
Jane Hodges and at the same time Special Administratrix of the estate of
Charles Newton Hodges. That the said Miss Avelina Magno is of legal age, a
resident of the Philippines, the most fit, competent, trustworthy and well-qualified
person to serve the duties of Administratrix and Special Administratrix and is
willing to act as such.

9. That Miss Avelina Magno is also willing to file bond in such sum which the
Hon. Court believes reasonable.

WHEREFORE, in view of all the foregoing, it is most respectfully prayed that,

Miss AVELINA A. MAGNO be immediately appointed Administratrix of the estate
of Linnie Jane Hodges and as Special Administratrix of the estate of Charles
 Newton Hodges, with powers and duties provided for by law. That the Honorable
Court fix the reasonable bond of P1,000.00 to be filed by Avelina A. Magno.

(Annex "O", Petition.)

which respondent court readily acted on in its order of even date thus: .

For the reasons alleged in the Urgent Ex-parte Motion filed by counsel for the
Executor dated December 25, 1962, which the Court finds meritorious, Miss
AVELINA A. MAGNO, is hereby appointed Administratrix of the estate of Linnie
Jane Hodges and as Special Administratrix of the estate of Charles Newton
Hodges, in the latter case, because the last will of said Charles Newton Hodges
is still kept in his vault or iron safe and that the real and personal properties of
both spouses may be lost, damaged or go to waste, unless a Special
Administratrix is appointed.

Miss Avelina A. Magno is required to file bond in the sum of FIVE THOUSAND
PESOS (P5,000.00), and after having done so, let letters of Administration be
issued to her." (Annex "P", Petition.)

On December 29, 1962, however, upon urgent ex-parte petition of respondent

Magno herself, thru Atty. Gellada, Harold, R. Davies, "a representative of the
heirs of deceased Charles Newton Hodges (who had) arrived from the United
States of America to help in the administration of the estate of said deceased"
was appointed as Co-Special Administrator of the estate of Hodges, (pp. 29-33,
Yellow - Record on Appeal) only to be replaced as such co-special administrator
on January 22, 1963 by Joe Hodges, who, according to the motion of the same
attorney, is "the nephew of the deceased (who had) arrived from the United
States with instructions from the other heirs of the deceased to administer the
properties or estate of Charles Newton Hodges in the Philippines, (Pp. 47-50, id.)

Meanwhile, under date of January 9, 1963, the same Atty. Gellada filed in Special Proceedings
1672 a petition for the probate of the will of Hodges, 2 with a prayer for the issuance of letters of
administration to the same Joe Hodges, albeit the motion was followed on February 22, 1963 by
a separate one asking that Atty. Fernando Mirasol be appointed as his co-administrator. On the
same date this latter motion was filed, the court issued the corresponding order of probate and
letters of administration to Joe Hodges and Atty. Mirasol, as prayed for.

At this juncture, again, it may also be explained that just as, in her will, Mrs. Hodges bequeathed
her whole estate to her husband "to have and to hold unto him, my said husband, during his
natural lifetime", she, at the same time or in like manner, provided that "at the death of my said
husband — I give devise and bequeath all of the rest, residue and remainder of my estate, both
real and personal, wherever situated or located, to be equally divided among my brothers and
sisters, share and share alike —". Accordingly, it became incumbent upon Hodges, as executor
of his wife's will, to duly liquidate the conjugal partnership, half of which constituted her estate,
in order that upon the eventuality of his death, "the rest, residue and remainder" thereof could
be determined and correspondingly distributed or divided among her brothers and sisters. And it
was precisely because no such liquidation was done, furthermore, there is the issue of whether
the distribution of her estate should be governed by the laws of the Philippines or those of
Texas, of which State she was a national, and, what is more, as already stated, Hodges made
official and sworn statements or manifestations indicating that as far as he was concerned no
"property interests passed to him as surviving spouse — "except for purposes of administering
the estate, paying debts, taxes and other legal charges" and it was the intention of the surviving
husband of the deceased to distribute the remaining property and interests of the deceased in
their Community Estate to the devisees and legatees named in the will when the debts,
liabilities, taxes and expenses of administration are finally determined and paid", that the
incidents and controversies now before Us for resolution arose. As may be observed, the
situation that ensued upon the death of Hodges became rather unusual and so, quite
understandably, the lower court's actuations presently under review are apparently wanting in
consistency and seemingly lack proper orientation.

Thus, We cannot discern clearly from the record before Us the precise perspective from which
the trial court proceeded in issuing its questioned orders. And, regretably, none of the lengthy
briefs submitted by the parties is of valuable assistance in clearing up the matter.

To begin with, We gather from the two records on appeal filed by petitioner, as appellant in the
appealed cases, one with green cover and the other with a yellow cover, that at the outset, a
sort of modus operandi had been agreed upon by the parties under which the respective
administrators of the two estates were supposed to act conjointly, but since no copy of the said
agreement can be found in the record before Us, We have no way of knowing when exactly
such agreement was entered into and under what specific terms. And while reference is made
to said modus operandi in the order of September 11, 1964, on pages 205-206 of the Green
Record on Appeal, reading thus:

The present incident is to hear the side of administratrix, Miss Avelina A. Magno,
in answer to the charges contained in the motion filed by Atty. Cesar Tirol on
September 3, 1964. In answer to the said charges, Miss Avelina A. Magno,
through her counsel, Atty. Rizal Quimpo, filed a written manifestation.

After reading the manifestation here of Atty. Quimpo, for and in behalf of the
administratrix, Miss Avelina A. Magno, the Court finds that everything that
happened before September 3, 1964, which was resolved on September 8,
1964, to the satisfaction of parties, was simply due to a misunderstanding
between the representative of the Philippine Commercial and Industrial Bank and
Miss Magno and in order to restore the harmonious relations between the
parties, the Court ordered the parties to remain in status quo as to their modus
operandi before September 1, 1964, until after the Court can have a meeting with
all the parties and their counsels on October 3, as formerly agreed upon between
counsels, Attys. Ozaeta, Gibbs and Ozaeta, Attys. Tirol and Tirol and Atty. Rizal
Quimpo.

In the meantime, the prayers of Atty. Quimpo as stated in his manifestation shall
not be resolved by this Court until October 3, 1964.

SO ORDERED.

there is nothing in the record indicating whatever happened to it afterwards, except that again,
reference thereto was made in the appealed order of October 27, 1965, on pages 292-295 of
the Green Record on Appeal, as follows:
On record is an urgent motion to allow PCIB to open all doors and locks in the
Hodges Office at 206-208 Guanco Street, Iloilo City, to take immediate and
exclusive possession thereof and to place its own locks and keys for security
purposes of the PCIB dated October 27, 1965 thru Atty. Cesar Tirol. It is alleged
in said urgent motion that Administratrix Magno of the testate estate of Linnie
Jane Hodges refused to open the Hodges Office at 206-208 Guanco Street, Iloilo
City where PCIB holds office and therefore PCIB is suffering great moral damage
and prejudice as a result of said act. It is prayed that an order be issued
authorizing it (PCIB) to open all doors and locks in the said office, to take
immediate and exclusive possession thereof and place thereon its own locks and
keys for security purposes; instructing the clerk of court or any available deputy
to witness and supervise the opening of all doors and locks and taking
possession of the PCIB.

A written opposition has been filed by Administratrix Magno of even date (Oct.
27) thru counsel Rizal Quimpo stating therein that she was compelled to close
the office for the reason that the PCIB failed to comply with the order of this Court
signed by Judge Anacleto I. Bellosillo dated September 11, 1964 to the effect
that both estates should remain in status quo to their modus operandi as of
September 1, 1964.

To arrive at a happy solution of the dispute and in order not to interrupt the
operation of the office of both estates, the Court aside from the reasons stated in
the urgent motion and opposition heard the verbal arguments of Atty. Cesar Tirol
for the PCIB and Atty. Rizal Quimpo for Administratix Magno.

After due consideration, the Court hereby orders Magno to open all doors and
locks in the Hodges Office at 206-208 Guanco Street, Iloilo City in the presence
of the PCIB or its duly authorized representative and deputy clerk of court Albis
of this branch not later than 7:30 tomorrow morning October 28, 1965 in order
that the office of said estates could operate for business.

Pursuant to the order of this Court thru Judge Bellosillo dated September 11,
1964, it is hereby ordered:

(a) That all cash collections should be deposited in the joint account of the
estates of Linnie Jane Hodges and estates of C.N. Hodges;

(b) That whatever cash collections that had been deposited in the account of
either of the estates should be withdrawn and since then deposited in the joint
account of the estate of Linnie Jane Hodges and the estate of C.N. Hodges;

(c) That the PCIB should countersign the check in the amount of P250 in favor of
Administratrix Avelina A. Magno as her compensation as administratrix of the
Linnie Jane Hodges estate chargeable to the testate estate of Linnie Jane
Hodges only;

(d) That Administratrix Magno is hereby directed to allow the PCIB to inspect
whatever records, documents and papers she may have in her possession in the
same manner that Administrator PCIB is also directed to allow Administratrix
 Magno to inspect whatever records, documents and papers it may have in its
possession;

(e) That the accountant of the estate of Linnie Jane Hodges shall have access to
all records of the transactions of both estates for the protection of the estate of
Linnie Jane Hodges; and in like manner the accountant or any authorized
representative of the estate of C.N. Hodges shall have access to the records of
transactions of the Linnie Jane Hodges estate for the protection of the estate of
C.N. Hodges.

Once the estates' office shall have been opened by Administratrix Magno in the
presence of the PCIB or its duly authorized representative and deputy clerk Albis
or his duly authorized representative, both estates or any of the estates should
not close it without previous consent and authority from this court.

SO ORDERED.

As may be noted, in this order, the respondent court required that all collections from the
properties in the name of Hodges should be deposited in a joint account of the two estates,
which indicates that seemingly the so-calledmodus operandi was no longer operative, but again
there is nothing to show when this situation started.

Likewise, in paragraph 3 of the petitioner's motion of September 14, 1964, on pages 188-201 of
the Green Record on Appeal, (also found on pp. 83-91 of the Yellow Record on Appeal) it is
alleged that:

3. On January 24, 1964 virtually all of the heirs of C.N. Hodges, Joe Hodges and
Fernando P. Mirasol acting as the two co-administrators of the estate of C.N.
Hodges, Avelina A. Magno acting as the administratrix of the estate of Linnie
Jane Hodges and Messrs. William Brown and Ardell Young acting for all of the
Higdon family who claim to be the sole beneficiaries of the estate of Linnie Jane
Hodges and various legal counsel representing the aforementioned parties
entered into an amicable agreement, which was approved by this Honorable
Court, wherein the parties thereto agreed that certain sums of money were to be
paid in settlement of different claims against the two estates and that the assets
(to the extent they existed) of both estates would be administered jointly by the
PCIB as administrator of the estate of C.N. Hodges and Avelina A. Magno as
administratrix of the estate of Linnie Jane Hodges, subject, however, to the
aforesaid October 5, 1963 Motion, namely, the PCIB's claim to exclusive
possession and ownership of one hundred percent (100%) (or, in the alternative,
seventy-five percent (75%) of all assets owned by C.N. Hodges or Linnie Jane
Hodges situated in the Philippines. On February 1, 1964 (pp. 934-935, CFI Rec.,
S.P. No. 1672) this Honorable Court amended its order of January 24, 1964 but
in no way changed its recognition of the afore-described basic demand by the
PCIB as administrator of the estate of C.N. Hodges to one hundred percent
(100%) of the assets claimed by both estates.

but no copy of the mentioned agreement of joint administration of the two estates exists in the
record, and so, We are not informed as to what exactly are the terms of the same which could
be relevant in the resolution of the issues herein.
On the other hand, the appealed order of November 3, 1965, on pages 313-320 of the Green
Record on Appeal, authorized payment by respondent Magno of, inter alia, her own fees as
administratrix, the attorney's fees of her lawyers, etc., as follows:

Administratrix Magno thru Attys. Raul S. Manglapus and Rizal. R. Quimpo filed a
Manifestation and Urgent Motion dated June 10, 1964 asking for the approval of
the Agreement dated June 6, 1964 which Agreement is for the purpose of
retaining their services to protect and defend the interest of the said
Administratrix in these proceedings and the same has been signed by and bears
the express conformity of the attorney-in-fact of the late Linnie Jane Hodges, Mr.
James L. Sullivan. It is further prayed that the Administratrix of the Testate Estate
of Linnie Jane Hodges be directed to pay the retailers fee of said lawyers, said
fees made chargeable as expenses for the administration of the estate of Linnie
Jane Hodges (pp. 1641-1642, Vol. V, Sp. 1307).

An opposition has been filed by the Administrator PCIB thru Atty. Herminio
Ozaeta dated July 11, 1964, on the ground that payment of the retainers fee of
Attys. Manglapus and Quimpo as prayed for in said Manifestation and Urgent
Motion is prejudicial to the 100% claim of the estate of C. N. Hodges;
employment of Attys. Manglapus and Quimpo is premature and/or unnecessary;
Attys. Quimpo and Manglapus are representing conflicting interests and the
estate of Linnie Jane Hodges should be closed and terminated (pp. 1679-1684,
Vol, V, Sp. 1307).

Atty. Leon P. Gellada filed a memorandum dated July 28, 1964 asking that the
Manifestation and Urgent Motion filed by Attys. Manglapus and Quimpo be
denied because no evidence has been presented in support thereof. Atty.
Manglapus filed a reply to the opposition of counsel for the Administrator of the
C. N. Hodges estate wherein it is claimed that expenses of administration include
reasonable counsel or attorney's fees for services to the executor or
administrator. As a matter of fact the fee agreement dated February 27, 1964
between the PCIB and the law firm of Ozaeta, Gibbs & Ozaeta as its counsel
(Pp. 1280-1284, Vol. V, Sp. 1307) which stipulates the fees for said law firm has
been approved by the Court in its order dated March 31, 1964. If payment of the
fees of the lawyers for the administratrix of the estate of Linnie Jane Hodges will
cause prejudice to the estate of C. N. Hodges, in like manner the very agreement
which provides for the payment of attorney's fees to the counsel for the PCIB will
also be prejudicial to the estate of Linnie Jane Hodges (pp. 1801-1814, Vol. V,
Sp. 1307).

Atty. Herminio Ozaeta filed a rejoinder dated August 10, 1964 to the reply to the
opposition to the Manifestation and Urgent Motion alleging principally that the
estates of Linnie Jane Hodges and C. N. Hodges are not similarly situated for the
reason that C. N. Hodges is an heir of Linnie Jane Hodges whereas the latter is
not an heir of the former for the reason that Linnie Jane Hodges predeceased C.
N. Hodges (pp. 1839-1848, Vol. V, Sp. 1307); that Attys. Manglapus and Quimpo
formally entered their appearance in behalf of Administratrix of the estate of
Linnie Jane Hodges on June 10, 1964 (pp. 1639-1640, Vol. V, Sp. 1307).
Atty. Manglapus filed a manifestation dated December 18, 1964 stating therein
that Judge Bellosillo issued an order requiring the parties to submit memorandum
in support of their respective contentions. It is prayed in this manifestation that
the Manifestation and Urgent Motion dated June 10, 1964 be resolved (pp. 6435-
6439, Vol. VII, Sp. 1307).

Atty. Roman Mabanta, Jr. for the PCIB filed a counter- manifestation dated
January 5, 1965 asking that after the consideration by the court of all allegations
and arguments and pleadings of the PCIB in connection therewith (1) said
manifestation and urgent motion of Attys. Manglapus and Quimpo be denied (pp.
6442-6453, Vol. VII, Sp. 1307). Judge Querubin issued an order dated January
4, 1965 approving the motion dated June 10, 1964 of the attorneys for the
administratrix of the estate of Linnie Jane Hodges and agreement annexed to
said motion. The said order further states: "The Administratrix of the estate of
Linnie Jane Hodges is authorized to issue or sign whatever check or checks may
be necessary for the above purpose and the administrator of the estate of C. N.
Hodges is ordered to countersign the same. (pp. 6518-6523, Vol VII, Sp. 1307).

Atty. Roman Mabanta, Jr. for the PCIB filed a manifestation and motion dated
January 13, 1965 asking that the order of January 4, 1965 which was issued by
Judge Querubin be declared null and void and to enjoin the clerk of court and the
administratrix and administrator in these special proceedings from all
proceedings and action to enforce or comply with the provision of the aforesaid
order of January 4, 1965. In support of said manifestation and motion it is alleged
that the order of January 4, 1965 is null and void because the said order was
never delivered to the deputy clerk Albis of Branch V (the sala of Judge
Querubin) and the alleged order was found in the drawer of the late Judge
Querubin in his office when said drawer was opened on January 13, 1965 after
the death of Judge Querubin by Perfecto Querubin, Jr., the son of the judge and
in the presence of Executive Judge Rovira and deputy clerk Albis (Sec. 1, Rule
36, New Civil Code) (Pp. 6600-6606, Vol. VIII, Sp. 1307).

Atty. Roman Mabanta, Jr. for the PCIB filed a motion for reconsideration dated
February 23, 1965 asking that the order dated January 4, 1964 be reversed on
the ground that:

1. Attorneys retained must render services to the estate not to the personal heir;

2. If services are rendered to both, fees should be pro-rated between them;

3. Attorneys retained should not represent conflicting interests; to the prejudice of

the other heirs not represented by said attorneys;

4. Fees must be commensurate to the actual services rendered to the estate;

5. There must be assets in the estate to pay for said fees (Pp. 6625-6636, Vol.
VIII, Sp. 1307).

Atty. Quimpo for Administratrix Magno of the estate of Linnie Jane Hodges filed a
motion to submit dated July 15, 1965 asking that the manifestation and urgent
 motion dated June 10, 1964 filed by Attys. Manglapus and Quimpo and other
incidents directly appertaining thereto be considered submitted for consideration
and approval (pp. 6759-6765, Vol. VIII, Sp. 1307).

Considering the arguments and reasons in support to the pleadings of both the
Administratrix and the PCIB, and of Atty. Gellada, hereinbefore mentioned, the
Court believes that the order of January 4, 1965 is null and void for the reason
that the said order has not been filed with deputy clerk Albis of this court (Branch
V) during the lifetime of Judge Querubin who signed the said order. However, the
said manifestation and urgent motion dated June 10, 1964 is being treated and
considered in this instant order. It is worthy to note that in the motion dated
January 24, 1964 (Pp. 1149- 1163, Vol. V, Sp. 1307) which has been filed by
Atty. Gellada and his associates and Atty. Gibbs and other lawyers in addition to
the stipulated fees for actual services rendered. However, the fee agreement
dated February 27, 1964, between the Administrator of the estate of C. N.
Hodges and Atty. Gibbs which provides for retainer fee of P4,000 monthly in
addition to specific fees for actual appearances, reimbursement for expenditures
and contingent fees has also been approved by the Court and said lawyers have
already been paid. (pp. 1273-1279, Vol. V, Sp. Proc. 1307 pp. 1372-1373, Vol. V,
Sp. Proc. 1307).

WHEREFORE, the order dated January 4, 1965 is hereby declared null and void.

The manifestation and motion dated June 10, 1964 which was filed by the
attorneys for the administratrix of the testate estate of Linnie Jane Hodges is
granted and the agreement annexed thereto is hereby approved.

The administratrix of the estate of Linnie Jane Hodges is hereby directed to be

needed to implement the approval of the agreement annexed to the motion and
the administrator of the estate of C. N. Hodges is directed to countersign the said
check or checks as the case may be.

SO ORDERED.

thereby implying somehow that the court assumed the existence of independent but
simultaneous administrations.

Be that as it may, again, it appears that on August 6, 1965, the court, acting on a motion of
petitioner for the approval of deeds of sale executed by it as administrator of the estate of
Hodges, issued the following order, also on appeal herein:

Acting upon the motion for approval of deeds of sale for registered land of the
PCIB, Administrator of the Testate Estate of C. N. Hodges in Sp. Proc. 1672 (Vol.
VII, pp. 2244-2245), dated July 16, 1965, filed by Atty. Cesar T. Tirol in
representation of the law firms of Ozaeta, Gibbs and Ozaeta and Tirol and Tirol
and the opposition thereto of Atty. Rizal R. Quimpo (Vol. VIII, pp. 6811-6813)
dated July 22, 1965 and considering the allegations and reasons therein stated,
the court believes that the deeds of sale should be signed jointly by the PCIB,
Administrator of the Testate Estate of C. N. Hodges and Avelina A. Magno,
Administratrix of the Testate Estate of Linnie Jane Hodges and to this effect the
 PCIB should take the necessary steps so that Administratrix Avelina A. Magno
could sign the deeds of sale.

SO ORDERED. (p. 248, Green Record on Appeal.)

Notably this order required that even the deeds executed by petitioner, as administrator of the
Estate of Hodges, involving properties registered in his name, should be co-signed by
respondent Magno. 3 And this was not an isolated instance.

In her brief as appellee, respondent Magno states:

After the lower court had authorized appellee Avelina A. Magno to execute final
deeds of sale pursuant to contracts to sell executed by C. N. Hodges on
February 20, 1963 (pp. 45-46, Green ROA), motions for the approval of final
deeds of sale (signed by appellee Avelina A. Magno and the administrator of the
estate of C. N. Hodges, first Joe Hodges, then Atty. Fernando Mirasol and later
the appellant) were approved by the lower court upon petition of appellee
Magno's counsel, Atty. Leon P. Gellada, on the basis of section 8 of Rule 89 of
the Revised Rules of Court. Subsequently, the appellant, after it had taken over
the bulk of the assets of the two estates, started presenting these motions itself.
The first such attempt was a "Motion for Approval of Deeds of Sale for
Registered Land and Cancellations of Mortgages" dated July 21, 1964 filed by
Atty. Cesar T. Tirol, counsel for the appellant, thereto annexing two (2) final
deeds of sale and two (2) cancellations of mortgages signed by appellee Avelina
A. Magno and D. R. Paulino, Assistant Vice-President and Manager of the
appellant (CFI Record, Sp. Proc. No. 1307, Vol. V, pp. 1694-1701). This motion
was approved by the lower court on July 27, 1964. It was followed by another
motion dated August 4, 1964 for the approval of one final deed of sale again
signed by appellee Avelina A. Magno and D. R. Paulino (CFI Record, Sp. Proc.
No. 1307. Vol. V, pp. 1825-1828), which was again approved by the lower court
on August 7, 1964. The gates having been opened, a flood ensued: the appellant
subsequently filed similar motions for the approval of a multitude of deeds of
sales and cancellations of mortgages signed by both the appellee Avelina A.
Magno and the appellant.

A random check of the records of Special Proceeding No. 1307 alone will show
Atty. Cesar T. Tirol as having presented for court approval deeds of sale of real
properties signed by both appellee Avelina A. Magno and D. R. Paulino in the
following numbers: (a) motion dated September 21, 1964 — 6 deeds of sale; (b)
motion dated November 4, 1964 — 1 deed of sale; (c) motion dated December 1,
1964 — 4 deeds of sale; (d) motion dated February 3, 1965 — 8 deeds of sale;
(f) motion dated May 7, 1965 — 9 deeds of sale. In view of the very extensive
landholdings of the Hodges spouses and the many motions filed concerning
deeds of sale of real properties executed by C. N. Hodges the lower court has
had to constitute special separate expedientes in Special Proceedings Nos. 1307
and 1672 to include mere motions for the approval of deeds of sale of the
conjugal properties of the Hodges spouses.

As an example, from among the very many, under date of February 3, 1965, Atty.
Cesar T. Tirol, as counsel for the appellant, filed "Motion for Approval of Deeds of
 Sale for Registered Land and Cancellations of Mortgages" (CFI Record, Sp.
Proc. No. 1307, Vol. VIII, pp. 6570-6596) the allegations of which read:

"1. In his lifetime, the late C. N. Hodges executed "Contracts to Sell" real
property, and the prospective buyers under said contracts have already paid the
price and complied with the terms and conditions thereof;

"2. In the course of administration of both estates, mortgage debtors have

already paid their debts secured by chattel mortgages in favor of the late C. N.
Hodges, and are now entitled to release therefrom;

"3. There are attached hereto documents executed jointly by the Administratrix in
Sp. Proc. No. 1307 and the Administrator in Sp. Proc. No. 1672, consisting of
deeds of sale in favor —

Fernando Cano, Bacolod City, Occ. Negros

Fe Magbanua, Iloilo City
Policarpio M. Pareno, La Paz, Iloilo City
Rosario T. Libre, Jaro, Iloilo City
Federico B. Torres, Iloilo City
Reynaldo T. Lataquin, La Paz, Iloilo City
Anatolio T. Viray, Iloilo City
Benjamin Rolando, Jaro, Iloilo City

and cancellations of mortgages in favor of —

Pablo Manzano, Oton, Iloilo

Ricardo M. Diana, Dao, San Jose, Antique
Simplicio Tingson, Iloilo City
Amado Magbanua, Pototan, Iloilo
Roselia M. Baes, Bolo, Roxas City
William Bayani, Rizal Estanzuela, Iloilo City
Elpidio Villarete, Molo, Iloilo City
Norma T. Ruiz, Jaro, Iloilo City

"4. That the approval of the aforesaid documents will not reduce
the assets of the estates so as to prevent any creditor from
receiving his full debt or diminish his dividend."

And the prayer of this motion is indeed very revealing:

"WHEREFORE, it is respectfully prayed that, under Rule 89, Section 8 of the

Rules of Court, this honorable court approve the aforesaid deeds of sale and
cancellations of mortgages." (Pp. 113-117, Appellee's Brief.)

None of these assertions is denied in Petitioner's reply brief.

Further indicating lack of concrete perspective or orientation on the part of the respondent court
and its hesitancy to clear up matters promptly, in its other appealed order of November 23,
1965, on pages 334-335 of the Green Record on Appeal, said respondent court allowed the
movant Ricardo Salas, President of appellee Western Institute of Technology (successor of
Panay Educational Institutions, Inc.), one of the parties with whom Hodges had contracts that
are in question in the appeals herein, to pay petitioner, as Administrator of the estate of Hodges
and/or respondent Magno, as Administrator of the estate of Mrs. Hodges, thus:

Considering that in both cases there is as yet no judicial declaration of heirs nor
distribution of properties to whomsoever are entitled thereto, the Court believes
that payment to both the administrator of the testate estate of C. N. Hodges and
the administratrix of the testate estate of Linnie Jane Hodges or to either one of
the two estates is proper and legal.

WHEREFORE, movant Ricardo T. Salas can pay to both estates or either of

them.

SO ORDERED.

(Pp. 334-335, Green Record on Appeal.)

On the other hand, as stated earlier, there were instances when respondent Magno was given
authority to act alone. For instance, in the other appealed order of December 19, 1964, on page
221 of the Green Record on Appeal, the respondent court approved payments made by her of
overtime pay to some employees of the court who had helped in gathering and preparing copies
of parts of the records in both estates as follows:

Considering that the expenses subject of the motion to approve payment of

overtime pay dated December 10, 1964, are reasonable and are believed by this
Court to be a proper charge of administration chargeable to the testate estate of
the late Linnie Jane Hodges, the said expenses are hereby APPROVED and to
be charged against the testate estate of the late Linnie Jane Hodges. The
administrator of the testate estate of the late Charles Newton Hodges is hereby
ordered to countersign the check or checks necessary to pay the said overtime
pay as shown by the bills marked Annex "A", "B" and "C" of the motion.

SO ORDERED.

(Pp. 221-222, Green Record on Appeal.)

Likewise, the respondent court approved deeds of sale executed by respondent Magno alone,
as Administratrix of the estate of Mrs. Hodges, covering properties in the name of Hodges,
pursuant to "contracts to sell" executed by Hodges, irrespective of whether they were executed
by him before or after the death of his wife. The orders of this nature which are also on appeal
herein are the following:

1. Order of March 30, 1966, on p. 137 of the Green Record on Appeal, approving the deed of
sale executed by respondent Magno in favor of appellee Lorenzo Carles on February 24, 1966,
pursuant to a "contract to sell" signed by Hodges on June 17, 1958, after the death of his wife,
which contract petitioner claims was cancelled by it for failure of Carles to pay the installments
due on January 7, 1965.
2. Order of April 5, 1966, on pp. 139-140, id., approving the deed of sale executed by
respondent Magno in favor of appellee Salvador Guzman on February 28, 1966 pursuant to a
"contract to sell" signed by Hodges on September 13, 1960, after the death of his wife, which
contract petitioner claims it cancelled on March 3, 1965 in view of failure of said appellee to pay
the installments on time.

3. Order of April 20, 1966, on pp. 167-168, id., approving the deed of sale executed by
respondent Magno in favor of appellee Purificacion Coronado on March 28, 1966 pursuant to a
"contract to sell" signed by Hodges on August 14, 1961, after the death of his wife.

4. Order of April 20, 1966, on pp. 168-169, id., approving the deed of sale executed by
respondent Magno in favor of appellee Florenia Barrido on March 28, 1966, pursuant to a
"contract to sell" signed by Hodges on February 21, 1958, after the death of his wife.

5. Order of June 7, 1966, on pp. 184-185, id., approving the deed of sale executed by
respondent Magno in favor of appellee Belcezar Causing on May 2, 1966, pursuant to a
"contract to sell" signed by Hodges on February 10, 1959, after the death of his wife.

6. Order of June 21, 1966, on pp. 211-212, id., approving the deed of sale executed by
respondent Magno in favor of appellee Artheo Thomas Jamir on June 3, 1966, pursuant to a
"contract to sell" signed by Hodges on May 26, 1961, after the death of his wife.

7. Order of June 21, 1966, on pp. 212-213, id., approving the deed of sale executed by
respondent Magno in favor of appellees Graciano Lucero and Melquiades Batisanan on June 6
and June 3, 1966, respectively, pursuant to "contracts to sell" signed by Hodges on June 9,
1959 and November 27, 1961, respectively, after the death of his wife.

8. Order of December 2, 1966, on pp. 303-304, id., approving the deed of sale executed by
respondent Magno in favor of appellees Espiridion Partisala, Winifredo Espada and Rosario
Alingasa on September 6, 1966, August 17, 1966 and August 3, 1966, respectively, pursuant to
"contracts to sell" signed by Hodges on April 20, 1960, April 18, 1960 and August 25, 1958,
respectively, that is, after the death of his wife.

9. Order of April 5, 1966, on pp. 137-138, id., approving the deed of sale executed by
respondent Magno in favor of appellee Alfredo Catedral on March 2, 1966, pursuant to a
"contract to sell" signed by Hodges on May 29, 1954, before the death of his wife, which
contract petitioner claims it had cancelled on February 16, 1966 for failure of appellee Catedral
to pay the installments due on time.

10. Order of April 5, 1966, on pp. 138-139, id., approving the deed of sale executed by
respondent Magno in favor of appellee Jose Pablico on March 7, 1966, pursuant to a "contract
to sell" signed by Hodges on March 7, 1950, after the death of his wife, which contract petitioner
claims it had cancelled on June 29, 1960, for failure of appellee Pablico to pay the installments
due on time.

11. Order of December 2, 1966, on pp. 303-304, id., insofar as it approved the deed of sale
executed by respondent Magno in favor of appellee Pepito Iyulores on September 6, 1966,
pursuant to a "contract to sell" signed by Hodges on February 5, 1951, before the death of his
wife.
12. Order of January 3, 1967, on pp. 335-336, id., approving three deeds of sale executed by
respondent Magno, one in favor of appellees Santiago Pacaonsis and two in favor of appellee
Adelfa Premaylon on December 5, 1966 and November 3, 1966, respectively, pursuant to
separate "promises to sell" signed respectively by Hodges on May 26, 1955 and January 30,
1954, before the death of his wife, and October 31, 1959, after her death.

In like manner, there were also instances when respondent court approved deeds of sale
executed by petitioner alone and without the concurrence of respondent Magno, and such
approvals have not been the subject of any appeal. No less than petitioner points this out on
pages 149-150 of its brief as appellant thus:

The points of fact and law pertaining to the two abovecited assignments of error
have already been discussed previously. In the first abovecited error, the order
alluded to was general, and as already explained before, it was, as admitted by
the lower court itself, superseded by the particular orders approving specific final
deeds of sale executed by the appellee, Avelina A. Magno, which are subject of
this appeal, as well as the particular orders approving specific final deeds of sale
executed by the appellant, Philippine Commercial and Industrial Bank, which
were never appealed by the appellee, Avelina A. Magno, nor by any party for that
matter, and which are now therefore final.

Now, simultaneously with the foregoing incidents, others of more fundamental and all embracing
significance developed. On October 5, 1963, over the signature of Atty. Allison J. Gibbs in
representation of the law firm of Ozaeta, Gibbs & Ozaeta, as counsel for the co-administrators
Joe Hodges and Fernando P. Mirasol, the following self-explanatory motion was filed:

URGENT MOTION FOR AN ACCOUNTING AND DELIVERY TO

ADMINISTRATION OF THE ESTATE OF C. N. HODGES OF ALL
OF THE ASSETS OF THE CONJUGAL PARTNERSHIP OF THE
DECEASED LINNIE JANE HODGES AND C N. HODGES
EXISTING AS OF MAY 23, 1957 PLUS ALL THE RENTS,
EMOLUMENTS AND INCOME THEREFROM.

COMES NOW the co-administrator of the estate of C. N. Hodges, Joe Hodges,

through his undersigned attorneys in the above-entitled proceedings, and to this
Honorable Court respectfully alleges:

(1) On May 23, 1957 Linnie Jane Hodges died in Iloilo City.

(2) On June 28, 1957 this Honorable Court admitted to probate the Last Will and
Testament of the deceased Linnie Jane Hodges executed November 22, 1952
and appointed C. N. Hodges as Executor of the estate of Linnie Jane Hodges
(pp. 24-25, Rec. Sp. Proc. 1307).

(3) On July 1, 1957 this Honorable Court issued Letters Testamentary to C. N.

Hodges in the Estate of Linnie Jane Hodges (p. 30, Rec. Sp. Proc. 1307).

(4) On December 14, 1957 this Honorable Court, on the basis of the following
allegations in a Motion dated December 11, 1957 filed by Leon P. Gellada as
attorney for the executor C. N. Hodges:
 "That herein Executor, (is) not only part owner of the properties
left as conjugal, but also,the successor to all the properties left by
the deceased Linnie Jane Hodges."

(p. 44, Rec. Sp. Proc. 1307; emphasis supplied.)

issued the following order:

"As prayed for by Attorney Gellada, counsel for the Executory, for
the reasons stated in his motion dated December 11, 1957 which
the court considers well taken, all the sales, conveyances, leases
and mortgages of all properties left by the deceased Linnie Jane
Hodges are hereby APPROVED. The said executor is further
authorized to execute subsequent sales, conveyances, leases and
mortgages of the properties left by the said deceased Linnie Jane
Hodges in consonance with the wishes contained in the last will
and testament of the latter."

(p. 46, Rec. Sp. Proc. 1307; emphasis supplied.)

(5) On April 21, 1959 this Honorable Court approved the inventory and
accounting submitted by C. N. Hodges through his counsel Leon P. Gellada on
April 14, 1959 wherein he alleged among other things

"That no person interested in the Philippines of the time and place

of examining the herein account, be given notice, as herein
executor is the only devisee or legatee of the deceased, in
accordance with the last will and testament already probated by
the Honorable Court."

(pp. 77-78, Rec. Sp. Proc. 1307; emphasis supplied.).

(6) On July 30, 1960 this Honorable Court approved the "Annual Statement of
Account" submitted by C. N. Hodges through his counsel Leon P. Gellada on
July 21, 1960 wherein he alleged among other things:

"That no person interested in the Philippines of the time and place

of examining the herein account, be given notice as herein
executor is the only devisee or legatee of the deceased Linnie
Jane Hodges, in accordance with the last will and testament of the
deceased, already probated by this Honorable Court."

(pp. 81-82. Rec. Sp. Proc. 1307; emphasis supplied.)

(7) On May 2, 1961 this Honorable court approved the "Annual Statement of
Account By The Executor for the Year 1960" submitted through Leon P. Gellada
on April 20, 1961 wherein he alleged:
 That no person interested in the Philippines be given notice, of the
time and place of examining the herein account, as herein
Executor is the only devisee or legatee of the deceased Linnie
Jane Hodges, in accordance with the last will and testament of the
deceased, already probated by this Honorable Court.

(pp. 90-91. Rec. Sp. Proc. 1307; emphasis supplied.)

(8) On December 25, 1962, C.N. Hodges died.

(9) On December 25, 1962, on the Urgent Ex-parte Motion of Leon P. Gellada
filed only in Special Proceeding No. 1307, this Honorable Court appointed
Avelina A. Magno

"Administratrix of the estate of Linnie Jane Hodges and as Special Administratrix

of the estate of Charles Newton Hodges, in the latter case, because the last will
of said Charles Newton Hodges is still kept in his vault or iron safe and that the
real and personal properties of both spouses may be lost, damaged or go to
waste, unless a Special Administratrix is appointed."

(p. 100. Rec. Sp. Proc. 1307)

(10) On December 26, 1962 Letters of Administration were issued to Avelina

Magno pursuant to this Honorable Court's aforesaid Order of December 25, 1962

"With full authority to take possession of all the property of said

deceased in any province or provinces in which it may be situated
and to perform all other acts necessary for the preservation of said
property, said Administratrix and/or Special Administratrix having
filed a bond satisfactory to the Court."

(p. 102, Rec. Sp. Proc. 1307)

(11) On January 22, 1963 this Honorable Court on petition of Leon P. Gellada of
January 21, 1963 issued Letters of Administration to:

(a) Avelina A. Magno as Administratrix of the estate of Linnie Jane Hodges;

(b) Avelina A. Magno as Special Administratrix of the Estate of Charles Newton

Hodges; and

(c) Joe Hodges as Co-Special Administrator of the Estate of Charles Newton

Hodges.

(p. 43, Rec. Sp. Proc. 1307)

(12) On February 20, 1963 this Honorable Court on the basis of a motion filed by
Leon P. Gellada as legal counsel on February 16, 1963 for Avelina A. Magno
 acting as Administratrix of the Estate of Charles Newton Hodges (pp. 114-116,
Sp. Proc. 1307) issued the following order:

"... se autoriza a aquella (Avelina A. Magno) a firmar escrituras de

venta definitiva de propiedades cubiertas por contratos para
vender, firmados, en vida, por el finado Charles Newton Hodges,
cada vez que el precio estipulado en cada contrato este
totalmente pagado. Se autoriza igualmente a la misma a firmar
escrituras de cancelacion de hipoteca tanto de bienes reales
como personales cada vez que la consideracion de cada hipoteca
este totalmente pagada.

"Cada una de dichas escrituras que se otorguen debe ser

sometida para la aprobacion de este Juzgado."

(p. 117, Sp. Proc. 1307).

[Par 1 (c), Reply to Motion For Removal of Joe Hodges]

(13) On September l6, 1963 Leon P. Gellada, acting as attorney for Avelina A.
Magno as Administratrix of the estate of Linnie Jane Hodges, alleges:

3. — That since January, 1963, both estates of Linnie Jane

Hodges and Charles Newton Hodges have been receiving in full,
payments for those "contracts to sell" entered into by C. N.
Hodges during his lifetime, and the purchasers have been
demanding the execution of definite deeds of sale in their favor.

4. — That hereto attached are thirteen (13) copies deeds of sale

executed by the Administratrix and by the co-administrator
(Fernando P. Mirasol) of the estate of Linnie Jane Hodges and
Charles Newton Hodges respectively, in compliance with the
terms and conditions of the respective "contracts to sell" executed
by the parties thereto."

(14) The properties involved in the aforesaid motion of September 16, 1963 are
all registered in the name of the deceased C. N. Hodges.

(15) Avelina A. Magno, it is alleged on information and belief, has been

advertising in the newspaper in Iloilo thusly:

For Sale

Testate Estate of Linnie Jane Hodges and Charles Newton Hodges.

All Real Estate or Personal Property will be sold on First Come First Served
Basis.
 Avelin
a A.
Magno
Admini
stratrix

(16) Avelina A. Magno, it is alleged on information and belief, has paid and still is
paying sums of money to sundry persons.

(17) Joe Hodges through the undersigned attorneys manifested during the
hearings before this Honorable Court on September 5 and 6, 1963 that the estate
of C. N. Hodges was claiming all of the assets belonging to the deceased
spouses Linnie Jane Hodges and C. N. Hodges situated in Philippines because
of the aforesaid election by C. N. Hodges wherein he claimed and took
possession as sole owner of all of said assets during the administration of the
estate of Linnie Jane Hodges on the ground that he was the sole devisee and
legatee under her Last Will and Testament.

(18) Avelina A. Magno has submitted no inventory and accounting of her

administration as Administratrix of the estate of Linnie Jane Hodges and Special
Administratrix of the estate of C. N. Hodges. However, from manifestations made
by Avelina A. Magno and her legal counsel, Leon P. Gellada, there is no question
she will claim that at least fifty per cent (50%) of the conjugal assets of the
deceased spouses and the rents, emoluments and income therefrom belong to
the Higdon family who are named in paragraphs Fourth and Fifth of the Will of
Linnie Jane Hodges (p. 5, Rec. Sp. Proc. 1307).

WHEREFORE, premises considered, movant respectfully prays that this

Honorable Court, after due hearing, order:

(1) Avelina A. Magno to submit an inventory and accounting of all of the funds,
properties and assets of any character belonging to the deceased Linnie Jane
Hodges and C. N. Hodges which have come into her possession, with full details
of what she has done with them;

(2) Avelina A. Magno to turn over and deliver to the Administrator of the estate of
C. N. Hodges all of the funds, properties and assets of any character remaining
in her possession;

(3) Pending this Honorable Court's adjudication of the aforesaid issues, Avelina
A. Magno to stop, unless she first secures the conformity of Joe Hodges (or his
duly authorized representative, such as the undersigned attorneys) as the Co-
administrator and attorney-in-fact of a majority of the beneficiaries of the estate of
C. N. Hodges:

(a) Advertising the sale and the sale of the properties of the estates:

(b) Employing personnel and paying them any compensation.

 (4) Such other relief as this Honorable Court may deem just and equitable in the
premises. (Annex "T", Petition.)

Almost a year thereafter, or on September 14, 1964, after the co-administrators Joe Hodges
and Fernando P. Mirasol were replaced by herein petitioner Philippine Commercial and
Industrial Bank as sole administrator, pursuant to an agreement of all the heirs of Hodges
approved by the court, and because the above motion of October 5, 1963 had not yet been
heard due to the absence from the country of Atty. Gibbs, petitioner filed the following:

MANIFESTATION AND MOTION, INCLUDING MOTION TO SET

FOR HEARING AND RESOLVE "URGENT MOTION FOR AN
ACCOUNTING AND DELIVERY TO ADMINISTRATORS OF THE
ESTATE OF C. N. HODGES OF ALL THE ASSETS OF THE
CONJUGAL PARTNERSHIP OF THE DECEASED LINNIE JANE
HODGES AND C. N. HODGES EXISTING AS OF MAY 23, 1957
PLUS ALL OF THE RENTS, EMOLUMENTS AND INCOME
THEREFROM OF OCTOBER 5, 1963.

COMES NOW Philippine Commercial and Industrial Bank (hereinafter referred to

as PCIB), the administrator of the estate of C. N. Hodges, deceased, in Special
Proceedings No. 1672, through its undersigned counsel, and to this Honorable
Court respectfully alleges that:

1. On October 5, 1963, Joe Hodges acting as the co-administrator of the estate

of C. N. Hodges filed, through the undersigned attorneys, an "Urgent Motion For
An Accounting and Delivery To Administrator of the Estate of C. N. Hodges of all
Of The Assets Of The Conjugal Partnership of The Deceased Linnie Jane
Hodges and C. N. Hodges Existing as Of May, 23, 1957 Plus All Of The Rents,
Emoluments and Income Therefrom" (pp. 536-542, CFI Rec. S. P. No. 1672).

2. On January 24, 1964 this Honorable Court, on the basis of an amicable

agreement entered into on January 23, 1964 by the two co-administrators of the
estate of C. N. Hodges and virtually all of the heirs of C. N. Hodges (p. 912, CFI
Rec., S. P. No. 1672), resolved the dispute over who should act as administrator
of the estate of C. N. Hodges by appointing the PCIB as administrator of the
estate of C. N. Hodges (pp. 905-906, CFI Rec. S. P. No. 1672) and issuing
letters of administration to the PCIB.

3. On January 24, 1964 virtually all of the heirs of C. N. Hodges, Joe Hodges and
Fernando P. Mirasol acting as the two co-administrators of the estate of C. N.
Hodges, Avelina A. Magno acting as the administratrix of the estate of Linnie
Jane Hodges, and Messrs. William Brown and Ardel Young Acting for all of the
Higdon family who claim to be the sole beneficiaries of the estate of Linnie Jane
Hodges and various legal counsel representing the aforenamed parties entered
into an amicable agreement, which was approved by this Honorable Court,
wherein the parties thereto agreed that certain sums of money were to be paid in
settlement of different claims against the two estates and that the assets (to the
extent they existed)of both estates would be administrated jointly by the PCIB as
administrator of the estate of C. N. Hodges and Avelina A. Magno as
administratrix of the estate of Linnie Jane Hodges, subject, however, to the
aforesaid October 5, 1963 Motion, namely, the PCIB's claim to exclusive
possession and ownership of one-hundred percent (10017,) (or, in the
alternative, seventy-five percent [75%] of all assets owned by C. N. Hodges or
Linnie Jane Hodges situated in the Philippines. On February 1, 1964 (pp. 934-
935, CFI Rec., S. P. No. 1672) this Honorable Court amended its order of
January 24, 1964 but in no way changes its recognition of the aforedescribed
basic demand by the PCIB as administrator of the estate of C. N. Hodges to one
hundred percent (100%) of the assets claimed by both estates.

4. On February 15, 1964 the PCIB filed a "Motion to Resolve" the aforesaid
Motion of October 5, 1963. This Honorable Court set for hearing on June 11,
1964 the Motion of October 5, 1963.

5. On June 11, 1964, because the undersigned Allison J. Gibbs was absent in
the United States, this Honorable Court ordered the indefinite postponement of
the hearing of the Motion of October 5, 1963.

6. Since its appointment as administrator of the estate of C. N. Hodges the PCIB

has not been able to properly carry out its duties and obligations as administrator
of the estate of C. N. Hodges because of the following acts, among others, of
Avelina A. Magno and those who claim to act for her as administratrix of the
estate of Linnie Jane Hodges:

(a) Avelina A. Magno illegally acts as if she is in exclusive control

of all of the assets in the Philippines of both estates including
those claimed by the estate of C. N. Hodges as evidenced in part
by her locking the premises at 206-208 Guanco Street, Iloilo City
on August 31, 1964 and refusing to reopen same until ordered to
do so by this Honorable Court on September 7, 1964.

(b) Avelina A. Magno illegally acts as though she alone may

decide how the assets of the estate of C.N. Hodges should be
administered, who the PCIB shall employ and how much they may
be paid as evidenced in party by her refusal to sign checks issued
by the PCIB payable to the undersigned counsel pursuant to their
fee agreement approved by this Honorable Court in its order dated
March 31, 1964.

(c) Avelina A. Magno illegally gives access to and turns over

possession of the records and assets of the estate of C.N. Hodges
to the attorney-in-fact of the Higdon Family, Mr. James L. Sullivan,
as evidenced in part by the cashing of his personal checks.

(d) Avelina A. Magno illegally refuses to execute checks prepared

by the PCIB drawn to pay expenses of the estate of C. N. Hodges
as evidenced in part by the check drawn to reimburse the PCIB's
advance of P48,445.50 to pay the 1964 income taxes reported
due and payable by the estate of C.N. Hodges.
7. Under and pursuant to the orders of this Honorable Court, particularly those of
January 24 and February 1, 1964, and the mandate contained in its Letters of
Administration issued on January 24, 1964 to the PCIB, it has

"full authority to take possession of all the property

of the deceased C. N. Hodges

"and to perform all other acts necessary for the preservation of

said property." (p. 914, CFI Rec., S.P. No. 1672.)

8. As administrator of the estate of C. N. Hodges, the PCIB claims the right to the
immediate exclusive possession and control of all of the properties, accounts
receivables, court cases, bank accounts and other assets, including the
documentary records evidencing same, which existed in the Philippines on the
date of C. N. Hodges' death, December 25, 1962, and were in his possession
and registered in his name alone. The PCIB knows of no assets in the
Philippines registered in the name of Linnie Jane Hodges, the estate of Linnie
Jane Hodges, or, C. N. Hodges, Executor of the Estate of Linnie Jane Hodges on
December 25, 1962. All of the assets of which the PCIB has knowledge are
either registered in the name of C. N. Hodges, alone or were derived therefrom
since his death on December 25, 1962.

9. The PCIB as the current administrator of the estate of C. N. Hodges,

deceased, succeeded to all of the rights of the previously duly appointed
administrators of the estate of C. N. Hodges, to wit:

(a) On December 25, 1962, date of C. N. Hodges' death, this

Honorable Court appointed Miss Avelina A. Magno simultaneously
as:

(i) Administratrix of the estate of Linnie Jane Hodges (p. 102, CFI
Rec., S.P. No. 1307) to replace the deceased C. N. Hodges who
on May 28, 1957 was appointed Special Administrator (p. 13. CFI
Rec. S.P. No. 1307) and on July 1, 1957 Executor of the estate of
Linnie Jane Hodges (p. 30, CFI Rec., S. P. No. 1307).

(ii) Special Administratrix of the estate of C. N. Hodges (p. 102,

CFI Rec., S.P. No. 1307).

(b) On December 29, 1962 this Honorable Court appointed Harold

K. Davies as co-special administrator of the estate of C.N. Hodges
along with Avelina A. Magno (pp. 108-111, CFI Rec., S. P. No.
1307).

(c) On January 22, 1963, with the conformity of Avelina A. Magno,

Harold K. Davies resigned in favor of Joe Hodges (pp. 35-36, CFI
Rec., S.P. No. 1672) who thereupon was appointed on January
22, 1963 by this Honorable Court as special co-administrator of
the estate of C.N. Hodges (pp. 38-40 & 43, CFI Rec. S.P. No.
 1672) along with Miss Magno who at that time was still acting as
special co-administratrix of the estate of C. N. Hodges.

(d) On February 22, 1963, without objection on the part of Avelina

A. Magno, this Honorable Court appointed Joe Hodges and
Fernando P. Mirasol as co-administrators of the estate of C.N.
Hodges (pp. 76-78, 81 & 85, CFI Rec., S.P. No. 1672).

10. Miss Avelina A. Magno, pursuant to the orders of this Honorable Court of
December 25, 1962, took possession of all Philippine Assets now claimed by the
two estates. Legally, Miss Magno could take possession of the assets registered
in the name of C. N. Hodges alone only in her capacity as Special Administratrix
of the Estate of C.N. Hodges. With the appointment by this Honorable Court on
February 22, 1963 of Joe Hodges and Fernando P. Mirasol as the co-
administrators of the estate of C.N. Hodges, they legally were entitled to take
over from Miss Magno the full and exclusive possession of all of the assets of the
estate of C.N. Hodges. With the appointment on January 24, 1964 of the PCIB as
the sole administrator of the estate of C.N. Hodges in substitution of Joe Hodges
and Fernando P. Mirasol, the PCIB legally became the only party entitled to the
sole and exclusive possession of all of the assets of the estate of C. N. Hodges.

11. The PCIB's predecessors submitted their accounting and this Honorable
Court approved same, to wit:

(a) The accounting of Harold K. Davies dated January 18, 1963

(pp. 16-33, CFI Rec. S.P. No. 1672); which shows or its face the:

(i) Conformity of Avelina A. Magno acting as "Administratrix of the

Estate of Linnie Jane Hodges and Special Administratrix of the
Estate of C. N. Hodges";

(ii) Conformity of Leslie Echols, a Texas lawyer acting for the heirs
of C.N. Hodges; and

(iii) Conformity of William Brown, a Texas lawyer acting for the

Higdon family who claim to be the only heirs of Linnie Jane
Hodges (pp. 18, 25-33, CFI Rec., S. P. No. 1672).

Note: This accounting was approved by this Honorable Court on January 22,
1963 (p. 34, CFI Rec., S. P. No. 1672).

(b) The accounting of Joe Hodges and Fernando P. Mirasol as of

January 23, 1964, filed February 24, 1964 (pp. 990-1000, CFI
Rec. S.P. No. 1672 and pp. 1806-1848, CFI Rec. S.P. No. 1307).

Note: This accounting was approved by this Honorable Court on March 3, 1964.

(c) The PCIB and its undersigned lawyers are aware of no report
or accounting submitted by Avelina A. Magno of her acts as
administratrix of the estate of Linnie Jane Hodges or special
 administratrix of the estate of C.N. Hodges, unless it is the
accounting of Harold K. Davies as special co-administrator of the
estate of C.N. Hodges dated January 18, 1963 to which Miss
Magno manifested her conformity (supra).

12. In the aforesaid agreement of January 24, 1964, Miss Avelina A. Magno agreed to receive
P10,000.00

"for her services as administratrix of the estate of Linnie Jane

Hodges"

and in addition she agreed to be employed, starting February 1, 1964, at

"a monthly salary of P500.00 for her services as an employee of

both estates."

24 ems.

13. Under the aforesaid agreement of January 24, 1964 and the orders of this
Honorable Court of same date, the PCIB as administrator of the estate of C. N.
Hodges is entitled to the exclusive possession of all records, properties and
assets in the name of C. N. Hodges as of the date of his death on December 25,
1962 which were in the possession of the deceased C. N. Hodges on that date
and which then passed to the possession of Miss Magno in her capacity as
Special Co-Administratrix of the estate of C. N. Hodges or the possession of Joe
Hodges or Fernando P. Mirasol as co-administrators of the estate of C. N.
Hodges.

14. Because of Miss Magno's refusal to comply with the reasonable request of
PCIB concerning the assets of the estate of C. N. Hodges, the PCIB dismissed
Miss Magno as an employee of the estate of C. N. Hodges effective August 31,
1964. On September 1, 1964 Miss Magno locked the premises at 206-208
Guanco Street and denied the PCIB access thereto. Upon the Urgent Motion of
the PCIB dated September 3, 1964, this Honorable Court on September 7, 1964
ordered Miss Magno to reopen the aforesaid premises at 206-208 Guanco Street
and permit the PCIB access thereto no later than September 8, 1964.

15. The PCIB pursuant to the aforesaid orders of this Honorable Court is again in
physical possession of all of the assets of the estate of C. N. Hodges. However,
the PCIB is not in exclusive control of the aforesaid records, properties and
assets because Miss Magno continues to assert the claims hereinabove outlined
in paragraph 6, continues to use her own locks to the doors of the aforesaid
premises at 206-208 Guanco Street, Iloilo City and continues to deny the PCIB
its right to know the combinations to the doors of the vault and safes situated
within the premises at 206-208 Guanco Street despite the fact that said
combinations were known to only C. N. Hodges during his lifetime.

16. The Philippine estate and inheritance taxes assessed the estate of Linnie
Jane Hodges were assessed and paid on the basis that C. N. Hodges is the sole
beneficiary of the assets of the estate of Linnie Jane Hodges situated in the
 Philippines. Avelina A. Magno and her legal counsel at no time have questioned
the validity of the aforesaid assessment and the payment of the corresponding
Philippine death taxes.

17. Nothing further remains to be done in the estate of Linnie Jane Hodges
except to resolve the aforesaid Motion of October 5, 1963 and grant the PCIB the
exclusive possession and control of all of the records, properties and assets of
the estate of C. N. Hodges.

18. Such assets as may have existed of the estate of Linnie Jane Hodges were
ordered by this Honorable Court in special Proceedings No. 1307 to be turned
over and delivered to C. N. Hodges alone. He in fact took possession of them
before his death and asserted and exercised the right of exclusive ownership
over the said assets as the sole beneficiary of the estate of Linnie Jane Hodges.

WHEREFORE, premises considered, the PCIB respectfully petitions that this

Honorable court:

(1) Set the Motion of October 5, 1963 for hearing at the earliest possible date
with notice to all interested parties;

(2) Order Avelina A. Magno to submit an inventory and accounting as

Administratrix of the Estate of Linnie Jane Hodges and Co-Administratrix of the
Estate of C. N. Hodges of all of the funds, properties and assets of any character
belonging to the deceased Linnie Jane Hodges and C. N. Hodges which have
come into her possession, with full details of what she has done with them;

(3) Order Avelina A. Magno to turn over and deliver to the PCIB as administrator
of the estate of C. N. Hodges all of the funds, properties and assets of any
character remaining in her possession;

(4) Pending this Honorable Court's adjudication of the aforesaid issues, order
Avelina A. Magno and her representatives to stop interferring with the
administration of the estate of C. N. Hodges by the PCIB and its duly authorized
representatives;

(5) Enjoin Avelina A. Magno from working in the premises at 206-208 Guanco
Street, Iloilo City as an employee of the estate of C. N. Hodges and approve her
dismissal as such by the PCIB effective August 31, 1964;

(6) Enjoin James L. Sullivan, Attorneys Manglapus and Quimpo and others
allegedly representing Miss Magno from entering the premises at 206-208
Guanco Street, Iloilo City or any other properties of C. N. Hodges without the
express permission of the PCIB;

(7) Order such other relief as this Honorable Court finds just and equitable in the
premises. (Annex "U" Petition.)

On January 8, 1965, petitioner also filed a motion for "Official Declaration of Heirs of Linnie Jane
Hodges Estate" alleging:
COMES NOW Philippine Commercial and Industrial Bank (hereinafter referred to as PCIB), as
administrator of the estate of the late C. N. Hodges, through the undersigned counsel, and to
this Honorable Court respectfully alleges that:

1. During their marriage, spouses Charles Newton Hodges and Linnie Jane
Hodges, American citizens originally from the State of Texas, U.S.A., acquired
and accumulated considerable assets and properties in the Philippines and in the
States of Texas and Oklahoma, United States of America. All said properties
constituted their conjugal estate.

2. Although Texas was the domicile of origin of the Hodges spouses, this
Honorable Court, in its orders dated March 31 and December 12, 1964 (CFI
Record, Sp. Proc. No. 1307, pp. ----; Sp. Proc. No. 1672, p. ----), conclusively
found and categorically ruled that said spouses had lived and worked for more
than 50 years in Iloilo City and had, therefore, acquired a domicile of choice in
said city, which they retained until the time of their respective deaths.

3. On November 22, 1952, Linnie Jane Hodges executed in the City of Iloilo her
Last Will and Testament, a copy of which is hereto attached as Annex "A". The
bequests in said will pertinent to the present issue are the second, third,
and fourth provisions, which we quote in full hereunder.

SECOND: I give, devise and bequeath all of the rest, residue and
remainder of my estate, both personal and real, wherever
situated, or located, to my husband, Charles Newton Hodges, to
have and to hold unto him, my said husband during his natural
lifetime.

THIRD: I desire, direct and provide that my husband, Charles

Newton Hodges, shall have the right to manage, control, use and
enjoy said estate during his lifetime, and he is hereby given the
right to make any changes in the physical properties of said estate
by sale of any part thereof which he think best, and the purchase
of any other or additional property as he may think best; to
execute conveyances with or without general or special warranty,
conveying in fee simple or for any other term or time, any property
which he may deem proper to dispose of; to lease any of the real
property for oil, gas and/or other minerals, and all such deeds or
leases shall pass the absolute fee simple title to the interest so
conveyed in such property as he may elect to sell. All rents,
emoluments and income from said estate shall belong to him, and
he is further authorized to use any part of the principal of said
estate as he may need or desire. It is provided herein, however,
that he shall not sell or otherwise dispose of any of the improved
property now owned by us located at, in or near the City of
Lubbock, Texas, but he shall have the full right to lease, manage
and enjoy the same during his lifetime, as above provided. He
shall have the right to sub-divide any farmland and sell lots
therein, and may sell unimproved town lots.
 FOURTH: At the death of my said husband, Charles Newton
Hodges, I give, devise and bequeath all of the rest, residue and
remainder of my estate both real and personal, wherever situated
or located, to be equally divided among my brothers and sisters,
share and share alike, namely:

"Esta Higdon, Emma Howell, Leonard Higdon, Roy Higdon, Sadie

Rascoe, Era Boman and Nimray Higdon."

4. On November 14, 1953, C. N. Hodges executed in the City of Iloilo his Last
Will and Testament, a copy of which is hereto attached as Annex "B ". In said
Will, C. N. Hodges designated his wife, Linnie Jane Hodges, as his beneficiary
using the identical language she used in the second and third provisos of her
Will, supra.

5. On May 23, 1957 Linnie Jane Hodges died in Iloilo City, predeceasing her
husband by more than five (5) years. At the time of her death, she had no forced
or compulsory heir, except her husband, C. N. Hodges. She was survived also by
various brothers and sisters mentioned in her Will (supra), which, for
convenience, we shall refer to as the HIGDONS.

6. On June 28, 1957, this Honorable Court admitted to probate the Last Will and
Testament of the deceased Linnie Jane Hodges (Annex "A"), and appointed C.
N. Hodges as executor of her estate without bond. (CFI Record, Sp. Proc. No.
1307, pp. 24-25). On July 1, 1957, this Honorable Court issued letters
testamentary to C. N. Hodges in the estate of Linnie Jane Hodges. (CFI Record,
Sp. Proc. No. 1307, p. 30.)

7. The Will of Linnie Jane Hodges, with respect to the order of succession, the
amount of successional rights, and the intrinsic of its testamentary provisions,
should be governed by Philippine laws because:

(a) The testatrix, Linnie Jane Hodges, intended Philippine laws to

govern her Will;

(b) Article 16 of the Civil Code provides that "the national law of
the person whose succession is under consideration, whatever
may be the nature of the property and regardless of the country
wherein said property may be found", shall prevail. However, the
Conflict of Law of Texas, which is the "national law" of the
testatrix, Linnie Jane Hodges, provide that the domiciliary law
(Philippine law — see paragraph 2, supra) should govern the
testamentary dispositions and successional rights over movables
(personal properties), and the law of the situs of the property (also
Philippine law as to properties located in the Philippines) with
regards immovable (real properties). Thus applying the "Renvoi
Doctrine", as approved and applied by our Supreme Court in the
case of "In The Matter Of The Testate Estate of Eduard E.
Christensen", G.R. No.
L-16749, promulgated January 31, 1963, Philippine law should
 apply to the Will of Linnie Jane Hodges and to the successional
rights to her estate insofar as her movable andimmovable assets
in the Philippines are concerned. We shall not, at this stage,
discuss what law should govern the assets of Linnie Jane Hodges
located in Oklahoma and Texas, because the only assets in issue
in this motion are those within the jurisdiction of this motion Court
in the two above-captioned Special Proceedings.

8. Under Philippine and Texas law, the conjugal or community estate of spouses
shall, upon dissolution, be divided equally between them. Thus, upon the death
of Linnie Jane Hodges on May 23, 1957, one-half (1/2) of the entirety of the
assets of the Hodges spouses constituting their conjugal estate pertained
automatically to Charles Newton Hodges, not by way of inheritance, but in his
own right as partner in the conjugal partnership. The other one-half (1/2) portion
of the conjugal estate constituted the estate of Linnie Jane Hodges. This is the
only portion of the conjugal estate capable of inheritance by her heirs.

9. This one-half (1/2) portion of the conjugal assets pertaining to Linnie Jane
Hodges cannot, under a clear and specific provision of her Will, be enhanced or
increased by income, earnings, rents, or emoluments accruing after her death on
May 23, 1957. Linnie Jane Hodges' Will provides that "all rents, emoluments and
income from said estate shall belong to him (C. N. Hodges) and he is further
authorized to use any part of the principal of said estate as he may need or
desire." (Paragraph 3, Annex "A".) Thus, by specific provision of Linnie Jane
Hodges' Will, "all rents, emoluments and income" must be credited to the one-
half (1/2) portion of the conjugal estate pertaining to C. N. Hodges. Clearly,
therefore, the estate of Linnie Jane Hodges, capable of inheritance by her heirs,
consisted exclusively of no more than one-half (1/2) of the conjugal estate,
computed as of the time of her death on May 23, 1957.

10. Articles 900, 995 and 1001 of the New Civil Code provide that the surviving
spouse of a deceased leaving no ascendants or descendants is entitled, as a
matter of right and by way of irrevocable legitime, to at least one-half (1/2) of the
estate of the deceased, and no testamentary disposition by the deceased can
legally and validly affect this right of the surviving spouse. In fact, her husband is
entitled to said one-half (1/2) portion of her estate by way of legitime. (Article 886,
Civil Code.) Clearly, therefore, immediately upon the death of Linnie Jane
Hodges, C. N. Hodges was the owner of at least three-fourths (3/4) or seventy-
five (75%) percent of all of the conjugal assets of the spouses, (1/2 or 50% by
way of conjugal partnership share and 1/4 or 25% by way of inheritance and
legitime) plus all "rents, emoluments and income" accruing to said conjugal
estate from the moment of Linnie Jane Hodges' death (see paragraph 9, supra).

11. The late Linnie Jane Hodges designated her husband C.N. Hodges as her
sole and exclusive heir with full authority to do what he pleased, as exclusive heir
and owner of all the assets constituting her estate, except only with regards
certain properties "owned by us, located at, in or near the City of Lubbock,
Texas". Thus, even without relying on our laws of succession and legitime, which
we have cited above, C. N. Hodges, by specific testamentary designation of his
wife, was entitled to the entirely to his wife's estate in the Philippines.
12. Article 777 of the New Civil Code provides that "the rights of the successor
are transmitted from the death of the decedent". Thus, title to the estate of Linnie
Jane Hodges was transmitted to C. N. Hodges immediately upon her death on
May 23, 1957. For the convenience of this Honorable Court, we attached hereto
as Annex "C" a graph of how the conjugal estate of the spouses Hodges should
be divided in accordance with Philippine law and the Will of Linnie Jane Hodges.

13. In his capacity as sole heir and successor to the estate of Linnie Jane
Hodges as above-stated, C. N. Hodges, shortly after the death of Linnie Jane
Hodges, appropriated to himself the entirety of her estate. He operated all the
assets, engaged in business and performed all acts in connection with the
entirety of the conjugal estate, in his own name alone, just as he had been
operating, engaging and doing while the late Linnie Jane Hodges was still
alive. Upon his death on December 25, 1962, therefore, all said conjugal assets
were in his sole possession and control, and registered in his name alone, not as
executor, but as exclusive owner of all said assets.

14. All these acts of C. N. Hodges were authorized and sanctioned expressly and
impliedly by various orders of this Honorable Court, as follows:

(a) In an Order dated May 27, 1957, this Honorable Court ruled that C. N.
Hodges "is allowed or authorized to continue the business in which he was
engaged, and to perform acts which he had been doing while the deceased was
living." (CFI Record, Sp. Proc. No. 1307, p. 11.)

(b) On December 14, 1957, this Honorable Court, on the basis of the following
fact, alleged in the verified Motion dated December 11, 1957 filed by Leon P.
Gellada as attorney for the executor C. N. Hodges:

That herein Executor, (is) not only part owner of the properties left as conjugal,
but also, the successor to all the properties left by the deceased Linnie Jane
Hodges.' (CFI Record, Sp. Proc. No. 1307, p. 44; emphasis supplied.)

issued the following order:

"As prayed for by Attorney Gellada, counsel for the Executor, for the reasons
stated in his motion dated December 11, 1957, which the Court considers well
taken, all the sales, conveyances, leases and mortgages of all the properties left
by the deceased Linnie Jane Hodges executed by the Executor, Charles Newton
Hodges are hereby APPROVED. The said Executor is further authorized to
execute subsequent sales, conveyances, leases and mortgages of the properties
left by the said deceased Linnie Jane Hodges in consonance with the wishes
contained in the last will and testament of the latter." (CFI Record. Sp. Proc. No.
1307, p. 46; emphasis supplied.)

24 ems

(c) On April 21, 1959, this Honorable Court approved the verified inventory and
accounting submitted by C. N. Hodges through his counsel Leon P. Gellada on
April 14, 1959 wherein he alleged among other things,
 "That no person interested in the Philippines of the time and place
of examining the herein account, be given notice, as herein
executor is the only devisee or legatee of the deceased, in
accordance with the last will and testament already probated by
the Honorable Court." (CFI Record, Sp. Proc. No. 1307, pp. 77-78;
emphasis supplied.)

(d) On July 20, 1960, this Honorable Court approved the verified "Annual
Statement of Account" submitted by C. N. Hodges through his counsel Leon P.
Gellada on July 21, 1960 wherein he alleged, among other things.

"That no person interested in the Philippines of the time and place

of examining the herein account, be given notice as herein
executor is the only devisee or legatee of the deceased Linnie
Jane Hodges, in accordance with the last will and testament ofthe
deceased, already probated by this Honorable Court." (CFI
Record, Sp. Proc. No. 1307, pp. 81-82; emphasis supplied.)

(e) On May 2, 1961, this Honorable Court approved the verified "Annual
Statement of Account By The Executor For the Year 1960" submitted through
Leon P. Gellada on April 20, 1961 wherein he alleged:

"That no person interested in the Philippines be given notice, ofthe time and
place of examining the herein account, as herein executor is the only devisee or
legatee of the deceased Linnie Jane Hodges, in accordance with the last will and
testament ofthe deceased, already probated by this Honorable Court." (CFI
Record, Sp. Proc. No. 1307, pp. 90-91; emphasis supplied.)

15. Since C. N. Hodges was the sole and exclusive heir of Linnie Jane Hodges,
not only by law, but in accordance with the dispositions of her will, there was, in
fact, no need to liquidate the conjugal estate of the spouses. The entirely of said
conjugal estate pertained to him exclusively, therefore this Honorable Court
sanctioned and authorized, as above-stated, C. N. Hodges to manage, operate
and control all the conjugal assets as owner.

16. By expressly authorizing C. N. Hodges to act as he did in connection with the

estate of his wife, this Honorable Court has (1) declared C. N. Hodges as the
sole heir of the estate of Linnie Jane Hodges, and (2) delivered and distributed
her estate to C. N. Hodges as sole heir in accordance with the terms and
conditions of her Will. Thus, although the "estate of Linnie Jane Hodges" still
exists as a legal and juridical personality, it had no assets or properties located in
the Philippines registered in its name whatsoever at the time of the death of C. N.
Hodges on December 25, 1962.

17. The Will of Linnie Jane Hodges (Annex "A"), fourth paragraph, provides as
follows:

"At the death of my said husband, Charles Newton Hodges, I give,

devise and bequeath all of the rest, residue and remainder of my
estate both real and personal, wherever situated or located, to be
 equally divided among my brothers and sisters, share and share
alike, namely:

"Esta Higdon, Emma Howell, Leonard Higdon, Roy

Higdon, Sadie Rascoe, Era Boman and Nimray
Higdon."

Because of the facts hereinabove set out there is no "rest, residue and
remainder", at least to the extent of the Philippine assets, which remains to vest
in the HIGDONS, assuming this proviso in Linnie Jane Hodges' Will is valid and
binding against the estate of C. N. Hodges.

18. Any claims by the HIGDONS under the above-quoted provision of Linnie
Jane Hodges' Will is without merit because said provision is void and invalid at
least as to the Philippine assets. It should not, in anyway, affect the rights of the
estate of C. N. Hodges or his heirs to the properties, which C. N. Hodges
acquired by way of inheritance from his wife Linnie Jane Hodges upon her death.

(a) In spite of the above-mentioned provision in the Will of Linnie

Jane Hodges, C. N. Hodges acquired, not merely a usufructuary
right, but absolute title and ownership to her estate. In a recent
case involving a very similar testamentary provision, the Supreme
Court held that the heir first designated acquired full ownership of
the property bequeathed by the will, not mere usufructuary rights.
(Consolacion Florentino de Crisologo, et al., vs. Manuel Singson,
G. R. No. L-13876, February 28, 1962.)

(b) Article 864, 872 and 886 of the New Civil Code clearly provide
that no charge, condition or substitution whatsoever upon the
legitime can be imposed by a testator. Thus, under the provisions
of Articles 900, 995 and 1001 of the New Civil Code, the legitime
of a surviving spouse is 1/2 of the estate of the deceased spouse.
Consequently, the above-mentioned provision in the Will of Linnie
Jane Hodges is clearly invalid insofar as the legitime of C. N.
Hodges was concerned, which consisted of 1/2 of the 1/2 portion
of the conjugal estate, or 1/4 of the entire conjugal estate of the
deceased.

(c) There are generally only two kinds of substitution provided for
and authorized by our Civil Code (Articles 857-870), namely,
(1) simple or common substitution, sometimes referred to
as vulgar substitution (Article 859), and (2) fideicommissary
substitution (Article 863). All other substitutions are merely
variations of these. The substitution provided for by paragraph
four of the Will of Linnie Jane Hodges is not fideicommissary
substitution, because there is clearly no obligation on the part of
C. N. Hodges as the first heir designated, to preserve the
properties for the substitute heirs. (Consolacion Florentino de
Crisologo et al. vs. Manuel Singson, G. R. No.
L-13876.) At most, it is a vulgar or simple substitution. However, in
 order that a vulgar orsimple substitution can be valid, three
alternative conditions must be present, namely, that the first
designated heir (1) should die before the testator; or (2) should not
wish to accept the inheritance; or (3) should be incapacitated to do
so. None of these conditions apply to C. N. Hodges, and,
therefore, the substitution provided for by the above-quoted
provision of the Will is not authorized by the Code, and, therefore,
it is void. Manresa, commenting on these kisses of substitution,
meaningfully stated that: "... cuando el testador instituyeun primer
heredero, y por fallecimiento de este nombra otro u otros, ha de
entenderse que estas segundas designaciones solo han de llegar
a tener efectividad en el caso de que el primer instituido muera
antes que el testador, fuera o no esta su verdadera intencion. ...".
(6 Manresa, 7 a ed., pag. 175.) In other words, when another heir
is designated to inherit upon the death of a first heir, the second
designation can have effect only in case the first instituted heir
dies before the testator, whether or not that was the true intention
of said testator. Since C. N. Hodges did not die before Linnie Jane
Hodges, the provision for substitution contained in Linnie Jane
Hodges' Willis void.

(d) In view of the invalidity of the provision for substitution in the

Will, C. N. Hodges' inheritance to the entirety of the Linnie Jane
Hodges estate is irrevocable and final.

19. Be that as it may, at the time of C. N. Hodges' death, the entirety of the
conjugal estate appeared and was registered in him exclusively as owner. Thus,
the presumption is that all said assets constituted his estate. Therefore —

(a) If the HIGDONS wish to enforce their dubious rights as substituted heirs to
1/4 of the conjugal estate (the other 1/4 is covered by the legitime of C. N.
Hodges which can not be affected by any testamentary disposition), their
remedy, if any, is to file their claim against the estate of C. N. Hodges, which
should be entitled at the present time to full custody and control of all the
conjugal estate of the spouses.

(b) The present proceedings, in which two estates exist under separate
administration, where the administratrix of the Linnie Jane Hodges estate
exercises an officious right to object and intervene in matters affecting
exclusively the C. N. Hodges estate, is anomalous.

WHEREFORE, it is most respectfully prayed that after trial and reception of

evidence, this Honorable Court declare:

1. That the estate of Linnie Jane Hodges was and is composed exclusively of
one-half (1/2) share in the conjugal estate of the spouses Hodges, computed as
of the date of her death on May 23, 1957;

2. That the other half of the conjugal estate pertained exclusively to C. N. Hodges
as his share as partner in the conjugal partnership;
 3. That all "rents, emoluments and income" of the conjugal estate accruing after
Linnie Jane Hodges' death pertains to C. N. Hodges;

4. That C. N. Hodges was the sole and exclusive heir of the estate of Linnie Jane
Hodges;

5. That, therefore, the entire conjugal estate of the spouses located in the
Philippines, plus all the "rents, emoluments and income" above-mentioned, now
constitutes the estate of C. N. Hodges, capable of distribution to his heirs upon
termination of Special Proceedings No. 1672;

6. That PCIB, as administrator of the estate of C. N. Hodges, is entitled to full and

exclusive custody, control and management of all said properties; and

7. That Avelina A. Magno, as administratrix of the estate of Linnie Jane Hodges,

as well as the HIGDONS, has no right to intervene or participate in the
administration of the C. N. Hodges estate.

PCIB further prays for such and other relief as may be deemed just and equitable
in the premises."

(Record, pp. 265-277)

Before all of these motions of petitioner could be resolved, however, on December 21, 1965,
private respondent Magno filed her own "Motion for the Official Declaration of Heirs of the
Estate of Linnie Jane Hodges" as follows:

COMES NOW the Administratrix of the Estate of Linnie Jane Hodges and,
through undersigned counsel, unto this Honorable Court most respectfully states
and manifests:

1. That the spouses Charles Newton Hodges and Linnie Jane Hodges were
American citizens who died at the City of Iloilo after having amassed and
accumulated extensive properties in the Philippines;

2. That on November 22, 1952, Linnie Jane Hodges executed a last will and
testament (the original of this will now forms part of the records of these
proceedings as Exhibit "C" and appears as Sp. Proc. No. 1307, Folio I, pp. 17-
18);

3. That on May 23, 1957, Linnie Jane Hodges died at the City of Iloilo at the time
survived by her husband, Charles Newton Hodges, and several relatives named
in her last will and testament;

4. That on June 28, 1957, a petition therefor having been priorly filed and duly
heard, this Honorable Court issued an order admitting to probate the last will and
testament of Linnie Jane Hodges (Sp. Proc. No. 1307, Folio I, pp. 24-25, 26-28);
5. That the required notice to creditors and to all others who may have any
claims against the decedent, Linnie Jane Hodges has already been printed,
published and posted (Sp. Proc. No. 1307, Folio I. pp. 34-40) and the
reglamentary period for filing such claims has long ago lapsed and expired
without any claims having been asserted against the estate of Linnie Jane
Hodges, approved by the Administrator/Administratrix of the said estate, nor
ratified by this Honorable Court;

6. That the last will and testament of Linnie Jane Hodges already admitted to
probate contains an institution of heirs in the following words:

"SECOND: I give, devise and bequeath all of the rest, residue and
remainder of my estate, both personal and real, wherever situated
or located, to my beloved husband, Charles Newton Hodges to
have and to hold unto him, my said husband, during his natural
lifetime.

THIRD: I desire, direct and provide that my husband, Charles

Newton Hodges, shall have the right to manage, control, use and
enjoy said estate during his lifetime, and, he is hereby given the
right to make any changes in the physical properties of said
estate, by sale of any part thereof which he may think best, and
the purchase of any other or additional property as he may think
best; to execute conveyances with or without general or special
warranty, conveying in fee simple or for any other term or time,
any property which he may deem proper to dispose of; to lease
any of the real property for oil, gas and/or other minerals, and all
such deeds or leases shall pass the absolute fee simple title to the
interest so conveyed in such property as he elect to sell. All rents,
emoluments and income from said estate shall belong to him, and
he is further authorized to use any part of the principal of said
estate as he may need or desire. It is provided herein, however,
that he shall not sell or otherwise dispose of any of the improved
property now owned by us located at, in or near the City of
Lubbock Texas, but he shall have the full right to lease, manage
and enjoy the same during his lifetime, above provided. He shall
have the right to subdivide any farm land and sell lots therein, and
may sell unimproved town lots.

FOURTH: At the death of my said husband, Charles Newton

Hodges, I give, devise and bequeath all of the rest, residue and
remainder of my estate, both real and personal, wherever situated
or located, to be equally divided among my brothers and sisters,
share and share alike, namely:

Esta Higdon, Emma Howell, Leonard Higdon, Roy Higdon, Sadie

Rascoe, Era Boman and Nimroy Higdon.

FIFTH: In case of the death of any of my brothers and/or sisters

named in item Fourth, above, prior to the death of my husband,
 Charles Newton Hodges, then it is my will and bequest that the
heirs of such deceased brother or sister shall take jointly the share
which would have gone to such brother or sister had she or he
survived."

7. That under the provisions of the last will and testament already above-quoted,
Linnie Jane Hodges gave a life-estate or a usufruct over all her estate to her
husband, Charles Newton Hodges, and a vested remainder-estate or the naked
title over the same estate to her relatives named therein;

8. That after the death of Linnie Jane Hodges and after the admission to probate
of her last will and testament, but during the lifetime of Charles Newton Hodges,
the said Charles Newton Hodges with full and complete knowledge of the life-
estate or usufruct conferred upon him by the will since he was then acting as
Administrator of the estate and later as Executor of the will of Linnie Jane
Hodges, unequivocably and clearly through oral and written declarations and
sworn public statements, renounced, disclaimed and repudiated his life-estate
and usufruct over the estate of Linnie Jane Hodges;

9. That, accordingly, the only heirs left to receive the estate of Linnie Jane
Hodges pursuant to her last will and testament, are her named brothers and
sisters, or their heirs, to wit: Esta Higdon, Emma Howell, Leonard Higdon, Aline
Higdon and David Higdon, the latter two being the wife and son respectively of
the deceased Roy Higdon, Sadie Rascoe Era Boman and Nimroy Higdon, all of
legal ages, American citizens, with residence at the State of Texas, United States
of America;

10. That at the time of the death of Linnie Jane Hodges on May 23, 1957, she
was the co-owner (together with her husband Charles Newton Hodges) of an
undivided one-half interest in their conjugal properties existing as of that date,
May 23, 1957, which properties are now being administered sometimes jointly
and sometimes separately by the Administratrix of the estate of Linnie Jane
Hodges and/or the Administrator of the estate of C. N. Hodges but all of which
are under the control and supervision of this Honorable Court;

11. That because there was no separation or segregation of the interests of

husband and wife in the combined conjugal estate, as there has been no such
separation or segregation up to the present, both interests have continually
earned exactly the same amount of "rents, emoluments and income", the entire
estate having been continually devoted to the business of the spouses as if they
were alive;

12. That the one-half interest of Linnie Jane Hodges in the combined conjugal
estate was earning "rents, emoluments and income" until her death on May 23,
1957, when it ceased to be saddled with any more charges or expenditures
which are purely personal to her in nature, and her estate kept on earning such
"rents, emoluments and income" by virtue of their having been expressly
renounced, disclaimed and repudiated by Charles Newton Hodges to whom they
were bequeathed for life under the last will and testament of Linnie Jane Hodges;
13. That, on the other hand, the one-half interest of Charles Newton Hodges in
the combined conjugal estate existing as of May 23, 1957, while it may have
earned exactly the same amount of "rents, emoluments and income" as that of
the share pertaining to Linnie Jane Hodges, continued to be burdened by
charges, expenditures, and other dispositions which are purely personal to him in
nature, until the death of Charles Newton Hodges himself on December 25,
1962;

14. That of all the assets of the combined conjugal estate of Linnie Jane Hodges
and Charles Newton Hodges as they exist today, the estate of Linnie Jane
Hodges is clearly entitled to a portion more than fifty percent (50%) as compared
to the portion to which the estate of Charles Newton Hodges may be entitled,
which portions can be exactly determined by the following manner:

a. An inventory must be made of the assets of the combined

conjugal estate as they existed on the death of Linnie Jane
Hodges on May 23, 1957 — one-half of these assets belong to the
estate of Linnie Jane Hodges;

b. An accounting must be made of the "rents, emoluments and

income" of all these assets — again one-half of these belong to
the estate of Linnie Jane Hodges;

c. Adjustments must be made, after making a deduction of

charges, disbursements and other dispositions made by Charles
Newton Hodges personally and for his own personal account from
May 23, 1957 up to December 25, 1962, as well as other charges,
disbursements and other dispositions made for him and in his
behalf since December 25, 1962 up to the present;

15. That there remains no other matter for disposition now insofar as the estate
of Linnie Jane Hodges is concerned but to complete the liquidation of her estate,
segregate them from the conjugal estate, and distribute them to her heirs
pursuant to her last will and testament.

WHEREFORE, premises considered, it is most respectfully moved and prayed

that this Honorable Court, after a hearing on the factual matters raised by this
motion, issue an order:

a. Declaring the following persons, to wit: Esta Higdon, Emma Howell, Leonard
Higdon, Aline Higdon, David Higdon, Sadie Rascoe, Era Boman and Nimroy
Higdon, as the sole heirs under the last will and testament of Linnie Jane Hodges
and as the only persons entitled to her estate;

b. Determining the exact value of the estate of Linnie Jane Hodges in

accordance with the system enunciated in paragraph 14 of this motion;

c. After such determination ordering its segregation from the combined conjugal
estate and its delivery to the Administratrix of the estate of Linnie Jane Hodges
for distribution to the heirs to whom they properly belong and appertain.
 (Green Record on Appeal, pp. 382-391)

whereupon, instead of further pressing on its motion of January 8, 1965 aforequoted, as it had
been doing before, petitioner withdrew the said motion and in addition to opposing the above
motion of respondent Magno, filed a motion on April 22, 1966 alleging in part that:

1. That it has received from the counsel for the administratrix of the supposed
estate of Linnie Jane Hodges a notice to set her "Motion for Official Declaration
of Heirs of the Estate of Linnie Jane Hodges";

2. That before the aforesaid motion could be heard, there are matters pending
before this Honorable Court, such as:

a. The examination already ordered by this Honorable Court of

documents relating to the allegation of Avelina Magno that
Charles Newton Hodges "through ... written declarations and
sworn public statements, renounced, disclaimed and repudiated
life-estate and usufruct over the estate of Linnie Jane Hodges';

b. That "Urgent Motion for An Accounting and Delivery to the

Estate of C. N. Hodges of All the Assets of the Conjugal
Partnership of the Deceased Linnie Jane Hodges and C. N.
Hodges Existing as of May 23, 1957 Plus All the Rents,
Emoluments and Income Therefrom";

c. Various motions to resolve the aforesaid motion;

d. Manifestation of September 14, 1964, detailing acts of

interference of Avelina Magno under color of title as administratrix
of the Estate of Linnie Jane Hodges;

which are all prejudicial, and which involve no issues of fact, all facts involved
therein being matters of record, and therefore require only the resolution of
questions of law;

3. That whatever claims any alleged heirs or other persons may have could be
very easily threshed out in the Testate Estate of Charles Newton Hodges;

4. That the maintenance of two separate estate proceedings and two

administrators only results in confusion and is unduly burdensome upon the
Testate Estate of Charles Newton Hodges, particularly because the bond filed by
Avelina Magno is grossly insufficient to answer for the funds and property which
she has inofficiously collected and held, as well as those which she continues to
inofficiously collect and hold;

5. That it is a matter of record that such state of affairs affects and

inconveniences not only the estate but also third-parties dealing with it;" (Annex
"V", Petition.)
and then, after further reminding the court, by quoting them, of the relevant allegations of its
earlier motion of September 14, 1964, Annex U, prayed that:

1. Immediately order Avelina Magno to account for and deliver to the

administrator of the Estate of C. N. Hodges all the assets of the conjugal
partnership of the deceased Linnie Jane Hodges and C. N. Hodges, plus all the
rents, emoluments and income therefrom;

2. Pending the consideration of this motion, immediately order Avelina Magno to

turn over all her collections to the administrator Philippine Commercial &
Industrial Bank;

3. Declare the Testate Estate of Linnie Jane Hodges (Sp. Proc. No. 1307)
closed;

4. Defer the hearing and consideration of the motion for declaration of heirs in the
Testate Estate of Linnie Jane Hodges until the matters hereinabove set forth are
resolved.
(Prayer, Annex "V" of Petition.)

On October 12, 1966, as already indicated at the outset of this opinion, the respondent court
denied the foregoing motion, holding thus:

ORDER

On record is a motion (Vol. X, Sp. 1672, pp. 4379-4390) dated April 22, 1966 of
administrator PCIB praying that (1) Immediately order Avelina Magno to account
for and deliver to the administrator of the estate of C. N. Hodges all assets of the
conjugal partnership of the deceased Linnie Jane Hodges and C. N. Hodges,
plus all the rents, emoluments and income therefrom; (2) Pending the
consideration of this motion, immediately order Avelina Magno to turn over all her
collections to the administrator PCIB; (3) Declare the Testate Estate of Linnie
Jane Hodges (Sp. Proc. No. 1307) closed; and (4) Defer the hearing and
consideration of the motion for declaration of heirs in the Testate Estate of Linnie
Jane Hodges until the matters hereinabove set forth are resolved.

This motion is predicated on the fact that there are matters pending before this
court such as (a) the examination already ordered by this Honorable Court of
documents relating to the allegation of Avelina Magno that Charles Newton
Hodges thru written declaration and sworn public statements renounced,
disclaimed and repudiated his life-estate and usufruct over the estate of Linnie
Jane Hodges (b) the urgent motion for accounting and delivery to the estate of C.
N. Hodges of all the assets of the conjugal partnership of the deceased Linnie
Jane Hodges and C. N. Hodges existing as of May 23, 1957 plus all the rents,
emoluments and income therefrom; (c) various motions to resolve the aforesaid
motion; and (d) manifestation of September 14, 1964, detailing acts of
interference of Avelina Magno under color of title as administratrix of the estate of
Linnie Jane Hodges.
These matters, according to the instant motion, are all pre-judicial involving no
issues of facts and only require the resolution of question of law; that in the
motion of October 5, 1963 it is alleged that in a motion dated December 11, 1957
filed by Atty. Leon Gellada as attorney for the executor C. N. Hodges, the said
executor C. N. Hodges is not only part owner of the properties left as conjugal
but also the successor to all the properties left by the deceased Linnie Jane
Hodges.

Said motion of December 11, 1957 was approved by the Court in consonance
with the wishes contained in the last will and testament of Linnie Jane Hodges.

That on April 21, 1959 this Court approved the inventory and accounting
submitted by C. N. Hodges thru counsel Atty. Leon Gellada in a motion filed on
April 14, 1959 stating therein that executor C. N. Hodges is the only devisee or
legatee of Linnie Jane Hodges in accordance with the last will and testament
already probated by the Court.

That on July 13, 1960 the Court approved the annual statement of accounts
submitted by the executor C. N. Hodges thru his counsel Atty. Gellada on July
21, 1960 wherein it is stated that the executor, C. N. Hodges is the only devisee
or legatee of the deceased Linnie Jane Hodges; that on May 2, 1961 the Court
approved the annual statement of accounts submitted by executor, C. N. Hodges
for the year 1960 which was submitted by Atty. Gellada on April 20, 1961
wherein it is stated that executor Hodges is the only devisee or legatee of the
deceased Linnie Jane Hodges;

That during the hearing on September 5 and 6, 1963 the estate of C. N. Hodges
claimed all the assets belonging to the deceased spouses Linnie Jane Hodges
and C. N. Hodges situated in the Philippines; that administratrix Magno has
executed illegal acts to the prejudice of the testate estate of C. N. Hodges.

An opposition (Sp. 1672, Vol. X, pp. 4415-4421) dated April 27, 1966 of
administratrix Magno has been filed asking that the motion be denied for lack of
merit and that the motion for the official declaration of heirs of the estate of Linnie
Jane Hodges be set for presentation and reception of evidence.

It is alleged in the aforesaid opposition that the examination of documents which

are in the possession of administratrix Magno can be made prior to the hearing of
the motion for the official declaration of heirs of the estate of Linnie Jane Hodges,
during said hearing.

That the matters raised in the PCIB's motion of October 5, 1963 (as well as the
other motion) dated September 14, 1964 have been consolidated for the purpose
of presentation and reception of evidence with the hearing on the determination
of the heirs of the estate of Linnie Jane Hodges. It is further alleged in the
opposition that the motion for the official declaration of heirs of the estate of
Linnie Jane Hodges is the one that constitutes a prejudicial question to the
motions dated October 5 and September 14, 1964 because if said motion is
found meritorious and granted by the Court, the PCIB's motions of October 5,
1963 and September 14, 1964 will become moot and academic since they are
 premised on the assumption and claim that the only heir of Linnie Jane Hodges
was C. N. Hodges.

That the PCIB and counsel are estopped from further questioning the
determination of heirs in the estate of Linnie Jane Hodges at this stage since it
was PCIB as early as January 8, 1965 which filed a motion for official declaration
of heirs of Linnie Jane Hodges that the claim of any heirs of Linnie Jane Hodges
can be determined only in the administration proceedings over the estate of
Linnie Jane Hodges and not that of C. N. Hodges, since the heirs of Linnie Jane
Hodges are claiming her estate and not the estate of C. N. Hodges.

A reply (Sp. 1672, Vol. X, pp. 4436-4444) dated May 11, 1966 of the PCIB has
been filed alleging that the motion dated April 22, 1966 of the PCIB is not to seek
deferment of the hearing and consideration of the motion for official declaration of
heirs of Linnie Jane Hodges but to declare the testate estate of Linnie Jane
Hodges closed and for administratrix Magno to account for and deliver to the
PCIB all assets of the conjugal partnership of the deceased spouses which has
come to her possession plus all rents and income.

A rejoinder (Sp. 1672, Vol. X, pp. 4458-4462) of administratrix Magno dated May
19, 1966 has been filed alleging that the motion dated December 11, 1957 only
sought the approval of all conveyances made by C. N. Hodges and requested
the Court authority for all subsequent conveyances that will be executed by C. N.
Hodges; that the order dated December 14, 1957 only approved the
conveyances made by C. N. Hodges; that C. N. Hodges represented by counsel
never made any claim in the estate of Linnie Jane Hodges and never filed a
motion to declare himself as the heir of the said Linnie Jane Hodges despite the
lapse of more than five (5) years after the death of Linnie Jane Hodges; that it is
further alleged in the rejoinder that there can be no order of adjudication of the
estate unless there has been a prior express declaration of heirs and so far no
declaration of heirs in the estate of Linnie Jane Hodges (Sp. 1307) has been
made.

Considering the allegations and arguments in the motion and of the PCIB as well
as those in the opposition and rejoinder of administratrix Magno, the Court finds
the opposition and rejoinder to be well taken for the reason that so far there has
been no official declaration of heirs in the testate estate of Linnie Jane Hodges
and therefore no disposition of her estate.

WHEREFORE, the motion of the PCIB dated April 22, 1966 is hereby DENIED.
(Annex "W", Petition)

In its motion dated November 24, 1966 for the reconsideration of this order, petitioner
alleged inter alia that:

It cannot be over-stressed that the motion of December 11, 1957 was based on
the fact that:

a. Under the last will and testament of the deceased, Linnie Jane
Hodges, the late Charles Newton Hodges was the sole heir
 instituted insofar as her properties in the Philippines are
concerned;

b. Said last will and testament vested upon the said late Charles
Newton Hodges rights over said properties which, in sum, spell
ownership, absolute and in fee simple;

c. Said late Charles Newton Hodges was, therefore, "not only part
owner of the properties left as conjugal, but also, the successor to
all the properties left by the deceased Linnie Jane Hodges.

Likewise, it cannot be over-stressed that the aforesaid motion was granted by

this Honorable Court "for the reasons stated" therein.

Again, the motion of December 11, 1957 prayed that not only "all the sales,
conveyances, leases, and mortgages executed by" the late Charles Newton
Hodges, but also all "the subsequent sales, conveyances, leases, and mortgages
..." be approved and authorized. This Honorable Court, in its order of December
14, 1957, "for the reasons stated" in the aforesaid motion, granted the same, and
not only approved all the sales, conveyances, leases and mortgages of all
properties left by the deceased Linnie Jane Hodges executed by the late Charles
Newton Hodges, but also authorized "all subsequent sales, conveyances, leases
and mortgages of the properties left by the said deceased Linnie Jane Hodges.
(Annex "X", Petition)

and reiterated its fundamental pose that the Testate Estate of Linnie Jane Hodges had already
been factually, although not legally, closed with the virtual declaration of Hodges and
adjudication to him, as sole universal heir of all the properties of the estate of his wife, in the
order of December 14, 1957, Annex G. Still unpersuaded, on July 18, 1967, respondent court
denied said motion for reconsideration and held that "the court believes that there is no
justification why the order of October 12, 1966 should be considered or modified", and, on July
19, 1967, the motion of respondent Magno "for official declaration of heirs of the estate of Linnie
Jane Hodges", already referred to above, was set for hearing.

In consequence of all these developments, the present petition was filed on August 1, 1967
(albeit petitioner had to pay another docketing fee on August 9, 1967, since the orders in
question were issued in two separate testate estate proceedings, Nos. 1307 and 1672, in the
court below).

Together with such petition, there are now pending before Us for resolution herein, appeals from
the following:

1. The order of December 19, 1964 authorizing payment by respondent Magno of

overtime pay, (pp. 221, Green Record on Appeal) together with the subsequent
orders of January 9, 1965, (pp. 231-232, id.) October 27, 1965, (pp. 227, id.) and
February 15, 1966 (pp. 455-456, id.) repeatedly denying motions for
reconsideration thereof.
 2. The order of August 6, 1965 (pp. 248, id.) requiring that deeds executed by
petitioner to be co-signed by respondent Magno, as well as the order of October
27, 1965 (pp. 276-277) denying reconsideration.

3. The order of October 27, 1965 (pp. 292-295, id.) enjoining the deposit of all
collections in a joint account and the same order of February 15, 1966 mentioned
in No. 1 above which included the denial of the reconsideration of this order of
October 27, 1965.

4. The order of November 3, 1965 (pp. 313-320, id.) directing the payment of
attorney's fees, fees of the respondent administratrix, etc. and the order of
February 16, 1966 denying reconsideration thereof.

5. The order of November 23, 1965 (pp. 334-335, id.) allowing appellee Western
Institute of Technology to make payments to either one or both of the
administrators of the two estates as well as the order of March 7, 1966 (p.
462, id.) denying reconsideration.

6. The various orders hereinabove earlier enumerated approving deeds of sale

executed by respondent Magno in favor of appellees Carles, Catedral, Pablito,
Guzman, Coronado, Barrido, Causing, Javier, Lucero and Batisanan, (see pp. 35
to 37 of this opinion), together with the two separate orders both dated December
2, 1966 (pp. 306-308, and pp. 308-309, Yellow Record on Appeal) denying
reconsideration of said approval.

7. The order of January 3, 1967, on pp. 335-336, Yellow Record on Appeal,

approving similar deeds of sale executed by respondent Magno, as those in No.
6, in favor of appellees Pacaonsis and Premaylon, as to which no motion for
reconsideration was filed.

8. Lastly, the order of December 2, 1966, on pp. 305-306, Yellow Record on

Appeal, directing petitioner to surrender to appellees Lucero, Batisanan, Javier,
Pablito, Barrido, Catedral, Causing, Guzman, and Coronado, the certificates of
title covering the lands involved in the approved sales, as to which no motion for
reconsideration was filed either.

Strictly speaking, and considering that the above orders deal with different matters, just as they
affect distinctly different individuals or persons, as outlined by petitioner in its brief as appellant
on pp. 12-20 thereof, there are, therefore, thirty-three (33) appeals before Us, for which reason,
petitioner has to pay also thirty-one (31) more docket fees.

It is as well perhaps to state here as elsewhere in this opinion that in connection with these
appeals, petitioner has assigned a total of seventy-eight (LXXVIII) alleged errors, the respective
discussions and arguments under all of them covering also the fundamental issues raised in
respect to the petition for certiorari and prohibition, thus making it feasible and more practical for
the Court to dispose of all these cases together. 4

The assignments of error read thus:

I to IV
 THE ORDER COURT ERRED IN APPROVING THE FINAL DEEDS OF SALE IN
FAVOR OF THE APPELLEES, PEPITO G. IYULORES, ESPIRIDION
PARTISALA, WINIFREDO C. ESPADA AND ROSARIO ALINGASA, EXECUTED
BY THE APPELLEE, AVELINA A. MAGNO, COVERING PARCELS OF LAND
OWNED BY THE DECEASED, CHARLES NEWTON HODGES, AND THE
CONTRACTS TO SELL COVERING WHICH WERE EXECUTED BY HIM
DURING HIS LIFETIME.

V to VIII

THE LOWER COURT ERRED IN APPROVING THE DEEDS OF SALE IN

FAVOR OF THE APPELLEES, PEPITO G. IYULORES, ESPIRIDION
PARTISALA, WINIFREDO C. ESPADA AND ROSARIO ALINGASA, COVERING
PARCELS OF LAND FOR WHICH THEY HAVE NEVER PAID IN FULL IN
ACCORDANCE WITH THE ORIGINAL CONTRACTS TO SELL.

IX to XII

THE LOWER COURT ERRED IN DETERMINING THE RIGHTS OF

OWNERSHIP OVER REAL PROPERTY OF THE APPELLEES, PEPITO G.
IYULORES, ESPIRIDION PARTISALA, WINIFREDO C. ESPADA AND
ROSARIO ALINGASA, WHILE ACTING AS A PROBATE COURT.

XIII to XV

THE LOWER COURT ERRED IN APPROVING THE FINAL DEEDS OF SALE IN

FAVOR OF THE APPELLEES ADELFA PREMAYLON (LOT NO. 102),
SANTIAGO PACAONSIS, AND ADELFA PREMAYLON (LOT NO. 104),
EXECUTED BY THE APPELLEE, AVELINA A. MAGNO, COVERING PARCELS
OF LAND OWNED BY THE DECEASED, CHARLES NEWTON HODGES, AND
THE CONTRACTS TO SELL COVERING WHICH WERE EXECUTED BY HIM
DURING HIS LIFETIME.

XVI to XVIII

THE LOWER COURT ERRED IN APPROVING THE DEEDS OF SALE IN

FAVOR OF THE APPELLEES ADELFA PREMAYLON (LOT NO. 102),
SANTIAGO PACAONSIS, AND ADELFA PREMAYLON (LOT NO. 104)
COVERING PARCELS OF LAND FOR WHICH THEY HAVE NEVER PAID IN
FULL IN ACCORDANCE WITH THE ORIGINAL CONTRACTS TO SELL.

XIX to XXI

THE LOWER COURT ERRED IN DETERMINING THE RIGHTS OF

OWNERSHIP OVER REAL PROPERTY OF THE APPELLEES ADELFA
PREMAYLON (LOT NO. 102), SANTIAGO PACAONSIS, AND ADELFA
PREMAYLON (LOT NO. 104) WHILE ACTING AS A PROBATE COURT.

XXII to XXV
 THE LOWER COURT ERRED IN APPROVING THE FINAL DEEDS OF SALE IN
FAVOR OF THE APPELLEES LORENZO CARLES, JOSE PABLICO, ALFREDO
CATEDRAL AND SALVADOR S. GUZMAN, EXECUTED BY THE APPELLEE,
AVELINA A. MAGNO, COVERING PARCELS OF LAND OWNED BY THE
DECEASED, CHARLES NEWTON HODGES, AND THE CONTRACTS TO SELL
COVERING WHICH WERE EXECUTED BY HIM DURING HIS LIFETIME.

XXVI to XXIX

THE LOWER COURT ERRED IN APPROVING THE FINAL DEED OF SALE

EXECUTED IN FAVOR OF THE APPELLEES, LORENZO CARLES, JOSE
PABLICO, ALFREDO CATEDRAL AND SALVADOR S. GUZMAN PURSUANT
TO CONTRACTS TO SPELL WHICH WERE CANCELLED AND RESCINDED.

XXX to XXXIV

THE LOWER COURT ERRED IN DETERMINING THE RIGHTS OF

OWNERSHIP OVER REAL PROPERTY OF THE LORENZO CARLES, JOSE
PABLICO, ALFREDO CATEDRAL AND SALVADOR S. GUZMAN, WHILE
ACTING AS A PROBATE COURT.

XXXV to XXXVI

THE LOWER COURT ERRED IN APPROVING THE FINAL DEEDS OF SALE IN

FAVOR OF THE APPELLEES, FLORENIA BARRIDO AND PURIFICACION
CORONADO, EXECUTED BY THE APPELLEE, AVELINA A. MAGNO,
COVERING PARCELS OF LAND OWNED BY THE DECEASED, CHARLES
NEWTON HODGES, AND THE CONTRACTS TO SELL COVERING WHICH
WERE EXECUTED BY HIM DURING HIS LIFETIME.

XXXVII to XXXVIII

THE LOWER COURT ERRED IN APPROVING THE DEEDS OF SALE IN

FAVOR OF THE APPELLEES, FLORENIA BARRIDO AND PURIFICACION
CORONADO, ALTHOUGH THEY WERE IN ARREARS IN THE PAYMENTS
AGREED UPON IN THE ORIGINAL CONTRACT TO SELL WHICH THEY
EXECUTED WITH THE DECEASED, CHARLES NEWTON HODGES, IN THE
AMOUNT OF P10,680.00 and P4,428.90, RESPECTIVELY.

XXXIX to XL

THE LOWER COURT ERRED IN DEPRIVING THE DECEASED, CHARLES

NEWTON HODGES, OF THE CONTRACTUAL RIGHT, EXERCISED
THROUGH HIS ADMINISTRATOR, THE INSTANT APPELLANT, TO CANCEL
THE CONTRACTS TO SELL OF THE APPELLEES, FLORENIA BARRIDO AND
PURIFICACION CORONADO.

XLI to XLIII
 THE LOWER COURT ERRED IN APPROVING THE FINAL DEEDS OF SALE IN
FAVOR OF THE APPELLEES, GRACIANO LUCERO, ARITEO THOMAS JAMIR
AND MELQUIADES BATISANAN, EXECUTED BY THE APPELLEE, AVELINA
A. MAGNO, COVERING PARCELS OF LAND OWNED BY THE DECEASED,
CHARLES NEWTON HODGES, AND THE CONTRACTS TO SELL COVERING
WHICH WERE EXECUTED BY HIM DURING HIS LIFETIME.

XLIV to XLVI

THE LOWER COURT ERRED IN APPROVING THE FINAL DEED OF SALE IN

FAVOR OF THE APPELLEES, GRACIANO LUCERO, ARITEO THOMAS JAMIR
AND MELQUIADES BATISANAN, PURSUANT TO CONTRACTS TO SELL
EXECUTED BY THEM WITH THE DECEASED, CHARLES NEWTON HODGES,
THE TERMS AND CONDITIONS OF WHICH THEY HAVE NEVER COMPLIED
WITH.

XLVII to XLIX

THE LOWER COURT ERRED IN DEPRIVING THE DECEASED, CHARLES

NEWTON HODGES, OF HIS RIGHT, EXERCISED THROUGH HIS
ADMINISTRATION, THE INSTANT APPELLANT, TO CANCEL THE
CONTRACTS TO SELL OF THE APPELLEES, GRACIANO LUCERO, ARITEO
THOMAS JAMIR AND MELQUIADES BATISANAN, AND IN DETERMINING
THE RIGHTS OF THE SAID APPELLEES OVER REAL PROPERTY WHILE
ACTING AS A PROBATE COURT.

THE LOWER COURT ERRED IN APPROVING THE FINAL DEEDS OF SALE IN

FAVOR OF THE APPELLEE, BELCESAR CAUSING, EXECUTED BY THE
APPELLEE, AVELINA A. MAGNO, COVERING PARCELS OF LAND OWNED
BY THE DECEASED, CHARLES NEWTON HODGES, AND THE CONTRACTS
TO SELL COVERING WHICH WERE EXECUTED BY HIM DURING HIS
LIFETIME.

LI

THE LOWER COURT ERRED IN APPROVING THE DEEDS OF SALE IN

FAVOR OF THE APPELLEE, BELCESAR CAUSING, ALTHOUGH HE WAS IN
ARREARS IN THE PAYMENTS AGREED UPON IN THE ORIGINAL
CONTRACT TO SELL WHICH HE EXECUTED WITH THE DECEASED,
CHARLES NEWTON HODGES, IN THE AMOUNT OF P2,337.50.

LII

THE LOWER COURT ERRED IN APPROVING THE DEED OF SALE IN FAVOR

OF THE APPELLEE, BELCESAR CAUSING, ALTHOUGH THE SAME WAS
NOT EXECUTED IN ACCORDANCE WITH THE RULES OF COURT.

LIII to LXI
 THE LOWER COURT ERRED IN ORDERING THE APPELLANT, PHILIPPINE
COMMERCIAL AND INDUSTRIAL BANK TO SURRENDER THE OWNER'S
DUPLICATE CERTIFICATES OF TITLE OVER THE RESPECTIVE LOTS
COVERED BY THE DEEDS OF SALE EXECUTED BY THE APPELLEE,
AVELINA A. MAGNO, IN FAVOR OF THE OTHER APPELLEES, JOSE
PABLICO, ALFREDO CATEDRAL, SALVADOR S. GUZMAN, FLRENIA
BARRIDO, PURIFICACION CORONADO, BELCESAR CAUSING, ARITEO
THOMAS JAMIR, MAXIMA BATISANAN AND GRACIANO L. LUCERO.

LXII

THE LOWER COURT ERRED IN RESOLVING THE MOTION OF THE

APPELLEE, WESTERN INSTITUTE OF TECHNOLOGY, DATED NOVEMBER
3, 1965, WITHOUT ANY COPY THEREOF HAVING BEEN SERVED UPON
THE APPELLANT, PHILIPPINE COMMERCIAL & INDUSTRIAL BANK.

LXIII

THE LOWER COURT ERRED IN HEARING AND CONSIDERING THE MOTION

OF THE APPELLEE, WESTERN INSTITUTE OF TECHNOLOGY, DATED
NOVEMBER 3rd, 1965, ON NOVEMBER 23, 1965, WHEN THE NOTICE FOR
THE HEARING THEREOF WAS FOR NOVEMBER 20, 1965.

LXIV

THE LOWER COURT ERRED IN GRANTING THE APPELLEE, WESTERN

INSTITUTE OF TECHNOLOGY A RELIEF OTHER THAN THAT PRAYED FOR
IN ITS MOTION, DATED NOVEMBER 3, 1965, IN THE ABSENCE OF A
PRAYER FOR GENERAL RELIEF CONTAINED THEREIN.

LXV

THE LOWER COURT ERRED IN ALLOWING THE APPELLEE, WESTERN

INSTITUTE OF TECHNOLOGY, TO CONTINUE PAYMENTS UPON A
CONTRACT TO SELL THE TERMS AND CONDITIONS OF WHICH IT HAS
FAILED TO FULFILL.

LXVI

THE LOWER COURT ERRED IN DETERMINING THE RIGHTS OF THE

APPELLEE, WESTERN INSTITUTE OF TECHNOLOGY OVER THE REAL
PROPERTY SUBJECT MATTER OF THE CONTRACT TO SELL IT EXECUTED
WITH THE DECEASED, CHARLES NEWTON HODGES, WHILE ACTING AS A
PROBATE COURT.

LXVII

LOWER COURT ERRED IN ALLOWING THE CONTINUATION OF PAYMENTS

BY THE APPELLEE, WESTERN INSTITUTE OF TECHNOLOGY, UPON A
 CONTRACT TO SELL EXECUTED BY IT AND THE DECEASED, CHARLES
NEWTON HODGES, TO A PERSON OTHER THAN HIS LAWFULLY
APPOINTED ADMINISTRATOR.

LXVIII

THE LOWER COURT ERRED IN ORDERING THE PAYMENT OF RETAINER'S

FEES FROM THE SUPPOSED ESTATE OF THE DECEASED, LINNIE JANE
HODGES, WHEN THERE IS NEITHER SUCH ESTATE NOR ASSETS
THEREOF.

LXIX

THE LOWER COURT ERRED IN ORDERING THE PAYMENT OF RETAINER'S

FEES OF LAWYERS OF ALLEGED HEIRS TO THE SUPPOSED ESTATE OF
THE DECEASED, LINNIE JANE HODGES.

LXX

THE LOWER COURT ERRED IN IMPLEMENTING THE ALLEGED

AGREEMENT BETWEEN THE HEIRS OF THE SUPPOSED ESTATE OF THE
DECEASED, LINNIE JANE HODGES, AND THEIR LAWYERS.

LXXI

THE LOWER COURT ERRED IN ORDERING THE PREMATURE

DISTRIBUTION OF ESTATE ASSETS TO ALLEGED HEIRS OR
BENEFICIARIES THEREOF, BY WAY OF RETAINER'S FEES.

LXXII

THE LOWER COURT ERRED IN ORDERING THAT ALL FINAL DEEDS OF

SALE EXECUTED PURSUANT TO CONTRACTS TO SELL ENTERED INTO BY
THE DECEASED, CHARLES NEWTON HODGES, DURING HIS LIFETIME, BE
SIGNED JOINTLY BY THE APPELLEE, AVELINA A. MAGNO, AND THE
APPELLANT, PHILIPPINE COMMERCIAL AND INDUSTRIAL BANK, AND NOT
BY THE LATTER ONLY AS THE LAWFULLY APPOINTED ADMINISTRATOR
OF HIS ESTATE.

LXXIII

THE LOWER COURT ERRED IN ORDERING THE PAYMENT OF LEGAL

EXPENSES FROM THE SUPPOSED ESTATE OF THE DECEASED, LINNIE
JANE HODGES, WHEN THERE IS NEITHER SUCH ESTATE NOR ASSETS
THEREOF.

LXXIV
 THE LOWER COURT ERRED IN ORDERING THE PAYMENT OF LEGAL
EXPENSES OF LAWYERS OF ALLEGED HEIRS TO THE SUPPOSED
ESTATE OF THE DECEASED, LINNIE JANE HODGES.

LXXV

THE LOWER COURT ERRED IN ORDERING THE PREMATURE

DISTRIBUTION OF ESTATE ASSETS TO ALLEGED HEIRS OR
BENEFICIARIES THEREOF, BY WAY OF LEGAL EXPENSES.

LXXVI

THE LOWER COURT ERRED IN ORDERING THE PAYMENT OF

COMPENSATION TO THE PURPORTED ADMINISTRATRIX OF THE
SUPPOSED ESTATE OF THE DECEASED, LINNIE JANE HODGES, THE
INSTANT APPELLEE, AVELINA A. MAGNO, WHEN THERE IS NEITHER
SUCH ESTATE NOR ASSETS THEREOF.

LXXVII

THE LOWER COURT ERRED IN ORDERING THAT THE FUNDS OF THE

TESTATE ESTATE OF THE DECEASED, CHARLES NEWTON HODGES, BE
PLACED IN A JOINT ACCOUNT OF THE APPELLANT, PHILIPPINE
COMMERCIAL AND INDUSTRIAL BANK, AND THE APPELLEE, AVELINA A.
MAGNO, WHO IS A COMPLETE STRANGER TO THE AFORESAID ESTATE.

LXXVIII

THE LOWER COURT ERRED IN ORDERING THAT THE APPELLEE, AVELINA

A. MAGNO, BE GIVEN EQUAL ACCESS TO THE RECORDS OF THE
TESTATE ESTATE OF THE DECEASED, CHARLES NEWTON HODGES,
WHEN SHE IS A COMPLETE STRANGER TO THE AFORESAID ESTATE. (Pp.
73-83, Appellant's Brief.)

To complete this rather elaborate, and unavoidably extended narration of the factual setting of
these cases, it may also be mentioned that an attempt was made by the heirs of Mrs. Hodges to
have respondent Magno removed as administratrix, with the proposed appointment of Benito J.
Lopez in her place, and that respondent court did actually order such proposed replacement,
but the Court declared the said order of respondent court violative of its injunction of August 8,
1967, hence without force and effect (see Resolution of September 8, 1972 and February 1,
1973). Subsequently, Atty. Efrain B. Trenas, one of the lawyers of said heirs, appeared no
longer for the proposed administrator Lopez but for the heirs themselves, and in a motion dated
October 26, 1972 informed the Court that a motion had been filed with respondent court for the
removal of petitioner PCIB as administrator of the estate of C. N. Hodges in Special
Proceedings 1672, which removal motion alleged that 22.968149% of the share of C. N.
Hodges had already been acquired by the heirs of Mrs. Hodges from certain heirs of her
husband. Further, in this connection, in the answer of PCIB to the motion of respondent Magno
to have it declared in contempt for disregarding the Court's resolution of September 8, 1972
modifying the injunction of August 8, 1967, said petitioner annexed thereto a joint manifestation
and motion, appearing to have been filed with respondent court, informing said court that in
addition to the fact that 22% of the share of C. N. Hodges had already been bought by the heirs
of Mrs. Hodges, as already stated, certain other heirs of Hodges representing 17.343750% of
his estate were joining cause with the heirs of Mrs. Hodges as against PCIB, thereby making
somewhat precarious, if not possibly untenable, petitioners' continuation as administrator of the
Hodges estate.

RESOLUTION OF ISSUES IN THE CERTIORARI AND

PROHIBITION CASES

As to the Alleged Tardiness

of the Present Appeals

The priority question raised by respondent Magno relates to the alleged tardiness of all the
aforementioned thirty-three appeals of PCIB. Considering, however, that these appeals revolve
around practically the same main issues and that it is admitted that some of them have been
timely taken, and, moreover, their final results hereinbelow to be stated and explained make it of
no consequence whether or not the orders concerned have become final by the lapsing of the
respective periods to appeal them, We do not deem it necessary to pass upon the timeliness of
any of said appeals.

II

The Propriety Here of Certiorari and

Prohibition instead of Appeal

The other preliminary point of the same respondent is alleged impropriety of the special civil
action of certiorariand prohibition in view of the existence of the remedy of appeal which it
claims is proven by the very appeals now before Us. Such contention fails to take into account
that there is a common thread among the basic issues involved in all these thirty-three appeals
which, unless resolved in one single proceeding, will inevitably cause the proliferation of more or
less similar or closely related incidents and consequent eventual appeals. If for this
consideration alone, and without taking account anymore of the unnecessary additional effort,
expense and time which would be involved in as many individual appeals as the number of such
incidents, it is logical and proper to hold, as We do hold, that the remedy of appeal is not
adequate in the present cases. In determining whether or not a special civil action of certiorari or
prohibition may be resorted to in lieu of appeal, in instances wherein lack or excess of
jurisdiction or grave abuse of discretion is alleged, it is not enough that the remedy of appeal
exists or is possible. It is indispensable that taking all the relevant circumstances of the given
case, appeal would better serve the interests of justice. Obviously, the longer delay, augmented
expense and trouble and unnecessary repetition of the same work attendant to the present
multiple appeals, which, after all, deal with practically the same basic issues that can be more
expeditiously resolved or determined in a single special civil action, make the remedies
of certiorari and prohibition, pursued by petitioner, preferable, for purposes of resolving the
common basic issues raised in all of them, despite the conceded availability of appeal. Besides,
the settling of such common fundamental issues would naturally minimize the areas of conflict
between the parties and render more simple the determination of the secondary issues in each
of them. Accordingly, respondent Magno's objection to the present remedy of certiorari and
prohibition must be overruled.
We come now to the errors assigned by petitioner-appellant, Philippine Commercial & Industrial
Bank, (PCIB, for short) in the petition as well as in its main brief as appellant.

III

On Whether or Not There is Still Any Part of the Testate

Estate Mrs. Hodges that may be Adjudicated to her brothers
and sisters as her estate, of which respondent Magno is the
unquestioned Administratrix in special Proceedings 1307.

In the petition, it is the position of PCIB that the respondent court exceeded its jurisdiction or
gravely abused its discretion in further recognizing after December 14, 1957 the existence of the
Testate Estate of Linnie Jane Hodges and in sanctioning purported acts of administration
therein of respondent Magno. Main ground for such posture is that by the aforequoted order of
respondent court of said date, Hodges was already allowed to assert and exercise all his rights
as universal heir of his wife pursuant to the provisions of her will, quoted earlier, hence, nothing
else remains to be done in Special Proceedings 1307 except to formally close it. In other words,
the contention of PCIB is that in view of said order, nothing more than a formal declaration of
Hodges as sole and exclusive heir of his wife and the consequent formal unqualified
adjudication to him of all her estate remain to be done to completely close Special Proceedings
1307, hence respondent Magno should be considered as having ceased to be Administratrix of
the Testate Estate of Mrs. Hodges since then.

After carefully going over the record, We feel constrained to hold that such pose is patently
untenable from whatever angle it is examined.

To start with, We cannot find anywhere in respondent Order of December 14, 1957 the sense
being read into it by PCIB. The tenor of said order bears no suggestion at all to such effect. The
declaration of heirs and distribution by the probate court of the estate of a decedent is its most
important function, and this Court is not disposed to encourage judges of probate proceedings
to be less than definite, plain and specific in making orders in such regard, if for no other reason
than that all parties concerned, like the heirs, the creditors, and most of all the government, the
devisees and legatees, should know with certainty what are and when their respective rights
and obligations ensuing from the inheritance or in relation thereto would begin or cease, as the
case may be, thereby avoiding precisely the legal complications and consequent litigations
similar to those that have developed unnecessarily in the present cases. While it is true that in
instances wherein all the parties interested in the estate of a deceased person have already
actually distributed among themselves their respective shares therein to the satisfaction of
everyone concerned and no rights of creditors or third parties are adversely affected, it would
naturally be almost ministerial for the court to issue the final order of declaration and distribution,
still it is inconceivable that the special proceeding instituted for the purpose may be considered
terminated, the respective rights of all the parties concerned be deemed definitely settled, and
the executor or administrator thereof be regarded as automatically discharged and relieved
already of all functions and responsibilities without the corresponding definite orders of the
probate court to such effect.

Indeed, the law on the matter is specific, categorical and unequivocal. Section 1 of Rule 90
provides:
 SECTION 1. When order for distribution of residue made. — When the debts,
funeral charges, and expenses of administration, the allowance to the widow and
inheritance tax, if any, chargeable to the estate in accordance with law have
been paid, the court, on the application of the executor or administrator, or of a
person interested in the estate, and after hearing upon notice, shall assign the
residue of the estate to the persons entitled to the same, naming them and the
proportions, or parts, to which each is entitled, and such persons may demand
and recover their respective shares from the executor or administrator, or any
other person having the same in his possession. If there is a controversy before
the court as to who are the lawful heirs of the deceased person or as to the
distributive shares to which each person is entitled under the law, the controversy
shall be heard and decided as in ordinary cases.

No distribution shall be allowed until the payment of the obligations above

mentioned has been made or provided for, unless the distributees, or any of
them give a bond, in a sum to be fixed by the court, conditioned for the payment
of said obligations within such time as the court directs.

These provisions cannot mean anything less than that in order that a proceeding for the
settlement of the estate of a deceased may be deemed ready for final closure, (1) there should
have been issued already an order of distribution or assignment of the estate of the decedent
among or to those entitled thereto by will or by law, but (2) such order shall not be issued until
after it is shown that the "debts, funeral expenses, expenses of administration, allowances,
taxes, etc. chargeable to the estate" have been paid, which is but logical and proper. (3)
Besides, such an order is usually issued upon proper and specific application for the purpose of
the interested party or parties, and not of the court.

... it is only after, and not before, the payment of all debts, funeral charges,
expenses of administration, allowance to the widow, and inheritance tax shall
have been effected that the court should make a declaration of heirs or of such
persons as are entitled by law to the residue. (Moran, Comments on the Rules of
Court, 2nd ed., Vol. II, p. 397, citing Capistrano vs. Nadurata, 49 Phil., 726;
Lopez vs. Lopez, 37 Off. Gaz., 3091.) (JIMOGA-ON v. BELMONTE, 84 Phil. 545,
548) (p. 86, Appellee's Brief)

xxx xxx xxx

Under Section 753 of the Code of Civil Procedure, (corresponding to Section 1,

Rule 90) what brings an intestate (or testate) proceeding to a close is the order of
distribution directing delivery of the residue to the persons entitled thereto after
paying the indebtedness, if any, left by the deceased. (Santiesteban vs.
Santiesteban, 68 Phil. 367, 370.)

In the cases at bar, We cannot discern from the voluminous and varied facts, pleadings and
orders before Us that the above indispensable prerequisites for the declaration of heirs and the
adjudication of the estate of Mrs. Hodges had already been complied with when the order of
December 14, 1957 was issued. As already stated, We are not persuaded that the proceedings
leading to the issuance of said order, constituting barely of the motion of May 27, 1957, Annex
D of the petition, the order of even date, Annex E, and the motion of December 11, 1957, Annex
H, all aforequoted, are what the law contemplates. We cannot see in the order of December 14,
1957, so much relied upon by the petitioner, anything more than an explicit approval of "all the
sales, conveyances, leases and mortgages of all the properties left by the deceased Linnie Jane
Hodges executed by the Executor Charles N. Hodges" (after the death of his wife and prior to
the date of the motion), plus a general advance authorization to enable said "Executor — to
execute subsequent sales, conveyances, leases and mortgages of the properties left the said
deceased Linnie Jane Hodges in consonance with wishes conveyed in the last will and
testament of the latter", which, certainly, cannot amount to the order of adjudication of the estate
of the decedent to Hodges contemplated in the law. In fact, the motion of December 11, 1957
on which the court predicated the order in question did not pray for any such adjudication at all.
What is more, although said motion did allege that "herein Executor (Hodges) is not only part
owner of the properties left as conjugal, but also, the successor to all the properties left by the
deceased Linnie Jane Hodges", it significantly added that "herein Executor, as Legatee (sic),
has the right to sell, convey, lease or dispose of the properties in the Philippines — during his
lifetime", thereby indicating that what said motion contemplated was nothing more than either
the enjoyment by Hodges of his rights under the particular portion of the dispositions of his
wife's will which were to be operative only during his lifetime or the use of his own share of the
conjugal estate, pending the termination of the proceedings. In other words, the authority
referred to in said motions and orders is in the nature of that contemplated either in Section 2 of
Rule 109 which permits, in appropriate cases, advance or partial implementation of the terms of
a duly probated will before final adjudication or distribution when the rights of third parties would
not be adversely affected thereby or in the established practice of allowing the surviving spouse
to dispose of his own share of he conjugal estate, pending its final liquidation, when it appears
that no creditors of the conjugal partnership would be prejudiced thereby, (see the Revised
Rules of Court by Francisco, Vol. V-B, 1970 ed. p. 887) albeit, from the tenor of said motions,
We are more inclined to believe that Hodges meant to refer to the former. In any event, We are
fully persuaded that the quoted allegations of said motions read together cannot be construed
as a repudiation of the rights unequivocally established in the will in favor of Mrs. Hodges'
brothers and sisters to whatever have not been disposed of by him up to his death.

Indeed, nowhere in the record does it appear that the trial court subsequently acted upon the
premise suggested by petitioner. On the contrary, on November 23, 1965, when the court
resolved the motion of appellee Western Institute of Technology by its order We have quoted
earlier, it categorically held that as of said date, November 23, 1965, "in both cases (Special
Proceedings 1307 and 1672) there is as yet no judicial declaration of heirs nor distribution of
properties to whomsoever are entitled thereto." In this connection, it may be stated further
against petitioner, by way of some kind of estoppel, that in its own motion of January 8, 1965,
already quoted in full on pages 54-67 of this decision, it prayed inter alia that the court declare
that "C. N. Hodges was the sole and exclusive heir of the estate of Linnie Jane Hodges", which
it would not have done if it were really convinced that the order of December 14, 1957 was
already the order of adjudication and distribution of her estate. That said motion was later
withdrawn when Magno filed her own motion for determination and adjudication of what should
correspond to the brothers and sisters of Mrs. Hodges does not alter the indubitable implication
of the prayer of the withdrawn motion.

It must be borne in mind that while it is true that Mrs. Hodges bequeathed her whole estate to
her husband and gave him what amounts to full powers of dominion over the same during his
lifetime, she imposed at the same time the condition that whatever should remain thereof upon
his death should go to her brothers and sisters. In effect, therefore, what was absolutely given to
Hodges was only so much of his wife's estate as he might possibly dispose of during his
lifetime; hence, even assuming that by the allegations in his motion, he did intend to adjudicate
the whole estate to himself, as suggested by petitioner, such unilateral act could not have
affected or diminished in any degree or manner the right of his brothers and sisters-in-law over
what would remain thereof upon his death, for surely, no one can rightly contend that the
testamentary provision in question allowed him to so adjudicate any part of the estate to himself
as to prejudice them. In other words, irrespective of whatever might have been Hodges'
intention in his motions, as Executor, of May 27, 1957 and December 11, 1957, the trial court's
orders granting said motions, even in the terms in which they have been worded, could not have
had the effect of an absolute and unconditional adjudication unto Hodges of the whole estate of
his wife. None of them could have deprived his brothers and sisters-in-law of their rights under
said will. And it may be added here that the fact that no one appeared to oppose the motions in
question may only be attributed, firstly, to the failure of Hodges to send notices to any of them,
as admitted in the motion itself, and, secondly, to the fact that even if they had been notified,
they could not have taken said motions to be for the final distribution and adjudication of the
estate, but merely for him to be able, pending such final distribution and adjudication, to either
exercise during his lifetime rights of dominion over his wife's estate in accordance with the
bequest in his favor, which, as already observed, may be allowed under the broad terms of
Section 2 of Rule 109, or make use of his own share of the conjugal estate. In any event, We do
not believe that the trial court could have acted in the sense pretended by petitioner, not only
because of the clear language of the will but also because none of the interested parties had
been duly notified of the motion and hearing thereof. Stated differently, if the orders of May 27,
1957 and December 4, 1957 were really intended to be read in the sense contended by
petitioner, We would have no hesitancy in declaring them null and void.

Petitioner cites the case of Austria vs. Ventenilla, G. R. No. L-10018, September 19, 1956,
(unreported but a partial digest thereof appears in 99 Phil. 1069) in support of its insistence that
with the orders of May 27 and December 14, 1957, the closure of Mrs. Hodges' estate has
become a mere formality, inasmuch as said orders amounted to the order of adjudication and
distribution ordained by Section 1 of Rule 90. But the parallel attempted to be drawn between
that case and the present one does not hold. There the trial court had in fact issued a clear,
distinct and express order of adjudication and distribution more than twenty years before the
other heirs of the deceased filed their motion asking that the administratrix be removed, etc. As
quoted in that decision, the order of the lower court in that respect read as follows:

En orden a la mocion de la administradora, el juzgado la encuentra procedente

bajo la condicion de que no se hara entrega ni adjudicacion de los bienes a los
herederos antes de que estos presten la fianza correspondiente y de acuerdo
con lo prescrito en el Art. 754 del Codigo de Procedimientos: pues, en autos no
aparece que hayan sido nombrados comisionados de avaluo y reclamaciones.
Dicha fianza podra ser por un valor igual al de los bienes que correspondan a
cada heredero segun el testamento. Creo que no es obice para la terminacion
del expediente el hecho de que la administradora no ha presentado hasta ahora
el inventario de los bienes; pues, segun la ley, estan exentos de esta formalidad
os administradores que son legatarios del residuo o remanente de los bienes y
hayan prestado fianza para responder de las gestiones de su cargo, y aparece
en el testamento que la administradora Alejandra Austria reune dicha condicion.

POR TODO LO EXPUESTO, el juzgado declara, 1.o: no haber lugar a la mocion

de Ramon Ventenilla y otros; 2.o, declara asimismo que los unicos herederos del
finado Antonio Ventenilla son su esposa Alejandra Austria, Maria Ventenilla,
hermana del testador, y Ramon Ventenilla, Maria Ventenilla, Ramon Soriano,
Eulalio Soriano, Jose Soriano, Gabriela Ventenilla, Lorenzo Ventenilla, Felicitas
 Ventenilla, Eugenio Ventenilla y Alejandra Ventenilla, en representacion de los
difuntos Juan, Tomas, Catalino y Froilan, hermanos del testador, declarando,
ademas que la heredera Alejandra Austria tiene derecho al remanente de todos
los bienes dejados por el finado, despues de deducir de ellos la porcion que
corresponde a cada uno de sus coherederos, conforme esta mandado en las
clausulas 8.a, 9.a, 10.a, 11.a, 12.a y 13.a del testamento; 3.o, se aprueba el
pago hecho por la administradora de los gastos de la ultima enfermedad y
funerales del testador, de la donacion hecha por el testador a favor de la Escuela
a Publica del Municipio de Mangatarem, y de las misas en sufragio del alma del
finado; 4.o, que una vez prestada la fianza mencionada al principio de este auto,
se haga la entrega y adjudicacion de los bienes, conforme se dispone en el
testamento y se acaba de declarar en este auto; 5.o, y, finalmente, que
verificada la adjudicacion, se dara por terminada la administracion, revelandole
toda responsabilidad a la administradora, y cancelando su fianza.

ASI SE ORDENA.

Undoubtedly, after the issuance of an order of such tenor, the closure of any proceedings for the
settlement of the estate of a deceased person cannot be but perfunctory.

In the case at bar, as already pointed out above, the two orders relied upon by petitioner do not
appear ex-facie to be of the same tenor and nature as the order just quoted, and, what is more,
the circumstances attendant to its issuance do not suggest that such was the intention of the
court, for nothing could have been more violative of the will of Mrs. Hodges.

Indeed, to infer from Hodges' said motions and from his statements of accounts for the years
1958, 1959 and 1960, A Annexes I, K and M, respectively, wherein he repeatedly claimed that
"herein executor (being) the only devisee or legatee of the deceased, in accordance with the
last will and testament already probated," there is "no (other) person interested in the
Philippines of the time and place of examining herein account to be given notice", an intent to
adjudicate unto himself the whole of his wife's estate in an absolute manner and without regard
to the contingent interests of her brothers and sisters, is to impute bad faith to him, an
imputation which is not legally permissible, much less warranted by the facts of record herein.
Hodges knew or ought to have known that, legally speaking, the terms of his wife's will did not
give him such a right. Factually, there are enough circumstances extant in the records of these
cases indicating that he had no such intention to ignore the rights of his co-heirs. In his very
motions in question, Hodges alleged, thru counsel, that the "deceased Linnie Jane Hodges died
leaving no descendants and ascendants, except brothers and sisters and herein petitioner, as
surviving spouse, to inherit the properties of the decedent", and even promised that "proper
accounting will be had — in all these transactions" which he had submitted for approval and
authorization by the court, thereby implying that he was aware of his responsibilities vis-a-vis his
co-heirs. As alleged by respondent Magno in her brief as appellee:

Under date of April 14, 1959, C. N. Hodges filed his first "Account by the
Executor" of the estate of Linnie Jane Hodges. In the "Statement of Networth of
Mr. C. N. Hodges and the Estate of Linnie Jane Hodges" as of December 31,
1958 annexed thereto, C. N. Hodges reported that the combined conjugal estate
earned a net income of P328,402.62, divided evenly between him and the estate
of Linnie Jane Hodges. Pursuant to this, he filed an "individual income tax return"
for calendar year 1958 on the estate of Linnie Jane Hodges reporting, under
 oath, the said estate as having earned income of P164,201.31, exactly one-half
of the net income of his combined personal assets and that of the estate of Linnie
Jane Hodges. (p. 91, Appellee's Brief.)

Under date of July 21, 1960, C. N. Hodges filed his second "Annual Statement of
Account by the Executor" of the estate of Linnie Jane Hodges. In the "Statement
of Networth of Mr. C. N. Hodges and the Estate of Linnie Jane Hodges" as of
December 31, 1959 annexed thereto, C. N. Hodges reported that the combined
conjugal estate earned a net income of P270,623.32, divided evenly between
him and the estate of Linnie Jane Hodges. Pursuant to this, he filed an "individual
income tax return" for calendar year 1959 on the estate of Linnie Jane Hodges
reporting, under oath, the said estate as having earned income of P135,311.66,
exactly one-half of the net income of his combined personal assets and that of
the estate of Linnie Jane Hodges. (pp. 91-92, id.)

Under date of April 20, 1961, C. N. Hodges filed his third "Annual Statement of
Account by the Executor for the year 1960" of the estate of Linnie Jane Hodges.
In the "Statement of Net Worth of Mr. C. N. Hodges and the Estate of Linnie Jane
Hodges" as of December 31, 1960 annexed thereto, C. N. Hodges reported that
the combined conjugal estate earned a net income of P314,857.94, divided of
Linnie Jane Hodges. Pursuant to this, he filed an "individual evenly between him
and the estate income tax return" for calendar year 1960 on the estate of Linnie
Jane Hodges reporting, under oath, the said estate as having earned income of
P157,428.97, exactly one-half of the net income of his combined personal assets
and that of the estate of Linnie Jane Hodges. (pp. 92-93, id.)

In the petition for probate that he (Hodges) filed, he listed the seven brothers and
sisters of Linnie Jane as her "heirs" (see p. 2, Green ROA). The order of the
court admitting the will to probate unfortunately omitted one of the heirs, Roy
Higdon (see p. 14, Green ROA). Immediately, C. N. Hodges filed a verified
motion to have Roy Higdon's name included as an heir, stating that he wanted to
straighten the records "in order (that) the heirs of deceased Roy Higdon may not
think or believe they were omitted, and that they were really and are interested in
the estate of deceased Linnie Jane Hodges".

Thus, he recognized, if in his own way, the separate identity of his wife's estate from his own
share of the conjugal partnership up to the time of his death, more than five years after that of
his wife. He never considered the whole estate as a single one belonging exclusively to himself.
The only conclusion one can gather from this is that he could have been preparing the basis for
the eventual transmission of his wife's estate, or, at least, so much thereof as he would not have
been able to dispose of during his lifetime, to her brothers and sisters in accordance with her
expressed desire, as intimated in his tax return in the United States to be more extensively
referred to anon. And assuming that he did pay the corresponding estate and inheritance taxes
in the Philippines on the basis of his being sole heir, such payment is not necessarily
inconsistent with his recognition of the rights of his co-heirs. Without purporting to rule definitely
on the matter in these proceedings, We might say here that We are inclined to the view that
under the peculiar provisions of his wife's will, and for purposes of the applicable inheritance tax
laws, Hodges had to be considered as her sole heir, pending the actual transmission of the
remaining portion of her estate to her other heirs, upon the eventuality of his death, and
whatever adjustment might be warranted should there be any such remainder then is a matter
that could well be taken care of by the internal revenue authorities in due time.

It is to be noted that the lawyer, Atty. Leon P. Gellada, who signed the motions of May 27, 1957
and December 11, 1957 and the aforementioned statements of account was the very same one
who also subsequently signed and filed the motion of December 26, 1962 for the appointment of
respondent Magno as "Administratrix of the Estate of Mrs. Linnie Jane Hodges" wherein it was
alleged that "in accordance with the provisions of the last will and testament of Linnie Jane
Hodges, whatever real properties that may remain at the death of her husband, Charles Newton
Hodges, the said properties shall be equally divided among their heirs." And it appearing that
said attorney was Hodges' lawyer as Executor of the estate of his wife, it stands to reason that
his understanding of the situation, implicit in his allegations just quoted, could somehow be
reflective of Hodges' own understanding thereof.

As a matter of fact, the allegations in the motion of the same Atty. Gellada dated July 1, 1957, a
"Request for Inclusion of the Name of Roy Higdon in the Order of the Court dated July 19, 1957,
etc.", reference to which is made in the above quotation from respondent Magno's brief, are
over the oath of Hodges himself, who verified the motion. Said allegations read:

1. — That the Hon. Court issued orders dated June 29, 1957, ordering the
probate of the will.

2. — That in said order of the Hon. Court, the relatives of the deceased Linnie
Jane Hodges were enumerated. However, in the petition as well as in the
testimony of Executor during the hearing, the name Roy Higdon was mentioned,
but deceased. It was unintentionally omitted the heirs of said Roy Higdon who
are his wife Aline Higdon and son David Higdon, all of age, and residents of
Quinlan, Texas, U.S.A.

3. — That to straighten the records, and in order the heirs of deceased Roy
Higdon may not think or believe they were omitted, and that they were really and
are interested in the estate of deceased Linnie Jane Hodges, it is requested of
the Hon. Court to insert the names of Aline Higdon and David Higdon, wife and
son of deceased Roy Higdon in the said order of the Hon. Court dated June 29,
1957. (pars. 1 to 3, Annex 2 of Magno's Answer — Record, p. 260)

As can be seen, these italicized allegations indicate, more or less, the real attitude of Hodges in
regard to the testamentary dispositions of his wife.

In connection with this point of Hodges' intent, We note that there are documents, copies of
which are annexed to respondent Magno's answer, which purportedly contain Hodges' own
solemn declarations recognizing the right of his co-heirs, such as the alleged tax return he filed
with the United States Taxation authorities, identified as Schedule M, (Annex 4 of her answer)
and his supposed affidavit of renunciation, Annex 5. In said Schedule M, Hodges appears to
have answered the pertinent question thus:

2a. Had the surviving spouse the right to declare an election between (1) the
provisions made in his or her favor by the will and (11) dower, curtesy or a
statutory interest? (X) Yes ( ) No
 2d. Does the surviving spouse contemplate renouncing the will and electing to
take dower, curtesy, or a statutory interest? (X) Yes ( ) No

3. According to the information and belief of the person or persons filing the
return, is any action described under question 1 designed or contemplated? ( )
Yes (X) No (Annex 4, Answer — Record, p. 263)

and to have further stated under the item, "Description of property interests passing to surviving
spouse" the following:

None, except for purposes of administering the Estate, paying debts, taxes and
other legal charges. It is the intention of the surviving husband of deceased to
distribute the remaining property and interests of the deceased in their
Community Estate to the devisees and legatees named in the will when the
debts, liabilities, taxes and expenses of administration are finally determined and
paid. (Annex 4, Answer — Record, p. 263)

In addition, in the supposed affidavit of Hodges, Annex 5, it is stated:

I, C. N. Hodges, being duly sworn, on oath affirm that at the time the United
States Estate Tax Return was filed in the Estate of Linnie Jane Hodges on
August 8, 1958, I renounced and disclaimed any and all right to receive the rents,
emoluments and income from said estate, as shown by the statement contained
in Schedule M at page 29 of said return, a copy of which schedule is attached to
this affidavit and made a part hereof.

The purpose of this affidavit is to ratify and confirm, and I do hereby ratify and
confirm, the declaration made in Schedule M of said return and hereby formally
disclaim and renounce any right on my part to receive any of the said rents,
emoluments and income from the estate of my deceased wife, Linnie Jane
Hodges. This affidavit is made to absolve me or my estate from any liability for
the payment of income taxes on income which has accrued to the estate of
Linnie Jane Hodges since the death of the said Linnie Jane Hodges on May 23,
1957. (Annex 5, Answer — Record, p. 264)

Although it appears that said documents were not duly presented as evidence in the court
below, and We cannot, therefore, rely on them for the purpose of the present proceedings, still,
We cannot close our eyes to their existence in the record nor fail to note that their tenor jibes
with Our conclusion discussed above from the circumstances related to the orders of May 27
and December 14, 1957. 5 Somehow, these documents, considering they are supposed to be
copies of their originals found in the official files of the governments of the United States and of
the Philippines, serve to lessen any possible apprehension that Our conclusion from the other
evidence of Hodges' manifest intent vis-a-vis the rights of his co-heirs is without basis in fact.

Verily, with such eloquent manifestations of his good intentions towards the other heirs of his
wife, We find it very hard to believe that Hodges did ask the court and that the latter agreed that
he be declared her sole heir and that her whole estate be adjudicated to him without so much as
just annotating the contingent interest of her brothers and sisters in what would remain thereof
upon his demise. On the contrary, it seems to us more factual and fairer to assume that Hodges
was well aware of his position as executor of the will of his wife and, as such, had in mind the
following admonition made by the Court in Pamittan vs. Lasam, et al., 60 Phil., 908, at pp. 913-
914:

Upon the death of Bernarda in September, 1908, said lands continued to be

conjugal property in the hands of the defendant Lasam. It is provided in article
1418 of the Civil Code that upon the dissolution of the conjugal partnership, an
inventory shall immediately be made and this court in construing this provision in
connection with section 685 of the Code of Civil Procedure (prior to its
amendment by Act No. 3176 of November 24, 1924) has repeatedly held that in
the event of the death of the wife, the law imposes upon the husband the duty of
liquidating the affairs of the partnership without delay (desde luego) (Alfonso vs.
Natividad, 6 Phil., 240; Prado vs. Lagera, 7 Phil., 395; De la Rama vs. De la
Rama, 7 Phil., 745; Enriquez vs. Victoria, 10 Phil., 10; Amancio vs. Pardo, 13
Phil., 297; Rojas vs. Singson Tongson, 17 Phil., 476; Sochayseng vs. Trujillo, 31
Phil., 153; Molera vs. Molera, 40 Phil., 566; Nable Jose vs. Nable Jose, 41 Phil.,
713.)

In the last mentioned case this court quoted with approval the case
of Leatherwood vs. Arnold (66 Texas, 414, 416, 417), in which that court
discussed the powers of the surviving spouse in the administration of the
community property. Attention was called to the fact that the surviving husband,
in the management of the conjugal property after the death of the wife, was a
trustee of unique character who is liable for any fraud committed by him with
relation to the property while he is charged with its administration. In the
liquidation of the conjugal partnership, he had wide powers (as the law stood
prior to Act No. 3176) and the high degree of trust reposed in him stands out
more clearly in view of the fact that he was the owner of a half interest in his own
right of the conjugal estate which he was charged to administer. He could
therefore no more acquire a title by prescription against those for whom he was
administering the conjugal estate than could a guardian against his ward or a
judicial administrator against the heirs of estate. Section 38 of Chapter III of the
Code of Civil Procedure, with relation to prescription, provides that "this chapter
shall not apply ... in the case of a continuing and subsisting trust." The surviving
husband in the administration and liquidation of the conjugal estate occupies the
position of a trustee of the highest order and is not permitted by the law to hold
that estate or any portion thereof adversely to those for whose benefit the law
imposes upon him the duty of administration and liquidation. No liquidation was
ever made by Lasam — hence, the conjugal property which came into his
possession on the death of his wife in September, 1908, still remains conjugal
property, a continuing and subsisting trust. He should have made a liquidation
immediately (desde luego). He cannot now be permitted to take advantage of his
own wrong. One of the conditions of title by prescription (section 41, Code of Civil
Procedure) is possession "under a claim of title exclusive of any other right". For
a trustee to make such a claim would be a manifest fraud.

And knowing thus his responsibilities in the premises, We are not convinced that Hodges
arrogated everything unto himself leaving nothing at all to be inherited by his wife's brothers and
sisters.
PCIB insists, however, that to read the orders of May 27 and December 14, 1957, not as
adjudicatory, but merely as approving past and authorizing future dispositions made by Hodges
in a wholesale and general manner, would necessarily render the said orders void for being
violative of the provisions of Rule 89 governing the manner in which such dispositions may be
made and how the authority therefor and approval thereof by the probate court may be secured.
If We sustained such a view, the result would only be that the said orders should be declared
ineffective either way they are understood, considering We have already seen it is legally
impossible to consider them as adjudicatory. As a matter of fact, however, what surges
immediately to the surface, relative to PCIB's observations based on Rule 89, is that from such
point of view, the supposed irregularity would involve no more than some non-jurisdictional
technicalities of procedure, which have for their evident fundamental purpose the protection of
parties interested in the estate, such as the heirs, its creditors, particularly the government on
account of the taxes due it; and since it is apparent here that none of such parties are objecting
to said orders or would be prejudiced by the unobservance by the trial court of the procedure
pointed out by PCIB, We find no legal inconvenience in nor impediment to Our giving sanction
to the blanket approval and authority contained in said orders. This solution is definitely
preferable in law and in equity, for to view said orders in the sense suggested by PCIB would
result in the deprivation of substantive rights to the brothers and sisters of Mrs. Hodges,
whereas reading them the other way will not cause any prejudice to anyone, and, withal, will
give peace of mind and stability of rights to the innocent parties who relied on them in good
faith, in the light of the peculiar pertinent provisions of the will of said decedent.

Now, the inventory submitted by Hodges on May 12, 1958 referred to the estate of his wife as
consisting of "One-half of all the items designated in the balance sheet, copy of which is hereto
attached and marked as "Annex A"." Although, regrettably, no copy of said Annex A appears in
the records before Us, We take judicial notice, on the basis of the undisputed facts in these
cases, that the same consists of considerable real and other personal kinds of properties. And
since, according to her will, her husband was to be the sole owner thereof during his lifetime,
with full power and authority to dispose of any of them, provided that should there be any
remainder upon his death, such remainder would go to her brothers and sisters, and
furthermore, there is no pretension, much less any proof that Hodges had in fact disposed of all
of them, and, on the contrary, the indications are rather to the effect that he had kept them more
or less intact, it cannot truthfully be said that, upon the death of Hodges, there was no more
estate of Mrs. Hodges to speak of. It is Our conclusion, therefore, that properties do exist which
constitute such estate, hence Special Proceedings 1307 should not yet be closed.

Neither is there basis for holding that respondent Magno has ceased to be the Administratrix in
said proceeding. There is no showing that she has ever been legally removed as such, the
attempt to replace her with Mr. Benito Lopez without authority from the Court having been
expressly held ineffective by Our resolution of September 8, 1972. Parenthetically, on this last
point, PCIB itself is very emphatic in stressing that it is not questioning said respondent's status
as such administratrix. Indeed, it is not clear that PCIB has any standing to raise any objection
thereto, considering it is a complete stranger insofar as the estate of Mrs. Hodges is concerned.

It is the contention of PCIB, however, that as things actually stood at the time of Hodges' death,
their conjugal partnership had not yet been liquidated and, inasmuch as the properties
composing the same were thus commingled pro indiviso and, consequently, the properties
pertaining to the estate of each of the spouses are not yet identifiable, it is PCIB alone, as
administrator of the estate of Hodges, who should administer everything, and all that respondent
Magno can do for the time being is to wait until the properties constituting the remaining estate
of Mrs. Hodges have been duly segregated and delivered to her for her own administration.
Seemingly, PCIB would liken the Testate Estate of Linnie Jane Hodges to a party having a claim
of ownership to some properties included in the inventory of an administrator of the estate of a
decedent, (here that of Hodges) and who normally has no right to take part in the proceedings
pending the establishment of his right or title; for which as a rule it is required that an ordinary
action should be filed, since the probate court is without jurisdiction to pass with finality on
questions of title between the estate of the deceased, on the one hand, and a third party or even
an heir claiming adversely against the estate, on the other.

We do not find such contention sufficiently persuasive. As We see it, the situation obtaining
herein cannot be compared with the claim of a third party the basis of which is alien to the
pending probate proceedings. In the present cases what gave rise to the claim of PCIB of
exclusive ownership by the estate of Hodges over all the properties of the Hodges spouses,
including the share of Mrs. Hodges in the community properties, were the orders of the trial
court issued in the course of the very settlement proceedings themselves, more specifically, the
orders of May 27 and December 14, 1957 so often mentioned above. In other words, the root of
the issue of title between the parties is something that the court itself has done in the exercise of
its probate jurisdiction. And since in the ultimate analysis, the question of whether or not all the
properties herein involved pertain exclusively to the estate of Hodges depends on the legal
meaning and effect of said orders, the claim that respondent court has no jurisdiction to take
cognizance of and decide the said issue is incorrect. If it was within the competence of the court
to issue the root orders, why should it not be within its authority to declare their true significance
and intent, to the end that the parties may know whether or not the estate of Mrs. Hodges had
already been adjudicated by the court, upon the initiative of Hodges, in his favor, to the
exclusion of the other heirs of his wife instituted in her will?

At this point, it bears emphasis again that the main cause of all the present problems
confronting the courts and the parties in these cases was the failure of Hodges to secure, as
executor of his wife's estate, from May, 1957 up to the time of his death in December, 1962, a
period of more than five years, the final adjudication of her estate and the closure of the
proceedings. The record is bare of any showing that he ever exerted any effort towards the
early settlement of said estate. While, on the one hand, there are enough indications, as already
discuss that he had intentions of leaving intact her share of the conjugal properties so that it
may pass wholly to his co-heirs upon his death, pursuant to her will, on the other hand, by not
terminating the proceedings, his interests in his own half of the conjugal properties remained
commingled pro-indiviso with those of his co-heirs in the other half. Obviously, such a situation
could not be conducive to ready ascertainment of the portion of the inheritance that should
appertain to his co-heirs upon his death. Having these considerations in mind, it would be giving
a premium for such procrastination and rather unfair to his co-heirs, if the administrator of his
estate were to be given exclusive administration of all the properties in question, which would
necessarily include the function of promptly liquidating the conjugal partnership, thereby
identifying and segregating without unnecessary loss of time which properties should be
considered as constituting the estate of Mrs. Hodges, the remainder of which her brothers and
sisters are supposed to inherit equally among themselves.

To be sure, an administrator is not supposed to represent the interests of any particular party
and his acts are deemed to be objectively for the protection of the rights of everybody
concerned with the estate of the decedent, and from this point of view, it maybe said that even if
PCIB were to act alone, there should be no fear of undue disadvantage to anyone. On the other
hand, however, it is evidently implicit in section 6 of Rule 78 fixing the priority among those to
whom letters of administration should be granted that the criterion in the selection of the
administrator is not his impartiality alone but, more importantly, the extent of his interest in the
estate, so much so that the one assumed to have greater interest is preferred to another who
has less. Taking both of these considerations into account, inasmuch as, according to Hodges'
own inventory submitted by him as Executor of the estate of his wife, practically all their
properties were conjugal which means that the spouses have equal shares therein, it is but
logical that both estates should be administered jointly by representatives of both, pending their
segregation from each other. Particularly is such an arrangement warranted because the
actuations so far of PCIB evince a determined, albeit groundless, intent to exclude the other
heirs of Mrs. Hodges from their inheritance. Besides, to allow PCIB, the administrator of his
estate, to perform now what Hodges was duty bound to do as executor is to violate the spirit, if
not the letter, of Section 2 of Rule 78 which expressly provides that "The executor of an
executor shall not, as such, administer the estate of the first testator." It goes without saying that
this provision refers also to the administrator of an executor like PCIB here.

We are not unmindful of the fact that under Section 2 of Rule 73, "When the marriage is
dissolved by the death of the husband or 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. If both spouses have died, the conjugal partnership shall be liquidated
in the testate or intestate proceedings of either." Indeed, it is true that the last sentence of this
provision allows or permits the conjugal partnership of spouses who are both deceased to be
settled or liquidated in the testate or intestate proceedings of either, but precisely because said
sentence allows or permits that the liquidation be made in either proceeding, it is a matter of
sound judicial discretion in which one it should be made. After all, the former rule referring to the
administrator of the husband's estate in respect to such liquidation was done away with by Act
3176, the pertinent provisions of which are now embodied in the rule just cited.

Thus, it can be seen that at the time of the death of Hodges, there was already the pending
judicial settlement proceeding of the estate of Mrs. Hodges, and, more importantly, that the
former was the executor of the latter's will who had, as such, failed for more than five years to
see to it that the same was terminated earliest, which was not difficult to do, since from ought
that appears in the record, there were no serious obstacles on the way, the estate not being
indebted and there being no immediate heirs other than Hodges himself. Such dilatory or
indifferent attitude could only spell possible prejudice of his co-heirs, whose rights to inheritance
depend entirely on the existence of any remainder of Mrs. Hodges' share in the community
properties, and who are now faced with the pose of PCIB that there is no such remainder. Had
Hodges secured as early as possible the settlement of his wife's estate, this problem would not
arisen. All things considered, We are fully convinced that the interests of justice will be better
served by not permitting or allowing PCIB or any administrator of the estate of Hodges exclusive
administration of all the properties in question. We are of the considered opinion and so hold
that what would be just and proper is for both administrators of the two estates to act conjointly
until after said estates have been segregated from each other.

At this juncture, it may be stated that we are not overlooking the fact that it is PCIB's contention
that, viewed as a substitution, the testamentary disposition in favor of Mrs. Hodges' brothers
and sisters may not be given effect. To a certain extent, this contention is correct. Indeed,
legally speaking, Mrs. Hodges' will provides neither for a simple or vulgar substitution under
Article 859 of the Civil Code nor for a fideicommissary substitution under Article 863 thereof.
There is no vulgar substitution therein because there is no provision for either (1) predecease of
the testator by the designated heir or (2) refusal or (3) incapacity of the latter to accept the
inheritance, as required by Article 859; and neither is there a fideicommissary substitution
therein because no obligation is imposed thereby upon Hodges to preserve the estate or any
part thereof for anyone else. But from these premises, it is not correct to jump to the conclusion,
as PCIB does, that the testamentary dispositions in question are therefore inoperative and
invalid.

The error in PCIB's position lies simply in the fact that it views the said disposition exclusively in
the light of substitutions covered by the Civil Code section on that subject, (Section 3, Chapter
2, Title IV, Book III) when it is obvious that substitution occurs only when another heir is
appointed in a will "so that he may enter into inheritance in default of the heir originally
instituted," (Article 857, id.) and, in the present case, no such possible default is contemplated.
The brothers and sisters of Mrs. Hodges are not substitutes for Hodges because, under her will,
they are not to inherit what Hodges cannot, would not or may not inherit, but what he would not
dispose of from his inheritance; rather, therefore, they are also heirs instituted simultaneously
with Hodges, subject, however, to certain conditions, partially resolutory insofar as Hodges was
concerned and correspondingly suspensive with reference to his brothers and sisters-in-law. It
is partially resolutory, since it bequeaths unto Hodges the whole of her estate to be owned and
enjoyed by him as universal and sole heir with absolute dominion over them 6 only during his
lifetime, which means that while he could completely and absolutely dispose of any portion
thereof inter vivos to anyone other than himself, he was not free to do so mortis causa, and all
his rights to what might remain upon his death would cease entirely upon the occurrence of that
contingency, inasmuch as the right of his brothers and sisters-in-law to the inheritance, although
vested already upon the death of Mrs. Hodges, would automatically become operative upon the
occurrence of the death of Hodges in the event of actual existence of any remainder of her
estate then.

Contrary to the view of respondent Magno, however, it was not the usufruct alone of her estate,
as contemplated in Article 869 of the Civil Code, that she bequeathed to Hodges during his
lifetime, but the full ownership thereof, although the same was to last also during his lifetime
only, even as there was no restriction whatsoever against his disposing or conveying the whole
or any portion thereof to anybody other than himself. The Court sees no legal impediment to this
kind of institution, in this jurisdiction or under Philippine law, except that it cannot apply to the
legitime of Hodges as the surviving spouse, consisting of one-half of the estate, considering that
Mrs. Hodges had no surviving ascendants nor descendants. (Arts. 872, 900, and 904, New Civil
Code.)

But relative precisely to the question of how much of Mrs. Hodges' share of the conjugal
partnership properties may be considered as her estate, the parties are in disagreement as to
how Article 16 of the Civil Code 7 should be applied. On the one hand, petitioner claims that
inasmuch as Mrs. Hodges was a resident of the Philippines at the time of her death, under said
Article 16, construed in relation to the pertinent laws of Texas and the principle ofrenvoi, what
should be applied here should be the rules of succession under the Civil Code of the
Philippines, and, therefore, her estate could consist of no more than one-fourth of the said
conjugal properties, the other fourth being, as already explained, the legitime of her husband
(Art. 900, Civil Code) which she could not have disposed of nor burdened with any condition
(Art. 872, Civil Code). On the other hand, respondent Magno denies that Mrs. Hodges died a
resident of the Philippines, since allegedly she never changed nor intended to change her
original residence of birth in Texas, United States of America, and contends that, anyway,
regardless of the question of her residence, she being indisputably a citizen of Texas, under
said Article 16 of the Civil Code, the distribution of her estate is subject to the laws of said State
which, according to her, do not provide for any legitime, hence, the brothers and sisters of Mrs.
Hodges are entitled to the remainder of the whole of her share of the conjugal partnership
properties consisting of one-half thereof. Respondent Magno further maintains that, in any
event, Hodges had renounced his rights under the will in favor of his co-heirs, as allegedly
proven by the documents touching on the point already mentioned earlier, the genuineness and
legal significance of which petitioner seemingly questions. Besides, the parties are disagreed as
to what the pertinent laws of Texas provide. In the interest of settling the estates herein involved
soonest, it would be best, indeed, if these conflicting claims of the parties were determined in
these proceedings. The Court regrets, however, that it cannot do so, for the simple reason that
neither the evidence submitted by the parties in the court below nor their discussion, in their
respective briefs and memoranda before Us, of their respective contentions on the pertinent
legal issues, of grave importance as they are, appear to Us to be adequate enough to enable
Us to render an intelligent comprehensive and just resolution. For one thing, there is no clear
and reliable proof of what in fact the possibly applicable laws of Texas are. 7* Then also, the
genuineness of documents relied upon by respondent Magno is disputed. And there are a
number of still other conceivable related issues which the parties may wish to raise but which it
is not proper to mention here. In Justice, therefore, to all the parties concerned, these and all
other relevant matters should first be threshed out fully in the trial court in the proceedings
hereafter to be held therein for the purpose of ascertaining and adjudicating and/or distributing
the estate of Mrs. Hodges to her heirs in accordance with her duly probated will.

To be more explicit, all that We can and do decide in connection with the petition
for certiorari and prohibition are: (1) that regardless of which corresponding laws are applied,
whether of the Philippines or of Texas, and taking for granted either of the respective
contentions of the parties as to provisions of the latter, 8 and regardless also of whether or not it
can be proven by competent evidence that Hodges renounced his inheritance in any degree, it
is easily and definitely discernible from the inventory submitted by Hodges himself, as Executor
of his wife's estate, that there are properties which should constitute the estate of Mrs. Hodges
and ought to be disposed of or distributed among her heirs pursuant to her will in said Special
Proceedings 1307; (2) that, more specifically, inasmuch as the question of what are the
pertinent laws of Texas applicable to the situation herein is basically one of fact, and,
considering that the sole difference in the positions of the parties as to the effect of said laws
has reference to the supposed legitime of Hodges — it being the stand of PCIB that Hodges
had such a legitime whereas Magno claims the negative - it is now beyond controversy for all
future purposes of these proceedings that whatever be the provisions actually of the laws of
Texas applicable hereto, the estate of Mrs. Hodges is at least, one-fourth of the conjugal estate
of the spouses; the existence and effects of foreign laws being questions of fact, and it being the
position now of PCIB that the estate of Mrs. Hodges, pursuant to the laws of Texas, should only
be one-fourth of the conjugal estate, such contention constitutes an admission of fact, and
consequently, it would be in estoppel in any further proceedings in these cases to claim that
said estate could be less, irrespective of what might be proven later to be actually the provisions
of the applicable laws of Texas; (3) that Special Proceedings 1307 for the settlement of the
testate estate of Mrs. Hodges cannot be closed at this stage and should proceed to its logical
conclusion, there having been no proper and legal adjudication or distribution yet of the estate
therein involved; and (4) that respondent Magno remains and continues to be the Administratrix
therein. Hence, nothing in the foregoing opinion is intended to resolve the issues which, as
already stated, are not properly before the Court now, namely, (1) whether or not Hodges had in
fact and in law waived or renounced his inheritance from Mrs. Hodges, in whole or in part, and
(2) assuming there had been no such waiver, whether or not, by the application of Article 16 of
the Civil Code, and in the light of what might be the applicable laws of Texas on the matter, the
estate of Mrs. Hodges is more than the one-fourth declared above. As a matter of fact, even our
finding above about the existence of properties constituting the estate of Mrs. Hodges rests
largely on a general appraisal of the size and extent of the conjugal partnership gathered from
reference made thereto by both parties in their briefs as well as in their pleadings included in the
records on appeal, and it should accordingly yield, as to which exactly those properties are, to
the more concrete and specific evidence which the parties are supposed to present in support of
their respective positions in regard to the foregoing main legal and factual issues. In the interest
of justice, the parties should be allowed to present such further evidence in relation to all these
issues in a joint hearing of the two probate proceedings herein involved. After all, the court a
quo has not yet passed squarely on these issues, and it is best for all concerned that it should
do so in the first instance.

Relative to Our holding above that the estate of Mrs. Hodges cannot be less than the remainder
of one-fourth of the conjugal partnership properties, it may be mentioned here that during the
deliberations, the point was raised as to whether or not said holding might be inconsistent with
Our other ruling here also that, since there is no reliable evidence as to what are the applicable
laws of Texas, U.S.A. "with respect to the order of succession and to the amount of
successional rights" that may be willed by a testator which, under Article 16 of the Civil Code,
are controlling in the instant cases, in view of the undisputed Texan nationality of the deceased
Mrs. Hodges, these cases should be returned to the court a quo, so that the parties may prove
what said law provides, it is premature for Us to make any specific ruling now on either the
validity of the testamentary dispositions herein involved or the amount of inheritance to which
the brothers and sisters of Mrs. Hodges are entitled. After nature reflection, We are of the
considered view that, at this stage and in the state of the records before Us, the feared
inconsistency is more apparent than real. Withal, it no longer lies in the lips of petitioner PCIB to
make any claim that under the laws of Texas, the estate of Mrs. Hodges could in any event be
less than that We have fixed above.

It should be borne in mind that as above-indicated, the question of what are the laws of Texas
governing the matters herein issue is, in the first instance, one of fact, not of law. Elementary is
the rule that foreign laws may not be taken judicial notice of and have to be proven like any
other fact in dispute between the parties in any proceeding, with the rare exception in instances
when the said laws are already within the actual knowledge of the court, such as when they are
well and generally known or they have been actually ruled upon in other cases before it and
none of the parties concerned do not claim otherwise. (5 Moran, Comments on the Rules of
Court, p. 41, 1970 ed.) In Fluemer vs. Hix, 54 Phil. 610, it was held:

It is the theory of the petitioner that the alleged will was executed in Elkins West Virginia, on
November 3, 1925, by Hix who had his residence in that jurisdiction, and that the laws of West
Virginia govern. To this end, there was submitted a copy of section 3868 of Acts 1882, c. 84 as
found in West Virginia Code, Annotated, by Hogg Charles E., vol. 2, 1914, p. 1960, and as
certified to by the Director of the National Library. But this was far from a compliance with the
law. The laws of a foreign jurisdiction do not prove themselves in our courts. The courts of the
Philippine Islands are not authorized to take judicial notice of the laws of the various States of
the American Union. Such laws must be proved as facts. (In re Estate of Johnson [1918], 39
Phil., 156.) Here the requirements of the law were not met. There was no showing that the book
from which an extract was taken was printed or published under the authority of the State of
West Virginia, as provided in section 300 of the Code of Civil Procedure. Nor was the extract
from the law attested by the certificate of the officer having charge of the original, under the seal
of the State of West Virginia, as provided in section 301 of the Code of Civil Procedure. No
evidence was introduced to show that the extract from the laws of West Virginia was in force at
the time the alleged will was executed."

No evidence of the nature thus suggested by the Court may be found in the records of the
cases at bar. Quite to the contrary, the parties herein have presented opposing versions in their
respective pleadings and memoranda regarding the matter. And even if We took into account
that in Aznar vs. Garcia, the Court did make reference to certain provisions regarding
succession in the laws of Texas, the disparity in the material dates of that case and the present
ones would not permit Us to indulge in the hazardous conjecture that said provisions have not
been amended or changed in the meantime.

On the other hand, in In re Estate of Johnson, 39 Phil. 156, We held:

Upon the other point — as to whether the will was executed in conformity with
the statutes of the State of Illinois — we note that it does not affirmatively appear
from the transcription of the testimony adduced in the trial court that any witness
was examined with reference to the law of Illinois on the subject of the execution
of will. The trial judge no doubt was satisfied that the will was properly executed
by examining section 1874 of the Revised Statutes of Illinois, as exhibited in
volume 3 of Starr & Curtis's Annotated Illinois Statutes, 2nd ed., p. 426; and he
may have assumed that he could take judicial notice of the laws of Illinois under
section 275 of the Code of Civil Procedure. If so, he was in our opinion mistaken.
That section authorizes the courts here to take judicial notice, among other
things, of the acts of the legislative department of the United States. These words
clearly have reference to Acts of the Congress of the United States; and we
would hesitate to hold that our courts can, under this provision, take judicial
notice of the multifarious laws of the various American States. Nor do we think
that any such authority can be derived from the broader language, used in the
same section, where it is said that our courts may take judicial notice of matters
of public knowledge "similar" to those therein enumerated. The proper rule we
think is to require proof of the statutes of the States of the American Union
whenever their provisions are determinative of the issues in any action litigated in
the Philippine courts.

Nevertheless, even supposing that the trial court may have erred in taking judicial
notice of the law of Illinois on the point in question, such error is not now
available to the petitioner, first, because the petition does not state any fact from
which it would appear that the law of Illinois is different from what the court found,
and, secondly, because the assignment of error and argument for the appellant
in this court raises no question based on such supposed error. Though the trial
court may have acted upon pure conjecture as to the law prevailing in the State
of Illinois, its judgment could not be set aside, even upon application made within
six months under section 113 of the Code of Civil Procedure, unless it should be
made to appear affirmatively that the conjecture was wrong. The petitioner, it is
true, states in general terms that the will in question is invalid and inadequate to
pass real and personal property in the State of Illinois, but this is merely a
conclusion of law. The affidavits by which the petition is accompanied contain no
reference to the subject, and we are cited to no authority in the appellant's brief
which might tend to raise a doubt as to the correctness of the conclusion of the
 trial court. It is very clear, therefore, that this point cannot be urged as of serious
moment.

It is implicit in the above ruling that when, with respect to certain aspects of the foreign laws
concerned, the parties in a given case do not have any controversy or are more or less in
agreement, the Court may take it for granted for the purposes of the particular case before it
that the said laws are as such virtual agreement indicates, without the need of requiring the
presentation of what otherwise would be the competent evidence on the point. Thus, in the
instant cases wherein it results from the respective contentions of both parties that even if the
pertinent laws of Texas were known and to be applied, the amount of the inheritance pertaining
to the heirs of Mrs. Hodges is as We have fixed above, the absence of evidence to the effect
that, actually and in fact, under said laws, it could be otherwise is of no longer of any
consequence, unless the purpose is to show that it could be more. In other words, since PCIB,
the petitioner-appellant, concedes that upon application of Article 16 of the Civil Code and the
pertinent laws of Texas, the amount of the estate in controversy is just as We have determined
it to be, and respondent-appellee is only claiming, on her part, that it could be more, PCIB may
not now or later pretend differently.

To be more concrete, on pages 20-21 of its petition herein, dated July 31, 1967, PCIB states
categorically:

Inasmuch as Article 16 of the Civil Code provides that "intestate and

testamentary successions both with respect to the order of succession and to the
amount of successional rights and to the intrinsic validity of testamentary
provisions, shall be regulated by the national law of the person whose
succession is under consideration, whatever may be the nature of the property
and regardless of the country wherein said property may be found", while the law
of Texas (the Hodges spouses being nationals of U.S.A., State of Texas), in its
conflicts of law rules, provides that the domiciliary law (in this case Philippine
law) governs the testamentary dispositions and successional rights over
movables or personal properties, while the law of the situs (in this case also
Philippine law with respect to all Hodges properties located in the Philippines),
governs with respect to immovable properties, and applying therefore the 'renvoi
doctrine' as enunciated and applied by this Honorable Court in the case of In re
Estate of Christensen (G.R. No. L-16749, Jan. 31, 1963), there can be no
question that Philippine law governs the testamentary dispositions contained in
the Last Will and Testament of the deceased Linnie Jane Hodges, as well as the
successional rights to her estate, both with respect to movables, as well as to
immovables situated in the Philippines.

In its main brief dated February 26, 1968, PCIB asserts:

The law governing successional rights.

As recited above, there is no question that the deceased, Linnie Jane Hodges,
was an American citizen. There is also no question that she was a national of the
State of Texas, U.S.A. Again, there is likewise no question that she had her
domicile of choice in the City of Iloilo, Philippines, as this has already been
pronounced by the above-cited orders of the lower court, pronouncements which
 are by now res adjudicata (par. [a], See. 49, Rule 39, Rules of Court; In re Estate
of Johnson, 39 Phil. 156).

Article 16 of the Civil Code provides:

"Real property as well as personal property is subject to the law of the country
where it is situated.

However, intestate and testamentary successions, both with respect to the order
of succession and to the amount of successional rights and to the intrinsic validity
of testamentary provisions, shall be regulated by the national law of the person
whose succession is under consideration, whatever may be the nature of the
property and regardless of the country wherein said property may be found."

Thus the aforecited provision of the Civil Code points towards the national law of
the deceased, Linnie Jane Hodges, which is the law of Texas, as governing
succession "both with respect to the order of succession and to the amount of
successional rights and to the intrinsic validity of testamentary provisions ...". But
the law of Texas, in its conflicts of law rules, provides that the domiciliary law
governs the testamentary dispositions and successional rights over movables or
personal property, while the law of the situs governs with respect to immovable
property. Such that with respect to both movable property, as well as immovable
property situated in the Philippines, the law of Texas points to the law of the
Philippines.

Applying, therefore, the so-called "renvoi doctrine", as enunciated and applied by

this Honorable Court in the case of "In re Christensen" (G.R. No. L-16749, Jan.
31, 1963), there can be no question that Philippine law governs the testamentary
provisions in the Last Will and Testament of the deceased Linnie Jane Hodges,
as well as the successional rights to her estate, both with respect to movables,
as well as immovables situated in the Philippines.

The subject of successional rights.

Under Philippine law, as it is under the law of Texas, the conjugal or community
property of the spouses, Charles Newton Hodges and Linnie Jane Hodges, upon
the death of the latter, is to be divided into two, one-half pertaining to each of the
spouses, as his or her own property. Thus, upon the death of Linnie Jane
Hodges, one-half of the conjugal partnership property immediately pertained to
Charles Newton Hodges as his own share, and not by virtue of any successional
rights. There can be no question about this.

Again, Philippine law, or more specifically, Article 900 of the Civil Code provides:

If the only survivor is the widow or widower, she or he shall be

entitled to one-half of the hereditary estate of the deceased
spouse, and the testator may freely dispose of the other half.

If the marriage between the surviving spouse and the testator was
solemnized in articulo mortis, and the testator died within three
 months from the time of the marriage, the legitime of the surviving
spouse as the sole heir shall be one-third of the hereditary estate,
except when they have been living as husband and wife for more
than five years. In the latter case, the legitime of the surviving
spouse shall be that specified in the preceding paragraph.

This legitime of the surviving spouse cannot be burdened by a fideicommisary

substitution (Art. 864, Civil code), nor by any charge, condition, or substitution
(Art, 872, Civil code). It is clear, therefore, that in addition to one-half of the
conjugal partnership property as his own conjugal share, Charles Newton
Hodges was also immediately entitled to one-half of the half conjugal share of the
deceased, Linnie Jane Hodges, or one-fourth of the entire conjugal property, as
his legitime.

One-fourth of the conjugal property therefore remains at issue.

In the summary of its arguments in its memorandum dated April 30, 1968, the following
appears:

Briefly, the position advanced by the petitioner is:

a. That the Hodges spouses were domiciled legally in the Philippines (pp. 19-20,
petition). This is now a matter of res adjudicata (p. 20, petition).

b. That under Philippine law, Texas law, and the renvoi doctrine, Philippine law
governs the successional rights over the properties left by the deceased, Linnie
Jane Hodges (pp. 20-21, petition).

c. That under Philippine as well as Texas law, one-half of the Hodges properties
pertains to the deceased, Charles Newton Hodges (p. 21, petition). This is not
questioned by the respondents.

d. That under Philippine law, the deceased, Charles Newton Hodges,

automatically inherited one-half of the remaining one-half of the Hodges
properties as his legitime (p. 21, petition).

e. That the remaining 25% of the Hodges properties was inherited by the
deceased, Charles Newton Hodges, under the will of his deceased spouse (pp.
22-23, petition). Upon the death of Charles Newton Hodges, the substitution
'provision of the will of the deceased, Linnie Jane Hodges, did not operate
because the same is void (pp. 23-25, petition).

f. That the deceased, Charles Newton Hodges, asserted his sole ownership of
the Hodges properties and the probate court sanctioned such assertion (pp. 25-
29, petition). He in fact assumed such ownership and such was the status of the
properties as of the time of his death (pp. 29-34, petition).

Of similar tenor are the allegations of PCIB in some of its pleadings quoted in the earlier part of
this option.
On her part, it is respondent-appellee Magno's posture that under the laws of Texas, there is no
system of legitime, hence the estate of Mrs. Hodges should be one-half of all the conjugal
properties.

It is thus unquestionable that as far as PCIB is concerned, the application to these cases of
Article 16 of the Civil Code in relation to the corresponding laws of Texas would result in that the
Philippine laws on succession should control. On that basis, as We have already explained
above, the estate of Mrs. Hodges is the remainder of one-fourth of the conjugal partnership
properties, considering that We have found that there is no legal impediment to the kind of
disposition ordered by Mrs. Hodges in her will in favor of her brothers and sisters and, further,
that the contention of PCIB that the same constitutes an inoperative testamentary substitution is
untenable. As will be recalled, PCIB's position that there is no such estate of Mrs. Hodges is
predicated exclusively on two propositions, namely: (1) that the provision in question in Mrs.
Hodges' testament violates the rules on substitution of heirs under the Civil Code and (2) that, in
any event, by the orders of the trial court of May 27, and December 14, 1957, the trial court had
already finally and irrevocably adjudicated to her husband the whole free portion of her estate to
the exclusion of her brothers and sisters, both of which poses, We have overruled. Nowhere in
its pleadings, briefs and memoranda does PCIB maintain that the application of the laws of
Texas would result in the other heirs of Mrs. Hodges not inheriting anything under her will. And
since PCIB's representations in regard to the laws of Texas virtually constitute admissions of
fact which the other parties and the Court are being made to rely and act upon, PCIB is "not
permitted to contradict them or subsequently take a position contradictory to or inconsistent with
them." (5 Moran, id, p. 65, citing Cunanan vs. Amparo, 80 Phil. 227; Sta. Ana vs. Maliwat, L-
23023, Aug. 31, 1968, 24 SCRA 1018).

Accordingly, the only question that remains to be settled in the further proceedings hereby
ordered to be held in the court below is how much more than as fixed above is the estate of
Mrs. Hodges, and this would depend on (1) whether or not the applicable laws of Texas do
provide in effect for more, such as, when there is no legitime provided therein, and (2) whether
or not Hodges has validly waived his whole inheritance from Mrs. Hodges.

In the course of the deliberations, it was brought out by some members of the Court that to
avoid or, at least, minimize further protracted legal controversies between the respective heirs of
the Hodges spouses, it is imperative to elucidate on the possible consequences of dispositions
made by Hodges after the death of his wife from the mass of the unpartitioned estates without
any express indication in the pertinent documents as to whether his intention is to dispose of
part of his inheritance from his wife or part of his own share of the conjugal estate as well as of
those made by PCIB after the death of Hodges. After a long discussion, the consensus arrived
at was as follows: (1) any such dispositions made gratuitously in favor of third parties, whether
these be individuals, corporations or foundations, shall be considered as intended to be of
properties constituting part of Hodges' inheritance from his wife, it appearing from the tenor of
his motions of May 27 and December 11, 1957 that in asking for general authority to make sales
or other disposals of properties under the jurisdiction of the court, which include his own share
of the conjugal estate, he was not invoking particularly his right over his own share, but rather
his right to dispose of any part of his inheritance pursuant to the will of his wife; (2) as regards
sales, exchanges or other remunerative transfers, the proceeds of such sales or the properties
taken in by virtue of such exchanges, shall be considered as merely the products of "physical
changes" of the properties of her estate which the will expressly authorizes Hodges to make,
provided that whatever of said products should remain with the estate at the time of the death of
Hodges should go to her brothers and sisters; (3) the dispositions made by PCIB after the death
of Hodges must naturally be deemed as covering only the properties belonging to his estate
considering that being only the administrator of the estate of Hodges, PCIB could not have
disposed of properties belonging to the estate of his wife. Neither could such dispositions be
considered as involving conjugal properties, for the simple reason that the conjugal partnership
automatically ceased when Mrs. Hodges died, and by the peculiar provision of her will, under
discussion, the remainder of her share descended also automatically upon the death of Hodges
to her brothers and sisters, thus outside of the scope of PCIB's administration. Accordingly,
these construction of the will of Mrs. Hodges should be adhered to by the trial court in its final
order of adjudication and distribution and/or partition of the two estates in question.

THE APPEALS

A cursory examination of the seventy-eight assignments of error in appellant PCIB's brief would
readily reveal that all of them are predicated mainly on the contention that inasmuch as Hodges
had already adjudicated unto himself all the properties constituting his wife's share of the
conjugal partnership, allegedly with the sanction of the trial court per its order of December 14,
1957, there has been, since said date, no longer any estate of Mrs. Hodges of which appellee
Magno could be administratrix, hence the various assailed orders sanctioning her actuations as
such are not in accordance with law. Such being the case, with the foregoing resolution holding
such posture to be untenable in fact and in law and that it is in the best interest of justice that for
the time being the two estates should be administered conjointly by the respective
administrators of the two estates, it should follow that said assignments of error have lost their
fundamental reasons for being. There are certain matters, however, relating peculiarly to the
respective orders in question, if commonly among some of them, which need further
clarification. For instance, some of them authorized respondent Magno to act alone or without
concurrence of PCIB. And with respect to many of said orders, PCIB further claims that either
the matters involved were not properly within the probate jurisdiction of the trial court or that the
procedure followed was not in accordance with the rules. Hence, the necessity of dealing
separately with the merits of each of the appeals.

Indeed, inasmuch as the said two estates have until now remained commingled pro-indiviso,
due to the failure of Hodges and the lower court to liquidate the conjugal partnership, to
recognize appellee Magno as Administratrix of the Testate Estate of Mrs. Hodges which is still
unsegregated from that of Hodges is not to say, without any qualification, that she was therefore
authorized to do and perform all her acts complained of in these appeals, sanctioned though
they might have been by the trial court. As a matter of fact, it is such commingling pro-indivisoof
the two estates that should deprive appellee of freedom to act independently from PCIB, as
administrator of the estate of Hodges, just as, for the same reason, the latter should not have
authority to act independently from her. And considering that the lower court failed to adhere
consistently to this basic point of view, by allowing the two administrators to act independently of
each other, in the various instances already noted in the narration of facts above, the Court has
to look into the attendant circumstances of each of the appealed orders to be able to determine
whether any of them has to be set aside or they may all be legally maintained notwithstanding
the failure of the court a quo to observe the pertinent procedural technicalities, to the end only
that graver injury to the substantive rights of the parties concerned and unnecessary and
undesirable proliferation of incidents in the subject proceedings may be forestalled. In other
words, We have to determine, whether or not, in the light of the unusual circumstances extant in
the record, there is need to be more pragmatic and to adopt a rather unorthodox approach, so
as to cause the least disturbance in rights already being exercised by numerous innocent third
parties, even if to do so may not appear to be strictly in accordance with the letter of the
applicable purely adjective rules.

Incidentally, it may be mentioned, at this point, that it was principally on account of the confusion
that might result later from PCIB's continuing to administer all the community properties,
notwithstanding the certainty of the existence of the separate estate of Mrs. Hodges, and to
enable both estates to function in the meantime with a relative degree of regularity, that the
Court ordered in the resolution of September 8, 1972 the modification of the injunction issued
pursuant to the resolutions of August 8, October 4 and December 6, 1967, by virtue of which
respondent Magno was completely barred from any participation in the administration of the
properties herein involved. In the September 8 resolution, We ordered that, pending this
decision, Special Proceedings 1307 and 1672 should proceed jointly and that the respective
administrators therein "act conjointly — none of them to act singly and independently of each
other for any purpose." Upon mature deliberation, We felt that to allow PCIB to continue
managing or administering all the said properties to the exclusion of the administratrix of Mrs.
Hodges' estate might place the heirs of Hodges at an unduly advantageous position which could
result in considerable, if not irreparable, damage or injury to the other parties concerned. It is
indeed to be regretted that apparently, up to this date, more than a year after said resolution,
the same has not been given due regard, as may be gleaned from the fact that recently,
respondent Magno has filed in these proceedings a motion to declare PCIB in contempt for
alleged failure to abide therewith, notwithstanding that its repeated motions for reconsideration
thereof have all been denied soon after they were filed. 9

Going back to the appeals, it is perhaps best to begin first with what appears to Our mind to be
the simplest, and then proceed to the more complicated ones in that order, without regard to the
numerical sequence of the assignments of error in appellant's brief or to the order of the
discussion thereof by counsel.

Assignments of error numbers

LXXII, LXXVII and LXXVIII.

These assignments of error relate to (1) the order of the trial court of August 6, 1965 providing
that "the deeds of sale (therein referred to involving properties in the name of Hodges) should
be signed jointly by the PCIB, as Administrator of Testate Estate of C.N. Hodges, and Avelina A.
Magno, as Administratrix of the Testate Estate of Linnie Jane Hodges, and to this effect, the
PCIB should take the necessary steps so that Administratrix Avelina A. Magno could sign the
deeds of sale," (p. 248, Green Rec. on Appeal) (2) the order of October 27, 1965 denying the
motion for reconsideration of the foregoing order, (pp. 276-277, id.) (3) the other order also
dated October 27, 1965 enjoining inter alia, that "(a) all cash collections should be deposited in
the joint account of the estate of Linnie Jane Hodges and estate of C. N. Hodges, (b) that
whatever cash collections (that) had been deposited in the account of either of the estates
should be withdrawn and since then (sic) deposited in the joint account of the estate of Linnie
Jane Hodges and the estate of C. N. Hodges; ... (d) (that) Administratrix Magno — allow the
PCIB to inspect whatever records, documents and papers she may have in her possession, in
the same manner that Administrator PCIB is also directed to allow Administratrix Magno to
inspect whatever records, documents and papers it may have in its possession" and "(e) that
the accountant of the estate of Linnie Jane Hodges shall have access to all records of the
transactions of both estates for the protection of the estate of Linnie Jane Hodges; and in like
manner, the accountant or any authorized representative of the estate of C. N. Hodges shall
have access to the records of transactions of the Linnie Jane Hodges estate for the protection of
the estate of C. N. Hodges", (pp. 292-295, id.) and (4) the order of February 15, 1966, denying,
among others, the motion for reconsideration of the order of October 27, 1965 last referred to.
(pp. 455-456, id.)

As may be readily seen, the thrust of all these four impugned orders is in line with the Court's
above-mentioned resolution of September 8, 1972 modifying the injunction previously issued on
August 8, 1967, and, more importantly, with what We have said the trial court should have
always done pending the liquidation of the conjugal partnership of the Hodges spouses. In fact,
as already stated, that is the arrangement We are ordering, by this decision, to be followed.
Stated differently, since the questioned orders provide for joint action by the two administrators,
and that is precisely what We are holding out to have been done and should be done until the
two estates are separated from each other, the said orders must be affirmed. Accordingly the
foregoing assignments of error must be, as they are hereby overruled.

Assignments of error Numbers LXVIII

to LXXI and LXXIII to LXXVI.

The orders complained of under these assignments of error commonly deal with expenditures
made by appellee Magno, as Administratrix of the Estate of Mrs. Hodges, in connection with her
administration thereof, albeit additionally, assignments of error Numbers LXIX to LXXI put into
question the payment of attorneys fees provided for in the contract for the purpose, as
constituting, in effect, premature advances to the heirs of Mrs. Hodges.

More specifically, assignment Number LXXIII refers to reimbursement of overtime pay paid to
six employees of the court and three other persons for services in copying the court records to
enable the lawyers of the administration to be fully informed of all the incidents in the
proceedings. The reimbursement was approved as proper legal expenses of administration per
the order of December 19, 1964, (pp. 221-222, id.) and repeated motions for reconsideration
thereof were denied by the orders of January 9, 1965, (pp. 231-232, id.) October 27, 1965, (p.
277, id.) and February 15, 1966. (pp. 455-456, id.) On the other hand, Assignments Numbers
LXVIII to LXXI, LXXIV and LXXV question the trial court's order of November 3, 1965 approving
the agreement of June 6, 1964 between Administratrix Magno and James L. Sullivan, attorney-
in-fact of the heirs of Mrs. Hodges, as Parties of the First Part, and Attorneys Raul Manglapus
and Rizal R. Quimpo, as Parties of the Second Part, regarding attorneys fees for said counsel
who had agreed "to prosecute and defend their interests (of the Parties of the First Part) in
certain cases now pending litigation in the Court of First Instance of Iloilo —, more specifically in
Special Proceedings 1307 and 1672 —" (pp. 126-129, id.) and directing Administratrix Magno
"to issue and sign whatever check or checks maybe needed to implement the approval of the
agreement annexed to the motion" as well as the "administrator of the estate of C. N. Hodges —
to countersign the said check or checks as the case maybe." (pp. 313-320, id.), reconsideration
of which order of approval was denied in the order of February 16, 1966, (p. 456,id.)
Assignment Number LXXVI imputes error to the lower court's order of October 27, 1965, already
referred to above, insofar as it orders that "PCIB should counter sign the check in the amount of
P250 in favor of Administratrix Avelina A. Magno as her compensation as administratrix of
Linnie Jane Hodges estate chargeable to the Testate Estate of Linnie Jane Hodges only." (p.
294, id.)

Main contention again of appellant PCIB in regard to these eight assigned errors is that there is
no such estate as the estate of Mrs. Hodges for which the questioned expenditures were made,
hence what were authorized were in effect expenditures from the estate of Hodges. As We have
already demonstrated in Our resolution above of the petition for certiorari and prohibition, this
posture is incorrect. Indeed, in whichever way the remaining issues between the parties in these
cases are ultimately resolved, 10 the final result will surely be that there are properties
constituting the estate of Mrs. Hodges of which Magno is the current administratrix. It follows,
therefore, that said appellee had the right, as such administratrix, to hire the persons whom she
paid overtime pay and to be paid for her own services as administratrix. That she has not yet
collected and is not collecting amounts as substantial as that paid to or due appellant PCIB is to
her credit.

Of course, she is also entitled to the services of counsel and to that end had the authority to
enter into contracts for attorney's fees in the manner she had done in the agreement of June 6,
1964. And as regards to the reasonableness of the amount therein stipulated, We see no
reason to disturb the discretion exercised by the probate court in determining the same. We
have gone over the agreement, and considering the obvious size of the estate in question and
the nature of the issues between the parties as well as the professional standing of counsel, We
cannot say that the fees agreed upon require the exercise by the Court of its inherent power to
reduce it.

PCIB insists, however, that said agreement of June 6, 1964 is not for legal services to the estate
but to the heirs of Mrs. Hodges, or, at most, to both of them, and such being the case, any
payment under it, insofar as counsels' services would redound to the benefit of the heirs, would
be in the nature of advances to such heirs and a premature distribution of the estate. Again, We
hold that such posture cannot prevail.

Upon the premise We have found plausible that there is an existing estate of Mrs. Hodges, it
results that juridically and factually the interests involved in her estate are distinct and different
from those involved in her estate of Hodges and vice versa. Insofar as the matters related
exclusively to the estate of Mrs. Hodges, PCIB, as administrator of the estate of Hodges, is a
complete stranger and it is without personality to question the actuations of the administratrix
thereof regarding matters not affecting the estate of Hodges. Actually, considering the obviously
considerable size of the estate of Mrs. Hodges, We see no possible cause for apprehension that
when the two estates are segregated from each other, the amount of attorney's fees stipulated
in the agreement in question will prejudice any portion that would correspond to Hodges' estate.

And as regards the other heirs of Mrs. Hodges who ought to be the ones who should have a say
on the attorney's fees and other expenses of administration assailed by PCIB, suffice it to say
that they appear to have been duly represented in the agreement itself by their attorney-in-fact,
James L. Sullivan and have not otherwise interposed any objection to any of the expenses
incurred by Magno questioned by PCIB in these appeals. As a matter of fact, as ordered by the
trial court, all the expenses in question, including the attorney's fees, may be paid without
awaiting the determination and segregation of the estate of Mrs. Hodges.

Withal, the weightiest consideration in connection with the point under discussion is that at this
stage of the controversy among the parties herein, the vital issue refers to the existence or non-
existence of the estate of Mrs. Hodges. In this respect, the interest of respondent Magno, as the
appointed administratrix of the said estate, is to maintain that it exists, which is naturally
common and identical with and inseparable from the interest of the brothers and sisters of Mrs.
Hodges. Thus, it should not be wondered why both Magno and these heirs have seemingly
agreed to retain but one counsel. In fact, such an arrangement should be more convenient and
economical to both. The possibility of conflict of interest between Magno and the heirs of Mrs.
Hodges would be, at this stage, quite remote and, in any event, rather insubstantial. Besides,
should any substantial conflict of interest between them arise in the future, the same would be a
matter that the probate court can very well take care of in the course of the independent
proceedings in Case No. 1307 after the corresponding segregation of the two subject estates.
We cannot perceive any cogent reason why, at this stage, the estate and the heirs of Mrs.
Hodges cannot be represented by a common counsel.

Now, as to whether or not the portion of the fees in question that should correspond to the heirs
constitutes premature partial distribution of the estate of Mrs. Hodges is also a matter in which
neither PCIB nor the heirs of Hodges have any interest. In any event, since, as far as the
records show, the estate has no creditors and the corresponding estate and inheritance taxes,
except those of the brothers and sisters of Mrs. Hodges, have already been paid, 11 no prejudice
can caused to anyone by the comparatively small amount of attorney's fees in question. And in
this connection, it may be added that, although strictly speaking, the attorney's fees of the
counsel of an administrator is in the first instance his personal responsibility, reimbursable later
on by the estate, in the final analysis, when, as in the situation on hand, the attorney-in-fact of
the heirs has given his conformity thereto, it would be idle effort to inquire whether or not the
sanction given to said fees by the probate court is proper.

For the foregoing reasons, Assignments of Error LXVIII to LXXI and LXXIII to LXXVI should be
as they are hereby overruled.

Assignments of error I to IV,

XIII to XV, XXII to XXV, XXXV
to XXX VI, XLI to XLIII and L.

These assignments of error deal with the approval by the trial court of various deeds of sale of
real properties registered in the name of Hodges but executed by appellee Magno, as
Administratrix of the Estate of Mrs. Hodges, purportedly in implementation of corresponding
supposed written "Contracts to Sell" previously executed by Hodges during the interim between
May 23, 1957, when his wife died, and December 25, 1962, the day he died. As stated on pp.
118-120 of appellant's main brief, "These are: the, contract to sell between the deceased,
Charles Newton Hodges, and the appellee, Pepito G. Iyulores executed on February 5, 1961;
the contract to sell between the deceased, Charles Newton Hodges, and the appellant
Esperidion Partisala, executed on April 20, 1960; the contract to sell between the deceased,
Charles Newton Hodges, and the appellee, Winifredo C. Espada, executed on April 18, 1960;
the contract to sell between the deceased, Charles Newton Hodges, and the appellee, Rosario
Alingasa, executed on August 25, 1958; the contract to sell between the deceased, Charles
Newton Hodges, and the appellee, Lorenzo Carles, executed on June 17, 1958; the contract to
sell between the deceased, Charles Newton Hodges, and the appellee, Salvador S. Guzman,
executed on September 13, 1960; the contract to sell between the deceased, Charles Newton
Hodges, and the appellee, Florenia Barrido, executed on February 21, 1958; the contract to sell
between the deceased, Charles Newton Hodges, and the appellee, Purificacion Coronado,
executed on August 14, 1961; the contract to sell between the deceased, Charles Newton
Hodges, and the appellee, Graciano Lucero, executed on November 27, 1961; the contract to
sell between the deceased, Charles Newton Hodges, and the appellee, Ariteo Thomas Jamir,
executed on May 26, 1961; the contract to sell between the deceased, Charles Newton Hodges,
and the appellee, Melquiades Batisanan, executed on June 9, 1959; the contract to sell
between the deceased, Charles Newton Hodges, and the appellee, Belcezar Causing, executed
on February 10, 1959 and the contract to sell between the deceased, Charles Newton Hodges,
and the appellee, Adelfa Premaylon, executed on October 31, 1959, re Title No. 13815."

Relative to these sales, it is the position of appellant PCIB that, inasmuch as pursuant to the will
of Mrs. Hodges, her husband was to have dominion over all her estate during his lifetime, it was
as absolute owner of the properties respectively covered by said sales that he executed the
aforementioned contracts to sell, and consequently, upon his death, the implementation of said
contracts may be undertaken only by the administrator of his estate and not by the
administratrix of the estate of Mrs. Hodges. Basically, the same theory is invoked with particular
reference to five other sales, in which the respective "contracts to sell" in favor of these
appellees were executed by Hodges before the death of his wife, namely, those in favor of
appellee Santiago Pacaonsis, Alfredo Catedral, Jose Pablico, Western Institute of Technology
and Adelfa Premaylon.

Anent those deeds of sale based on promises or contracts to sell executed by Hodges after the
death of his wife, those enumerated in the quotation in the immediately preceding paragraph, it
is quite obvious that PCIB's contention cannot be sustained. As already explained earlier, 1 1* all
proceeds of remunerative transfers or dispositions made by Hodges after the death of his wife
should be deemed as continuing to be parts of her estate and, therefore, subject to the terms of
her will in favor of her brothers and sisters, in the sense that should there be no showing that
such proceeds, whether in cash or property have been subsequently conveyed or assigned
subsequently by Hodges to any third party by acts inter vivos with the result that they could not
thereby belong to him anymore at the time of his death, they automatically became part of the
inheritance of said brothers and sisters. The deeds here in question involve transactions which
are exactly of this nature. Consequently, the payments made by the appellees should be
considered as payments to the estate of Mrs. Hodges which is to be distributed and partitioned
among her heirs specified in the will.

The five deeds of sale predicated on contracts to sell executed Hodges during the lifetime of his
wife, present a different situation. At first blush, it would appear that as to them, PCIB's position
has some degree of plausibility. Considering, however, that the adoption of PCIB's theory would
necessarily have tremendous repercussions and would bring about considerable disturbance of
property rights that have somehow accrued already in favor of innocent third parties, the five
purchasers aforenamed, the Court is inclined to take a pragmatic and practical view of the legal
situation involving them by overlooking the possible technicalities in the way, the non-
observance of which would not, after all, detract materially from what should substantially
correspond to each and all of the parties concerned.

To start with, these contracts can hardly be ignored. Bona fide third parties are involved; as
much as possible, they should not be made to suffer any prejudice on account of judicial
controversies not of their own making. What is more, the transactions they rely on were
submitted by them to the probate court for approval, and from already known and recorded
actuations of said court then, they had reason to believe that it had authority to act on their
motions, since appellee Magno had, from time to time prior to their transactions with her, been
allowed to act in her capacity as administratrix of one of the subject estates either alone or
conjointly with PCIB. All the sales in question were executed by Magno in 1966 already, but
before that, the court had previously authorized or otherwise sanctioned expressly many of her
act as administratrix involving expenditures from the estate made by her either conjointly with or
independently from PCIB, as Administrator of the Estate of Hodges. Thus, it may be said that
said buyers-appellees merely followed precedents in previous orders of the court. Accordingly,
unless the impugned orders approving those sales indubitably suffer from some clearly fatal
infirmity the Court would rather affirm them.

It is quite apparent from the record that the properties covered by said sales are equivalent only
to a fraction of what should constitute the estate of Mrs. Hodges, even if it is assumed that the
same would finally be held to be only one-fourth of the conjugal properties of the spouses as of
the time of her death or, to be more exact, one-half of her estate as per the inventory submitted
by Hodges as executor, on May 12, 1958. In none of its numerous, varied and voluminous
pleadings, motions and manifestations has PCIB claimed any possibility otherwise. Such being
the case, to avoid any conflict with the heirs of Hodges, the said properties covered by the
questioned deeds of sale executed by appellee Magno may be treated as among those
corresponding to the estate of Mrs. Hodges, which would have been actually under her control
and administration had Hodges complied with his duty to liquidate the conjugal partnership.
Viewing the situation in that manner, the only ones who could stand to be prejudiced by the
appealed orders referred to in the assignment of errors under discussion and who could,
therefore, have the requisite interest to question them would be only the heirs of Mrs. Hodges,
definitely not PCIB.

It is of no moment in what capacity Hodges made the "contracts to sell' after the death of his
wife. Even if he had acted as executor of the will of his wife, he did not have to submit those
contracts to the court nor follow the provisions of the rules, (Sections 2, 4, 5, 6, 8 and 9 of Rule
89 quoted by appellant on pp. 125 to 127 of its brief) for the simple reason that by the very
orders, much relied upon by appellant for other purposes, of May 27, 1957 and December 14,
1957, Hodges was "allowed or authorized" by the trial court "to continue the business in which
he was engaged and to perform acts which he had been doing while the deceased was living",
(Order of May 27) which according to the motion on which the court acted was "of buying and
selling personal and real properties", and "to execute subsequent sales, conveyances, leases
and mortgages of the properties left by the said deceased Linnie Jane Hodges in consonance
with the wishes conveyed in the last will and testament of the latter." (Order of December 14) In
other words, if Hodges acted then as executor, it can be said that he had authority to do so by
virtue of these blanket orders, and PCIB does not question the legality of such grant of authority;
on the contrary, it is relying on the terms of the order itself for its main contention in these cases.
On the other hand, if, as PCIB contends, he acted as heir-adjudicatee, the authority given to him
by the aforementioned orders would still suffice.

As can be seen, therefore, it is of no moment whether the "contracts to sell" upon which the
deeds in question were based were executed by Hodges before or after the death of his wife. In
a word, We hold, for the reasons already stated, that the properties covered by the deeds being
assailed pertain or should be deemed as pertaining to the estate of Mrs. Hodges; hence, any
supposed irregularity attending the actuations of the trial court may be invoked only by her heirs,
not by PCIB, and since the said heirs are not objecting, and the defects pointed out not being
strictly jurisdictional in nature, all things considered, particularly the unnecessary disturbance of
rights already created in favor of innocent third parties, it is best that the impugned orders are
not disturbed.

In view of these considerations, We do not find sufficient merit in the assignments of error under
discussion.
Assignments of error V to VIII,
XVI to XVIII, XXVI to XXIX, XXXVII
to XXXVIII, XLIV to XLVI and LI.

All these assignments of error commonly deal with alleged non-fulfillment by the respective
vendees, appellees herein, of the terms and conditions embodied in the deeds of sale referred
to in the assignments of error just discussed. It is claimed that some of them never made full
payments in accordance with the respective contracts to sell, while in the cases of the others,
like Lorenzo Carles, Jose Pablico, Alfredo Catedral and Salvador S. Guzman, the contracts with
them had already been unilaterally cancelled by PCIB pursuant to automatic rescission clauses
contained in them, in view of the failure of said buyers to pay arrearages long overdue. But
PCIB's posture is again premised on its assumption that the properties covered by the deeds in
question could not pertain to the estate of Mrs. Hodges. We have already held above that, it
being evident that a considerable portion of the conjugal properties, much more than the
properties covered by said deeds, would inevitably constitute the estate of Mrs. Hodges, to
avoid unnecessary legal complications, it can be assumed that said properties form part of such
estate. From this point of view, it is apparent again that the questions, whether or not it was
proper for appellee Magno to have disregarded the cancellations made by PCIB, thereby
reviving the rights of the respective buyers-appellees, and, whether or not the rules governing
new dispositions of properties of the estate were strictly followed, may not be raised by PCIB
but only by the heirs of Mrs. Hodges as the persons designated to inherit the same, or perhaps
the government because of the still unpaid inheritance taxes. But, again, since there is no
pretense that any objections were raised by said parties or that they would necessarily be
prejudiced, the contentions of PCIB under the instant assignments of error hardly merit any
consideration.

Assignments of error IX to XII, XIX

to XXI, XXX to XXIV, XXXIX to XL,
XLVII to XLIX, LII and LIII to LXI.

PCIB raises under these assignments of error two issues which according to it are fundamental,
namely: (1) that in approving the deeds executed by Magno pursuant to contracts to sell already
cancelled by it in the performance of its functions as administrator of the estate of Hodges, the
trial court deprived the said estate of the right to invoke such cancellations it (PCIB) had made
and (2) that in so acting, the court "arrogated unto itself, while acting as a probate court, the
power to determine the contending claims of third parties against the estate of Hodges over real
property," since it has in effect determined whether or not all the terms and conditions of the
respective contracts to sell executed by Hodges in favor of the buyers-appellees concerned
were complied with by the latter. What is worse, in the view of PCIB, is that the court has taken
the word of the appellee Magno, "a total stranger to his estate as determinative of the issue".

Actually, contrary to the stand of PCIB, it is this last point regarding appellee Magno's having
agreed to ignore the cancellations made by PCIB and allowed the buyers-appellees to
consummate the sales in their favor that is decisive. Since We have already held that the
properties covered by the contracts in question should be deemed to be portions of the estate of
Mrs. Hodges and not that of Hodges, it is PCIB that is a complete stranger in these incidents.
Considering, therefore, that the estate of Mrs. Hodges and her heirs who are the real parties in
interest having the right to oppose the consummation of the impugned sales are not objecting,
and that they are the ones who are precisely urging that said sales be sanctioned, the
assignments of error under discussion have no basis and must accordingly be as they are
hereby overruled.

With particular reference to assignments LIII to LXI, assailing the orders of the trial court
requiring PCIB to surrender the respective owner's duplicate certificates of title over the
properties covered by the sales in question and otherwise directing the Register of Deeds of
Iloilo to cancel said certificates and to issue new transfer certificates of title in favor of the
buyers-appellees, suffice it to say that in the light of the above discussion, the trial court was
within its rights to so require and direct, PCIB having refused to give way, by withholding said
owners' duplicate certificates, of the corresponding registration of the transfers duly and legally
approved by the court.

Assignments of error LXII to LXVII

All these assignments of error commonly deal with the appeal against orders favoring appellee
Western Institute of Technology. As will be recalled, said institute is one of the buyers of real
property covered by a contract to sell executed by Hodges prior to the death of his wife. As of
October, 1965, it was in arrears in the total amount of P92,691.00 in the payment of its
installments on account of its purchase, hence it received under date of October 4, 1965 and
October 20, 1965, letters of collection, separately and respectively, from PCIB and appellee
Magno, in their respective capacities as administrators of the distinct estates of the Hodges
spouses, albeit, while in the case of PCIB it made known that "no other arrangement can be
accepted except by paying all your past due account", on the other hand, Magno merely said
she would "appreciate very much if you can make some remittance to bring this account up-to-
date and to reduce the amount of the obligation." (See pp. 295-311, Green R. on A.) On
November 3, 1965, the Institute filed a motion which, after alleging that it was ready and willing
to pay P20,000 on account of its overdue installments but uncertain whether it should pay PCIB
or Magno, it prayed that it be "allowed to deposit the aforesaid amount with the court pending
resolution of the conflicting claims of the administrators." Acting on this motion, on November
23, 1965, the trial court issued an order, already quoted in the narration of facts in this opinion,
holding that payment to both or either of the two administrators is "proper and legal", and so
"movant — can pay to both estates or either of them", considering that "in both cases (Special
Proceedings 1307 and 1672) there is as yet no judicial declaration of heirs nor distribution of
properties to whomsoever are entitled thereto."

The arguments under the instant assignments of error revolve around said order. From the
procedural standpoint, it is claimed that PCIB was not served with a copy of the Institute's
motion, that said motion was heard, considered and resolved on November 23, 1965, whereas
the date set for its hearing was November 20, 1965, and that what the order grants is different
from what is prayed for in the motion. As to the substantive aspect, it is contended that the
matter treated in the motion is beyond the jurisdiction of the probate court and that the order
authorized payment to a person other than the administrator of the estate of Hodges with whom
the Institute had contracted.

The procedural points urged by appellant deserve scant consideration. We must assume,
absent any clear proof to the contrary, that the lower court had acted regularly by seeing to it
that appellant was duly notified. On the other hand, there is nothing irregular in the court's
having resolved the motion three days after the date set for hearing the same. Moreover, the
record reveals that appellants' motion for reconsideration wherein it raised the same points was
denied by the trial court on March 7, 1966 (p. 462, Green R. on A.) Withal, We are not
convinced that the relief granted is not within the general intent of the Institute's motion.

Insofar as the substantive issues are concerned, all that need be said at this point is that they
are mere reiterations of contentions We have already resolved above adversely to appellants'
position. Incidentally, We may add, perhaps, to erase all doubts as to the propriety of not
disturbing the lower court's orders sanctioning the sales questioned in all these appeal s by
PCIB, that it is only when one of the parties to a contract to convey property executed by a
deceased person raises substantial objections to its being implemented by the executor or
administrator of the decedent's estate that Section 8 of Rule 89 may not apply and,
consequently, the matter has, to be taken up in a separate action outside of the probate court;
but where, as in the cases of the sales herein involved, the interested parties are in agreement
that the conveyance be made, it is properly within the jurisdiction of the probate court to give its
sanction thereto pursuant to the provisions of the rule just mentioned. And with respect to the
supposed automatic rescission clauses contained in the contracts to sell executed by Hodges in
favor of herein appellees, the effect of said clauses depend on the true nature of the said
contracts, despite the nomenclature appearing therein, which is not controlling, for if they
amount to actual contracts of sale instead of being mere unilateral accepted "promises to sell",
(Art. 1479, Civil Code of the Philippines, 2nd paragraph) thepactum commissorium or the
automatic rescission provision would not operate, as a matter of public policy, unless there has
been a previous notarial or judicial demand by the seller (10 Manresa 263, 2nd ed.) neither of
which have been shown to have been made in connection with the transactions herein involved.

Consequently, We find no merit in the assignments of error

Number LXII to LXVII.

SUMMARY

Considering the fact that this decision is unusually extensive and that the issues herein taken up
and resolved are rather numerous and varied, what with appellant making seventy-eight
assignments of error affecting no less than thirty separate orders of the court a quo, if only to
facilitate proper understanding of the import and extent of our rulings herein contained, it is
perhaps desirable that a brief restatement of the whole situation be made together with our
conclusions in regard to its various factual and legal aspects. .

The instant cases refer to the estate left by the late Charles Newton Hodges as well as that of
his wife, Linnie Jane Hodges, who predeceased him by about five years and a half. In their
respective wills which were executed on different occasions, each one of them provided
mutually as follows: "I give, devise and bequeath all of the rest, residue and remainder (after
funeral and administration expenses, taxes and debts) of my estate, both real and personal,
wherever situated or located, to my beloved (spouse) to have and to hold unto (him/her) —
during (his/her) natural lifetime", subject to the condition that upon the death of whoever of them
survived the other, the remainder of what he or she would inherit from the other is "give(n),
devise(d) and bequeath(ed)" to the brothers and sisters of the latter.

Mrs. Hodges died first, on May 23, 1957. Four days later, on May 27, Hodges was appointed
special administrator of her estate, and in a separate order of the same date, he was "allowed or
authorized to continue the business in which he was engaged, (buying and selling personal and
real properties) and to perform acts which he had been doing while the deceased was living."
Subsequently, on December 14, 1957, after Mrs. Hodges' will had been probated and Hodges
had been appointed and had qualified as Executor thereof, upon his motion in which he
asserted that he was "not only part owner of the properties left as conjugal, but also, the
successor to all the properties left by the deceased Linnie Jane Hodges", the trial court ordered
that "for the reasons stated in his motion dated December 11, 1957, which the Court considers
well taken, ... all the sales, conveyances, leases and mortgages of all properties left by the
deceased Linnie Jane Hodges executed by the Executor, Charles Newton Hodges are hereby
APPROVED. The said Executor is further authorized to execute subsequent sales,
conveyances, leases and mortgages of the properties left by the said deceased Linnie Jane
Hodges in consonance with the wishes contained in the last will and testament of the latter."

Annually thereafter, Hodges submitted to the court the corresponding statements of account of
his administration, with the particularity that in all his motions, he always made it point to urge
the that "no person interested in the Philippines of the time and place of examining the herein
accounts be given notice as herein executor is the only devisee or legatee of the deceased in
accordance with the last will and testament already probated by the Honorable Court." All said
accounts approved as prayed for.

Nothing else appears to have been done either by the court a quo or Hodges until December
25, 1962. Importantly to be the provision in the will of Mrs. Hodges that her share of the conjugal
partnership was to be inherited by her husband "to have and to hold unto him, my said husband,
during his natural lifetime" and that "at the death of my said husband, I give, devise and
bequeath all the rest, residue and remainder of my estate, both real and personal, wherever
situated or located, to be equally divided among my brothers and sisters, share and share
alike", which provision naturally made it imperative that the conjugal partnership be promptly
liquidated, in order that the "rest, residue and remainder" of his wife's share thereof, as of the
time of Hodges' own death, may be readily known and identified, no such liquidation was ever
undertaken. The record gives no indication of the reason for such omission, although relatedly,
it appears therein:

1. That in his annual statement submitted to the court of the net worth of C. N.
Hodges and the Estate of Linnie Jane Hodges, Hodges repeatedly and
consistently reported the combined income of the conjugal partnership and then
merely divided the same equally between himself and the estate of the deceased
wife, and, more importantly, he also, as consistently, filed corresponding
separate income tax returns for each calendar year for each resulting half of such
combined income, thus reporting that the estate of Mrs. Hodges had its own
income distinct from his own.

2. That when the court a quo happened to inadvertently omit in its order
probating the will of Mrs. Hodges, the name of one of her brothers, Roy Higdon
then already deceased, Hodges lost no time in asking for the proper correction
"in order that the heirs of deceased Roy Higdon may not think or believe they
were omitted, and that they were really interested in the estate of the deceased
Linnie Jane Hodges".

3. That in his aforementioned motion of December 11, 1957, he expressly stated

that "deceased Linnie Jane Hodges died leaving no descendants or ascendants
except brothers and sisters and herein petitioner as the surviving spouse, to
inherit the properties of the decedent", thereby indicating that he was not
excluding his wife's brothers and sisters from the inheritance.
 4. That Hodges allegedly made statements and manifestations to the United
States inheritance tax authorities indicating that he had renounced his
inheritance from his wife in favor of her other heirs, which attitude he is supposed
to have reiterated or ratified in an alleged affidavit subscribed and sworn to here
in the Philippines and in which he even purportedly stated that his reason for so
disclaiming and renouncing his rights under his wife's will was to "absolve (him)
or (his) estate from any liability for the payment of income taxes on income which
has accrued to the estate of Linnie Jane Hodges", his wife, since her death.

On said date, December 25, 1962, Hodges died. The very next day, upon motion of herein
respondent and appellee, Avelina A. Magno, she was appointed by the trial court as
Administratrix of the Testate Estate of Linnie Jane Hodges, in Special Proceedings No. 1307
and as Special Administratrix of the estate of Charles Newton Hodges, "in the latter case,
because the last will of said Charles Newton Hodges is still kept in his vault or iron safe and that
the real and personal properties of both spouses may be lost, damaged or go to waste, unless
Special Administratrix is appointed," (Order of December 26, 1962, p. 27, Yellow R. on A.)
although, soon enough, on December 29, 1962, a certain Harold K. Davies was appointed as
her Co-Special Administrator, and when Special Proceedings No. 1672, Testate Estate of
Charles Newton Hodges, was opened, Joe Hodges, as next of kin of the deceased, was in due
time appointed as Co-Administrator of said estate together with Atty. Fernando P. Mirasol, to
replace Magno and Davies, only to be in turn replaced eventually by petitioner PCIB alone.

At the outset, the two probate proceedings appear to have been proceeding jointly, with each
administrator acting together with the other, under a sort of modus operandi. PCIB used to
secure at the beginning the conformity to and signature of Magno in transactions it wanted to
enter into and submitted the same to the court for approval as their joint acts. So did Magno do
likewise. Somehow, however, differences seem to have arisen, for which reason, each of them
began acting later on separately and independently of each other, with apparent sanction of the
trial court. Thus, PCIB had its own lawyers whom it contracted and paid handsomely, conducted
the business of the estate independently of Magno and otherwise acted as if all the properties
appearing in the name of Charles Newton Hodges belonged solely and only to his estate, to the
exclusion of the brothers and sisters of Mrs. Hodges, without considering whether or not in fact
any of said properties corresponded to the portion of the conjugal partnership pertaining to the
estate of Mrs. Hodges. On the other hand, Magno made her own expenditures, hired her own
lawyers, on the premise that there is such an estate of Mrs. Hodges, and dealth with some of
the properties, appearing in the name of Hodges, on the assumption that they actually
correspond to the estate of Mrs. Hodges. All of these independent and separate actuations of
the two administrators were invariably approved by the trial court upon submission. Eventually,
the differences reached a point wherein Magno, who was more cognizant than anyone else
about the ins and outs of the businesses and properties of the deceased spouses because of
her long and intimate association with them, made it difficult for PCIB to perform normally its
functions as administrator separately from her. Thus, legal complications arose and the present
judicial controversies came about.

Predicating its position on the tenor of the orders of May 27 and December 14, 1957 as well as
the approval by the court a quo of the annual statements of account of Hodges, PCIB holds to
the view that the estate of Mrs. Hodges has already been in effect closed with the virtual
adjudication in the mentioned orders of her whole estate to Hodges, and that, therefore, Magno
had already ceased since then to have any estate to administer and the brothers and sisters of
Mrs. Hodges have no interests whatsoever in the estate left by Hodges. Mainly upon such
theory, PCIB has come to this Court with a petition for certiorari and prohibition praying that the
lower court's orders allowing respondent Magno to continue acting as administratrix of the
estate of Mrs. Hodges in Special Proceedings 1307 in the manner she has been doing, as
detailed earlier above, be set aside. Additionally, PCIB maintains that the provision in Mrs.
Hodges' will instituting her brothers and sisters in the manner therein specified is in the nature of
a testamentary substitution, but inasmuch as the purported substitution is not, in its view, in
accordance with the pertinent provisions of the Civil Code, it is ineffective and may not be
enforced. It is further contended that, in any event, inasmuch as the Hodges spouses were both
residents of the Philippines, following the decision of this Court in Aznar vs. Garcia, or the case
of Christensen, 7 SCRA 95, the estate left by Mrs. Hodges could not be more than one-half of
her share of the conjugal partnership, notwithstanding the fact that she was citizen of Texas,
U.S.A., in accordance with Article 16 in relation to Articles 900 and 872 of the Civil Code.
Initially, We issued a preliminary injunction against Magno and allowed PCIB to act alone.

At the same time PCIB has appealed several separate orders of the trial court approving
individual acts of appellee Magno in her capacity as administratrix of the estate of Mrs. Hodges,
such as, hiring of lawyers for specified fees and incurring expenses of administration for
different purposes and executing deeds of sale in favor of her co-appellees covering properties
which are still registered in the name of Hodges, purportedly pursuant to corresponding
"contracts to sell" executed by Hodges. The said orders are being questioned on jurisdictional
and procedural grounds directly or indirectly predicated on the principal theory of appellant that
all the properties of the two estates belong already to the estate of Hodges exclusively.

On the other hand, respondent-appellee Magno denies that the trial court's orders of May 27
and December 14, 1957 were meant to be finally adjudicatory of the hereditary rights of Hodges
and contends that they were no more than the court's general sanction of past and future acts of
Hodges as executor of the will of his wife in due course of administration. As to the point
regarding substitution, her position is that what was given by Mrs. Hodges to her husband under
the provision in question was a lifetime usufruct of her share of the conjugal partnership, with
the naked ownership passing directly to her brothers and sisters. Anent the application of Article
16 of the Civil Code, she claims that the applicable law to the will of Mrs. Hodges is that of
Texas under which, she alleges, there is no system of legitime, hence, the estate of Mrs.
Hodges cannot be less than her share or one-half of the conjugal partnership properties. She
further maintains that, in any event, Hodges had as a matter of fact and of law renounced his
inheritance from his wife and, therefore, her whole estate passed directly to her brothers and
sisters effective at the latest upon the death of Hodges.

In this decision, for the reasons discussed above, and upon the issues just summarized, We
overrule PCIB's contention that the orders of May 27, 1957 and December 14, 1957 amount to
an adjudication to Hodges of the estate of his wife, and We recognize the present existence of
the estate of Mrs. Hodges, as consisting of properties, which, while registered in that name of
Hodges, do actually correspond to the remainder of the share of Mrs. Hodges in the conjugal
partnership, it appearing that pursuant to the pertinent provisions of her will, any portion of said
share still existing and undisposed of by her husband at the time of his death should go to her
brothers and sisters share and share alike. Factually, We find that the proven circumstances
relevant to the said orders do not warrant the conclusion that the court intended to make
thereby such alleged final adjudication. Legally, We hold that the tenor of said orders furnish no
basis for such a conclusion, and what is more, at the time said orders were issued, the
proceedings had not yet reached the point when a final distribution and adjudication could be
made. Moreover, the interested parties were not duly notified that such disposition of the estate
would be done. At best, therefore, said orders merely allowed Hodges to dispose of portions of
his inheritance in advance of final adjudication, which is implicitly permitted under Section 2 of
Rule 109, there being no possible prejudice to third parties, inasmuch as Mrs. Hodges had no
creditors and all pertinent taxes have been paid.

More specifically, We hold that, on the basis of circumstances presently extant in the record,
and on the assumption that Hodges' purported renunciation should not be upheld, the estate of
Mrs. Hodges inherited by her brothers and sisters consists of one-fourth of the community
estate of the spouses at the time of her death, minus whatever Hodges had gratuitously
disposed of therefrom during the period from, May 23, 1957, when she died, to December 25,
1962, when he died provided, that with regard to remunerative dispositions made by him during
the same period, the proceeds thereof, whether in cash or property, should be deemed as
continuing to be part of his wife's estate, unless it can be shown that he had subsequently
disposed of them gratuitously.

At this juncture, it may be reiterated that the question of what are the pertinent laws of Texas
and what would be the estate of Mrs. Hodges under them is basically one of fact, and
considering the respective positions of the parties in regard to said factual issue, it can already
be deemed as settled for the purposes of these cases that, indeed, the free portion of said
estate that could possibly descend to her brothers and sisters by virtue of her will may not be
less than one-fourth of the conjugal estate, it appearing that the difference in the stands of the
parties has reference solely to the legitime of Hodges, PCIB being of the view that under the
laws of Texas, there is such a legitime of one-fourth of said conjugal estate and Magno
contending, on the other hand, that there is none. In other words, hereafter, whatever might
ultimately appear, at the subsequent proceedings, to be actually the laws of Texas on the matter
would no longer be of any consequence, since PCIB would anyway be in estoppel already to
claim that the estate of Mrs. Hodges should be less than as contended by it now, for admissions
by a party related to the effects of foreign laws, which have to be proven in our courts like any
other controverted fact, create estoppel.

In the process, We overrule PCIB's contention that the provision in Mrs. Hodges' will in favor of
her brothers and sisters constitutes ineffective hereditary substitutions. But neither are We
sustaining, on the other hand, Magno's pose that it gave Hodges only a lifetime usufruct. We
hold that by said provision, Mrs. Hodges simultaneously instituted her brothers and sisters as
co-heirs with her husband, with the condition, however, that the latter would have complete
rights of dominion over the whole estate during his lifetime and what would go to the former
would be only the remainder thereof at the time of Hodges' death. In other words, whereas they
are not to inherit only in case of default of Hodges, on the other hand, Hodges was not obliged
to preserve anything for them. Clearly then, the essential elements of testamentary substitution
are absent; the provision in question is a simple case of conditional simultaneous institution of
heirs, whereby the institution of Hodges is subject to a partial resolutory condition the operative
contingency of which is coincidental with that of the suspensive condition of the institution of his
brothers and sisters-in-law, which manner of institution is not prohibited by law.

We also hold, however, that the estate of Mrs. Hodges inherited by her brothers and sisters
could be more than just stated, but this would depend on (1) whether upon the proper
application of the principle of renvoi in relation to Article 16 of the Civil Code and the pertinent
laws of Texas, it will appear that Hodges had no legitime as contended by Magno, and (2)
whether or not it can be held that Hodges had legally and effectively renounced his inheritance
from his wife. Under the circumstances presently obtaining and in the state of the record of
these cases, as of now, the Court is not in a position to make a final ruling, whether of fact or of
law, on any of these two issues, and We, therefore, reserve said issues for further proceedings
and resolution in the first instance by the court a quo, as hereinabove indicated. We reiterate,
however, that pending such further proceedings, as matters stand at this stage, Our considered
opinion is that it is beyond cavil that since, under the terms of the will of Mrs. Hodges, her
husband could not have anyway legally adjudicated or caused to be adjudicated to himself her
whole share of their conjugal partnership, albeit he could have disposed any part thereof during
his lifetime, the resulting estate of Mrs. Hodges, of which Magno is the uncontested
administratrix, cannot be less than one-fourth of the conjugal partnership properties, as of the
time of her death, minus what, as explained earlier, have beengratuitously disposed of
therefrom, by Hodges in favor of third persons since then, for even if it were assumed that, as
contended by PCIB, under Article 16 of the Civil Code and applying renvoi the laws of the
Philippines are the ones ultimately applicable, such one-fourth share would be her free
disposable portion, taking into account already the legitime of her husband under Article 900 of
the Civil Code.

The foregoing considerations leave the Court with no alternative than to conclude that in
predicating its orders on the assumption, albeit unexpressed therein, that there is an estate of
Mrs. Hodges to be distributed among her brothers and sisters and that respondent Magno is the
legal administratrix thereof, the trial court acted correctly and within its jurisdiction. Accordingly,
the petition for certiorari and prohibition has to be denied. The Court feels however, that pending
the liquidation of the conjugal partnership and the determination of the specific properties
constituting her estate, the two administrators should act conjointly as ordered in the Court's
resolution of September 8, 1972 and as further clarified in the dispositive portion of its decision.

Anent the appeals from the orders of the lower court sanctioning payment by appellee Magno,
as administratrix, of expenses of administration and attorney's fees, it is obvious that, with Our
holding that there is such an estate of Mrs. Hodges, and for the reasons stated in the body of
this opinion, the said orders should be affirmed. This We do on the assumption We find justified
by the evidence of record, and seemingly agreed to by appellant PCIB, that the size and value
of the properties that should correspond to the estate of Mrs. Hodges far exceed the total of the
attorney's fees and administration expenses in question.

With respect to the appeals from the orders approving transactions made by appellee Magno,
as administratrix, covering properties registered in the name of Hodges, the details of which are
related earlier above, a distinction must be made between those predicated on contracts to sell
executed by Hodges before the death of his wife, on the one hand, and those premised on
contracts to sell entered into by him after her death. As regards the latter, We hold that
inasmuch as the payments made by appellees constitute proceeds of sales of properties
belonging to the estate of Mrs. Hodges, as may be implied from the tenor of the motions of May
27 and December 14, 1957, said payments continue to pertain to said estate, pursuant to her
intent obviously reflected in the relevant provisions of her will, on the assumption that the size
and value of the properties to correspond to the estate of Mrs. Hodges would exceed the total
value of all the properties covered by the impugned deeds of sale, for which reason, said
properties may be deemed as pertaining to the estate of Mrs. Hodges. And there being no
showing that thus viewing the situation, there would be prejudice to anyone, including the
government, the Court also holds that, disregarding procedural technicalities in favor of a
pragmatic and practical approach as discussed above, the assailed orders should be affirmed.
Being a stranger to the estate of Mrs. Hodges, PCIB has no personality to raise the procedural
and jurisdictional issues raised by it. And inasmuch as it does not appear that any of the other
heirs of Mrs. Hodges or the government has objected to any of the orders under appeal, even
as to these parties, there exists no reason for said orders to be set aside.

DISPOSITIVE PART

IN VIEW OF ALL THE FOREGOING PREMISES, judgment is hereby rendered DISMISSING

the petition in G. R. Nos. L-27860 and L-27896, and AFFIRMING, in G. R. Nos. L-27936-37 and
the other thirty-one numbers hereunder ordered to be added after payment of the corresponding
docket fees, all the orders of the trial court under appeal enumerated in detail on pages 35 to 37
and 80 to 82 of this decision; the existence of the Testate Estate of Linnie Jane Hodges, with
respondent-appellee Avelina A. Magno, as administratrix thereof is recognized, and it is
declared that, until final judgment is ultimately rendered regarding (1) the manner of applying
Article 16 of the Civil Code of the Philippines to the situation obtaining in these cases and (2)
the factual and legal issue of whether or not Charles Newton Hodges had effectively and legally
renounced his inheritance under the will of Linnie Jane Hodges, the said estate consists of one-
fourth of the community properties of the said spouses, as of the time of the death of the wife on
May 23, 1957, minus whatever the husband had already gratuitously disposed of in favor of
third persons from said date until his death, provided, first, that with respect to remunerative
dispositions, the proceeds thereof shall continue to be part of the wife's estate, unless
subsequently disposed of gratuitously to third parties by the husband, and second, that should
the purported renunciation be declared legally effective, no deductions whatsoever are to be
made from said estate; in consequence, the preliminary injunction of August 8, 1967, as
amended on October 4 and December 6, 1967, is lifted, and the resolution of September 8,
1972, directing that petitioner-appellant PCIB, as Administrator of the Testate Estate of Charles
Newton Hodges, in Special Proceedings 1672, and respondent-appellee Avelina A. Magno, as
Administratrix of the Testate Estate of Linnie Jane Hodges, in Special Proceedings 1307, should
act thenceforth always conjointly, never independently from each other, as such administrators,
is reiterated, and the same is made part of this judgment and shall continue in force, pending
the liquidation of the conjugal partnership of the deceased spouses and the determination and
segregation from each other of their respective estates, provided, that upon the finality of this
judgment, the trial court should immediately proceed to the partition of the presently combined
estates of the spouses, to the end that the one-half share thereof of Mrs. Hodges may be
properly and clearly identified; thereafter, the trial court should forthwith segregate the
remainder of the one-fourth herein adjudged to be her estate and cause the same to be turned
over or delivered to respondent for her exclusive administration in Special Proceedings 1307,
while the other one-fourth shall remain under the joint administration of said respondent and
petitioner under a joint proceedings in Special Proceedings 1307 and 1672, whereas the half
unquestionably pertaining to Hodges shall be administered by petitioner exclusively in Special
Proceedings 1672, without prejudice to the resolution by the trial court of the pending motions
for its removal as administrator 12; and this arrangement shall be maintained until the final
resolution of the two issues of renvoi and renunciation hereby reserved for further hearing and
determination, and the corresponding complete segregation and partition of the two estates in
the proportions that may result from the said resolution.

Generally and in all other respects, the parties and the court a quo are directed to adhere
henceforth, in all their actuations in Special Proceedings 1307 and 1672, to the views passed
and ruled upon by the Court in the foregoing opinion.

Appellant PCIB is ordered to pay, within five (5) days from notice hereof, thirty-one additional
appeal docket fees, but this decision shall nevertheless become final as to each of the parties
herein after fifteen (15) days from the respective notices to them hereof in accordance with the
rules.

Costs against petitioner-appellant PCIB.

Zaldivar, Castro, Esguerra and Fernandez, JJ., concur.

Makasiar, Antonio, Muñoz Palma and Aquino, JJ., concur in the result.

Separate Opinions

FERNANDO, J., concurring:

I concur on the basis of the procedural pronouncements in the opinion.

TEEHANKEE, J., concurring:

I concur in the result of dismissal of the petition for certiorari and prohibition in Cases L-27860
and L-27896 and with the affirmance of the appealed orders of the probate court in Cases L-
27936-37.

I also concur with the portion of the dispositive part of the judgment penned by Mr. Justice
Barredo decreeing thelifting of the Court's writ of preliminary injunction of August 8, 1967 as
amended on October 4, and December 6, 1967 1 and ordering in lieu thereof that the Court's
resolution of September 8, 1972 2 which directed thatpetitioner-appellant PCIB as administrator
of C. N. (Charles Newton) Hodges' estate (Sp. Proc. No. 1672 and respondent-appellee Avelina
A. Magno as administratrix of Linnie Jane Hodges' estate (Sp. Proc. No. 1307) should act
always conjointly never independently from each other, as such administrators, is reiterated and
shall continue in force and made part of the judgment.

It is manifest from the record that petitioner-appellant PCIB's primal contention in the cases at
bar belatedly filedby it with this Court on August 1, 1967 (over ten (10) years after Linnie Jane
Hodges' death on May 23, 1957 and (over five (5) years after her husband C.N. Hodges' death
on December 25, 1962 — during which time both estates have been pending settlement and
distribution to the decedents' respective rightful heirs all this time up to now) — that the probate
court per its order of December 14, 1957 (supplementing an earlier order of May 25, 1957) 3 in
granting C. N. Hodges' motion as Executor of his wife Linnie's estate to continue their
"business of buying and selling personal and real properties" and approving "all sales,
conveyances, leases and mortgages" made and to be made by him as such executor under his
obligation to submit his yearly accounts in effect declared him as sole heir of his wife's estate
and nothing remains to be done except to formally close her estate (Sp. Proc. No. 1307) as her
estate was thereby merged with his own so that nothing remains of it that may be adjudicated to
her brothers and sisters as her designated heirs after him, 4 — is wholly untenable and deserves
scant consideration.

Aside from having been put forth as an obvious afterthought much too late in the day, this
contention of PCIB that there no longer exists any separate estate of Linnie Jane Hodges after
the probate court's order of December 14, 1957 goes against the very acts and
judicial admissions of C.N. Hodges as her executor whereby he consistently recognized
the separate existence and identity of his wife's estate apart from his own separate estate and
from his own share of their conjugal partnership and estate and "never considered the whole
estate as a single one belonging exclusively to himself" during the entire period that he survived
her for over five (5) years up to the time of his own death on December 25, 1962 5 and against
the identical acts and judicial admissions of PCIB as administrator of C.N. Hodges' estate until
PCIB sought in 1966 to take over both estates as pertaining to its sole administration.

PCIB is now barred and estopped from contradicting or taking a belated position contradictory to
or inconsistent with its previous admissions 6 (as well as those of C.N. Hodges himself in his
lifetime and of whose estate PCIB is merely an administrator) recognizing the existence and
identity of Linnie Jane Hodges' separate estate and the legal rights and interests therein of her
brothers and sisters as her designated heirs in her will.

PCIB's petition for certiorari and prohibition to declare all acts of the probate court in Linnie Jane
Hodges' estate subsequent to its order of December 14, 1957 as "null and void for having been
issued without jurisdiction" must therefore be dismissed with the rejection of its belated and
untenable contention that there is no longer any estate of Mrs. Hodges of which respondent
Avelina Magno is the duly appointed and acting administratrix.

PCIB's appeal 7 from the probate court's various orders recognizing respondent Magno as
administratrix of Linnie's estate (Sp. Proc No. 1307) and sanctioning her acts of administration
of said estate and approving the sales contracts executed by her with the various individual
appellees, which involve basically the same primal issue raised in the petition as to whether
there still exists a separate estate of Linnie of which respondent-appellee Magno may continue
to be the administratrix, must necessarily fail — a result of the Court's main opinion at bar that
there does exist such an estate and that the two estates (husband's and wife's) must be
administered cojointlyby their respective administrators (PCIB and Magno).

The dispositive portion of the main opinion

The main opinion disposes that:

IN VIEW OF ALL THE FOREGOING PREMISES, judgment is hereby rendered

DISMISSING the petition in G. R. Nos. L-27860 and L-27896, and AFFIRMING,
in G. R. Nos. L-27936-37 and the other thirty-one numbers hereunder ordered to
be added after payment of the corresponding docket fees, all the orders of the
trial court under appeal enumerated in detail on pages 35 to 37 and 80 to 82 of
this decision:

The existence of the Testate Estate of Linnie Jane Hodges, with respondent-
appellee Avelina A. Magno, as administratrix thereof is recognized, and
 It is declared that, until final judgment is ultimately rendered regarding (1) the
manner of applying Article 16 of the Civil Code of the Philippines to the situation
obtaining in these cases and (2) the factual and legal issues of whether or not
Charles Newton Hodges has effectively and legally renounced his inheritance
under the will of Linnie Jane Hodges, the said estate consists of one-fourthof the
community properties of the said spouses, as of the time of the death of the wife
on May 23, 1957, minus whatever the husband had already gratuitously disposed
of in favor of third persons from said date until his death, provided, first, that with
respect to remunerative dispositions, the proceeds thereof shall continue to
be part of the wife's estate, unless subsequently disposed of gratuitously to third
parties by the husband, and second, that should the purported renunciation be
declared legally effective, no deduction whatsoever are to be made from said
estate;

In consequence, the preliminary injunction of August 8, 1967, as amended on

October 4 and December 6, 1967, is lifted and the resolution of September 8,
1972, directing that petitioner-appellant PCIB, as Administrator of the Testate
Estate of Charles Newton Hodges in Special Proceedings 1672, and respondent-
appellee Avelina A. Magno, as Administratrix of the Testate Estate of Linnie Jane
Hodges in Special Proceedings 1307, should act thenceforth always conjointly,
never independently from each other, as such administrators, is reiterated, and
the same is made part of this judgment and shall continue in
force, pending the liquidation of the conjugal partnership of the deceased
spouses and the determination and segregation from each other of their
respective estates; provided, that upon the finality of this judgment, the trial court
should immediately proceed to the partition of the presently combined estates of
the spouses, to the end that the one-half share thereof of Mrs. Hodges may be
properly and clearly identified;

Thereafter, the trial court should forthwith segregate the remainder of the one-
fourth herein adjudged to be her estate and cause the same to be turned over or
delivered to respondent for her exclusive administration in Special Proceedings
1307, while the other one-fourth shall remain under the joint administrative of
said respondent and petitioner under a joint proceedings in Special Proceedings
1307 and 1672, whereas the half unquestionably pertaining to Hodges shall
be administered bypetitioner exclusively in Special Proceedings 1672, without
prejudice to the resolution by the trial court of the pending motions for its
removal as administrator;

And this arrangement shall be maintained until the final resolution of the two
issues of renvoi andrenunciation hereby reserved for further hearing and
determination, and the corresponding completesegregation and partition of the
two estates in the proportions that may result from the said resolution.

Generally and in all other respects, the parties and the court a quo are directed to
adhere henceforth, in all their actuations in Special Proceedings 1307 and 1672,
to the views passed and ruled upon by the Court in the foregoing opinion. 8

Minimum estimate of Mrs. Hodges' estate:

One-fourth of conjugal properties.
The main opinion in declaring the existence of a separate estate of Linnie Jane Hodges which
shall pass to her brothers and sisters with right of representation (by their heirs) as her duly
designated heirs declares that her estate consists as a minimum (i.e. assuming (1) that under
Article 16 of the Philippine Civil Code C. N. Hodges as surviving husband was entitled to one-
half of her estate as legitime and (2) that he had not effectively and legallyrenounced his
inheritance under her will) of "one-fourth of the community properties of the said spouses, as of
the time of the death of the wife on May 23, 1957, minus whatever the husband had
already gratuitously disposed of in favor of third persons from said date until his death," with the
proviso that proceeds of remunerative dispositions or sales for valuable consideration made by
C. N. Hodges after his wife Linnie's death shall continue to be part of her
estate unless subsequently disposed of by him gratuitously to third parties subject to the
condition, however, that if he is held to have validly and effectively renounced his inheritance
under his wife's will, no deductions of any dispositions made by Hodges even if gratuitously are
to be made from his wife Linnie's estate which shall passintact to her brothers and sisters as her
designated heirs called in her will to succeed to her estate upon the death of her husband C. N.
Hodges.

Differences with the main opinion

I do not share the main opinion's view that Linnie Jane Hodges instituted her husband as her
heir under her will "to have dominion over all her estate during his lifetime ... as absolute
owner of the properties ..." 9 and that she bequeathed "the whole of her estate to be owned and
enjoyed by him as universal and sole heir with absolute dominion over them only during his
lifetime, which means that while he could completely and absolutely dispose of any portion
thereof inter vivos to anyone other than himself, he was not free to do so mortis causa, and all
his rights to what might remain upon his death would cease entirely upon the occurrence of that
contingency, inasmuch as the right of his brothers and sisters-in-law to the inheritance, although
vested already upon the death of Mrs. Hodges, would automatically become operative upon the
occurrence of the death of Hodges in the event of actual existence of any remainder of her
estate then." 10

As will be amplified hereinafter, I do not subscribe to such a view that Linnie Jane Hodges willed
"full and absolute ownership" and "absolute dominion" over her estate to her husband, but
rather that she named her husband C. N. Hodges and her brothers and sisters as instituted
heirs with a term under Article 885 of our Civil Code, to wit, Hodges as instituted heir with
a resolutory term whereunder his right to the succession ceased in diem upon arrival of
the resolutory term of his death on December 25, 1962 and her brothers and sisters as
instituted heirs with asuspensive term whereunder their right to the succession commenced ex
die upon arrival of the suspensive term of the death of C. N. Hodges on December 25, 1962.

Hence, while agreeing with the main opinion that the proceeds of all remunerative dispositions
made by C. N. Hodges after his wife's death remain an integral part of his wife's estate which
she willed to her brothers and sisters, I submit that C. N. Hodges could not validly
make gratuitous dispositions of any part or all of his wife's estate — "completely and absolutely
dispose of any portion thereof inter vivos to anyone other than himself" in the language of the
main opinion, supra — and thereby render ineffectual and nugatory her institution of her
brothers and sisters as her designated heirs to succeed to her whole estate "at the death of
(her) husband." If according to the main opinion, Hodges could not make such gratuitous
"complete and absolute dispositions" of his wife Linnie's estate "mortis causa," it would seem
that by the same token and rationale he was likewise proscribed by the will from making such
dispositions of Linnie's estate inter vivos.

I believe that the two questions of renvoi and renunciation should be

resolved preferentially and expeditiously by the probate court ahead of the partition and
segregation of the minimum one-fourth of the conjugal or community properties constituting
Linnie Jane Hodges' separate estate, which task considering that it is now seventeen (17) years
since Linnie Jane Hodges' death and her conjugal estate with C. N. Hodges has
remained unliquidated up to now might take a similar number of years to unravel with the
numerous items, transactions and details of the sizable estates involved.

Such partition of the minimum one-fourth would not be final, since if the two prejudicial
questions of renvoi andrenunciation were resolved favorably to Linnie's estate meaning to say
that if it should be held that C. N. Hodges is not entitled to any legitime of her estate and at any
rate he had totally renounced his inheritance under the will), then Linnie's estate would consist
not only of the minimum one-fourth but one-half of the conjugal or community properties of the
Hodges spouses, which would require again the partition and segregation of still another one-
fourth of said. properties to complete Linnie's separate estate.

My differences with the main opinion involve further the legal concepts, effects and
consequences of the testamentary dispositions of Linnie Jane Hodges in her will and the
question of the best to reach a solution of the pressing question of expediting the closing of the
estates which after all do not appear to involve any outstanding debts nor any dispute between
the heirs and should therefore be promptly settled now after all these years without any further
undue complications and delays and distributed to the heirs for their full enjoyment and benefit.
As no consensus appears to have been reached thereon by a majority of the Court, I propose to
state views as concisely as possible with the sole end in view that they may be of some
assistance to the probate court and the parties in reaching an expeditious closing and
settlement of the estates of the Hodges spouses.

Two Assumptions

As indicated above, the declaration of the minimum of Mrs. Hodges' estate as one-fourth of the
conjugal properties is based on two assumptions most favorable to C. N. Hodges' estate and his
heirs, namely (1) that the probate court must accept the renvoi or "reference back" 11 allegedly
provided by the laws of the State of Texas (of which state the Hodges spouses were citizens)
whereby the civil laws of the Philippines as the domicile of the Hodges spouses would govern
their succession notwithstanding the provisions of Article 16 of our Civil Code (which provides
that the national law of the decedents, in this case, of Texas, shall govern their succession) with
the result that her estate would consist of no more than one-fourth of the conjugal properties
since the legitime of her husband (the other one-fourth of said conjugal properties or one-half
of her estate, under Article 900 of our Civil Code) could not then be disposed of nor burdened
with any condition by her and (2) that C.N. Hodges had noteffectively and legally renounced his
inheritance under his wife's will.

These two assumptions are of course flatly disputed by respondent-appellee Magno as Mrs.
Hodges' administratrix, who avers that the law of the State of Texas governs her succession
and does not provide for and legitime, hence, her brothers and sisters are entitled to succeed to
the whole of her share of the conjugal properties which is one-half thereof and that in any event,
Hodges had totally renounced all his rights under the will.
The main opinion concedes that "(I)n the interest of settling the estates herein involved soonest,
it would be best, indeed, if these conflicting claims of the parties were determined in these
proceedings." It observes however that this cannot be done due to the inadequacy of the
evidence submitted by the parties in the probate court and of the parties' discussion, viz, "there
is no clear and reliable proof of what the possibly applicable laws of Texas are. Then also, the
genuineness of the documents relied upon by respondent Magno [re Hodges' renunciation] is
disputed." 12

Hence, the main opinion expressly reserves resolution and determination on these two
conflicting claims and issues which it deems "are not properly before the Court
now," 13 and specifically holds that "(A)ccordingly, the only question that remains to be settled in
the further proceedings hereby ordered to be held in the court below is how much more than as
fixed above is the estate of Mrs. Hodges, and this would depend on (1) whether or not the
applicable laws of Texas do provide in effect for more, such as, when there is
no legitime provided therein, and (2) whether or not Hodges has validly waived his whole
inheritance from Mrs. Hodges." 14

Suggested guidelines

Considering that the only unresolved issue has thus been narrowed down and in consonance
with the ruling spirit of our probate law calling for the prompt settlement of the estates of
deceased persons for the benefit of creditors and those entitled to the residue by way of
inheritance — considering that the estates have been long pending settlement since 1957 and
1962, respectively — it was felt that the Court should lay down specific guidelines for the
guidance of the probate court towards the end that it may expedite the closing of the protracted
estates proceedings below to the mutual satisfaction of the heirs and without need of a
dissatisfied party elevating its resolution of this only remaining issue once more to this Court
and dragging out indefinitely the proceedings.

After all, the only question that remains depends for its determination on the resolution of the
two questions ofrenvoi and renunciation, i.e. as to whether C. N. Hodges can claim
a legitime and whether he had renounced the inheritance. But as already indicated above, the
Court without reaching a consensus which would finally resolve the conflicting claims here and
now in this case opted that "these and other relevant matters should first be threshed out fully in
the trial court in the proceedings hereinafter to be held for the purpose of ascertaining and/or
distributing the estate of Mrs. Hodges to her heirs in accordance with her duly probated will." 15

The writer thus feels that laying down the premises and principles governing the nature, effects
and consequences of Linnie Jane Hodges' testamentary dispositions in relation to her conjugal
partnership and co-ownership of properties with her husband C. N. Hodges and "thinking out"
the end results, depending on whether the evidence directed to be formally received by the
probate court would bear out that under renvoi C. N. Hodges was or was not entitled to claim a
legitime of one-half of his wife Linnie's estate and/or that he had or had not effectively and
validly renounced his inheritance should help clear the decks, as it were, and assist the probate
court in resolving the only remaining question of how much more than the minimum one-fourth
of the community properties of the Hodges spouses herein finally determined should be
awarded as the separate estate of Linnie, particularly since the views expressed in the main
opinion have not gained a consensus of the Court. Hence, the following suggested guidelines,
which needless to state, represent the personal opinion and views of the writer:
1. To begin with, as pointed out in the main opinion, "according to Hodges' own inventory
submitted by him as executor of the estate of his wife, practically all their properties
were conjugal which means that the spouses haveequal shares therein." 16

2. Upon the death of Mrs. Hodges on May 23, 1957, and the dissolution thereby of the marriage,
the law imposed upon Hodges as surviving husband the duty of inventorying, administering and
liquidating the conjugal or community property. 17 Hodges failed to discharge this duty
of liquidating the conjugal partnership and estate. On the contrary, he sought and obtained
authorization from the probate court to continue the conjugal partnership'sbusiness of buying
and selling real and personal properties.

In his annual accounts submitted to the probate court as executor of Mrs. Hodges' estate,
Hodges thusconsistently reported the considerable combined income (in six figures) of
the conjugal partnership or coownershipand then divided the same equally between himself and
Mrs. Hodges' estate and as consistently filed separate income tax returns and paid the income
taxes for each resulting half of such combined income corresponding to his own and to Mrs.
Hodges' estate. 18 (Parenthetically, he could not in law do this, had he adjudicated Linnie's
entire estate to himself, thus supporting the view advanced even in the main opinion that
"Hodges waived not only his rights to the fruits but to the properties themselves." 19

By operation of the law of trust 20 as well as by his own acknowledgment and acts, therefore, all
transactions made by Hodges after his wife's death were deemed for and on behalf of
their unliquidated conjugal partnership andcommunity estate and were so reported and treated
by him.

3. With this premise established that all transactions of Hodges after his wife's death were for
and on behalf of their unliquidated conjugal partnership and community estate, share and share
alike, it should be clear that nogratuitous dispositions, if any, made by C. N. Hodges from his
wife Linnie's estate should be deducted from herseparate estate as held in the main opinion. On
the contrary, any such gratuitous dispositions should be charged to his own share of the
conjugal estate since he had no authority or right to make any gratuitous dispositions of Linnie's
properties to the prejudice of her brothers and sisters whom she called to her succession upon
his death, not to mention that the very authority obtained by him from the probate court per its
orders of May 25, and December 14, 1957 was to continue the conjugal partnership's business
of buying and selling real properties for the account of their unliquidated conjugal estate and co-
ownership, share and share alike and not to make anyfree dispositions of Linnie's estate.

4. All transactions as well after the death on December 25, 1962 of Hodges himself appear
perforce and necessarily to have been conducted, on the same premise, for and on behalf of
their unliquidated conjugal partnership and/or co-ownership, share and share alike — since the
conjugal partnership remained unliquidated — which is another way of saying that such
transactions, purchases and sales, mostly the latter, must be deemed in effect to have been
made for the respective estates of C. N. Hodges and of his wife Linnie Jane Hodges, as both
estates continued to have an equal stake and share in the conjugal partnership which was not
only leftunliquidated but continued as a co-ownership or joint business with the probate court's
approval by Hodges during the five-year period that he survived his wife.

This explains the probate court's action of requiring that deeds of sale executed by PCIB as
Hodges' estate's administrator be "signed jointly" by respondent Magno as Mrs. Hodges'
estate's administratrix, as well as its order authorizing payment by lot purchasers from the
Hodges to either estate, since "there is as yet no judicial declaration of heirs nor distribution of
properties to whomsoever are entitled thereto." 22

And this equally furnishes the rationale of the main opinion for continued conjoint administration
by the administrators of the two estates of the deceased spouses, "pending the liquidation of the
conjugal partnership,"23 since "it is but logical that both estates should be administered jointly by
the representatives of both, pending their segregation from each other. Particularly ... because
the actuations so far of PCIB evince a determined, albeit groundless, intent to exclude the other
heirs of Mrs. Hodges from their inheritance." 24 5. Antly by the representatives of both, pending
their segregation from each other. Particularly ... because the actuations so far of PCIB evince a
determined, albeit groundless, intent to exclude the other heirs of Mrs. Hodges from their
inheritance." 24

5. As stressed in the main opinion, the determination of the only unresolved issue of how much
more than the minimum of one-fourth of the community or conjugal properties of the Hodges
spouses pertains to Mrs. Hodges' estate depends on the twin questions
of renunciation and renvoi. It directed consequently that "a joint hearing of the two probate
proceedings herein involved" be held by the probate court for the reception of "further evidence"
in order to finally resolved these twin questions. 25

(a) On the question of renunciation, it is believed that all that the probate court has to do is to
receive formally in evidence the various documents annexed to respondent Magno's answer at
bar, 26 namely: Copy of the U.S. Estate Tax Return filed on August 8, 1958 by C. N. Hodges for
his wife Linnie's estate wherein he purportedly declared that he was renouncing his inheritance
under his wife's will in favor of her brothers and sisters as co-heirs designated with him and that
it was his "intention (as) surviving husband of the deceased to distribute the remaining property
and interests of the deceased in their community estate to the devisee and legatees named in
the will when the debts, liabilities, taxes and expenses of administration are finally determined
and paid;" 27 and

The affidavit of ratification of such renunciation (which places him in estoppel) allegedly
executed on August 9, 1962 by C. N. Hodges in Iloilo City wherein he reaffirmed that "...
on August 8, 1958, I renounced and disclaimed any and all right to receive the rents,
emoluments and income from said estate" and further declared that "(T)he purpose of this
affidavit is to ratify and confirm, and I do hereby ratify and confirm, the declaration made in
schedule M of said return and hereby formally disclaim and renounce any right on my part to
receive any of the said rents, emoluments and income from the estate of my deceased wife,
Linnie Jane Hodges. This affidavit is made to absolve me or my estate from any liability for the
payment of income taxes on income which has accrued to the estate of Linnie Jane
Hodges since the death of the said Linnie Jane Hodges on May 23, 1957." 28

(b) On the question of renvoi, all that remains for the probate court to do is to formally receive in
evidence duly authenticated copies of the laws of the State of Texas governing the succession
of Linnie Jane Hodges and her husband C. N. Hodges as citizens of said State at the time of
their respective deaths on May 23, 1957 andDecember 25, 1962. 29

6. The text and tenor of the declarations by C. N. Hodges of renunciation of his inheritance from
his wife in favor of her other named heirs in her will (her brothers and sisters and their
respective heirs) as ratified and reiteratedexpressly in his affidavit of renunciation executed four
years later for the avowed purpose of not being held liable for payment of income taxes on
income which has accrued to his wife's estate since her death indicate a valid and effective
renunciation.

Once the evidence has been formally admitted and its genuineness and legal effectivity
established by the probate court, the renunciation by C. N. Hodges must be given due effect
with the result that C. N. Hodges therefore acquired no part of his wife's one-half share of the
community properties since he removed himself as an heir by virtue of his renunciation. By
simple substitution then under Articles 857 and 859 of our Civil Code 30 and by virtue of the will's
institution of heirs, since "the heir originally instituted C. N. Hodges) does not become an
heir"31 by force of his renunciation, Mrs. Hodges' brothers and sisters whom she designated as
her heirs upon her husband's death are called immediately to her succession.

Consequently, the said community and conjugal properties would then pertain pro indiviso share
and share alike to their respective estates, with each estate, however, shouldering its own
expenses of administration, estate and inheritance taxes, if any remain unpaid, attorneys' fees
and other like expenses and the net remainder to be adjudicated directly to the decedents'
respective brothers and sisters (and their heirs) as the heirs duly designated in their respective
wills. The question of renvoi becomes immaterial since most laws and our
lawspermit such renunciation of inheritance.

7. If there were no renunciation (or the same may somehow be declared to have not been valid
and effective) by C. N. Hodges of his inheritance from his wife, however, what would be the
consequence?

(a) If the laws on succession of the State of Texas do provide for renvoi or "reference back" to
Philippine law as the domiciliary law of the Hodges' spouses governing their succession, then
petitioners' view that Mrs. Hodges' estate would consist only of the minimum of "one-fourth of
the community properties of the said spouses, as of the time of (her) death on May 23, 1957"
would have to be sustained and C. N. Hodges' estate would consist of three-fourths of the
community properties, comprising his own one-half (or two-fourths) share and the other fourth of
Mrs. Hodges' estate as the legitime granted him as surviving spouse by Philippine law (Article
900 of the Civil Code) which could not be disposed of nor burdened with any condition by Mrs.
Hodges as testatrix.

(b) If the laws on succession of the State of Texas do not provide for such renvoi and
respondent Magno's assertion is correct that the Texas law which would then prevail, provides
for no legitime for C. N. Hodges as the surviving spouse, then respondent Magno's assertion
that Mrs. Hodges' estate would consist of one-half of the community properties (with the other
half pertaining to C. N. Hodges) would have to be sustained. The community and conjugal
properties would then pertain share and share alike to their respective estates, with each estate
shouldering its own expenses of administration in the same manner stated in the last paragraph
of paragraph 6 hereof. .

8. As to the nature of the institution of heirs made by Mrs. Hodges in her will, the main opinion
holds that "(T)he brothers and sisters of Mrs. Hodges are not substitutes for Hodges; rather,
they are also heirs institutedsimultaneously with Hodges," but goes further and holds that "it was
not the usufruct alone of her estate ... that she bequeathed to Hodges during his lifetime, but
the full ownership thereof, although the same was to last also during his lifetime only, even as
there was no restriction against his disposing or conveying the whole or any portion
thereof anybody other than himself" and describes Hodges "as universal and sole
heir with absolute dominion over Mrs. Hodges' estate (except over their Lubbock, Texas
property ), 32 adding that "Hodges was not obliged to preserve anything for them" (referring to
Mrs. Hodges' brothers and sisters as instituted co-heirs). 33

Contrary to this view of the main opinion, the writer submits that the provisions of Mrs. Hodges'
will did not grant to C.N. Hodges "full ownership" nor "absolute dominion" over her estate, such
that he could as "universal and sole heir" by the mere expedient of gratuitously disposing to
third persons her whole estate during his lifetime nullify her institution of her brothers and sisters
as his co-heirs to succeed to her whole estate "at the death of (her) husband," deprive them of
any inheritance and make his own brothers and sisters in effect sole heirs not only of his own
estate but of his wife's estate as well.

Thus, while Linnie Jane Hodges did not expressly name her brothers and sisters as substitutes
for Hodges because she willed that they would enter into the succession upon his death, still it
cannot be gainsaid, as the main opinion concedes, "that they are
also heirs instituted simultaneously with Hodges, subject however to certain conditions,
partially resolutory insofar as Hodges was concerned and correspondingly suspensive with
reference to his brothers and sisters-in-law." 34

Hence, if Hodges is found to have validly renounced his inheritance, there would be a
substitution of heirs in fact and in law since Linnie's brothers and sisters as the heirs
"simultaneously instituted" with a suspensive term would be called immediately to her
succession instead of waiting for the arrival of suspensive term of Hodges' death, since as the
heir originally instituted he does not become an heir by force of his renunciation and therefore
they would "enter into the inheritance in default of the heir originally instituted" (Hodges) under
the provisions of Article 857 and 859 of our Civil Code, supra, 35 thus accelerating their
succession to her estate as a consequence of Hodges' renunciation.

Consequently, Linnie Jane Hodges willed that her husband C.N. Hodges would "during his
natural lifetime ...manage, control, use and enjoy said estate" and that only "all rents,
emoluments and income" alone shall belong to him. She further willed that while he
could sell and purchase properties of her estate, and "use any part of the principal estate," such
principal notwithstanding "any changes in the physical properties of said estate"(i.e. new
properties acquired or exchanged) would still pertain to her estate, which at the time of his
death would pass in full dominion to her brothers and sisters as the ultimate sole and universal
heirs of her estate. 36

The testatrix Linnie Jane Hodges in her will thus principally provided that "I give, devise and
bequeath all of the rest, residue and remainder of my estate, both personal and real ... to my
beloved husband, Charles Newton Hodges, to have and to hold with him ... during his natural
lifetime;" 37 that "(he) shall have the right to manage, control, use and enjoy said estate during
his lifetime, ... to make any changes in the physical properties of said estate, by sale ... and
the purchase of any other or additional property as he may think best ... . All rents,
emoluments and income from said estate shall belong to him and he is further authorized
to use any part of the principal of said estate as he may need or desire, ... he shall not sell or
otherwise dispose of any of the improved property now owned by us, located at ... City of
Lubbock, Texas ... . He shall have the right to subdivide any farmland and sell lots therein, and
may sell unimproved town lots;" 38 that "(A)t the death of my said husband, Charles Newton, I
give, devise and bequeath all of the rest, residue and remainder of my estate, both personal and
real, ... to be equally divided among my brothers and sisters, share and share alike, namely:
Esta Higdon, Emma Howell, Leonard Higdon, Roy Higdon, Sadie Rascoe, Era Roman and
Nimroy Higdon;" 39 and that "(I)n case of the death of any of my brothers and/or sisters ... prior
to the death of my husband ... the heirs of such deceased brother or sister shall take jointly the
share which would have gone to such brother or sister had she or he survived." 40

Such provisions are wholly consistent with the view already fully expounded above that all
transactions and sales made by Hodges after his wife Linnie's death were by operation of the
law of trust as well as by his ownacknowledgment and acts deemed for and on behalf of
their unliquidated conjugal partnership and community estate, share and share alike, with the
express authorization of the probate court per its orders of May 25, and December 14, 1957
granting Hodges' motion to continue the conjugal partnership business of buying and selling real
estate even after her death. By the same token, Hodges could not conceivably be deemed to
have had any authority or right to dispose gratuitously of any portion of her estate to whose
succession she had called her brothers and sisters upon his death.

9. Such institutions of heirs with a term are expressly recognized and permitted under Book III,
Chapter 2, section 4 of our Civil Code dealing with "conditional testamentary dispositions and
testamentary dispositions with a term." 41

Thus, Article 885 of our Civil Code expressly provides that:

ART 885. The designation of the day or time when the effects of the institution of
an heir shallcommence or cease shall be valid.

In both cases, the legal heir shall be considered as called to the succession until
the arrival of the period or its expiration. But in the first case he shall not enter
into possession of the property until after having given sufficient security, with the
intervention of the instituted heir.

Accordingly, under the terms of Mrs. Hodges' will, her husband's right to the succession as the
instituted heir ceased in diem, i.e. upon the arrival of the resolutory term of his death on
December 25, 1962, while her brothers' and sisters' right to the succession also as instituted
heirs commenced ex die, i.e. upon the expiration of the suspensive term (as far as they were
concerned) of the death of C. N. Hodges on December 25, 1962 . 42

As stated in Padilla's treatise on the Civil Code, "A term is a period whose arrival is certain
although the exact date thereof may be uncertain. A term may have either a suspensive or a
resolutory effect. The designation of the day when the legacy "shall commence" is ex die, or a
term with a suspensive effect, from a certain day. The designation of the day when the legacy
"shall cease" is in diem or a term with a resolutory effect, until a certain day." He adds that "A
legacy based upon a certain age or upon the death of a person is not a condition but aterm. If
the arrival of the term would commence the right of the heir, it is suspensive. If the arrival of the
term would terminate his right, it is resolutory" and that "upon the arrival of the period, in case of
a suspensive term, theinstituted heir is entitled to the succession, and in case of a resolutory
term, his right terminates." 43

10. The sizable estates herein involved have now been pending settlement for a considerably
protracted period (of seventeen years counted from Linnie's death in 1957), and all that is left to
be done is to resolve the onlyremaining issue (involving the two questions
of renunciation and renvoi) hereinabove discussed in order to close up the estates and finally
effect distribution to the deceased spouses' respective brothers and sisters and their heirs as
the heirs duly instituted in their wills long admitted to probate. Hence, it is advisable for said
instituted heirs and their heirs in turn 44 to come to terms for the adjudication and distribution to
them pro-indiviso of the up to now unliquidated community properties of the estates of the
Hodges spouses (derived from their unliquidatedconjugal partnership) rather than to get bogged
down with the formidable task of physically segregating andpartitioning the two estates with the
numerous transactions, items and details and physical changes of properties involved. The
estates proceedings would thus be closed and they could then name their respective attorneys-
in-fact to work out the details of segregating, dividing or partitioning the unliquidated community
properties or liquidating them — which can be done then on their own without further need of
intervention on the part of the probate court as well as allow them meanwhile to enjoy and make
use of the income and cash and liquid assets of the estates in such manner as may be agreed
upon between them.

Such a settlement or modus vivendi between the heirs of the unliquidated two estates for the
mutual benefit of all of them should not prove difficult, considering that it appears as stated in
the main opinion that 22.968149% of the share or undivided estate of C. N. Hodges have
already been acquired by the heirs of Linnie Jane Hodges from certain heirs of her husband,
while certain other heirs representing 17.34375% of Hodges' estate were joining cause with
Linnie's heirs in their pending and unresolved motion for the removal of petitioner PCIB as
administrator of Hodges' estate, 45 apparently impatient with the situation which has apparently
degenerated into a running battle between the administrators of the two estates to the common
prejudice of all the heirs.

11. As earlier stated, the writer has taken the pain of suggesting these guidelines which may
serve to guide the probate court as well as the parties towards expediting the winding up and
closing of the estates and the distribution of the net estates to the instituted heirs and their
successors duly entitled thereto. The probate court should exert all effort towards this desired
objective pursuant to the mandate of our probate law, bearing in mind the Court's admonition in
previous cases that "courts of first instance should exert themselves to close up estate within
twelve months from the time they are presented, and they may refuse to allow any
compensation to executors and administrators who do not actively labor to that end, and they
may even adopt harsher measures."46

Timeliness of appeals and imposition of

thirty-one (31) additional docket fees

Two appeals were docketed with this Court, as per the two records on appeal submitted (one
with a green cover and the other with a yellow cover). As stated at the outset, these appeals
involve basically the same primal issue raised in the petition for certiorari as to whether there
still exists a separate estate of Linnie Jane Hodges which has to continue to be administered by
respondent Magno. Considering the main opinion's ruling in the affirmative and that her estate
and that of her husband (since they jointly comprise unliquidated community properties) must be
administered conjointly by their respective administrators (PCIB and Magno), the said appeals
(involving thirty-three different orders of the probate court approving sales contracts and other
acts of administration executed and performed by respondent Magno on behalf of Linnie's
estate) have been necessarily overruled by the Court's decision at bar.

(a) The "priority question" raised by respondent Magno as to the patent failure of the two
records on appeal to show on their face and state the material data that the appeals were timely
taken within the 30-day reglamentary period as required by Rule 41, section 6 of the Rules of
Court, has been brushed aside by the main opinion with the statement that it is "not necessary
to pass upon the timeliness of any of said appeals" since they "revolve around practically the
same main issues and ... it is admitted that some of them have been timely taken." 47 The main
opinion thus proceeded with the determination of the thirty-three appealed orders despite the
grave defect of the appellant PCIB's records on appeal and their failure to state the required
material data showing the timeliness of the appeals.

Such disposition of the question of timeliness deemed as "mandatory and jurisdictional" in a

number of cases merits the writer's concurrence in that the question raised has been
subordinated to the paramount considerations of substantial justice and a "liberal interpretation
of the rules" applied so as not to derogate and detract from the primary intent and purpose of
the rules, viz "the proper and just determination of a litigation" 48 — which calls for "adherence to
a liberal construction of the procedural rules in order to attain their objective of substantial
justice and of avoiding denials of substantial justice due to procedural technicalities." 49

Thus, the main opinion in consonance with the same paramount considerations of substantial
justice has likewise overruled respondents' objection to petitioner's taking the recourse of "the
present remedy of certiorari and prohibition" — "despite the conceded availability of appeal" —
on the ground that "there is a common thread among the basic issues involved in all these
thirty-three appeals — (which) deal with practically the same basic issues that can be more
expeditiously resolved or determined in a single special civil action . . . " 50

(b) Since the basic issues have been in effect resolved in the special civil action at bar (as
above stated) with the dismissal of the petition by virtue of the Court's judgment as to the
continued existence of a separate estate of Linnie Jane Hodges and the affirmance as a
necessary consequence of the appealed orders approving and sanctioning respondent Magno's
sales contracts and acts of administration, some doubt would arise as to the propriety of the
main opinion requiring the payment by PCIB of thirty-one (31) additional appeal docket fees.
This doubt is further enhanced by the question of whether it would make the cost of appeal
unduly expensive or prohibitive by requiring the payment of a separate appeal docket fee for
each incidental order questioned when the resolution of all such incidental questioned orders
involve basically one and the same main issue (in this case, the existence of a separate estate
of Linnie Jane Hodges) and can be more expeditiously resolved or determined in
a single special civil action" (for which a single docket fee is required) as stated in the main
opinion. 51Considering the importance of the basic issues and the magnitude of the estates
involved, however, the writer haspro hac vice given his concurrence to the assessment of the
said thirty-one (31) additional appeal docket fees.

MAKALINTAL, C.J., concurring:

I concur in the separate opinion of Justice Teehankee, which in turn agrees with the dispositive
portion of the main opinion of Justice Barredo insofar as it dismisses the petition
for certiorari and prohibition in Cases L-27860 and L-27896 and affirms the appealed orders of
the probate court in cases L-27936-37.

However, I wish to make one brief observation for the sake of accuracy. Regardless of whether
or not C. N. Hodges was entitled to a legitime in his deceased wife's estate — which question,
still to be decided by the said probate court, may depend upon what is the law of Texas and
upon its applicability in the present case — the said estate consists of one-half, not one-fourth,
of the conjugal properties. There is neither a minimum of one-fourth nor a maximum beyond
that. It is important to bear this in mind because the estate of Linnie Hodges consists of her
share in the conjugal properties, is still under administration and until now has not been
distributed by order of the court.

The reference in both the main and separate opinions to a one-fourth portion of the conjugal
properties as Linnie Hodges' minimum share is a misnomer and is evidently meant only to
indicate that if her husband should eventually be declared entitled to a legitime, then the
disposition made by Linnie Hodges in favor of her collateral relatives would be valid only as to
one-half of her share, or one-fourth of the conjugal properties, since the remainder, which
constitutes such legitime, would necessarily go to her husband in absolute ownership,
unburdened by any substitution, term or condition, resolutory or otherwise. And until the estate
is finally settled and adjudicated to the heirs who may be found entitled to it, the administration
must continue to cover Linnie's entire conjugal share.

Separate Opinions

FERNANDO, J., concurring:

I concur on the basis of the procedural pronouncements in the opinion.

TEEHANKEE, J., concurring:

I concur in the result of dismissal of the petition for certiorari and prohibition in Cases L-27860
and L-27896 and with the affirmance of the appealed orders of the probate court in Cases L-
27936-37.

I also concur with the portion of the dispositive part of the judgment penned by Mr. Justice
Barredo decreeing thelifting of the Court's writ of preliminary injunction of August 8, 1967 as
amended on October 4, and December 6, 1967 1 and ordering in lieu thereof that the Court's
resolution of September 8, 1972 2 which directed thatpetitioner-appellant PCIB as administrator
of C. N. (Charles Newton) Hodges' estate (Sp. Proc. No. 1672 and respondent-appellee Avelina
A. Magno as administratrix of Linnie Jane Hodges' estate (Sp. Proc. No. 1307) should act
always conjointly never independently from each other, as such administrators, is reiterated and
shall continue in force and made part of the judgment.

It is manifest from the record that petitioner-appellant PCIB's primal contention in the cases at
bar belatedly filedby it with this Court on August 1, 1967 (over ten (10) years after Linnie Jane
Hodges' death on May 23, 1957 and (over five (5) years after her husband C.N. Hodges' death
on December 25, 1962 — during which time both estates have been pending settlement and
distribution to the decedents' respective rightful heirs all this time up to now) — that the probate
court per its order of December 14, 1957 (supplementing an earlier order of May 25, 1957) 3 in
granting C. N. Hodges' motion as Executor of his wife Linnie's estate to continue their
"business of buying and selling personal and real properties" and approving "all sales,
conveyances, leases and mortgages" made and to be made by him as such executor under his
obligation to submit his yearly accounts in effect declared him as sole heir of his wife's estate
and nothing remains to be done except to formally close her estate (Sp. Proc. No. 1307) as her
estate was thereby merged with his own so that nothing remains of it that may be adjudicated to
her brothers and sisters as her designated heirs after him, 4 — is wholly untenable and deserves
scant consideration.

Aside from having been put forth as an obvious afterthought much too late in the day, this
contention of PCIB that there no longer exists any separate estate of Linnie Jane Hodges after
the probate court's order of December 14, 1957 goes against the very acts and
judicial admissions of C.N. Hodges as her executor whereby he consistently recognized
the separate existence and identity of his wife's estate apart from his own separate estate and
from his own share of their conjugal partnership and estate and "never considered the whole
estate as a single one belonging exclusively to himself" during the entire period that he survived
her for over five (5) years up to the time of his own death on December 25, 1962 5 and against
the identical acts and judicial admissions of PCIB as administrator of C.N. Hodges' estate until
PCIB sought in 1966 to take over both estates as pertaining to its sole administration.

PCIB is now barred and estopped from contradicting or taking a belated position contradictory to
or inconsistent with its previous admissions 6 (as well as those of C.N. Hodges himself in his
lifetime and of whose estate PCIB is merely an administrator) recognizing the existence and
identity of Linnie Jane Hodges' separate estate and the legal rights and interests therein of her
brothers and sisters as her designated heirs in her will.

PCIB's petition for certiorari and prohibition to declare all acts of the probate court in Linnie Jane
Hodges' estate subsequent to its order of December 14, 1957 as "null and void for having been
issued without jurisdiction" must therefore be dismissed with the rejection of its belated and
untenable contention that there is no longer any estate of Mrs. Hodges of which respondent
Avelina Magno is the duly appointed and acting administratrix.

PCIB's appeal 7 from the probate court's various orders recognizing respondent Magno as
administratrix of Linnie's estate (Sp. Proc No. 1307) and sanctioning her acts of administration
of said estate and approving the sales contracts executed by her with the various individual
appellees, which involve basically the same primal issue raised in the petition as to whether
there still exists a separate estate of Linnie of which respondent-appellee Magno may continue
to be the administratrix, must necessarily fail — a result of the Court's main opinion at bar that
there does exist such an estate and that the two estates (husband's and wife's) must be
administered cojointlyby their respective administrators (PCIB and Magno).

The dispositive portion of the main opinion

The main opinion disposes that:

IN VIEW OF ALL THE FOREGOING PREMISES, judgment is hereby rendered

DISMISSING the petition in G. R. Nos. L-27860 and L-27896, and AFFIRMING,
in G. R. Nos. L-27936-37 and the other thirty-one numbers hereunder ordered to
be added after payment of the corresponding docket fees, all the orders of the
trial court under appeal enumerated in detail on pages 35 to 37 and 80 to 82 of
this decision:

The existence of the Testate Estate of Linnie Jane Hodges, with respondent-
appellee Avelina A. Magno, as administratrix thereof is recognized, and
It is declared that, until final judgment is ultimately rendered regarding (1) the
manner of applying Article 16 of the Civil Code of the Philippines to the situation
obtaining in these cases and (2) the factual and legal issues of whether or not
Charles Newton Hodges has effectively and legally renounced his inheritance
under the will of Linnie Jane Hodges, the said estate consists of one-fourthof the
community properties of the said spouses, as of the time of the death of the wife
on May 23, 1957, minus whatever the husband had already gratuitously disposed
of in favor of third persons from said date until his death, provided, first, that with
respect to remunerative dispositions, the proceeds thereof shall continue to
be part of the wife's estate, unless subsequently disposed of gratuitously to third
parties by the husband, and second, that should the purported renunciation be
declared legally effective, no deduction whatsoever are to be made from said
estate;

In consequence, the preliminary injunction of August 8, 1967, as amended on

October 4 and December 6, 1967, is lifted and the resolution of September 8,
1972, directing that petitioner-appellant PCIB, as Administrator of the Testate
Estate of Charles Newton Hodges in Special Proceedings 1672, and respondent-
appellee Avelina A. Magno, as Administratrix of the Testate Estate of Linnie Jane
Hodges in Special Proceedings 1307, should act thenceforth always conjointly,
never independently from each other, as such administrators, is reiterated, and
the same is made part of this judgment and shall continue in
force, pending the liquidation of the conjugal partnership of the deceased
spouses and the determination and segregation from each other of their
respective estates; provided, that upon the finality of this judgment, the trial court
should immediately proceed to the partition of the presently combined estates of
the spouses, to the end that the one-half share thereof of Mrs. Hodges may be
properly and clearly identified;

Thereafter, the trial court should forthwith segregate the remainder of the one-
fourth herein adjudged to be her estate and cause the same to be turned over or
delivered to respondent for her exclusive administration in Special Proceedings
1307, while the other one-fourth shall remain under the joint administrative of
said respondent and petitioner under a joint proceedings in Special Proceedings
1307 and 1672, whereas the half unquestionably pertaining to Hodges shall
be administered bypetitioner exclusively in Special Proceedings 1672, without
prejudice to the resolution by the trial court of the pending motions for its
removal as administrator;

And this arrangement shall be maintained until the final resolution of the two
issues of renvoi andrenunciation hereby reserved for further hearing and
determination, and the corresponding completesegregation and partition of the
two estates in the proportions that may result from the said resolution.

Generally and in all other respects, the parties and the court a quo are directed to
adhere henceforth, in all their actuations in Special Proceedings 1307 and 1672,
to the views passed and ruled upon by the Court in the foregoing opinion. 8

Minimum estimate of Mrs. Hodges' estate:

One-fourth of conjugal properties.
The main opinion in declaring the existence of a separate estate of Linnie Jane Hodges which
shall pass to her brothers and sisters with right of representation (by their heirs) as her duly
designated heirs declares that her estate consists as a minimum (i.e. assuming (1) that under
Article 16 of the Philippine Civil Code C. N. Hodges as surviving husband was entitled to one-
half of her estate as legitime and (2) that he had not effectively and legallyrenounced his
inheritance under her will) of "one-fourth of the community properties of the said spouses, as of
the time of the death of the wife on May 23, 1957, minus whatever the husband had
already gratuitously disposed of in favor of third persons from said date until his death," with the
proviso that proceeds of remunerative dispositions or sales for valuable consideration made by
C. N. Hodges after his wife Linnie's death shall continue to be part of her
estate unless subsequently disposed of by him gratuitously to third parties subject to the
condition, however, that if he is held to have validly and effectively renounced his inheritance
under his wife's will, no deductions of any dispositions made by Hodges even if gratuitously are
to be made from his wife Linnie's estate which shall passintact to her brothers and sisters as her
designated heirs called in her will to succeed to her estate upon the death of her husband C. N.
Hodges.

Differences with the main opinion

I do not share the main opinion's view that Linnie Jane Hodges instituted her husband as her
heir under her will "to have dominion over all her estate during his lifetime ... as absolute
owner of the properties ..." 9 and that she bequeathed "the whole of her estate to be owned and
enjoyed by him as universal and sole heir with absolute dominion over them only during his
lifetime, which means that while he could completely and absolutely dispose of any portion
thereof inter vivos to anyone other than himself, he was not free to do so mortis causa, and all
his rights to what might remain upon his death would cease entirely upon the occurrence of that
contingency, inasmuch as the right of his brothers and sisters-in-law to the inheritance, although
vested already upon the death of Mrs. Hodges, would automatically become operative upon the
occurrence of the death of Hodges in the event of actual existence of any remainder of her
estate then." 10

As will be amplified hereinafter, I do not subscribe to such a view that Linnie Jane Hodges willed
"full and absolute ownership" and "absolute dominion" over her estate to her husband, but
rather that she named her husband C. N. Hodges and her brothers and sisters as instituted
heirs with a term under Article 885 of our Civil Code, to wit, Hodges as instituted heir with
a resolutory term whereunder his right to the succession ceased in diem upon arrival of
the resolutory term of his death on December 25, 1962 and her brothers and sisters as
instituted heirs with asuspensive term whereunder their right to the succession commenced ex
die upon arrival of the suspensive term of the death of C. N. Hodges on December 25, 1962.

Hence, while agreeing with the main opinion that the proceeds of all remunerative dispositions
made by C. N. Hodges after his wife's death remain an integral part of his wife's estate which
she willed to her brothers and sisters, I submit that C. N. Hodges could not validly
make gratuitous dispositions of any part or all of his wife's estate — "completely and absolutely
dispose of any portion thereof inter vivos to anyone other than himself" in the language of the
main opinion, supra — and thereby render ineffectual and nugatory her institution of her
brothers and sisters as her designated heirs to succeed to her whole estate "at the death of
(her) husband." If according to the main opinion, Hodges could not make such gratuitous
"complete and absolute dispositions" of his wife Linnie's estate "mortis causa," it would seem
that by the same token and rationale he was likewise proscribed by the will from making such
dispositions of Linnie's estate inter vivos.

I believe that the two questions of renvoi and renunciation should be

resolved preferentially and expeditiously by the probate court ahead of the partition and
segregation of the minimum one-fourth of the conjugal or community properties constituting
Linnie Jane Hodges' separate estate, which task considering that it is now seventeen (17) years
since Linnie Jane Hodges' death and her conjugal estate with C. N. Hodges has
remained unliquidated up to now might take a similar number of years to unravel with the
numerous items, transactions and details of the sizable estates involved.

Such partition of the minimum one-fourth would not be final, since if the two prejudicial
questions of renvoi andrenunciation were resolved favorably to Linnie's estate meaning to say
that if it should be held that C. N. Hodges is not entitled to any legitime of her estate and at any
rate he had totally renounced his inheritance under the will), then Linnie's estate would consist
not only of the minimum one-fourth but one-half of the conjugal or community properties of the
Hodges spouses, which would require again the partition and segregation of still another one-
fourth of said. properties to complete Linnie's separate estate.

My differences with the main opinion involve further the legal concepts, effects and
consequences of the testamentary dispositions of Linnie Jane Hodges in her will and the
question of the best to reach a solution of the pressing question of expediting the closing of the
estates which after all do not appear to involve any outstanding debts nor any dispute between
the heirs and should therefore be promptly settled now after all these years without any further
undue complications and delays and distributed to the heirs for their full enjoyment and benefit.
As no consensus appears to have been reached thereon by a majority of the Court, I propose to
state views as concisely as possible with the sole end in view that they may be of some
assistance to the probate court and the parties in reaching an expeditious closing and
settlement of the estates of the Hodges spouses.

Two Assumptions

As indicated above, the declaration of the minimum of Mrs. Hodges' estate as one-fourth of the
conjugal properties is based on two assumptions most favorable to C. N. Hodges' estate and his
heirs, namely (1) that the probate court must accept the renvoi or "reference back" 11 allegedly
provided by the laws of the State of Texas (of which state the Hodges spouses were citizens)
whereby the civil laws of the Philippines as the domicile of the Hodges spouses would govern
their succession notwithstanding the provisions of Article 16 of our Civil Code (which provides
that the national law of the decedents, in this case, of Texas, shall govern their succession) with
the result that her estate would consist of no more than one-fourth of the conjugal properties
since the legitime of her husband (the other one-fourth of said conjugal properties or one-half
of her estate, under Article 900 of our Civil Code) could not then be disposed of nor burdened
with any condition by her and (2) that C.N. Hodges had noteffectively and legally renounced his
inheritance under his wife's will.

These two assumptions are of course flatly disputed by respondent-appellee Magno as Mrs.
Hodges' administratrix, who avers that the law of the State of Texas governs her succession
and does not provide for and legitime, hence, her brothers and sisters are entitled to succeed to
the whole of her share of the conjugal properties which is one-half thereof and that in any event,
Hodges had totally renounced all his rights under the will.
The main opinion concedes that "(I)n the interest of settling the estates herein involved soonest,
it would be best, indeed, if these conflicting claims of the parties were determined in these
proceedings." It observes however that this cannot be done due to the inadequacy of the
evidence submitted by the parties in the probate court and of the parties' discussion, viz, "there
is no clear and reliable proof of what the possibly applicable laws of Texas are. Then also, the
genuineness of the documents relied upon by respondent Magno [re Hodges' renunciation] is
disputed." 12

Hence, the main opinion expressly reserves resolution and determination on these two
conflicting claims and issues which it deems "are not properly before the Court
now," 13 and specifically holds that "(A)ccordingly, the only question that remains to be settled in
the further proceedings hereby ordered to be held in the court below is how much more than as
fixed above is the estate of Mrs. Hodges, and this would depend on (1) whether or not the
applicable laws of Texas do provide in effect for more, such as, when there is
no legitime provided therein, and (2) whether or not Hodges has validly waived his whole
inheritance from Mrs. Hodges." 14

Suggested guidelines

Considering that the only unresolved issue has thus been narrowed down and in consonance
with the ruling spirit of our probate law calling for the prompt settlement of the estates of
deceased persons for the benefit of creditors and those entitled to the residue by way of
inheritance — considering that the estates have been long pending settlement since 1957 and
1962, respectively — it was felt that the Court should lay down specific guidelines for the
guidance of the probate court towards the end that it may expedite the closing of the protracted
estates proceedings below to the mutual satisfaction of the heirs and without need of a
dissatisfied party elevating its resolution of this only remaining issue once more to this Court
and dragging out indefinitely the proceedings.

After all, the only question that remains depends for its determination on the resolution of the
two questions ofrenvoi and renunciation, i.e. as to whether C. N. Hodges can claim
a legitime and whether he had renounced the inheritance. But as already indicated above, the
Court without reaching a consensus which would finally resolve the conflicting claims here and
now in this case opted that "these and other relevant matters should first be threshed out fully in
the trial court in the proceedings hereinafter to be held for the purpose of ascertaining and/or
distributing the estate of Mrs. Hodges to her heirs in accordance with her duly probated will." 15

The writer thus feels that laying down the premises and principles governing the nature, effects
and consequences of Linnie Jane Hodges' testamentary dispositions in relation to her conjugal
partnership and co-ownership of properties with her husband C. N. Hodges and "thinking out"
the end results, depending on whether the evidence directed to be formally received by the
probate court would bear out that under renvoi C. N. Hodges was or was not entitled to claim a
legitime of one-half of his wife Linnie's estate and/or that he had or had not effectively and
validly renounced his inheritance should help clear the decks, as it were, and assist the probate
court in resolving the only remaining question of how much more than the minimum one-fourth
of the community properties of the Hodges spouses herein finally determined should be
awarded as the separate estate of Linnie, particularly since the views expressed in the main
opinion have not gained a consensus of the Court. Hence, the following suggested guidelines,
which needless to state, represent the personal opinion and views of the writer:
1. To begin with, as pointed out in the main opinion, "according to Hodges' own inventory
submitted by him as executor of the estate of his wife, practically all their properties
were conjugal which means that the spouses haveequal shares therein." 16

2. Upon the death of Mrs. Hodges on May 23, 1957, and the dissolution thereby of the marriage,
the law imposed upon Hodges as surviving husband the duty of inventorying, administering and
liquidating the conjugal or community property. 17 Hodges failed to discharge this duty
of liquidating the conjugal partnership and estate. On the contrary, he sought and obtained
authorization from the probate court to continue the conjugal partnership'sbusiness of buying
and selling real and personal properties.

In his annual accounts submitted to the probate court as executor of Mrs. Hodges' estate,
Hodges thusconsistently reported the considerable combined income (in six figures) of
the conjugal partnership or coownershipand then divided the same equally between himself and
Mrs. Hodges' estate and as consistently filed separate income tax returns and paid the income
taxes for each resulting half of such combined income corresponding to his own and to Mrs.
Hodges' estate. 18 (Parenthetically, he could not in law do this, had he adjudicated Linnie's
entire estate to himself, thus supporting the view advanced even in the main opinion that
"Hodges waived not only his rights to the fruits but to the properties themselves." 19

By operation of the law of trust 20 as well as by his own acknowledgment and acts, therefore, all
transactions made by Hodges after his wife's death were deemed for and on behalf of
their unliquidated conjugal partnership andcommunity estate and were so reported and treated
by him.

3. With this premise established that all transactions of Hodges after his wife's death were for
and on behalf of their unliquidated conjugal partnership and community estate, share and share
alike, it should be clear that nogratuitous dispositions, if any, made by C. N. Hodges from his
wife Linnie's estate should be deducted from herseparate estate as held in the main opinion. On
the contrary, any such gratuitous dispositions should be charged to his own share of the
conjugal estate since he had no authority or right to make any gratuitous dispositions of Linnie's
properties to the prejudice of her brothers and sisters whom she called to her succession upon
his death, not to mention that the very authority obtained by him from the probate court per its
orders of May 25, and December 14, 1957 was to continue the conjugal partnership's business
of buying and selling real properties for the account of their unliquidated conjugal estate and co-
ownership, share and share alike and not to make anyfree dispositions of Linnie's estate.

4. All transactions as well after the death on December 25, 1962 of Hodges himself appear
perforce and necessarily to have been conducted, on the same premise, for and on behalf of
their unliquidated conjugal partnership and/or co-ownership, share and share alike — since the
conjugal partnership remained unliquidated — which is another way of saying that such
transactions, purchases and sales, mostly the latter, must be deemed in effect to have been
made for the respective estates of C. N. Hodges and of his wife Linnie Jane Hodges, as both
estates continued to have an equal stake and share in the conjugal partnership which was not
only leftunliquidated but continued as a co-ownership or joint business with the probate court's
approval by Hodges during the five-year period that he survived his wife.

This explains the probate court's action of requiring that deeds of sale executed by PCIB as
Hodges' estate's administrator be "signed jointly" by respondent Magno as Mrs. Hodges'
estate's administratrix, as well as its order authorizing payment by lot purchasers from the
Hodges to either estate, since "there is as yet no judicial declaration of heirs nor distribution of
properties to whomsoever are entitled thereto." 22

And this equally furnishes the rationale of the main opinion for continued conjoint administration
by the administrators of the two estates of the deceased spouses, "pending the liquidation of the
conjugal partnership,"23 since "it is but logical that both estates should be administered jointly by
the representatives of both, pending their segregation from each other. Particularly ... because
the actuations so far of PCIB evince a determined, albeit groundless, intent to exclude the other
heirs of Mrs. Hodges from their inheritance." 24 5. Antly by the representatives of both, pending
their segregation from each other. Particularly ... because the actuations so far of PCIB evince a
determined, albeit groundless, intent to exclude the other heirs of Mrs. Hodges from their
inheritance." 24

5. As stressed in the main opinion, the determination of the only unresolved issue of how much
more than the minimum of one-fourth of the community or conjugal properties of the Hodges
spouses pertains to Mrs. Hodges' estate depends on the twin questions
of renunciation and renvoi. It directed consequently that "a joint hearing of the two probate
proceedings herein involved" be held by the probate court for the reception of "further evidence"
in order to finally resolved these twin questions. 25

(a) On the question of renunciation, it is believed that all that the probate court has to do is to
receive formally in evidence the various documents annexed to respondent Magno's answer at
bar, 26 namely: Copy of the U.S. Estate Tax Return filed on August 8, 1958 by C. N. Hodges for
his wife Linnie's estate wherein he purportedly declared that he was renouncing his inheritance
under his wife's will in favor of her brothers and sisters as co-heirs designated with him and that
it was his "intention (as) surviving husband of the deceased to distribute the remaining property
and interests of the deceased in their community estate to the devisee and legatees named in
the will when the debts, liabilities, taxes and expenses of administration are finally determined
and paid;" 27 and

The affidavit of ratification of such renunciation (which places him in estoppel) allegedly
executed on August 9, 1962 by C. N. Hodges in Iloilo City wherein he reaffirmed that "...
on August 8, 1958, I renounced and disclaimed any and all right to receive the rents,
emoluments and income from said estate" and further declared that "(T)he purpose of this
affidavit is to ratify and confirm, and I do hereby ratify and confirm, the declaration made in
schedule M of said return and hereby formally disclaim and renounce any right on my part to
receive any of the said rents, emoluments and income from the estate of my deceased wife,
Linnie Jane Hodges. This affidavit is made to absolve me or my estate from any liability for the
payment of income taxes on income which has accrued to the estate of Linnie Jane
Hodges since the death of the said Linnie Jane Hodges on May 23, 1957." 28

(b) On the question of renvoi, all that remains for the probate court to do is to formally receive in
evidence duly authenticated copies of the laws of the State of Texas governing the succession
of Linnie Jane Hodges and her husband C. N. Hodges as citizens of said State at the time of
their respective deaths on May 23, 1957 andDecember 25, 1962. 29

6. The text and tenor of the declarations by C. N. Hodges of renunciation of his inheritance from
his wife in favor of her other named heirs in her will (her brothers and sisters and their
respective heirs) as ratified and reiteratedexpressly in his affidavit of renunciation executed four
years later for the avowed purpose of not being held liable for payment of income taxes on
income which has accrued to his wife's estate since her death indicate a valid and effective
renunciation.

Once the evidence has been formally admitted and its genuineness and legal effectivity
established by the probate court, the renunciation by C. N. Hodges must be given due effect
with the result that C. N. Hodges therefore acquired no part of his wife's one-half share of the
community properties since he removed himself as an heir by virtue of his renunciation. By
simple substitution then under Articles 857 and 859 of our Civil Code 30 and by virtue of the will's
institution of heirs, since "the heir originally instituted C. N. Hodges) does not become an
heir"31 by force of his renunciation, Mrs. Hodges' brothers and sisters whom she designated as
her heirs upon her husband's death are called immediately to her succession.

Consequently, the said community and conjugal properties would then pertain pro indiviso share
and share alike to their respective estates, with each estate, however, shouldering its own
expenses of administration, estate and inheritance taxes, if any remain unpaid, attorneys' fees
and other like expenses and the net remainder to be adjudicated directly to the decedents'
respective brothers and sisters (and their heirs) as the heirs duly designated in their respective
wills. The question of renvoi becomes immaterial since most laws and our
lawspermit such renunciation of inheritance.

7. If there were no renunciation (or the same may somehow be declared to have not been valid
and effective) by C. N. Hodges of his inheritance from his wife, however, what would be the
consequence?

(a) If the laws on succession of the State of Texas do provide for renvoi or "reference back" to
Philippine law as the domiciliary law of the Hodges' spouses governing their succession, then
petitioners' view that Mrs. Hodges' estate would consist only of the minimum of "one-fourth of
the community properties of the said spouses, as of the time of (her) death on May 23, 1957"
would have to be sustained and C. N. Hodges' estate would consist of three-fourths of the
community properties, comprising his own one-half (or two-fourths) share and the other fourth of
Mrs. Hodges' estate as the legitime granted him as surviving spouse by Philippine law (Article
900 of the Civil Code) which could not be disposed of nor burdened with any condition by Mrs.
Hodges as testatrix.

(b) If the laws on succession of the State of Texas do not provide for such renvoi and
respondent Magno's assertion is correct that the Texas law which would then prevail, provides
for no legitime for C. N. Hodges as the surviving spouse, then respondent Magno's assertion
that Mrs. Hodges' estate would consist of one-half of the community properties (with the other
half pertaining to C. N. Hodges) would have to be sustained. The community and conjugal
properties would then pertain share and share alike to their respective estates, with each estate
shouldering its own expenses of administration in the same manner stated in the last paragraph
of paragraph 6 hereof. .

8. As to the nature of the institution of heirs made by Mrs. Hodges in her will, the main opinion
holds that "(T)he brothers and sisters of Mrs. Hodges are not substitutes for Hodges; rather,
they are also heirs institutedsimultaneously with Hodges," but goes further and holds that "it was
not the usufruct alone of her estate ... that she bequeathed to Hodges during his lifetime, but
the full ownership thereof, although the same was to last also during his lifetime only, even as
there was no restriction against his disposing or conveying the whole or any portion
thereof anybody other than himself" and describes Hodges "as universal and sole
heir with absolute dominion over Mrs. Hodges' estate (except over their Lubbock, Texas
property ), 32 adding that "Hodges was not obliged to preserve anything for them" (referring to
Mrs. Hodges' brothers and sisters as instituted co-heirs). 33

Contrary to this view of the main opinion, the writer submits that the provisions of Mrs. Hodges'
will did not grant to C.N. Hodges "full ownership" nor "absolute dominion" over her estate, such
that he could as "universal and sole heir" by the mere expedient of gratuitously disposing to
third persons her whole estate during his lifetime nullify her institution of her brothers and sisters
as his co-heirs to succeed to her whole estate "at the death of (her) husband," deprive them of
any inheritance and make his own brothers and sisters in effect sole heirs not only of his own
estate but of his wife's estate as well.

Thus, while Linnie Jane Hodges did not expressly name her brothers and sisters as substitutes
for Hodges because she willed that they would enter into the succession upon his death, still it
cannot be gainsaid, as the main opinion concedes, "that they are
also heirs instituted simultaneously with Hodges, subject however to certain conditions,
partially resolutory insofar as Hodges was concerned and correspondingly suspensive with
reference to his brothers and sisters-in-law." 34

Hence, if Hodges is found to have validly renounced his inheritance, there would be a
substitution of heirs in fact and in law since Linnie's brothers and sisters as the heirs
"simultaneously instituted" with a suspensive term would be called immediately to her
succession instead of waiting for the arrival of suspensive term of Hodges' death, since as the
heir originally instituted he does not become an heir by force of his renunciation and therefore
they would "enter into the inheritance in default of the heir originally instituted" (Hodges) under
the provisions of Article 857 and 859 of our Civil Code, supra, 35 thus accelerating their
succession to her estate as a consequence of Hodges' renunciation.

Consequently, Linnie Jane Hodges willed that her husband C.N. Hodges would "during his
natural lifetime ...manage, control, use and enjoy said estate" and that only "all rents,
emoluments and income" alone shall belong to him. She further willed that while he
could sell and purchase properties of her estate, and "use any part of the principal estate," such
principal notwithstanding "any changes in the physical properties of said estate"(i.e. new
properties acquired or exchanged) would still pertain to her estate, which at the time of his
death would pass in full dominion to her brothers and sisters as the ultimate sole and universal
heirs of her estate. 36

The testatrix Linnie Jane Hodges in her will thus principally provided that "I give, devise and
bequeath all of the rest, residue and remainder of my estate, both personal and real ... to my
beloved husband, Charles Newton Hodges, to have and to hold with him ... during his natural
lifetime;" 37 that "(he) shall have the right to manage, control, use and enjoy said estate during
his lifetime, ... to make any changes in the physical properties of said estate, by sale ... and
the purchase of any other or additional property as he may think best ... . All rents,
emoluments and income from said estate shall belong to him and he is further authorized
to use any part of the principal of said estate as he may need or desire, ... he shall not sell or
otherwise dispose of any of the improved property now owned by us, located at ... City of
Lubbock, Texas ... . He shall have the right to subdivide any farmland and sell lots therein, and
may sell unimproved town lots;" 38 that "(A)t the death of my said husband, Charles Newton, I
give, devise and bequeath all of the rest, residue and remainder of my estate, both personal and
real, ... to be equally divided among my brothers and sisters, share and share alike, namely:
Esta Higdon, Emma Howell, Leonard Higdon, Roy Higdon, Sadie Rascoe, Era Roman and
Nimroy Higdon;" 39 and that "(I)n case of the death of any of my brothers and/or sisters ... prior
to the death of my husband ... the heirs of such deceased brother or sister shall take jointly the
share which would have gone to such brother or sister had she or he survived." 40

Such provisions are wholly consistent with the view already fully expounded above that all
transactions and sales made by Hodges after his wife Linnie's death were by operation of the
law of trust as well as by his ownacknowledgment and acts deemed for and on behalf of
their unliquidated conjugal partnership and community estate, share and share alike, with the
express authorization of the probate court per its orders of May 25, and December 14, 1957
granting Hodges' motion to continue the conjugal partnership business of buying and selling real
estate even after her death. By the same token, Hodges could not conceivably be deemed to
have had any authority or right to dispose gratuitously of any portion of her estate to whose
succession she had called her brothers and sisters upon his death.

9. Such institutions of heirs with a term are expressly recognized and permitted under Book III,
Chapter 2, section 4 of our Civil Code dealing with "conditional testamentary dispositions and
testamentary dispositions with a term." 41

Thus, Article 885 of our Civil Code expressly provides that:

ART 885. The designation of the day or time when the effects of the institution of
an heir shallcommence or cease shall be valid.

In both cases, the legal heir shall be considered as called to the succession until
the arrival of the period or its expiration. But in the first case he shall not enter
into possession of the property until after having given sufficient security, with the
intervention of the instituted heir.

Accordingly, under the terms of Mrs. Hodges' will, her husband's right to the succession as the
instituted heir ceased in diem, i.e. upon the arrival of the resolutory term of his death on
December 25, 1962, while her brothers' and sisters' right to the succession also as instituted
heirs commenced ex die, i.e. upon the expiration of the suspensive term (as far as they were
concerned) of the death of C. N. Hodges on December 25, 1962 . 42

As stated in Padilla's treatise on the Civil Code, "A term is a period whose arrival is certain
although the exact date thereof may be uncertain. A term may have either a suspensive or a
resolutory effect. The designation of the day when the legacy "shall commence" is ex die, or a
term with a suspensive effect, from a certain day. The designation of the day when the legacy
"shall cease" is in diem or a term with a resolutory effect, until a certain day." He adds that "A
legacy based upon a certain age or upon the death of a person is not a condition but aterm. If
the arrival of the term would commence the right of the heir, it is suspensive. If the arrival of the
term would terminate his right, it is resolutory" and that "upon the arrival of the period, in case of
a suspensive term, theinstituted heir is entitled to the succession, and in case of a resolutory
term, his right terminates." 43

10. The sizable estates herein involved have now been pending settlement for a considerably
protracted period (of seventeen years counted from Linnie's death in 1957), and all that is left to
be done is to resolve the onlyremaining issue (involving the two questions
of renunciation and renvoi) hereinabove discussed in order to close up the estates and finally
effect distribution to the deceased spouses' respective brothers and sisters and their heirs as
the heirs duly instituted in their wills long admitted to probate. Hence, it is advisable for said
instituted heirs and their heirs in turn 44 to come to terms for the adjudication and distribution to
them pro-indiviso of the up to now unliquidated community properties of the estates of the
Hodges spouses (derived from their unliquidatedconjugal partnership) rather than to get bogged
down with the formidable task of physically segregating andpartitioning the two estates with the
numerous transactions, items and details and physical changes of properties involved. The
estates proceedings would thus be closed and they could then name their respective attorneys-
in-fact to work out the details of segregating, dividing or partitioning the unliquidated community
properties or liquidating them — which can be done then on their own without further need of
intervention on the part of the probate court as well as allow them meanwhile to enjoy and make
use of the income and cash and liquid assets of the estates in such manner as may be agreed
upon between them.

Such a settlement or modus vivendi between the heirs of the unliquidated two estates for the
mutual benefit of all of them should not prove difficult, considering that it appears as stated in
the main opinion that 22.968149% of the share or undivided estate of C. N. Hodges have
already been acquired by the heirs of Linnie Jane Hodges from certain heirs of her husband,
while certain other heirs representing 17.34375% of Hodges' estate were joining cause with
Linnie's heirs in their pending and unresolved motion for the removal of petitioner PCIB as
administrator of Hodges' estate, 45 apparently impatient with the situation which has apparently
degenerated into a running battle between the administrators of the two estates to the common
prejudice of all the heirs.

11. As earlier stated, the writer has taken the pain of suggesting these guidelines which may
serve to guide the probate court as well as the parties towards expediting the winding up and
closing of the estates and the distribution of the net estates to the instituted heirs and their
successors duly entitled thereto. The probate court should exert all effort towards this desired
objective pursuant to the mandate of our probate law, bearing in mind the Court's admonition in
previous cases that "courts of first instance should exert themselves to close up estate within
twelve months from the time they are presented, and they may refuse to allow any
compensation to executors and administrators who do not actively labor to that end, and they
may even adopt harsher measures."46

Timeliness of appeals and imposition of

thirty-one (31) additional docket fees

Two appeals were docketed with this Court, as per the two records on appeal submitted (one
with a green cover and the other with a yellow cover). As stated at the outset, these appeals
involve basically the same primal issue raised in the petition for certiorari as to whether there
still exists a separate estate of Linnie Jane Hodges which has to continue to be administered by
respondent Magno. Considering the main opinion's ruling in the affirmative and that her estate
and that of her husband (since they jointly comprise unliquidated community properties) must be
administered conjointly by their respective administrators (PCIB and Magno), the said appeals
(involving thirty-three different orders of the probate court approving sales contracts and other
acts of administration executed and performed by respondent Magno on behalf of Linnie's
estate) have been necessarily overruled by the Court's decision at bar.

(a) The "priority question" raised by respondent Magno as to the patent failure of the two
records on appeal to show on their face and state the material data that the appeals were timely
taken within the 30-day reglamentary period as required by Rule 41, section 6 of the Rules of
Court, has been brushed aside by the main opinion with the statement that it is "not necessary
to pass upon the timeliness of any of said appeals" since they "revolve around practically the
same main issues and ... it is admitted that some of them have been timely taken." 47 The main
opinion thus proceeded with the determination of the thirty-three appealed orders despite the
grave defect of the appellant PCIB's records on appeal and their failure to state the required
material data showing the timeliness of the appeals.

Such disposition of the question of timeliness deemed as "mandatory and jurisdictional" in a

number of cases merits the writer's concurrence in that the question raised has been
subordinated to the paramount considerations of substantial justice and a "liberal interpretation
of the rules" applied so as not to derogate and detract from the primary intent and purpose of
the rules, viz "the proper and just determination of a litigation" 48 — which calls for "adherence to
a liberal construction of the procedural rules in order to attain their objective of substantial
justice and of avoiding denials of substantial justice due to procedural technicalities." 49

Thus, the main opinion in consonance with the same paramount considerations of substantial
justice has likewise overruled respondents' objection to petitioner's taking the recourse of "the
present remedy of certiorari and prohibition" — "despite the conceded availability of appeal" —
on the ground that "there is a common thread among the basic issues involved in all these
thirty-three appeals — (which) deal with practically the same basic issues that can be more
expeditiously resolved or determined in a single special civil action . . . " 50

(b) Since the basic issues have been in effect resolved in the special civil action at bar (as
above stated) with the dismissal of the petition by virtue of the Court's judgment as to the
continued existence of a separate estate of Linnie Jane Hodges and the affirmance as a
necessary consequence of the appealed orders approving and sanctioning respondent Magno's
sales contracts and acts of administration, some doubt would arise as to the propriety of the
main opinion requiring the payment by PCIB of thirty-one (31) additional appeal docket fees.
This doubt is further enhanced by the question of whether it would make the cost of appeal
unduly expensive or prohibitive by requiring the payment of a separate appeal docket fee for
each incidental order questioned when the resolution of all such incidental questioned orders
involve basically one and the same main issue (in this case, the existence of a separate estate
of Linnie Jane Hodges) and can be more expeditiously resolved or determined in
a single special civil action" (for which a single docket fee is required) as stated in the main
opinion. 51Considering the importance of the basic issues and the magnitude of the estates
involved, however, the writer haspro hac vice given his concurrence to the assessment of the
said thirty-one (31) additional appeal docket fees.

MAKALINTAL, C.J., concurring:

I concur in the separate opinion of Justice Teehankee, which in turn agrees with the dispositive
portion of the main opinion of Justice Barredo insofar as it dismisses the petition
for certiorari and prohibition in Cases L-27860 and L-27896 and affirms the appealed orders of
the probate court in cases L-27936-37.

However, I wish to make one brief observation for the sake of accuracy. Regardless of whether
or not C. N. Hodges was entitled to a legitime in his deceased wife's estate — which question,
still to be decided by the said probate court, may depend upon what is the law of Texas and
upon its applicability in the present case — the said estate consists of one-half, not one-fourth,
of the conjugal properties. There is neither a minimum of one-fourth nor a maximum beyond
that. It is important to bear this in mind because the estate of Linnie Hodges consists of her
share in the conjugal properties, is still under administration and until now has not been
distributed by order of the court.

The reference in both the main and separate opinions to a one-fourth portion of the conjugal
properties as Linnie Hodges' minimum share is a misnomer and is evidently meant only to
indicate that if her husband should eventually be declared entitled to a legitime, then the
disposition made by Linnie Hodges in favor of her collateral relatives would be valid only as to
one-half of her share, or one-fourth of the conjugal properties, since the remainder, which
constitutes such legitime, would necessarily go to her husband in absolute ownership,
unburdened by any substitution, term or condition, resolutory or otherwise. And until the estate
is finally settled and adjudicated to the heirs who may be found entitled to it, the administration
must continue to cover Linnie's entire conjugal share.

Footnotes

1 Actually, the affidavit reads as follows:

"I, C. N. Hodges, being duly sworn, on oath affirm that at the time the United
States Estate Tax Return was filed in the Estate of Linnie Jane Hodges on
August 8, 1958, I renounced and disclaimed any and all right to receive the rents,
emoluments and income from said estate, as shown by the statement contained
in schedule M at page 29 of said return, a copy of which schedule is attached to
this affidavit and made a part hereof.

"The purpose of this affidavit is to ratify and confirm, and I do hereby ratify and
confirm, the declaration made in schedule M of said return and hereby formally
disclaim and renounce any right on my part to receive any of the said rents,
emoluments and income from the estate of my deceased wife, Linnie Jane
Hodges. This affidavit is made to absolve me or my estate from any liability for
the payment of income taxes on income which has accrued to the estate of
Linnie Jane Hodges since the death of the said Linnie Jane Hodges on May 23,
1957." ( annex 5, Answer of respondent Avelina Magno, p. 264, L-27860 Rollo.)

2 The will of Hodges executed on November 14, 1953 contained mutually similar
dispositions as those of his wife as follows:

xxx xxx xxx

"FIRST: I direct that all my just debts and funeral expenses be first paid out of my
estate.

SECOND: I give, devise and bequeath all the rest, residue and remainder of my
estate, both personal and real, wherever situated, or located, to my beloved wife,
Linnie Jane Hodges, to have and to hold unto her, my said wife, during her
natural lifetime.

THIRD: I desire, direct and provide that my wife, Linnie Jane Hodges, shall have
the right to manage, control, use and enjoy said estate during her lifetime, and
she is hereby given the right to make any changes in the physical properties of
said estate, by sale or any part thereof which she may think best; to execute
conveyances with or without general or special warranty, conveying in fee simple
or for any other term or time, any property which she may deem proper to
dispose of; to lease any of the real property for oil, gas and/or other minerals,
and all such deeds or leases shall pass the absolute fee simple title to the
interest so conveyed in such property as she may elect to sell. All rents,
emoluments and income from said estate shall belong to her, and she is further
authorized to use any part of the principal of said estate as she may need or
desire. It is provided herein, however, that she shall not sell or otherwise dispose
of any of the improved property now owned by us located at, in or near the City
of Lubbock, Texas, but she shall have the full right to lease, manage and enjoy
the same during her lifetime, as above provided. She shall have the right to
subdivide any farm land and sell lots therein, and may sell unimproved town lots.

xxx xxx xxx

FIFTH: At the death of my beloved wife, Linnie Jane Hodges, I give, devise and
bequeath to the heirs of my half brother, Robert Hodges, who is now deceased, a
half brother's share of my estate.

SIXTH: At the death of my said wife, Linnie Jane Hodges, I give, devise and
bequeath to the heirs of my deceased full sister, Mattie Hodges Simpkins, a full
sister's share of my estate.

SEVENTH: At the death of my said wife, Linnie Jane Hodges, I give, devise and
bequeath to the heirs of my deceased half sister, Barbara O'dell, a half sister's
share of my estate.

EIGHT: At the death of my said wife, Linnie Jane Hodges, I give, devise and
bequeath to the heirs of my full brother, Joe Hodges, deceased, a full brother's
share of my estate. .

NINTH: At the death of my said wife, Linnie Jane Hodges, I give, devise and
bequeath to the heirs of my half brother, Willie Carver, deceased, a half brother's
share of my estate.

TENTH: At the death of my said wife, Linnie Jane Hodges, I give, devise and
bequeath all of the rest, residue and remainder of my estate, both real and
personal, wherever situated or located, to be equally divided among my other full
brothers and full sisters, share and share alike, namely: J. A. Hodges, B. F.
Hodges, Laura Holland and Addie Elliot.

ELEVENTH: In case of the death of any of my full brothers and/or full sisters
named in Item Tenth above, prior to the death of my wife, Linnie Jane Hodges,
then it is my will and bequest that the heirs of such deceased full brother or full
sister shall take jointly the share which would have gone to such full brother or
full sister had he or she survived.

xxx xxx xxx

All erasures and interlineations made before signing."

3 None of the two records on appeal contains any copy of the motion and the
opposition upon which the court acted.

4 More specific factual details related to these appeals will be stated later in the
course of the distribution of the assignments of error.

5 It should be noted that in his affidavit, Hodges ratified and confirmed the
"declaration made in Schedule M (of the inheritance tax return he filed in the
U.S.)" wherein he declared that no property interests passed to him as the
surviving spouse, except for purposes of administration and distribution to the
devisees and legatees named in the will of his wife, and further disclaimed and
renounced any right on his part to receive rents, emoluments and income
therefrom because he wanted to be "absolved ... from liability for the payment of
income taxes on income that has accrued to the estate of" his wife. While We
cannot make any definite ruling on the point now, We might at least express the
impression that reading all these statements together, one can hardly escape the
conclusion that in the literal sense the idea conveyed by them is that Hodges
waived not only his rights to the fruits but to the properties themselves.

6 With the exception of the limitations referring to the Texas properties.

7 "Real property as well as personal property is subject to the law of the country
where it is situated.

However, intestate and testamentary successions, both with respect to the order
of succession and to the amount of successional rights and to the intrinsic validity
of testamentary provisions, shall be regulated by the national law of the person
whose succession is under consideration, whatever may be the nature of the
property and regardless of the country wherein said property may be found."
(Article 16, Civil Code.)

7* The question of what is the law of a foreign country is one of fact subject to
proof like any other factual issue. (Sy Joc Lien vs. Sy Quia, 16 Phil. 137; Ching
Huat vs. Co Heong 77 Phil. 988.)

8 PCIB claims that pursuant to the laws of Texas, Mrs. Hodges' estate is only
one-fourth of the conjugal estate, while, on the other hand, Magno contends that
under said laws, it is one-half of said estate since there is no legitime for the
surviving spouse provided in said laws.

9 The motion for contempt will be separately taken up in due time.

10 The issues We have expressly reserved for later resolution. (See pp. 111-114
of this opinion.)

11 If it should be found by the court later that Hodges did renounce his
inheritance from Mrs. Hodges, as seems to be indicated in the documents
mentioned in the opinion, Schedule M of the Inheritance Tax Return filed by
Hodges in the United States, Annex 4 of the Answer in G. R. Nos. L- 27860 & L-
27896, and the affidavit of Hodges, Annex 5 also of the same answer, it is likely
that Hodges did not have to pay any inheritance tax, and it would only be after
these proceedings are finally terminated with a judgment favorable to the
brothers and sisters of Mrs. Hodges that taxes could be assessed against them
according to their respective individual shares.

11* See page 114-I ante.

12 See page 89-A of this decision.

TEEHANKEE J., CONCURRING:

1 This writ enjoined respondent court from acting in Sp. Proc. No. 1307 (Testate
Estate of Linnie Jane Hodges) and respondent-appellee Avelina A. Magno from
interfering and intervening therein, pendingdetermination of the main issue raised
by petitioner-appellant PCIB as to whether or not Mrs. Hodges' estate continued
to exist as such so as to require the services of said Avelina A. Magno as
administratrix thereof in view of PCIB's contention that her (Mrs. Hodges') entire
estate had been adjudicated in 1957 by the probate court to her surviving
husband C. N. Hodges as "the only devisee or legatee" under her will, which
contention has now been rejected in the Court's decision at bar.

2 This resolution was based on "the inherent fairness of allowing the

administratrix of the estate of Mrs. Hodges [Avelina A. Magno]
to jointly administer the properties, rights and interests comprising both estates
[Linnie Jane Hodges' and that of her husband C. N. Hodges] until they are
separated from each other" in order to give adequate protection to the rights and
interests of their respective brothers and sisters as their designated heirs rather
than "if the whole [both] proceedings were to be under the administration of the
estate of Mr. Hodges [PCIB] to the exclusion of any representative of the heirs of
Mrs. Hodges."

3 See page 5 et seq of main opinion.

4 See page 91 et seq of main opinion.

5 See page 100 of main opinion.

6 "Sec. 2. Judicial Admissions. — Admissions made by the parties in the

pleadings, or in the course of the trial or other proceedings do not require proof
and can not be contradicted unless previously shown to have been made through
palpable mistake." (Rule 129). See also 5 Moran's 1970 Ed. 65 and cases cited.

7 See p. 114-1 et seq. of main opinion.

8 At pp., 136-137 of main opinion; paragraphing and emphasis supplied.

9 At page 121 of main opinion.

10 At pages 110-11 of main opinion.

11 See In re: Testate Estate of Edward E. Christiansen, deceased, Aznar vs.

Garcia, 7 SCRA 95, 103, 107 (1963).

12 At p. 112, main opinion. See also p. 103, where the main opinion refers to still
other documentsevidencing Hodges' renunciation and observes that "we cannot
close our eyes to their existence in the record." (emphasis supplied).

13 At p. 113, main opinion.

14 At p. 114-I, main opinion, emphasis supplied.

15 At page 112, main opinion.

16 At page 109, main opinion; emphasis supplied.

17 "SEC 2. Where estate settled upon dissolution of marriage. — When the

marriage is dissolved by the death of the husband or 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. If both
spouses have died, the conjugal partnership shall be liquidated in the testate or
intestate proceedings of either." (Rule 73) 18 At pp. 129-130, main opinion.

19 At page 103, main opinion, fn. 5.

20 Pamittan vs. Lasam, 60 Phil. 908 (1934), where the Court stressed the "high
degree of trust" reposed in the surviving husband as "owner of a half interest in
his own right of the conjugal estate which he was charged to administer" and that
the conjugal property which thus comes into his possession upon his wife's death
"remains conjugal property, a continuing and subsisting trust" for as long as it
remains unliquidated.

21 Order of August 6, 1965, p. 248 Green Record on Appeal; see p. 30, main
opinion.

22 Appealed order of November 23, 1965 against Western Institute of

Technology, Inc. as purchaser-appellee, pp. 334-335, Green Rec. on App. see
pp. 33-34, main opinion.

23 At p. 137, main opinion.

24 At pp. 108-109, main opinion.

25 At p. 114, main opinion, which notes that "the question of what are the laws of
Texas governing the matter here in issue is . . . one of fact, not of law."

26 See p. 102 et seq. main opinion; Annexes 4 and 5 Answer, pp. 163-264
of Rollo.
27 Annex 4, Answer, p. 263 of Rollo; emphasis supplied. 28 Annex 5, Answer,
see p. 103, main opinion; emphasis supplied. 29 See pp. 114 et seq. main
opinion.

30 "ART. 857. Substitution is the appointment of another heir so that he may

enter into the inheritance in default of the heir originally instituted." (Civil Code)

"ART. 859. The testator may designate one or more persons to substitute the
heir or heirs instituted in case such heir or heirs should die before him, or should
not wish, or should be incapacitated to accept the inheritance.

"A simple substitution, without a statement of the cases to which it refers, shall
comprise the three mentioned in the preceding paragraph, unless the testator
has otherwise provided." (Civil Code, emphasis supplied)

31 6 Manresa 116, cited in III Padilla's Civil Code 1973 Ed., p. 241.

32 At pp. 110-112, main opinion; emphasis supplied.

33 At p. 134, main opinion.

34 At page 110, main opinion.

35 Text reproduced in fn. 30 hereof.

36 C.N. Hodges' own will contained identical provisions in favor of his wife, Linnie
Jane Hodges to "manage, control, use and enjoy (his)estate during her lifetime"
and making specific bequests of his whole estate to his full and half-brothers and
sisters in clauses Fifth to Tenth thereof all "at the death of my said wife, Linnie
Jane Hodges. "At p. 18 et seq. main opinion.

37 Second of seven clauses of will, emphasis supplied.

38 Third clause of will, idem.

39 Fourth clause of will, idem.

40 Fifth clause of will, idem.

41 Art. 871, Civil Code provides that "(T)he institution of an heir may he made
conditionally, or for a certain purpose or cause."

42 An analogous case is found in Crisologo vs. Singson, 4 SCRA 491 (1962)

where the testatrix provided that the property willed by her to a grandniece was
to pass to her brothers "to be effective or to take place upon the death of the
(grandniece)" — whether this happens before or after the testatrix's own death.
 43 Padilla's Civil Code, 1973 Ed. p. 284. The main opinion at pp. 110-111 also
concedes the suspensive and resolutory effects of Mrs. Hodges' institution of
heirs.

44 Linnie Jane Hodges' brothers and sisters at her death on May 23, 1957 had
ages ranging from 62 to 74 yrs. (except for Nimroy Higdon who was then 50 yrs.
old) and most likely have all passed away or are already too old to enjoy their
inheritance. Green Rec. on Appeal, p. 2.

45 At page 89-a, main opinion.

46 Medina et al. vs. C. A., L-34760, September 28, 1973, citing Lizarraga Hnos.
vs. Abada, 40 Phil. 124 and other cases.

47 At p. 90, main opinion.

48 Ronquillo vs. Marasigan, 5 SCRA 304, cited in Berkenkotter vs. C.A., L-

36629, September 28, 1973, per Esguerra, J.

49 See the writer's concurring op. in Sison vs. Gatchalian, L-34709, June 15,
1973 and dissenting op. in Velasco vs. C.A., L-31018, June 29, 1973.

50 At pp. 90-91, main opinion.

51 At p. 91, main opinion.

DALTON VS GIBERSON

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

DECISION

June 30, 1952

G.R. No. L-4113

Estate of the late William R. Giberson. LELA G. DALTON, petitioner-appellant,
vs.
SPRING Giberson, opponent-appealed.

The facts are listed in the decision of the Court.

Mr. C. D. Johnston and A. P. Deen in behalf of the appellant.
Paul, J.:

Lela G. Dalton presented 'on February 10, 1949 an application in the Court of First Instance of
Cebupidiendo the legalization of a document which it claims it is a holograph of William
R. Giberson, otorgadoen April 29, 1920 in San Francisco, California, that Giberson was a citizen
of Illinois, United States, and resident of Cebu, and who died on August 6, 1943 in the
concentration camp at the University of Sto Tomas, Manila, Philippines.

Spring Giberson, legitimate son of William R. Giberson, presented an opposition claiming that
the will is apocryphal, it does not represent the true will of the late Giberson, and has not been
Otor Gado in accordance with the law.

1. July 1949, the opposition presented a mocionpidiendo the dismissal of the application,
arguing that, before a will made in country extranjeropueda be legalized in the Philippines, will
be demonstrated that this had been legalized previamenteen that country accordance with
Article 1 of Rule 78, that the request does not allege that the will had already been legalized in
California.

The applicant opposed the motion to dismiss. On June 20, 1950 the judge dismissed the
request, stating: "... Our Existing rules only under wills Those That Have Previously Been
Proved and allowed in the United States, or Any state or Territory thereof, or Any U.S. foreign
country, according to the Laws of Such state, Territory, or country, May Be allowed, Filed or
Recorded in the Proper court of first instance in the Philippines.... " Against this order the
applicant appealed.

The opposition, in support of his theory, he argues that Article 635 of the Code of Civil
Procedure has been repealed by Rule 78, under Section 13, Article VIII of the Constitution. That
Article 635 of the Code of Civil Procedure reads:

A will made outside the Philippines, which may be authenticated and legalized under the laws of
the state or country where granted, may be authenticated, legalized and registered in the
Philippines, and shall have the same effectiveness quesi has been granted in accordance
with the laws of these Islands.

This article and has been applied in the case of Babcock Babcock Templeton against Rider, 52
Jur Fil. 134, which stated that the will made in California that could be legalized in that state,
may be legalized in the Philippines. In the Matter of Varela Varela against Calderon, 57 Jur
Fil. 291, legalizing the will made in Paris, France, by the late Dr. Francisco Varela Calderon
because it was a testament to podiaser legalized in accordance with the laws of France.

A person may dispose of their property for after his death by will.The granting of a will a legal
act can be done in the Philippines or abroad, if granted in a foreign country, must be in
accordance with the laws of that country, which is universally adopted rule.

The alien may have to after his death his property in the Philippines by will and not forced in the
Philippines given that he can act in their own country or another, but according to the laws of the
country granting it. Article 635 of the Code of Civil Procedure, respecting the freedom of the
testator to give his will anywhere, has the will to be legalized in a foreign country in accordance
with the laws of that country can legalizsarse also in the Philippines.This provision is substantial,
it creates the rights of beneficiaries of the will: they are assured to legalize otorgadosfuera
Philippine Islands wills if they can be legalized in the country in which they were granted, giving
them pedirjudicialmente cause of action for compliance with the latest testator's will whatever
the place of execution. Sines provision would be truncated to test the power.

This Court to amend the Code of Civil Procedure, only amended the procedural part, but not the
substance. "The substantive law can not be enmendadapor rules of procedure." (Reyes v.
Viuda de Luz, * 16 Lawyer Journal, 623.) For both, there is still subsisting as the articulo635
substantive law of the Code of Civil Procedure.

And article 637 reads: "Wills authenticated and legalized in the United States or any state or
territory thereof, or a state or paisextranjero, in accordance with the laws of that state, territory
or country, may be legalized yarchivados registered in the Court of First Instance of the province
that the testator has assets movable or immovable property for such purposes wills. " This
articulono is in conflict with Article 635, in fact, more than its corollary noes. If a will made in a
foreign country can be authenticated in accordance with the laws of that country may also
legalized in the Philippines, with more reason legalizadosen wills and foreign countries in
accordance with the laws of those countries, can also legalized in the Philippines.

Article 1 of Rule 78 is but one TRANSPLANTATION Article 637 of the Code of Civil
Procedure. Reproduce the two provisions:

RULE 78 - SECTION 1. Outside Philippines importations Wills May Be allowed here. - Wills and
allowed importations in a Foreign Country, According To The Laws of Such country, May Be
allowed, Filed, and Recorded by the Court of First Instance Proper in the Philippines
HqEE6WNv.

SEC. 637. Outside importations May Wills Be allowed here Islands. - Wills and allowed
importations in the United States, or Any State or Territory thereof, or in a Foreign State or
Country, According To The Laws of Such State, Territory, or country, May Be allowed, Filed,
and Recorded in the Court of First Instance of the province in Which the testator has real or
personal estate on Which Such will Operate May.

The underlined words in the second arrangement are not shown in the first.

Article 1 of Rule 78 can not prevent legalized in the Philippines a will made in a foreign country,
if it can be legalized in accordance with the laws of that country, not previously required to be
legalized in that country. It is untenable, therefore, the theory of the opposition.

Revoking the order appealed from with costs against the respondent.

Paras, Pres, Feria, Bengzon, Padilla, Tuason, Montemayor, Bautista Angelo, Labrador, MM.,
Are satisfied.

Footnotes

Part Four – Foreign Judgments

I. Foreign Judgments

ROEHR VS RODRIGUEZ
 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 142820 June 20, 2003

WOLFGANG O. ROEHR, petitioner,

vs.
MARIA CARMEN D. RODRIGUEZ, HON. JUDGE JOSEFINA GUEVARA-SALONGA,
Presiding Judge of Makati RTC, Branch 149, respondents.

QUISUMBING, J.:

At the core of the present controversy are issues of (a) grave abuse of discretion allegedly
committed by public respondent and (b) lack of jurisdiction of the regional trial court, in matters
that spring from a divorce decree obtained abroad by petitioner.

In this special civil action for certiorari, petitioner assails (a) the order 1 dated September 30,
1999 of public respondent Judge Josefina Guevara-Salonga, Presiding Judge of Makati
Regional Trial Court,2 Branch 149, in Civil Case No. 96-1389 for declaration of nullity of
marriage, and (b) the order3 dated March 31, 2000 denying his motion for reconsideration. The
assailed orders partially set aside the trial court’s order dismissing Civil Case No. 96-1389, for
the purpose of resolving issues relating to the property settlement of the spouses and the
custody of their children.

Petitioner Wolfgang O. Roehr, a German citizen and resident of Germany, married private
respondent Carmen Rodriguez, a Filipina, on December 11, 1980 in Hamburg, Germany. Their
marriage was subsequently ratified on February 14, 1981 in Tayasan, Negros Oriental. 4 Out of
their union were born Carolynne and Alexandra Kristine on November 18, 1981 and October 25,
1987, respectively.

On August 28, 1996, private respondent filed a petition 5 for declaration of nullity of marriage
before the Regional Trial Court (RTC) of Makati City. On February 6, 1997, petitioner filed a
motion to dismiss,6 but it was denied by the trial court in its order7 dated May 28, 1997.

On June 5, 1997, petitioner filed a motion for reconsideration, but was also denied in an
order8 dated August 13, 1997. On September 5, 1997, petitioner filed a petition for certiorari with
the Court of Appeals. On November 27, 1998, the appellate court denied the petition and
remanded the case to the RTC.

Meanwhile, petitioner obtained a decree of divorce from the Court of First Instance of Hamburg-
Blankenese, promulgated on December 16, 1997.

The decree provides in part:

 [T]he Court of First Instance, Hamburg-Blankenese, Branch 513, has ruled through
Judge van Buiren of the Court of First Instance on the basis of the oral proceedings held
on 4 Nov. 1997:

The marriage of the Parties contracted on 11 December 1980 before the Civil Registrar
of Hamburg-Altona is hereby dissolved.

The parental custody for the children

Carolynne Roehr, born 18 November 1981

Alexandra Kristine Roehr, born on 25 October 1987

is granted to the father.

The litigation expenses shall be assumed by the Parties. 9

In view of said decree, petitioner filed a Second Motion to Dismiss on May 20, 1999 on the
ground that the trial court had no jurisdiction over the subject matter of the action or suit as a
decree of divorce had already been promulgated dissolving the marriage of petitioner and
private respondent.

On July 14, 1999, Judge Guevara-Salonga issued an order granting petitioner’s motion to
dismiss. Private respondent filed a Motion for Partial Reconsideration, with a prayer that the
case proceed for the purpose of determining the issues of custody of children and the
distribution of the properties between petitioner and private respondent.

On August 18, 1999, an Opposition to the Motion for Partial Reconsideration was filed by the
petitioner on the ground that there is nothing to be done anymore in the instant case as the
marital tie between petitioner Wolfgang Roehr and respondent Ma. Carmen D. Rodriguez had
already been severed by the decree of divorce promulgated by the Court of First Instance of
Hamburg, Germany on December 16, 1997 and in view of the fact that said decree of divorce
had already been recognized by the RTC in its order of July 14, 1999, through the
implementation of the mandate of Article 26 of the Family Code,10 endowing the petitioner with
the capacity to remarry under the Philippine law.

On September 30, 1999, respondent judge issued the assailed order partially setting aside her
order dated July 14, 1999 for the purpose of tackling the issues of property relations of the
spouses as well as support and custody of their children. The pertinent portion of said order
provides:

Acting on the Motion for Partial Reconsideration of the Order dated July 14, 1999 filed by
petitioner thru counsel which was opposed by respondent and considering that the
second paragraph of Article 26 of the Family Code was included as an amendment thru
Executive Order 227, to avoid the absurd situation of a Filipino as being still married to
his or her alien spouse though the latter is no longer married to the Filipino spouse
because he/she had obtained a divorce abroad which is recognized by his/her national
law, and considering further the effects of the termination of the marriage under Article
43 in relation to Article 50 and 52 of the same Code, which include the dissolution of the
property relations of the spouses, and the support and custody of their children, the
 Order dismissing this case is partially set aside with respect to these matters which may
be ventilated in this Court.

SO ORDERED.11 (Emphasis supplied.)

Petitioner filed a timely motion for reconsideration on October 19, 1999, which was denied by
respondent judge in an order dated March 31, 2000. 12

Petitioner ascribes lack of jurisdiction of the trial court and grave abuse of discretion on the part
of respondent judge. He cites as grounds for his petition the following:

1. Partially setting aside the order dated July 14, 1999 dismissing the instant case is not
allowed by 1997 Rules of Civil Procedure. 13

2. Respondent Maria Carmen Rodriguez by her motion for Partial Reconsideration had
recognized and admitted the Divorce Decision obtained by her ex-husband in Hamburg,
Germany.14

3. There is nothing left to be tackled by the Honorable Court as there are no conjugal
assets alleged in the Petition for Annulment of Marriage and in the Divorce petition, and
the custody of the children had already been awarded to Petitioner Wolfgang Roehr. 15

Pertinent in this case before us are the following issues:

1. Whether or not respondent judge gravely abused her discretion in issuing her order
dated September 30, 1999, which partially modified her order dated July 14, 1999; and

2. Whether or not respondent judge gravely abused her discretion when she assumed
and retained jurisdiction over the present case despite the fact that petitioner has
already obtained a divorce decree from a German court.

On the first issue, petitioner asserts that the assailed order of respondent judge is completely
inconsistent with her previous order and is contrary to Section 3, Rule 16, Rules of Civil
Procedure, which provides:

Sec. 3. Resolution of motion - After the hearing, the court may dismiss the action or
claim, deny the motion, or order the amendment of the pleading.

The court shall not defer the resolution of the motion for the reason that the ground
relied upon is not indubitable.

In every case, the resolution shall state clearly and distinctly the reasons therefor.
(Emphasis supplied.)

Petitioner avers that a court’s action on a motion is limited to dismissing the action or claim,
denying the motion, or ordering the amendment of the pleading.
Private respondent, on her part, argues that the RTC can validly reconsider its order dated July
14, 1999 because it had not yet attained finality, given the timely filing of respondent’s motion
for reconsideration.

Pertinent to this issue is Section 3 in relation to Section 7, Rule 37 of the 1997 Rules of Civil
Procedure, which provides:

Sec. 3. Action upon motion for new trial or reconsideration.—The trial court may set
aside the judgment or final order and grant a new trial, upon such terms as may be just,
or may deny the motion. If the court finds that excessive damages have been
awarded or that the judgment or final order is contrary to the evidence or law, it may
amend such judgment or final order accordingly.

Sec. 7. Partial new trial or reconsideration.—If the grounds for a motion under this Rule
appear to the court to affect the issues as to only a part, or less than all of the matters in
controversy, or only one, or less than all, of the parties to it, the court may order a new
trial or grant reconsideration as to such issues if severable without interfering with the
judgment or final order upon the rest. (Emphasis supplied.)

It is clear from the foregoing rules that a judge can order a partial reconsideration of a case that
has not yet attained finality. Considering that private respondent filed a motion for
reconsideration within the reglementary period, the trial court's decision of July 14, 1999 can still
be modified. Moreover, in Sañado v. Court of Appeals,16we held that the court could modify or
alter a judgment even after the same has become executory whenever circumstances transpire
rendering its decision unjust and inequitable, as where certain facts and circumstances justifying
or requiring such modification or alteration transpired after the judgment has become final and
executory17 and when it becomes imperative in the higher interest of justice or when
supervening events warrant it.18 In our view, there are even more compelling reasons to do so
when, as in this case, judgment has not yet attained finality.

Anent the second issue, petitioner claims that respondent judge committed grave abuse of
discretion when she partially set aside her order dated July 14, 1999, despite the fact that
petitioner has already obtained a divorce decree from the Court of First Instance of Hamburg,
Germany.

In Garcia v. Recio,19 Van Dorn v. Romillo, Jr.,20 and Llorente v. Court of Appeals,21 we
consistently held that a divorce obtained abroad by an alien may be recognized in our
jurisdiction, provided such decree is valid according to the national law of the foreigner.
Relevant to the present case is Pilapil v. Ibay-Somera,22 where this Court specifically
recognized the validity of a divorce obtained by a German citizen in his country, the Federal
Republic of Germany. We held in Pilapil that a foreign divorce and its legal effects may be
recognized in the Philippines insofar as respondent is concerned in view of the nationality
principle in our civil law on the status of persons.

In this case, the divorce decree issued by the German court dated December 16, 1997 has not
been challenged by either of the parties. In fact, save for the issue of parental custody, even the
trial court recognized said decree to be valid and binding, thereby endowing private respondent
the capacity to remarry. Thus, the present controversy mainly relates to the award of the
custody of their two children, Carolynne and Alexandra Kristine, to petitioner.
As a general rule, divorce decrees obtained by foreigners in other countries are recognizable in
our jurisdiction, but the legal effects thereof, e.g. on custody, care and support of the children,
must still be determined by our courts. 23 Before our courts can give the effect of res judicata to a
foreign judgment, such as the award of custody to petitioner by the German court, it must be
shown that the parties opposed to the judgment had been given ample opportunity to do so on
grounds allowed under Rule 39, Section 50 of the Rules of Court (now Rule 39, Section 48,
1997 Rules of Civil Procedure), to wit:

SEC. 50. Effect of foreign judgments. - The effect of a judgment of a tribunal of a foreign
country, having jurisdiction to pronounce the judgment is as follows:

(a) In case of a judgment upon a specific thing, the judgment is conclusive upon the title
to the thing;

(b) In case of a judgment against a person, the judgment is presumptive evidence of a

right as between the parties and their successors in interest by a subsequent title; but
the judgment may be repelled by evidence of a want of jurisdiction, want of notice to the
party, collusion, fraud, or clear mistake of law or fact.

It is essential that there should be an opportunity to challenge the foreign judgment, in order for
the court in this jurisdiction to properly determine its efficacy. In this jurisdiction, our Rules of
Court clearly provide that with respect to actions in personam, as distinguished from actions in
rem, a foreign judgment merely constitutes prima facieevidence of the justness of the claim of a
party and, as such, is subject to proof to the contrary. 24

In the present case, it cannot be said that private respondent was given the opportunity to
challenge the judgment of the German court so that there is basis for declaring that judgment
as res judicata with regard to the rights of petitioner to have parental custody of their two
children. The proceedings in the German court were summary. As to what was the extent of
private respondent’s participation in the proceedings in the German court, the records remain
unclear. The divorce decree itself states that neither has she commented on the
proceedings25 nor has she given her opinion to the Social Services Office. 26 Unlike petitioner
who was represented by two lawyers, private respondent had no counsel to assist her in said
proceedings.27 More importantly, the divorce judgment was issued to petitioner by virtue of the
German Civil Code provision to the effect that when a couple lived separately for three years,
the marriage is deemed irrefutably dissolved. The decree did not touch on the issue as to who
the offending spouse was. Absent any finding that private respondent is unfit to obtain custody
of the children, the trial court was correct in setting the issue for hearing to determine the issue
of parental custody, care, support and education mindful of the best interests of the children.
This is in consonance with the provision in the Child and Youth Welfare Code that the child’s
welfare is always the paramount consideration in all questions concerning his care and
custody. 28

On the matter of property relations, petitioner asserts that public respondent exceeded the
bounds of her jurisdiction when she claimed cognizance of the issue concerning property
relations between petitioner and private respondent. Private respondent herself has admitted in
Par. 14 of her petition for declaration of nullity of marriage dated August 26, 1996 filed with the
RTC of Makati, subject of this case, that: "[p]etitioner and respondent have not acquired any
conjugal or community property nor have they incurred any debts during their
marriage."29Herein petitioner did not contest this averment. Basic is the rule that a court shall
grant relief warranted by the allegations and the proof. 30 Given the factual admission by the
parties in their pleadings that there is no property to be accounted for, respondent judge has no
basis to assert jurisdiction in this case to resolve a matter no longer deemed in controversy.

In sum, we find that respondent judge may proceed to determine the issue regarding the
custody of the two children born of the union between petitioner and private respondent. Private
respondent erred, however, in claiming cognizance to settle the matter of property relations of
the parties, which is not at issue.

WHEREFORE, the orders of the Regional Trial Court of Makati, Branch 149, issued on
September 30, 1999 and March 31, 2000 are AFFIRMED with MODIFICATION. We hereby
declare that the trial court has jurisdiction over the issue between the parties as to who has
parental custody, including the care, support and education of the children, namely Carolynne
and Alexandra Kristine Roehr. Let the records of this case be remanded promptly to the trial
court for continuation of appropriate proceedings. No pronouncement as to costs.

SO ORDERED.

Bellosillo, (Chairman), and Callejo, Sr., JJ., concur.

Austria-Martinez, J., on official leave.

Footnotes
1
Rollo, p. 15.
2
Judge Josefina Guevara-Salonga signed as Executive Judge.
3
Rollo, p. 16.
4
Records, pp. 5-6.
5
Id. at 1-4.
6
Id. at 19-28.
7
Id. at 147.
8
Id. at 165.
9
Rollo, p. 33.
10
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 likewise have
capacity to remarry under Philippine law. (As amended by E. O. No. 227, dated
July 17, 1987.)
11
Supra, note 1.
12
Supra, note 3.
13
Rollo, p. 6.
14
Id. at 8.
15
Ibid.
16
G.R. No. 108338, 17 April 2001, 356 SCRA 546, 561.
17
David v. Court of Appeals, G.R. No. 115821, 13 October 1999, 316 SCRA 710, 719.
18
People v. Gallo, G.R. No. 124736, 29 September 1999, 315 SCRA 461, 463.
19
G.R. No. 138322, 2 October 2001, 366 SCRA 437, 447.
20
No. L-68470, 8 October 1985, 139 SCRA 139, 143.
21
G.R. No. 124371, 23 November 2000, 345 SCRA 592, 601.
22
G.R. No. 80116, 30 June 1989, 174 SCRA 653, 663.
23
Llorente v. Court of Appeals, supra at 602.
24
Philsec Investment Corporation v. Court of Appeals, G.R. No. 103493, 19 June 1997,
274 SCRA 102, 110.
25
Rollo, p. 57.
26
Ibid.
27
Id. at 55-56.
28
Sagala-Eslao v. Court of Appeals, G.R. No. 116773, 16 January 1997, 266 SCRA
317, 321, citing Art. 8, P.D. No. 603, The Child and Youth Welfare Code-

Art. 8. Child’s Welfare Paramount. - In all questions regarding the care, custody,
education and property of the child, his welfare shall be the paramount
consideration.
29
Rollo, p. 19.
 30
JG Summit Holdings, Inc. v. Court of Appeals, G.R. No. 124293, 20 November 2000,
345 SCRA 143, 154.

PHI INTERNATIONAL SHIPPING COPR VS COURT APPEALS

Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 77085 April 26, 1989

PHILIPPINE INTERNATIONAL SHIPPING CORPORATION (PISC), GEORGE LIM, MARCOS

BAUTISTA, CARLOS LAUDE, TAN SING LIM, ANTONIO LIU LAO, ONG TEH, PHILIPPINE
CONSORTIUM CONSTRUCTION CORPORATION, PACIFIC MILLS, INC., and UNIVERSAL
STEEL SMELTING CO., INC., petitioners,
vs.
THE HON. COURT OF APPEALS, HON. JOSE C. DE GUZMAN, as Judge presiding Branch
93 of the Regional Trial Court of Quezon City, INTERPOOL, LTD. and SHERIFF
NORBERTO V. DOBLADA JR.,respondents.

RESOLUTION

FELICIANO, J.:

The subject of the present Petition is the Decision of the Court of Appeals dated 12 December
1986, in CA-G.R. SP No. 10614. The appellate court upheld the Order of Branch 93 of the
Regional Trial Court of Quezon City granting the issuance of a writ of execution, in Civil Case
No. Q-39927.

The undisputed facts are stated in the appealed decision:

Plaintiff [respondent Interpool, Ltd.] is a foreign corporation, duly organized and

existing under the laws of Bahamas Islands with office and business address at
630, 3rd Avenue, New York, New York, and not licensed to do, and not doing
business, in the Philippines.

Defendants Philippine International Shipping Corporation, Philippine Construction

Consortium Corporation, Pacific Mills Inc., and Universal Steel Smelting
Company, Inc., are corporations duly organized and existing under and by virtue
of the laws of the Philippines. The other defendants, George Lim Marcos
Bautista, Carlos Laude, Tan Sing Lim, Antonio Liu Lao and Ong Teh are
Philippine residents.
In 1979 to 1981, the defendant, Philippine International Shipping Corporation
(PISC) leased from the plaintiff and its wholly owned subsidiary, the Container
Trading Corporation, several containers pursuant to the Membership Agreement
and Hiring Conditions (Exhibit B) 1 and the Master Equipment Leasing
Agreement (Exhibit C ), 2 both dated June 8, 1979.

Defendants Philippine Construction Consortium Corporation, Pacific Mills Inc.

and Universal Steel Smelting Company, guaranteed to pay (sic) all monies due,
or to become due, to the plaintiff from (PISC) and any liability of the latter arising
out of the leasing or purchasing of equipment from the plaintiff or any of its
subsidiaries, affiliates and/or agents of I.S.C. dry cargo containers and/or
chassis, including but not limited, to per diem leasing charges, damages
protection plan charges, damages charge and/or replacement costs of
constructively and/or totally lost containers as well as handling and drop-off
charges (Exhibit J). 3

The other defendants, namely: 1) George Lim; 2) Marcos Bautista; 3) Carlos

Laude 4) Tan Sing Lim; 5) Antonio Liu Lao and 6) Ong Teh, unconditionally and
irrevocably guaranteed to pay (sic) plaintiff all payments due to it under the
Master Equipment Leasing Agreement (Exhibit C) and Membership Agreement
and Hiring Conditions (Exhibit B) dated June 8, 1979, in the amounts at the time
and in the manner set out in the said agreements and to indemnify plaintiff
against all claims, liabilities, costs, damages and expenses (including legal fees)
suffered or incurred by plaintiff, arising out of or in connection with any failure by
defendant Philippine International Shipping Corporation to perform any of its
obligations under the aforesaid Agreements (Exhibit D, E, F, G, H, and I). 4

In 1979 to 1981, defendant Philippine International Shipping Corporation incurred

outstanding and unpaid obligations with the plaintiff, in the amount of $94,456.28,
representing unpaid per diems, drop-off charges, interest and other agreed
charges.

The plaintiff sent letters to the defendants (Exhibit K, L, M, N 0, P, Q, R, S and T

), 5 demanding payment of their outstanding and unpaid obligations, but to no
avail, so plaintiff was constrained to file a case against the principal defendant,
(PISC) before the United States District Court, Southern District of New York,
which was docketed as 83 Civil 290 (EW) Plaintiff obtained a Default Judgment
on July 3, 1983 against (PISC) ordering it to pay the plaintiff the sum of
$80,779.33, as liquidated damages, together with interest in the amount of
$13,676.95 and costs in the amount of $80.00. or for a total judgment of
$94,456.28 (Exhibit A). 6

Because of the unjustifiable failure and refusal of PISC and its guarantors to
jointly and severally pay their obligations to the plaintiff, the latter filed on
November 16, 1983 a complaint [docketed as Civil Case No. Q-39927, Branch
93, Regional Trial Court of Quezon City] (Annex A) 7 to enforce the default
judgment of the U.S. District Court against the defendant PISC and also to
enforce the individually executed Continuing Guaranties of the other defendants
(Annexes D, E, F, G, H, I, and J of the Complaint).
 The defendants (herein petitioners) were duly summoned, but they failed to
answer the complaint. On motion of the plaintiff, they were declared in
default 8 and the plaintiff (herein private respondent) was allowed to present its
evidence ex parte.

On April 11, 1985 the court rendered judgment for the plaintiff, 9 the dispositive
part reading as follows:

WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against

the defendants, ordering:

1) The defendant, Philippine International Shipping Corporation, and the

defendants-Guarantors, to jointly and severally pay plaintiff the liquidated amount
of $80,779.33, together with interest in the amount of $13,676.95 and costs in the
amount of $80.00 or a total of $94,456.28, pursuant to the Default Judgment
rendered by the United States District Court, Southern District of New York, or in
the Philippine currency equivalent of the aforesaid amount of $94,456.28,
computed at the time of payment, with interest for late payment at the rate of
18% per annum from July 4, 1983, until fully paid;

2) The defendant, Philippine International Shipping Corporation, and the

defendants-Guarantors, to jointly and severally pay plaintiff the sum equivalent to
twenty (20%) percent of the total amount due from the defendants by way of
attorney's fees; and

3) To pay the costs.

On May 17, 1985, the defendants appealed the decision to this Appellate Court
(AC-G.R. UDK No. 7383) which dismissed the appeal on November 13, 1985 for
failure of the appellants to pay the docketing fee despite their receipt of the notice
to do so on August 26, 1985. 10 Entry of that final resolution was made on
December 6,1985.

In view of the finality of the decision, the plaintiff filed on July 23, 1986 a motion
for execution and for appointment of a special sheriff to enforce it. 11

Over the defendants' opposition, the trial court issued an order of execution on
October 15, 1986 and appointed Norberto V. Doblado, Jr., of the office of the
Makati Sheriff, as special sheriff for the purpose (Annex D). 12

On 20 November 1986, petitioners (defendants below) filed with the Court of Appeals a Petition
to Annul Judgment (docketed as C.A.-GR SP No. 10614) 13 directed at the 15 October 1986
Order of the Regional Trial Court. On 12 December 1986, the appellate court rendered a
Decision 14 denying that petition for lack of merit. A Motion for Reconsideration was likewise
denied for lack of merit.15

In the instant Petition for Review, filed with this Court on 27 February 1987, petitioners allege
that both the Default Judgment rendered by the U.S. District Court, Southern District of New
York, in 83 Civil 290 (EW), and the Decision of the Regional Trial Court of Quezon City, in Civil
Case No. Q-39927, are null and void essentially on jurisdictional grounds. In the first instance,
petitioners contend that the U.S. District Court never acquired jurisdiction over their persons as
they had not been served with summons and a copy of the Complaint in 83 Civil 290 (EW). In
the second instance, petitioners contend that such jurisdictional ty effectively prevented the
Regional Trial Court of Quezon City from taking cognizance of the Complaint in Civil Case No.
Q-39927 and from enforcing the U.S. District Court's Default Judgment against them. Petitioners
contend, finally, that assuming the validity of the disputed Default Judgment, the same may be
enforced only against petitioner Philippine International Shipping Corporation (PISC) the other
nine (9) petitioners not having been impleaded originally in the case filed in New York, U.S.A.

The Petition must fail.

1. To begin with, the evidence of record clearly shows that the U.S. District Court
had validly acquired jurisdiction over petitioner (PISC) under the procedural law
applicable in that forum i.e., the U.S. Federal Rules on Civil Procedure. Copies of
the Summons and Complaint 16 in 83 Civil 290 (EW) which were in fact attached
to the Petition for Review filed with this Court, were stamped "Received, 18 Jan
1983, PISC Manila." indicating that service thereof had been made upon and
acknowledged by the (PISC) office in Manila on, 18 January 1983, and that
(PISC) had actual notice of such Complaint and Summons. Moreover, copies of
said Summons and Complaint had likewise been served upon Prentice-Hall
Corporation System, Inc. (New York), petitioner PISCs agent, expressly
designated by it in the Master Equipment Leasing Agreement with respondent
Interpool. "for the purpose of accepting service of any process within the State of
New York, USA with respect to any claim or controversy arising out of or relating
to directly or indirectly, this Lease." 17 The record also shows that petitioner
PISC, without, however, assailing the jurisdiction of the U.S. District Court over
the person of petitioner, had filed a Motion to Dismiss 18 the Complaint in 83
Civil 290 (EW) which Motion was denied. All of the foregoing matters, which were
stated specifically in the U.S. District Court's disputed Default
Judgement, 19 have not been disproven or otherwise overcome by petitioners,
whose bare and unsubstantiated allegations cannot prevail over clear and
convincing evidence of record to the contrary.

That foreign judgment-which had become final and executory, no appeal having been taken
therefrom and perfected by petitioner PISC-is thus "presumptive evidence of a right as between
the parties [i.e., PISC and Interpool] and their successors in interest by a subsequent
title." 20 We note, further that there has been in this case no showing by petitioners that the
Default Judgment rendered by the U.S. District Court in 83 Civil 290 (EW) was vitiated by "want
of notice to the party, collusion, fraud, or clear mistake of law or fact. " 21 In other words, the
Default Judgment imposing upon petitioner PISC a liability of U.S.$94,456.28 in favor of
respondent Interpool, is valid and may be enforced in this jurisdiction.

2. The existence of liability (i.e., in the amount of U.S.$94,456.28) on the part of

petitioner PISC having been duly established in the U.S. case, it was not
improper for respondent Interpool, in seeking enforcement in this jurisdiction of
the foreign judgment imposing such liability, to have included the other nine (9)
petitioners herein (i.e., George Lim, Marcos Bautista, Carlos Laude,Tan Sing
Lim, Antonio Liu Lao, Ong Teh Philippine Consortium Construction Corporation,
Pacific Mills, Inc. and Universal Steel Smelting Co., Inc.) as defendants in Civil
Case No. Q- 39927, filed with Branch 93 of the Regional Trial Court of Quezon
 City. With respect to the latter, Section 6, Rule 3 of the Revised Rules of Court
expressly provides:

Sec. 6. Permissive joinder of parties. All persons in whom or against whom any
right to relief in respect to or arising out of the same transaction or series of
transactions is alleged to exist, whether jointly, severally, or in the alternative,
may, except as otherwise provided in these rules, join as plaintiffs or be joined as
defendants in one complaint, where any question of law or fact common to all
such plaintiffs or to all such defendants may arise in the action; but the court may
make such orders as may be just to prevent any plaintiff or defendant from being
embarrassed or put to expense in connection with any proceedings in which he
may have no interest. (Emphasis supplied)

The record shows that said nine (9) petitioners had executed continuing guarantees" to secure
performance by petitioner PISC of its contractual obligations, under the Membership Agreement
and Hiring Conditions and Master Equipment Leasing Agreement with respondent Interpool. As
guarantors, they had held themselves out as liable. "whether jointly, severally, or in the
alternative," to respondent Interpool under their separate "continuing guarantees" executed in
the Philippines, for any breach of those Agreements on the part of (PISC) The liability of the
nine (9) other petitioners was, in other words, not based upon the Membership Agreement and
the Master Equipment Leasing Agreement to which they were not parties. The New York award
of U.S.$94,456.28 is precisely premised upon a breach by PISC of its own obligations under
those Agreements. We, therefore, consider the nine (9) other petitioners as persons 44 against
whom [a] right to relief in respect to or arising out of the same transaction or series of
transactions [has been] alleged to exist." as contemplated in the Rule quoted above and,
consequently, properly impleaded as defendants in Civil Case No. Q-39927. There was, in other
words, no need at all, in order that Civil Case No. Q-39927 would prosper, for respondent
Interpool to have first impleaded the nine (9) other petitioners in the New York case and there
obtain judgment against all ten (10) petitioners.

3. Petitioners' argument of lack or absence of jurisdiction on the part of the

Quezon City Regional Trial Court, on the alleged ground of non-service of notice
or summons in Civil Case No. Q-39927, does not persuade. But we do not need
to address this specific argument. For even assuming (though merely arguendo)
that none of the ten (10) petitioner herein had been served with notice or
summons below, the record shows, however, that they did in fact file with the
Regional Trial Court a Motion for Extension of Time to file Answer 22 (dated 9
December 1983) as well as Motion for Bill of Particulars 23 (dated 15 December
1983), both addressing respondent Interpool's .Complaint in Civil Case No. Q-
39927. In those pleadings, petitioners not only manifested their intention to
controvert the allegations in the Complaint, but they neither questioned nor
assailed the jurisdiction of the trial court, either over the case filed against them
or over their individual persons, as defendants therein. There was here, in effect,
voluntary submission to the jurisdiction of the Quezon City trial court by
petitioners, who are thereby estopped from asserting otherwise before this
Court. 24

ACCORDINGLY, the Petition for Review is DENIED and the Decision dated 12 December 1986
of the Court of Appeals in C.A.-G.R. SP No. 10614, is hereby AFFIRMED. This Resolution is
immediately executory. Costs against petitioners.
SO ORDERED.

Fernan, C.J., Gutierrez, Jr., Bidin and Cortes, JJ., concur.

Footnotes

1 Rollo, pp. 93-95.

2 Id., pp. 96-103,

3 Id., pp. 124-125.

4 Id., pp. 106-123.

5 RTC Exhibits, pp. 39-58.

6 Rollo, pp. 36-37, Annex "C" of Petition.

7 Id., pp. 38-43, Annex "D" of Petition.

8 RTC Records, p. 284, Order dated 26 October 1984.

9 Id., pp. 291-295.

10 Id., p. 309.

11 Id., pp. 306-308.

12 Id., p. 321.

13 Court of Appeals Records, pp. 2-13.

14 Rollo, pp. 55-60, Annex "I" of Petition.

15 Id., p. 62, Annex "J" of Petition.

16 Id. pp. 29-33, Annexes "A" and "A-1 " of Petition.

17 Article 15 (c), Master Equipment Leasing Agreement; Rollo, p. 102.

Petitioners have not disputed the validity and effect of this clause under New
York law, the governing law of that Agreement. [See Article 14, Master
Equipment Leasing Agreement; Rollo, p. 102. See also American Blower Corp. v.
B.F. Sturtevant Co., 61 F. Supp. 756 (1945); and Neirbo Co. v. Bethlehem
Shipbuilding Corp., 308 U.S. 165 (1939).] There appears nothing in this clause
offensive to our own law and public policy.
18 Rollo, p. 34, Annex "B" of Petition.

19 The Default Judgment read, in its entirety:

This action having been commenced by the filing of a complaint and issuance of
a summons on January 7,1983, and a copy of said summons and complaint
having been served upon defendant by the Clerk of the Court pursuant to Fed. R.
Civ. P. Rule 4 (i) (1) (d) by registered mail, return receipt requested to defendant
at its residence in the Philippines, certificate of mailing of which was filed with the
Clerk of this Court on January 10, 1983, and the postal return indicating receipt
of said summons and complaint by defendant on January 18, 1983, and an
additional copy of said summons and complaint having been served on
defendant by personal service on Prentice Hall, Inc., defendant's contractually-
appointed agent to accept service of process, on January 11, 1983, proof of
which service was filed with this Court on January 13, 1983.

And Defendant having filed with this Court a Motion to Dismiss, without having
designated a member of the Bar of this Court, and defendant having been
advised of the requirements of Local Rule 3(a) by letter of March 25, 1983, and
defendant having further been instructed, by Memorandum to Counsel of May
11, 1983, to comply with Local Rule 3(a) by May 31, 1983, which memorandum
advised defendant that failure to so comply would result in the imposition of
appropriate sanctions.

And defendant having failed to comply with the May 11, 1983 memorandum to
counsel directing compliance with Local Rule 3(a) regarding designation of local
counsel.

And this Court, by memorandum decision dated June 16, 1983 having dismissed
defendant's motion, and defendant having failed to serve its answer to the
complaint within the period provided by FR Civ. P. 12(a), and the time for
defendant to answer having expired, it is:

ORDERED, ADJUDGED AND DECREED, that plaintiff, Interpool Ltd., have

judgment against defendant, Philippine International Shipping Corp. for the
liquidated amount of $80,779.33, together with interest in the amount of
$13,676.95 and costs in the amount of $80.00 for a total judgment of $94,456.28.

20 See Section 50 (b), Rule 39, Revised Rules of Court.

21 Ibid.

22 RTC Records, pp. 43-44.

23 Id., pp. 46-49

24 Section 23, Rule 14, Revised Rules of Court. See Paramount Insurance
Corporation v. Lina, 148 SCRA 564 (1987); and Royales v. Intermediate
Appellate Court, 127 SCRA 470 (1984).
GORAYAB VS HASHIM

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

DECISION

March 3, 1927

G.R. No. L-25577

AFIFE ABDO CHEYBAN GORAYEB, plaintiff-appellee,
vs.
NADJIB TANNUS HASHIM, defendant and appellant.

C. A. Sobral for appellant.

Gibbs and McDonough for appellee.

Street, J.:

This appeal is an incident arising out of civil case No. 19115 instituted in the Court of First
Instance of Manila on November 12, 1920, wherein the plaintiff, Afife Abdo Cheyban Gorayeb
,has obtained a judgment requiring the defendant (who is also her husband) Nadjib Tannus
Hashim, to pay to her a monthly stipend by way of support. In connection with the institution of
said action the plaintiff procured an order requiring the defendant to pay to the plaintiff the sum
of P1,000 per month as alimony, pendente lite. Vigorous efforts were made by the defendant to
precure the abrogation of this order not only in the court of origin but in this court by writ
of certiorari; but these efforts was unsuccessful.1 Upon finally hearing the cause upon its merits,
the Honorable Vicente Nepomuceno, presiding in the court of First Instance, under date of
December 24, 1923, awarded the plaintiff permanent alimony at the rate of P500 per month,
beginning November 12, 1920, the date of the filing of the complaint. This judgment was
subsequent affirmed by this court upon appeal.2 On January 23, 1926, the lower court, after
due hearing, reduced the rate of alimony to P100, at which amount it now stands.

Meanwhile, the plaintiff had caused execution to issue against the defendant to enforce the
payment of the provisional allowance of P1,000 per month, and various valuable properties
belonging to the defendant were sold under execution for the amount of P34,000. After
judgment had become final under the order of December 24, 1923, still another property
belonging to the defendant was sold under execution for the sum of P6,710. The proceeds of
these sales were paid in due course to the plaintiff.

It appears that for more than twelve years the plaintiff and defendant have been wholly
estranged and living apart. During this period each has attempted to convict the other of
infidelity; but the prosecution instituted by the defendant against the plaintiff for adultery and the
later prosecution for concubinage instituted by the plaintiff against the defendant were both
unsuccessful.

While the question of the defendant's civil liability for the support claimed by the plaintiff was still
undetermined, the defendant sought refuge in the State of Nevada; and, on December 1, 1924,
there obtained a decree of divorce from the plaintiff in the court of the Second Judicial District of
the State of Nevada. He then returned to the Philippine Islands, and on October 20, 1925, the
plaintiff filed a motion in civil case No. 19115, alleging that the defendant had failed to pay the
pension of P500 per month, which had been awarded to her in the decision of December 24,
1923, and praying that he be adjudged to be in contempt of court and that he be fined and
sentenced to imprisonment for six months and until he should comply with the order. In
response to this motion the defendant pleaded the decree of divorce obtained by him from the
Nevada court, claiming that said decree had the effect of dissolving the bonds of matrimony
between himself and the plaintiff and of relieving him from all liability to pay the persion claimed.

Upon hearing the cause the trial court found that, while, as a matter of fact, the defendant was
in arrears in the payment of the pension, nevertheless the defense asserted by him had been
put forth in good faith. His Honor therefore absolved the defendant from the contempt charge,
with costs de oficio. At the same time it was declared that the civil obligation created by the
previous orders of the court remained in full force and effect, notwithstanding the decree of
divorce upon which the defendant relied, and he was ordered to continue the payment of the
pension at the reduced rate of P100 per month. From so much of this order as declares the
defendant civilly liable for the pension claimed by the plaintiff the defendant appealed, and it is
this appeal that is now before us.

The only question necessary to be here considered relates to the civil liability of the defendant
for the monthly stipend which has been judicially awarded to the plaintiff and the amount of said
liability, supposing the obligation still to subsist. Upon the first point the trial court held that the
obligation of the defendant to pay the stipend had the opinion that this conclusion is correct.
There can be no other reasonable inference drawn from the defendant's acts than that the
procuring of the divorce in Nevada was a mere device on the part of the defendant to rid himself
of the obligation created by the judgment of the Philippine court and that his temporary sojourn
in the State of Nevada was a mere ruse unaccompanied by any genuine intention his part to
acquire a legal domicile in that State. This being true, the divorce granted by the Nevada court
cannot be recognized by the courts of this country oOqX8.

In Ramirez vs. Gmur (42 Phil., 855), this court held, in conformity with the rule declared by the
Supreme Court of the United States, that the court of a country in which neither of the spouses
is domiciled and to which one or both of them may resort merely for the purpose of obtaining a
divorce has no jurisdiction to determine their matrimonial status; and a divorce granted by such
a court is not entitled to recognition elsewhere. The voluntary appearance of the defendant
before such a tribunal does not invest the court with jurisdiction. In the same case this court
went on to say: "It follows that, to give a court jurisdiction on the ground of the plaintiff's
residence in the State or country of the judicial forum, his residence must be bona fide. If a
spouse leaves the family domicile and goes to another State for the sole purpose of obtaining a
divorce, and with no intention of remaining, his residence there is not sufficient to confer
jurisdiction on the courts of that State. This is especially true where the cause of divorce is one
not recognized by the laws of the State of his own domicile. (14 Cyc., 817, 818).

From this it will be seen that a divorce granted in one State may be called in question in the
courts of another and its validity determined upon the evidence relating to domicile of the parties
to the divorce. This undoubtedly involves a collateral attack upon the decree of divorce; but, as
has been said by the Supreme Court of the United States, it is now too late to deny the right
collaterally to impeach a decree of divorce in the courts of another State by proof that the court
granting the divorce had no jurisdiction, even though the record purports to show jurisdiction
and the appearance of the parties (German Savings and Loan Society vs. Dormitzer, 192, U.S.,
125).

The rule above referred to has been held by the Supreme Court of the United States to prevail
in the courts of the various States of the American Union, not withstanding the existence of the
constitutional provision requiring the courts of every State to give full faith and credit to
judgments obtained in other States. There is no similar constitutional provision in force in these
Islands, but, under section 309 of the Code of Civil Procedure, the judicial records of the courts
of the United States and of the several states and Territories of the United States have the
same force in the Philippine Islands as in the place where the judgment was obtained. But there
is nothing in this provision that would require the courts of this country to give any greater
consideration to the judgment of the court of an American State than is conceded to it in other
States and districts of the United States, in conformity with the doctrine sustained by the
Supreme Court of the United States and upheld in the courts of those States where the
marriage tie is best guarded.

In the application of the rule above stated the circumstance that the parties to the present action
contracted marriage in Syria, instead of the Philippine Islands, is not material to the case. The
fact that they contracted marriage lawfully, wherever the act may have been accomplished,
created the status of married persons between them; and the question with which we are here
concerned is not as to the marriage, but as to the divorce conceded to the defendant in the
State of Nevada wtwDNrBf1.

Section 309 of the Code of the Civil Procedure, declaring that a judgment obtained in an
American court shall have the same effect in the Philippine Islands as in the place where such
judgment was obtained, contains a qualification expressed in the following words: "except that it
can only be enforce here by an action or special proceeding." Upon this provision the attorneys
for the plaintiff plant a proposition to the effect that a Philippine court cannot recognized the
decree of divorce granted by the Nevada court upon the mere exemplification of a certified copy
of the decree; and it is insisted that, in order to get the benefit of said decree, it is necessary for
the defendant to institute an independent action or special proceeding in one of our courts for
the purpose of obtaining a judicial ratification of the decree of divorce. But it will be remembered
that the defendant pleaded the decree of divorce by way of defense in his answer; and if the
decree of divorce had been such as to have entitled it to recognition here, the defendant could
in our opinion have obtained the benefit of it in this action. The provision in question no doubt
contemplates primarily the situation where affirmative action has to be taken in the Philippine
Islands to give effect to the foreign judgment as where the plaintiff desires to obtain execution
upon property in these Islands to satisty a judgment obtained abroad. But a decree of divorce
operates on the marriage status; and if effective at all, it dissolves the marriage tie, without the
necessity of any affirmative proceeding in any other court. At any rate, all that was intended to
be secured by the provision requiring an action or proceeding here was that the courts of this
country should have an opportunity to pass judicially upon the efficacy of the judgment. This
purpose is accomplished as well where the foreign judgment is relied upon in an answer and
duly proved, as where the original action is actually brought by the holder of the judgment. It
could not have been intended by the authors of section 309 that the holder of the foreign
judgment must be deprived of the benefit of it merely because he happens to be defendant
rather than plaintiff in an action brought in our courts.

From what has been said it follows that the objections interposed by the plaintiff to the manner
in which the defendant seeks to avail himself of his alleged decree of divorce are not well taken;
but for reasons already stated, the decree itself is of no force in this jurisdiction. It supplies
therefore no justification for the defendant's failure to pay alimony.

But it is said that, even conceding that the defendant is technically liable for alimony, he should
nevertheless be relieved from the order requiring him to pay alimony, in view of the fact that the
plaintiff has been overpaid upon account of alimony. In this connection reliance is placed upon
the supposed retroactive effect of the order of December 24, 1923, fixing the plaintiff's stipend
definitely at P500 per month, while the original order granting alimony, pendente lite, was at the
rate of P1,000 per month; and, as will be remembered, judgment was executed at that rate for
an amount much in excess of what have been obtained if the rate of P500 per month had been
allowed from the beginning. It is insisted that the plaintiff should be required to refund this
excess or at least that it should be considered an equitable set-off against the claim for present
alimony.

It is true that the original order granting alimony at the rate of P1,000 per month was of a
provisional character, and the final order fixing the alimony at P500 per month was given
retroactive effect to the beginning of the litigation. At first blush, therefore, the facts appear to
supply an equitable consideration in favor of the defendant as regards his alimony account; but
upon examining the situation more minutely, it will be found that the case is not precisely such
as it appears to on the surface. It is true that the plaintiff secured execution of the order for
alimony in an amount in excess of what she finally became entitled to upon alimony account,
but it is nevertherless true that the property thus acquired by the plaintiff was made subject in
her hands to the preexisting debts properly chargeable against the conjugal partnership; and
litigation already determined in this court, or now pending before it, shows that the plaintiff has
already lost, or is in a way to lose, a great part, if not all, of the property so secured upon
execution . Furthermore, it is evident that she has not yet received in cash the amount actually
due her for alimony. It is therefore evident that there is nothing in the supposed over execution
of the claim for alimony which raises any equitable consideration in the defendant's favor.

In addition to this, it must be remembered that alimony is an allowance for support and is fixed
with a view to enable the party entitled thereto to confront obligations for current necessities.
The demands of to-day and tomorrow cannot always be satisfactorily met from the resources of
yesterday, and it seems inconsistent with the very nature of the obligation to offset against
claims for current alimony sums of money that have been improperly taken under previous
orders. It has accordingly been held by American courts that excessive payments made under
valid, though erroneous, prior orders cannot be offset against claims for current alimony (19 C.
J., p. 226; Lishey vs. Lishey, 6 Lea [Tenn.], 418; Johnson vs. Johnson [Tenn. Ch. A.], 49 S. W.,
305). Spanish jurisprudence appears to confirm this view (6 Manresa, Ley de Enjuiciamiento
Civil, p. 80; 20 Jur. Civ., Recurcos y Competencias, p. 566). This doctrine would seem to be
applicable with full force so far as regards the right to the amount strictly necessary to maintain
respectable existence. In the case before use the amount accruing to the plaintiff is only P100
per month, which is an exceedingly modest amount, considered from any point of view.

It results that we find no error whatever in the appealed judgment, either as regards the liability
of the defendant for alimony or its amount.

The judgment appealed from will therefore be affirmed, and it is so ordered, with costs against
the appellant.

Villamor, Ostrand, Johns, Romualdez, and Villa-Real, JJ., concur aAnC3KBi.

Footnotes

1Hashim vs. Concepcion and Gorayeb (42 Phil., 694).

2Gorayeb vs. Hashim (47 Phil., 87). mod640gY5w.

PERKINS VS BENGUET CONSOLIDATED MINING CO

Perkins v. Benguet Consolidated Mining Co., 342 U.S. 437 (1952)

Perkins v. Benguet Consolidated Mining Co.

No. 85

Argued November 27-28, 1951

Decided March 3, 1952

342 U.S. 437

CERTIORARI TO THE SUPREME COURT OF OHIO

Syllabus

A foreign corporation, owning gold and silver mines in the Philippine Islands, temporarily carried
on in Ohio (during the Japanese occupation of the Philippines) a continuous and systematic, but
limited, part of its general business -- consisting of directors' meetings, business
correspondence, banking, stock transfers, payment of salaries, purchasing of machinery, etc.
While engaged in doing such business in Ohio, its president was served with summons in an
action in personam against the corporation filed in an Ohio state court by a nonresident of Ohio.
The cause of action did not arise in Ohio, and did not relate to the corporation's activities there.
A judgment sustaining a motion to quash the service was affirmed by the State Supreme Court.

Held:

1. The Federal Constitution does not compel Ohio to open its courts to such a case -- even
though Ohio permits a complainant to maintain a proceeding in personam in its courts against a
properly served nonresident natural person to enforce a cause of action which does not arise
out of anything done within the State. Pp. 342 U. S. 440-441.

2. The Due Process Clause of the Fourteenth Amendment also does not prohibit Ohio from
granting such relief against a foreign corporation. Old Wayne Life Assn. v. McDonough, 204 U.
S. 8, and Simon v. Southern R. Co., 236 U. S. 115, distinguished. Pp. 342 U. S. 441-447.
3. As a matter of federal due process, the business done by the corporation in Ohio was
sufficiently substantial and of such a nature as to permit Ohio to entertain the cause of action
against it, though the cause of action arose from activities entirely distinct from its activities in
Ohio. Pp. 342 U. S. 447-449.

4. It not clearly appearing, under the Ohio practice as to the effect of the syllabus, whether the
Supreme Court of Ohio rested its decision on Ohio law or on the Fourteenth Amendment, the
cause is remanded to that court for further proceedings in the light of the opinion of this Court.
Pp. 342 U. S. 441-449.

155 Ohio St. 116, 98 N.E.2d 33, vacated and remanded.

Page 342 U. S. 438

In two actions in an Ohio state court, the trial court sustained a motion to quash the service on
the respondent foreign corporation. The Court of Appeals of Ohio affirmed, 88 Ohio App. 118,
95 N.E.2d 5, as did the State Supreme Court, 155 Ohio St. 116, 98 N.E.2d 33. This Court
granted certiorari. 342 U.S. 808. Judgment vacated and cause remanded, p. 342 U. S. 449.

MR. JUSTICE BURTON delivered the opinion of the Court.

This case calls for an answer to the question whether the Due Process Clause of the Fourteenth
Amendment to the Constitution of the United States precludes Ohio from subjecting a foreign
corporation to the jurisdiction of its courts in this action in personam. The corporation has been
carrying on in Ohio a continuous and systematic, but limited, part of its general business. Its
president, while engaged in doing such business in Ohio, has been served with summons in this
proceeding. The cause of action sued upon did not arise in Ohio and does not relate to the
corporation's activities there. For the reasons hereafter stated, we hold that the Fourteenth
Amendment leaves Ohio free to take or decline jurisdiction over the corporation.

After extended litigation elsewhere, [Footnote 1] petitioner, Idonah Slade Perkins, a nonresident
of Ohio, filed two actions in personam in the Court of Common Pleas of Clermont

Page 342 U. S. 439

County, Ohio, against the several respondents. Among those sued is the Benguet Consolidated
Mining Company, here called the mining company. It is styled a "sociedad anonima" under the
laws of the Philippine Islands, where it owns and has operated profitable gold and silver mines.
In one action, petitioner seeks approximately $68,400 in dividends claimed to be due her as a
stockholder. In the other, she claims $2,500,000 damages, largely because of the company's
failure to issue to her certificates for 120,000 shares of its stock.

In each case, the trial court sustained a motion to quash the service of summons on the mining
company. Ohio Com.Pl., 99 N.E.2d 515. The Court of Appeals of Ohio affirmed that decision, 88
Ohio App. 118, 95 N.E.2d 5, as did the Supreme Court of Ohio, 155 Ohio St. 116, 98 N.E.2d 33.
The cases were consolidated, and we granted certiorari in order to pass upon the conclusion
voiced within the court below that federal due process required the result there reached. 342
U.S. 808.

We start with the holding of the Supreme Court of Ohio, not contested here, that, under Ohio
law, the mining company is to be treated as a foreign corporation. [Footnote 2] Actual notice of
the proceeding was given to the corporation

Page 342 U. S. 440

in the instant case through regular service of summons upon its president while he was in Ohio
acting in that capacity. Accordingly, there can be no jurisdictional objection based upon a lack of
notice to a responsible representative of the corporation.

The answer to the question of whether the state courts of Ohio are open to a proceeding in
personam, against an amply notified foreign corporation, to enforce a cause of action not arising
in Ohio and not related to the business or activities of the corporation in that State rests entirely
upon the law of Ohio, unless the Due Process Clause of the Fourteenth Amendment compels a
decision either way.

The suggestion that federal due process compels the State to open its courts to such a case
has no substance.

"Provisions for making foreign corporations subject to service in the state is a matter of
legislative discretion, and a failure to provide for such service is not a denial of due process. Still
less is it incumbent upon a state in furnishing such process to make the jurisdiction over the
foreign corporation wide enough to include the adjudication of transitory actions not arising in
the state."

Missouri P. R. Co. v. Clarendon Co., 257 U. S. 533, 257 U. S. 535.

Page 342 U. S. 441

Also without merit is the argument that, merely because Ohio permits a complainant to maintain
a proceeding in personam in its courts against a properly served nonresident natural person to
enforce a cause of action which does not arise out of anything done in Ohio, therefore the
Constitution of the United States compels Ohio to provide like relief against a foreign
corporation.

A more serious question is presented by the claim that the Due Process Clause of the
Fourteenth Amendment prohibits Ohio from granting such relief against a foreign corporation.
The syllabus in the report of the case below, while denying the relief sought, does not indicate
whether the Supreme Court of Ohio rested its decision on Ohio law or on the Fourteenth
Amendment. The first paragraph of that syllabus is as follows:

"1. The doing of business in this state by a foreign corporation, which has not appointed a
statutory agent upon whom service of process against the corporation can be made in this state
or otherwise consented to service of summons upon it in actions brought in this state, will not
make the corporation subject to service of summons in an action in personam brought in the
courts of this state to enforce a cause of action not arising in this state, and in no way related to
the business or activities of the corporation in this state."

155 Ohio St. 116, 117, 98 N.E.2d 33, 34.

If the above statement stood alone, it might mean that the decision rested solely upon the law of
Ohio. In support of that possibility, we are told that, under the rules and practice of the Supreme
Court of Ohio, only the syllabus necessarily carries the approval of that court. [Footnote 3] As

Page 342 U. S. 442

we understand the Ohio practice, the syllabus of its Supreme Court constitutes the official
opinion of that court, but it must be read in the light of the facts and issues of the case.

Page 342 U. S. 443

The only opinion accompanying the syllabus of the court below places the concurrence of its
author unequivocally upon the ground that the Due Process Clause of the Fourteenth
Amendment prohibits the Ohio courts from exercising jurisdiction over the respondent
corporation in this proceeding. [Footnote 4] That opinion is an official part of the report of the
case. The report, however, does not disclose to what extent, if any, the other members of the
court may have shared the view expressed in that opinion. Accordingly, for us to allow the
judgment to stand as it is would risk an affirmance of a decision which might have been decided
differently if the court below had felt free under our decisions to do so.

The cases primarily relied on by the author of the opinion accompanying the syllabus below
are Old Wayne Life Assn. v. McDonough, 204 U. S. 8, and Simon v. Southern R. Co., 236 U. S.
115. Unlike the case at bar, no actual notice of the proceedings was received in those cases by
a

Page 342 U. S. 444

responsible representative of the foreign corporation. In each case, the public official who was
served with process in an attempt to bind the foreign corporation was held to lack the necessary
authority to accept service so as to bind it in a proceeding to enforce a cause of action arising
outside of the state of the forum. See 204 U.S. at 204 U. S. 22-23, and 236 U.S. at 236 U. S.
130. The necessary result was a finding of inadequate service in each case and a conclusion
that the foreign corporation was not bound by it. The same would be true today in a like
proceeding where the only service had and the only notice given was that directed to a public
official who had no authority, by statute or otherwise, to accept it in that kind of a proceeding. At
the time of rendering the above decisions, this Court was aided, in reaching its conclusion as to
the limited scope of the statutory authority of the public officials, by this Court's conception that
the Due Process Clause of the Fourteenth Amendment precluded a state from giving its public
officials authority to accept service in terms broad enough to bind a foreign corporation in
proceedings against it to enforce an obligation arising outside of the state of the forum. That
conception now has been modified by the rationale adopted in later decisions, and particularly
in International Shoe Co. v. Washington, 326 U. S. 310.

Today, if an authorized representative of a foreign corporation be physically present in the state

of the forum and be there engaged in activities appropriate to accepting service or receiving
notice on its behalf, we recognize that there is no unfairness in subjecting that corporation to the
jurisdiction of the courts of that state through such service of process upon that representative.
This has been squarely held to be so in a proceeding in personam against such a corporation,
at least in relation to a cause of action

Page 342 U. S. 445

arising out of the corporation's activities within the state of the forum. [Footnote 5]

The essence of the issue here, at the constitutional level, is a like one of general fairness to the
corporation. Appropriate tests for that are discussed in International Shoe Co. v. Washington,
supra, at 326 U. S. 317-320. The amount and kind of activities which must be carried on by the
foreign corporation in the state of the forum so as to make it reasonable and just to subject the
corporation to the jurisdiction of that state are to be determined in each case. The corporate
activities of a foreign corporation which, under state statute, make it necessary for it to secure a
license and to designate a statutory agent upon whom process may be served provide a helpful,
but not a conclusive, test. For example, the state of the forum may by statute require a foreign
mining corporation to secure a license in order lawfully to carry on there such functional
intrastate operations as those of mining or refining ore. On the other hand, if the same
corporation carries on, in that state, other continuous and systematic corporate activities as it
did here -- consisting of directors' meetings, business correspondence, banking, stock transfers,
payment of salaries, purchasing of machinery, etc. -- those activities are enough to make it fair
and reasonable to subject that corporation to proceedings in personam in that state, at least
insofar as the proceedings in personam seek to enforce

Page 342 U. S. 446

causes of action relating to those very activities or to other activities of the corporation within the
state.

The instant case takes us one step further to a proceeding in personam to enforce a cause of
action not arising out of the corporation's activities in the state of the forum. Using the tests
mentioned above, we find no requirement of federal due process that either prohibits Ohio from
opening its courts to the cause of action here presented or compels Ohio to do so. This
conforms to the realistic reasoning in International Shoe Co. v. Washington, supra, at 326 U. S.
318-319:

". . . there have been instances in which the continuous corporate operations within a state were
thought so substantial and of such a nature as to justify suit against it on causes of action
arising from dealings entirely distinct from those activities. See Missouri, K. & T. R. Co. v.
Reynolds, 255 U.S. 565; [Footnote 6] Tauza v. Susquehanna Coal Co., 220 N.Y. 259, 115 N.E.
915; cf. 227 U. S. Louis S.W. R. Co. v. Alexander, supra, [227 U.S. 218]."

". . . some of the decisions holding the corporation amenable to suit have been supported by
resort to the legal fiction that it has given its consent to service and suit, consent being implied
from its presence in the state through the acts of its authorized agents. 59 U. S. 407; 106 U. S.
356; 213 U. S. 254; Washington v. Superior Court,289 U. S. 361, 289 U. S. 364-365. But, more
realistically, it may be said that those authorized acts were of such a nature as to justify the
fiction. Smolik v. Philadelphia & Reading Co.,@ 222 F.1d 8, 151. Henderson, The Position of
Foreign Corporations in American Constitutional Law 94, 95."

". . . Whether due process is satisfied must depend, rather, upon the quality and nature of the
activity in relation to the fair and orderly administration of the laws which it was the purpose of
the due process clause to insure. That clause does not contemplate that a state may make
binding a judgment in personam against an individual or corporate defendant with which the
state has no contacts, ties, or relations. Cf. 95 U. S. Neff, supra, [95 U.S. 714]; Minnesota
Commercial Assn. v. Benn,261 U. S. 140."

It remains only to consider in more detail the issue of whether, as a matter of federal due
process, the business done in Ohio by the respondent mining company was sufficiently
substantial and of such a nature as to permit Ohio to entertain a cause of action against a
foreign corporation where the cause of action arose from activities entirely distinct from its
activities in Ohio. See International Shoe Co. v. Washington, supra, at 326 U. S. 318.

The Ohio Court of Appeals summarized the evidence on the subject. 88 Ohio App. at 119-125,
95 N.E.2d at 6-9. From that summary, the following facts are substantially beyond controversy:
the company's mining properties were in the Philippine Islands. Its operations there were
completely halted during the occupation of the Islands by the Japanese. During that interim, the
president, who was also the general manager and principal stockholder of the company,
returned to his home in Clermont County, Ohio. There, he maintained an office in

Page 342 U. S. 448

which he conducted his personal affairs and did many things on behalf of the company. He kept
there office files of the company. He carried on there correspondence relating to the business of
the company and to its employees. He drew and distributed there salary checks on behalf of the
company, both in his own favor as president and in favor of two company secretaries who
worked there with him. He used and maintained in Clermont County, Ohio, two active bank
accounts carrying substantial balances of company funds. A bank in Hamilton County, Ohio,
acted as transfer agent for the stock of the company. Several directors' meetings were held at
his office or home in Clermont County. From that office, he supervised policies dealing with the
rehabilitation of the corporation's properties in the Philippines, and he dispatched funds to cover
purchases of machinery for such rehabilitation. Thus, he carried on in Ohio a continuous and
systematic supervision of the necessarily limited wartime activities of the company. He there
discharged his duties as president and general manager, both during the occupation of the
company's properties by the Japanese and immediately thereafter. While no mining properties
in Ohio were owned or operated by the company, many of its wartime activities were directed
from Ohio and were being given the personal attention of its president in that State at the time
he was served with summons. Consideration of the circumstances which, under the law of Ohio,
ultimately will determine whether the courts of that State will choose to take jurisdiction over the
corporation is reserved for the courts of that State. Without reaching that issue of state policy,
we conclude that, under the circumstances above recited, it would not violate federal due
process for Ohio either to take or decline jurisdiction of the corporation in this proceeding. This
relieves the Ohio courts of the restriction relied upon in the opinion

Page 342 U. S. 449

accompanying the syllabus below, and which may have influenced the judgment of the court
below.

Accordingly, the judgment of the Supreme Court of Ohio is vacated, and the cause is remanded
to that court for further proceedings in the light of this opinion. [Footnote 7]

It is so ordered.

MR. JUSTICE BLACK concurs in the result.

[Footnote 1]

See Perkins v. Perkins, 57 Phil.R. 205; Harden v. Benguet Consolidated Mining Co., 58 Phil.R.
141; Perkins v. Guaranty Trust Co., 274 N.Y. 250, 8 N.E.2d 849; Perkins v. Benguet
Consolidated Mining Co., 55 Cal.App.2d 720, 132 P.2d 70, rehearing denied,55 Cal.App.2d
774, 132 P.2d 102, cert. denied, 319 U.S. 774; 60 Cal.App.2d 845, 141 P.2d 19, cert.
denied, 320 U.S. 803, 815; Perkins v. First National Bank of Cincinnati,Com.Pl., Hamilton
County, Ohio, 79 N.E.2d 159.

[Footnote 2]

Ohio requires a foreign corporation to secure a license to transact "business" in that State,
Throckmorton's Ohio Code, 1940, § 8625-4, and to appoint a "designated agent" upon whom
process may be served, §§ 8625-2, 8625-5. The mining company has neither secured such a
license nor designated such an agent. While this may make it subject to penalties and
handicaps, this does not prevent it from transacting business or being sued. § 8625-25. If it has
a "managing agent" in Ohio, service may be made upon him. § 11290. Such service is a
permissive alternative to service on the corporation through its president or other chief officer. §
11288. Lively v. Picton, 218 F.4d 1, 406-407. The evidence as to the business activities of the
corporation in Ohio is summarized by the Ohio Court of Appeals. 88 Ohio App. 118, 119-125, 95
N.E.2d 5, 6-9. That court held that such activities did not constitute the transaction of business
referred to in the Code. In its syllabus, however, the Supreme Court of Ohio, without passing
upon the sufficiency of such acts for the above statutory purpose, and without defining its use of
the term, affirmed the judgment dismissing the complaint and assumed that what the
corporation had done in Ohio constituted "doing business" to an extent sufficient to be
recognized in reaching its decision.

[Footnote 3]

In 1858, the Supreme Court of Ohio promulgated the following rule:

"A syllabus of the points decided by the Court in each case shall be stated, in writing, by the
Judge assigned to deliver the opinion of the Court, which shall be confined to the points of law,
arising from the facts of the case, that have been determined by the Court. And the syllabus
shall be submitted to the Judges concurring therein for revisal, before publication thereof, and it
shall be inserted in the book of reports without alteration, unless by the consent of the Judges
concurring therein."

5 Ohio St. vii.

This policy has been recognized by statute. Bates Ohio R.S. § 427, as amended, 103 Ohio
Laws 1913, § 1483, and 108 Ohio Laws 1919, § 1483. It appears now in Throckmorton's Ohio
Code, 1940, § 1483, as follows:

"Whenever it has been thus decided to report a case for publication, the syllabus thereof shall
be prepared by the judge delivering the opinion, and approved by a majority of the members of
the court, and the report may be per curiam, or if an opinion be reported, the same shall be
written in as brief and concise form as may be consistent with a clear presentation of the law of
the case. . . . Only such cases as are hereafter reported in accordance with the provisions of
this section shall be recognized by and receive the official sanction of any court within the state."

There are many references to this practice, both in the syllabi and opinions written for the
Supreme Court of Ohio. Typical of these is the following:

"It has long been the rule of this court that the syllabus contains the law of the case. It is the
only part of the opinion requiring the approval of all the members concurring in the judgment.
Where the judge writing an opinion discusses matters or gives expression to his views on
questions not contained in the syllabus, it is merely the personal opinion of that judge."

State ex rel. Donahey v. Edmondson, 89 Ohio St. 93, 107-108, 105 N.E. 269, 273.

See also Williamson Heater Co. v. Radich, 128 Ohio St. 124, 190 N.E. 403; Baltimore & O. R.
Co. v. Baillie, 112 Ohio St. 567, 148 N.E. 233. A syllabus must be read in the light of the facts in
the case, even where brought out in the accompanying opinion, rather than in the syllabus
itself. See Williamson Heater Co. v. Radich, supra; Perkins v. Bright, 109 Ohio St. 14, 19-20,
141 N.E. 689, 690-691; In re Poage, 87 Ohio St. 72, 82-83, 100 N.E. 125, 127-128.

[Footnote 4]
"However, the doing of business in a state by a foreign corporation, which has not appointed a
statutory agent upon whom service of process against the corporation can be made in that state
or otherwise consented to service of summons upon it in actions brought in that state, will not
make the corporation subject to service of summons in an action in personam brought in the
courts of that state to enforce a cause of action in no way related to the business or activities of
the corporation in that state. Old Wayne Mutual Life Assn. of Indianapolis v. McDonough, 204 U.
S. 8, 204 U. S. 22-23;Simon v. Southern Ry. Co., 236 U. S. 115, 236 U. S. 129-130 and 236 U.
S. 132. See also Pennsylvania Fire Ins. Co. of Philadelphia v. Gold Issue Mining & Milling
Co., 243 U. S. 93, 243 U. S. 95-96; Robert Mitchell Furniture Co. v. Selden Breck Construction
Co., 257 U. S. 213, 257 U. S. 215-216; International Shoe Co. v. Washington, 326 U. S.
310, 326 U. S. 319-320."

"An examination of the opinions of the Supreme Court of the United States in the foregoing
cases will clearly disclose that service of summons in such an instance would be void as
wanting in due process of law."

155 Ohio St. 116, 119-120, 98 N.E.2d 33, 35.

[Footnote 5]

". . . The obligation which is here sued upon arose out of those very activities. It is evident that
these operations establish sufficient contacts or ties with the state of the forum to make it
reasonable and just, according to our traditional conception of fair play and substantial justice,
to permit the state to enforce the obligations which appellant has incurred there. Hence, we
cannot say that the maintenance of the present suit in the Washington involves an
unreasonable or undue procedure."

International Shoe Co. v. Washington, supra, at 326 U. S. 320.

[Footnote 6]

This citation does not disclose the significance of this decision, but light is thrown upon it by the
opinions of the state court below. Reynolds v. Missouri, K. & T. R. Co., 224 Mass. 379, 113 N.E.
413; 228 Mass. 584, 117 N.E. 913. In addition to the cases cited in the text, see Barrow S.S.
Co. v. Kane, 170 U. S. 100; Pennsylvania Fire Insurance Co. v. Gold Issue Mining Co., 243 U.
S. 93 (statutory agent appointed); Philadelphia & Reading R. Co. v. McKibbin, 243 U. S.
264, 243 U. S. 268-269 (question left open).

[Footnote 7]

For like procedure followed under somewhat comparable circumstances, see State Tax Comm'n
v. Van Cott, 306 U. S. 511.

MR. JUSTICE MINTON, with whom THE CHIEF JUSTICE joins, dissenting.

As I understand the practice in Ohio, the law as agreed to by the court is stated in the syllabus.
If an opinion is filed, it expresses the views of the writer of the opinion and of those who may
join him as to why the law was so declared in the syllabus. Judge Taft alone filed an opinion in
the instant case.

The law as declared in the syllabus, which is the whole court speaking, is clearly based upon
adequate state grounds. Judge Taft, in his opinion, expresses the view that the opinions of this
Court on due process grounds require the court to declare the law as stated in the syllabus. As
the majority opinion of this Court points out, this is an erroneous view of this Court's decisions.

"This brings the situation clearly within the settled rule whereby this Court will not review a State
court decision resting on an adequate and independent nonfederal ground even though the
State court may have also summoned to its support an erroneous view of federal law."

Radio Station WOW v. Johnson, 326 U. S. 120, 326 U. S. 129.

The case of State Tax Comm'n v. Van Cott, 306 U. S. 511, is not this case. There, the case was
not clearly decided on an adequate state ground, but the state ground and the federal ground
were so interwoven that this Court was "unable to conclude that the judgment rests upon an
independent interpretation of the state law." 306 U.S. at 306 U. S. 514. In the instant case, a
clear statement of the state law is made by the court in the syllabus. Only Judge Taft has
summoned the erroneous view of this Court's decisions to his support of the adequate state
ground approved by the whole court.

What we are saying to Ohio is:

"You have decided this case on an adequate state ground, denying service, which you had a
right to do, but you don't have to do it if you don't want to, as far as the decisions of this Court
are concerned."

I think what we are doing is giving gratuitously an advisory opinion to the Ohio Supreme Court. I
would dismiss the writ as improvidently granted.

INGENOHL VS WALTER E. OLSEN

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-22288 January 12, 1925

CARL FRANZ ADOLPH OTTO INGENOHL, plaintiff-appellee,

vs.
WALTER E. OLSEN AND COMPANY, INC., defendant-appellant.
Gibbs and McDonough for appellant.
Ross, Lawrence and Selph for appellee.

STATEMENT

August 16, 1922, the plaintiff filed a complaint in the Court of First Instance against the
defendant in which after formal pleas, he alleges:

III. That on the 5th day of May, 1922, in the Supreme Court of Hongkong, the same
being a court of competent jurisdiction and having jurisdiction over both the plaintiff and
the defendant in a certain action wherein the plaintiff herein was plaintiff and the
defendant here was defendant, a final judgment was rendered in favor of the plaintiff and
against defendant a duly certified transcript of which said judgment is hereto attached,
marked Exhibit A.

IV. That the said judgment has not been reversed or modified and still in full force and
effect.

V. That on the 30th day of June, 1922, costs were duly taxed and allowed in the said
Supreme Court of Hongkong in favor of plaintiff and against the defendant in the sum of
twenty-six thousand two hundred and forty-four and 23/100 dollars ($26,244.23),
Hongkong currency, as appears by the certificate of the registrar of the said Supreme
Court of Hongkong, hereto attached and made a part hereof.

VI. That demand has been made by plaintiff upon defendant for the payment of the said
sum of twenty-six thousand two hundred and forty-four and 23/100 dollars ($26,244.23),
Hongkong currency, but the defendant has failed and refused and still fails and refuses
to pay plaintiff the said sum or any part thereof.

VII. That the equivalent of the said sum of twenty-six thousand two hundred and forty-
four and 23/100 dollars ($26,244.23), Hongkong currency, on the said 30th day of June,
1922, was thirty-one thousand ninety-nine pesos and forty-one centavos (P31,099.41),
Philippine currency.

Wherefore, he prays judgment for that amount, with legal interest, and for such other and further
relief as may seem just and equitable.

A duly certified transcript of the judgment of the Hongkong court was attached to the complaint,
marked Exhibit A.

For amended answer, the defendant denies each and every allegation of the complaint, and, as
a separate special defense, alleges that the judgment in question should be considered in
connection with the decision of the Supreme Court of Hongkong, a copy of which is attached to
and made a part of the answer, marked Exhibit 1. That the decision and judgment of that court
were rendered and entered as a result of a clear mistake of law and fact.

3. That previous to the 25th day of January, 1919, A. Mitchell Palmer, the duly
appointed, qualified and acting Alien Property Custodian of the United States, under and
by virtue of the Act of Congress of the United States approved October 6, 1917, known
as the Trading with the Enemy Act as amended, and in accordance with executive
 orders issued in pursuance thereof, required and caused to be conveyed, transferred
and assigned, delivered and paid over to him the property and business then owing and
belonging to, or held for, by, or on account of, or on behalf, or for the benefit of the
company known as Syndicat Oriente, a joint account association (sociedad de cuentas
en participacion), of which the plaintiff was the "gestor," and which association formed
under the laws of Belgium with its registered office in the City of Antwerp, Belgium, and
an enemy as defined in said Act, not holding a license granted by the President under
said Trading with the Enemy Act, and which the President of the United States, after
investigation had determined was so owing, or so belonged, or was so held, and
thereafter the said Alien Property Custodian in pursuance of said Act and proclamations
and executive orders, advertised that he would sell through his managing director of the
Philippine Islands to the highest bidder at public sale, subject to the terms and conditions
set forth in the advertisement of sale, the said property and business of the Syndicat
Oriente and of the said plaintiff as its "gestor" on the 27th day of December, 1918, at
Manila in the Philippine Islands, and pursuant to said advertisement of sale, and in
compliance with all the terms and conditions therein set forth, and after due and public
notice given thereof, on the 27th day of December, 1918, duly sold at public sale at
Manila, Philippines Islands, the said property and business, with certain exceptions
immaterial to this case, mentioned in the deed of conveyance hereinafter referred to, in
consideration of the bid therefor by the said defendant corporation of the sum of
P2,350,000, Philippine currency, which was the highest bid of any bidder qualified to bid
for and purchase said property and business at said sale, and the said Alien Property
Custodian of the United States having thereafter accepted said bid and received from
the defendant corporation in cash the amount of said bid, did on the 25th day of January,
1919, under and by virtue of said Act of Congress and said proclamations and executive
orders, execute in favor of the defendant corporation a deed of conveyance of said
property and business of the said Syndicat Oriente and of the said plaintiff as its
"gestor," a copy of which deed marked Exhibit 2 for identification is hereto attached and
made a part of this amended answer and counterclaim.

4. That among the property conveyed and described in said deed so executed by the
Alien Property Custodian of the United States in favor of the defendant corporation was
the cigar and cigarette factory situated in the City of Manila, Philippine Islands, known as
"El Oriente Fabrica de Tabacos, C. Ingenohl," and all incidents and appurtenances
thereto including the business as a going concern and the goodwill, trade names and
trade-marks thereof, and of the said Syndicat Oriente.

That at all times said C. Ingenohl mentioned therein was the gestor of the said Syndicat Oriente
and plaintiff in this action.

That based upon the claim of the plaintiff for himself and as gestor and agent of the Syndicat
Oriente, in the year 1921, the plaintiff collected and received from the Alien Property Custodian
of the United States, the purchase price of the property mentioned and described in this answer
and counterclaim and thereby ratified and confirmed the sale and conveyance of the property to
the defendant to all intents and purposes, the same as if the sale had originally been made by
plaintiff to the defendant.

7. That at the time of the conveyance of said property to the defendant corporation and
for many years previous and subsequent thereto, and up to the time of the wrongful acts
of the plaintiff as hereinafter set forth, China, the colony of Hongkong, the Federated
 Malay States, and the Straits Settlements were the principal markets for the output of the
cigars manufactured in the said cigar factory, and the only trade-marks and the trade
names under which said cigars were sold in those markets by the plaintiff previous to
said conveyance, and by the defendant subsequent thereto were "La Perla del Oriente,"
El Cometa del Oriente" and "Imperio del Mundo;" that by the sale of large quantities of
the output of said cigar factory in said markets by the plaintiff previous to said
conveyance, and by the defendant thereafter under said trade-marks and trade names
and by the appropriate registration of said trade-marks and trade names in said
countries, the plaintiff previous to said conveyance, and the defendant thereafter as his
successor in interest appropriated, acquired and became entitled to the exclusive use of
said trade-marks and trade names in said markets to designate the cigar products of
said factory.

That by virtue of the fact that the plaintiff took and accepted the purchase price for the sale of
the property, he thereby ratified and confirmed the peaceable possession and enjoyment and
the use of the property, including said trade-marks and trade names, the same is he had
personally made the sale.

9. That on or about the 28th of May, 1919, the said trade-marks and trade names known
as "La Perla del Oriente" and "El Cometa del Oriente" were duly registered at Shanghai
in the name of the defendant corporation for all of China with the exception of the colony
of Hongkong, which is British territory and where separate registration proceedings were
and are required; that by virtue of said registration and by virtue of the sale under said
trade-marks and trade names of the cigars manufactured in said factory by the plaintiff
previous to said conveyance and by the defendant as his successor in interest
thereafter, the latter acquired the sole and exclusive right to the use of said trade-marks
and trade names in all of China.

That at the time the plaintiff accepted the proceeds of the sale, he well knew that the Property
Custodian intended to and did sell and convey to the defendant, and that the defendant believed
that it acquired and did acquire the exclusive right to the use of said trade-marks and trade
names in said markets, and that the said trade-marks and trade names had been duly
registered at Shanghai for all of China in the name of the corporation, and that at the time he
accepted such proceeds, the plaintiff well knew that the defendant ever since the purchase of
the property was selling the product of said factory under trade-marks and trade names in all of
said markets. That plaintiff also knew the value of them at the time of the sale was P1,000,000,
and that said trade-marks and trade names evidenced P1,000,000 of the purchase price of the,
property. That after obtaining the proceeds of the sale, the plaintiff wrongfully instituted the said
action in the Supreme Court of the colony of Hongkong, resulting in the rendition of the
judgment in question. That at the time it was rendered the Hongkong court had before it and
under consideration the deed of conveyance executed by the Property Custodian to the
defendant and facsimiles of the trade-marks and trade names and the admission of the plaintiff
that he had received the proceeds of the sale from the Property Custodian. That
notwithstanding such facts, the Hongkong court decided in effect that the language
"wheresoever situate in the Philippine Islands" was a limitation upon the goodwill and right to
the use of said trade-marks and trade names to the Philippine Islands, whereas in truth and in
fact, as the plaintiff well knew at the time of said conveyance, almost the entire output of the
factory in the City of Manila was exported and sold outside of the Philippine Islands, and that the
intention of said conveyance was to convey the right to the use of said trade-marks and trade
names outside of the Philippine Islands, and that plaintiff willfully concealed and withheld said
facts from the Hongkong court, and induced it to hold in effect that the right to the use of said
trade-marks was limited by the conveyance to the Philippine Islands. The trade-marks in
question are then specifically described.

That the plaintiff in Hongkong court claimed to be the proprietor of the trade-marks and trade
names known as "La Perla del Oriente," "El Cometa del Oriente" and "Imperio del Mundo," in
connection with cigars manufactured by him in the factory at Mongkok, Hongkong, known as the
Hongkong factory, and which at the time of the conveyance, was a mere branch of the Manila
cigar factory.

That at the trial in the Hongkong court it appeared that between the years 1882 and 1905, "El
Oriente Fabrica de Tabacos Sociedad Anonima," hereinafter referred to as "Sociedad
Anonima," carried on a business as manufacturers of cigars and cigarettes in Manila, Philippine
Islands, and in connection with the cigars manufactured therein, made use of the trade-marks
and trade names, which are in dispute in this action. That on November 28, 1905, the "Sociedad
Anonima," being then in liquidation, sold all of its business interests and assets in the Philippine
Islands with its goodwill and trade-marks, including those in dispute here, to the plaintiff as a
gestor of a joint association consisting of the plaintiff and others, which was known as the
Syndicat Oriente, and carried on its business in the Philippine Islands under the style of "EL
Oriente Fabrica de Tabacos, C. Ingenohl, Manila." That in the year 1908 the Syndicat Oriente
opened the Hongkong factory, as a branch or agency, for the manufacture and sale in
Hongkong of cigars which were made of the tobacco supplied by "El Oriente Fabrica de
Tabacos" in the Philippine Islands, and which bore the trade-marks in dispute in this action. That
such trade-marks were registered in the Philippine Islands in the years 1884 and 1887 as the
property of the said "Sociedad Anonima," and such registration was renewed in the year 1902.
That in the year 1903 they were registered on the Hongkong register of trade-marks as the
property of the "Sociedad Anonima." That about April, 1906, the assignment of the said trade-
marks to "El Oriente Fabrica de Tabacos" was registered in the Philippine Islands, and in
February, 1910, they were assigned on the Hongkong register with the knowledge and authority
and by direction of the plaintiff, to the name of said Syndicat Oriente under its name and style of
"El Oriente Fabrica de Tabacos, C. Ingenohl, Manila," as proprietor. That on March 13, 1917,
the plaintiff renewed the registration of such trade-marks on the Hongkong register for a further
period of fourteen years from the 15th of April, 1917, in the same name, to wit: "El Oriente
Fabrica de Tabacos, C. Ingenohl, Manila," as proprietor. That such trade-marks and trade
names were inseparably connected and identified with the cigars manufactured in the Manila
factory, and that the Hongkong factory had no right to the use of them, except as a branch of
the Manila factory, and that the use of them by the Hongkong factory after conveyance to the
defendant constitutes a false representation and fraud upon the public purchasing such cigars,
and upon this defendant in particular. That under the laws of Great Britain, United States and
the Philippine Islands, trade-marks and trade names, such as those in dispute, belong to and
follow the product of the factory with which they are identified, and the use of them upon the
products of any other factory constitutes a fraud upon the public. That under such laws the
acceptance by the former owner of the proceeds of the sale amounts to a ratification of the sale
to all intents and purposes, the same as if the sale had been made by the owner himself, and
that as construed by the laws of Great Britain, United States and the Philippine Islands, the
deed of conveyance was not reasonably susceptible to the interpretation placed upon it by the
Hongkong court, to the effect that the goodwill and right to the use of the trade-marks and trade
names were limited to the Philippine Islands.
By way of counterclaim, the defendant alleges all of such material facts, and that the action in
Hongkong court was wrongfully instituted by the plaintiff against the defendant. That after the
rendition of such judgment and in violation of the terms of the sale and conveyance, the plaintiff,
through his solicitors, agents, and representatives, has been and is still wrongfully and
unlawfully causing to be inserted in the leading newspapers in China, the Federated Malay
States, Straits Settlements, and elsewhere, newspaper articles notifying the public of the
rendition of the judgment in which he claims and asserts his exclusive right to the use of the
trade-marks and trade names in all of said countries, and threatens to take legal proceedings
against any person, firm, or corporation which has its possession for sale cigars bearing the
said trade-marks and trade names, which are not manufactured by the branch factory at
Hongkong, and also by giving notices to the tobacco dealers. That by reason of said notices and
the threats, the cigar dealers have cancelled all pending orders and have refused to make any
further purchases of cigars without guaranties, protecting them against the threatened legal
proceedings of plaintiff. That the goodwill of the cigar business of the defendant and the value of
such trade-marks and trade names have been totally destroyed by the plaintiff, and that he has
wrongfully and unlawfully deprived the defendant of the use and enjoyment of them, to the
defendant's damage in the sum of P1,000,000 for which it prays judgment with costs.

Upon such issues the parties entered into the following agreed statement of facts:

Agreed statement of facts

Without prejudice to the introduction of such oral and documentary evidence as either
party may present at the time fixed by the Court for the trial of this case, and saving all
just objections and exceptions to the admissibility of such facts, or any of them, as
evidence in this case, it is hereby mutually stipulated and agreed by and between the
parties, their counsel and attorneys, as follows:

1. That the defendant, Walter E. Olsen & Co., Inc., is a corporation duly organized,
existing, and doing business under the laws of the Philippine Islands, having its principal
place of business at the City of Manila, and that the said Walter E. Olsen & Co., Inc., is
the same Walter E. Olsen & Co., Inc., referred to in the judgment of the Supreme Court
of Hongkong sued on herein, a duly certified copy of which said judgment is hereto
attached marked Exhibit A, and made a part hereof;

2. That the Supreme Court of Hongkong is a court of record of general jurisdiction, and
at the time of the rendition of the judgment sued on herein (Exhibit A) had jurisdiction
over the parties to the action in which the said judgment was rendered, and of the
subject-matter of the said action;

3. That the defendant Walter E. Olsen & Co., Inc., appeared and was represented by
counsel in the Supreme Court of Hongkong in the action in which the said judgment
(Exhibit A) was rendered;

4. That the defendant has refused to pay to the plaintiff the amount of the said judgment,
to wit, the sum of twenty-six thousand two hundred forty-four and 23/100 dollars
($26,244.23), Hongkong currency, equivalent to thirty-one thousand ninety-nine pesos
and forty-one centavos (P31,099.41), Philippine currency;
5. That Exhibit 1 attached to defendant's amended answer and counterclaim is a true
copy of the decision of the Supreme Court of Hongkong, upon which the judgment
referred to in the third paragraph of plaintiff's complaint was based;

6. That Exhibit 2 attached to defendant's amended answer and counterclaim is a true

copy of the Deed of Transfer executed on the 25th day of January, 1919, by A. Mitchell
Palmer, the duly appointed, qualified and acting Alien Property Custodian of the United
States in favor of the defendant corporation, and that the recitals contained in said Deed
of Transfer were and are true, except that the Syndicat Oriente mentioned therein was
formed under the laws of Belgium with its head office at Antwerp, by Articles of
Agreement dated November 28, a copy of which marked Exhibit B is hereto attached
and made a part hereof. Under the said agreement the plaintiff was the "Gerant" of the
said Syndicat Oriente, and his rights and liabilities as well as those of the other parties to
the said agreement to outsiders and inter se are governed by said articles and by the
laws of Belgium which are agreed to be substantially the same as the laws of the
Philippines with respect to joint accounts (cuentas en participacion) as provided by
articles 239-243 of the Philippine Code of Commerce. It is understood however that the
defendant will raise no question in this case as to the authority of the plaintiff to maintain
said action before the Hongkong court;

7. That the Ingenohl mentioned in said Deed of Transfer as C. Ingenohl, and as Francis
Adolfo Ingenohl, is the plaintiff in this action, and was at the time of the seizure and sale
of the property mentioned in said Deed of Transfer, and from that time up to and
including the time of the receipt by him from the Alien Property Custodian of the
proceeds of said sale, continue to be the "Gerant" of the Syndicat Oriente mentioned in
said Deed of Transfer, with full power and the authority to claim and receive the
proceeds of said sale from the said Alien Property Custodian of the United States;

8. That as a result of the claim made therefor, the said plaintiff for himself and as
"Gerant" and general representative of the said Syndicat Oriente, on the 13th day of
December, 1920, and 28th day of March, 1921, collected and received from the Alien
Property Custodian of the United States, the sum of $1,511,124.50, United States
currency, being the equivalent with interest of the purchase price of the property
described in said Deed of Transfer and paid to said Alien Property Custodian by the
defendant corporation, and the said plaintiff then and there issued to the said Alien
Property Custodian of the United States two receipts, copies of which marked Exhibits C
and D are hereto attached and made a part hereof; that neither the plaintiff nor the
Syndicat Oriente has at any time either orally or in writing ratified, consented to or
agreed to the action of the Alien Property Custodian in selling the property described in
the said Deed of Transfer, other than as may be deducted from the action of the said
plaintiff in making claim for and receiving the proceeds of the sale of the said property,
and the plaintiff reserves the right to contend and does contend that such action on his
part did not and does not constitute a ratification of said sale;

9. That at the time of the conveyance of said property by the Alien Property Custodian of
the United States to the defendant corporation and for many years previous and
subsequent thereto, and up to the time of the rendition by said Supreme Court of
Hongkong of the judgment (Exhibit A), China, the colony of Hongkong, the Federated
Malay States, and the Straits Settlements, were among the markets in which the output
of the cigars manufactured in the cigar factory known previous to its conveyance to the
defendant corporations as "El Oriente Fabrica de Tabacos," and that among the trade-
marks and trade names under which such cigars were sold in those markets by the
plaintiff previous to said conveyance and by the defendant subsequent thereto were "La
Perla del Oriente," "El Cometa del Oriente" and "Imperio del Mundo."

10. That at the time of rendering the decision and entering the judgment (Exhibit A), the
said Supreme Court of Hongkong had before it and under consideration said Deed of
Transfer executed by the Alien Property Custodian in favor of the defendant corporation
and facsimiles of the trade-marks and trade names under which the output of both the
Manila cigar factory and the Hongkong factory hereinafter mentioned had been sold in
Hongkong and the other markets mentioned, and had also before it and under
consideration the admission of the plaintiff that he had received the proceeds of said
sale by the Alien Property Custodian to the defendant corporation as evidenced by said
Deed of Transfer. That said action in Hongkong was instituted on the 9th day of October,
1919;

11. That the facsimile of one of the trade-marks or labels presented as evidence to the
said Supreme Court of Hongkong depicted among other things the head and shoulders
of a Filipina woman in a yellow camisa. The picture is surrounded with green leaves and
pink flowers. Above is a scroll with the words "La Perla del Oriente" printed on it and
underneath is another scroll with the words "El Oriente Fabrica de Tabacos, Sociedad
Anonima, Manila." That a facsimile of said trade-mark of label marked Exhibit E is hereto
attached and made a part hereof;

12. That subsequent to the transfer of said trade-marks and trade names by the said
"Sociedad Anonima" to the said plaintiff Ingenohl as hereinafter set forth, the words on
the scroll at the foot of said label mentioned in the preceding paragraph were changed to
"El Oriente Fabrica de Tabacos, Manila," as shown by the facsimile hereto attached,
marked Exhibit E and made a part hereof;

13. That the facsimile of another trade-mark or label likewise presented as evidence to
the said Supreme Court of Hongkong in part depicted a Filipina woman dressed in a red
skirt and loose yellow camisa, holding in the left hand by its cover an open cigar box full
of cigars, her right hand resting on a Spanish coat of arms. Above are printed the words
"La Perla del Oriente." The Spanish coat of arms is the Royal Coat of Arms of Spain.
Underneath the said arms are the obverse and reverse of three medals. On one of the
medals it is stated on the reverse to have been awarded to "El Oriente Fabrica de
Tabacos, Manila." The buildings and the back ground are the towers of the Dominican
Church (Walled City, Manila) and the high column is the Magallanes Monument, Manila.
That a facsimile of said trade-mark or label marked Exhibit G is hereto attached and
made a part hereof;

14. Another facsimile of a trade-mark and trade name also presented as evidence to the
said Supreme Court of Hongkong depicts the old Bridge of Spain across the Pasig River
at Manila, showing in the back ground the Old Stone Wall of the Walled City, Manila, and
the Dominican Church, Magallanes Monument, and Intendencia Building and the church
towers of the Walled City of Manila and above several stars and a comet, on the tail of
which appear the words "El Cometa del Oriente." That a copy of said trade-mark or label
marked Exhibit H is hereto attached and made a part hereof;
15. That if further appeared upon the trial of said action in the said Supreme Court of
Hongkong and it is stipulated to be true, that between the years 1882 and 1905, "El
Oriente Fabrica de Tabacos Sociedad Anonima" (hereinafter referred to as the
"Sociedad Anonima") carried on business as manufacturers of cigars and cigarettes at
Manila, Philippine Islands, and made use in connection with the sale of its output
through the Far East of Trade the marks which are in dispute in this action. That the
head office of the said "Sociedad Anonima" was at Antwerp, Belgium;

16. That on or about the 21st day of April, 1906, the said "Soceidad Anonima," being
then in liquidation, transferred all of its business interests and assets together with the
goodwill thereof and trade-marks and trade names of said "Sociedad Anonima"
wherever in use (including the trade-marks and trade names in dispute in this action), to
the plaintiff. That said transfer was effected by means of an instrument, in writing, a copy
of which is hereto attached marked Exhibit J. That plaintiff, as "Gerant" of said Syndicat
Oriente which had been organized in the meantime for that purpose, carried on business
in the Philippine Islands and throughout the Far East under the style of "El Fabrica de
Tabacos, C. Ingenohl, Manila" (hereinafter referred to as "El Oriente Fabrica de
Tabacos");

17. That in the year 1908 the plaintiff, as "Gerant" of said Syndicat Oriente, opened the
said Hongkong factory for the manufacture and sale of cigars which were composed, in
part, of tobacco supplied by "El Oriente Fabrica de Tabacos" in the Philippine Islands,
and, in part, of tobacco wrapper imported from Java. That subsequent to the
establishment of the said Hongkong factory its output was sold throughout the Far East
(except in the Philippine Islands) concurrently with the output of the Manila factory under
the trade-marks and trade names in question, except that one of the outside labels of
each box or package containing the output of the said Hongkong factory there appeared
the words "El Oriente Fabrica de Tabacos Hongkong, Sucursal de la Fabrica en Manila."
That a facsimile of one of said covering labels marked Exhibit 1 is hereto attached and
made a part hereof;

18. That the only factory belonging to the said "Sociedad Anonima" of Antwerp as the
Manila factory, and the only factory belonging to the plaintiff personally or as "Gerant" of
the Syndicat Oriente was the said Manila factory up until the time of the establishment of
the said Hongkong factory, and thereafter the only factories owned by the plaintiff of the
said Syndicat Oriente were the said Manila and Hongkong factories;

19. That the said trade-marks which are in dispute in this action were registered in the
Philippine Islands in the years 1884-1887 as the property of the said "Sociedad
Anonima" and the registration thereof in the Philippine Islands of said property was
renewed in the year 1902;

20. That the said trade-marks were subsequently in the year 1903 registered on the
Hongkong Register of Trade-Marks as the property of the said "Sociedad Anonima;"

21. That on or about April, 1906, the assignment of the said trade-marks to "El Oriente
Fabrica de Tabacos" was registered in the Philippine Islands and in February, 1910, said
trade-marks were assigned on the Hongkong register with the knowledge and authority
and by direction of the plaintiff to the name of the said Syndicat under its said style of "El
Oriente Fabrica de Tabacos, C. Ingenohl, Manila" as the proprietor of the said trade-
marks;

22. That for many years prior to the sale by the Alien Property Custodian of the said
trade-marks and trade names, the same were registered in various countries as follows:

In France, Australia, New Zealand, Shanghai, and Hongkong in the name of "El Oriente
Fabrica de Tabacos, C. Ingenohl, Manila," seven registrations in Belgium, six of which
are in the names of "El Oriente Fabrica de Tabacos, Antwerp," represented by its
manager C. Ingenohl. The seventh registration is of "Imperio del Mundo, C. Ingenohl,
Manila;"

In the English registrations the name is "Carl Ingenohl, Managing Director of and on
behalf of El Oriente Fabrica de Tabacos, Sociedad Anonima, Antwerp, Belgium and
Manila, Philippine Islands;"

There is but one American registration and that is of "El Cometa del Oriente," "Carl
Ingenohl," giving his address at Antwerp and also conducting business under the trade
name of "El Oriente Fabrica de Tabacos at 124 San Pedro Street, Manila, Philippine
Islands;"

The registration for Java and Sumatra reads "El Oriente Fabrica de Tabacos, C.
Ingenohl;"

The German registration is "El Oriente Fabrica de Tabacos, Sociedad Anonima, Emil
Schoett," and one subsequent registration with the name of C. Ingenohl substituted for
Schoett. But counsel for the defendant objects to the consideration of such registration
as wholly immaterial and for the further reason that the defendant as purchaser of the
factory and business known as "El Oriente Fabrica de Tabacos, C. Ingenohl, Manila,"
succeeded to all of the latter's rights under said registration;

23. That the said plaintiff on the 13th day of March, 1917, renewed the registration of the
said trade-marks on the Hongkong register for a further period of fourteen years from the
15th of April, 1917, in the name of "El Oriente Fabrica de Tabacos, C. Ingenohl, Manila,"
Proprietor;

24. That from the time of the establishment of said factory in Manila by the plaintiff, until
the present time, approximately 95 per cent of the output thereof has been exported;

25. That on or about the 28th day of May, 1919, the said trade-marks and trade names
known as "La Perla del Oriente" and "El Cometa del Oriente" were registered at
Shanghai in the name of the defendant corporation for all of China, with the exception of
the colony of Hongkong which is British territory and where separate registration
proceedings were and are required. The plaintiff had no knowledge of the registration of
the said trade-marks at Shanghai until requested by the defendant to enter into this
stipulation of facts, and the plaintiff does not concede the validity of the said registration
nor waive his right to take any action with respect thereto which he may deem suitable or
proper;
The said trade-marks and trade names have been registered in the name of said
Syndicat Oriente under its said style of "El Oriente Fabrica de Tabacos, C. Ingenohl,
Manila" at the Shanghai Customhouse since January, 1907;

26. That the registrations referred to in the last preceding paragraph by both the plaintiff
and defendant were made in the same manner;

27. That the plaintiff at the time of the acceptance from the Alien Property Custodian of
the proceeds of the sale of said property knew that the defendant corporation had been,
ever since the purchase of said property, selling the product of said factory under said
trade-marks and trade names in all of said markets hereinbefore mentioned;

28. The proceeds obtained by the Alien Property Custodian from the sale made by him
as aforesaid were received by the plaintiff after the commencement of the action
resulting in the judgment sued on herein, but prior to the rendition of the said judgment;

29. That the jurisdiction of the said Supreme Court of Hongkong was and is limited to the
colony of Hongkong;

30. That ever since the rendition of said judgment by the said Supreme Court of
Hongkong, the plaintiff through its solicitors, agents, and representatives has been and
still is causing to be inserted in the leading newspapers of China, the Federated Malay
States, and the Straits Settlements articles notifying the public of the rendition of said
judgment, asserting the plaintiff's exclusive right to the use of said trade-marks and trade
names in said countries, and threatening to take legal proceedings against any person,
firm, or corporation having in their possession for sale, cigars bearing the said trade-
marks and trade names which are not manufactured by the plaintiff in said Hongkong
factory, and also causing notices of the same character to be given to the dealers in said
countries in the cigars manufactured by defendant in said factory at Manila and sold in
said countries under said trade-marks and trade names;

31. That all of the articles published in newspapers of the various countries mentioned
and the notices given to the dealers in defendant's cigars were in substantially the same
form; that Exhibit 3 of defendant's amended answer is a copy of a notice which the
plaintiff caused to be published in the Singapore Free Press on July 11, 1922, and that
Exhibit 4 of the same answer is a true copy of a notice which the plaintiff caused to be
published in the North China Daily News at Shanghai on July 3, 1922, and Exhibit 5 of
the same answer is a true copy of a personal notice which the plaintiff caused to be
given to one of the dealers in defendant's cigars dated August 22, 1922.

The foregoing admissions of fact are made on the part of plaintiff with the following
reservations:

1. That the plaintiff objects to the admission in evidence and consideration by the court
of the facts set forth in paragraphs 6 to 31, inclusive, on the following grounds:

(a) That this Honorable Court has no jurisdiction to revise or review the judgment
(Exhibit A) of the Supreme Court of Hongkong;
 (b) That no evidence should be received in support of the defendant's answer
and counterclaim, for the reason that the same do not state facts sufficient to
constitute counterclaim or defense;

(c) That the facts set forth in the said paragraphs 6 to 31, inclusive, are
incompetent, irrelevant and immaterial as evidence in this case.

2. That the admission of facts set forth in the said paragraphs 6 to 31, inclusive, are
made for the purposes of this case only, and are not to be used against the plaintiff or
defendant for any other purpose or on any other occasion.

Based thereon and the other evidence in the case, the lower court rendered judgment for the
plaintiff for the full amount of his claim, with interest at the rate of 6 per cent per annum from
August 16, 1922, and costs, from which the defendant appeals, making the following
assignments of error:

I. The trial court erred in failing to find that the decision of the Supreme Court of
Hongkong and the judgment which are the basis of plaintiff's complaint in this action
were rendered and entered as a result of a clear mistake of law and of fact.

II. The trial court erred in rendering judgment in favor of the plaintiff and against the
defendant corporation for the amount claimed in the complaint.

III. The trial court erred in failing to find and to take into consideration that the Alien
Property Custodian of the United States in selling the Manila Cigar Factory with its
goodwill, trade-marks and trade names, acted as the trustee of the plaintiff, and that the
letter by applying for and accepting from the said Alien Property Custodian the proceeds
of such sale, ratified the same and thereby estopped himself from denying the
defendant's right to the use of said trade-marks and trade names on the exported output
of said cigar factory.

IV. The trial court erred in failing to find and take into consideration that the business of
the Manila Cigar Factory was almost exclusively an export business, and that the
transfer of the goodwill thereof necessarily carried with it the transfer of said export
business and of the trade-marks and trade names which could not be disconnected
therefrom.

V. The trial court erred in finding and holding that the intention of the Alien Property
Custodian as evidenced by his deed of transfer to the defendant corporation of January
25, 1919, was to limit the conveyance to the property and rights of the Syndicat Oriente
in the Philippine Islands and in concluding from such finding and holding that the
defendant corporation was not entitled to recover under its counterclaim.

VI. The trial court erred in denying defendant's counterclaim.

JOHNS, J.:
The important questions on this appeal are, first, the construction which should be placed upon
the conveyance of the United States Alien Property Custodian to the defendant; second, the
legal force and effect of the judgment which was rendered by the Hongkong court; and, third,
whether or not the defendant has sustained any damages for which it can recover in this action.

The conveyance in question was made on the 25th of January, 1919, and, among other things,
recites:

Alien Property Custodian of the United States, acting under authority of the Trading with
the Enemy Act, as amended, and the proclamations and executive orders issued in
pursuance thereof, does hereby grant, bargain, sell and convey to the said Walter E.
Olsen & Company, its successors and assigns, all the following described property and
business:

All the singular the property, real and personal, rights, claims, titles, interests, effects and
assets of every kind and description whatsoever (except only as specifically reserved
and excepted hereinafter), whatsoever situate in the Philippine Islands, and all incidents
and appurtenances thereto, including the business as going concern and the goodwill,
trade names and trade-marks thereof, of Syndicat Oriente, a company formed under the
laws of Belgium with its registered office in Antwerp, Belgium, and heretofore doing
business in the Philippine Islands under the name "El Oriente, Fabrica de Tabacos, C.
Ingenohl; etc." Then follows a long description of certain lands in the Philippine Islands,
after which, the conveyance then recites:

2. The factories and other buildings located upon the above described real estate and all
furniture, fixtures, machines, tools, equipment, launches and barges, materials, supplies,
labels, brands, tobacco, cigars, raw stock, stock party or wholly manufactured, therein or
belonging to said business.

3. All accounts receivable or other credits and all contract rights belonging to said
business, except the account owing by the Orient Tobacco Manufactory of Hongkong.

4. Any interest in the foregoing which may belong to Carlos Francisco Adolfo Otto
Ingenohl.

The undersigned Alien Property Custodian expressly excepts and reserves from this
sale all Liberty Bonds of the United States and the above account of the Orient Tobacco
Manufactory of Hongkong owned by said business.

Neither the United States nor the Alien Property Custodian nor any representative or
agent or agency thereof shall be held or admitted to make any representation or
guaranty, express or implied, concerning, or in any way respecting the above property or
business.

It is contended by the plaintiff that the words "wheresoever situate in the Philippine Islands" are
words of limitation, and that the future use of the trade-marks and trade names by the defendant
should be confined and limited to the Philippine Islands.

It appears that the property in question was seized and taken over by the United States under
the terms and provisions of the Trading with the Enemy Act, and that it was sold and conveyed
to the defendant under such provisions at the agreed purchase price of P2,350,000, and that
the Syndicat Oriente was a company organized under the laws of Belgium with its registered
office in Antwerp, and that it was an enemy of the United States, as defined in said Act, not
holding a license granted by the President under said Trading with the Enemy Act, "which the
President after investigation has determined was so owing, or so belonged, or was so held."

At the sale the defendant was the highest and best bidder and paid the amount of its bid, in
consideration of which the deed in question was executed.

For the purpose of this opinion, we must assume that as a war measure, the Government of the
United States had a legal right to seize and sell the property, and that the conveyance which it
made was valid. That fact is not and cannot be questioned. It follows that the property sold was
owned and held by an alien enemy.

The primary purpose of the proceeding was to seize, sell and convey any and all of the property
owned and held by the company or Ingenohl within the jurisdiction of the United States, as a
war measure, upon the ground that they were alien enemies of the United States. While
ostensibly the corporation in question was organized under the laws of Belgium, yet in truth and
in fact it was a one-man corporation in which Ingenohl, who was a citizen of Germany, owned
nearly all of the stock, and to all intents and purposes was the corporation itself. The
conveyance to the defendant must be construed in the light of the existing and surrounding
circumstances, and the purpose and intent for which it was made.

Although there are no covenants or warranties in the conveyance, the primary purpose of the
whole proceedings on which it was founded was to wipe Ingenohl and his company out of
existence and put them out of business in so far as the United States had the power to do so.
For such reasons, it should be the policy of the law to sustain rather than defeat the primary
purpose of the proceedings. In other words, the conveyance should be construed so as to give
full force and effect to the nature and purpose of the proceedings upon which it is founded. It
was not the purpose of the United states to seize and take hold of a portion of plaintiff's property
or that of his company within its jurisdiction. It was the purpose of the United states to seize all
of their property, real, personal, or mixed within its jurisdiction. The conveyance in question
must be construed as intended to convey to the defendant all property which either Ingenohl or
his company had within the jurisdiction of the United States. Any other construction would be
strained and unnatural and defeat the very purpose for which the proceedings were initiated.

The remaining question then is, what property did the plaintiff or his company have within the
jurisdiction of the United States, and what property did the United States seize and convey to
the defendant.

The deed to the defendant recites that it conveyed all and singular property of every kind, nature
and description wheresoever situate in the Philippine Islands, and all incidents and
appurtenances thereto, including the business as a going concern and the goodwill, trade-marks
and trade names of the company doing business in the Philippine Islands under the name of "El
Oriente Fabrica de Tabacos, C. Ingenohl."

It is vigorously contended that the words "trade-marks and trade names," as used therein,
should be confined and limited to their use in the Philippine Islands. That when the defendant
bought the property, it did not purchase the right to the use of the trade names or trade-marks of
the company outside of the Philippine Islands. The meaning of such words should be construed
in connection with what follows:

All accounts receivable or other credits and all contract rights belonging to said
business, except the account owing by the Orient Tobacco Manufactory of Hongkong.

The deed further conveys an express reservation:

The above account of the Orient tobacco Manufactory of Hongkong owned by said
business.

It will be noted that nothing whatever is said about trade names or trade-marks in such
reservations. If it was not the purpose and intent of the conveyance to sell and convey any and
all of the trade names and trade-marks of the company and to the use thereof wheresoever
situate, it would have been a very easy thing to have made an express reservation of them of
the same tenor as the reservations, "except the account owing by the Orient Tobacco
Manufactory of Hongkong" and "the above account of the Orient Tobacco Manufactory of
Hongkong owned by said business." Nothing whatever is said about trade-marks or trade
names in either one of them. Yet, at the time the deed was made a number of trade-marks were
registered in other and different countries outside of Hongkong, and the products of the Manila
factory were sold in those foreign countries under such registered trade names and trade-
marks.

Again, it is stipulated that the trade-marks which are in dispute were registered in the Philippine
Islands in the years 1884 and 1887, as the property of the "Sociedad Anonima," and that such
registration was renewed in the year 1902. That in the year 1903, said trade-marks were also
registered on the Hongkong register of trade-marks as the property of the said "Sociedad
Anonima ." That in April, 1906, the assignment of said trade-marks to "El Oriente Fabrica de
Tabacos" was registered in the Philippine Islands, and in February, 1910, the same trade-marks
were assigned on the Hongkong register with the knowledge and authority and by direction of
the plaintiff in the name of said Syndicat under the style of "El Oriente Fabrica de Tabacos, C.
Ingenohl, Manila," as proprietor of said trade-marks. That for many years prior to the sale of the
property, the trade-marks and trade names in question were registered in France, Australia,
New Zealand, Shanghai and Hongkong in the name of "El Oriente Fabrica de Tabacos, C.
Ingenohl, Manila," seven registrations in Belgium, six of which are in the names of "El Oriente
Fabrica de Tabacos, Antwerp," represented by its manager C. Ingenohl, the seventh registration
of which is of "Imperio del Mundo, C. Ingenohl, Manila."

In the English registrations, the name is "Carl Ingenohl, Managing Director of and on behalf of
El Oriente Fabrica de Tabacos, Sociedad Anonima, Antwerp, Belgium and Manila, Philippine
Islands."

The registration for Java and Sumatra reads: "El Oriente Fabrica de Tabacos, C. Ingenohl."

The German registration is "El Oriente Fabrica de Tabacos, Sociedad Anonima, Emil Schoett,"
and a later one was the name of C. Ingenohl substituted.

That on March 13, 1917, the plaintiff renewed the registration of the trade-marks on the
Hongkong register for a further period of fourteen years from the 15th of April, 1917, in the
name of "El Oriente Fabrica de Tabacos, C. Ingenohl, Manila," proprietor.
It is further stipulated:

That from the time of the establishment of said factory in Manila by the plaintiff, until the
present time, approximately 95 per cent of the output thereof has been exported.

It also appears that the Manila factory was established some time prior to 1884, and that all of
the trade-marks in question are typical of some thing, person or event, and that all of them have
some peculiar and distinct feature typical of the Philippine Islands. But also appears that all of
said trade-marks had their origin and were in use in the factory in the Philippine Islands long
before any factory was established in Hongkong, and that the products of the Manila factory
with such trade-marks on them were sold throughout the Orient, and even in Hongkong, long
before the Hongkong factory was established. That all of such trade-marks were used in,
connected with, and were a part of, the original business of the company in the Philippine
Islands. That the trade-marks registered in Hongkong were the identical trade-marks, both in
form and substance, which for a number of years had been previously in use and registered by
the Manila factory in the Philippine Islands. In other words, it clearly appears that all of the
trade-marks in question were created, had their origin, growth and development in the business
of the Manila factory, and were identified, connected with, and a part of, its business. That any
registration of such trade-marks in any foreign country was based and founded upon original
trade-marks which had their origin and primary use in the Manila factory, and which for many
years had been previously used and registered as such trade-marks in the Philippine Islands. It
must follow that all of the trade-marks in question were connected with, belonged to, and were a
part of, the business of the company as a going concern in the Philippine Islands.

Upon the question of the territorial limitation of a trade-mark, Ruling Case Law, volume 26,
pages 839-840, says:

12. Territorial limitation. — The right of property in a trade-mark is not limited in its
enjoyment by territorial bounds, but may be asserted and maintained wherever the
common law affords remedies for wrongs, subject only to such statutory regulations as
may be properly made concerning the use and enjoyment of other property. It is a
general rule that a trade-mark granted in a foreign country to an alien friend will be
protected against infringement. But the doctrine that property in a trade-mark is not
limited in its enjoyment by territorial bounds, but may be asserted and protected
wherever the law affords a remedy for wrongs, is true only in a limited sense. Into
whatever markets the use of a trade-mark has extended, or its meaning has become
known, there the manufacturer or trader whose trade is pirated by an infringing use will
be entitled to protection and redress. This does not mean that the proprietor of a trade-
mark, good in the markets where it has been employed, can monopolize markets that his
trade has never reached. The mark, of itself, cannot travel to markets where there is no
article to wear the badge and no trader to offer the article. . . .

We hold that the trade-marks and trade names in question were a part of the company's
business in the Philippine Islands, and that the defendant acquired title to the use and
enjoyment of them by its deed of conveyance, not only in the Philippine Islands, but in all foreign
countries in the same manner and to the same extent that they were used by the company and
Ingenohl prior to the time that their property was seized by the United states. That the right and
title to all of such trade-marks and to their use passed by the conveyance made to the
defendant.
The stipulation of facts shows that from the time the Manila factory was established by the
plaintiff until the present, approximately 95 per cent of the gross output of the factory has been
exported. To now give the plaintiff the use and benefit of 95 per cent of the trade-marks and
trade names formerly owned by himself and his company, would be a gross fraud and would
defeat the very purpose for which their property was seized and sold. That would be especially
true, as in this case, where the plaintiff has received and accepted the net proceeds of the sale
which the United States made to the defendant.

The case of Koppel Industrial Car & Equipment co. vs. Orenstein & Koppel Aktiengesellschaft,
vol. 289, Fed., advance sheets No. 3, p. 446, decides that:

Where the Alien Property Custodian sold the American business and goodwill of a going
concern, including its trade-marks and trade names, which company was the outgrowth
of a German corporation which was organized as an American subsidiary corporation,
and which was sold under section 12 of the Training with the Enemy Act, as enemy
owned property, to a new corporation;

Held, that the new corporation was entitled to injunctive relief restraining the German
corporation or its agents from endeavoring to recapture the business so sold by entering
the field after the war, using the same or similar trade names and representing
themselves to be the successors to the first American concern.

Held, further, that under section 12 of the Trading with the Enemy Act there vested in the
Alien Property Custodian all the powers of a common-law trustee in respect of all
property, and a conveyance by him of this German owned property as a going concern,
which included the goodwill, registered and unregistered trade-marks, carried with it
an implied covenant against the former owners entering the field in interference with the
trade names and goodwill so conveyed.

The legal effect of this very recent decision is to hold that in conveyances made by him, the
Alien Property Custodian has all the powers of a common-law trustee, and that a conveyance of
a business as a going concern, including the goodwill and trade-marks, carried with it an implied
covenant against the former owner entering the field of the former business or interfering with
the trade-marks and the goodwill conveyed.

In the instant case, the plaintiff, after accepting the proceeds of the sale, has not only become
an active competitor of the purchaser of the business, but is claiming and exercising the right of
an absolute owner to the use and benefit of 95 per cent of all the business evidenced by the
trade-marks and trade names.

It is a matter of common knowledge that trade-marks and trade names are very often the most
valuable assets of any business.

We are construing a deed of conveyance from the United States to the defendant. The primary
purpose of the whole proceeding was to seize and convey all of the property of the plaintiff or
his company within the jurisdiction of the United States, including trade names and trade-marks
as those of an alien enemy. To now give the defendant the use and benefit of only 5 per cent of
such trade names and trade-marks, and to permit the plaintiff to have and retain the other 95
per cent to his own use and benefit after he has ratified and confirmed the sale, would impugn
the honor and good name of the United States in the whole proceeding and defeat the very
purpose for which it seized and sold the property of an alien enemy.

Under the established facts, both plaintiff and his company were alien enemies, and as a war
measure all of their property within its jurisdiction was seized and held by the United States
under the Trading with the enemy act. As stated, the primary purpose of that proceeding,
because they were alien enemies, was to wipe them out of existence and put them out of
business. As a condition precedent to its purchase, the defendant had to establish the fact that it
was an American citizen and loyal to the United States.

The reservations made in the deed of conveyance are "except the account owing by the Orient
Tobacco Manufactory of Hongkong" and "the above account of the Orient Tobacco Manufactory
of Hongkong owned by said business," and they are the only reservations made.

It is very apparent that the purpose and intent of the United States was to sell and convey all
other property of Ingenohl or his company within its jurisdiction.

The legal force and effect of plaintiff's contention is to claim and assert that the United States
did not seize or take over the most valuable part of his assets and those of the company within
its jurisdiction, and that it did not sell it to the defendant. In other words, the most valuable part
of their assets was not seized or taken over by the United States. This position is not tenable.
The very fact that the above quoted reservations were made in the deed of conveyance, and
that no other reservations were made, clearly implies that it was the purpose and intent of the
United States to seize and take over all of the business and assets of the plaintiff and his
company, except "the amount owing by the Orient Tobacco Manufactory of Hongkong" and "the
above account of the Orient Tobacco Manufactory of Hongkong owned by said business." Any
other construction would be strained and unnatural, and would clearly imply the neglect of
official duty on the part of the United States Government. The trade-marks in question were the
creature of, and had their inception in, the Manila factory, and were incidental to, connected
with, and are a part of, the business of that factory, and it is very apparent from the nature of the
whole proceedings and the deed itself that it was the purpose and intent of the United States to
convey all of the business of "El Oriente Fabrica de Tabacos, C. Ingenohl, Manila" as a going
concern and that of the plaintiff, together with the right and title to the trade-marks in question
and to their use and enjoyment, except only as to the reservations which are expressly made in
the deed for "the account owing by the Orient Tobacco Manufactory of Hongkong" and "the
above account of the Orient Tobacco Manufactory of Hongkong owned by said business."

For such reasons, the first questions should be decided against the plaintiff and in favor of the
defendant. As to the second question, the legal force and effect of the judgment of the
Hongkong court. It is stipulated that it is a court of general jurisdiction. That the defendant
appeared, filed, answered and contested the action, and that as a result of the trial, that court
rendered the following judgment: First, that the plaintiff is the proprietor of the trade-marks and
trade names, the subject-matter of this action, and is entitled to the use of them in connection
with his business as a cigar manufacturer. Second, that the defendant be restrained from selling
or exposing for sale in boxes or packages bearing thereon the said trade-marks and trade
names, and from using any labels or stamps or advertisements in imitation thereof, designed to
represent that the cigars sold by the defendant are the cigars manufactured and sold by the
plaintiff under the trade-marks and trade names in question. Third, that an account be taken and
that based thereon, the defendant should pay to the plaintiff the amount of damages which he
has sustained. Fourth, that the defendant deliver up upon oath or destroy all articles and things
in its possession or under its control which offend against this injunction, and that plaintiff
recover from the defendant his costs of the action upon the claim or counterclaim of defendant,
including attorney's fees, which are hereby taxed and allowed in the sum of $26,244.23, as
appeared by the registrar's certificate.

It appears that under the law of the Hongkong court, judgment for attorney's fees is allowed to
the prevailing party against the defendant in this kind of a case as an incident to the action. In
other words, if the judgment on the merits is sustained, it would carry with it the judgment for the
$26,244.23 as a valid and legal part of it.

The instant case is an action to procure and enforce a judgment in the Philippine Islands for a
like amount founded upon the judgment and proceedings in the Hongkong court. That judgment
having been rendered by a court of competent jurisdiction which had jurisdiction of the parties
and the subject-matter of the action, it is vigorously contended by the appellee that he is entitled
as a matter of right and of comity under the Law of Nations, to enforce it in the Philippine
Islands, citing and relying upon the case of Hilton vs. Guyot (159 U.S., 113; 40 Law. ed., 95), in
which, among other things, the court says:

In view of all the authorities upon the subject, and of the trend of judicial opinion in this
country and in England following the lead of Kent and Story, we are satisfied that where
there has been opportunity for a full and fair trial abroad before a court of competent
jurisdiction, conducting the trial upon regular proceedings, after due citation or voluntary
appearance of the defendant, and under a system of jurisprudence likely to secure an
impartial administration of justice between the citizens of its own country and those of
other countries, and there is nothing to show either prejudice in the court or in the
system of laws under which it was sitting, or fraud in procuring the judgment, or any
other special reason why the comity of this nation should not allow it full effect, the
merits of the case should not, in an action brought in this country upon the judgment, be
tried afresh, as on a new trial or an appeal, upon the mere assertion of the party that the
judgment was erroneous in law or in fact. . . .

That is a leading case of the highest court in the land, and the opinion is exhaustive on the
question involved, and we have read it with care.

Among other things, the syllabus says:

1. International law, including questions concerning the rights of persons within the
dominion of one nation by reason of acts done within the dominion of another, is part of
our law, and should be ascertained and administered by the courts as often as such
questions are duly submitted to their determination.

2. Where there is no written law upon the subject, such as treaty or statute, questions of
international law must be determined by judicial decisions, the works of jurists, and the
acts and usages of civilized nations.

3. Comity of nations is the recognition which one nation allows within its territory to the
legislative, executive, or judicial acts of another nation, having due regard to
international duty and convenience, and to the rights of its own citizens or others who
are under the protection of its laws.
 xxx xxx xxx

6. A foreign judgment for money in favor of a citizen of the foreign country against a
citizen of this country, rendered by a competent court having jurisdiction of the cause
and of the parties, upon due allegations and proofs and opportunity to defend according
to the course of a civilized jurisprudence, whose record is clear and formal, is prima
facie evidence, at least, in a suit upon it in this country, and is conclusive on the merits,
unless impeached on special ground, or shown by international law or the comity of this
country not entitled to full faith and credit.

All of which are sustained in the opinion and must be accepted by this court as the law.

It will be noted that in section 2, (syllabus) it is said:

Where there is no written law upon the subject, such as treaty or statute.

It is not claimed that there is any treaty, but section 311 of the Code of Civil Procedure is as
follows:

Effect of other foreign judgment. — The effect of a judgment of any other tribunal of a
foreign country, having jurisdiction to pronounce the judgment, is as follows:

1. In case of a judgment against a specific thing, the judgment is conclusive upon the
title to the thing;

2. In case of a judgment against a person, the judgment is presumptive evidence of a

right as between the parties and their successors in interest by a subsequent title; but
the judgment may be repelled by evidence of a want of jurisdiction, want of notice to the
party, collusion, fraud, or clear mistake of law or fact.

It is conceded that the Hongkong court had jurisdiction and that the defendant appeared in the
action and contested the case on its merits. Hence, there was no collusion. Neither is it claimed
that there was any fraud, but it is vigorously contended that the Hongkong judgment was a clear
mistake of both law and fact.

We have read and reread with care the exhaustive opinion rendered by the Hongkong court,
which had before it all of the evidence now before this court, except as to the proof of the
defendant in the instant action on its counterclaim for damages. The Hongkong court was
construing the deed of conveyance made to the defendant founded upon the proceeding which
the United States took as a war measure against the plaintiff and his company, as alien
enemies, under its Trading with the Enemy Act. For the purposes of this opinion, all of such
proceedings must be construed as legal and valid, the scope and nature of which is very
apparent from the record. The plaintiff and his company were alien enemies of the United
States, and it was for such reason that their property was seized and sold to the defendant for
P2,350,000, which amount was paid as the purchase price.

The record shows that the original business of the company in the Philippine Islands was
established as early as 1883, and that in connection with and as a part of its business the
company had used and adopted the trade-marks in question and had them registered in the
Philippine Islands as early as 1883. All of those trade-marks appear upon their face to be
confined to and peculiar of persons or things in the Philippine Islands. On the strength of their
use, adoption and registration in the Philippine Islands, in succeeding years, they were
registered in many foreign countries in which a large amount of business was done by the
company in cigars, cigarettes, and tobacco manufactured in the Philippine Islands, all of which
were evidenced by such trade-marks.

The stipulated facts show that 95 per cent of all of its business was export, and that all of its
products were designated and labeled with the trade-marks and trade names in question. That
in later years a branch factory of the business was established in Hongkong. At the sale by the
United States of the business, the defendant paid P2,350,000 in good faith, and took over the
property and assets of the company, including its trade-marks and trade names and its business
as a going concern, except "the account owing by the Orient Tobacco Manufactory of
Hongkong" and "the above account of the Orient Tobacco Manufactory of Hongkong owned by
said business." After the sale, the plaintiff took and accepted the net proceeds and put them in
his pocket and is now using them in connection with the Hongkong factory not only as a
competitor of the defendant, but claiming to be the absolute owner and to have the exclusive
right to the use and benefit of the trade-marks and trade names in question.

With all due respect to the Hongkong court, its judgment is a clear mistake of both law and fact.
Exclusive of the provisions of section 311 of the Code of Civil Procedure, it is very doubtful
whether it could be sustained upon the ground of comity or the Law of Nations.

The proceedings were initiated during the world war, and as a war measure, by the Government
of the United States, an ally of Great Britain, of whose judiciary the Hongkong court is a branch.
Under such conditions and the law of comity and of Nations, there are many and strong reasons
why the Hongkong court should have upheld and sustained the proceedings of the United
States in the seizure and sale of the property of an alien enemy. It overlooked the fundamental
fact of the primary purpose and intent with which the seizure was made and the property sold,
and that it was all done as a war measure by an ally of Great Britain. The legal force and effect
of that decision is to defeat and destroy the very purpose for which the United States seized and
sold the property, took and accepted defendant's money.

As between allied nations and under the law of comity, their mutual policy should be to sustain
and enforce the spirit and intention with which the seizure and sale of any property of an alien
enemy was made rather than to minimize, destroy or defeat them.

If the decision of the Hongkong court is the law, in legal effect the defendant paid P2,350,000
for the right and privilege of doing 5 per cent of the business which was formerly done by the
company, and the plaintiff and his company have received and accepted $1,511,124.50, the full
amount of the purchase price of all of the property, and now have and own the exclusive right to
the remaining 95 per cent of all of the business which the company owned and operated at the
time of the seizure and sale. In its final analysis, that is the logical result of the Hongkong
decision.

We frankly concede that the authorities cited in that opinion are good law, but they are not in
point, for the simple reason that they are founded upon other and different facts. The purpose
and intent of the whole transaction is apparent upon the face of the deed of conveyance, the
stipulated facts and the nature of the proceedings. It was to seize and take over the property of
an alien enemy as a war measure, and to hold it in the nature of a trust or as a trustee for it or
him, and in the event of a sale of the property, as in this case, to hold the proceeds in trust.
Be that as it may, this court is bound be section 311 of the Code of Civil Procedure. In so far as
we are advised, the question here is one of first impression, and no other country has a like
statute. That law was enacted by the Legislature of the Philippine Islands, and as to the
Philippine Islands, it is the law of the land. In the absence of that statute, no matter how
wrongful the judgment of the Hongkong court may be, there would be strong reasons for holding
that it should be enforced by this court.

Such is the legal force of the well considered decision in Godard vs. Gray, English Ruling
Cases, volume 5, p. 726, where it is held:

It is no bar to an action, on a judgment in personam of a foreign court having jurisdiction

over the parties and cause, that the foreign tribunal has put a construction erroneous,
according to English law, on an English contract.

And in the case of Schibsby vs. Westenholz, in the same volume, p. 734, it is further held:

A judgment of a foreign court, obtained in default of appearance against a defendant,

cannot be enforced in an English Court, where the defendant, at the time the suit
commenced, was not subject of nor resident in the country in which the judgment was
obtained: for there existed nothing imposing on the defendant any duty to obey the
judgment.

The distinction is very clear. But in the instant case, the defendant not only appeared in the
Hongkong court, but there contested the case on its merits.

But here we have a statute which clearly defines the specific conditions upon which a foreign
judgment can be enforced in the Philippine Islands, and we have a decision of the United States
Supreme Court which holds that "where there is no written law upon the subject, such as treaty
or statute, questions of international law must be determined by judicial decisions, the works of
jurists, and the acts and usages of civilized nations." The converse of that proposition is also
true that where you do have a treaty or statute, to enforce a foreign judgment, it must come
under and within the specific provisions of the treaty or statute.

The judgment which is here sought to be enforced is clearly a mistake of both law and fact, and
was rendered in direct conflict with that comity between nations, which should exist among
those which were allies in the world war.

Upon the second question, we do not hesitate to say that the judgment rendered in the
Hongkong court was a clear mistake of both law and fact, and that it ought not to be enforced in
the Philippine Islands.

Upon the third question, as to the damages claimed by the defendant, it is alleged that after
obtaining the proceeds from the sale, the plaintiff in violation of the conveyance to the
defendant, which he had ratified, wrongfully instituted an action in the Supreme Court of the
colony of Hongkong against the defendant in which he claimed to be the sole owner of the
trade-marks in question, which up to that time had been a mere branch of the Manila factory,
and that he secured from that court the decision in question. That although the judgment of the
Hongkong court has no extraterritorial effect, the plaintiff in violation of the terms of such sale
and conveyance, ever since the rendition of said judgment, through his agents and solicitors,
has been and is still wrongfully causing to be inserted in the leading newspapers of China, the
Federated Malay States, the Straits Settlements and elsewhere, "articles notifying the public of
the rendition of said judgment, asserting the plaintiff's exclusive right to the use of said trade-
marks and trade names in said countries and threatening to take legal proceedings against any
person, firm, or corporation having in their possession for sale cigars bearing the said trade-
marks or trade names, which are not manufactured by the said branch factory at Hongkong, and
also causing notices of the same character to be given to the dealers in said countries in the
cigars manufactured by the defendant in said cigar factory at Manila and sold in said countries
under said trade-marks and trade names." That by reason of the threats made and the articles
published, all the dealers in the cigars of the defendant labeled with the trade-marks in question
were intimidated and deterred from further dealing in defendant's cigars and that they cancelled
all pending orders, have refused to make further purchases of defendant's cigars without
guaranties for their protection, and that the goodwill of the business and the value of the trade-
marks in question had been totally destroyed, and the defendant has been wrongfully deprived
of the use and enjoyment and the goodwill of its business to its damages in the sum of
P1,000,000.

It is not claimed or alleged that the plaintiff in any manner injured or interfered with defendant's
business prior to the rendition of the Hongkong judgment. The articles published in the
newspapers are attached to and made a part of defendant's counterclaim for damages. When
analyzed they are nothing more than a statement to the effect that the judgment had been
rendered by the Hongkong court and the nature and extent of the judgment, and that it was the
purpose and intent of the plaintiff to claim the use and benefit of it and to enforce it. After the
judgment was rendered, he had a legal right to do that.

The law is well stated in Hopkins, on trade-marks, page 374:

It is the general rule that a notice warning the public or specific dealers or users of a suit
for patent infringement is not actionable unless it appears that the notices were not given
in good faith, or that they were entirely without foundation in the scope of the defendant's
patent. The determination of the question ofbona fides in the making of such threats is
obviously of great difficulty at times. "The question whether the patent owner is acting in
good faith in advertising his claims to the manufacturer's customers by circulars or letters
can seldom be determined from the contents of the communication alone, and, like all
questions of intent, must generally be determined by the extrinsic facts.". . .

In Clip Bar Manufacturing Co. vs. Steel Protected Concrete Co. (209 Fed., 874), the court said:

Notices of claims of infringement given by the owner of a patent to customers of a

manufacturer of a similar article, or even threats of suit, if in good faith, are within its
rights and not actionable as acts of unfair competition.

Facts: The plaintiff moves for a preliminary injunction to restrain the defendant from making
representations to the plaintiff's customers that defendant's patent No. 727, 233 declared invalid
in a suit brought by the defendant against the Central Improvement & Contracting Company in
the Circuit Court for the Eastern District of Louisiana (155 Fed., 279), affirmed by the Circuit
Court of Appeals in 158 Fed., 1021; 85, C.C.A., 7, is valid, or being infringed by the plaintiff or
its customers, and from threatening orally or in writing the plaintiff's customers with threats of
litigation for infringement of its patent.

xxx xxx xxx

 It nowhere appears on the record that the notices given to the plaintiff's customers were
not in good faith or that they were false or malicious or for the purpose of destroying the
business of the plaintiff. To the contrary, the defendant, so far as appears, believing its
claims to be valid, has proceeded to bring suit in this district to establish infringement.
Under these circumstances, it must be held for the purposes of the present motion that
the defendant is acting within its rights. (209 Fed., 874.)

In United Electric Co. vs. Creamery Package Manufacturing Co. (203 Fed., 53), the court said:

It is within the right of the owner of a patent, notwithstanding the pendency of suits
against the manufacturers of alleged infringing articles, to notify users of such articles of
its claims, and its intention to protect its rights by suits against users, provided such
notices contain no misstatements of fact and are sent in good faith, and not for the
purpose of unnecessarily injuring defendant's business . . .

As a second basis for the recovery of damage, the plaintiff contends that the defendant
circulated among the agents, users, purchasers and prospective purchaser of the churns
of the plaintiffs, located in different states, reports and statements that the combined
churns and butter workers sold by plaintiff were infringements of the Desbrow patents
owned and controlled by the defendant and that they threatened to bring suits against
the users of the plaintiff's churn. That the owner of a patent may notify infringers of his
claims and warn them that unless they desist, suits will be brought to protect him in his
legal rights, is sustained by numerous decisions.

The only limitation on the right to issue such warning is the requirement of good faith.
There is nothing in the warnings given in this case to show that the letters or notices
were false, malicious, offensive, or opprobrious, or that they were used for the willful
purpose of inflicting injury.

Applying the law to the facts, the plaintiff did nothing more than to advise the cigar dealers of the
force and effect of the Hongkong judgment, and that defendant was therein enjoined from
selling cigars bearing the trade-marks in question. That was a statement of an actual fact. It is
true that the defendant may have been damaged as a result of such notices and publications. If
so, it was a damage without injury, for which it has no legal redress.

After a careful consideration, it is the judgment of this court, first, that the words "wheresoever
situate in the Philippine Islands" are not words of limitation in the deed of conveyance to the
defendant company or the business as a going concern, the goodwill, the trade names or trade-
marks of the Syndicat Oriente or the plaintiff; second, that the defendant is the exclusive owner
of the business of the plaintiff and his company as a going concern, and has the absolute title
and right to all of the trade-marks in question and to their exclusive use and enjoyment not only
in the Philippine Islands, but in all other countries where they are duly registered, save and
except as to the reservations only of "the account owing by the Orient Tobacco Manufactory of
Hongkong" and "the above account of the Orient Tobacco Manufactory of Hongkong owned by
said business," which were mad in its deed of conveyance; third, that the judgment of the
Hongkong court is a clear mistake of both law and fact, and for such reason should not be
enforced in the Philippine Islands; fourth, that the defendant is not entitled to recover any
damages on its counterclaim; and fifth, that the judgment of the lower court should be reversed,
and that neither party to recover costs in the lower court or on this appeal. So ordered.
Villamor, Ostrand, and Romualdez, JJ., concur.
Johnson, J., took no part in the consideration of this case.

Separate Opinions

STREET, J., concurring and dissenting:

I concur except in the disposition made of the cross-complaint, in respect to which I am of the
opinion that the defendant is entitled to damages.

MALCOLM and AVANCEÑA, JJ., dissenting:

The plaintiff was successful in the Court of First Instance of Manila in enforcing so much of a
judgment rendered by the Supreme Court of Hongkong as allowed him costs, in a case in which
the plaintiff herein was plaintiff and the defendant herein was defendant. On appeal, the
prevailing view in the court denies to the defendant-appellant the right to recover on its
counterclaim, but sets aside the judgment of the trial court for the principal reason that the
judgment of the Supreme Court of Hongkong, which is the basis of plaintiff's complaint, was
entered as a result of a clear mistake of both law and fact. We agree with the disposition of the
appeal as it affects the counterclaim but disagree as it affects the judgment secured by the
plaintiff in the lower court.

We shall stoutly maintain in this dissent that the Supreme Court of Hongkong was right in its
judgment, but that, even if that judgment be conceded to be wrong, no such clear mistake of law
or fact was committed as justifies the Supreme Court of the Philippine Islands in, in effect,
retrying the case and reversing the Supreme Court of Hongkong. If for no other reason than
judicial courtesy and international comity, we should, as far as feasible, try to put ourselves in
the position of the distinguished Judge who handed down the decision in Hongkong and should
try, as we think is proper, to interpret his viewpoint. That will be our purpose. We begin with a
statement of the case.

Carl Franz Adolf Otto Ingenohl, the present plaintiff, is a resident of Hongkong. In the Supreme
Court of Hongkong, he instituted suit to enjoin the use by Walter E. Olsen and Company, Inc.,
within the colony of Hongkong, of certain trade-marks which the defendant claimed to have
acquired by purchase from the United States Alien Property Custodian, and to secure damages.
The defendant, by counterclaim, asked for an injunction and damages. A trial extending over a
considerable period of time was had, evidence was produced by the parties, and learned
counsel were heard. On May 5, 1922, the Supreme Court of Hongkong, having acquired
jurisdiction over both the plaintiff and the defendant, rendered judgment in favor of plaintiff and
against defendant.

The decision of his Honor, W. Rees Davies, after stating in a fair and comprehensive manner
the respective views of the parties and the facts, came to the conclusion that the case was
covered by the authority of the Chartreuse Case, Rey vs. Lecouturier ( [1908] 2 Ch., 715; [1910]
A.C., 362). According to the court "To apply the decision to this case the trade-marks in
question had been registered many years before in Hongkong, the cigars admittedly had for a
long time acquired a reputation in the Hongkong market, and the assignment by the Custodian
of the assets in the Manila firm cannot have any extraterritorial effect so as to affect the rights of
the party concerned in Hongkong whoever that party may be." The court, further, reached the
conclusion that the articles of the "Syndicat Oriente" should "be construed according to Belgian
Law." It was therefore adjudged that the plaintiff was the sole proprietor of the trade-marks and
trade names, the subject matter of the action, and was entitled to the exclusive use of the said
trade-marks and trade names in connection with his business as a cigar manufacturer; that the
defendant and others acting under his direction and instruction, be restrained from selling cigars
in boxes bearing the said trade-marks and trade names; that an accounting be had, and that the
plaintiff recover against the first defendant his costs of action. No appeal from the judgment of
the Hongkong Supreme Court was taken by defendant.

Costs were taxed in the Supreme Court of Hongkong in favor of the plaintiff and against the
defendant in the sum of $26,224.23, Hongkong currency. It was to recover the equivalent of this
sum, computed at P31,099.41, Philippine currency, that action was begun in the Court of First
Instance by Ingenohl against Olsen and Company.

Walter E. Olsen & Company, Inc., is a Philippine corporation, having its principal place of
business in the City of Manila, Philippine Islands. It was the defendant as above indicated in
Hongkong. It again became defendant when this suit was instituted in the Philippine courts.
Defendant then presented an answer and a counterclaim. It alleged that the decision of the
Supreme Court of Hongkong was the result of a clear mistake of law and fact. It relied upon the
sale to the defendant at public auction, by the United States Alien Property Custodian of
property belonging to the plaintiff, in consideration of the sum of P2,350,000, including the cigar
and cigarette factory, situated in the City of Manila, Philippine Islands, known as "El Oriente
Fabrica de Tabacos, C. Ingenohl;" following the sale, the plaintiff for himself and as gestor and
representative of the "Syndicat Oriente" collected the purchase price of the property from the
Alien Property Custodian. Allegations were also made intended to prove damages in the
amount of P1,000,000.

The plaintiff filed a demurrer to the special defense and counterclaim of the defendant on the
grounds that the court had no jurisdiction of the subject matter of the action, and that the
defense and counterclaim did not state facts sufficient to constitute a defense or counterclaim.
The parties entered into an agreed statement of facts. Judge Imperial in his decision speaking
of the Hongkong judgment remarked:

"From a careful examination of the decision rendered by the Chief Justice of the Supreme Court
of the Hongkong colony, it will be observed that in adjudicating the case and rendering judgment
in favor of the then and now plaintiff, a minute examination was made not only of the laws
applicable to the case, but also of the evidence and the facts supporting the complaint. It will
likewise be noted that the principal ground of the judgment consisted in the interpretation that
was given to the contract of sale executed by the Alien Property Custodian in favor of the
defendant Walter E. Olsen and Co., Inc., it having been established that judging from the very
terms of the deed of transfer, the aforesaid defendant had not acquired any title to, nor the right
to use, the trade-marks and trade names that were being used by the plaintiff in the City of
Hongkong, that the rights acquired by the defendant had to do with the properties situated in the
Philippine Islands and not in the colony of Hongkong, and that, lastly, the contract of sale was
not to be given an extraterritorial effect." Then after examining the bill of sale, the trial judge
continued:

"In the phraseology of said deed there is nothing tending to show that it was the intention of the
Alien Property Custodian to sell other rights or properties situated outside of the Philippine
Islands or within the Hongkong colony. For this reason the decision and judgment rendered by
the Supreme Court of said city were in accordance with law and the facts proven. For this same
reason the defense set up by the defendant appears untenable and must be overruled." By the
judgment, the defendant was ordered to pay the plaintiff the sum of P31,099.41, with legal
interest and costs. The counterclaim of the defendant was dismissed.

On appeal, the major issue is as framed in appellant's first assignment of error. To quote: "The
trial court erred in failing to find that the decision of the Supreme Court of Hongkong and the
judgment which are the basis of plaintiff's complaint in this action were rendered and entered as
a result of a clear mistake of law and of fact." We turn first to the facts mostly stipulated and
concerning which there is little dispute.

Plaintiff Ingenohl was born in Germany but is a naturalized Belgian subject. In 1882, he, in
conjunction with others, founded in Antwerp, Belgium, a company under the style of "El Oriente
Fabrica de Tabacos Societe Anonyme." Ingenohl was the "Administrator Directuer" of the
society. This company continued until 1905 when it went into voluntary liquidation. On
November 28 of that year, an "Association in participation governed by the laws of Belgium
under the denomination of Syndicat Oriente" was formed. The head office of the association
was to be at Antwerp, Belgium. In 1906, the "Societe Anonyme" transferred all of its business
interests and assets, together with the goodwill and the trade-marks and trade names, to
Ingenohl.

The "Societe Anonyme," in 1882, opened a branch factory in Manila under the same name. It
continued until 1905-1906 when, as above stated, it was taken over by Ingenohl, and called "El
Oriente Fabrica de Tabacos, C. Ingenohl." In 1908 and 1909, Ingenohl, as "Gerant" of the
"Syndicat Oriente," opened a cigar factory in Hongkong under the name of "The Orient Tobacco
Manufactory." The output of the factory was composed in part of tabacco supplied by "El
Oriente Fabrica de Tabacos" in the Philippines, and in part of tobacco wrapper imported from
Java. This business was carried on in Hongkong until the present.

The trade-marks which are in dispute were registered in the Philippine Islands in the years
1884-1887 as the property of the "Societe Anonyme." Registration was renewed in the
Philippines in 1902. The trade-marks were likewise registered in the Hongkong Registry of
Trade-Marks as the property of the "Societe Anonyme." In 1906, the assignment of the trade-
marks to "El Oriente Fabrica de Tabacos" was registered in the Philippine Islands. In 1910, the
assignment of the trade-marks was registered in Hongkong under the style of "El Oriente
Fabrica de Tabacos, C. Ingenohl, Manila." As to this, the Registrar of Trade-Marks at Hongkong
testified, during the hearing in Hongkong, that the description was regarded as the name under
which Ingenohl was trading, and the Ingenohl had registered other marks in the name "Orient
Tobacco Manufactory, C. Ingenohl, Mong Kok in the Colony of Hongkong." In 1917, Ingenohl
renewed registration of the trade-marks in Hongkong for a period of fourteen years for "El
Oriente Fabrica de Tabacos, C. Ingenohl, Manila."

The trade-marks and trade names were registered in France, Australia, New Zealand,
Shanghai, and Hongkong in the name of "El Oriente Fabrica de Tabacos, C. Ingenohl, Manila."
Six registrations in Belgium were in the name of "El Oriente Fabrica de Tabacos, Antwerp" and
the seventh registration was in the name of "Imperio del Mundo, C. Ingenohl, Manila." In
England, the registrations were in the name of "Carl Ingenohl, Managing Director of and on
behalf of El Oriente Fabrica de Tabacos, Sociedad Anonima, Antwerp, Belgium, and Manila,
Philippine Islands." The registration for Java and Sumatra was in the name of "El Oriente
Fabrica de Tabacos, C. Ingenohl." The registration for Germany was in the name of "El Oriente
Fabrica de Tabacos, Sociedad Anonima, Emil Schoett." The sole American registration was that
of "El Cometa del Oriente," "Carl Ingenohl" giving his address as Antwerp and also as
conducting business under the trade name of "El Oriente Fabrica de Tabacos at 125 San Pedro
Street, Manila, Philippine Islands."

Subsequent to the establishment of the Hongkong factory, its output was sold throughout the
Far East, except in the Philippine Islands, concurrently with the output of the Manila factory
under the trade-marks and trade names in question. Approximately 95 per cent of the output of
the Manila factory was exported.

Such in general was the situation until the time of the Great War. Then in 1919, the United
States Alien Property Custodian accomplished a sale to Walter E. Olsen and Co., Inc., "for the
benefit of the company known as Syndicat Oriente, a company formed under the laws of
Belgium with its registered office at Antwerp, Belgium." The sale was of "all ... the property ... of
every kind and description whatsoever (except only as specifically reserved and excepted
hereinafter), wheresoever situate in the Philippine Islands, and all incidents and appurtenances
thereto, including the business as a going concern, and the goodwill, trade names and trade-
marks thereof of Syndicat Oriente, a company formed under the laws of Belgium, with its
registered office in Antwerp, Belgium, and heretofore doing business in the Philippine Islands
under the name of "El Oriente Fabrica de Tabacos, C. Ingenohl." Also of "all accounts
receivable or other credits and all contract rights belonging to said business, except the account
owing by the Orient Tobacco Manufactory of Hongkong." But "The undersigned Alien Property
Custodian expressly excepts and reserves from this sale all Liberty Bonds of the United States
and the above account of the Orient Tobacco Manufactory of Hongkong owned by said
business."

These facts and others put in issue the question of whether the Hongkong business was a
separate concern, or a branch of the Antwerp business, or a branch of the Manila business.
They also put in issue the question of whether the sale by the Alien Property Custodian was to
have extraterritorial effect. As to the first general issue, the Hongkong Supreme Court
expressed no definite opinion; as to the second general issue, the Hongkong Supreme Court
held that the assignment "cannot affect any rights to the trade-marks in question in Hongkong."

We come now to the law, international and local, on which like the facts, there can be little
divergence of opinion. The modern English and American doctrines are adopted for statement.

Effect is given to foreign judgments as a matter of comity and reciprocity. But aside from
international courtesy, a better and more practical reason giving greater force and dignity to the
records of foreign courts is that, where parties have once litigated fairly a dispute in the courts of
a foreign country which gives effect to like judgments of the domestic courts, the same question
ought not to be tried anew by the local courts. Parties are bound by the judgment of the foreign
tribunal of competent jurisdiction, and questions of fact or law settled by the foreign tribunal
should not be reexamined, unless it can be shown that the proceedings were tainted with fraud.

The source of comity as a basis of recognition of foreign judgments is identity of position and
similarity of institutions. In those countries where the civil law prevails, much less of international
comity has been exhibited. In the United States and Great Britain, the law as to enforcing
foreign judgments is practically the same. The point last made is of some importance since the
judgment sought to be enforced comes from a court within the British Empire, and is offered for
the plaintiff in a suit in courts under the jurisdiction of the United States.

A foreign judgment upon a matter within the jurisdiction of the court rendering it, and in which
the court had jurisdiction of the parties, will be regarded as conclusive between the parties in the
courts of the United States, where there has been a trial upon the merits in the foreign court,
under a system of jurisprudence likely to secure an impartial administration of justice, and there
is no showing of prejudice on the part of the court or fraud in procuring the judgment, and no
special reason why the comity of this nation should not allow it full credit. Such in effect were the
decisions of the United States Supreme Court in the related cases of Hilton vs. Guyot ( [1895],
159 U.S., 113), and Ritchie vs. McMullen ( [1895], 159 U.S., 235). In the first cited case, it was
held that a judgment for a sum of money rendered by a court of a foreign country, having
jurisdiction of the cause and of the parties, in a suit brought by one of its citizens against one of
ours, is prima facie only, and not conclusive of the merits of the claim, in an action brought here
upon the judgment, if by the law of the foreign country, as in France, judgments of our own
courts are not recognized as conclusive. In the second case, it was held that a judgment
rendered by a court having jurisdiction of the cause and of the parties, upon regular proceedings
and due notice or appearance, and not procured by fraud, in a foreign country, by the law of
which, as in England and Canada, a judgment of one of our own courts, under like
circumstances, is held conclusive of the merits, is conclusive, as between the parties, in an
action brought upon it in this country, as to all matters pleaded and which might have been tried
in the foreign country. (See further Warren vs. Warren [1917], 73 Fla., 764; Dunstan vs. Higgins
[1893], 20 L.R.A., 668.)

In England, as stated, the law is like ours, or, more accurately stated, our law is like theirs, since
greatly influenced in all its history by the jurisprudence of the mother country. The two English
cases occupying the same relative position as Hilton vs. Guyot, supra, and Ritchie vs.
McMullen, supra, are Godard vs. Gray ([1870], 5 Eng. Ruling Cases, 726), and Schibsby vs.
Westenholz ( [1870], 5 Eng. Ruling Cases, 734). English law treats as binding, and the English
courts will enforce, the judgment of a foreign court having jurisdiction over the cause of action
and over the person to be bound by the judgment. Such a foreign judgment is as conclusive
upon the parties thereto as a domestic judgment.

The grounds of impeachment of a foreign judgment are want of jurisdiction, fraud, abuse of
process, want of finality, and statute of limitations. As to errors of law and fact as a ground of
impeachment, in England at least, the defendant in a suit on the judgment of a foreign tribunal
having jurisdiction over him and the cause, is not permitted to set up as a defense that the
judgment proceeded on a mistake as to English law or had come to an erroneous conclusion as
to the facts. Thus in Godard vs. Gray, supra, the plaintiffs, who were Frenchmen, brought suit in
France against the defendants, who were Englishmen, on a charter party made in England
which contained a clause providing as a penalty for its nonperformance, the estimated amount
of the freight. The French court awarded as damages the estimated amount of the freight. It was
not brought to the notice of the French court that, according to the interpretation of the English
law, a penal clause of this sort was idle and inoperative, and the court made a mistake as to the
construction of the English contract, and, in consequence, judgment was given for an amount
different from that for which it would have given if the court had been correctly informed of the
English construction. The question raised was whether this was a bar to the action brought in
England to enforce the judgment, and the court was of the opinion that it was not. The rule
announced was that it is no bar to an action in personam in a foreign court having jurisdiction
over the parties and cause that the foreign tribunal has put a construction erroneous according
to English law on an English contract. (See also 23 Cyc., 1610, citing Godardvs. Gray, supra;
Scott vs. Pilkington, 2 Best and S., 11; Newton vs. Hunt [1908], 112 N.Y.S., 573.)

Digressing at this point, before proceeding with a further description of the law, it is
incontestable that should the Hongkong judgment be tested by the prevailing rules relative to
the effect of judgments of foreign courts, it would be found to be conclusive. Putting the thought
in another way, should the Hongkong judgment be weighed in the balance as the United States
Supreme Court would weigh it, following its own precedents, the Hongkong judgment would
undoubtedly be given full effect. For the Hongkong judgment comes from a court having
jurisdiction of the subject matter and the parties. For there has been a trial upon the merits in
the Hongkong court under a system of jurisprudence likely to secure an impartial administration
of justice. For there is no showing of prejudice on the part of the Hongkong court or fraud in
procuring the judgment. For there is no special reason why American courts should not allow
that judgment full credit. And if the highest court in England was to consider a like judgment of
some foreign court, as the United States, it would give the judgment effect even though it was
erroneous in a matter of law or fact, and even though the foreign court proceeded upon a
mistaken application of the English law to an English contract.

It is quite within the realm of possibility, that the majority in the court would willingly concede the
correctness of the altogether too lengthy a statement of the facts and the law which has here
been attempted, in order that it may serve as a fit background to our opinion. But having
conceded that much, the majority would insist that the case is governed not by general principle
but by specific statutory law. Concurring with the majority for the moment so as to be just as
eminently fair as they are, we come to consider the local Philippine law and its applicability to
the questions which confront the court.

Section 309 of our Code of Civil Procedure relates to the effect of a judicial record of a court in
the United States. Codal section 310 relates to the effect of a judicial record of a court of
admiralty for a foreign country. Codal section 311 relates to the effect of other foreign
judgments. It reads: "The effect of a judgment of any other tribunal of a foreign country, having
jurisdiction to pronounce the judgment, is as follows:

1. In case of a judgment against a specific thing, the judgment is conclusive upon the
title to the thing." The appellee argues with some plausibility that the case comes within
the purview of the above quoted paragraph, and that the paragraph applies to a
judgment rendered in connection with a controversy over any "specific thing," to wit,
certain trade-marks. Not stopping to discuss this debatable point, we go forward to the
second paragraph of section 311 relied upon by the appellant and the majority, reading
as follows:

2. In case of a judgment against a person, the judgment is presumptive evidence of a

right as between the parties and their successors in interest by a subsequent title; but
the judgment may be repelled by evidence of a want of jurisdiction, want of notice to the
party, collusion, fraud, or clear mistake of law or fact.

With the premise that the Hongkong judgment was in personam and under the further premise
that paragraph 2 of section 311 of the Code of Civil Procedure covers the question at issue, let
us analyze the contents of said paragraph. Admittedly, the judgment of the Hongkong court is
presumptive evidence of a right. That judgment is not sought to be repelled by evidence of a
want of jurisdiction. Nor repelled by evidence of want of notice to the parties. Nor repelled by
evidence of collusion. Nor repelled by evidence of fraud. On the contrary, all this is admitted. It
is simply vigorously asserted that there was a "clear mistake of law or fact" in the foreign
judgment sued on, and that therefore the Philippine courts should refuse to enforce the foreign
judgment.

Section 311 of the Philippine Code of Civil Procedure was derived from section 1915 of the
California Code of Civil Procedure which, in turn, was derived from the California Act of March
11, 1872. A careful search has failed to disclose any other similar statutory provision in the
United States or any interpretative decisions arising in the California courts or elsewhere. The
California provision may, however, have been inspired by the commentaries of Mr. Justice Story
and Chancellor Kent. If so, the word "mistake" was used "in the stricter sense of
misapprehension or oversight," and is equivalent to what in Burnham vs. Webster ... Mr. Justice
Woodbury spoke of as "some objection to the judgment's reaching the merits, and tending to
prove that they had not been acted on;" "some accident or mistake," or "that the court did not
decide at all on the merits." These passages taken from the decision of the United States
Supreme Court in Hilton vs. Guyot, supra, are copied with the suggestion that they are "hardly
consistent with the statement of Chief Justice Marshall" in his decision in the case of
Elmendorf vs. Taylor ( [1825], 10 Wheat., 152). The court then proceeds to emphasize that the
mistake must appear on the face of the record. Under the conditions named, says the court, "the
merits of the case should not, in an action brought in this court upon the judgment, be tried
afresh, as on a new trial or on appeal, upon the mere assertion of the party that the judgment
was erroneous in law or in fact."

Coordinating more closely the facts and the law, both general and specific, certain pertinent
observations are in order. Possibly, the most apparent thought with reference to the Hongkong
judgment is that no appeal was attempted to be taken by the losing party. Instead, the
defendant indirectly seeks to appeal to the Philippine courts to reopen and retry the case. In
England at least, it has been irrevocably settled that the home tribunal cannot act as a court of
appeal from the foreign tribunal. In Bank of Australasia vs. Nias ( [1851], 16 Q.B., 717, 734),
Lord Campbell, in delivering judgment, distinctly put the decision upon the ground that the
defendant might have appealed to the Judicial Committee of the Privy Council, and thus have
procured a review of the colonial judgment. In Traford vs. Blanc ( [1887], 36 Ch. D., 600), it was
said: "... The principle on which Bank of Australasia vs. Nias was decided appears to be that the
courts of this country do not sit to hear appeals from foreign tribunals, and that if the judgment of
a foreign court is erroneous, the regular mode provided by every system of jurisprudence of
procuring it to be examined and reversed, ought to be followed. Neither do the courts of this
country sit to rehear causes which have been tried abroad. ..." A trial anew to reexamine the
facts and the law as to a foreign judgment when the losing party has not exhausted all his
remedies abroad and when the judgment is in reality res adjudicata, should be avoided. This
rule is of particular application where all the evidence is not before us, where the witnesses
were not under observation on the stand, where the effort of the court here is not concentrated
on issues of fact or law, but is given up to a critical analysis of a foreign judgment, and where all
that is in view is a judgment for costs.

The next thought which comes to mind is that if the Hongkong judgment had been rendered by
a Court of First Instance in the Philippine Islands, the Supreme Court of the Philippine Islands
would proceed to decide the appeal guided by the well-known principle that in order to reverse
the decision it must be plainly and manifestly against the weight of the evidence. Here, there is
ample evidence to support the findings of Mr. Justice Davies. It would be doubtful if, sitting as a
court of appeal, this judgment would be modified or reversed.
Indeed, we would go farther and would hold that the judgment of the Hongkong court is correct
in fact and law. The judgment is "presumptive evidence of a right." The case was "decided on
the merits." There was no "misapprehension or oversight" as to the facts or the law. There is no
"clear mistake of law or fact" appearing on the face of the record.

In the first place, the bill of sale executed by the United States Alien Property Custodian was
only of property "wherever situate in the Philippine Islands" of a company "heretofore doing
business in the Philippine Islands." It expressly excepted and reserved the "account owing by
the Orient Tobacco Manufactory of Hongkong."

The intent of the parties to the conveyance is made clear by the language of the instrument. The
limited operation of the conveyance is clearly expressed by its language. The phraseology of
the deed was used advisedly, since the Alien Property Custodian had no desire to do what it
would be futile to attempt — to convey property outside the Philippine Islands and the United
States. There is in the instrument an entire absence of reference to trade-marks in foreign
countries. In a case relied upon by the majority, where a similar provision of a deed was under
observation, the court emphasized that the purchaser took by conveyance "the exclusive right to
carry on the business in the United States," and was entitled to protection against unfair
competition. (Koppel Industrial Car and Equipment Co. vs. Orenstein & Koppel
Aktiengesellschaft [1923], 289 Fed., 446. See also Bourjois & Co. vs. Katzel [1923], 260 U.S.,
689.)

In the next place, it is apparent that the "Syndicat Oriente" was a Belgian corporation, with its
head office at Antwerp. As such Belgian corporation, it was permitted to transact business in the
Philippine Islands as a foreign corporation. Although the Hongkong court did not find it
necessary to so decide, this Belgian corporation undoubtedly had two branches, one in
Hongkong, and one in the Philippine Islands, but both with connections with the home office. All
that the United States Government attempted to sell was the Philippine business of the Belgian
corporation. It did not care to do more for Great Britain and Belgium were allies of the United
States in the Great War. Great Britain could have taken over the "Orient Tobacco Manufactory"
of Hongkong if it had so desired, and the Belgian Government could have taken over the
"Syndicat Oriente" in Belgium if it had so desired. With the seizure by either Great Britain or
Belgium, would have passed the trade-marks of the respective companies.

As to the alleged mistake of law committed by the Hongkong court, it will be recalled that the
Chartreuse case was given application. Now, this may have been error and again it may not.
Lord Macnaghten in that case reached the conclusion "that the sale by the liquidator of the
property bought by the appellant company has not carried with it the English trade-marks." And
the United States Supreme Court in the case of Baglin vs. Cusenier Co. ( [1911], 221 U.S.,
580), likewise quoting approvingly from the Chartreuse case, among other things, decided:
"...The French law cannot be conceded to have any extraterritorial effect to detach the trade-
marks in this country from the product of the Monks, which they are still manufacturing."

But why stop here. Why not go the full length of the majority decision and admit that there may
have been a "mistake of law or fact" in the Hongkong judgment. Even then, the modifying word
"clear" should not be forgotten. It is only a "clear" mistake which suffices to warrant our courts in
interfering with a foreign judgment. The legislative precaution suggests that this right of revision
should be exercised only for most cogent and conclusive reasons. A trial judge of long
experience and two members of this court, in effect concurring with the views of the Hongkong
magistrate, at least weaken the argument relative to a "clear" mistake of law or fact.
Let us now suppose that this court had ruled in favor of appellant on its counterclaim, as indeed
one member would have us do. The defendant would then be forced to have recourse to the
Hongkong courts for the enforcement of any judgment it might recover against the plaintiff. The
Philippine courts having failed in reciprocal regard for a judgment rendered in Hongkong, the
Hongkong court in turn would be justified in reopening and retrying the case, with the probable
result that its former views would be maintained and the Philippine judgment nullified.

For many years, the fullest reciprocity has prevailed between England and the United States
with respect to allowing full and conclusive effect to the judgments of each by the other. This
reciprocity should be maintained between integral parts of the British Empire and the United
States in such close proximity as are the ports of Manila and Hongkong. But this reciprocity will
be blotted out entirely if any jurisdiction in either the British Empire or the United States, with
jealous regard for its own dignity, breaks away from the practice which reason and comity have
long sanctioned.

It may well be doubted if the Government of the United States ever intended that the Philippine
Commission, acting under war powers, should enact legislation at variance with the foreign
policies and relations of the United States. It is questionable, if it is not beyond the power of the
local legislature, to provide peculiar legislation so entirely out of harmony with international
comity. If forced to take the stand, we would debate long before holding that this provision in
Philippine law is valid and constitutional.

It is a most serious responsibility which this court assumes when it ventures to set at naught the
full effect of reciprocity between two great states of the world, gravely acknowledged in both,
and fulfilled everywhere else in the two countries with the most scrupulous regard for the rights
of the other.

The proportions of this dissent are appalling. Our excuse must be the gravity of the question at
bar and the earnestness of our convictions. This opinion has been drafted separate and apart in
the main from the majority decision, as the vehicle for the expression of our individual views. We
hope that we have made it clear that under any and every aspect of the case, the Hongkong
judgment should be given force and effect.

Our vote is for the affirmance of the judgment of the lower court.

NAGARMULL VS BINALBAGAN-ISABELA SUGAR

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-22470 May 28, 1970 virtual law library

SOORAJMULL NAGARMULL, Plaintiff-Appellee, vs. BINALBAGAN-ISABELA SUGAR
COMPANY, INC., Defendant-Appellant.

DIZON, J.:

Appeal taken by Binalbagan-Isabela Sugar Company, Inc. from the decision of the Court of First
Instance of Manila in Civil Case No. 41103 entitled Soorajmull Nagarmull vs. Binalbagan-
Isabela Sugar Company, Inc." of the following tenor:

IN VIEW OF ALL THE FOREGOING, judgment is hereby rendered in favor of the

plaintiff, Soorajmull Nagarmull, ordering the defendant, Binalbagan-Isabela Sugar
Co., Inc. to pay said plaintiff the sum of 18,562 rupees and 8 annas, with
reservation for the plaintiff to prove its equivalent in Philippine pesos on the date
of the filing of the complaint, plus the costs of suit.

The parties submitted to the trial court the following, stipulation of facts:

1. Under Contract G/14370 dated May 6, 1949, plaintiff, a foreign corporation

with offices at No. 8 Dalhousie Square (East) Calcutta, India, agreed to sell to
defendant, a domestic corporation with offices at the Chronicle Building, Aduana
Street, Manila, 1,700,000 pieces of Hessian bags at $26.20 per 100 bags, C.I.F.
Iloilo. Shipment of these bags was to be made in equal installments of 425,000
pcs. or 425 bales (1,000 pcs. to a bale during each of the months of July, August,
September and October, 1949. A copy of this contract marked Annex 'A' and the
Calcutta Jute Fabrics Shippers Association Form 1935 which was made a part of
the contract and marked as Annex 'A-l' are hereto attached.virtualawlibrary virtual
law library

2. This agreement was confirmed in a letter by the plaintiff to the defendant on

May 7, 1949, copy of which is attached hereto and made a part hereof as Annex
'B'; .virtualawlibrary virtual law library

3. On September 8, 1949, plaintiff advised defendant that of the 850 bales

scheduled for shipment in July and August, the former was able to ship only 310
bales owing to the alleged failure of the Adamjee Jute Mills to supply the goods
in due time. Copy of plaintiff's letter is attached hereto as Annex 'C' and made an
integral part hereof; "4. In a letter dated September 29, 1949, defendant
requested plaintiff to ship 100 bales of the 540 bales defaulted from the July and
August shipments. A copy of this letter marked Annex 'D' is hereto attached. In
this connection, it may also be mentioned that of the 425 bales scheduled for
shipment in September, 54 bales were likewise defaulted resulting in a total of
154 bales which is now the object of the controversy.virtualawlibrary virtual law
library

5. Defendant requested plaintiff to pay 5% of the value of the 154 bales defaulted
as penalty which plaintiff did.virtualawlibrary virtual law library

6. Meanwhile, on October 1, 1949, the Government of India increased the export

duty of jute bags from 80 to 350 rupees per ton, and on October 5, 1949, plaintiff
requested defendant to increase its letter of credit to cover the enhanced rate of
export duty imposed upon the goods that were to be shipped in October,
reminding the latter that under their agreement, any alteration in export duty was
to be for the buyer's account. Copy of plaintiff's letter is attached hereto as Annex
'E'; virtual law library

7. On October 25, 1949, defendant, in compliance with plaintiff's request,

increased the amount of its letter of credit by $10,986.25 to cover the increase in
export duty on 425 bales scheduled under the contract for the shipment in
October, 1949. A copy of defendants letter marked Annex 'F' is hereto
attached; virtual law library

8. On October 27, 1949, plaintiff wrote to defendant for a further increase of

$4,000.00 in its letter of credit to cover the shipment of 154 bales which under
the contract should have been included in the July, August and September
shipments. A copy of said letter is attached hereto as Annex 'G'; virtual law
library

9. On November 17, 1949, plaintiff wrote defendant a letter reiterating its claim
for $4,000.00 corresponding to the increased export taxes on the 154 bales
delivered to defendant from the defaulted shipments for the months of July,
August and September, 1949. A copy of said letter is attached hereto as Annex
'H'; virtual law library

10. On February 6, 1951, defendant received notification from the Bengal

Chamber of Commerce Tribunal of Arbitration in Calcutta, India, advising it that
on December 28, 1950, Plaintiff applied to said Tribunal for arbitration regarding
their claim. The Tribunal requested the defendant to send them its version of the
case. This, defendant did on March 1, 1951, thru the then Government Corporate
Counsel, former Justice Pompeyo Diaz. A copy of the letter of authority is
attached as Annex 'I'; virtual law library

11. The case was heard by the Tribunal of Arbitration on July 5, 1951. Having
previously requested the Secretary Foreign Affairs for Assistance, defendant was
represented at the hearing by the Philippine Consulate General in Calcutta, India,
by Consul Jose Moreno. A copy of the authority, consisting of the letter of
Government Corporate Counsel Pompeyo Diaz, dated March 1, 1951, and 1st
Indorsement thereon, dated March 2, 1951, are attached hereto as Annexes 'J'
and 'J-1'; virtual law library

12. As presented to the Tribunal of Arbitration, the whole case revolved on the
question of whether or not defendant is liable to the plaintiff for the payment of
increased export taxes imposed by the Indian Government on the shipments of
jute sacks. Defendant contended that if the jute sacks in question were delivered
by plaintiff in the months of July, August, and September, 1949, pursuant to the
terms of the contract, then there would have been no increased export taxes to
pay because said increased taxes became effective only on October 1, 1949,
while on the other hand, plaintiff argued that the contract between the parties and
all papers and documents made parts thereto should prevail, including
defendant's letter of September 29, 1949; virtual law library
 13. The Bengal Chamber of Commerce, Tribunal of Arbitration, refused to
sustain defendant's contention and decided in favor of the plaintiff, ordering the
defendant to pay to the plaintiff the sum of 18,562 rupees and 8 annas. This
award was thereafter referred to the Calcutta High Court which issued a decree
affirming the award; virtual law library

14. For about two years, the plaintiff attempted to enforce the said award through
the Philippine Charge de'Affaires in Calcutta, the Indian Legation here in the
Philippines, and the Department of Foreign Affairs. On September 22, 1952,
plaintiff, thru the Department of Foreign Affairs, sought to enforce its claim to
which letter defendant replied on August 11, 1952, saying that they are not
bound by the decision of the Bengal Chamber of Commerce and consequently
are not obligated to pay the claim in question. Copies of said letters are attached
hereto as Annexes 'K' and 'L', respectively; virtual law library

15. For more than three years thereafter, no communication was received by
defendant from the plaintiff regarding their claim until January 26, 1956, when
Atty. S. Emiliano Calma wrote the defendant a letter of demand, copy of which is
attached hereto as Annex 'M'; virtual law library

16. On February 3, 1956, defendant's counsel replied informing Atty. S. Emiliano

Calma that it refuses to pay plaintiff's claim because the same has no foundation
in law and in fact. A copy of this letter is attached hereto as Annex 'N'; virtual law
library

17. Thereafter, no communication was received by defendant from plaintiff or its

lawyers regarding their claim until June, 1959, when the present complaint was
filed.virtualawlibrary virtual law library

FINALLY, parties thru their respective counsel, state that much as they have
endeavored to agree on all matters of fact, they have failed to do so on certain
points. It is, therefore respectfully prayed of this Honorable Court that parties be
allowed to present evidence on the disputed facts.

Thereafter the parties submitted additional evidence pursuant to the reservation they made in
the above stipulation.virtualawlibrary virtual law library

The appeal was elevated to the Court of Appeals but the latter, by its resolution of January 27,
1964, elevated it to this Court because the additional documents and oral evidence presented
by the parties did not raise any factual issue, and said court further found that "the three
assigned errors quoted above all pose questions of law." virtual law library

As may be gathered from the pleadings and the facts stipulated, the action below was for the
enforcement of a foreign judgment: the decision rendered by the Tribunal of Arbitration of the
Bengal Chamber of Commerce in Calcutta, India, as affirmed by the High Court of Judicature of
Calcutta. The appealed decision provides for its enforcement subject to the right reserved to
appellee to present evidence on the equivalent in Philippine currency of the amount adjudged in
Indian currency. The record does not disclose any evidence presented for that purpose
subsequent to the rendition of judgment.virtualawlibrary virtual law library
To secure a reversal of the appealed decision appellant claims that the lower court committed
the following errors:

I virtual law library

THE LOWER COURT ERRED IN HOLDING THAT PLAINTIFF-APPELLEE, A

FOREIGN CORPORATION NOT LICENSED TO TRANSACT BUSINESS IN
THE PHILIPPINES, HAS THE RIGHT TO SUE IN PHILIPPINE
COURTS.virtualawlibrary virtual law library

II virtual law library

THE LOWER COURT ERRED WHEN IT FAILED TO CONSIDER PLAINTIFF-

APPELLEE'S DEFAULT, AND INSTEAD RELIED SOLELY ON THE AWARD OF
THE BENGAL CHAMBER OF COMMERCE TRIBUNAL OF
ARBITRATION.virtualawlibrary virtual law library

III virtual law library

THE LOWER COURT ERRED WHEN IT HELD THAT PLAINTIFF-APPELLEE

WAS NOT GUILTY OF LACHES.

The main issue to be resolved is whether or not the decision of the Tribunal of Arbitration of the
Bengal Chamber of Commerce, as affirmed by the High Court of Judicature of Calcutta, is
enforceable in the Philippines.virtualawlibrary virtual law library

For the purpose of this decision We shall assume that appellee - contrary to appellant's
contention - has the right to sue in Philippine courts and that, as far as the instant case is
concerned, it is not guilty of laches. This notwithstanding, We are constrained to reverse the
appealed decision upon the ground that it is based upon a clear mistake of law and its
enforcement will give rise to a patent injustice.virtualawlibrary virtual law library

It is true that under the provisions of Section 50 of Rule 39, Rules of Court, a judgment for a
sum of money rendered by a foreign court "is presumptive evidence of a right as between the
parties and their successors in interest by a subsequent title", but when suit for its enforcement
is brought in a Philippine court, said judgment "may be repelled by evidence of a want of
jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact"
(Emphasis supplied.) virtual law library

Upon the facts of record, We are constrained to hold that the decision sought to be enforced
was rendered upon a "clear mistake of law" and because of that it makes appellant - an
innocent party - suffer the consequences of the default or breach of contract committed by
appellee.virtualawlibrary virtual law library

There is no question at all that appellee was guilty of a breach of contract when it failed to
deliver one-hundred fifty-four Hessian bales which, according to the contract entered into with
appellant, should have been delivered to the latter in the months of July, August and
September, all of the year 1949. It is equally clear beyond doubt that had these one-hundred
fifty-four bales been delivered in accordance with the contract aforesaid, the increase in the
export tax due upon them would not have been imposed because said increased export tax
became effective only on October 1, 1949.virtualawlibrary virtual law library

To avoid its liability for the aforesaid increase in the export tax, appellee claims that appellant
should be held liable therefor on the strength of its letter of September 29, 1949 asking appellee
to ship the shortage. This argument is unavailing because it is not only illogical but contrary to
known principles of fairness and justice. When appellant demanded that appellee deliver the
shortage of 154 bales it did nothing more than to demand that to which it was entitled as a
matter of right. The breach of contract committed by appellee gave appellant, under the law and
even under general principles of fairness, the right to rescind the contract or to ask for its
specific performance, in either case with right to demand damages. Part of the damages
appellant was clearly entitled to recover from appellee growing out of the latter's breach of the
contract consists precisely of the amount of the increase decreed in the export tax due on the
shortage - which, because of appellee's fault, had to be delivered after the effectivity of the
increased export tax.virtualawlibrary virtual law library

To the extent, therefore, that the decisions of the Tribunal of Arbitration of the Bengal Chamber
of Commerce and of the High Court of Judicature of Calcutta fail to apply to the facts of this
case fundamental principles of contract, the same may be impeached, as they have been
sufficiently impeached by appellant, on the ground of "clear mistake of law". We agree in this
regard with the majority opinion in Ingenohl vs. Walter E. Olsen & Co. (47 Phil. 189), although
its view was reversed by the Supreme Court of the United States (273 U.S. 541, 71 L. ed. 762)
which at that time had jurisdiction to review by certiorari decisions of this Court. We can not
sanction a clear mistake of law that would work an obvious injustice upon
appellant.virtualawlibrary virtual law library

WHEREFORE, the appealed judgment is reversed and set aside, with costs.

Concepcion, C.J., Reyes, J.B.L., Makalintal, Zaldivar, Fernando, Teehankee, Barredo and
Villamor, JJ., concur.virtualawlibrary virtual law library

Castro, J., is on leave.

BOUDARD VS TAIT

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-45193 April 5, 1939

EMILIE ELMIRA RENEE BOUDARD, RAYMOND ANTONIN BOUDARD,

GINETTE ROSE ADELAIDE BOUDARD and MONIQUE VICTOIRE BOUDARD, plaintiffs-
appellants,
vs.
STEWART EDDIE TAIT, defendant-appellee.
Ramirez and Ortigas for appellants.
Gibbs, McDonough and Ozaeta for appellee.

DIAZ, J.:

Plaintiffs appeal from a judgment of the Court of First Instance of Manila dismissing the case
instituted by them, thereby overruling their complaint, and sentencing them to pay the costs.
They now contend in their brief that:

I. The lower court erred in not admitting Exhibits D, E, F and H to M-1 of plaintiffs.

II. The lower court erred in declaring that it was indispensable for the defendant to be
served with summons in Hanoi.

III. The lower court erred in declaring that service by publication, with personal notice by
the French Consul in Manila, was not sufficient.

IV. The lower court erred in declaring that the Court of Hanoi had no jurisdiction over the
person of the defendant.

V. The lower court erred in dismissing this case, instead of sentencing the defendant to
pay to the plaintiffs the amounts claimed in the complaint as adjudged by the Court of
Hanoi; and

VI. The lower court erred in denying the motion for new trial on the ground that the
decision is contrary to the law and the evidence.

Briefly stated, the pertinent facts of the case, that we glean from the records, are as follows: The
appellant Emilie Elmira Renee Boudard, in her capacity as widow of Marie Theodore Jerome
Boudard and as guardian of her coappellants, her children born during her marriage with the
deceased, obtained a judgment in their favor from the civil division of the Court of First Instance
of Hanoi, French Indo-China, on June 27, 1934, for the sum of 40,000piastras, equivalent,
according to the rate of exchange at the time of the rendition of the judgment, to P56,905.77,
Philippine currency, plus interest the amount or rate of which is not given. The judgment was
rendered against Stewart Eddie Tait who had been declared in default for his failure to appear
at the trial before said court.

Appellants' action, by virtue of which they obtained the foregoing judgment, was based on the
fact that Marie Theodore Jerome Boudard, who was an employee of Stewart Eddie Tait, was
killed in Hanoi by other employees of said Tait, although "outside of the fulfillment of a duty",
according to the English translation of a certified copy of the decision in French, presented by
the appellants. The dismissal of appellants' complaint by the lower court was based principally
on the lack of jurisdiction of the Court of Hanoi to render the judgment in question, for the
execution of which this action was instituted in this jurisdiction. The lack of jurisdiction was
discovered in the decision itself of the Court of Hanoi which states that the appellee was not a
resident of, nor had a known domicile in, that country.

The evidence adduced at the trial conclusively proves that neither the appellee nor his agent or
employees were ever in Hanoi, French Indo-China; and that the deceased Marie Theodore
Jerome Boudard had never, at any time, been his employee. The appellee's first intimation of
his having been sued and sentenced to pay a huge sum by the civil division of the Court of First
Instance of Hanoi was when he was served with summons in the present case.

Passing now to the consideration of the errors assigned by the appellants, we must say that it
was really unnecessary for the lower court to admit Exhibit D, E, F and H to M-1, nor can these
exhibits be admitted as evidence, for, as to the first point, the appellants failed to show that the
proceedings against the appellee in the Court of Hanoi were in accordance with the laws of
France then in force; and as to the second point, it appears that said documents are not of the
nature mentioned in sections 304 and 305 of Act No. 190. They are not copies of the judicial
record of the proceedings against the appellee in the Court of Hanoi, duly certified by the proper
authorities there, whose signatures should be authenticated by the Consul or some consular
agent of the United States in said country. The appellants argue that the papers are the original
documents and that the Honorable French Consul in the Philippines had confirmed this fact.
Such argument is not sufficient to authorize a deviation from a rule established and sanctioned
by law. To comply with the rule, the best evidence of foreign judicial proceedings is a certified
copy of the same with all the formalities required in said sections 304 and 305 for only thus can
one be absolutely sure of the authenticity of the record. On the other hand said exhibits or
documents, if admitted, would only corroborate and strengthen the evidence of the appellee
which in itself is convincing, and the conclusion of the lower court that the appellee is not liable
for the amount to which he was sentenced, as alleged, for he was not duly tried or even
summoned in conformity with the law. It is said that the French law regarding summons,
according to its English translation presented by the appellants, is of the following tenor:

"SEC. 69 (par. 8). Those who have no known residence in France, in the place of their present
residence: if the place is unknown, the writ shall be posted at the main door of the hall of the
court where the complaint has been filed; a second copy shall be given to the Attorney-General
of the Republic who shall visae the original." But then, Exhibits E, E-1, F and F-1 show that the
summons alleged to have been addressed to the appellee, was delivered in Manila on
September 18, 1933, to J. M. Shotwell, a representative or agent of Churchill & Tait Inc., which
is an entity entirely different from the appellee.

Moreover, the evidence of record shows that the appellee was not in Hanoi during the time
mentioned in the complaint of the appellants, nor were his employees or representatives. The
rule in matters of this nature is that judicial proceedings in a foreign country, regarding payment
of money, are only effective against a party if summons is duly served on him within such
foreign country before the proceedings.

The fundamental rule is that jurisdiction in personam over nonresidents, so as to sustain

a money judgment, must be based upon personal service within the state which renders
the judgment. (Pennoyer vs. Neff, 95 U. S., 714; 24 Law. ed., 565; Twining vs. New
Jersy, 211 U. S., 78; 29 S. Ct., 14; 53 Law. ed., 97; Continental National Bank of
Boston vs. Thurber, 143 N. Y., 648; 37 N. E., 828.)

The process of a court of one state cannot run into another and summon a party there
domiciled to respond to proceedings against him. (Hess vs. Pawloski, 274 U. S., 352,
355; 47 S. Ct., 632, 633 [71 Law. ed., 109].) Notice sent outside the state to a
nonresident is unavailing to give jurisdiction in an action against him personally for
money recovery. (Pennoyer vs. Neff, 95 U. S., 741 [24 Law. ed., 565].) There must be
actual service within the State of notice upon him or upon some one authorized to
accept service for him. (Goldeyvs. Morning News, 156 U. S., 518 [15 S. Ct., 559; 39
 Law. ed., 517].) A personal judgment rendered against a nonresident, who has neither
been served with process nor appeared in the suit, is without validity.
(McDonald vs. Mabee, 243 U. S., 90 [37 S. Ct., 343; 61 Law, ed., 608; L. R. A. 1917F,
485].) The mere transaction of business in a state by nonresident natural persons does
not imply consent to be bound by the process of its courts. (Flexner vs. Farson, 248 U.
S., 289 [39 S. Ct., 97; 63 Law. ed., 250].)" (Cited in Skandinaviska Granit
Aktiebolaget vs. Weiss, 234 N. Y. S., 202, 206, 207.)

The process of a court has no extraterritorial effect, and no jurisdiction is acquired over
the person of the defendant by serving him beyond the boundaries of the state. Nor has
a judgment of a court of a foreign country against a resident of his country having no
property in such foreign country based on process served here, any effect here against
either the defendant personally or his property situated here. (5 R. C. L., 912.)

Process issuing from the courts of one state or country cannot run into another, and
although a nonresident defendant may have been personally served with such process
in the state or country of his domicile, it will not give such jurisdiction as to authorize a
personal judgment against him. (23 Cyc., 688.)

It can not be said that the decision rendered by the Court of Hanoi should be conclusive to such
an extent that it cannot be contested, for it merely constitutes, from the viewpoint of our
laws, prima facie evidence of the justness of appellants' claim, and, as such, naturally admits
proof to the contrary. This is precisely the provision of section 311 of Act No. 190, as interpreted
in the case of Ingenohl vs. Walter E. Olsen & Co. (47 Phil., 189):0

The effect of a judgment of any other tribunal of a foreign country, having jurisdiction to
pronounce the judgment, is as follows:

1. In case of a judgment against a specific thing, the judgment is conclusive upon the
title to the thing;

2. In case of a judgment against a person, the judgment is presumptive evidence of a

right as between the parties and their successors in interest by a subsequent title; but
the judgment may be repelled by evidence of a want of jurisdiction, want of notice to the
party, collusion, fraud, or clear mistake of law or fact. (Sec. 311 of Act No. 190.)

In view of the foregoing considerations, our conclusion is that we find no merit in the errors
assigned to the lower court and the appealed judgment is in accordance with the law.

Wherefore, the judgment is affirmed, with costs against the appellants. So ordered.

Avanceña, C. J., Villa-Real, Imperial, Laurel, and Moran, JJ., concur.

PILAPIL VS IBAY-SOMERA

Republic of the Philippines

SUPREME COURT
Manila
 SECOND DIVISION

G.R. No. 80116 June 30, 1989

IMELDA MANALAYSAY PILAPIL, petitioner,

vs.
HON. CORONA IBAY-SOMERA, in her capacity as Presiding Judge of the Regional Trial
Court of Manila, Branch XXVI; HON. LUIS C. VICTOR, in his capacity as the City Fiscal of
Manila; and ERICH EKKEHARD GEILING, respondents.

REGALADO, J.:

An ill-starred marriage of a Filipina and a foreigner which ended in a foreign absolute divorce,
only to be followed by a criminal infidelity suit of the latter against the former, provides Us the
opportunity to lay down a decisional rule on what hitherto appears to be an unresolved
jurisdictional question.

On September 7, 1979, petitioner Imelda Manalaysay Pilapil, a Filipino citizen, and private
respondent Erich Ekkehard Geiling, a German national, were married before the Registrar of
Births, Marriages and Deaths at Friedensweiler in the Federal Republic of Germany. The
marriage started auspiciously enough, and the couple lived together for some time in Malate,
Manila where their only child, Isabella Pilapil Geiling, was born on April 20, 1980. 1

Thereafter, marital discord set in, with mutual recriminations between the spouses, followed by
a separation de facto between them.

After about three and a half years of marriage, such connubial disharmony eventuated in private
respondent initiating a divorce proceeding against petitioner in Germany before the Schoneberg
Local Court in January, 1983. He claimed that there was failure of their marriage and that they
had been living apart since April, 1982. 2

Petitioner, on the other hand, filed an action for legal separation, support and separation of
property before the Regional Trial Court of Manila, Branch XXXII, on January 23, 1983 where
the same is still pending as Civil Case No. 83-15866. 3

On January 15, 1986, Division 20 of the Schoneberg Local Court, Federal Republic of Germany,
promulgated a decree of divorce on the ground of failure of marriage of the spouses. The
custody of the child was granted to petitioner. The records show that under German law said
court was locally and internationally competent for the divorce proceeding and that the
dissolution of said marriage was legally founded on and authorized by the applicable law of that
foreign jurisdiction. 4

On June 27, 1986, or more than five months after the issuance of the divorce decree, private
respondent filed two complaints for adultery before the City Fiscal of Manila alleging that, while
still married to said respondent, petitioner "had an affair with a certain William Chia as early as
1982 and with yet another man named Jesus Chua sometime in 1983". Assistant Fiscal Jacinto
A. de los Reyes, Jr., after the corresponding investigation, recommended the dismissal of the
cases on the ground of insufficiency of evidence. 5 However, upon review, the respondent city
fiscal approved a resolution, dated January 8, 1986, directing the filing of two complaints for
adultery against the petitioner. 6 The complaints were accordingly filed and were eventually
raffled to two branches of the Regional Trial Court of Manila. The case entitled "People of the
Philippines vs. Imelda Pilapil and William Chia", docketed as Criminal Case No. 87-52435, was
assigned to Branch XXVI presided by the respondent judge; while the other case, "People of the
Philippines vs. Imelda Pilapil and James Chua", docketed as Criminal Case No. 87-52434 went
to the sala of Judge Leonardo Cruz, Branch XXV, of the same court. 7

On March 14, 1987, petitioner filed a petition with the Secretary of Justice asking that the
aforesaid resolution of respondent fiscal be set aside and the cases against her be
dismissed. 8 A similar petition was filed by James Chua, her co-accused in Criminal Case No.
87-52434. The Secretary of Justice, through the Chief State Prosecutor, gave due course to
both petitions and directed the respondent city fiscal to inform the Department of Justice "if the
accused have already been arraigned and if not yet arraigned, to move to defer further
proceedings" and to elevate the entire records of both cases to his office for review. 9

Petitioner thereafter filed a motion in both criminal cases to defer her arraignment and to
suspend further proceedings thereon. 10 As a consequence, Judge Leonardo Cruz suspended
proceedings in Criminal Case No. 87-52434. On the other hand, respondent judge merely reset
the date of the arraignment in Criminal Case No. 87-52435 to April 6, 1987. Before such
scheduled date, petitioner moved for the cancellation of the arraignment and for the suspension
of proceedings in said Criminal Case No. 87-52435 until after the resolution of the petition for
review then pending before the Secretary of Justice. 11 A motion to quash was also filed in the
same case on the ground of lack of jurisdiction, 12 which motion was denied by the respondent
judge in an order dated September 8, 1987. The same order also directed the arraignment of
both accused therein, that is, petitioner and William Chia. The latter entered a plea of not guilty
while the petitioner refused to be arraigned. Such refusal of the petitioner being considered by
respondent judge as direct contempt, she and her counsel were fined and the former was
ordered detained until she submitted herself for arraignment. 13 Later, private respondent
entered a plea of not guilty. 14

On October 27, 1987, petitioner filed this special civil action for certiorari and prohibition, with a
prayer for a temporary restraining order, seeking the annulment of the order of the lower court
denying her motion to quash. The petition is anchored on the main ground that the court is
without jurisdiction "to try and decide the charge of adultery, which is a private offense that
cannot be prosecuted de officio (sic), since the purported complainant, a foreigner, does not
qualify as an offended spouse having obtained a final divorce decree under his national law
prior to his filing the criminal complaint." 15

On October 21, 1987, this Court issued a temporary restraining order enjoining the respondents
from implementing the aforesaid order of September 8, 1987 and from further proceeding with
Criminal Case No. 87-52435. Subsequently, on March 23, 1988 Secretary of Justice Sedfrey A.
Ordoñez acted on the aforesaid petitions for review and, upholding petitioner's ratiocinations,
issued a resolution directing the respondent city fiscal to move for the dismissal of the
complaints against the petitioner. 16

We find this petition meritorious. The writs prayed for shall accordingly issue.

Under Article 344 of the Revised Penal Code, 17 the crime of adultery, as well as four other
crimes against chastity, cannot be prosecuted except upon a sworn written complaint filed by
the offended spouse. It has long since been established, with unwavering consistency, that
compliance with this rule is a jurisdictional, and not merely a formal, requirement. 18 While in
point of strict law the jurisdiction of the court over the offense is vested in it by the Judiciary Law,
the requirement for a sworn written complaint is just as jurisdictional a mandate since it is that
complaint which starts the prosecutory proceeding 19 and without which the court cannot
exercise its jurisdiction to try the case.

Now, the law specifically provides that in prosecutions for adultery and concubinage the person
who can legally file the complaint should be the offended spouse, and nobody else. Unlike the
offenses of seduction, abduction, rape and acts of lasciviousness, no provision is made for the
prosecution of the crimes of adultery and concubinage by the parents, grandparents or guardian
of the offended party. The so-called exclusive and successive rule in the prosecution of the first
four offenses above mentioned do not apply to adultery and concubinage. It is significant that
while the State, as parens patriae, was added and vested by the 1985 Rules of Criminal
Procedure with the power to initiate the criminal action for a deceased or incapacitated victim in
the aforesaid offenses of seduction, abduction, rape and acts of lasciviousness, in default of her
parents, grandparents or guardian, such amendment did not include the crimes of adultery and
concubinage. In other words, only the offended spouse, and no other, is authorized by law to
initiate the action therefor.

Corollary to such exclusive grant of power to the offended spouse to institute the action, it
necessarily follows that such initiator must have the status, capacity or legal representation to
do so at the time of the filing of the criminal action. This is a familiar and express rule in civil
actions; in fact, lack of legal capacity to sue, as a ground for a motion to dismiss in civil cases, is
determined as of the filing of the complaint or petition.

The absence of an equivalent explicit rule in the prosecution of criminal cases does not mean
that the same requirement and rationale would not apply. Understandably, it may not have been
found necessary since criminal actions are generally and fundamentally commenced by the
State, through the People of the Philippines, the offended party being merely the complaining
witness therein. However, in the so-called "private crimes" or those which cannot be
prosecuted de oficio, and the present prosecution for adultery is of such genre, the offended
spouse assumes a more predominant role since the right to commence the action, or to refrain
therefrom, is a matter exclusively within his power and option.

This policy was adopted out of consideration for the aggrieved party who might prefer to suffer
the outrage in silence rather than go through the scandal of a public trial. 20 Hence, as cogently
argued by petitioner, Article 344 of the Revised Penal Code thus presupposes that the marital
relationship is still subsisting at the time of the institution of the criminal action for, adultery. This
is a logical consequence since the raison d'etre of said provision of law would be absent where
the supposed offended party had ceased to be the spouse of the alleged offender at the time of
the filing of the criminal case. 21

In these cases, therefore, it is indispensable that the status and capacity of the complainant to
commence the action be definitely established and, as already demonstrated, such status or
capacity must indubitably exist as of the time he initiates the action. It would be absurd if his
capacity to bring the action would be determined by his status before or subsequent to the
commencement thereof, where such capacity or status existed prior to but ceased before, or
was acquired subsequent to but did not exist at the time of, the institution of the case. We would
thereby have the anomalous spectacle of a party bringing suit at the very time when he is
without the legal capacity to do so.

To repeat, there does not appear to be any local precedential jurisprudence on the specific
issue as to when precisely the status of a complainant as an offended spouse must exist where
a criminal prosecution can be commenced only by one who in law can be categorized as
possessed of such status. Stated differently and with reference to the present case, the inquiry
;would be whether it is necessary in the commencement of a criminal action for adultery that the
marital bonds between the complainant and the accused be unsevered and existing at the time
of the institution of the action by the former against the latter.

American jurisprudence, on cases involving statutes in that jurisdiction which are in pari
materia with ours, yields the rule that after a divorce has been decreed, the innocent spouse no
longer has the right to institute proceedings against the offenders where the statute provides
that the innocent spouse shall have the exclusive right to institute a prosecution for adultery.
Where, however, proceedings have been properly commenced, a divorce subsequently granted
can have no legal effect on the prosecution of the criminal proceedings to a conclusion. 22

In the cited Loftus case, the Supreme Court of Iowa held that —

'No prosecution for adultery can be commenced except on the complaint of the
husband or wife.' Section 4932, Code. Though Loftus was husband of defendant
when the offense is said to have been committed, he had ceased to be such
when the prosecution was begun; and appellant insists that his status was not
such as to entitle him to make the complaint. We have repeatedly said that the
offense is against the unoffending spouse, as well as the state, in explaining the
reason for this provision in the statute; and we are of the opinion that the
unoffending spouse must be such when the prosecution is commenced.
(Emphasis supplied.)

We see no reason why the same doctrinal rule should not apply in this case and in our
jurisdiction, considering our statutory law and jural policy on the matter. We are convinced that
in cases of such nature, the status of the complainant vis-a-vis the accused must be determined
as of the time the complaint was filed. Thus, the person who initiates the adultery case must be
an offended spouse, and by this is meant that he is still married to the accused spouse, at the
time of the filing of the complaint.

In the present case, the fact that private respondent obtained a valid divorce in his country, the
Federal Republic of Germany, is admitted. Said divorce and its legal effects may be recognized
in the Philippines insofar as private respondent is concerned 23 in view of the nationality
principle in our civil law on the matter of status of persons.

Thus, in the recent case of Van Dorn vs. Romillo, Jr., et al., 24 after a divorce was granted by a
United States court between Alice Van Dornja Filipina, and her American husband, the latter
filed a civil case in a trial court here alleging that her business concern was conjugal property
and praying that she be ordered to render an accounting and that the plaintiff be granted the
right to manage the business. Rejecting his pretensions, this Court perspicuously demonstrated
the error of such stance, thus:
 There can be no question as to the validity of that Nevada divorce in any of the
States of the United States. The decree is binding on private respondent as an
American citizen. For instance, private respondent cannot sue petitioner, as her
husband, in any State of the Union. ...

It is true that owing to the nationality principle embodied in Article 15 of the Civil
Code, only Philippine nationals are covered by the policy against absolute
divorces the same being considered contrary to our concept of public policy and
morality. However, aliens may obtain divorces abroad, which may be recognized
in the Philippines, provided they are valid according to their national law. ...

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 petitioner's
husband entitled to exercise control over conjugal assets. ... 25

Under the same considerations and rationale, private respondent, being no longer the husband
of petitioner, had no legal standing to commence the adultery case under the imposture that he
was the offended spouse at the time he filed suit.

The allegation of private respondent that he could not have brought this case before the decree
of divorce for lack of knowledge, even if true, is of no legal significance or consequence in this
case. When said respondent initiated the divorce proceeding, he obviously knew that there
would no longer be a family nor marriage vows to protect once a dissolution of the marriage is
decreed. Neither would there be a danger of introducing spurious heirs into the family, which is
said to be one of the reasons for the particular formulation of our law on adultery, 26 since there
would thenceforth be no spousal relationship to speak of. 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.

The aforecited case of United States vs. Mata cannot be successfully relied upon by private
respondent. In applying Article 433 of the old Penal Code, substantially the same as Article 333
of the Revised Penal Code, which punished adultery "although the marriage be afterwards
declared void", the Court merely stated that "the lawmakers intended to declare adulterous the
infidelity of a married woman to her marital vows, even though it should be made to appear that
she is entitled to have her marriage contract declared null and void, until and unless she actually
secures a formal judicial declaration to that effect". Definitely, it cannot be logically inferred
therefrom that the complaint can still be filed after the declaration of nullity because such
declaration that the marriage is void ab initio is equivalent to stating that it never existed. There
being no marriage from the beginning, any complaint for adultery filed after said declaration of
nullity would no longer have a leg to stand on. Moreover, what was consequently contemplated
and within the purview of the decision in said case is the situation where the criminal action for
adultery was filed before the termination of the marriage by a judicial declaration of its nullity ab
initio. The same rule and requisite would necessarily apply where the termination of the
marriage was effected, as in this case, by a valid foreign divorce.

Private respondent's invocation of Donio-Teves, et al. vs. Vamenta, hereinbefore cited, 27 must
suffer the same fate of inapplicability. A cursory reading of said case reveals that the offended
spouse therein had duly and seasonably filed a complaint for adultery, although an issue was
raised as to its sufficiency but which was resolved in favor of the complainant. Said case did not
involve a factual situation akin to the one at bar or any issue determinative of the controversy
herein.

WHEREFORE, the questioned order denying petitioner's motion to quash is SET ASIDE and
another one enteredDISMISSING the complaint in Criminal Case No. 87-52435 for lack of
jurisdiction. The temporary restraining order issued in this case on October 21, 1987 is hereby
made permanent.

SO ORDERED.

Melencio-Herrera, Padilla and Sarmiento, JJ., concur.

Separate Opinions

PARAS, J., concurring:

It is my considered opinion that regardless of whether We consider the German absolute

divorce as valid also in the Philippines, the fact is that the husband in the instant case, by the
very act of his obtaining an absolute divorce in Germany can no longer be considered as the
offended party in case his former wife actually has carnal knowledge with another, because in
divorcing her, he already implicitly authorized the woman to have sexual relations with others. A
contrary ruling would be less than fair for a man, who is free to have sex will be allowed to
deprive the woman of the same privilege.

In the case of Recto v. Harden (100 Phil. 427 [1956]), the Supreme Court considered the
absolute divorce between the American husband and his American wife as valid and binding in
the Philippines on the theory that their status and capacity are governed by their National law,
namely, American law. There is no decision yet of the Supreme Court regarding the validity of
such a divorce if one of the parties, say an American, is married to a Filipino wife, for then two
(2) different nationalities would be involved.

In the book of Senate President Jovito Salonga entitled Private International Law and precisely
because of theNational law doctrine, he considers the absolute divorce as valid insofar as the
American husband is concerned but void insofar as the Filipino wife is involved. This results in
what he calls a "socially grotesque situation," where a Filipino woman is still married to a man
who is no longer her husband. It is the opinion however, of the undersigned that very likely the
opposite expresses the correct view. While under the national law of the husband the absolute
divorce will be valid, still one of the exceptions to the application of the proper foreign law (one
of the exceptions to comity) is when the foreign law will work an injustice or injury to the people
or residents of the forum. Consequently since to recognize the absolute divorce as valid on the
part of the husband would be injurious or prejudicial to the Filipino wife whose marriage would
be still valid under her national law, it would seem that under our law existing before the new
Family Code (which took effect on August 3, 1988) the divorce should be considered void both
with respect to the American husband and the Filipino wife.
The recent case of Van Dorn v. Romillo, Jr. (139 SCRA [1985]) cannot apply despite the fact
that the husband was an American can with a Filipino wife because in said case the validity of
the divorce insofar as the Filipino wife is concerned was NEVER put in issue.

Separate Opinions

PARAS, J., concurring:

It is my considered opinion that regardless of whether We consider the German absolute

divorce as valid also in the Philippines, the fact is that the husband in the instant case, by the
very act of his obtaining an absolute divorce in Germany can no longer be considered as the
offended party in case his former wife actually has carnal knowledge with another, because in
divorcing her, he already implicitly authorized the woman to have sexual relations with others. A
contrary ruling would be less than fair for a man, who is free to have sex will be allowed to
deprive the woman of the same privilege.

In the case of Recto v. Harden (100 Phil. 427 [1956]), the Supreme Court considered the
absolute divorce between the American husband and his American wife as valid and binding in
the Philippines on the theory that their status and capacity are governed by their National law,
namely, American law. There is no decision yet of the Supreme Court regarding the validity of
such a divorce if one of the parties, say an American, is married to a Filipino wife, for then two
(2) different nationalities would be involved.

In the book of Senate President Jovito Salonga entitled Private International Law and precisely
because of theNational law doctrine, he considers the absolute divorce as valid insofar as the
American husband is concerned but void insofar as the Filipino wife is involved. This results in
what he calls a "socially grotesque situation," where a Filipino woman is still married to a man
who is no longer her husband. It is the opinion however, of the undersigned that very likely the
opposite expresses the correct view. While under the national law of the husband the absolute
divorce will be valid, still one of the exceptions to the application of the proper foreign law (one
of the exceptions to comity) is when the foreign law will work an injustice or injury to the people
or residents of the forum. Consequently since to recognize the absolute divorce as valid on the
part of the husband would be injurious or prejudicial to the Filipino wife whose marriage would
be still valid under her national law, it would seem that under our law existing before the new
Family Code (which took effect on August 3, 1988) the divorce should be considered void both
with respect to the American husband and the Filipino wife.

The recent case of Van Dorn v. Romillo, Jr. (139 SCRA [1985]) cannot apply despite the fact
that the husband was an American can with a Filipino wife because in said case the validity of
the divorce insofar as the Filipino wife is concerned was NEVER put in issue.

Footnotes

1 Rollo, 5, 29.

2 Ibid., 6, 29.

3 Ibid., 7.
4 Ibid., 7, 29-30; Annexes A and A-1, Petition.

5 Ibid., 7, 178.

6 Ibid., 8; Annexes B, B-1 and B-2, id.

7 Ibid., 8-9, 178.

8 Ibid., 9, 178; Annex C, id.

9 Ibid., 9-10, 178; Annex D, id.

10 Ibid., 9; Annexes E and E-1, id.

11 Ibid., 10; Annex F, id.

12 Ibid., 9, 179; Annex G, id.

13 Ibid., 10 Annex H, id.

14 Ibid, 105.

15 Ibid., 11.

16 Ibid., 311-313.

17 Cf. Sec. 5, Rule 110, Rules of Court.

18 People vs. Mandia, 60 Phil. 372, 375 (1934); People vs. Zurbano, 37 SCRA
565, 569 (1971); People vs. Lingayen, G.R. No. 64556, June 10, 1988.

19 Valdepeñas vs. People, 16 SCRA 871 (1966); People vs. Babasa, 97 SCRA
672 (1980).

20 Samilin vs. Court of First Instance of Pangasinan, 57 Phil. 298 (1932); Donio-
Teves, et al. vs. Vamenta, et al., 133 SCRA 616 (1984).

21 Rollo, 289.

22 2 Am. Jur. 2d., 973 citing State vs. Loftus, 104 NW 906, 907; Re Smith, 2
Okla. 153, 37 p. 1099; State vs. Russell, 90 Iowa 569, 58 NW 915.

23 Recto vs. Harden, 100 Phil. 427 (1956).

24 139 SCRA 139,140 (1985).

25 The said pronouncements foreshadowed and are adopted in the Family Code
of the Philippines (Executive Order No. 209, as amended by Executive Order No.
 227, effective on August 3, 1988), Article 26 whereof provides that "(w)here
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 likewise have capacity to re under
Philippine law.

26 U.S. vs. Mata, 18 Phil. 490 (1911).

27 Footnote 20, ante.

NORTHWEST ORIENT AIRLINES VS CA

Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 83033 June 8, 1990

NORTHWEST ORIENT AIRLINES, petitioner,

vs.
COURT OF APPEALS, CONCEPCION S. SALONGA, BENJAMIN SALONGA, ANNETE S.
PASTORAL, JOY ANN S. PASTORAL (represented by their parents BENJAMIN C.
PASTORAL and ERLINDA S. PASTORAL) and MARILOU VELISANO (represented by her
parents CARMELITA VELISANO and GABRIEL VELISANO),respondents.

Guerrero and Torres for petitioner.

Salonga, Andres, Hernandez & Associates and Angara, Concepcion, Regala & Cruz for private
respondents.

CRUZ, J.:

As found by the respondent court, the facts of this case are simple.

Three young ladies, Annette Pastoral, Joy Ann Pastoral, and Marilou Velisano, who are among
the private respondent herein, were gifted on their graduation with their first trip abroad, to
Hongkong, Tokyo and the United States, by their parents. Accompanied by their grandmother,
Concepcion Salonga, they flew on April 23, 1978, to Hongkong, where they were to await their
plane tickets for the rest of their trip.

On April 26, 1978, Erlinda Pastoral and her uncle, Serafin Salonga, went to the Office of the
petitioner's agent, the Inter-Pacific Transit, Inc., in Manila to purchase the said tickets. They paid
the computed total price of P25,100.40 in the afternoon of that same day and were assured that
the tickets would be delivered to the passengers in Hongkong in time for their flight to Japan the
following day.

The Hongkong office of the Northwest Orient Airlines found, however, that ITI had made a
mistake in the computation of the price of the tickets-in fact, two mistakes. That office first sent a
telex to the Manila office that the wrong conversion rates of exchange had been used and that
there was a deficit of $160.70 for each ticket. Then a second telex advised that the 10% mileage
surcharge had not been paid, which meant that the revised additional charge should be further
increased to $261.60 per ticket.

As a result of these errors, the NOA office in Hongkong refused to release the prepaid tickets to
the four passengers when Annette Pastoral and Marilou Velisano came to claim them on April
27, 1978. They were told they had to pay the additional fare of $261.60 per ticket. The girls
requested the NOA personnel to cheek with their Manila Office, but this request was arrogantly
rejected in the presence of many persons. As the flight was scheduled at one o'clock that same
afternoon, the girls had no choice but to pay the total differential fare of $ 1,046.40.

That unexpected expense depleted their foreign currency and caused them a great deal of
tension and inconvenience. They had to stay in a cheap hotel in Tokyo, with all four of them
occupying only one room. Marilou got sick. The 69-year old Concepcion, who had a heart
condition, fretted. Frantic and worried over their dwindlings funds, the girls called up their
parents for assistance. Their grandfather, Benjamin Salonga, finally decided to fly to Japan to
join them, incurring additional expenses for this purpose.

On January 4, 1979, the private respondents sued the petitioner and ITI for breach of contract
and damages. After trial, judgment was rendered for the plaintiffs and the defendants were
jointly and severally required.

1. To pay unto the plaintiffs the expenses of Benjamin Salonga from Manila to
Tokyo only which should be less than P5,000.00 to include actual fare and
incidental expenses of travel;

2. To pay moral damages for physical sufferings, mental anguish, serious anxiety
and humuliation in the amount of P400,000.00 incurred by each passenger;

3. To pay exemplary damages unto plaintiffs in the breach of contract and a

public duty as a carrier P200,000.00; and

4. To pay for and as attorney's fees P80,000.00 for having failed to honor
immediately plaintiffs' just and lawful demand thus compelling plaintiffs to go to
court; and to pay the costs of the proceedings. 1

On its motion for reconsideration, however, ITI was absolved of liability as a mere agent of the
petitioner. 2

On appeal, the findings of the trial court were sustained by the respondent court which,
however, modified the decision as follows:

WHEREFORE, the decision appealed from is modified by ordering the defendant

Northwest Orient Airlines to pay P50,000.00 to each passenger as moral
 damages, P10,000.00 each to the passengers as exemplary damages and
P50,000.00 as attorney's fees.

The award of P5,000.00 to Benjamin Salonga is eliminated.

Costs against the appellant Northwest Orient Airlines.

SO ORDERED. 3

The petitioner now challenges this ruling on the ground that there is no factual or legal basis for
the award to the plaintiffs of the moral and exemplary damages, and neither are the attorney's
fees justified. While it now concedes that it was negligent in computing the correct fare, it insists
it had not acted in bad faith or with malice, to warrant the said awards.

The rule, indeed, is that even if there is a breach of contract, as admitted in this case, moral
damages are nevertheless not justified where only simple negligence can be imputed to the
defendant.

In China Airlines v. Intermediate Appellate Court, 4 we held as follows:

With respect to moral damages, the rule is that the same are recoverable in a
damage suit predicated upon a breach of contract of carriage only where (1) the
mishap results in the death of a passenger and (2) it is proved that the carrier
was guilty of fraud or bad faith, even if death does not result. As the present case
does not fall under either of the cited instances, the award of moral damages
should be, as it is hereby disallowed.

And only recently, Sabena Belgian World vs. Court of Appeals 5 affirmed the doctrine that:

In cases of breach of contract, moral damages can be awarded only where the
defendant has acted fraudulently or in bad faith. Mere negligence, even if thereby
the plaintiff suffers mental anguish or serious fright is not ground for awarding
moral damages.

However, the finding of the trial court in the case at bar is that the petitioner should not be
faulted with mere negligence that would absolve it from damages for its breach of contract.
Rejecting its defense of good faith, Judge Rafael de la Cruz observed:

To evade liability good faith is being claimed by the defendants in the

performance of their part of the obligation. The facts adduced from the pleadings
and the records, to our mind, are not sufficient to make good faith the thinly
veiled excuse for justification because as aptly said: "A contract to transport
passengers is quite different in kind and degree from any other contractual
relations. And this is so because of the relation which an air carrier sustains with
the public. Its business is mainly with the travelling public. It invites people to
avail of the comfort and advantages it offers. The contract of air carriage
therefore generates a relation attended with public duty. Neglect or malfeasance
of the carriers' employees, naturally, could give ground for an action for
damages.
The court agrees.

We note first the error upon error committed by the petitioner's agent in computing the
passengers' fare, a task with which it was not exactly unfamiliar, being experienced in the travel
business. That negligence imposed needless burden on the passengers who had gone on their
trip, the first abroad for the three girls, precisely to enjoy themselves. Worse, the negligence,
which was strange enough as it was, was not the only vexation. On top of this annoyance was
the manner in which the petitioner's personnel in Hongkong sought to rectify the supposed
mistakes of its Manila office. It was far from acceptable.

The petitioner's employees should have been at least polite if not even sympathetic and
apologetic to the two young girls in the foreign land. Instead they were overbearing and hostile,
forgetting that they were dealing not with bothersome persons begging for a free ride. The girls
were respectable passengers who had in fact paid for their tickets in advance in the exact
amount computed by the petitioner's own agent in Manila.

Annete Pastoral and Marilou Velisano testified that they were treated coldly and arrogantly by
the NOA Hongkong personnel. They were flatly told their tickets would not be released unless
the additional charge was paid. They were humiliated when their request to contact the Manila
office by telex was haughtily rejected in the presence and within hearing of other persons. They
were not accorded the courtesy due them even only as ordinary individuals if not, indeed, as
pre-paid passengers.

We accept the findings of the lower courts in this regard, absent a clear showing that they were
arbitrarily reached. We are satisfied with the evidence that the petitioner's personnel in
Hongkong were less than polite to the two young ladies who, it must be added, had not
provoked any boorishness. And we also agree with the following observation of the respondent
court:

We find no merit in the contention of appellant NOA that no coercion or threat or

force (was) used on the passengers in the payment of the additional amount of
$261.00 from each passenger.

The worries and axiety of the Plaintiffs passengers started when the Hongkong
office of NOA refused to issued their tickets for the rest of their trip to the United
States. There may be no threat with physical sence but the mere fact of the
refusal of defendant's office in Hongkong to issue the pre-paid tickets was
enough tension as they could be stranded in Hongkong with meager funds.

The cavalier treatment of the two girls at the Hongkong NOA office requires a brief comment.
The Court feels it is about time foreigners realized that Filipinos, whatever their station in life,
are entitled to the same civility accorded other persons when they are in an alien land. We
cannot be dismissed or disdained on the basis of our nationality, which is as proud and as
respectable as any other on this earth. The haughty attitude of some foreigners who seem to
think they belong to a superior race has irked not a few Filipino travelers. Let it be stressed to
our credit that we are not impressed at all by such self-importance. Airlines should especially
advise their personnel against superciliousness when dealing with citizens of the Philippines
and are cautioned that this Court will not countenance that kind of conduct.
We hold that the acts of the petitioner, assessed in their totality, constituted more than mere
negligence and assumed the dimensions of bad faith. There was clear malice here, manifested
in the contemptuous disregard of the passenger's protest and the abrupt rejection of their
request that the Manila office be contacted for verification of the correct billing. Rudeness is
never excusable. It is especially condemnable if it is committed in one's own country against a
foreign guest, as in the case at bar. It is not correct to say that moral damages are not due
Concepcion Salonga and Joy Ann Pastoral because they had not testified on the effects of the
petitioner's acts upon them. The other two girls took the stand to described their common
experiences and reactions and were later corroborated by Benjamin Salonga. Their testimonies
were enough. It is true that we denied moral damages to the plaintiff in Francisco v.
GSIS, 6 because she failed to testify as to her social humiliation, wounded feelings and anxiety.
In that case, however, there was absolutely no evidence in this respect from her or from any
other source, let alone the fact that bad faith had also not been proved.

But we do agree that the amount awarded in the present case is rather steep. We hereby
reduce it to P10,000.00 for each of the four passengers plus another P10,000.00 each for
Annette Pastoral and Marilou Velisano for their humiliation at the NOA Hongkong office.

We sustain the award of exemplary damages, to deter the petitioner and other airlines from the
commission of the acts complained of by the private respondents. Airlines should always bear in
mind the special responsibilities they owe their passengers not only of carrying them safely and
comfortably according to their contracts but also of extending to them the courtesy due them in
all matters relating to their trip, including reservations, confirmation of bookings, ticketing and
other ground and in-flight services. The fare of the passenger includes payment for politeness.

In view of our findings regarding the mala fides of the petitioner, we also approve the award of
attorney's fees but reduce it in our discretion to P20,000.00.

WHEREFORE, with the modification of the amount of the moral damages and of the attorney's
fees as above indicated, the appealed decision of the respondent court is AFFIRMED, with
costs against the petitioner.

SO ORDERED.

Narvasa (Chairman), Gancayco and Medialdea, JJ., concur.

Griño-Aquino, J., is on leave.

Footnotes

1 Original Records, pp. 219-228.

2 Ibid., pp. 237-238.

3 Rollo, pp. 26-38. Decision penned by Coquia, J., with Aldecoa, Jr. and Kalalo,
JJ., concurring.
 4 169 SCRA 226.

5 G.R. No. 82068, March 31, 1989.

6 7 SCRA 577.

HANG LUNG BANK VS SAULOG

Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 73765 August 26, 1991

HANG LUNG BANK, LTD., petitioner,

vs.
HON. FELINTRIYE G. SAULOG, Presiding Judge, Regional Trial Court, National Capital
Judicial Region, Branch CXLII, Makati, Metro Manila, and CORDOVA CHIN
SAN, respondents.

Belo, Abiera & Associates for petitioner.

Castelo Law Office for private respondent.

FERNAN, C.J.:p

Challenged in this petition for certiorari which is anchored on grave abuse of discretion, are two
orders of the Regional Trial Court, Branch CXLII of Makati, Metro Manila dismissing the
complaint for collection of a sum of money and denying the motion for reconsideration of the
dismissal order on the ground that petitioner, a Hongkong-based bank, is barred by the General
Banking Act from maintaining a suit in this jurisdiction.

The records show that on July 18, 1979, petitioner Hang Lung Bank, Ltd., which was not doing
business in the Philippines, entered into two (2) continuing guarantee agreements with Cordova
Chin San in Hongkong whereby the latter agreed to pay on demand all sums of money which
may be due the bank from Worlder Enterprises to the extent of the total amount of two hundred
fifty thousand Hongkong dollars (HK $250,000). 1

Worlder Enterprises having defaulted in its payment, petitioner filed in the Supreme Court of
Hongkong a collection suit against Worlder Enterprises and Chin San. Summonses were
allegedly served upon Worlder Enterprises and Chin San at their addresses in Hongkong but
they failed to respond thereto. Consequently, the Supreme Court of Hongkong issued the
following:

JUDGMENT

THE 14th DAY OF JUNE, 1984

No notice of intention to defend having been given by the 1st and 2nd
Defendants herein, IT IS THIS DAY ADJUDGED that: —

(1) the 1st Defendant (Ko Ching Chong Trading otherwise known as the Worlder
Enterprises) do pay the Plaintiff the sum of HK$1,117,968.36 together with
interest on the respective principal sums of HK$196,591.38, HK$200,216.29,
HK$526,557.63, HK$49,350.00 and HK$3,965.50 at the rates of 1.7% per month
(or HK$111.40 per day), 18.5% per annum (or HK$101.48 per day), 1.85% per
month (or HK$324.71 per day), 1.55% per month (or HK$25.50 per day) and
1.7% per month (or HK$2.25 per day) respectively from 4th May 1984 up to the
date of payment; and

(2) the 2nd Defendant (Cordova Chin San) do pay the Plaintiff the sum of
HK$279,325.00 together with interest on the principal sum of HK$250,000.00 at
the rate of 1.7% per month (or HK$141.67 per day) from 4th May 1984 up to the
date of payment.

AND IT IS ADJUDGED that the 1st and 2nd Defendants do pay the Plaintiff the
sum of HK$970.00 fixed costs.

N.J. BARNETT
Registrar

Thereafter, petitioner through counsel sent a demand letter to Chin San at his Philippine
address but again, no response was made thereto. Hence, on October 18, 1984, petitioner
instituted in the court below an action seeking "the enforcement of its just and valid claims
against private respondent, who is a local resident, for a sum of money based on a transaction
which was perfected, executed and consummated abroad." 2

In his answer to the complaint, Chin San raised as affirmative defenses: lack of cause of action,
incapacity to sue and improper venue. 3

Pre-trial of the case was set for June 17, 1985 but it was postponed to July 12, 1985. However,
a day before the latter pre-trial date, Chin San filed a motion to dismiss the case and to set the
same for hearing the next day. The motion to dismiss was based on the grounds that petitioner
had no legal capacity to sue and that venue was improperly laid.

Acting on said motion to dismiss, on December 20, 1985, the lower court 4 issued the following
order:

On defendant Chin San Cordova's motion to dismiss, dated July 10, 1985;
plaintiff's opposition, dated July 12, 1985; defendant's reply, dated July 22, 1985;
 plaintiff's supplemental opposition, dated September 13, 1985, and defendant's
rejoinder filed on September 23, 1985, said motion to dismiss is granted.

Section 14, General Banking Act provides:

"No foreign bank or banking corporation formed, organized or

existing under any laws other than those of the Republic of the
Philippines, shall be permitted to transact business in the
Philippines, or maintain by itself any suit for the recovery of any
debt, claims or demands whatsoever until after it shall have
obtained, upon order of the Monetary Board, a license for that
purpose."

Plaintiff Hang Lung Bank, Ltd. with business and postal address at the 3rd Floor,
United Centre, 95 Queensway, Hongkong, does not do business in the
Philippines. The continuing guarantee, Annexes "A" and "B" appeared to have
been transacted in Hongkong. Plaintiff's Annex "C" shows that it had already
obtained judgment from the Supreme Court of Hongkong against defendant
involving the same claim on June 14, 1984.

The cases of Mentholatum Company, Inc. versus Mangaliman, 72 Phil. 524

and Eastern Seaboard Navigation, Ltd. versus Juan Ysmael & Company, Inc.,
102 Phil. 1-8, relied upon by plaintiff, deal with isolated transaction in the
Philippines of foreign corporation. Such transaction though isolated is the one
that conferred jurisdiction to Philippine courts, but in the instant case, the
transaction occurred in Hongkong.

Case dismissed. The instant complaint not the proper action.

SO ORDERED. 5

Petitioner filed a motion for the reconsideration of said order but it was denied for lack of
merit. 6 Hence, the instant petition for certiorari seeking the reversal of said orders "so as to
allow petitioner to enforce through the court below its claims against private respondent as
recognized by the Supreme Court of Hongkong." 7

Petitioner asserts that the lower court gravely abused its discretion in: (a) holding that the
complaint was not the proper action for purposes of collecting the amount guaranteed by Chin
San "as recognized and adjudged by the Supreme Court of Hongkong;" (b) interpreting Section
14 of the General Banking Act as precluding petitioner from maintaining a suit before Philippine
courts because it is a foreign corporation not licensed to do business in the Philippines despite
the fact that it does not do business here; and (c) impliedly sustaining private respondent's
allegation of improper venue.

We need not detain ourselves on the issue of improper venue. Suffice it to state that private
respondent waived his right to invoke it when he forthwith filed his answer to the complaint
thereby necessarily implying submission to the jurisdiction of the court. 8

The resolution of this petition hinges on a determination of whether petitioner foreign banking
corporation has the capacity to file the action below.
Private respondent correctly contends that since petitioner is a bank, its capacity to file an action
in this jurisdiction is governed by the General Banking Act (Republic Act No. 337), particularly
Section 14 thereof which provides:

SEC. 14. No foreign bank or banking corporation formed, organized or existing

under any laws other than those of the Republic of the Philippines shall be
permitted to transact business in the Philippines, or maintain by itself or assignee
any suit for the recovery of any debt, claims, or demand whatsoever, until after it
shall have obtained, upon order of the Monetary Board, a license for that purpose
from the Securities and Exchange Commissioner. Any officer, director or agent of
any such corporation who transacts business in the Philippines without the said
license shall be punished by imprisonment for not less than one year nor more
than ten years and by a fine of not less than one thousand pesos nor more than
ten thousand pesos. (45 O.G. No. 4, 1647, 1649-1650)

In construing this provision, we adhere to the interpretation given by this Court to the almost
identical Section 69 of the old Corporation Law (Act No. 1459) which reads:

SEC. 69. No foreign corporation or corporation formed, organized, or existing

under any laws other than those of the Philippines shall be permitted to transact
business in the Philippines or maintain by itself or assignee any suit for the
recovery of any debt, claim, or demand whatever, unless it shall have the license
prescribed in the section immediately preceding. Any officer, director or agent of
the corporation or any person transacting business for any foreign corporation
not having the license prescribed shall be punished by imprisonment for not less
than six months nor more than two years or by a fine of not less than two
hundred pesos nor more than one thousand pesos, or by both such
imprisonment and fine, in the discretion of the Court.

In a long line of cases, this Court has interpreted this last quoted provision as not altogether
prohibiting a foreign corporation not licensed to do business in the Philippines from suing or
maintaining an action in Philippine courts. 9 What it seeks to prevent is a foreign corporation
doing business in the Philippines without a license from gaining access to Philippine courts. As
elucidated in Marshall-Wells Co. vs. Elser & Co., 46 Phil. 70:

The object of the statute was to subject the foreign corporation doing business in
the Philippines to the jurisdiction of its courts. The object of the statute was not to
prevent it from performing single acts but to prevent it from acquiring a domicile
for the purpose of business without taking the steps necessary to render it
amenable to suit in the local courts. The implication of the law is that it was never
the purpose of the Legislature to exclude a foreign corporation which happens to
obtain an isolated order for business from the Philippines from securing redress
from Philippine courts, and thus, in effect, to permit persons to avoid their
contract made with such foreign corporation. The effect of the statute preventing
foreign corporations from doing business and from bringing actions in the local
courts, except on compliance with elaborate requirements, must not be unduly
extended or improperly applied. It should not be construed to extend beyond the
plain meaning of its terms, considered in connection with its object, and in
connection with the spirit of the entire law.
The fairly recent case of Universal Shipping Lines vs. Intermediate Appellate Court, 10 although
dealing with the amended version of Section 69 of the old Corporation Law, Section 133 of the
Corporation Code (Batas Pambansa Blg. 68), but which is nonetheless apropos, states the rule
succinctly: "it is not the lack of the prescribed license (to do business in the Philippines) but
doing business without license, which bars a foreign corporation from access to our courts."

Thus, we have ruled that a foreign corporation not licensed to do business in the Philippines
may file a suit in this country due to the collision of two vessels at the harbor of Manila 11 and for
the loss of goods bound for Hongkong but erroneously discharged in Manila. 12

Indeed, the phraseologies of Section 14 of the General Banking Act and its almost identical
counterpart Section 69 of the old Corporation Law are misleading in that they seem to require a
foreign corporation, including a foreign bank or banking corporation, not licensed to do business
and not doing business in the Philippines to secure a license from the Securities and Exchange
Commission before it can bring or maintain an action in Philippine courts. To avert such
misimpression, Section 133 of the Corporation Code is now more plainly worded thus:

No foreign corporation transacting business in the Philippines without a license,

or its successors or assigns, shall be permitted to maintain or intervene in any
action, suit or proceeding in any court or administrative agency of the Philippines.

Under this provision, we have ruled that a foreign corporation may sue in this jurisdiction for
infringement of trademark and unfair competition although it is not doing business in the
Philippines 13 because the Philippines was a party to the Convention of the Union of Paris for
the Protection of IndustrialProperty. 14

We even went further to say that a foreign corporation not licensed to do business in the
Philippines may not be denied the right to file an action in our courts for an isolated transaction
in this country. 15

Since petitioner foreign banking corporation was not doing business in the Philippines, it may
not be denied the privilege of pursuing its claims against private respondent for a contract which
was entered into and consummated outside the Philippines. Otherwise we will be hampering the
growth and development of business relations between Filipino citizens and foreign nationals.
Worse, we will be allowing the law to serve as a protective shield for unscrupulous Filipino
citizens who have business relationships abroad.

In its pleadings before the court, petitioner appears to be in a quandary as to whether the suit
below is one for enforcement or recognition of the Hongkong judgment. Its complaint states:

COMES NOW Plaintiff, by undersigned counsel, and to this Honorable Court,

most respectfully alleges that:

1. Plaintiff is a corporation duly organized and existing under and by virtue of the
laws of Hongkong with business and postal address at the 3rd Floor, United
Centre, 95 Queensway, Hongkong, not doing business in the Philippines, but is
suing for this isolated transaction, but for purposes of this complaint may be
served with summons and legal processes of this Honorable Court, at the 6th
Floor, Cibeles Building, 6780 Ayala Avenue, Makati, Metro Manila, while
defendant Cordova Chin San, may be served with summons and other legal
processes of this Honorable Court at the Municipality of Moncada, Province of
Tarlac, Philippines;

2. On July 18, 1979 and July 25, 1980, the defendant executed Continuing
Guarantees, in consideration of plaintiff's from time to time making advances, or
coming to liability or discounting bills or otherwise giving credit or granting
banking facilities from time to time to, or on account of the Wolder Enterprises
(sic), photocopies of the Contract of Continuing Guarantees are hereto attached
as Annexes "A" and "B", respectively, and made parts hereof;

3. In June 1984, a complaint was filed by plaintiff against the Wolder Enterprises
(sic) and defendant Cordova Chin San, in The Supreme Court of Hongkong,
under Case No. 3176, and pursuant to which complaint, a judgment dated 14th
day of July, 1984 was rendered by The Supreme Court of Hongkong ordering to
(sic) defendant Cordova Chin San to pay the plaintiff the sum of HK$279,325.00
together with interest on the principal sum of HK$250,000.00 at the rate of
HK$1.7% per month or (HK$141.67) per day from 4th May, 1984 up to the date
the said amount is paid in full, and to pay the sum of HK$970.00 as fixed cost, a
photocopy of the Judgment rendered by The Supreme Court of Hongkong is
hereto attached as Annex "C" and made an integral part hereof.

4. Plaintiff has made demands upon the defendant in this case to pay the
aforesaid amount the last of which is by letter dated July 16, 1984 sent by
undersigned counsel, a photocopy of the letter of demand is hereto attached as
Annex "D" and the Registry Return Card hereto attached as Annex "E",
respectively, and made parts hereof. However, this notwithstanding, defendant
failed and refused and still continue to fail and refuse to make any payment to
plaintiff on the aforesaid amount of HK$279,325.00 plus interest on the principal
sum of HK$250,000.00 at the rate of (HK$141.67) per day from May 4, 1984 up
to the date of payment;

5. In order to protect and safeguard the rights and interests of herein plaintiff, it
has engaged the services of undersigned counsel, to file the suit at bar, and for
whose services it has agreed to pay an amount equivalent to 25% of the total
amount due and owing, as of and by way of attorney's fees plus costs of suit.

WHEREFORE, premises considered, it is most respectfully prayed of this

Honorable Court that judgment be rendered ordering the defendant:

a) To pay plaintiff the sum of HK$279,325.00 together with interest on the

principal sum of HK$260,000.00 at the rate of HK$1.7% (sic) per month (or
HK$141.67 per day) from May 4, 1984 until the aforesaid amount is paid in full;

b) To pay an amount equivalent to 25% of the total amount due and demandable
as of and by way of attorney's fees; and

c) To pay costs of suit, and

Plaintiff prays for such other and further reliefs, to which it may by law and equity,
be entitled. 16
The complaint therefore appears to be one of the enforcement of the Hongkong judgment
because it prays for the grant of the affirmative relief given by said foreign judgment. 17 Although
petitioner asserts that it is merely seeking the recognition of its claims based on the contract
sued upon and not the enforcement of the Hongkong judgment 18 it should be noted that in the
prayer of the complaint, petitioner simply copied the Hongkong judgment with respect to private
respondent's liability.

However, a foreign judgment may not be enforced if it is not recognized in the jurisdiction where
affirmative relief is being sought. Hence, in the interest of justice, the complaint should be
considered as a petition for the recognition of the Hongkong judgment under Section 50 (b),
Rule 39 of the Rules of Court in order that the defendant, private respondent herein, may
present evidence of lack of jurisdiction, notice, collusion, fraud or clear mistake of fact and law, if
applicable.

WHEREFORE, the questioned orders of the lower court are hereby set aside. Civil Case No.
8762 is reinstated and the lower court is directed to proceed with dispatch in the disposition of
said case. This decision is immediately executory. No costs.

SO ORDERED.

Gutierrez, Jr., Bidin and Davide, Jr., JJ., concur.

Feliciano, J., is on leave.

Footnotes

1 Rollo, pp. 24-29.

2 Civil Case No. 8762. Petitioner's Reply, pp. 2-3; Rollo, pp. 56 & 58.

3 Rollo, p. 7.

4 Presided by Judge Felintriye G. Saulog.

5 Rollo, p. 21.

6 Ibid., p. 23.

7 Petition, p. 4.

8 Pangasinan Transportation Co., Inc. v. Yatco, L-23090, October 31, 1967, 21

SCRA 658.

9 Atlantic Mutual Ins. Co. v. Cebu Stevedoring Co., Inc., G.R. No. L-18961,
August 31, 1966, 17 SCRA 1037; Pacific Vegetable Oil Corporation v. Singson,
96 Phil. 986; The Swedish East Asia Co., Ltd. v. Manila Port Service, et al., G.R.
No. L-26332, October 26, 1968, 25 SCRA 633; Central Bank & Trust Co. v.
 Bustamante, 71 Phil. 359; Eastboard Navigation Ltd. v. Ysmael & Co., 102 Phil.
1.

10 G.R. No. 74125, July 31, 1990, 188 SCRA 170.

11 Dampfschiefs Rhederei Union v. La Campania Transatlantica, 8 Phil. 766

(1907).

12 The Swedish East Asia Co. Ltd. v. Manila Port Service, supra.

13 Puma Sportschuhfabriken Rudolf Dassler, K.G. v. Intermediate Appellate

Court, G.R. No. 75067, February 26, 1988, 158 SCRA 233.

14 Converse Rubber Corporation v. Universal Rubber Products, Inc., L-27906,

January 8, 1987, 147 SCRA 155.

15 Commissioner of Customs v. K.M.K Gani, G.R. No. 73760, February 26,

1990, 182 SCRA 591 citing Bulakhidas v. Navarro, L-49695, April 7, 1986, 142
SCRA 1.

16 Record of Civil Case No. 8762, pp. 2-3.

17 Salonga, Private International Law, 1979 ed., p. 429.

18 Petition, p. 10.

HABANA VS VAMENTA

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. Nos. L-27091-92 June 30, 1970

CONRADO HABAÑA and ROSARIO R. HABAÑA, petitioners,

vs.
HON. CIPRIANO VAMENTA, JR., Judge of the Court of First Instance of Negros Oriental,
JOSE T. IMBO and CONCEPCION TEVES, Co-Administrators of the Estates of PEDRO
TEVES and MARIA PASTOR, and MARIANO TEVES, Executor of the Last Will and
Testament of PEDRO TEVES, respondents.

Salvador H. Laurel and Gregorio R. Puruganan for petitioners.

Rodrigo R. Tugade for respondent Jose T. Imbo. Luz A. Teves for respondents Mariano Teves,
et al.
TEEHANKEE, J.:

Original action for the issuance of a writ of certiorari, prohibition and/or mandamus for
annulment of the questioned orders of respondent court taking cognizance of a new action filed
by respondent Jose T. Imbo and his co-plaintiffs that would question again the validity of the
sale made to petitioners on June 28, 1955 of two lots, as previously adjudicated by this Court in
a 1964 decision and denying the issuance of a writ of execution for the enforcement of said
decision.

This case is a sequel of Habaña vs. Imbo, 1 decided by the Court on March 31, 1964, against
respondents and plaintiffs in the new case below, and upholding the sale made on June 28,
1955 in favor of therein petitioners, the spouses Conrado Habaña, and Rosario Habaña,
(likewise petitioners at bar) by Concepcion Teves, (a daughter and principal heir of the estates
of the deceased spouses Maria Pastor de Teves and Pedro Teves) of two large coconut
plantations identified as Lots Nos. 6272 and 1932 of the cadastral survey of Dumaguete,
Negros Oriental, to whom the said lots had been distributed in the partition by will executed by
the deceased testator Pedro Teves.

The principal parties involved, aside from petitioners, are identified in the opening portion of the
Court's decision penned by Justice Paredes: "(P)edro Teves and Maria Pastor were husband
and wife, residing in Dumaguete City, Negros Oriental. Maria Pastor died on February 22, 1937,
and was survived by her husband and three children, named Concepcion Teves, of age; Jose
Teves (now deceased), who left no legitimate heirs (except his father and a natural child); and
Asuncion Teves, also deceased, who was survived by her husband Luciano Imbo and her
children named Jesusa, 24; Jose, 23; Maria, 22; Remedios, 21; Corazon, 17; Mariano, 14; and
Luciano, Jr., 13.

"On December 12, 1949, Pedro Teves applied for letters of Administration in the CFI of Negros
Oriental, Sp. Proc. No. 675, and was appointed administrator of the estate of his deceased wife
Maria Pastor on May 9, 1951. On June 2, 1951, Concepcion Teves was appointed as co-
administratrix of the estate.

"On December 15, 1954, Pedro Teves died, leaving a will and testament, which was presented
to the same Court for probate on January 8, 1955, in Sp. Proc. No. 1010 of said Court. The
court on February 25, 1955, allowed the said will and admitted the same to probate. On January
26, 1955, Dr. Jose T. Imbo was appointed as co-administrator of the estate in Sp. Proceeding
No. 675, in place of the deceased Pedro Teves and Dr. Imbo, qualified as such administrator on
January 28, 1955. Mariano Teves, named executor of the will of Pedro Teves was, on February
24, 1955, appointed by the Court as such, with a will annexed in Sp. Proc. No. 1010. The
properties of Maria Pastor inventoried under Sp. Proc. No. 675, and the properties of Pedro
Teves inventoried under Sp. Proc. No. 1010, are the same conjugal properties of the deceased
spouses."

As narrated in the said decision, the testator Pedro Teves partitioned and divided in his will most
of the real properties of the estates among the heirs, adjudicating the two lots in question to
Concepcion Teves as her share. "With respect to this adjudication," the Court's decision
expressly found that "Dr. (Jose T.) Imbo and all the heirs, on October 20, 1956, made a Joint
Manifestation in court of the following tenor: —
 '5. That in view of the fact that the only properties of the intestate Maria Pastor de
Teves now remaining and of the testate Pedro Teves are their conjugal and
undivided properties and in view of the further fact that the legal heirs of the said
intestate are in conformity with the disposition of the will of the said testate, which
also covers all said conjugal properties, thereby including the intestate
properties, it would be to the convenience of all parties if the aforesaid two
proceedings ... be considered either jointly or simultaneously.' 2

Concepcion Teves had on June 28, 1965 previously sold for P10,000.00 the said two lots, in her
capacity as heir and devisee thereof, in favor of petitioners. When she filed on August 10, 1956
a motion in the joint estate proceedings to sell a part of the estate for the purpose of finally
liquidating and settling the two estates, the executor and other heirs filed an opposition alleging
that "a disposal of any of the properties ...would be prejudicial to the interest of the heir to whom
said property have (sic) been assigned" and that "(Concepcion) has lost all her rights and
interest in the estate of the deceased due to the fact that she has already sold all her shares
and participation (therein)." The probate court nevertheless ordered on October 4, 1956 the sale
of some properties, preferably those mentioned in paragraph XVIII of the testator's will, referring
to "some parcels of land which are not mentioned in this will, but it is my wish that these lands
be divided in equal shares by nine (9) children — these of my children by the first and second
wife."

Thereafter, as recounted in our said decision, from November 8, 1956 and thereafter,
respondents Jose T. Imbo and Concepcion Teves, administrator and co-administratrix of the
intestate estate of the deceased Maria Pastor de Teves, and respondent Mariano Teves,
executor of the testate estate of the deceased Pedro Teves, embarked on a series of
maneuvers to disregard and nullify Concepcion's sale of the two lots to petitioners. First came
an aborted sale on December 21, 1956 of the same two lots to the administrator Jose T. Imbo,
with prior authority and immediate approval of the probate court, which was opposed at the time
by Concepcion "on the ground that such sale was made in bad faith, because the purchaser
knew that said lots were adjudicated by will to Concepcion Teves as her share, with the
conformity of all the heirs, and the same were already sold to Dr. and Mrs. Habaña, for valid and
sufficient consideration." After the probate court had overruled the opposition of Concepcion
and petitioners, the sale to respondent-administrator Jose T. Imbo was "rescinded" by the
probate court on November 7, 1957 upon the latter's own motion, thus discontinuing the appeal
that had been timely appealed by petitioners. But on March 19, 1958, barely four months after
said "rescission", the executor filed another motion asking for the sale again of the same two
lots for the same price of P10,000.00, to be joined later on October 21, 1958, by respondent
Concepcion Teves, the very same heir and devisee who had already sold the same to
petitioners. As the probate court on January 7, 1959 overruled anew the petitioners' opposition
and granted anew the motion to sell the same lots again, notwithstanding their having been
already sold to petitioners, the matter was elevated to this Court upon petitioners' appeal.

In this Court's decision of March 31, 1964, we upheld the validity of the sale by Concepcion
Teves of the two lots in favor of petitioners:

The distribution made in the Will of Pedro Teves, ... is in accordance with article
1080 of the Civil Code, which provides that "Should a person make a partition of
his estate by an act inter vivos, or by will, such partition shall be respected,
insofar as it does not prejudice the legitime of the compulsory heirs." There was
no showing that said distribution ever prejudiced the legitime of the compulsory
 heirs herein, and as a matter of fact all the heirs gave their express conformity to
the said distribution (see joint manifestation, supra). There was not even a vague
suggestion of unfairness with respect to the disposition of the legitimes.
Concepcion Teves by operation of law, became the absolute owner of said lots
because 'A partition legally made confers upon each heir the exclusive ownership
of the property adjudicated to him' (Article 1091, New Civil Code), from the death
of her ancestors, subject to rights and obligations of the latter, and, she can not
be deprived of her rights thereto except by the methods provided for by law
... Concepcion Teves could, as she did, sell the lots in question as part of her
share of the estate of the deceased, even before the approval of the proposed
partition of the properties, especially when, as in the present case, the sale has
been expressly recognized by herself and her co-heirs; ... The executor of the will
and all other heirs of the late Pedro Teves should be precluded from questioning
the validity of the sale of the lots in question in favor of the appellants, Dr. and
Mrs. Habaña; rather they should comply with the lawful provisions of the Will of
the testator, for it has been well provided that 'should a person make a partition
of his estate by an inter vivos or by will (as in this case), such partition shall be
respected, in so far as it does not prejudice the legitime of the compulsory heirs'
(Art. 1080, Civ. Code). 3

and rendered judgment as follows: —

WHEREFORE, judgment is rendered reversing the Order of the Court, dated

January 7, 1959, authorizing the executor to enter into a contract to sell anew
lots 1932 and 6272, and remanding the case to the Court of origin for further
proceedings, with instructions to sell other undisposed or unencumbered
properties of the estate, or the undisposed or unencumbered properties of any of
the heirs, should there be any obligation of the estate still unpaid, in conformity
with law as in such cases provided, reserving the right, if any, upon any
authorized party to question the validity of the sale made by Concepcion Teves
to appellants herein, in the proper Court. Cost against the appellees. 4

After the said decision became final and executory on May 4, 1964, petitioner' in implementation
thereof, filed with respondent court in the estate proceedings their motion for execution of
August 19, 1964 for respondent court to direct respondents to deliver possession of the two lots
involved (the use and enjoyment of which had been denied them all these years) and to issue
other appropriate orders necessary for the transfer of the title thereof in their favor. Opposition
thereto was filed on September 10, 1964 by respondent Jose T. Imbo and his six brothers and
sisters (all grandchildren of the deceased Teves spouses, by their pre-deceased daughter,
Asuncion Teves,supra), invoking the reservation clause in this Court's decision of "any
authorized party to question the validity of the sale made by Concepcion Teves to appellants
herein (petitioners), in the proper court," and questioning anew the validity of said sale on the
ground that the testator Pedro Teves could not dispose by will of the said two lots entirely in
favor of Concepcion as the same pertained to his conjugal partnership and estate with the
deceased Maria Pastor de Teves and that they had the right to be subrogated to the rights of
petitioners as strangers-purchasers under Article 1088 of the Civil Code. No action on
petitioners' motion was taken by the probate court.

Meanwhile, the same respondent Jose T. Imbo and his six brothers and sisters, joined by
Ariston Teves and others, alleging themselves to be "legitimated children of the said Pedro
Teves and of his widow, plaintiff Maria Dizon de Teves" as well as by said Maria Dizon de
Teves, filed under date of April 20, 1965 an entirely new and separate complaint against
petitioners and Concepcion Teves as defendants, likewise questioning anew the validity of the
sale of the same properties by Concepcion Teves to petitioners, invoking the same reservation
clause in this Court's decision, alleging that Concepcion had surreptitiously and without notice to
them executed the sale of June 28, 1955 in favor of petitioners, and praying the court to declare
the sale null and void and to grant them the preferential right to purchase the properties for the
same consideration of P10,000.00. This action was taken cognizance of by the same
respondent court. 5 Petitioners' motion to dismiss the complaint for being barred by res
judicata and the conclusiveness of this Court's judgment of March 31, 1964 and for lack of
cause of action was denied by respondent court on June 8, 1965 as concerning "matters which
could only be properly threshed out and resolved after the case shall have been tried on the
merits." 6 Petitioners thereupon filed their answer with counterclaim and cross-claim against
Concepcion Teves for actual and exemplary damages and attorney's fees. As more than a year
and a half had already intervened without their motion for execution in the estate proceedings
having been resolved by respondent court, petitioners moved anew on April 13, 1966 for the
granting thereof, but respondent court, two months later, issued its order of June 28, 1966,
denying execution, "considering that the court is still conducting further proceedings ... as
directed by the Supreme Court per its decision in the appealed case ... and in view of the
pendency of Civil Case No. 4390 before this court involving the two lots in question" and that it
had no legal justification to order execution "until after said proceedings shall have been duly
terminated." 7 Petitioners' reasoned motion for reconsideration was peremptorily denied by
respondent court in its order of August 1, 1966. 8 Hence, the present, plea of petitioners, which
we find to be meritorious.<äre||anº•1àw>

1. Respondent court acted with grave abuse of discretion and in excess of its jurisdiction in
taking cognizance of the new and separate complaint filed by respondent Jose T. Imbo and the
six other grandchildren of the decedent spouses and their other co-plaintiffs seeking anew to
nullify the sale of the two lots in question by Concepcion Teves to petitioners notwithstanding
that a re-litigation of the same question is already barred by this Court's judgment of March 31,
1964. There could be no such further proceedings. This Court, in upholding the validity of the
sale of the said lots to petitioners, remanded the case to respondent court, with express
instructions "to sell other undisposed or unencumbered properties of any of the heirs, should
there be any obligation of the estate still unpaid."

We then found that the only unpaid obligation of the estate, per information of the executor
himself was an insignificant amount of P3,186.40, and that Concepcion Teves, "according to
unrebutted disclosure in the records had paid her share." In the remote event that the remaining
considerable properties of the estate were not sufficient to discharge its obligations, (and we
noted that this was not the case), we further indicated that a notation of a lien in favor of the
estate on the certificates of title of the two lots to guarantee that its obligations would be met, to
which notation petitioners had expressed their conformity, would be a feasible procedure to
"expedite the delivery of said lots to (petitioners)."

This Court then unequivocably ruled that "(T)he executor of the will and all other heirs of the late
Pedro Teves should be precluded from questioning the validity of the sale of the lots in question
in favor of (petitioners); rather, they should comply with the lawful provisions of the will of the
testator ..." The questions raised by respondent Imbo and his co-plaintiffs in their new action, as
to the alleged surreptitious sale by Concepcion Teves of the properties and their alleged legal
right to be subrogated to the rights of petitioners as vendees are matters that are no longer
triable, since they are foreclosed by this Court's prior judgment in the 1964 case. The complaint
in said Case No. 4390 therefore clearly stated no cause of action, besides being barred by res
judicata, and since respondent court patently has no jurisdiction to even attempt to take
cognizance of the action to nullify or modify a final judgment of this Court, certiorari and
prohibition lie to annul and set aside the proceedings and to direct respondent court to desist
from further proceedings in the matter, as reiterated recently by the Court in Sterling Investment
Corporation vs. Ruiz. 9

2. Respondent court also neglected the performance of its ministerial function of issuing the writ
of execution prayed for by petitioners in the estate proceedings to which they were entitled as a
matter of right, by virtue of this Court's final judgment. Its stated grounds in its long delayed
order for denying the writ of execution, viz, that it "is still conducting proceedings ... as directed
by the Supreme Court per its decision in the appealed case" and that the new civil case (No.
4390) involving the two lots in question pending before it should first be duly terminated, are
legally untenable for the reasons already stated. Clearly, respondent court failed to take due
note that the "further proceedings in the estate proceedings, as remanded by this Court, were
delimited by the express instructions given in the judgment to sell other undiposed or
unencumbered properties of any of the heirs to meet the unpaid obligations, if any, of the estate
and that it could not deal any longer with the two lots validly sold to petitioners or entertain any
further claim thereto of the executor or any of the heirs questioning the validity of said sale,
except to annotate, if necessary, a lien in favor of the estate on the titles thereof, to guarantee
the discharge of any obligations of the estate in the event of insufficiency of the remaining
properties, as above stated.

3. The reservation clause in the dispositive part of the judgment "reserving the right, if any, upon
any authorized party, to question the validity of the sale made by Concepcion Teves to
(petitioners), in the proper Court" could in no sense be invoked by respondents for justifying
respondent court's denial of the writ of execution or the institution anew by plaintiffs-heirs of
their new and separate civil action questioning the same sale. For by express terms of the
judgment, the executor and all other heirs of the estate were precluded from questioning the
validity of the sale in question. This should readily have been perceived by respondents for the
Court in its said judgment never referred to the executor or administrator or their other co-heirs
as parties to the case, much less as an "authorized party" but always referred to them therein
either in their official capacity as executor or administrator or by name or collectively as heirs,
and expressly precluded them collectively as heirs from questioning the validity of the sale. The
reservation clause was obviously intended as a saving clause to protect third parties (non-heirs)
who may have had any title or rights to the two lots prior or superior to those of the decedent
spouses whose estates were being settled or of Concepcion Teves, (to whom the said lots had
been adjudicated in the will of the testator Pedro Teves) whose sale thereof in favor of
petitioners was declared valid as against the adverse claims of all other heirs. (This was merely
a cautionary reservation as to third parties, since it was not clear in the record, although the two
lots' numbers apparently correspond to the cadastral survey of Dumaguete, that the lots were
duly registered in the name of either or both of the decedent spouses).<äre||anº•1àw>

4. Then new action filed by respondent Imbo and his co-plaintiffs is clearly barred by res
judicata by virtue of this Court's final verdict in the 1964 case. The "new" questions raised by
said respondents-plaintiffs now, per their answer to the petition and their memorandum, pertain
to the allegation that one of them, Luciano T. Imbo, was at the time of the "surreptitious sale" of
the lots by Concepcion Teves to petitioners, "was still a minor of less than eighteen (18) years of
age, he having been born on December 1, 1938," as a basis for their alleged right of
subrogation to petitioners' rights; and to the contention, that assuming that they are barred as
heirs from questioning the sale, "would they not be considered as the creditors, since out of the
sale in favor of Jose T. Imbo, most of the obligations of the estate were paid" 10 as to be
considered third parties authorized to question the sale under this Court's reservation clause.

These bare allegations have no factual basis, because they are contrary to the factual findings
in this Court's judgment and as to Luciano Imbo's alleged minority, assuming that he was born
on December 1, 1938 as alleged, then he was already of age at the time that respondent court
ordered in 1959 for a second time the sale anew of the lots and during the pendency of
petitioners' appeal therefrom to this Court — so it cannot be truthfully alleged that he had no
knowledge or notice of the "surreptitious sale" of the properties to petitioners. Aside from these
allegations being belatedly raised now only in this case, for they were not pleaded at all in the
complaint below in Case No. 4390, even if they were taken as true, they would have no legal
merit or significance, for as repeatedly stated, since the lots in question were partitioned by will
to Concepcion Teves, she became the absolute owner thereof by operation of law from the
death of her parents, free to sell the same to petitioners, more so, when the sale was expressly
recognized by herself and her co-heirs, as held by this Court in the 1964 judgment; and
therefore, there could be no legal right of subrogation to petitioners' rights as vendees under
Article 1088 of the Civil Code, as invoked by them.

All these allegations and contentions of respondents and the co-plaintiffs are now barred by res
judicata which has set the controversy at rest. A party cannot be permitted to urge one ground
at a time and indulge in "piece-meal and endless litigation", and "by varying the form of action or
adopting a different method of presenting his case, escape the operation of the principle that
one and the same cause of action shall not be twice litigated between the same parties and
their privies." 11 As reaffirmed by the Court in the recent case of Zambales Academy, Inc. vs.
Villanueva, 12 respondents "should finally realize that public policy and sound practice enshrine
the fundamental principle of res judicata that parties ought not to be permitted to litigate the
same issue more than once, as the very object for which courts were constituted was to put an
end to controversies. Thus, the provisions of Rule 39, section 49 (b) that the effect of a
judgment or final order rendered by a court or judge of the Philippines, having jurisdiction to
pronounce the judgment or order, is 'with respect to the matter directly adjudged or as to any
other matter that could have been raised in relation thereto, conclusive between the parties and
their successors in interest by title subsequent to the commencement of the action or special
proceeding, litigating for the same thing and under the same title and in the same capacity.'"
The corollary principle of res judicata that courts of the present day are not concerned so much
with the form of actions as with their 'substance' and that 'despite a difference in the form of the
action nevertheless the doctrine of res judicata would be applied "where it appeared that the
parties in the two suit were in truth 'litigating for the same thing,' has just as long been
enunciated by this Court." 13

5. We noted that petitioners committed a procedural error in not having formally impleaded in
this action as respondents plaintiffs in Civil Case 4390 below, namely, the six brothers and
sisters of respondent Jose T. Imbo and the widow of the testator's second marriage and their six
alleged "legitimated children." 14 This might have been a serious error resulting in further delay
in the disposition of this case, since said plaintiffs as indispensable parties would have needed
to be formally impleaded herein and the corresponding summons issued to them. 15 At any rate,
the defect has been cured by the voluntary appearance herein of said plaintiffs through their
counsel, Atty. Luz A. Teves, plaintiffs' counsel of record in the case below and who filed the
answer and memorandum in lieu of oral argument as "counsel for respondent Mariano
Teves 16 and counsel for plaintiffs in Civil Case No. 4390." The answer to the petition thus filed
by Atty. Teves is further verified by Mariano T. Imbo, one of the plaintiffs. Furthermore, by the
very nature of the issues, even if said plaintiffs had not thus appeared in this case, the Court's
pronouncement as to their action below being barred by res judicata, since copies of the
pleadings therein were annexed to the petition, would not be affected.

6. Finally, the Court has noted the unduly long number of years that the estate proceedings
have been pending since December 12, 1949 in the case of the decedent Maria Pastor de
Teves (Sp. Proc. No. 675) and since January 8, 1955 in the case of the decedent Pedro Teves
(Sp. Proc. No. 1010), notwithstanding that it is of record in the 1964 case that on October 20,
1956, all the heirs made a joint manifestation for the two proceedings to be considered either
jointly or simultaneously, as the properties left by the two decedents consisted of their conjugal
properties. It is likewise of record in the said case that the indebtedness left by the joint estate
was insignificant and that most of the real properties of the estate were partitioned by the will of
the deceased testator among the heirs including the children of the second wife, and that all the
heirs expressed their conformity with the disposition of the said will, with no legitime of any
compulsory heir having been prejudiced. Yet, as late as respondents' memorandum of August
29, 1967, it is therein manifested that "up to now, there has been no declaration of heirs and
distribution of the estate" in the said proceeding pending before the probate court. Respondent
court and respondents executor and administrators are enjoined to exert their best efforts
towards expeditiously effecting such final distribution and closing of the joint estate proceedings.

ACCORDINGLY, the writs prayed for are hereby granted. The writ of certiorari is granted and
the questioned orders of respondent court (Annexes "E"; "H" and "J") of the petition are annulled
and set aside;

The writ of prohibition is granted, hereby perpetually enjoining respondent court from further
taking cognizance of the complaint in Civil Case No. 4390 of said court and from further taking
any proceedings in connection therewith, other than to dismiss the complaint, except that it may
proceed to try and decide on the merits the counterclaim and cross-claim for actual and
exemplary damages and attorneys' fees and costs filed by petitioners in their answer as
defendants therein; and

The writ of mandamus is likewise granted and respondent court is directed to forthwith issue the
writ of execution and corresponding orders in implementation of this Court's judgment of March
31, 1964 in Habaña vs. Imbo, G.R. Nos. L-15598 and L-15726, as prayed for in the petitioners'
motion dated August 19, 1964 filed in the estate proceedings (Annex "A" of the petition).

With reference to the Court's observations in paragraph 6 of this decision, respondent court is
directed to advise the Court through the Secretary of Justice of the action taken by it to effect
the final distribution of the estate and the closing of the settlement proceedings.

With costs jointly and severally against private respondents.

Let a copy of this decision be furnished the Secretary of Justice for his information and notation.

Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Castro, Fernando and Barredo,
JJ., concur.

Villamor, J., is on leave.

# Footnotes

1 L-15598 & L-15726, entitled "In the matter of the Intestate Estate of the
Deceased Maria Pastor de Teves, Pedro Teves, petitioner; Testate Estate of the
Deceased Pedro Teves, Mariano Teves, executor-petitioner, Conrado Habaña
and Rosario Habaña, petitioners-appellants, vs. Jose T. Imbo, administrator,
Concepcion Teves, co-administratrix, of Pedro Teves and Maria Pastor, viz:
Mariano Imbo and Luciano Imbo, Jr, represented by their guardian ad litem
Luciano Imbo, Sr., Remedios Imbo, Corazon T. Imbo, Luciano Imbo, Sr., Jesusa
Imbo, Maria Imbo and the heirs of Pedro Teves and Maria Dizon, viz: Liberata,
Ariston, Milagros, Pedro Teves, Jr., Monica, Juanita, and Benjamin, all surnamed
Teves and Henry Teves, Devisee in the Will of Pedro Teves, respondents-
appellees", 10 SCRA 471.

2 Note in parentheses supplied; emphasis copied.

3 Emphasis supplied.

4 Idem.

5 Civil Case No. 4390 of the Court of First Instance of Negros Oriental, entitled
"Ariston Teves, Maria Dizon de Teves, Liberata Teves, Monica Teves, Pedro
Teves, Jr., Julita Teves, Benjamin Teves, Maria T. Imbo, Remedios T. Imbo,
Mariano T. Imbo, Luciano T. Imbo, Jr., Corazon T. Imbo, Jesusa T. Imbo, and
Jose T. Imbo, plaintiffs, vs. Conrado Habaña, Rosario Remollo de Habaña,
spouses, and Concepcion Teves, defendants".

6 Annex E, petition.

7 Annex H, petition.

8 Annex J, petition.

9 30 SCRA 318 (Oct. 31, 1969) and cases cited.

10 This refers to the aborted sale rescinded on November 7, 1957 by respondent

court's order upon motion of Jose T. Imbo himself. Their tortuous contention here
is that Imbo was never reimbursed the P10,000.00 that he paid the estate for the
rescinded sale, and that he therefore "stepped into the shoes" of the estate's
creditor "because out of the sale most of the obligations of the estate were paid."

11 Florendo vs. Gonzales, 86 Phil. 631 (1950), citing Penalosa vs. Tuason, 22
Phil. 303 (1912).

12 28 SCRA 1 (May 8, 1969).

 13 Tanguinlay vs. Quiros, 10 Phil. 360, 365 (1912), cited in Pua vs. Lapitan, 107
Phil. 95 (1960).

14 Supra, see fn. 5.

15 See Rule 65, section 5 of the Rules of Court.

16 Executor of the will of the testator Pedro Teves, later substituted by Perfecto
Y. Teves as such executor, upon Mariano Teves' death.

CAMILANG VS COURT APPEALS – can’t find case

TIONGSON VS COURT APPEALS

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-35059 February 27, 1973

ANTONIO T. TIONGSON, Petitioner, vs. THE HONORABLE COURT OF APPEALS,

PASCUAL ARNOBIT, CARLOS UBALDO, RAFAEL LAPENA, MARCELINO FELIXMENA,
LUDOVICO ANTONIO GALLIGUEZ, MARIANO MATEO, FORTUNATO VILLASISTA,
MELCHOR DE GUZMAN, MARCELINA SANTIAGO, TRANQUILINO CAYOG, JOSE GUBA,
MARIANO NAZARENO, BIENVENIDO NATIVIDAD, VICTOR NEMENIO, MARCELINO
MOLINA, and HERMINIGILDO MATEO, Respondents.

ANTONIO, J.:

Certiorari to review the decision, dated February 25, 1972, of the Court of Appeals in CA-G.R.
No. 45183-R, reversing that of the Court of Agrarian Relations.virtualawlibrary virtual law library

Petitioner is the owner of the "Green Valley Farm", a substantially large tract of land in
Urdaneta, Pangasinan, devoted to palay and secondary crops. Private respondents are
petitioner's tenants of said land.virtualawlibrary virtual law library

On May 9, 1967, an ejectment suit was filed by petitioner with the Court of Agrarian Relations
(CAR Case No. 1605-P-67) against the private respondents which culminated in a judgment by
compromise dated April 8, 1968, embodying the terms and conditions of the amicable
settlement of the parties as regards their share tenancy relationship.virtualawlibrary virtual law
library

This judgment was amended by an order dated May 22, 1968 where the court fixed the sharing
basis of the parties and what items are deductible from the gross produce.virtualawlibrary virtual
law library
On October 28, 1968, the present action for ejectment (CAR Case 1743-P-68) was filed by
petitioner against the same respondents on the ground that respondents violated the terms and
conditions of the judgment by compromise (par. 9, complaint), in that they defiantly refuse to
use certified fertilizers recommended by an agriculturist (par. 6, id.) and maliciously failed and
refused to use a Tractor offered for use by petitioner to plow the land (par. 7, id.), both of which
are proven farm practices, resulting to the damage and prejudice of petitioner to the amount of
P10,000.00.virtualawlibrary virtual law library

In answer to the complaint, respondents raised the defenses of res judicata and of the fact that
it was petitioner who failed to furnish the certified seedlings, certified fertilizers and Tractor, in
violation of the terms of the compromise judgment. As counterclaims, respondents asked that
their tenancy relationship be converted from share tenancy to leasehold, and that petitioner be
ordered to pay them P16,000 representing their expected share from the harvests which they
failed to realize, together with moral and exemplary damages.virtualawlibrary virtual law library

After trial, judgment was rendered, as follows:

WHEREFORE, and in view of all the foregoing, judgment is hereby rendered

ordering the ejectment of all of the above-named defendants from their
respective landholdings in question. The defendants are ordered to pay plaintiff
attorney's fees in the sum of P1,000.00 and the costs of suit.

From this judgment, the respondents appealed to the Court of Appeals contending that the
lower court erred:

1. In not dismissing the complaint on the ground of lack of cause of action as it is

barred by prior judgment.virtualawlibrary virtual law library

2. In holding that the acts of the defendants were intentional in order to present
and sabotage increase in harvest to justify low rentals after they became
leaseholders.virtualawlibrary virtual law library

3. In ejecting them despite attendant circumstances that bring forth grave doubts
that should have been resolved in favor of the appellants.virtualawlibrary virtual
law library

4. In not granting leasehold to the defendants-appellants.virtualawlibrary virtual

law library

5. In adjudging attorney's fee against the defendants.

In passing upon these issues, the Court of Appeals had the following to say:

The issues raised by the appellants in this appeal are (1) whether the present
case is barred by prior judgment (judgment by compromise is CAR case 1605-P-
67); (2) whether appellants violated the terms of the judgment by compromise in
the manner narrated in the complaint; and (3) whether appellants can ask for the
conversion of their tenancy relationship into leasehold.virtualawlibrary virtual law
library
To our mind, the most vital issue upon which this appeal hinges is whether the
present case is already barred by prior judgment.virtualawlibrary virtual law
library

Anent this issue, all the elements necessary to the application of the petition of
the principle of res judicata are present - the prior judgment in CAR case 1605-P-
67 is final and executory, the court rendering the same had jurisdiction over the
subject-matter and the parties, there is identity of parties, of subject-matter and
cause of action between the two cases, and the prior judgment is on the merits.
The prior judgment in CAR case 1605-P-67 having the sanction of the court, and
entered as its determination of the controversy, it has the force and effect of any
other judgment (see Marquez vs. Marquez, 73 Phil. 74; Piano vs. Gayanong, L-
18603, Feb. 28, 1963; Araneta vs. Perez, 7 SCRA 923; Sotto vs. Reyes, 8 SCRA
691), and cannot be litigated anew by reason of res judicata (Valdez vs.
Octaviano, 1 SCRA 744, 746; Suarez vs. Municipality of Naujan, 18 SCRA 683;
Sabina vs. Cuba, 18 SCRA 981).virtualawlibrary virtual law library

It follows from all this that it was error for the lower court not to have dismissed
the present case, for, otherwise, to allow parties to institute a separate suit
everytime the compromise judgment is violated is conducive to multiplicity of
suits abhored by the Rules of Court and by established jurisprudence (Marcelino
vs. Antonio, 70 Phil. 388; also Section 3, Rule 2, Revised Rules of Court). The
remedy of appellee, if the allegation petitions of the complaint are true that
appellants violated the terms of the compromise judgment, is to go back to the
issuing court and move for the execution of judgment with the end in view of
enforcing compliance with the terms and conditions of the compromise judgment.
For its part, the issuing court shall hear both sides of the controversy, and
determine whether to issue execution or not, and if it finds that violations are
committed, issue such orders and take such appropriate measures as would
ensure compliance with the compromise judgment.virtualawlibrary virtual law
library

xxx xxx xxx virtual law library

One more thing needs to be resolved.virtualawlibrary virtual law library

Appellants prayed in their counterclaim for conversion of their share tenancy

relationship into leasehold. It would appear that this matter has been embraced
in the compromise judgment as in fact in the amicable settlement it was
stipulated that "1. That the parties agree to continue with their share tenancy
relationship, ...", hence cannot likewise be raised anew by reason of res
judicata.virtualawlibrary virtual law library

FROM ALL THE FOREGOING, upon the authority of the decided cases
hereinbefore cited, the judgment appealed from is reversed and set aside with
costs against appellee. Let a new decision be rendered dismissing the complaint
and appellants' counterclaim. This is without prejudice to plaintiff's pursuing the
remedy pointed out above.
A motion for reconsideration, dated March 20, 1972, filed by petitioner having been denied on
April 26, 1972, petitioner herein interposed the present appeal, asserting among others, that the
respondent Court of Appeals, (1) in holding that CAR Case No. 1743-P-68 was barred by the
decision in CAR CASE No. 1605-P-67, went further than the issue brought by the parties to the
case; and (2) had misapplied the ruling in the case of Asirot v. Vda. de Gonzales (28 SCRA
258) in that petitioner has established sufficient evidence to eject the private respondents from
their respective landholdings, pursuant to the provisions of Republic Act No. 1199, as
amended.virtualawlibrary virtual law library

The only issue determinative of this appeal on certiorari is whether or not the Appellate Court
misapplied the doctrine of res judicata in reversing the judgment of the Agrarian Court and in
dismissing the complaint and appellants counterclaim. It must be noted that the principle of "res
judicata" embraces two different concepts. The first is "bar by former judgment" and the other,
"conclusiveness of judgment." virtual law library

There is no question that where as between the first case where the judgment is rendered and
the second case where such judgment is invoked, there is identity of parties, subject-matter and
cause of action, the judgment on the merits in the first case constitutes an absolute bar to the
subsequent action not only as to every matter which was offered and received to sustain or
defeat the claim or demand but also as to any other admissible matter which might have been
offered for that purpose and to all matters that could have been adjudged in that case. 1 This is
designated as "bar by former judgment." virtual law library

But where the second action between the same parties is upon a different claim or demand, the
judgment in the prior action operates as an estoppel only as to those matters in issue or points
controverted, upon the determination of which the finding or judgment was rendered. In fine, the
previous judgment is conclusive in the second case, only as to those matters actually and
directly controverted and determined and not as to matters merely involved therein. 2 This is the
rule on "conclusiveness of judgment" embodied in subdivision (c) of Section 49 of Rule 39 of the
Revised Rules of Court.virtualawlibrary virtual law library

In the case at bar, the cause of action of petitioner is upon a different claim or demand. The
action of petitioner was predicated upon the violation by the private respondents of the terms
and conditions of the judgment by compromise rendered by the Agrarian Court on April 8, 1968,
as amended by its order of May 22, 1968. As to whether or not private respondents violated the
terms and conditions thereof by defiantly refusing to use certified fertilizers recommended by an
agriculturist and maliciously failed and refused to use tractor offered for their use by petitioner
resulting in substantial damage and prejudice to the latter, are matters which were not actually
and directly controverted and determined in the previous case. These are new facts which
occurred subsequent to the first judgment. A judgment is not and may not be considered as
operating as an estoppel as to facts which did not occur or rights which did not accrue until after
the particular judgment was rendered and which were not involved in the suit in which it was
rendered. 3 virtual law library

It was therefore error for the Appellate Court to reverse the decision of the Agrarian Court and
dismiss the complain on the ground of res judicata.virtualawlibrary virtual law library

While it may have been desirable, in conformity with the Asirot v. Vda. de
Rodriguez ruling, 4 that the petitioner should have sought the enforcement of the compromise
judgment in the original case, the fact that private respondent have voluntarily submitted to the
jurisdiction of the Agrarian Court in the second case, and adduced their evidence therein,
should preclude them now from raising that question. The steps suggested in Asirot to be taken
by an aggrieved party are matters of procedure which could be waived. Matters such as these
do not affect the merits of the case or the substantial rights of the parties and are not grounds
for reversing orders or judgments. 5 virtual law library

We note however from the "motion for execution pending appeal" filed with this Court by private
respondents on November 7, 1972, and the "comment" thereto by petitioner that the judgment
of the Agrarian Court dated January 10, 1970 ordering the ejectment of the private respondents
from the landholdings had already been enforced, notwithstanding the pendency of the appeal.
The collective ouster of the private respondents by the execution of the Agrarian Court's
judgment pending appeal transgresses the substantive rights of said respondents. Under the
Land Reform Code they are entitled to the enjoyment and possession of their landholdings
except when their dispossession has been authorized by the Court in a judgment that is final
and executory. The focus is on the finality of the judgment for ejectment. This We clearly
explained in Quilantang, et al. v. Court of Appeals (G.R. No. L-34212, Dec. 13, 1972) thus:

... In our view, the same section 36 of R.A. 3844, supra, which the private
respondent invoked before the trial court to obtain the petitioner's collective
ouster, created in favor of an agricultural lessee a substantive right to "continue
in the enjoyment and possession of his landholding except when his
dispossession has been authorized by the Court in a judgment that is final and
executory." R.A. 5434, on the other hand, as its statutory title indicates, is purely
procedural in nature. In that it purports to do no more than prescribe a uniform
procedure for appeals from the bodies and entities enumerated therein. It is
easily comprehensible, then, considering the adjective nature of R.A. 5434, that
section 12 of R.A. 1267, as amended, was explicitly and precisely referred to as
one of the procedural provisions to be superseded by R.A.
5434.virtualawlibrary virtual law library

The legislative policy on agrarian relations, however, has changed radically since
the enactment of R.A. 1267. Share tenancy, for instance, has become outcast,
and has been declared as contrary to public policy, and tenants were given
greater security and added interests of a semi-proprietary nature in their
landholdings. It is, therefore, not a mere accident in the law-making process that
while under R.A. 1267 a tenant's authority to stay in his landholding until the
judgment ousting him became final and executory, merely formed out part of the
ordinary rules of procedure in the disposition of agrarian cases, that same
authority to hold over until final judgment was withdrawn by R.A. 3844 from the
realm of procedural law and transformed into a transcendental substantive right.
Within the context of the environmental legislative intention directly pertinent to
the issue at bar, this Court cannot construe R.A. 5434, an adjective law, in a
manner that will upturn one of the fundamental substantive aspects of R.A. 3844,
although the latter, in terms of end-results, would seemingly operate to constrict
the scope of the former.

WHEREFORE, the appealed decision of the respondent Court of Appeals should be, as it is
hereby, reversed and set aside, and this case remanded to said Court for decision on the
merits. The Court of Appeals is further directed to issue immediately an order for the
reinstatement of private respondents as tenants of the land in question. This decision is hereby
declared immediately executory.

Makalintal, Zaldivar, Castro, Barredo, Makasiar and Esguerra, JJ., concur.

virtual law library

virtual law library

Separate Opinions

TEEHANKEE, J., concurring and dissenting: virtual law library

I concur in the result reversing the appellate court's decision and returning the case to it for
decision on the merits.virtualawlibrary virtual law library

But respondents-tenants were clearly wrongfully ordered ejected from their landholding by the
agrarian court, notwithstanding their appeal, since under our decision in Quilantang vs. Court of
Appeals (L-34212, Dec. 13, 1972) they are entitled under section 36 of the Agricultural Land
Reform Code (R.A. 3844) "to continue in the enjoyment and possession of (their)
landholdingexcept when (their) dispossession has been authorized by the Court in a judgment
that is final and executory." virtual law library

Respondents-tenants are therefore clearly entitled to reinstatement pending decision on the

merits of their appeal by the Court of Appeals to which we have ordered the case returned for
decision on the merits.virtualawlibrary virtual law library

In the interest of avoiding further delay in respondent-tenants' obtaining the reinstatement and
possession which the law unqualifiedly grants them pending final decision on the merits on their
appeal (which reinstatement has already been long delayed and which will necessarily be
further delayed, notwithstanding the Court's directive that the appellate court immediately issue
such reinstatement order, due to the mechanics of remanding the records of the case to the
said court), I vote that such immediate reinstatement order should be issued directly by this
Court. I therefore dissent from the decision insofar as it fails and declines to issue such
reinstatement order and to grant respondents' urgent petition expressly praying for such
reinstatement order from this Court. This Court's authority to issue such order cannot be
seriously questioned nor can any valid technical or procedural objection be raised against its
directly issuing such order in the decision at bar.

Concepcion, C.J., Fernando and Teehankee, JJ., concurs and dissents.

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Separate Opinions

TEEHANKEE, J., concurring and dissenting:

I concur in the result reversing the appellate court's decision and returning the case to it for
decision on the merits.

But respondents-tenants were clearly wrongfully ordered ejected from their landholding by the
agrarian court, notwithstanding their appeal, since under our decision in Quilantang vs. Court of
Appeals (L-34212, Dec. 13, 1972) they are entitled under section 36 of the Agricultural Land
Reform Code (R.A. 3844) "to continue in the enjoyment and possession of (their)
landholdingexcept when (their) dispossession has been authorized by the Court in a judgment
that is final and executory."

Respondents-tenants are therefore clearly entitled to reinstatement pending decision on the

merits of their appeal by the Court of Appeals to which we have ordered the case returned for
decision on the merits.

In the interest of avoiding further delay in respondent-tenants' obtaining the reinstatement and
possession which the law unqualifiedly grants them pending final decision on the merits on their
appeal (which reinstatement has already been long delayed and which will necessarily be
further delayed, notwithstanding the Court's directive that the appellate court immediately issue
such reinstatement order, due to the mechanics of remanding the records of the case to the
said court), I vote that such immediate reinstatement order should be issued directly by this
Court. I therefore dissent from the decision insofar as it fails and declines to issue such
reinstatement order and to grant respondents' urgent petition expressly praying for such
reinstatement order from this Court. This Court's authority to issue such order cannot be
seriously questioned nor can any valid technical or procedural objection be raised against its
directly issuing such order in the decision at bar.

II. Arbitral Awards