ROSALIO BONILLA (a minor) SALVACION BONILLA (a minor) and PONCIANO BONILLA (their father) who represents the minors, petitioners, vs. LEON BARCENA, MAXIMA ARIAS BALLENA, ESPERANZA BARCENA, MANUEL BARCENA, AGUSTINA NERI, widow of JULIAN TAMAYO and HON. LEOPOLDO GIRONELLA of the Court First Instance of Abra, respondents. Federico Paredes for petitioners. Demetrio V. Pre for private respondents. SYNOPSIS On March 31, 1975, Fortunata Barcena instituted a civil action to quiet title over certain parcels of land. About three months later, Fortunata Barcena died and defendants moved to dismiss the complaint. Counsels for plaintiff asked for substitution by her minor children and her husband, but the court dismissed the case and refused to reconsider. Hence this petition for review. The Supreme Court reversed the respondent court, set aside the order of dismissal and the orders denying the motion for reconsideration, and directed the respondent court to allow the substitution of the minor children and to appoint a qualified person as guardian ad litem for them. SYLLABUS 1. CIVIL PROCEDURES; DEATH OF A PARTY; SUBSTITUTION OF PARTIES. While it is true that a a person who is dead cannot sue in court, yet he can be substituted by his heirs in pursuing the case up to its completion. Where plaintiff was still alive when the complaint was filed, the Court acquires jurisdiction over the person. If thereafter she dies, Section 16, Rule 3 of the Rules of Court, prescribes the procedures whereby a party who dies during the pendency of the proceedings can be substituted; and where proper substitution of parties had been asked for, it is grave error for the court to dismiss the complaint on the ground that a dead person has no legal personality to sue. 2. CIVIL LAW; SUCCESSION; RIGHTS TO SUCCESSION TRANSMITTED FROM THE MOMENT OF DEATH OF DECEDENT. From the moment of the death of the decedent, the heirs become the absolute owners of his property, subject to the rights and obligations of the decedent, and they cannot be deprived of right thereto except by the methods provided for by law. The moment of death is the determining factor where the heirs acquire a definite right to the inheritance whether such right to be pure or contingent. The right of the heirs to the property of the deceased vests in them even before judicial declaration of their being heirs in the testate or intestate proceedings. 3. ID.; ID.; ID.; HEIRS BECOME PARTIES IN INTEREST. The death of the plaintiff during the pendency of an action to quiet title of a parcel of land did not extinguish her claim or right to the parcels of land in litigation but was transmitted to her heirs upon her death. Her heirs have thus acquired interest in the properties in litigation and became parties in interest in the case. There is therefore, no reason for the Court not to follow their substitution as parties in interest for the deceased plaintiff. 4. CIVIL PROCEDURE; ACTIONS; SURVIVAL OF ACTIONS. The question as to whether an action survives or not defends on the nature of the action and the damaged sued for. In causes of action which survive the wrong complained, of affects primarily and principally property and property rights, the injuries to the person being merely incidental, while in the causes of action which do not survive the injury complained of is to the person, the property and rights of property affected being incidental. 5. ID.; ID.; ID.; ACTION TO QUIET TITLE. An action to quiet title over a parcel of land affects primarily and principally property and property rights and therefore, is one that survives even after plaintiff's death. It is therefore, the duty of the trial. Court to order the legal representative of the deceased plaintiff to appear and to be substituted for said deceased, pursuant to Section 17, Rule 3 of the Rules of Court. 6. ID.; ID.; ID.; REFUSAL OF COURT TO ALLOW SUBSTITUTION ON THE GROUND THAT THE HEIRS WERE STILL MINORS IS A GRAVE ERROR. Where, upon the death of the plaintiff in an action to quiet title, counsel has not only asked that the minor children be substituted for her but also suggested that the uncle be appointed as guardian ad litem for them because their father is busy earning a living for the family; it is grave error for the respondent court to refuse the request for substitution on the ground that the children were still minors and cannot sue, because it ought to know that Section 17, Rule 3 of the Rules of Court, directs the Court to appoint a guardian ad litem for the minor. D E C I S I O N MARTIN, J p: This is a petition for review 1 of the Order of the Court of First Instance of Abra in Civil Case No. 856, entitled Fortunata Barcena vs. Leon Barcena, et al., denying the motions for reconsideration of its order dismissing the complaint in the aforementioned case. cdll On March 31, 1975 Fortunata Barcena, mother of minors Rosalio Bonilla and Salvacion Bonilla and wife of Ponciano Bonilla, instituted a civil action in the Court of First Instance of Abra, to quiet title over certain parcels of land located in Abra. On May 9, 1975, defendants filed a written motion to dismiss the complaint, but before the hearing of the motion to dismiss, the counsel for the plaintiff moved to amend the complaint in order to include certain allegations therein. The motion to amend the complaint was granted and on July 17, 1975, plaintiffs filed their amended complaint. On August 4, 1975, the defendants filed another motion to dismiss the complaint on the ground that Fortunata Barcena is dead and, therefore, has no legal capacity to sue. Said motion to dismiss was heard on August 14, 1975. In said hearing, counsel for the plaintiff confirmed the death of Fortunata Barcena and asked for substitution by her minor children and her husband, the petitioners herein; but the court after the hearing immediately dismissed the case on the ground that a dead person cannot be a real party in interest and has no legal personality to sue. LLjur On August 19, 1975, counsel for the plaintiff received a copy of the order dismissing the complaint and on August 23, 1975, he moved to set aside the order of the dismissal pursuant to Sections 16 and 17 of Rule 3 of the Rules of Court. 2 On August 28, 1975, the court denied the motion for reconsideration filed by counsel for the plaintiff for lack of merit. On September 1, 1975, counsel for deceased plaintiff filed a written manifestation praying that the minors Rosalio Bonilla and Salvacion Bonilla be allowed to substitute their deceased mother, but the court denied the counsel's prayer for lack of merit. From the order, counsel for the deceased plaintiff filed a second motion for reconsideration of the order dismissing the complaint claiming that the same is in violation of Sections 16 and 17 of Rule 3 of the Rules of Court but the same was denied. Hence, this petition for review. The Court reverses the respondent Court and sets aside its order dismissing the complaint in Civil Case No. 856 and its orders denying the motion for reconsideration of said order of dismissal. While it is true that a person who is dead cannot sue in court, yet he can be substituted by his heirs in pursuing the case up to its completion. The records of this case show that the death of Fortunata Barcena took place on July 9, 1975 while the complaint was filed on March 31, 1975. This means that when the complaint was filed on March 31, 1975, Fortunata Barcena was still alive, and therefore, the court had acquired jurisdiction over her person. If thereafter she died, the Rules of Court prescribes the procedure whereby a party who died during the pendency of the proceeding can be substituted. Under Section 16, Rule 3 of the Rules of Court "whenever a party to a pending case dies . . . it shall be the duty of his attorney to inform the court promptly of such death . . . and to give the name and residence of his executor, administrator, guardian or other legal representatives." This duty was complied with by the counsel for the deceased plaintiff when he manifested before the respondent Court that Fortunata Barcena died on July 9, 1975 and asked for the proper substitution of parties in the case. The respondent Court, however, instead of allowing the substitution, dismissed the complaint on the ground that a dead person has no legal personality to sue. This is a grave error. Article 777 of the Civil Code provides "that the rights to the succession are transmitted from the moment of the death of the decedent." From the moment of the death of the decedent, the heirs become the absolute owners of his property, subject to the rights and obligations of the decedent, and they cannot be deprived of their rights thereto except by the methods provided for by law. 3 The moment of death is the determining factor when the heirs acquire a definite right to the inheritance whether such right be pure or contingent. 4 The right of the heirs to the property of the deceased vests in them even before judicial declaration of their being heirs in the testate or intestate proceedings. 5 When Fortunata Barcena, therefore, died her claim or right to the parcels of land in litigation in Civil Case No. 856, was not extinguished by her death but was transmitted to her heirs upon her death. Her heirs have thus acquired interest in the properties in litigation and became parties in interest in the case. There is, therefore, no reason for the respondent Court to allow their substitution as parties in interest for the deceased plaintiff. Under Section 17, Rule 3 of the Rules of Court "after a party dies and the claim is not thereby extinguished, the court shall order, upon proper notice, the legal representative of the deceased to appear and be substituted for the deceased, within such time as may be granted . . ." The question as to whether an action survives or not depends on the nature of the action and the damage sued for. 6 In the causes of action which survive the wrong complained affects primarily and principally property and property rights, the injuries to the person being merely incidental, while in the causes of action which do not survive the injury complained of is to the person, the property and rights of property affected being incidental. 7 Following the foregoing criterion the claim of the deceased plaintiff which is an action to quiet title over the parcels of land in litigation affects primarily and principally property and property rights and therefore is one that survives even after her death. It is, therefore, the duty of the respondent Court to order the legal representative of the deceased plaintiff to appear and to be substituted for her. But what the respondent Court did, upon being informed by the counsel for the deceased plaintiff that the latter was dead, was to dismiss the complaint. This should not have been done for under the same Section 17, Rule 3 of the Rules of Court, it is even the duty of the court, if the legal representative fails to appear, to order the opposing party to procure the appointment of a legal representative of the deceased. In the instant case the respondent Court did not have to bother ordering the opposing party to procure the appointment of a legal representative of the deceased because her counsel has not only asked that the minor children be substituted for her but also suggested that their uncle be appointed as guardian ad litem for them because their father is busy in Manila earning a living for the family. But the respondent Court refused the request for substitution on the ground that the children were still minors and cannot sue in court. This is another grave error because the respondent Court ought to have known that under the same Section 17, Rule 3 of the Rules of Court, the court is directed to appoint a guardian ad litem for the minor heirs. Precisely in the instant case, the counsel for the deceased plaintiff has suggested to the respondent Court that the uncle of the minors be appointed to act as guardian ad litem for them. Unquestionably, the respondent Court has gravely abused its discretion in not complying with the clear provision of the Rules of Court dismissing the complaint of the plaintiff in Civil Case No. 856 and refusing the substitution of parties in the case. prLL IN VIEW OF THE FOREGOING, the order of the respondent Court dismissing the complaint in Civil Case No. 856 of the Court of First Instance of Abra and the motions for reconsideration of the order of dismissal of said complaint are set aside and the respondent Court is hereby directed to allow the substitution of the minor children, who are the petitioners therein for the deceased plaintiff and to appoint a qualified person as guardian ad litem for them. Without pronouncement as to costs. SO ORDERED." Teehankee (Chairman), Makasiar, Esguerra and Muoz Palma, JJ., concur.
EN BANC [G.R. No. L-770. April 27, 1948.] ANGEL T. LIMJOCO, petitioner, vs. INTESTATE ESTATE OF PEDRO O. FRAGANTE, deceased, respondent. Angel Limjoco, jr. and Delfin L. Gonzales, for petitioner. Bienvenido A. Tan, for respondent. SYLLABUS 1. PUBLIC SERVICE COMMISSION; CERTIFICATE OF PUBLIC CONVENIENCE; RIGHT OF ESTATE OF DECEDENT TO PROSECUTE APPLICATION; CASE AT BAR. If P. O. F. had not died, there can be no question that he would have had the right to prosecute his application for a certificate of public convenience to its final conclusion. No one would have denied him that right. As declared by the commission in its decision, he had invested in the ice plant in question P35,000, and from what the commission said regarding his other properties and business, he would certainly have been financially able to maintain and operate said plant had he not died. His transportation business alone was netting him about P1,440 monthly. He was a Filipino citizen and continued to be such till his demise. The commission declared in its decision, in view of the evidence before it, that his estate was financially able to maintain and operate the ice plant. The aforesaid light of P. O. F. to prosecute said application to its final conclusion was one which by its nature did not lapse through his death. Hence, it constitutes a part of the assets of his estate, for such a right was property despite the possibility that in the end the commission might have denied the application, although under the facts of the case, the commission granted the application in view of the financial ability of the estate to maintain and operate the ice plant. Petitioner, in his memorandum of March 19, 1947, admits (p. 3) that a certificate of public convenience once granted "as a rule, should descend to his estate as an asset." Such certificate would certainly be property, and the right to acquire such a certificate, by complying with the requisites of the law, belonged to the decedent in his lifetime, and survived to his estate and judicial administrator after his death. 2. ID.; ID.; ID.; ESTATE OF DECEDENT, A PERSON; CASE AT BAR. Within the philosophy of the present legal system and within the framework of the constitution, the estate of P. O. F. should be considered an artificial or juridical person for the purposes of the settlement and distribution of his estate which, of course, include the exercise during the judicial administration thereof of those rights and the fulfillment of those obligations of his which survived after his death. One of those rights was the one involved in his pending application before the Public Service Commission in the instant case, consisting in the prosecution of said application to its final conclusion. An injustice would ensue from the opposite course. 3. ID.; ID.; ID.; ID.; CITIZENSHIP OF DECEDENT EXTENDED TO HIS ESTATE; CASE AT BAR. If by legal fiction the personality of P. O. F. is considered extended so that any debts or obligations left by, and surviving, him may be paid, and any surviving rights may be exercised for the benefit of his creditors and heirs, respectively, there is no sound and cogent reason for denying the application of the same fiction to his citizenship, and for not considering it as likewise extended for the purposes of the aforesaid unfinished proceeding before the Public Service Commission. The outcome of said proceeding, if successful, would in the end inure to the benefit of the same creditors, and the heirs. Even in that event petitioner could not allege any prejudice in the legal sense, any more than he could have done if F. had lived longer and obtained the desired certificate. The fiction of such extension of his citizenship is grounded upon the same principle, and motivated by the same reason, as the fiction of the extension of his personality. The fiction is made necessary to avoid the injustice of subjecting his estate, creditors and heirs, solely by reason of his death, to the loss of the investment amounting to P35,000, which he already made in the ice plant, not counting the other expenses occasioned by the instant proceeding, from the Public Service Commission to this court. D E C I S I O N HILADO, J p: Under date of May 21, 1946, the Public Service Commission, through Deputy Commissioner Fidel Ibaez, rendered its decision in case No. 4572 of Pedro O. Fragante, as applicant for a certificate of public convenience to install, maintain and operate an ice plant in San Juan, Rizal, whereby said commission held that the evidence therein showed that the public interest and convenience will be promoted in a proper and suitable manner "by authorizing the operation and maintenance of another ice plant of two and one-half (2-1/2) tons in the municipality of San Juan; that the original applicant Pedro 0. Fragante was a Filipino citizen at the time of his death; and that his intestate estate is financially capable of maintaining the proposed service". The commission, therefore, overruled the opposition filed in the case and ordered "that under the provisions of section 15 of Commonwealth Act No. 146, as amended, a certificate of public convenience be issued to the Intestate Estate of the deceased Pedro Fragante, authorizing said Intestate Estate through its Special or Judicial Administrator, appointed by the proper court of competent jurisdiction, to maintain and operate an ice plant with a daily productive capacity of two and one half tons (2-1/2) in the Municipality of San Juan and to sell the ice produced from said plant in the said Municipality of San Juan and in the Municipality of Mandaluyong, Rizal, and in Quezon City", subject to the conditions therein set forth in detail (petitioner's brief, pp. 33-34). Petitioner makes four assignments of error in his brief as follows: "1. The decision of the Public Service Commission is not in accordance with law. "2. The decision of the Public Service Commission is not reasonably supported by evidence. "3. The Public Service Commission erred in not giving petitioner and the Ice and Cold Storage Industries of the Philippines, Inc., as existing operators, a reasonable opportunity to meet the increased demand. "4. The decision of the Public Service Commission is an unwarranted departure from its announced policy with respect to the establishment and operation of ice plant." (Pp. 1-2, petitioner's brief.) In his argument petitioner contends that it was error on the part of the commission to allow the substitution of the legal representative of the estate of Pedro O. Fragante for the latter as party applicant in the case then pending before the commission, and in subsequently granting to said estate the certificate applied for, which is said to be in contravention of law. If Pedro O. Fragante had not died, there can be no question that he would have had the right to prosecute his application before the commission to its final conclusion. No one would have denied him that right. As declared by the commission in its decision, he had invested in the ice plant in question P35,000, and from what the commission said regarding his other properties and business, he would certainly have been financially able to maintain and operate said plant had he not died. His transportation business alone was netting him about P1,440 monthly. He was a Filipino citizen and continued to be such till his demise. The commission declared in its decision, in view of the evidence before it, that his estate was financially able to maintain and operate the ice plant. The aforesaid right of Pedro O. Fragante to prosecute said application to its final conclusion was one which by its nature did not lapse through his death. Hence, it constitutes a part of the assets of his estate, for such a right was property despite the possibility that in the end the commission might have denied the application, although under the facts of the case, the commission granted the application in view of the financial ability of the estate to maintain and operate the ice plant. Petitioner, in his memorandum of March 19, 1947, admits (page 3) that a certificate of public convenience once granted "as a rule, should descend to his estate as an asset". Such certificate would certainly be property, and the right to acquire such a certificate, by complying with the requisites of the law, belonged to the decedent in his lifetime, and survived to his estate and judicial administrator after his death. If Pedro O. Fragante had in his lifetime secured an option to buy a piece of land and during the life of the option he died, if the option had been given him in the ordinary course of business and not out of special consideration for his person, there would be no doubt that said option and the right to exercise it would have survived to his estate and legal representatives. In such a case there would also be the possibility of failure to acquire the property should he or his estate or legal representative fail to comply with the conditions of the option. In the case at bar Pedro O. Fragante's undoubted right to apply for and acquire the desired certificate of public convenience the evidence established that the public needed the ice plant was under the law conditioned only upon the requisite citizenship and economic ability to maintain and operate the service. Of course, such right to acquire or obtain such certificate of public convenience was subject to failure to secure its objective through nonfulfillment of the legal conditions, but the situation here is no different from the legal standpoint from that of the option in the illustration just given. Rule 88, section 2, provides that the executor or administrator may bring or defend actions, among other cases, for the protection of the property or rights of the deceased which survive, and it says that such actions may be brought or defended "in the right of the deceased". Rule 82, section 1, paragraph (a), mentions among the duties of the executor or administrator, the making of an inventory of all goods, chattels, rights, credits, and estate of the deceased which shall come to his possession or knowledge, or to the possession of any other person for him. In his commentaries on the Rules of Court (Volume II, 2nd ed., pages 366, 367), the present Chief Justice of this Court draws the following conclusion from the decisions cited by him: "Therefore, unless otherwise expressly provided by law, any action affecting the property or rights (underscoring supplied) of a deceased person which may be brought by or against him if he were alive, may likewise be instituted and prosecuted by or against the administrator, unless the action is for recovery of money, debt or interest thereon, or unless, by its very nature, it cannot survive, because death extinguishes the right . . .". It is true that a proceeding upon an application for a certificate of public convenience before the Public Service Commission is not an "action". But the foregoing provisions and citations go to prove that the decedent's rights which by their nature are not extinguished by death go to make up a part and parcel of the assets of his estate which, being placed under the control and management of the executor or administrator, can not be exercised but by him in representation of the estate for the benefit of the creditors, devisees, or legatees, if any, and the heirs of the decedent. And if the right involved happens to consist in the prosecution of an unfinished proceeding upon an application for a certificate of public convenience of the deceased before the Public Service Commission, it is but logical that the legal representative be empowered and entitled in behalf of the estate to make the right effective in that proceeding. Manresa (Vol. III, 6th ed., p. 11) says that No. 10 of article 334 and article 336 of the Civil Code, respectively, consider as immovable and movable things rights which are not material. The same eminent commentator says in the cited volume (p. 45) that article 336 of the Civil Code has been deficiently drafted in that it is not sufficiently expressive of all incorporeal rights which are also property for juridical purposes. Corpus Juris (Vol. 50, p. 737) states that in the broad sense of the term, property includes, among other things, "an option", and "the certificate of the railroad commission permitting the operation of a bus line," and on page 748 of the same volume we read: "However, these terms (real property, as estate or interest) have also been declared to include every species of title, inchoate or complete, and embrace rights which lie in contract, whether executory or executed." (Italics supplied.) Another important question raised by petitioner is whether the estate of Pedro O. Fragante is a "person" within the meaning of the Public Service Act. Words and Phrases, First Series, (Vol. 6, p. 5325), states the following doctrine in the jurisdiction of the State of Indiana: "As the estate of a decedent is in law regarded as a person, a forgery committed after the death of the man whose name purports to be signed to the instrument may be prosecuted as with the intent to defraud the estate. Billings vs. State, 107 Ind., 54, 55, 6 N. E. 914, 7 N. E. 763, 57 Am. Rep. 77." The Supreme Court of Indiana in the decision cited above had before it a case of forgery committed after the death of one Morgan for the purpose of defrauding his estate. The objection was urged that the information did not aver that the forgery was committed with the intent to defraud any person. The Court, per Elliott, J., disposed of this objection as follows: ". . . The reason advanced in support of this proposition is that the law does not regard the estate of a decedent as a person. This intention (contention) cannot prevail. The estate of a decedent is a person in legal contemplation. 'The word "person", says Mr. Abbot, 'in its legal signification, is a generic term, and includes artificial as well as natural persons,' 2 Abb. Dict. 271; Douglas vs. Pacific, etc., Co., 4 Cal. 304; Planters', etc., Bank vs. Andrews, 8 Port (Ala.) 404. It is said in another work that 'persons are of two kinds: natural and artificial. A natural person is a human being. Artificial persons include (1) a collection or succession of natural persons forming a corporation; (2) a collection of property to which the law attributes the capacity of having rights and duties. The latter class of artificial persons is recognized only to a limited extent in our law. Examples are the estate of a bankrupt or deceased person.' 2 Rapalje & L. Law Dict. 954. Our own cases inferentially recognize the correctness of the definition given by the authors from whom we have quoted, for they declare that it is sufficient, in pleading a claim against a decedent's estate, to designate the defendant as the estate of the deceased person, naming him. Ginn vs. Collins, 43 Ind. 271. Unless we accept this definition as correct, there would be a failure of justice in cases where, as here, the forgery is committed after the death of the person whose name is forged; and this is a result to be avoided if it can be done consistent with principle. We perceive no difficulty in avoiding such a result; for, to our minds, it seems reasonable that the estate of a decedent should be regarded as an artificial person. It is the creation of law for the purpose of enabling a disposition of the assets to be properly made, and, although natural persons as heirs, devisees, or creditors, have an interest in the property, the artificial creature is a distinct legal entity. The interest which natural persons have in it is not complete until there has been a due administration; and one who forges the name of the decedent to an instrument purporting to be a promissory note must be regarded as having intended to defraud the estate of the decedent, and not the natural persons having diverse interests in it, since he cannot be presumed to have known who those persons were, or what was the nature of their respective interests. The fraudulent intent is against the artificial person, the estate, and not the natural persons who have direct or contingent interests in it." (107 Ind. 54, 55, 6 N. E. 914-915.) In the instant case there would also be a failure of justice unless the estate of Pedro O. Fragante is considered a "person", for the quashing of the proceedings for no other reason than his death would entail prejudicial results to his investment amounting to P35,000.00 as found by the commission, not counting the expenses and disbursements which the proceeding can be presumed to have occasioned him during his lifetime, let alone those defrayed by the estate thereafter. In this jurisdiction there are ample precedents to show that the estate of a deceased person is also considered as having legal personality independent of the heirs. Among the most recent cases may be mentioned that of "Estate of Mota vs. Concepcion, 56 Phil., 712, 717, wherein the principal plaintiff was the estate of the deceased Lazaro Mota, and this Court gave judgment in favor of said estate along with the other plaintiffs in these words: ". . . the judgment appealed from must be affirmed so far as it holds that defendants Concepcion and Whitaker are indebted to the plaintiffs in the amount of P245,804.69 . . .." Under the regime of the Civil Code and before the enactment of the Code of Civil Procedure, the heirs of a deceased person were considered in contemplation of law as the continuation of his personality by virtue of the provision of article 661 of the first Code that the heirs succeed to all the rights and obligations of the decedent by the mere fact of his death. It was so held by this Court in Barrios vs. Dolor, 2 Phil., 44, 46. However, after the enactment of the Code of Civil Procedure, article 661 of the Civil Code was abrogated, as held in Suiliong & Co. vs. Chio-Taysan, 12 Phil., 13 22. In that case, as well as in many others decided by this Court after the innovations introduced by the Code of Civil Procedure in the matter of estates of deceased persons, it has been the constant doctrine that it is the estate or the mass of property, rights and assets left by the decedent, instead of the heirs directly, that becomes vested and charged with his rights and obligations which survive after his demise. The heirs were formerly considered as the continuation of the decedent's personality simply by legal fiction, for they might not be even of his flesh and blood the reason was one in the nature of a legal exigency derived from the principle that the heirs succeeded to the rights and obligations of the decedent. Under the present legal system, such rights and obligations as survive after death have to be exercised and fulfilled only by the estate of the deceased. And if the same legal fiction were not indulged, there would be no juridical basis for the estate, represented by the executor or administrator, to exercise those rights and to fulfill those obligations of the deceased. The reason and purpose for indulging the fiction is identical and the same in both cases. This is why according to the Supreme Court of Indiana in Billings vs. State, supra, citing 2 Rapalje & L. Dictionary, 954, among the artificial persons recognized by law figures "a collection of property to which the law attributes the capacity of having rights and duties", as for instance, the estate of a bankrupt or deceased person. Petitioner raises the decisive question of whether or not the estate of Pedro O. Fragante can be considered a "citizen of the Philippines" within the meaning of section 16 of the Public Service Act, as amended, particularly the proviso thereof expressly and categorically limiting the power of the commission to issue certificates of public convenience or certificates of public convenience and necessity "only to citizens of the Philippines or of the United States or to corporations, co-partnerships, associations, or joint-stock companies constituted and organized under the laws of the Philippines", and the further proviso that sixty per centum of the stock or paid-up capital of such entities must belong entirely to citizens of the Philippines or of the United States. Within the philosophy of the present legal system, the underlying reason for the legal fiction by which, for certain purposes, the estate of a deceased person is considered a "person" is the avoidance of injustice or prejudice resulting from the impossibility of exercising such legal rights and fulfilling such legal obligations of the decedent as survived after his death unless the fiction is indulged. Substantially the same reason is assigned to support the same rule in the jurisdiction of the State of Indiana, as announced in Billings vs. State, supra, when the Supreme Court of said State said: ". . . It seems reasonable that the estate of a decedent should be regarded as an artificial person. It is the creation of law for the purpose of enabling a disposition of the assets to be properly made . . .." Within the framework and principles of the constitution itself, to cite just one example, under the bill of rights it seems clear that while the civil rights guaranteed therein in the majority of cases relate to natural persons, the term "person" used in section 1 (1) and (2) must be deemed to include artificial or juridical persons, for otherwise these latter would be without the constitutional guarantee against being deprived of property without due process of law, or the immunity from unreasonable searches and seizures. We take it that it was the intendment of the framers to include artificial or juridical, no less than natural, persons in these constitutional immunities and in others of similar nature. Among these artificial or juridical persons figure estates of deceased persons. Hence, we hold that within the framework of the constitution, the estate of Pedro O. Fragante should be considered an artificial or juridical person for the purposes of the settlement and distribution of his estate which, of course, include the exercise during the judicial administration thereof of those rights and the fulfillment of those obligations of his which survived after his death. One of those rights was the one involved in his pending application before the Public Service Commission in the instant case, consisting in the prosecution of said application to its final conclusion. As stated above, an injustice would ensue from the opposite course. How about the point of citizenship? If by legal fiction his personality is considered extended so that any debts or obligations left by, and surviving, him may be paid, and any surviving rights may be exercised for the benefit of his creditors and heirs, respectively, we find no sound and cogent reason for denying the application of the same fiction to his citizenship, and for not considering it as likewise extended for the purposes of the aforesaid unfinished proceeding before the Public Service Commission. The outcome of said proceeding, if successful, would in the end inure to the benefit of the same creditors and the heirs. Even in that event petitioner could not allege any prejudice in the legal sense, any more than he could have done if Fragante had lived longer and obtained the desired certificate. The fiction of such extension of his citizenship is grounded upon the same principle, and motivated by the same reason, as the fiction of the extension of his personality. The fiction is made necessary to avoid the injustice of subjecting his estate, creditors and heirs, solely by reason of his death, to the loss of the investment amounting to P35,000, which he had already made in the ice plant, not counting the other expenses occasioned by the instant proceeding, from the Public Service Commission to this Court. We can perceive no valid reason for holding that within the intent of the Constitution (Article IV), its provisions on Philippine citizenship exclude the legal principle of extension above adverted to. If for reasons already stated our law indulges the fiction of extension of personality, if for such reasons the estate of Pedro O. Fragante should be considered an artificial or juridical person herein, we can find no justification for refusing to declare a like fiction as to the extension of his citizenship for the purposes of this proceeding. Pedro O. Fragante was a Filipino citizen, and as such, if he had lived, in view of the evidence of record, he would have obtained from the commission the certificate for which he was applying. The situation has suffered but one change, and that is, his death. His estate was that of a Filipino citizen. And its economic ability to appropriately and adequately operate and maintain the service of an ice plant was the same that it received from the decedent himself. In the absence of a contrary showing, which does not exist here, his heirs may be assumed to be also Filipino citizens; and if they are not, there is the simple expedient of revoking the certificate or enjoining them from inheriting it. Upon the whole, we are of opinion that for the purposes of the prosecution of said case No. 4572 of the Public Service Commission to its final conclusion, both the personality and citizenship of Pedro O. Fragante must be deemed extended, within the meaning and intent of the Public Service Act, as amended, in harmony with the constitution: it is so adjudged and decreed. Decision affirmed, without costs. So ordered. Moran, C. J., Paras, Pablo, Bengzon, Briones, Padilla and Tuason, JJ., concur. Paras, J., I hereby certify that Mr. Justice Feria voted with the majority. Separate Opinions PERFECTO, J., dissenting: Commonwealth Act No. 146 reserves to Filipino citizens the right to obtain a certificate of public convenience to operate an ice plant in San Juan, Rizal. The limitation is in accordance with section 8 of Article XIV of the Constitution which provides. "No franchise, certificate, or any other form of authorization for the operation of a public utility shall be granted except to citizens of the Philippines or to corporations or other entities organized under the laws of the Philippines, sixty per centum of the capital of which is owned by citizens of the Philippines, nor shall such franchise, certificate, or authorization be exclusive in character or for a longer period than fifty years. No franchise or right shall be granted to any individual, firm, or corporation, except under the condition that it shall be subject to amendment, alteration, or repeal by the Congress when the public interest so requires." The main question in this case is whether the estate of Pedro O. Fragante fulfills the citizenship requirement. To our mind, the question can be restated by asking whether the heirs of Pedro O. Fragante fulfill the citizenship requirement of the law. The estate is an abstract entity. As such, its legal value depends on what it represents. It is a device by which the law gives a kind of personality and unity to undetermined tangible persons, the heirs. They inherit and replace the deceased at the very moment of his death. As there are procedural requisites for their identification and determination that need time for their compliance, a legal fiction has been devised to represent them. That legal fiction is the estate, a liquid condition in process of solidification. The estate, therefore, has only a representative value. What the law calls estate is, as a matter of fact, intended to designate the heirs of the deceased. The question, therefore, in this case, boils down to the citizenship of the heirs of Fragante. There is nothing in the record to show conclusively the citizenship of the heirs of Fragante. If they are Filipino citizens, the action taken by the Public Service Commission should be affirmed. If they are not, it should be reversed. Petitioner alleges that the estate is just a front or dummy for aliens to go around the citizenship constitutional provision. It is alleged that Gaw Suy, the special administrator of the estate, is an alien. We are of opinion that the citizenship of the heirs of Fragante should be determined by the Commission upon evidence that the party should present. It should also determine the dummy question raised by petitioner. We are of opinion and so vote that the decision of the Public Service Commission of May 21, 1946, be set aside and that the Commission be instructed to receive evidence on the above factual questions and render a new decision accordingly.
FIRST DIVISION [G.R. No. 137548. September 3, 2007.] HEIRS OF THE LATE DOMINGO N. NICOLAS, petitioners, vs. METROPOLITAN BANK & TRUST COMPANY, respondent. D E C I S I O N SANDOVAL-GUTIERREZ, J p: For our resolution is the instant Petition for Review on Certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as amended, seeking to reverse the Decision 1 of the Court of Appeals (Sixteenth Division) dated January 14, 1999 in CA-G.R. SP No. 49926. DASCIc The facts of the case are not in dispute, thus: aSIAHC Spouses Domingo and Josefa Nicolas are the registered owners of two (2) parcels of land located at Sanville Subdivision, Quezon City as evidenced by Transfer Certificates of Title (TCT) Nos. 156339 and 156341 of the Registry of Deeds, same city. On these lots is the residential house of spouses Nicolas and their two children, herein petitioners. These properties are conjugal. SaICcT On May 19, 1986, Domingo Nicolas passed away. DIcTEC On June 11, 1988, a fire gutted the office of the Register of Deeds of Quezon City. Among the records destroyed were the original copies of TCTs Nos. 156339 and 156341. HESCcA Sometime in 1988, Josefa Nicolas, the surviving spouse of Domingo, filed with the Land Registration Administration (LRA) an application for reconstitution of the two (2) land titles. EHSTDA In 1991, the LRA approved the application and ordered the reconstitution of the destroyed TCTs but only in the name of applicant Josefa Nicolas. EcSCAD In 1998, petitioners learned that their mother mortgaged the lots with the Metropolitan Bank & Trust Co., herein respondent; that the mortgage had been foreclosed; that respondent had the land titles consolidated in its name; and that respondent filed with the Regional Trial Court (RTC), Branch 77, Quezon City a petition for the issuance of a writ of possession (LRC Case No. Q-8019[96]) which was granted on January 15, 1998. HCATEa Petitioners then filed with the RTC, Branch 22, Quezon City Civil Case No. Q-98-34312 for Annulment of Reconstituted Titles, Mortgage and Sale at Public Auction. This case is still pending trial. aEcHCD Petitioners also filed with the RTC, Branch 77, Quezon City a motion to quash the writ of possession, but it was denied on September 10, 1998. Thereupon, they filed with the Court of Appeals a petition for certiorari, docketed as CA-G.R. SP No. 49926. However, the appellate court dismissed the petition. It held that the trial court, in issuing the writ of possession in favor of the respondent, did not commit grave abuse of discretion amounting to lack or excess of jurisdiction considering that the trial court has the ministerial task to issue such writ. DTISaH Petitioners seasonably filed a motion for reconsideration, but this was denied by the Court of Appeals in its Resolution of February 24, 1999. AcDaEH Hence, the instant petition. EcIDaA Petitioners contend that the Court of Appeals erred in dismissing their petition for certiorari, invoking our ruling in Rivero de Ortega v. Natividad 2 which reads: caSDCA The general rule is that after a sale has been made under a decree in a foreclosure suit, the court has the power to give possession to the purchaser, and the latter will not be driven to an action in law to obtain possession. The power of the court to issue a process and place the purchaser in possession, is said to rest upon the ground that it has power to enforce its own decrees and thus avoid circuitous actions and vexatious litigation. But where a party in possession was not a party to the foreclosure, and did not acquire his possession from a person who was bound by the decree, but who is a mere stranger and who entered into possession before the suit was begun, the court has no power to deprive him of possession by enforcing the decree. Thus, it was held that only parties to the suit, persons who came in under them pendente lite, and trespassers or intruders without title, can be evicted by a writ of possession. The reason for this limitation is that the writ does not issue in case of doubt, nor will a question of legal title be tried or decided in proceedings looking to the exercise of the power of the court to put a purchaser in possession. A very serious question may arise upon full proofs as to where the legal title to the property rests, and should not be disposed of in a summary way. The petitioner, it is held, should be required to establish his title in a proceeding directed to that end. prcd Here, petitioners as children and, therefore, compulsory heirs of spouses Nicolas, acquired ownership of portions of the lots as their legitime upon the death of their father or prior to the foreclosure of mortgage and the filing by the respondent of its petition for the issuance of a writ of possession. Consequently, petitioners are strangers or third parties therein whose rights cannot be determined as they were not impleaded by respondent. Verily, they should not be deprived of their legitime by the enforcement of the writ of possession. Clearly, therefore, the writ of possession should not include parts of the two lots pertaining to petitioners. HIaSDc Records indicate that the estate of Domingo Nicolas has not been judicially or extra-judicially settled. TEHDIA It is basic that after consolidation of title in the buyer's name for failure of the mortgagor to redeem, the writ of possession becomes a matter of right 3 and its issuance to a purchaser in an extra-judicial foreclosure is merely a ministerial function. 4 However, considering the circumstances obtaining in this case and following our ruling in Rivero de Ortega, earlier cited, we hold that such writ of possession should apply only to the share of Josefa as may be determined in Civil Case No. Q-98-34312 or in any other proceeding that may be instituted by petitioners for the purpose of settling the undivided estate of Domingo Nicolas. cDCSET WHEREFORE, we GRANT the petition. The assailed Decision of the Court of Appeals in CA-G.R. SP No. 49926 is MODIFIED in the sense that the writ of possession issued by the RTC, Branch 77, Quezon City in LRC Case No. Q-8019(96) shall apply only to such portion of the lots pertaining to Josefa Nicolas as may be determined in Civil Case No. Q-98-34312 or in any other proper proceeding which petitioners may file. HTaIAC SO ORDERED. Puno, C.J., Corona, Azcuna and Garcia, JJ., concur.
FIRST DIVISION [G.R. No. L-23079. February 27, 1970.] RUBEN AUSTRIA, CONSUELO AUSTRIA-BENTA and LAURO AUSTRIA MOZO, petitioners, vs. HON. ANDRES REYES, Judge, Court of First Instance of Rizal, PERFECTO CRUZ, BENITA CRUZ-MENEZ ISAGANI CRUZ, ALBERTO CRUZ and LUZ CRUZ-SALONGA respondents. Salonga, Ordoez, Yap, Sicat & Associates for petitioners. Ruben Austria for himself and co-petitioners. De los Santos, De los Santos & De los Santos for respondent Perfecto Cruz. Villareal, Almacen, Navarra & Amores for other respondents. SYLLABUS 1. CIVIL LAW; TESTATE SUCCESSION; REQUISITES TO ANNUL INSTITUTION OF HEIRS. Before the institution of heirs may be annulled under article 850 of the Civil Code, the following requisites must concur: First, the cause for the institution of heirs must be stated in the will; second, the cause must be shown to be false; and third, it must appear from the face of the will that the testator would not have made such institution if he had known the falsity of the cause. 2. ID.; ID.; CAUSE FOR ANNULMENT OF INSTITUTION OF HEIRS MUST BE CLEAR; CASE AT BAR. If the impelling reason or cause for the institution of the respondents as her heirs was the testatrix's belief that under the law she could not do otherwise, she did not make it known in her will. Surely if she was aware that succession to the legitime takes place by operation of law, independent of her own wishes, she would not have found it convenient to name her supposed compulsory heirs to their legitimes. Her express adoption of the rules on legitimes should very well indicate her complete agreement with that statutory scheme. But even this, like the petitioners' own proposition, is highly speculative of what was in the mind of the testatrix when she executed her will. One fact prevails, however, and it is the decedent's will does not state in a specific or unequivocal manner the cause for such institution of heirs. We cannot annul the same on the basis of guesswork or uncertain implications. 3. ID.; ID.; TESTACY FAVORED AND WISHES OF TESTATOR MUST PREVAIL. Testacy is favored and doubts are resolved on its side, especially where the will evinces an intention on the part of the testator to dispose of practically his whole estate, as was done in this case. Moreover, so compelling is the principle that intestacy should be avoided and the wishes of the testator allowed to prevail, that we could even vary the language of the will for the purpose of giving it effect. As in one case where the probate court has found, by final judgment, that the testator was possessed of testamentary capacity and her last will executed free from falsification, fraud, trickery or undue influence this Court held, it is its duty to give full expression to her will. 4. ID.; ID.; LEGALITY OF ADOPTION APART FROM CASE OF TESTATE SUCCESSION, ADOPTION NOT SUBJECT TO COLLATERAL ATTACK. The legality of the adoption of the respondents by the testatrix can be assailed only in a separate action brought for that purpose, and cannot be the subject of a collateral attack. 5. REMEDIAL LAW; COURTS; INHERENT POWER OF COURT. Every court has the inherent power to amend and control its processes and orders so as to make them conformable to law and justice. That the court a quo has limited the extent of the petitioners' intervention is also within its powers as articulated by the Rules of Court. D E C I S I O N CASTRO, J p: On July 7, 1956 Basilia Austria vda. de Cruz filed with the Court of First Instance of Rizal (Special Proceedings 2457) a petition for probate, ante mortem, of her last will and testament. The probate was opposed by the present petitioners Ruben Austria, Consuelo Austria-Benta and Lauro Austria Mozo, and still others who, like the petitioner, are nephews and nieces of Basilia. This opposition was, however, dismissed and the probate of the will allowed after due hearing. The bulk of the estate of Basilia, admittedly, was destined under the will to pass on to the respondents Perfecto Cruz, Benita Cruz-Meez, Isagani Cruz, Alberto Cruz, and Luz Cruz-Salonga, all of whom had been assumed and declared by Basilia as her own legally adopted children. On April 23, 1969, more than two years after her will was allowed to probate, Basilia died. The respondent Perfecto Cruz was appointed executor without bond by the same court in accordance with the provisions of the decedent's will, notwithstanding the blocking attempt pursued by the petitioner Ruben Austria. Finally, on November 5, 1959, the present petitioners filed in the same proceedings a petition in intervention for partition alleging in substance that they are the nearest of kin of Basilia, and that the five respondents Perfecto Cruz, et al., had not in fact been adopted by the decedent in accordance with law, in effect rendering these respondents mere strangers to the decedent and without any right to succeed as heirs. Notwithstanding opposition by the respondent Perfecto Cruz, as executor of the estate, the court a quo allowed the petitioners' intervention by its order of December 22, 1959, couched in broad terms, as follows: "The Petition in Intervention for Partition filed by the above-named oppositors [Ruben Austria, et al.,] dated November 5, 1969 is hereby granted." In the meantime, the contending sides debated the matter of authenticity or lack of it of the several adoption papers produced and presented by the respondents. On motion of the petitioners Ruben Austria, et al., these documents were referred to the National Bureau of Investigation for examination and advice. N.B.I. report seems to bear out the genuineness of the documents, but the petitioners, evidently dissatisfied with the results, managed to obtain a preliminary opinion from a Constabulary questioned-document examiner whose views undermine the authenticity of the said documents. The petitioners Ruben Austria, et al., thus moved the lower court to refer the adoption papers to the Philippine Constabulary for further study. The petitioners likewise located former personnel of the court which appeared to have granted the questioned adoption, and obtained written depositions from two of them denying any knowledge of the pertinent adoption proceedings. On February 6, 1963, more than three years after they were allowed to intervene, the petitioners Ruben Austria, et al., moved the lower court to set for hearing the matter of the genuineness of the adoption of the respondents Perfecto Cruz, et al., by the late Basilia. Before the date set by the court for hearing arrived, however, the respondent Benita Cruz-Meez, who entered an appearance separately from that of her brother Perfecto Cruz, filed on February 28, 1963 a motion asking the lower court, by way of alternative relief, to confine the petitioners' intervention, should it be permitted, to properties not disposed of in the will of the decedent. On March 4, 1963, the lower court heard the respondent Benita's motion. Both sides subsequently submitted their respective memoranda, and finally, the lower court issued an order on June 4, 1963, delimiting the petitioners' intervention to the properties of the deceased which were not disposed of in the will. The petitioners moved the lower court to reconsider this latest order, eliciting thereby an opposition from the respondents. On October 25, 1963 the same court denied the petitioners' motion for reconsideration. A second motion for reconsideration which set off a long exchange of memoranda from both sides, was summarily denied on April 21, 1964. Hence this petition for certiorari, praying this Court to annul the orders of June 4 and October 25, 1963 and the order of April 21, 1964, all restricting petitioners' intervention to properties that were not included in the decedent's testamentary dispositions. The uncontested premises are clear. Two interests are locked in dispute over the bulk of the estate of the deceased. Arrayed on one side are the petitioners Ruben Austria, Consuelo Austria-Benta and Lauro Austria Mozo, three of a number of nephews and nieces who are concededly the nearest surviving blood relatives of the decedent. On the other side are the respondents brothers and sisters, Perfecto Cruz, Benita Cruz-Meez, Isagani Cruz, Alberto Cruz and Luz Cruz-Salonga, all of whom heirs in the will of the deceased Basilia, and all of whom claim kinship with the decedent by virtue of legal adoption. At the heart of the controversy is Basilia's last will immaculate in its extrinsic validity since it bears the imprimatur of duly conducted probate proceedings. The complaint in intervention filed in the lower court assails the legality of the tie which the respondent Perfecto Cruz and his brothers and sisters claim to have with the decedent. The lower court had, however, assumed, by its orders in question, that the validity or invalidity of the adoption is not material nor decisive on the efficacy of the institution of heirs; for, even if the adoption in question were spurious, the respondents Perfecto Cruz, et al., will nevertheless succeed not as compulsory heirs but as testamentary heirs instituted in Basilia's will. This ruling apparently finds support in article 842 of the Civil Code which reads: "One who has no compulsory heirs may dispose of by will all his estate or any part of it in favor of any person having capacity to succeed. "One who has compulsory heirs may dispose of his estate provided he does not contravene the provisions of this Code with regard to the legitime of said heirs." The lower court must have assumed that since the petitioners nephews and niece are not compulsory heirs, they do not possess that interest which can be prejudiced by a free-wheeling testamentary disposition. The petitioners' interest is confined to properties, if any, that have not been disposed of in the will, for to that extent intestate succession can take place and the question of the veracity of the adoption acquires relevance. The petitioners nephews and niece, upon the other hand, insist that the entire estate should descend to them by intestacy by reason of the intrinsic nullity of the institution of heirs embodied in the decedent's will. They have thus raised squarely the issue of whether or not such institution of heirs would retain efficacy in the event there exists proof that the adoption of the same heirs by the decedent is false. The petitioners cite, as the controlling rule, article 850 of the Civil Code which reads: "The statement of a false cause for the institution of an heir shall be considered as not written, unless it appears from the will that the testator would not have made such institution if he had known the falsity of such cause." Coming closer to the center of the controversy, the petitioners have called the attention of the lower court and this Court to the following pertinent portions of the will of the deceased which recite: "III "Ang aking mga sapilitang tagapagmana (herederos forzosos) ay ang aking itinuturing na mga anak na tunay (Hijos legalmente adoptados) na sina Perfecto, Alberto, Luz, Benita at Isagani, na pawang may apelyidong Cruz. xxx xxx xxx "V "Kung ako ay bawian ng Dios ng buhay, ay aking ipinamamana ang aking mga ari-ariang maiiwan, sa kaparaanang sumusunod: "A. Aking ipinamamana sa aking nabanggit na limang anak na sina Perfecto, Alberto, Luz, Benita at Isagani, na pawang may apelyidong Cruz, na parepareho ang kaparti ng bawa't isa at walang lamangan (en partes iguales), bilang kanilang sapilitang mana (legiti[ma]), ang kalahati (1/2) ng aking kaparti sa lahat ng aming ari-ariang gananciales ng aking yumaong asawang Pedro Cruz na napapaloob sa Actuacion Especial No. 640 ng Hukumang Unang Dulugan ng Rizal at itinutukoy sa No. 1 ng parafo IV ng testamentong ito, ang kalahati (1/2) ng mga lagay na lupa at palaisdaan na nasa Obando at Polo, Bulacan, na namana ko sa aking yumaong ama na si Calixto Austria, at ang kalahati (1/2) ng ilang lagay na lupa na nasa Tenejeros, Malabon, Rizal, na aking namana sa yumao kong kapatid na si Fausto Austria." The tenor of the language used, the petitioners argue, gives rise to the inference that the late Basilia was deceived into believing that she was legally bound to bequeath one-half of her entire estate to the respondents Perfecto Cruz, et al. as the latter's legitime. The petitioners further contend that had the deceased known the adoption to be spurious, she would not have instituted the respondents at all the basis of the institution being solely her belief that they were compulsory heirs. Proof therefore of the falsity of the adoption would cause a nullity of the institution of heirs and the opening of the estate wide to intestacy. Did the lower court then abuse its discretion or act in violation of the rights of the parties in barring the petitioners nephews and niece from registering their claim even to properties adjudicated by the decedent in her will? Before the institution of heirs may be annulled under article 850 of the Civil Code, the following requisites must concur: First, the cause for the institution of heirs must be stated in the will; second, the cause must be shown to be false; and third, it must appear from the face of the will that the testator would not have made such institution if he had known the falsity of the cause. The petitioners would have us imply, from the use of the terms, "sapilitang tagapagmana" (compulsory heirs) and "sapilitang mana" (legitime), that the impelling reason or cause for the institution of the respondents was the testatrix's belief that under the law she could not do otherwise. If this were indeed what prompted the testatrix in instituting the respondents, she did not make it known in her will. Surely if she was aware that succession to the legitime takes place by operation of law, independent of her own wishes, she would not have found it convenient to name her supposed compulsory heirs to their legitimes. Her express adoption of the rules on legitimes should very well indicate her complete agreement with that statutory scheme. But even this, like the petitioners' own proposition, is highly speculative of what was in the mind of the testatrix when she executed her will. One fact prevails, however, and it is that the decedent's will does not state in a specific or unequivocal manner the cause for such institution of heirs. We cannot annul the same on the basis of guesswork or uncertain implications. And even if we should accept the petitioners' theory that the decedent instituted the respondents perfecto Cruz, et al. solely because she believed that the law commanded her to do so, on the false assumption that her adoption of these respondents was valid, still such institution must stand. Article 850 of the Civil Code, quoted above, is a positive injunction to ignore whatever false cause the testator may have written in his will for the institution of heirs. Such institution may be annulled only when one is satisfied, after an examination of the will, that the testator clearly would not have made the institution if he had known the cause for it to be false. Now, would the late Basilia have caused the revocation of the institution of heirs if she had known that she was mistaken in treating these heirs as her legally adopted children? Or would she have instituted them nonetheless? The decedent's will, which alone should provide the answer, is mute on this point or at best is vague and uncertain. The phrases, "mga sapilitang tagapagmana" and "sapilitang mana," were borrowed from the language of the law on succession and were used, respectively, to de scribe the class of heirs instituted and the abstract object of the inheritance. They offer no absolute indication that the decedent would have willed her estate other than the way she did if she had known that she was not bound by law to make allowance for legitimes. Her disposition of the free portion of her estate (libre disposicion) which largely favored the respondent Perfecto Cruz, the latter's children, and the children of the respondent Benita Cruz, shows a perceptible inclination on her part to give to the respondents more than what she thought the law enjoined her to give to them. Compare this with the relatively small devise of land which the decedent had left for her blood relatives, including the petitioners Consuelo Austria-Benta and Lauro Mozo and the children of the petitioner Ruben Austria. Were we to exclude the respondents Perfecto Cruz, et al, from the inheritance, then the petitioners and the other nephews and nieces would succeed to the bulk of the estate by intestacy a result which would subvert the clear wishes of the decedent. Whatever doubts one entertains in his mind should be swept away by these explicit injunctions in the Civil Code: "The words of a will are to receive an interpretation which will give to every expression some effect, rather than one which will render any of the expressions inoperative; and of two modes of interpreting a will, that is to be preferred which will prevent intestacy." 1 Testacy is favored and doubts are resolved on its side, especially where the will evinces an intention on the part of the testator to dispose of practically his whole estate, 2 as was done in this case. Moreover, so compelling is the principle that intestacy should be avoided and the wishes of the testator allowed to prevail, that we could even vary the language of the will for the purpose of giving it effect. 3 A probate court has found, by final judgment, that the late Basilia Austria Vda. de Cruz was possessed of testamentary capacity and her last will executed free from falsification, fraud, trickery or undue influence. In this situation, it becomes our duty to give full expression to her will. 4 At all events, the legality of the adoption of the respondents by the testatrix can be assailed only in a separate action brought for that purpose, and cannot be the subject of a collateral attack. 5 To the petitioners' charge that the lower court had no power to reverse its order of December 22, 1969, suffice it to state that, as borne by the records, the subsequent orders complained of served merely to clarify the first an act which the court could legally do. Every court has the inherent power to amend and control its processes and orders so as to make them conformable to law and justice. 6 That the court a quo has limited the extent of the petitioners' intervention is also within its powers as articulated by the Rules of Court. 7 ACCORDINGLY, the present petition is denied, at petitioners cost. Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Fernando, Teehankee, Barredo and Villamor, JJ., concur.
FIRST DIVISION [G.R. No. 118248. April 5, 2000.] DKC HOLDINGS CORPORATION, petitioner, vs. COURT OF APPEALS, VICTOR U. BARTOLOME and REGISTER OF DEEDS FOR METRO MANILA, DISTRICT III, respondents. De Borja Medialdea Bello Guevarra Separio & Gerodias for petitioner. Jesus E. Mendoza and Oscar I. Mercado for private respondent. SYNOPSIS On March 16, 1988, petitioner entered into a Contract of Lease with Option to Buy with Encarnacion Bartolome, which option must be exercised within a period of two years from the signing thereof. Petitioner undertook to pay P3,000.00 a month as consideration for the reservation of its option. The contract also provided that in case petitioner chose to lease the property, it may take actual possession of the premises. In such an event, the lease shall be for a period of six years, renewable for another six years. Petitioner regularly paid the reservation fee to Encarnacion until her death in January 1990. Thereafter, petitioner paid the reservation fees to private respondent, being the sole heir of Encarnacion. Private respondent, however, refused to accept these payments. On March 14, 1990, petitioner served upon private respondent a notice that it was exercising its option to lease the property, and tendered the rental fee for the month of March. Again, Victor refused to accept the tendered rental fee and to surrender possession of the property to petitioner. Petitioner thus opened a savings account with the China Banking Corporation in the name of private respondent and deposited therein the rental and reservation fees. When petitioner tried to register and annotate the contract on the title of the subject property, the respondent Register of Deeds refused to register or annotate the same. Hence, petitioner filed a complaint for specific performance and damages against private respondent and the Register of Deeds, before the Regional Trial Court of Valenzuela. After trial on the merits, the trial court dismissed the complaint. On appeal, the Court of Appeals affirmed in toto the decision of the trial court. Hence, this petition. Where the service or act is of such a character that it may as well be performed by another, or where the contract by its terms, shows that the performance by others was contemplated, death does not terminate the contract or excuse non-performance. In the case at bar, there was no personal act required from the late Encarnacion Bartolome. Rather, the obligation of Encarnacion in the contract to deliver possession of the subject property to petitioner upon the exercise by the latter of its option to lease the same may very well be performed by her heir Victor. It is futile for private respondent to insist that he is not a party to the contract because of the clear provision of Article 1311 of the Civil Code. Being an heir of Encarnacion, there is privity of interest between him and his deceased mother. He only succeeds to what rights his mother had and what are valid and binding against her is also valid and binding as against him. Moreover, the subject matter of the contract is a lease, which is a property right. cACDaH SYLLABUS 1. CIVIL LAW; CONTRACTS; HEIRS ARE BOUND BY CONTRACTS ENTERED INTO BY THEIR PREDECESSOR-IN-INTEREST; EXCEPTIONS. The general rule is that heirs are bound by contracts entered into by their predecessors-in-interest except when the rights and obligations arising therefrom are not transmissible by (1) their nature, (2) stipulation or (3) provision of law. In the case at bar, there is neither contractual stipulation nor legal provision making the rights and obligations under the contract intransmissible. More importantly, the nature of the rights and obligations therein are, by their nature, transmissible. 2. ID.; ID.; ID.; INTRANSMISSIBLE RIGHTS; EXPLAINED. The nature of intransmissible rights as explained by Arturo Tolentino, an eminent civilist, is as follows: "Among contracts which are intransmissible are those which are purely personal, either by provision of law, such as in cases of partnerships and agency, or by the very nature of the obligations arising therefrom, such as those requiring special personal qualifications of the obligor. It may also be stated that contracts for the payment of money debts are not transmitted to the heirs of a party, but constitute a charge against his estate. Thus, where the client in a contract for professional services of a lawyer died, leaving minor heirs, and the lawyer, instead of presenting his claim for professional services under the contract to the probate court, substituted the minors as parties for his client, it was held that the contact could not be enforced against the minors; the lawyer was limited to a recovery on the basis of quantum meruit." In American jurisprudence, "(W)here acts stipulated in a contract require the exercise of special knowledge, genius, skill, taste, ability, experience, judgment, discretion, integrity, or other personal qualification of one or both parties, the agreement is of a personal nature, and terminates on the death of the party who is required to render such service." 3. ID.; ID.; DEATH DOES NOT TERMINATE A CONTRACT OR EXCUSE NON-PERFORMANCE THEREOF WHERE THE CONTRACT, BY ITS TERMS, SHOWS THAT PERFORMANCE BY OTHERS WAS CONTEMPLATED. It has been held that a good measure for determining whether a contract terminates upon the death of one of the parties is whether it is of such a character that it may be performed by the promissor's personal representative. Contracts to perform personal acts which cannot be as well performed by others are discharged by the death of the promissor. Conversely, where the service or act is of such a character that it may as well be performed by another, or where the contract, by its terms, shows that performance by others was contemplated, death does not terminate the contract or excuse nonperformance. In the case at bar, there is no personal act required from the late Encarnacion Bartolome. Rather, the obligation of Encarnacion in the contract to deliver possession of the subject property to petitioner upon the exercise by the latter of its option to lease the same may very well be performed by her heir Victor. 4. ID.; ID.; HEIR SUCCEEDS TO WHAT RIGHTS HIS PREDECESSOR-IN-INTEREST HAD AND WHAT IS VALID AND BINDING AGAINST THE LATTER IS ALSO VALID AND BINDING AGAINST HIM. As early as 1903, it was held that "(H)e who contracts does so for himself and his heirs." In 1952, it was ruled that if the predecessor was duty-bound to reconvey land to another, and at his death the reconveyance had not been made, the heirs can be compelled to execute the proper deed for reconveyance. This was grounded upon the principle that heirs cannot escape the legal consequence of a transaction entered into by their predecessor-in-interest because they have inherited the property subject to the liability affecting their common ancestor. It is futile for Victor to insist that he is not a party to the contract because of the clear provision of Article 1311 of the Civil Code. Indeed, being an heir of Encarnacion, there is privity of interest between him and his deceased mother. He only succeeds to what rights his mother had and what is valid and binding against her is also valid and binding as against him. This is clear from Paraaque Kings Enterprises vs. Court of Appeals, where the Court rejected a similar defense . . . . 5. ID.; ID.; NON-PERFORMANCE OF A CONTRACT IS NOT EXCUSED BY DEATH OF PARTY WHEN OTHER PARTY HAS PROPERTY INTEREST IN SUBJECT MATTER THEREOF. In the case at bar, the subject matter of the contract is a lease, which is a property right. The death of a party does not excuse nonperformance of a contract which involves a property right, and the rights and obligations thereunder pass to the personal representatives of the deceased. Similarly, nonperformance is not excused by the death of the party when the other party has a property interest in the subject matter of the contract. Under both Article 1311 of the Civil Code and jurisprudence, therefore, Victor is bound by the subject Contract of Lease with Option to Buy. EDCcaS 6. ID.; ID.; CONTRACT OF LEASE WITH OPTION TO BUY; PRIVATE RESPONDENT HAS OBLIGATION TO SURRENDER POSSESSION OF LAND AND LEASE THE PREMISES TO PETITIONER. The payment by petitioner of the reservation fees during the two-year period within which it had the option to lease or purchase the property is not disputed. In fact, the payment of such reservation fees, except those for February and March, 1990 were admitted by Victor. Petitioner also paid the P15,000.00 monthly rental fee on the subject property by depositing the same in China Bank Savings Account No. 1-04-02558-I-1, in the name of Victor as the sole heir of Encarnacion Bartolome, for the months of March to July 30, 1990, or a total of five (5) months, despite the refusal of Victor to turn over the subject property. Likewise, petitioner complied with its duty to inform the other party of its intention to exercise its option to lease through its letter dated March 12, 1990, well within the two-year period for it to exercise its option. Considering that at the time Encarnacion Bartolome had already passed away, it was legitimate for petitioner to have addressed its letter to her heir. It appears, therefore, that the exercise by petitioner of its option to lease the subject property was made in accordance with the contractual provisions. Concomitantly, private respondent Victor Bartolome has the obligation to surrender possession of and lease the premises to petitioner for a period of six (6) years, pursuant to the Contract of Lease with Option to Buy. 7. LABOR AND SOCIAL LEGISLATION; TENANCY ISSUE; NOT FOR SUPREME COURT TO PASS UPON IN PRESENT PETITION. Coming now to the issue of tenancy, we find that this is not for this Court to pass upon in the present petition. We note that the Motion to Intervene and to Dismiss of the alleged tenant, Andres Lanozo, was denied by the lower court and that such denial was never made the subject of an appeal. As the lower court stated in its Order, the alleged right of the tenant may well be ventilated in another proceeding in due time. D E C I S I O N YNARES-SANTIAGO, J p: This is a petition for review on certiorari seeking the reversal of the December 5, 1994 Decision of the Court of Appeals in CA-G.R. CV No. 40849 entitled "DKC Holdings Corporation vs. Victor U. Bartolome, et al.", 1 affirming in toto the January 4, 1993 Decision of the Regional Trial Court of Valenzuela, Branch 172, 2 which dismissed Civil Case No. 3337-V-90 and ordered petitioner to pay P30,000.00 as attorneys fees. cdrep The subject of the controversy is a 14,021 square meter parcel of land located in Malinta, Valenzuela, Metro Manila which was originally owned by private respondent Victor U. Bartolomes deceased mother, Encarnacion Bartolome, under Transfer Certificate of Title No. B-37615 of the Register of Deeds of Metro Manila, District III. This lot was in front of one of the textile plants of petitioner and, as such, was seen by the latter as a potential warehouse site. On March 16, 1988, petitioner entered into a Contract of Lease with Option to Buy with Encarnacion Bartolome, whereby petitioner was given the option to lease or lease with purchase the subject land, which option must be exercised within a period of two years counted from the signing of the Contract. In turn, petitioner undertook to pay P3,000.00 a month as consideration for the reservation of its option. Within the two-year period, petitioner shall serve formal written notice upon the lessor Encarnacion Bartolome of its desire to exercise its option. The contract also provided that in case petitioner chose to lease the property, it may take actual possession of the premises. In such an event, the lease shall be for a period of six years, renewable for another six years, and the monthly rental fee shall be P15,000.00 for the first six years and P18,000.00 for the next six years, in case of renewal. Petitioner regularly paid the monthly P3,000.00 provided for by the Contract to Encarnacion until her death in January 1990. Thereafter, petitioner coursed its payment to private respondent Victor Bartolome, being the sole heir of Encarnacion. Victor, however, refused to accept these payments. Meanwhile, on January 10, 1990, Victor executed an Affidavit of Self-Adjudication over all the properties of Encarnacion, including the subject lot. Accordingly, respondent Register of Deeds cancelled Transfer Certificate of Title No. B-37615 and issued Transfer Certificate of Title No. V-14249 in the name of Victor Bartolome. On March 14, 1990, petitioner served upon Victor, via registered mail, notice that it was exercising its option to lease the property, tendering the amount of P15,000.00 as rent for the month of March. Again, Victor refused to accept the tendered rental fee and to surrender possession of the property to petitioner. Petitioner thus opened Savings Account No. 1-04-02558-I-1 with the China Banking Corporation, Cubao Branch, in the name of Victor Bartolome and deposited therein the P15,000.00 rental fee for March as well as P6,000.00 reservation fees for the months of February and March. Petitioner also tried to register and annotate the Contract on the title of Victor to the property. Although respondent Register of Deeds accepted the required fees, he nevertheless refused to register or annotate the same or even enter it in the day book or primary register. Thus, on April 23, 1990, petitioner filed a Complaint for specific performance and damages against Victor and the Register of Deeds, 3 docketed as Civil Case No. 3337-V-90 which was raffled off to Branch 171 of the Regional Trial Court of Valenzuela. Petitioner prayed for the surrender and delivery of possession of the subject land in accordance with the Contract terms; the surrender of title for registration and annotation thereon of the Contract; and the payment of P500,000.00 as actual damages, P500,000.00 as moral damages, P500,000.00 as exemplary damages and P300,000.00 as attorneys fees. Meanwhile, on May 8, 1990, a Motion for Intervention with Motion to Dismiss 4 was filed by one Andres Lanozo, who claimed that he was and has been a tenant-tiller of the subject property, which was agricultural riceland, for forty-five years. He questioned the jurisdiction of the lower court over the property and invoked the Comprehensive Agrarian Reform Law to protect his rights that would be affected by the dispute between the original parties to the case. On May 18, 1990, the lower court issued an Order 5 referring the case to the Department of Agrarian Reform for preliminary determination and certification as to whether it was proper for trial by said court. On July 4, 1990, the lower court issued another Order 6 referring the case to Branch 172 of the RTC of Valenzuela which was designated to hear cases involving agrarian land, after the Department of Agrarian Reform issued a letter-certification stating that referral to it for preliminary determination is no longer required. On July 16, 1990, the lower court issued an Order denying the Motion to Intervene, 7 holding that Lanozos rights may well be ventilated in another proceeding in due time. After trial on the merits, the RTC of Valenzuela, branch 172 rendered its Decision on January 4, 1993, dismissing the Complaint and ordering petitioner to pay Victor P30,000.00 as attorneys fees. On appeal to the CA, the Decision was affirmed in toto. Hence, the instant Petition assigning the following errors: (A) FIRST ASSIGNMENT OF ERROR THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE PROVISION ON THE NOTICE TO EXERCISE OPTION WAS NOT TRANSMISSIBLE. (B) SECOND ASSIGNMENT OF ERROR THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE NOTICE OF OPTION MUST BE SERVED BY DKC UPON ENCARNACION BARTOLOME PERSONALLY. (C) THIRD ASSIGNMENT OF ERROR THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE CONTRACT WAS ONE-SIDED AND ONEROUS IN FAVOR OF DKC. (D) FOURTH ASSIGNMENT OF ERROR THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE EXISTENCE OF A REGISTERED TENANCY WAS FATAL TO THE VALIDITY OF THE CONTRACT. (E) FIFTH ASSIGNMENT OF ERROR THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT PLAINTIFF-APPELLANT WAS LIABLE TO DEFENDANT-APPELLEE FOR ATTORNEYS FEES. 8 The issue to be resolved in this case is whether or not the Contract of Lease with Option to Buy entered into by the late Encarnacion Bartolome with petitioner was terminated upon her death or whether it binds her sole heir, Victor, even after her demise.
Both the lower court and the Court of Appeals held that the said contract was terminated upon the death of Encarnacion Bartolome and did not bind Victor because he was not a party thereto. Article 1311 of the Civil Code provides, as follows- "ARTICLE 1311. Contracts take effect only between the parties, their assigns and heirs, except in case where the rights and obligations arising from the contract are not transmissible by their nature, or by stipulation or by provision of law. The heir is not liable beyond the value of the property he received from the decedent. xxx xxx xxx." The general rule, therefore, is that heirs are bound by contracts entered into by their predecessors-in- interest except when the rights and obligations arising therefrom are not transmissible by (1) their nature, (2) stipulation or (3) provision of law. In the case at bar, there is neither contractual stipulation nor legal provision making the rights and obligations under the contract intransmissible. More importantly, the nature of the rights and obligations therein are, by their nature, transmissible. The nature of intransmissible rights as explained by Arturo Tolentino, an eminent civilist, is as follows: cdrep "Among contracts which are intransmissible are those which are purely personal, either by provision of law, such as in cases of partnerships and agency, or by the very nature of the obligations arising therefrom, such as those requiring special personal qualifications of the obligor. It may also be stated that contracts for the payment of money debts are not transmitted to the heirs of a party, but constitute a charge against his estate. Thus, where the client in a contract for professional services of a lawyer died, leaving minor heirs, and the lawyer, instead of presenting his claim for professional services under the contract to the probate court, substituted the minors as parties for his client, it was held that the contract could not be enforced against the minors; the lawyer was limited to a recovery on the basis of quantum meruit." 9 In American jurisprudence, "(W)here acts stipulated in a contract require the exercise of special knowledge, genius, skill, taste, ability, experience, judgment, discretion, integrity, or other personal qualification of one or both parties, the agreement is of a personal nature, and terminates on the death of the party who is required to render such service." 10 It has also been held that a good measure for determining whether a contract terminates upon the death of one of the parties is whether it is of such a character that it may be performed by the promissors personal representative. Contracts to perform personal acts which cannot be as well performed by others are discharged by the death of the promissor. Conversely, where the service or act is of such a character that it may as well be performed by another, or where the contract, by its terms, shows that performance by others was contemplated, death does not terminate the contract or excuse nonperformance. 11 In the case at bar, there is no personal act required from the late Encarnacion Bartolome. Rather, the obligation of Encarnacion in the contract to deliver possession of the subject property to petitioner upon the exercise by the latter of its option to lease the same may very well be performed by her heir Victor. As early as 1903, it was held that "(H)e who contracts does so for himself and his heirs." 12 In 1952, it was ruled that if the predecessor was duty-bound to reconvey land to another, and at his death the reconveyance had not been made, the heirs can be compelled to execute the proper deed for reconveyance. This was grounded upon the principle that heirs cannot escape the legal consequence of a transaction entered into by their predecessor-in-interest because they have inherited the property subject to the liability affecting their common ancestor. 13 It is futile for Victor to insist that he is not a party to the contract because of the clear provision of Article 1311 of the Civil Code. Indeed, being an heir of Encarnacion, there is privity of interest between him and his deceased mother. He only succeeds to what rights his mother had and what is valid and binding against her is also valid and binding as against him. 14 This is clear from Paraaque Kings Enterprises vs. Court of Appeals, 15 where this Court rejected a similar defense With respect to the contention of respondent Raymundo that he is not privy to the lease contract, not being the lessor nor the lessee referred to therein, he could thus not have violated its provisions, but he is nevertheless a proper party. Clearly, he stepped into the shoes of the owner-lessor of the land as, by virtue of his purchase, he assumed all the obligations of the lessor under the lease contract. Moreover, he received benefits in the form of rental payments. Furthermore, the complaint, as well as the petition, prayed for the annulment of the sale of the properties to him. Both pleadings also alleged collusion between him and respondent Santos which defeated the exercise by petitioner of its right of first refusal. In order then to accord complete relief to petitioner, respondent Raymundo was a necessary, if not indispensable, party to the case. A favorable judgment for the petitioner will necessarily affect the rights of respondent Raymundo as the buyer of the property over which petitioner would like to assert its right of first option to buy. In the case at bar, the subject matter of the contract is likewise a lease, which is a property right. The death of a party does not excuse nonperformance of a contract which involves a property right, and the rights and obligations thereunder pass to the personal representatives of the deceased. Similarly, nonperformance is not excused by the death of the party when the other party has a property interest in the subject matter of the contract. 16 Under both Article 1311 of the Civil Code and jurisprudence, therefore, Victor is bound by the subject Contract of Lease with Option to Buy. That being resolved, we now rule on the issue of whether petitioner had complied with its obligations under the contract and with the requisites to exercise its option. The payment by petitioner of the reservation fees during the two-year period within which it had the option to lease or purchase the property is not disputed. In fact, the payment of such reservation fees, except those for February and March, 1990 were admitted by Victor. 17 This is clear from the transcripts, to wit "ATTY. MOJADO: One request, Your Honor. The last payment which was allegedly made in January 1990 just indicate in that stipulation that it was issued November of 1989 and postdated January 1990 and then we will admit all. COURT: All reservation fee? ATTY. MOJADO: Yes, Your Honor. COURT: All as part of the lease? ATTY. MOJADO: Reservation fee, Your Honor. There was no payment with respect to payment of rentals." 18 Petitioner also paid the P15,000.00 monthly rental fee on the subject property by depositing the same in China Bank Savings Account No. 1-04-02558-I-1, in the name of Victor as the sole heir of Encarnacion Bartolome, 19 for the months of March to July 30, 1990, or a total of five (5) months, despite the refusal of Victor to turn over the subject property. 20 Likewise, petitioner complied with its duty to inform the other party of its intention to exercise its option to lease through its letter dated March 12, 1990, 21 well within the two-year period for it to exercise its option. Considering that at that time Encarnacion Bartolome had already passed away, it was legitimate for petitioner to have addressed its letter to her heir. It appears, therefore, that the exercise by petitioner of its option to lease the subject property was made in accordance with the contractual provisions. Concomitantly, private respondent Victor Bartolome has the obligation to surrender possession of and lease the premises to petitioner for a period of six (6) years, pursuant to the Contract of Lease with Option to Buy. Coming now to the issue of tenancy, we find that this is not for this Court to pass upon in the present petition. We note that the Motion to Intervene and to Dismiss of the alleged tenant, Andres Lanozo, was denied by the lower court and that such denial was never made the subject of an appeal. As the lower court stated in its Order, the alleged right of the tenant may well be ventilated in another proceeding in due time. WHEREFORE, in view of the foregoing, the instant Petition for Review is GRANTED. The Decision of the Court of Appeals in CA-G.R. CV No. 40849 and that of the Regional Trial Court of Valenzuela in Civil Case No. 3337-V-90 are both SET ASIDE and a new one rendered ordering private respondent Victor Bartolome to: (a) surrender and deliver possession of that parcel of land covered by Transfer Certificate of Title No. V-14249 by way of lease to petitioner and to perform all obligations of his predecessor-in-interest, Encarnacion Bartolome, under the subject Contract of Lease with Option to Buy; (b) surrender and deliver his copy of Transfer Certificate of Title No. V-14249 to respondent Register of Deeds for registration and annotation thereon of the subject Contract of Lease with Option to Buy; (c) pay costs of suit. Respondent Register of Deeds is, accordingly, ordered to register and annotate the subject Contract of Lease with Option to Buy at the back of Transfer Certificate of Title No. V-14249 upon submission by petitioner of a copy thereof to his office. cdll SO ORDERED. Davide, Jr., C.J., Puno, Kapunan and Pardo, JJ., concur.
FIRST DIVISION [G.R. No. 124371. November 23, 2000.] PAULA T. LLORENTE, petitioner, vs. COURT OF APPEALS and ALICIA F. LLORENTE, respondents. E.A. Dacanay for petitioner. Pardalis, Navarro & Sales for private respondents. SYNOPSIS The deceased Lorenzo N. Llorente was an enlisted serviceman of the United States Navy from 1927 to 1957 and a naturalized American citizen. On February 22, 1937, Lorenzo married petitioner Paula Llorente. Before the outbreak of the Pacific War, Lorenzo departed for the United States and Paula stayed in the conjugal home in barrio Antipolo, Nabua, Camarines Sur. When Lorenzo returned to the Philippines to visit his wife in 1945, he discovered that his wife Paula was pregnant and was "living in" and having an adulterous relationship with his brother, Ceferino Llorente. Lorenzo refused to forgive Paula and live with her. Lorenzo returned to the United States and filed for divorce with the Superior Court of the State of California in and for the County of San Diego. Paula was represented by counsel, John Riley, and actively participated in the proceedings. The Superior Court of the State of California, for the County of San Diego found all factual allegations to be true and issued an interlocutory judgment of divorce. The divorce decree became final in 1952. On January 16, 1958, Lorenzo married Alicia F. Llorente in Manila. Apparently, Alicia had no knowledge of the first marriage even if they resided in the same town as Paula, who did not oppose the marriage or cohabitation. From 1958 to 1985, Lorenzo and Alicia lived together as husband and wife and produced three children, Raul, Luz and Beverly, all surnamed Llorente. On March 13, 1981, Lorenzo executed a Last Will and Testament. In the will, Lorenzo bequeathed all his property to Alicia and their three children. On December 14, 1983, Lorenzo filed with the Regional Trial Court, Iriga, Camarines Sur, a petition for the probate and allowance of his last will and testament wherein Lorenzo moved that Alicia be appointed Special Administratrix of his estate. The trial court admitted the will to probate. On June 11, 1985, before the proceedings could be terminated, Lorenzo died. Paula filed with the same court a petition for letters of administration over Lorenzo's estate in her favor. Alicia also filed in the testate proceeding a petition for the issuance of letters testamentary. The trial court denied Alicia's petition and ruled that the divorce decree granted to the late Lorenzo Llorente was void and inapplicable in the Philippines, therefore, her marriage to Lorenzo was likewise void. The trial court appointed Paula Llorente as legal administrator of the estate of the deceased, Lorenzo Llorente. Respondent Alicia filed with the trial court a motion for reconsideration, but was denied. Alicia appealed to the Court of Appeals. The appellate court promulgated its decision, affirming with modification the decision of the trial court. The trial court declared Alicia as co-owner of whatever properties she and the deceased Lorenzo may have acquired during the twenty-five (25) years of cohabitation. Petitioner Paula moved for reconsideration, but was denied for lack of merit. Hence, the present petition. DaHcAS The Supreme Court reversed and set aside the ruling of the trial court and recognized as valid and as a matter of comity the decree of divorce granted in favor of the deceased Lorenzo N. Llorente by the Superior Court of the State of California in and for the County of San Diego, made final on December 4, 1952. According to the Court, the "national law" indicated in Article 16 of the Civil Code cannot possibly apply to the general American law. There is no such law governing the validity of testamentary provisions in the United States. Each State of the union has its own law applicable to its citizens and in force only within the State. It can, therefore, refer to no other than the law of the State of which the decedent was a resident and there was also no showing that the application of the renvoi doctrine was called for or required by New York State law. The Court also said that the clear intent of Lorenzo to bequeath his property to his second wife and children by her was glaringly shown in the will he executed and the Court did not wish to frustrate Lorenzo's wishes, since he was a foreigner, not covered by Philippine laws on family rights and duties, status, condition and legal capacity. The Court remanded the cases to the court of origin for determination of the intrinsic validity of Lorenzo N. Llorente's will and determination of the parties' successional rights allowing proof of foreign law. SYLLABUS 1. CIVIL LAW; PRIVATE INTERNATIONAL LAW; RENVOI DOCTRINE; NOT APPLICABLE IN CASE AT BAR. True, foreign laws do not prove themselves in our jurisdiction and our courts are not authorized to take judicial notice of them. Like any other fact, they must be alleged and proved. While the substance of the foreign law was pleaded, the Court of Appeals did not admit the foreign law. The Court of Appeals and the trial court called to the fore the renvoi doctrine, where the case was "referred back" to the law of the decedent's domicile, in this case, Philippine law. We note that while the trial court stated that the law of New York was not sufficiently proven, in the same breath it made the categorical, albeit equally unproven statement that "American law follows the 'domiciliary theory, hence, Philippine law applies when determining the validity of Lorenzo's will. First, there is no such thing as one American law. The "national law" indicated in Article 16 of the Civil Code cannot possibly apply to general American law. There is no such law governing the validity of testamentary provisions in the United States. Each State of the union has its own law applicable to its citizens and in force only within the State. It can therefore refer to no other than the law of the State of which the decedent was a resident. Second, there is no showing that the application of the renvoi doctrine is called for or required by New York State law. The trial court held that the will was intrinsically invalid since it contained dispositions in favor of Alice, who in the trial court's opinion was a mere paramour. The trial court threw the will out, leaving Alice, and her two children, Raul and Luz, with nothing. The Court of Appeals also disregarded the will. It declared Alice entitled to one half () of whatever property she and Lorenzo acquired during their cohabitation, applying Article 144 of the Civil Code of the Philippines. The hasty application of Philippine law and the complete disregard of the will, already probated as duly executed in accordance with the formalities of Philippine law, is fatal, especially in light of the factual and legal circumstances here obtaining. 2. ID.; ID.; VALIDITY OF FOREIGN DIVORCE; DIVORCE OBTAINED BY PETITIONER'S HUSBAND ABROAD VALID AND RECOGNIZED BY PHILIPPINE LAWS AS A MATTER OF COMITY; SETTLED DOCTRINES. In Van Dorn v. Romillo, Jr., we held 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. In the same case, the Court ruled that aliens may obtain divorces abroad, provided they are valid according to their national law. Citing this landmark case, the Court held in Quita v. Court of Appeals, that once proven that respondent was no longer a Filipino citizen when he obtained the divorce from petitioner, the ruling in Van Dorn would become applicable and petitioner could "very well lose her right to inherit" from him. In Pilapil v. Ibay- Somera, we recognized the divorce obtained by the respondent in his country, the Federal Republic of Germany. There, we stated that 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. For failing to apply these doctrines, the decision of the Court of Appeals must be reversed. We hold that the divorce obtained by Lorenzo H. Llorente from his first wife Paula was valid and recognized in this jurisdiction as a matter of comity. Now, the effects of this divorce (as to the succession to the estate of the decedent) are matters best left to the determination of the trial court. IcESDA 3. ID.; ID.; FORMALITIES OF WILL EXECUTED BY FOREIGN NATIONALS SHALL BE GOVERNED BY PHILIPPINE LAW; DETERMINATION OF SUCCESSIONAL RIGHTS BEST PROVED BY FOREIGN LAW WHICH MUST BE DULY PLEADED AND PROVED; CASE AT BAR. The clear intent of Lorenzo to bequeath his property to his second wife and children by her is glaringly shown in the will he executed. We do not wish to frustrate his wishes, since he was a foreigner, not covered by our laws on "family rights and duties, status, condition and legal capacity." Whether the will is intrinsically valid and who shall inherit from Lorenzo are issues best proved by foreign law which must be pleaded and proved. Whether the will was executed in accordance with the formalities required is answered by referring to Philippine law. In fact, the will was duly probated. As a guide however, the trial court should note that whatever public policy or good customs may be involved in our system of legitimes, Congress did not intend to extend the same to the succession of foreign nationals. Congress specifically left the amount of successional rights to the decedent's national law. D E C I S I O N PARDO, J p: The Case The case raises a conflict of laws issue. ADTEaI What is before us is an appeal from the decision of the Court of Appeals 1 modifying that of the Regional Trial Court, Camarines Sur, Branch 35, Iriga City 2 declaring respondent Alicia F. Llorente (hereinafter referred to as "Alicia"), as co-owners of whatever property she and the deceased Lorenzo N. Llorente (hereinafter referred to as "Lorenzo") may have acquired during the twenty-five (25) years that they lived together as husband and wife. The Facts The deceased Lorenzo N. Llorente was an enlisted serviceman of the United States Navy from March 10, 1927 to September 30, 1957. 3 On February 22, 1937, Lorenzo and petitioner Paula Llorente (hereinafter referred to as "Paula") were married before a parish priest, Roman Catholic Church, in Nabua, Camarines Sur. 4 Before the outbreak of the Pacific War, Lorenzo departed for the United States and Paula stayed in the conjugal home in barrio Antipolo, Nabua, Camarines Sur. 5 On November 30, 1943, Lorenzo was admitted to United States citizenship and Certificate of Naturalization No. 5579816 was issued in his favor by the United States District Court, Southern District of New York. 6 Upon the liberation of the Philippines by the American Forces in 1945, Lorenzo was granted an accrued leave by the U.S. Navy, to visit his wife and he visited the Philippines. 7 He discovered that his wife Paula was pregnant and was "living in" and having an adulterous relationship with his brother, Ceferino Llorente. 8 On December 4, 1945, Paula gave birth to a boy registered in the Office of the Registrar of Nabua as "Crisologo Llorente," with the certificate stating that the child was not legitimate and the line for the father's name was left blank. 9 Lorenzo refused to forgive Paula and live with her. In fact, on February 2, 1946, the couple drew a written agreement to the effect that (1) all the family allowances allotted by the United States Navy as part of Lorenzo's salary and all other obligations for Paula's daily maintenance and support would be suspended; (2) they would dissolve their marital union in accordance with judicial proceedings; (3) they would make a separate agreement regarding their conjugal property acquired during their marital life; and (4) Lorenzo would not prosecute Paula for her adulterous act since she voluntarily admitted her fault and agreed to separate from Lorenzo peacefully. The agreement was signed by both Lorenzo and Paula and was witnessed by Paula's father and stepmother. The agreement was notarized by Notary Public Pedro Osabel. 10 Lorenzo returned to the United States and on November 16, 1951 filed for divorce with the Superior Court of the State of California in and for the County of San Diego. Paula was represented by counsel, John Riley, and actively participated in the proceedings. On November 27, 1951, the Superior Court of the State of California, for the County of San Diego found all factual allegations to be true and issued an interlocutory judgment of divorce. 11 On December 4, 1952, the divorce decree became final. 12 In the meantime, Lorenzo returned to the Philippines. CADHcI On January 16, 1958, Lorenzo married Alicia F. Llorente in Manila. 13 Apparently, Alicia had no knowledge of the first marriage even if they resided in the same town as Paula, who did not oppose the marriage or cohabitation. 14 From 1958 to 1985, Lorenzo and Alicia lived together as husband and wife. 15 Their twenty-five (25) year union produced three children, Raul, Luz and Beverly, all surnamed Llorente. 16 On March 13, 1981, Lorenzo executed a Last Will and Testament. The will was notarized by Notary Public Salvador M. Occiano, duly signed by Lorenzo with attesting witnesses Francisco Hugo, Francisco Neibres and Tito Trajano. In the will, Lorenzo bequeathed all his property to Alicia and their three children, to wit: "(1) I give and bequeath to my wife ALICIA R. FORTUNO exclusively my residential house and lot, located at San Francisco, Nabua, Camarines Sur, Philippines, including ALL the personal properties and other movables or belongings that may be found or existing therein; "(2) I give and bequeath exclusively to my wife Alicia R. Fortuno and to my children, Raul F. Llorente, Luz F. Llorente and Beverly F. Llorente, in equal shares, all my real properties whatsoever and wheresoever located, specifically my real properties located at Barangay Aro-Aldao, Nabua, Camarines Sur; Barangay Paloyon, Nabua, Camarines Sur; Barangay Baras, Sitio Puga, Nabua, Camarines Sur; and Barangay Paloyon, Sitio Nalilidong, Nabua, Camarines Sur; HDIaST "(3) I likewise give and bequeath exclusively unto my wife Alicia R. Fortuno and unto my children, Raul F. Llorente, Luz F. Llorente and Beverly F. Llorente, in equal shares, my real properties located in Quezon City Philippines, and covered by Transfer Certificate of Title No. 188652; and my lands in Antipolo, Rizal, Philippines, covered by Transfer Certificate of Title Nos. 124196 and 165188, both of the Registry of Deeds of the province of Rizal, Philippines; "(4) That their respective shares in the above-mentioned properties, whether real or personal properties, shall not be disposed of, ceded, sold and conveyed to any other persons, but could only be sold, ceded, conveyed and disposed of by and among themselves; "(5) I designate my wife ALICIA R. FORTUNO to be the sole executor of this my Last Will and Testament, and in her default or incapacity of the latter to act, any of my children in the order of age, if of age; "(6) I hereby direct that the executor named herein or her lawful substitute should served (sic) without bond; "(7) I hereby revoke any and all my other wills, codicils, or testamentary dispositions heretofore executed, signed, or published, by me; "(8) It is my final wish and desire that if I die, no relatives of mine in any degree in the Llorente's Side should ever bother and disturb in any manner whatsoever my wife Alicia R. Fortunato and my children with respect to any real or personal properties I gave and bequeathed respectively to each one of them by virtue of this Last Will and Testament." 17 On December 14, 1983, Lorenzo filed with the Regional Trial Court, Iriga, Camarines Sur, a petition for the probate and allowance of his last will and testament wherein Lorenzo moved that Alicia be appointed Special Administratrix of his estate. 18 On January 18, 1984, the trial court denied the motion for the reason that the testator Lorenzo was still alive. 19 On January 24, 1984, finding that the will was duly executed, the trial court admitted the will to probate. 20 On June 11, 1985, before the proceedings could be terminated, Lorenzo died. 21 On September 4, 1985, Paula filed with the same court a petition 22 for letters of administration over Lorenzo's estate in her favor. Paula contended (1) that she was Lorenzo's surviving spouse, (2) that the various property were acquired during their marriage, (3) that Lorenzo's will disposed of all his property in favor of Alicia and her children, encroaching on her legitime and 1/2 share in the conjugal property. 23 On December 13, 1985, Alicia filed in the testate proceeding (Sp. Proc. No. IR-755), a petition for the issuance of letters testamentary. 24 On October 14, 1985, without terminating the testate proceedings, the trial court gave due course to Paula's petition in Sp. Proc. No. IR-888. 25 On November 6, 13 and 20, 1985, the order was published in the newspaper "Bicol Star". 26 On May 18, 1987, the Regional Trial Court issued a joint decision, thus: ISaCTE "Wherefore, considering that this court has so found that the divorce decree granted to the late Lorenzo Llorente is void and inapplicable in the Philippines, therefore the marriage he contracted with Alicia Fortunato on January 16, 1958 at Manila is likewise void. This being so the petition of Alicia F. Llorente for the issuance of letters testamentary is denied. Likewise, she is not entitled to receive any share from the estate even if the will especially said so her relationship with Lorenzo having gained the status of paramour which is under Art. 739 (1). "On the other hand, the court finds the petition of Paula Titular Llorente, meritorious, and so declares the intrinsic disposition of the will of Lorenzo Llorente dated March 13, 1981 as void and declares her entitled as conjugal partner and entitled to one-half of their conjugal properties, and as primary compulsory heir, Paula T. Llorente is also entitled to one-third of the estate and then one-third should go to the illegitimate children, Raul, Luz and Beverly, all surname (sic) Llorente, for them to partition in equal shares and also entitled to the remaining free portion in equal shares. "Petitioner, Paula Llorente is appointed legal administrator of the estate of the deceased, Lorenzo Llorente. As such let the corresponding letters of administration issue in her favor upon her filing a bond in the amount (sic) of P100,000.00 conditioned for her to make a return to the court within three (3) months a true and complete inventory of all goods, chattels, rights, and credits, and estate which shall at any time come to her possession or to the possession of any other person for her, and from the proceeds to pay and discharge all debts, legacies and charges on the same, or such dividends thereon as shall be decreed or required by this court; to render a true and just account of her administration to the court within one (1) year, and at any other time when required by the court and to perform all orders of this court by her to be performed. "On the other matters prayed for in respective petitions for want of evidence could not be granted. TaHIDS "SO ORDERED." 27 In time, Alicia filed with the trial court a motion for reconsideration of the aforequoted decision. 28 On September 14, 1987, the trial court denied Alicia's motion for reconsideration but modified its earlier decision, stating that Raul and Luz Llorente are not children "legitimate or otherwise" of Lorenzo since they were not legally adopted by him. 29 Amending its decision of May 18, 1987, the trial court declared Beverly Llorente as the only illegitimate child of Lorenzo, entitling her to one-third (1/3) of the estate and one-third (1/3) of the free portion of the estate. 30 On September 28, 1987, respondent appealed to the Court of Appeals. 31 On July 31, 1995, the Court of Appeals promulgated its decision, affirming with modification the decision of the trial court in this wise: "WHEREFORE, the decision appealed from is hereby AFFIRMED with the MODIFICATION that Alicia is declared as co-owner of whatever properties she and the deceased may have acquired during the twenty-five (25) years of cohabitation. "SO ORDERED." 32 On August 25, 1995, petitioner filed with the Court of Appeals a motion for reconsideration of the decision. 33 On March 21, 1996, the Court of Appeals, 34 denied the motion for lack of merit. Hence, this petition. 35 The Issue Stripping the petition of its legalese and sorting through the various arguments raised, 36 the issue is simple. Who are entitled to inherit from the late Lorenzo N. Llorente? We do not agree with the decision of the Court of Appeals. We remand the case to the trial court for ruling on the intrinsic validity of the will of the deceased. The Applicable Law The fact that the late Lorenzo N. Llorente became an American citizen long before and at the time of: (1) his divorce from Paula; (2) marriage to Alicia; (3) execution of his will; and (4) death, is duly established, admitted and undisputed. Thus, as a rule, issues arising from these incidents are necessarily governed by foreign law. The Civil Code clearly provides: "ARTICLE 15. Laws relating to family rights and duties, or to the status, condition and legal capacity of persons are binding upon citizens of the Philippines, even though living abroad. SCcHIE "ARTICLE 16. Real property as well as personal property is subject to the law of the country where it is situated. "However, intestate and testamentary succession, both with respect to the order of succession and to the amount of successional rights and to the intrinsic validity of testamentary provisions, shall be regulated by the national law of the person whose succession is under consideration, whatever may be the nature of the property and regardless of the country wherein said property may be found." (italics ours) True, foreign laws do not prove themselves in our jurisdiction and our courts are not authorized to take judicial notice of them. Like any other fact, they must be alleged and proved. 37 While the substance of the foreign law was pleaded, the Court of Appeals did not admit the foreign law. The Court of Appeals and the trial court called to the fore the renvoi doctrine, where the case was "referred back" to the law of the decedent's domicile, in this case, Philippine law. We note that while the trial court stated that the law of New York was not sufficiently proven, in the same breath it made the categorical, albeit equally unproven statement that "American law" follows the 'domiciliary theory' hence, Philippine law applies when determining the validity of Lorenzo's will. 38 First, there is no such thing as one American law. The "national law" indicated in Article 16 of the Civil Code cannot possibly apply to general American law. There is no such law governing the validity of testamentary provisions in the United States. Each State of the union has its own law applicable to its citizens and in force only within the State. It can therefore refer to no other than the law of the State of which the decedent was a resident. 39 Second, there is no showing that the application of the renvoi doctrine is called for or required by New York State law. SDTIHA The trial court held that the will was intrinsically invalid since it contained dispositions in favor of Alice, who in the trial court's opinion was a mere paramour. The trial court threw the will out, leaving Alice, and her two children, Raul and Luz, with nothing. The Court of Appeals also disregarded the will. It declared Alice entitled to one half (1/2) of whatever property she and Lorenzo acquired during their cohabitation, applying Article 144 of the Civil Code of the Philippines. The hasty application of Philippine law and the complete disregard of the will, already probated as duly executed in accordance with the formalities of Philippine law, is fatal, especially in light of the factual and legal circumstances here obtaining. Validity of the Foreign Divorce In Van Dorn v. Romillo, Jr. 40 we held 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. In the same case, the Court ruled that aliens may obtain divorces abroad, provided they are valid according to their national law. Citing this landmark case, the Court held in Quita v. Court of Appeals, 41 that once proven that respondent was no longer a Filipino citizen when he obtained the divorce from petitioner, the ruling in Van Dorn would become applicable and petitioner could "very well lose her right to inherit" from him. EHaASD In Pilapil v. Ibay-Somera, 42 we recognized the divorce obtained by the respondent in his country, the Federal Republic of Germany. There, we stated that 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. For failing to apply these doctrines, the decision of the Court of Appeals must be reversed. 43 We hold that the divorce obtained by Lorenzo H. Llorente from his first wife Paula was valid and recognized in this jurisdiction as a matter of comity. Now, the effects of this divorce (as to the succession to the estate of the decedent) are matters best left to the determination of the trial court. Validity of the Will The Civil Code provides: "ARTICLE 17. The forms and solemnities of contracts, wills, and other public instruments shall be governed by the laws of the country in which they are executed. "When the acts referred to are executed before the diplomatic or consular officials of the Republic of the Philippines in a foreign country, the solemnities established by Philippine laws shall be observed in their execution." (italics ours) The clear intent of Lorenzo to bequeath his property to his second wife and children by her is glaringly shown in the will he executed. We do not wish to frustrate his wishes, since he was a foreigner, not covered by our laws on "family rights and duties, status, condition and legal capacity." 44 Whether the will is intrinsically valid and who shall inherit from Lorenzo are issues best proved by foreign law which must be pleaded and proved. Whether the will was executed in accordance with the formalities required is answered by referring to Philippine law. In fact, the will was duly probated. HAICcD As a guide however, the trial court should note that whatever public policy or good customs may be involved in our system of legitimes, Congress did not intend to extend the same to the succession of foreign nationals. Congress specifically left the amount of successional rights to the decedent's national law. 45 Having thus ruled, we find it unnecessary to pass upon the other issues raised. The Fallo WHEREFORE, the petition is GRANTED. The decision of the Court of Appeals in CA-G. R. SP No. 17446 promulgated on July 31, 1995 is SET ASIDE. In lieu thereof, the Court REVERSES the decision of the Regional Trial Court and RECOGNIZES as VALID the decree of divorce granted in favor of the deceased Lorenzo N. Llorente by the Superior Court of the State of California in and for the County of San Diego, made final on December 4, 1952. Further, the Court REMANDS the cases to the court of origin for determination of the intrinsic validity of Lorenzo N. Llorente's will and determination of the parties' successional rights allowing proof of foreign law with instructions that the trial court shall proceed with all deliberate dispatch to settle the estate of the deceased within the framework of the Rules of Court. aTADcH No costs. SO ORDERED. Davide, Jr., C.J., Puno, Kapunan, and Ynares-Santiago, JJ., concur.