SP Nos.

26-54 cases
-Quirino vs Gorospe (case not found)

[G.R. No. 25842. March 18, 1927.]

Intestate estate of Samuel William Allen. MOORE & SONS MERCANTILE CO., appellant, v. CARMEN
WAGNER, Appellee.
P. J. Moore for Appellant.
Gregorio Perfecto for Appellee.
SYLLABUS
1. HEREDITARY PROPERTY; WIDOWS SUPPORT PENDING SETTLEMENT OF LATE HUSBANDS INTESTATE
ESTATE. It having been proven by the evidence of record that the liabilities exceed the assets of the deceased
husbands intestate estate and that his widow had not contributed any property to the marriage, she cannot be granted
support, pending the liquidation of the intestate estate, because said support, having the character of an advance payment
to be deducted from the respective share of each participant is without legal basis under article 1430 of the Civil Code when
there is no property to be partitioned.
DECISION
VILLAMOR, J.:
In the present proceeding for the settlement of the intestate estate of the deceased Samuel William Allen, the court, upon
petition of the widow of said deceased, entered an order, dated March 5, 1925, requiring the administrator to give said
widow and her daughter Avelina Allen an allowance of P80. The special administrator appointed in the case objected to the
allowance of the widow upon the ground that the estate is insolvent, in view of the claims presented and approved by the
committee on appraisal and claims. Attorney P. J. Moore, in behalf of several creditors of the estate, also entered his
opposition to said order of the court upon the same ground.
There is no question that the estate is insolvent, inasmuch as it appears from the report of the administrator, which is not
contradicted by the widow, that the value of the property of the estate sold by the said special administrator, excluding the
expenses amounts to only P899.79 from which must be deducted the sum of P28.82 for expenses incurred, leaving a
balance of P870.97, and it must be noted that there still remains to be paid the sum of P64 as commissioners fee plus the
sum of P50 for charges of administration.
It also appears from the record on appeal that the claims against the estate allowed by the said committee amount to
P2,457.99. Notwithstanding this insolvent condition of the estate, the lower court entered the order referred to of March 5,
1925, citing in its support article 1430 of the Civil Code and section 684 of the Code of Civil Procedure.
The only question submitted to this court for decision in the present case is the legality of the order appealed from, in view of
the insolvency of the estate of Samuel William Allen. According to section 684 of the Code of Civil Procedure, "The widow
and minor children of a deceased person, during the settlement of the estate, shall receive therefrom, under the direction of
the court, such allowances as are provided by the law in force in the Philippine Islands, on and immediately prior to the
thirteenth day of August, eighteen hundred and ninety-eight, and the descent of all property and estates to heirs shall be
regulated by that law as to all property belonging to intestate estates, and as to all property belonging to the testate estates,
but not disposed of by the will of the testator. A husband or wife of the deceased person shall receive such portion of his or
her estate not disposed of by will as the said law in force on the thirteenth day of August, eighteen hundred and ninety-eight,
gives to him or to her." And the law in force in the Philippine Islands prior to August 13, 1898, is article 1430 of the Civil
Code which says:
"The surviving spouse and his or her children shall be given an allowance for their support out of the general estate, pending
the liquidation of the inventoried estate, and until their share has been delivered to them, but it shall be deducted from their
portion in so far as it exceeds what they may have been entitled to as fruits or income."
May support be demanded when the liabilities exceed the assets of the estate of the deceased spouse? The judgment of the
Supreme Court of Spain of May 28, 1896, resolves this question affirmatively.
"Sometime after the death of her husband, the widow applied for support from the general inventoried estate of the property
from the date of the death of the husband until the delivery of her share. The court granted the application and the Audiencia
affirmed its decision. The heirs sued a writ of error upon several grounds among which are the violations of the following
articles:
"1. Article 1430 of the Civil Code, inasmuch as its wording, letter and spirit show that the allowance granted the surviving

spouse is an advance payment to be deducted from such share as may be allotted to him when the same is delivered, and
the inventoried credits being greater than the estate left, to give allowance to the widow would be prejudicial to the creditors
who are entitled to recover them in their entirety.
"2. Article 148 of the same Code, inasmuch as the order grants support to the widow from the beginning of the liquidation of
the inventoried estate, in spite of the fact that the same had not been applied for until two years thereafter, which is contrary
to the provision of said article which requires that support shall be paid only from the date of the filing of the complaint.
"The Supreme Court denied the writ on the ground that it was not proven that the liabilities exceed the assets of the estate,
and because the provision of article 1430 of the Civil Code is entirely independent and has no connection with those
contained in title 6, book 1, of the same Code, among which is article 148, because they each refer to different kind of rights,
and the former cannot be understood as subordinate to the rules and provisions contained in said title and book, which
regulate support between persons who, according to law, have the obligation to give it, and those who have the right to
receive the same."
Mr. Manresa, commenting on said article 1430 relative to the said judgment of May 28, 1896, wisely observes "That the
support does not encumber the property of the deceased spouse, but the general estate, and that by the general estate or
the inventoried estate is meant the dowry or capital of the wife; wherefore, even if the indebtedness exceed the residue of
the estate, the wife can always be allowed support as part payment of the income of her property. In any case, the support is
given prior to the termination of the liquidation of the partnership, and it does not seem logical to deny the same before
knowing exactly the result of the liquidation, just because of the fear that the liabilities will exceed the estate, or on the
ground of estimates more or less uncertain, and without any sufficient proof of its reality. The judge or the administrator, as
the case may be, must grant the support referred to in article 1430, when the same is requested, and if the creditors believe
that they are prejudiced by such an action, by separating from the estate a part of its income, they can appeal to the court
therefrom, by satisfactorily proving that there is no property or asset that may, in any case, be allotted to the interested
parties. It having proven that no property, either private or conjugal, pertains to the surviving spouse or the heirs of the
deceased, the support cannot be granted, because this, in effect, according to article 1430, is only an advance payment on
account of the respective share of each partner."
Such is the case now before us. It appears from the record that the liabilities exceed the assets of the estate of Samuel
William Allen and that his widow, by her own admission, had not contributed any property to the marriage. Wherefore, it is
unlawful, in the present case, to grant the support which is under consideration, because said support, having the character
of an advance payment to be deducted from the respective share of each partner, when there is no property to be
partitioned, lacks the legal basis provided by article 1430.
The order appealed from is reversed, and the record is remanded to the court of origin for further proceedings, without
special finding as to costs.
Avancea, C.J., Johnson, Street, Ostrand, Romualdez, and Villa-Real, JJ., concur.
Malcolm, J., dissents.

G.R. No. L-61700 September 14, 1987

PRINCESITA SANTERO, FEDERICO SANTERO and WILLIE SANTERO, petitioners,
vs.
HON. COURT OF FIRST INSTANCE OF CAVITE, ANSELMA DIAZ, VICTOR, RODRIGO, ANSELMINA, MIGUEL, all
surnamed SANTERO, and REYNALDO EVARISTO, in his capacity as Administrator of the Intestate Estate of PABLO
SANTERO, respondents.

PARAS, J.:
This is a Petition for certiorari which questions the order of the respondent court granting the Motion for Allowance filed by
private respondents. Said order reads as follows:
Acting on the Motion For Allowance dated June 30, 1982 filed by Victor, Rodrigo, Anselmina and Miguel,
all surnamed Santero, thru their guardian, Anselma Diaz, the Opposition thereto dated July 8, 1982 filed
by the oppositors, the Reply to Opposition dated July 12, 1982 filed by movant Anselma Diaz and the
Rejoinder dated July 26, 1982 filed by the oppositors, the Court was constrained to examine the Motion
For Allowance filed by the herein movant last year wherein the ground cited was for support which
included educational expenses, clothing and medical necessities, which was granted and said minors
were given an allowance prayed for in their motion.

In the Motion For Allowance in question guardian-movant Anselma Diaz only followed the precedent of
the Court which granted a similar motion last year to be spent for the school expenses of her wards. In
their opposition the oppositors contend that the wards for whom allowance is sought are no longer
schooling and have attained majority age so that they are no longer under guardianship. They likewise
allege that the administrator does not have sufficient funds to cover the said allowance because whatever
funds are in the hands of the administrator, they constitute funds held in trust for the benefit of whoever
will be adjudged as owners of the Kawit property from which said administrator derives the only income
of the intestate estate of Pablo Santero, et al.
In the Reply filed by the guardian-movant, she admitted some of her children are of age and not enrolled
for the first semester due to lack of funds but will be enrolled as soon as they are given the requested
allowances. She cited Article 290 of the Civil Code providing that:
Support is everything that is indispensable for substance, dwelling, clothing and
medical attendance, according to the social position of the family.
Support also includes the education of the person entitled to be supported until he
completes his education or training for some trade or vocation, even beyond the age
of majority.'
citing also Section 3 of Rule 83 of the Rules of Court which provides:
Allowance to widow and family. The widow and minor or incapacitated children of a
deceased person, during the settlement of the estate, shall receive therefrom, under
the direction of the Court, such allowance as provided by law.'
From the foregoing discussion alone, the Court cannot deviate from its duty to give the allowance sought
by the wards, the fact that they need further education which should have been provided to them if their
deceased father were alive.
On the allegation that the funds from which the allowance would be derived are trust funds, the Court,
time and again had emphasized that the estate of the Santeros is quite big and the amount to be
released for allowances is indeed insignificant and which can easily be replaced from its general fund if
the so-called trust fund is adjudicated to the oppositors.
WHEREFORE, Victor, Rodrigo, Anselmina and Miguel, all surnamed Santero are hereby granted an
allowance of two thousand (P2,000.00) pesos each for tuition fees, clothing materials and subsistence
out of any available funds in the hands of the administrator who is ordered to reimburse to them the said
amount after this order shall have become final to enable the oppositors to file their appeal by certiorari if
they so desire within the reglementary period.
SO ORDERED.
Bacoor, Cavite, July 28, 1982.
ILDEFONSO M. BLEZA
Executive Judge
(pp. 35-36, Rollo)
It appears from the records that petitioners Princesita Santero-Morales, Federico Santero and Winy Santero are the children
begotten by the late Pablo Santero with Felixberta Pacursa while private respondents Victor, Rodrigo, Anselmina and Miguel
all surnamed Santero are four of the seven children begotten by the same Pablo Santero with Anselma Diaz. Both sets of
children are the natural children of the late Pablo Santero since neither of their mothers, was married to their father Pablo.
Pablo Santero in turn, who died on November 30, 1973 was the only legitimate son of Pascual Santero who died in 1970
and Simona Pamuti Vda. de Santero who died in 1976.
Meanwhile before We could act on the instant petition private respondents filed another Motion for Allowance dated March
25, 1985 with the respondent court to include Juanita, Estelita and Pedrito all surnamed Santero as children of the late
Pablo Santero with Anselma Diaz praying that an order be granted directing the administrator Reynaldo C. Evaristo, to
deliver the sum of P6,000.00 to each of the seven (7) children of Anselma Diaz as their allowance from the estate of Pablo
Santero. The respondent Court granted the motion of the private respondents but oppositors (petitioners herein) asked the
court to reconsider said Order.
On September 10, 1985, an Amended Order was issued by respondent Court directing Anselma Diaz to submit her
clarification or explanation as to the additional three (3) children of Anselma Diaz included in the motion. In compliance
therewith Anselma Diaz filed her "Clarification" stating among others that in her previous motions, only the last four minor
children as represented by the mother, Anselma Diaz were included in the motion for support and her first three (3) children
who were then of age should have been included since all her children have the right to receive allowance as advance
payment of their shares in the inheritance of Pablo Santero under Art. 188, of the New Civil Code.

On October 15, 1985, petitioners herein filed their Motion to Admit Supplemental Petition opposing the inclusion of three (3)
more heirs. We denied that "Motion for Extension of Time to file their Supplemental Petition" as per Our Resolution dated
October 23, 1985.
On November 11, 1985, another Order was issued by the respondent court directing the administrator of the estate to get
back the allowance of the three additional recipients or children of Anselma Diaz apparently based on the oppositors'
(petitioners herein) "Urgent Motion to Direct the Administrator to Withhold Disbursement of Allowance to the Movants."
The issues now being raised in this present Petition are:
1. Whether or not respondent court acted with abuse of discretion amounting to lack of jurisdiction in
granting the allowance to the respondents Victor, Rodrigo, Anselmina and Miguel-P2,000.00 each
despite the fact that all of them are not minors and all are gainfully employed with the exception of
Miguel.
2. Whether or not respondent Court acted with abuse of discretion in granting the allowance based on the
allegations of the said respondents that the abovenamed wards are still schooling and they are in actual
need of money to defray their school expenses for 1982-83 when the truth is that they are no longer
schooling.
3. Whether or not respondent Court acted with abuse of discretion in granting the motion for allowance
without conducting a hearing thereon, to determine the truth of allegations of the private respondents.
Petitioners argue that private respondents are not entitled to any allowance since they have already attained majority age,
two are gainfully employed and one is married as provided for under Sec. 3 Rule 83, of the Rules of Court. Petitioners also
allege that there was misrepresentation on the part of the guardian in asking for allowance for tuition fees, books and other
school materials and other miscellaneous expenses for school term 1982-83 because these wards have already attained
majority age so that they are no longer under guardianship. They further allege that the administrator of the estate of Pablo
Santero does not have sufficient funds to cover said allowance because whatever funds are in the hands of the
administrator constitute funds held in trust for the benefit of whoever will be adjudged as owners of the Kawit properties from
where these funds now held by the administrator are derived.
In this connection, the question of whether the private respondents are entitled to allowance or not concerns only the
intestate estate of the late Pablo Santero and not the intestate estates of Pascual Santero and Simona Pamuti, parents of
their late legitimate son Pablo Santero. The reason for this is Art. 992 of the New Civil Code which states that "An illegitimate
child has no right to inherit ab intestato from the legitimate children and relatives of his father or mother; nor shall such
children or relatives inherit in the same manner from the illegitimate child." The question of whether or not the petitioners and
private respondents are entitled to inherit by right of representation from their grandparents more particularly from Simona
Pamuti was settled by Us in the related case of "Anselma Diaz, et al. vs. Felisa Pamuti-Jardin" (G.R. No. 66574-R) wherein
We held that in view of the barrier present in said Art. 992, petitioners and private respondents are excluded from the
intestate estate of Simona Pamuti Vda. de Santero.
The present petition obviously lacks merit.
The controlling provision of law is not Rule 83, Sec. 3 of the New Rules of Court but Arts. 290 and 188 of the Civil Code
reading as follows:
Art. 290. Support is everything that is indispensable for sustenance, dwelling, clothing and medical
attendance, according tothe social position of the family.
Support also includes the education of the person entitled to be supported until he completes his
education or training for some profession, trade or vocation, even beyond the age of majority.
Art. 188. From the common mass of property support shall be given to the surviving spouse and to the
children during the liquidation of the inventoried property and until what belongs to them is delivered; but
from this shall be deducted that amount received for support which exceeds the fruits or rents pertaining
to them.
The fact that private respondents are of age, gainfully employed, or married is of no moment and should not be regarded as
the determining factor of their right to allowance under Art. 188. While the Rules of Court limit allowances to the widow and
minor or incapacitated children of the deceased, the New Civil Code gives the surviving spouse and his/her children without
distinction. Hence, the private respondents Victor, Rodrigo, Anselmina and Miguel all surnamed Santero are entitled to
allowances as advances from their shares in the inheritance from their father Pablo Santero. Since the provision of the Civil
Code, a substantive law, gives the surviving spouse and to the children the right to receive support during the liquidation of
the estate of the deceased, such right cannot be impaired by Rule 83 Sec. 3 of the Rules of Court which is a procedural rule.
Be it noted however that with respect to "spouse," the same must be the "legitimate spouse" (not common-law spouses who
are the mothers of the children here).
It is not true that the Motion for Allowance was granted by respondent Court without hearing. The record shows that the
"Motion for Allowance" dated June 30, 1982 contains a Notice of Hearing (p. 2, Annex "A") addressed to the lawyers for the
petitioners and setting the hearing thereof on July 8, 1982 at 9:00 in the morning. Apparently a copy of said motion was duly

received by the lawyer, Atty. Beltran as he filed an opposition thereto on the same date of hearing of the motion.
Furthermore even the instant petition admits that the wards, (petitioners and private respondents as represented by their
respective guardians) "have been granted allowances for school expenses for about 8 years now." The respondent court in
granting the motion for allowance merely "followed the precedentof the court which granted a similar motion last year."
(Annex "F") However in previous years (1979-1981) the "wards" (petitioners and private respondents) only received
P1,500.00 each depending upon the availability of funds as granted by the court in several orders. (Annex 1 to Annex 4).
WHEREFORE, in the light of the aforementioned circumstances, the instant Petition is hereby DISMISSED and the assailed
judgment is AFFIRMED.
SO ORDERED.
Yap (Chairman), Melencio-Herrera, and Sarmiento, JJ., concur.
Padilla, J., took no part.

[G.R. No. 46249. October 18, 1939.]

Intestate Estate of Rafael Jocson, deceased. CONCEPCION JOCSON DE HILADO, Plaintiff-Appellee, v. JESUS R.
NAVA, Defendant-Appellant.
Jose M. Estacion for Appellant.
Luis G. Hilado for Appellee.
SYLLABUS
1. EXECUTORS AND ADMINISTRATORS; POWER OF ADMINISTRATOR TO ENTER INTO A CONTRACT OF LEASE
WITHOUT JUDICIAL INTERVENTION; POWER OF COURT TO ANNUL SUCH CONTRACT OF LEASE. The contract
here in question, being a mere act of administration, could validly be entered into by the administratrix within her powers of
administration, even without the courts previous authority. And the court had no power to annul or invalidate the contract in
the intestate proceedings wherein it had no jurisdiction over the person of the lessee. A separate ordinary action is
necessary to that effect.

DECISION

MORAN, J.:

On February 8, 1935, the administratrix Estefania Fenix of the intestate estate of the deceased Rafael Jocson, executed in
favor of appellant Jesus R. Nava a contract of lease for a period of five crop years, over certain properties of the estate, at a
stipulated rental of P1,000 a year. The contract was entered into without the intervention of the court acting in the intestate
proceedings. On July 23, 1936, appellee herein, Concepcion Jocson de Hilado, filed a motion in said proceedings, praying
that the administratrix be required to explain certain details in the matter of said lease; and, in reply to the answer filed by
said administratrix, she prayed that the contract be declared null and void. The court, in its order of December 6, 1936,
declared the contract null and void and ordered the administratrix to lease the lands comprised in the contract to the highest
bidder at public auction. Jesus R. Nava, the lessee, filed a motion asking that the order be set aside, it having been issued
without jurisdiction. The motion was denied, and he appealed.
The controlling issue here raised is whether or not the lower court has the power to annul, in the intestate proceedings, a
contract of lease executed by the administratrix without its intervention. Appellant maintains that it has no such power, and
that the contract can only be annulled in a separate, independent proceeding.
The contract here in question being a mere act of administration, could validly be entered into by the administratrix within her

powers of administration, even without the courts previous authority. And the court had no power to annul or invalidate the
contract in the intestate proceedings wherein it had no jurisdiction over the person of the lessee. A separate ordinary action
is necessary to that effect. In Gamboa v. Gamboa (G. R. No. 45121), we held:
"Creemos que el Juzgado inferior erro manifiestamenteal declarar en estas mismas actuaciones de Tutela sin haberse
promovido una causa separada, que el contrato de arrendamiento en cuestion es nulo por falta de aprobacion judicial. Los
contratos se presumen validos mientras no se declare que no lo son; y esto solo puede hacerse mediante el ejercicio de
una accion ordinaria en causa aparte, que esd ebe determinarse la cuestion, porque el capitulo XXVII de la Ley No. 190 que
habla de Tutelas no confiere autoridadal Juzgado para ocuparse o mejor dicho resolver la misma. Lo resuelto en las causas
de Guzman contra Anog y otro,: 35 Jur. Fil., 66; Alafriz contra Mina, 28 Jur. Fil., 142; Llacer contra Muoz, 12 Jur. Fil., 336;
Y Hagans contra wislizenus, 42 Jur. Fil., 928, son por su estrecha analogia al caso de autos, de mucha y oportuna
aplicacion al mismo."
In Ferraris v. Rodas, G. R. No. 46021, we observed:
"No se discute que el arrendamiento de la participacion de esta testamentaria en la hacienda Talaban a favor de Mamerto
Ferraris hecha por la administradora es legal, y loes, en efecto, pues, siendo el arrendamiento un acto de mera
administracion, la administradora podia legalmente, por Si sola, celebrar aquel contrato con Mamerto Ferraris. Si esto es
asi, aun sin considerar si el Juzgado tenia a no jurisdiccion para dictar el discutido auto, es claro que, si la tenia, abuso de
ella el obrar contra los efectos legales del arrendamiento valida y legitimamente celebrado por la administradora con
Mamerto Ferraris, sin que dicho arrendamiento haya sido antes declarado nulo por los procedimientos correspondientes."
Order is accordingly reversed, with costs against appellee.
Avancea, C.J., Villa-Real, Imperial Diaz, Laurel and Concepcion, JJ., concur.

G.R. No. L-19265

May 29, 1964

MOISES SAN DIEGO, SR., petitioner,

vs.
ADELO NOMBRE and PEDRO ESCANLAR, respondents.
A. R. Castaeda and M. S. Roxas for petitioner.
Amado B. Parreo Law Office for respondents.
PAREDES, J.:
The case at bar had its origin in Special Proceedings No. 7279 of the CFI of Negros Occidental wherein respondent Adelo
Nombre was the duly constituted judicial administrator. On May 1, 1960, Nombre, in his capacity was judicial administrator
of the intestate estate subject of the Sp. Proc. stated above, leased one of the properties of the estate (a fishpond identified
as Lot No. 1617 of the cadastral survey of Kabankaban, Negros Occidental), to Pedro Escanlar, the other respondent. The
terms of the lease was for three (3) years, with a yearly rental of P3,000.00 to expire on May 1, 1963, the transaction having
been done, admittedly, without previous authority or approval of the Court where the proceedings was pending. On January
17, 1961, Nombre was removed as administrator by Order of the court and one Sofronio Campillanos was appointed in his
stead. The appeal on the Order of Nombre's removal is supposedly pending with the Court of Appeals. Respondent
Escanlar was cited for contempt, allegedly for his refusal to surrender the fishpond to the newly appointed administrator. On
March 20, 1961, Campillanos filed a motion asking for authority to execute a lease contract of the same fishpond, in favor of
petitioner herein, Moises San Diego, Sr., for 5 years from 1961, at a yearly rental of P5,000.00. Escanlar was not notified of
such motion. Nombre, the deposed administrator, presented a written opposition to the motion of Campillanos on April 11,
1964, pointing out that the fishpond had been leased by him to Escanlar for 3 years, the period of which was going to expire
on May 1, 1963. In a supplemental opposition, he also invited the attention of the Court that to grant the motion of the new
administrator would in effect nullify the contract in favor of Escanlar, a person on whom the Court had no jurisdiction. He
also intimated that the validity of the lease contract entered into by a judicial administrator, must be recognized unless so
declared void in a separate action. The opposition notwithstanding, the Court on April 8, 1961, in effect declared that the
contract in favor of Escanlar was null and void, for want of judicial authority and that unless he would offer the same as or
better conditions than the prospective lessee, San Diego, there was no good reason why the motion for authority to lease
the property to San Diego should not be granted. Nombre moved to reconsider the Order of April 8, stating that Escanlar
was willing to increase the rental of P5,000.00, but only after the termination of his original contract. The motion for
reconsideration was denied on April 24, 1961, the trial judge stating that the contract in favor of Escanlar was executed in

bad faith and was fraudulent because of the imminence of Nombre's removal as administrator, one of the causes of which
was his indiscriminate pleasant, of the property with inadequate rentals.
From this Order, a petition for Certiorari asking for the annulment of the Orders of April 8 and 24, 1961 was presented by
Nombre and Escanlar with the Court of Appeals. A Writ of preliminary injunction was likewise prayed for to restrain the new
administrator Campillanos from possessing the fishpond and from executing a new lease contract covering it; requiring him
to return the possession thereof to Escanlar, plus damages and attorney's fees in the amount of P10,000.00 and costs. The
Court of Appeals issued the injunctive writ and required respondents therein to Answer. Campillanos insisted on the
invalidity of the contract in favor of Escanlar; the lower court alleged that it did not exactly annul or invalidate the lease in his
questioned orders but suggested merely that Escanlar "may file a separate ordinary action in the Court of general
jurisdiction."
The Court of Appeals, in dismissing the petition for certiorari, among others said
The controlling issue in this case is the legality of the contract of lease entered into by the former administrator
Nombre, and Pedro Escanlar on May 1, 1960.
Respondents contend that this contract, not having been authorized or approved by the Court, is null and void and
cannot be an obstacle to the execution of another of lease by the new administrator, Campillanos. This contention
is without merit. ... . It has been held that even in the absence of such special powers, a contract or lease for more
than 6 years is not entirely invalid; it is invalid only in so far as it exceeds the six-year limit (Enrique v. Watson
Company, et al., 6 Phil. 84). 1
No such limitation on the power of a judicial administrator to grant a lease of property placed under his custody is
provided for in the present law. Under Article 1647 of the present Civil Code, it is only when the lease is to
be recorded in the Registry of Property that it cannot be instituted without special authority. Thus, regardless of the
period of lease, there is no need of special authority unless the contract is to be recorded in the Registry of
Property. As to whether the contract in favor of Escanlar is to be so recorded is not material to our
inquiry. 1wph1.t
On the contrary, Rule 85, Section 3, of the Rules of Court authorizes a judicial administrator, among other things,
to administer the estate of the deceased not disposed of by will. Commenting on this Section in the light of several
Supreme Court decisions (Jocson de Hilado v. Nava, 69 Phil. 1; Gamboa v. Gamboa, 68 Phil. 304; Ferraris v.
Rodas, 65 Phil. 732; Rodriguez v. Borromeo, 43 Phil. 479), Moran says: "Under this provision, the executor or
administrator has the power of administering the estate of the deceased for purposes of liquidation and distribution.
He may, therefore, exercise all acts of administration without special authority of the Court. For instance, he
may lease the property without securing previously any permission from the court. And where the lease has
formally been entered into, the court cannot, in the same proceeding, annul the same, to the prejudice of the
lessee, over whose person it had no jurisdiction. The proper remedy would be a separate action by the
administrator or the heirs to annul the lease. ... .
On September 13, 1961, petitioner herein Moises San Diego, Sr., who was not a party in the case, intervened and moved
for a reconsideration of the above judgment. The original parties (the new administrator and respondent judge) also filed
Motions for reconsideration, but we do not find them in the record. On November 18, 1961, the Court of Appeals denied the
motions for reconsideration. With the denial of the said motions, only San Diego, appealed therefrom, raising legal
questions, which center on "Whether a judicial administrator can validly lease property of the estate without prior judicial
authority and approval", and "whether the provisions of the New Civil Code on Agency should apply to judicial
administrators."
The Rules of Court provide that
An executor or administrator shall have the right to the possession of the real as well as the personal estate of the
deceased so long as it is necessary for the payment of the debts and the expenses of administration, and
shall administer the estate of the deceased not disposed of by his will. (Sec. 3, Rule 85, old Rules).
Lease has been considered an act of administration (Jocson v. Nava; Gamboa v. Gamboa; Rodriguez v. Borromeo; Ferraris
v. Rodas, supra).
The Civil Code, on lease, provides:
If a lease is to be recorded in the Registry of Property, the following persons cannot constitute the same without
proper authority, the husband with respect to the wife's paraphernal real estate, the father or guardian as to the
property of the minor or ward, and the manager without special power. (Art. 1647).
The same Code, on Agency, states:
Special powers of attorneys are necessary in the following cases:
(8) To lease any real property to another person for more than one year. (Art. 1878)
Petitioner contends, that No. 8, Art. 1878 is the limitation to the right of a judicial administrator to lease real property without
prior court authority and approval, if it exceeds one year. The lease contract in favor of Escanlar being for 3 years and

without such court approval and authority is, therefore, null and void. Upon the other hand, respondents maintain that there
is no limitation of such right; and that Article 1878 does not apply in the instant case.
We believe that the Court of Appeals was correct in sustaining the validity of the contract of lease in favor of Escanlar,
notwithstanding the lack of prior authority and approval. The law and prevailing jurisprudence on the matter militates in favor
of this view. While it may be admitted that the duties of a judicial administrator and an agent (petitioner alleges that both act
in representative capacity), are in some respects, identical, the provisions on agency (Art. 1878, C.C.), should not apply to a
judicial administrator. A judicial administrator is appointed by the Court. He is not only the representative of said Court, but
also the heirs and creditors of the estate (Chua Tan v. Del Rosario, 57 Phil. 411). A judicial administrator before entering into
his duties, is required to file a bond. These circumstances are not true in case of agency. The agent is only answerable to
his principal. The protection which the law gives the principal, in limiting the powers and rights of an agent, stems from the
fact that control by the principal can only be thru agreements, whereas the acts of a judicial administrator are subject to
specific provisions of law and orders of the appointing court. The observation of former Chief Justice Moran, as quoted in the
decision of the Court of Appeals, is indeed sound, and We are not prone to alter the same, at the moment.
We, likewise, seriously doubt petitioner's legal standing to pursue this appeal. And, if We consider the fact that after the
expiration of the original period of the lease contract executed by respondent Nombre in favor of Escanlar, a new contract in
favor of said Escanlar, was executed on May 1, 1963, by the new administrator Campillanos. who, incidentally, did not take
any active participation in the present appeal, the right of petitioner to the fishpond becomes a moot and academic issue,
which We need not pass upon.
WHEREFORE, the decision appealed from should be, as it is hereby affirmed, in all respects, with costs against petitioner
Moises San Diego, Sr.
Bengzon, C.J., Bautista Angelo, Concepcion, Reyes, J.B.L., Barrera, Regala and Makalintal, JJ., concur.
Padilla, Labrador and Dizon, JJ., took no part.
Footnotes
1

Referring to Art. 1548 of the old Civil Code.

G.R. No. L-28214

July 30, 1969

NATIVIDAD V. A. JARODA, petitioner,

vs.
THE HONORABLE VICENTE N. CUSI, JR., Presiding Judge, Branch I, Court of First Instance of Davao, and
ANTONIO V. A. TAN, in his capacity as judicial administrator of intestate estate of Carlos Villa Abrille, Special Proc.
No. 1391, Court of First Instance of Davao, respondents.
Dario C. Rama for petitioner.
Jose R. Madrazo, Jr. for respondents.
REYES, J.B.L., J.:
Questioned as null and void in this petition for certiorari with preliminary injunction are two (2) orders of the Court of First
Instance of Davao, Branch I, issued in its Special Proceeding No. 1391 entitled "In the Matter of the Intestate Estate of
Carlos Villa Abrille, deceased, Antonio V. A. Tan, petitioner."
The first of the said two orders, dated 5 May 1965, granted an ex-parte petition by then special administrator Antonio V. A.
Tan, the herein respondent, to withdraw from the Philippine National Bank the amount of P182,531.08 deposited in savings
and checking accounts in the name, and during the lifetime, of Carlos Villa Abrille (now deceased) but allegedly held in trust
for the decedent's co-owners in the Juna Subdivision.
The second order, dated 3 September 1965, approved ex-parte the power of attorney executed by special administrator Tan
appointing himself attorney-in-fact to sell the share of the estate in the subdivision lots.
The aforesaid Special Proceeding No. 1391 was commenced by Antonio V. A. Tan on 22 April 1965, alleging in his petition
filed with the respondent court that Carlos Villa Abrille died intestate on 3 April 1965; that he left an estate consisting of his
conjugal share in real and personal properties, among which are:
p. Nineteen (19) Percent share in the co-ownership known as Juna Subdivision;
xxx

xxx

xxx

xxx

xxx

xxx

t. Cash on Bank: BPI (Savings) D-1365 in the amount of P55,284.11; PNB (Savings) 8189, in the amount of
P9,047.74; and PCIB (Savings) 337, in the amount of P416.24. (Annex "A" to Petition, Rollo, pages 1415);
that the heirs of the deceased are his surviving spouse, nine (9) children (among them the herein petitioner, Natividad V. A.
Jaroda), and four (4) grandsons, among them the herein respondent, Antonio V. A. Tan.

On 26 April 1965, respondent Tan was appointed special administrator.

On 4 May 1965, respondent special administrator Tan fled an ex-parte petition for the withdrawal of the sums of
P109,886.42 and P72,644.66 from the Philippine National Bank, Davao Branch, which sums were not listed in his petition for
administration as among the properties left by the deceased, alleging that these sums were deposited in the name of the
deceased but that they actually belong to, and were held in trust for, the co-owners of the Juna Subdivision, and alleging as
reason for the withdrawal that it would be advantageous to the estate of the deceased. Annexed to the said petition are
powers of attorney purportedly signed by the co-owners in 1948 and 1949 authorizing the late Carlos Villa Abrille to sell the
lots in the Juna Subdivision and to deposit the proceeds thereof with the Philippine National Bank. The alleged co-owners of
the subdivision concurred in the petition, but not the heirs of the deceased (Annex "C" to Petition, Rollo, page 19).
The respondent court found the petition for withdrawal of the bank deposits as "meritorious", and granted the petition in an
order on 5 May 1965.
On 7 May 1965, special administrator Tan executed, together with the other co-owners of the Juna Subdivision, a power of
attorney appointing himself as attorney-in-fact to "sell (or) dispose upon terms and conditions as he deems wise" the lots in
the 99.546-hectare subdivision (Annex "F-1" to Petition, Rollo, pages 30-32).
On 9 September 1965, respondent Tan was issued letters of administration by the respondent court.
On the same day, 9 September 1965, as regular administrator, respondent Tan filed a petition with the respondent court,
alleging that the deceased was the manager of and a co-owner in the Juna Subdivision and that he had been engaged in
the business of selling the lots, and praying for the approval by the court of the power of attorney executed by him, in behalf
of the intestate estate, and appointing and authorizing himself to sell the lots.
The court granted the petition, "as prayed for," on 3 September 1965.1wph1.t
On 29 November 1966, herein petitioner Natividad V. A. Jaroda moved to nullify the order of 5 May 1965, that allowed the
withdrawal of the bank deposits, as well as the order of 3 September 1965, which approved the power of attorney.
The respondent court denied, on 25 February 1967, "for lack of merit" the aforesaid motion.
Petitioner Jaroda appealed from the order of denial, but the respondent court dismissed the appeal on the ground that the
order appealed from was interlocutory. Jaroda then filed before the Supreme Court a petition for certiorari and/or mandamus
on 8 July 1967, docketed as G.R. No. L-27831, but this Court dismissed the petition, adding in its resolution that appeal in
due time is the remedy.
On 28 October 1967, petitioner Jaroda filed the present petition for certiorari with preliminary injunction. She alleged, among
other things, that appeal would not be speedy and adequate as respondent Tan has sold and continues to sell the
subdivision lots on the strength of the respondent court's order, to her irreparable prejudice and that of the other heirs. This
Court gave due course to the petition and issued preliminary injunction on 3 November 1967, restraining the respondent
from selling the share of the intestate estate.
We agree with petitioner that the order of 5 May 1965 allowing the special administrator to withdraw the bank deposits
standing in the name of the decedent is in abuse of discretion amounting to lack of jurisdiction. In the first place, said
withdrawal is foreign to the powers and duties of a special administrator, which, as Section 2 of Rule 80 of the Rules of
Court provides, are to
take possession and charge of the goods, chattels, rights, credits and estate of the decease and preserve the
same for the executor or administrator afterwards appointed, and for that purpose may commence and maintain
suits as administrator. He may sell only such perishable and other property as the court orders sold. A special
administrator shall not be liable to pay any debts of the deceased unless so ordered by the court.
In the second place, the order was issued without notice to, and hearing of, the heirs of the deceased. The withdrawal of the
bank deposits may be viewed as a taking of possession and charge of the credits of the estate, and apparently within the
powers and duties of a special administrator; but actually, said withdrawal is a waiver by the special administrator of a prima
facie exclusive right of the intestate estate to the bank deposits in favor of the co-owners of the Juna Subdivision, who were
allegedly claiming the same as alleged by the administrator in his motion (Petition, Annex "C"). The bank deposits were in
the name of the deceased; they, therefore, belong prima facie to his estate after his death. And until the contrary is shown
by proper evidence at the proper stage, when money claims may be filed in the intestate proceedings, the special
administrator is without power to make the waiver or to hand over part of the estate, or what appears to be a prima facie part
of the estate, to other persons on the ground that the estate is not the owner thereof. If even to sell for valuable
consideration property of the estate requires prior written notice of the application to the heirs, legatees, or devisees under
Rule 89 of the Rules of Court, such notice is equally, if not more, indispensable for disposing gratuitously of assets of the
decedent in favor of strangers. Admittedly, no such notice was given, and without it the court's authority is invalid and
improper.
The order of 3 September 1965 approving the power of attorney executed by administrator Tan and appointing himself as
attorney-in-fact to sell the subdivision lots for a price at his discretion is, likewise, void for want of notice and for approving an
improper contract or transaction.

The very rule, Section 4 of Rule 89 of the Rules of Court, relied on by respondent Tan to sustain the power of attorney for
the sale of the pro-indiviso share of the estate in the subdivision requires "written notice to the heirs, devisees, and legatees
who are interested in the estate to be sold" and, admittedly, administrator Tan did not furnish such notice. (Answer, pages 1
and 2, paragraph 3, Rollo, page 53) Without such notice, the order of the court authorizing the sale is void. (Estate of
Gamboa vs. Floranza, 12 Phil. 191; Gabriel vs. Encarnacion, 94 Phil. 917)
But respondent Tan holds petitioner Jaroda with actual knowledge of the questioned order, and to show it he quotes the
transcript of stenographic notes of a discussion by a lawyer of Jaroda about the said order. The discussion, however, took
place on 19 March 1966 while the order was issued on 13 September 1965, and there is nothing in the discussion that may
indicate knowledge by Jaroda of the order before, at or immediately after its issuance.
It has been broadly stated that an administrator is not permitted to deal with himself as an individual in any transaction
concerning trust property. (Pesula's Estate, 64 ALR 2d 851, 150 Cal. App. 2d 462, 310 P 2d 39)
It is well settled that an executrix holds the property of her testator's estate as a trustee. In re Heydenfeldt's Estate,
117 Cal. 551, 49 P. 713; Firebaugh v. Burbank, 121 Cal. 186, 53 P. 560. It is equally well settled that an executrix
will not be permitted to deal with herself as an individual in any transaction concerning the trust property. Civil
Code, S 2230. In Davis v. Rock Creek L., F. & M Co., 55 Cal. 359, at page 364, 36 Am. Rep. 40, it is said: 'The
law, for wise reasons, will not permit one who acts in a fiduciary capacity thus to deal with himself in his individual
capacity.' The following cases are to the same effect: Wickersham v. Crittenden, 93 Cal. 17, 29, 28 P. 788; Sims v.
Petaluma Gas Light Co., 131 Cal. 656, 659, 63 P. 1011;Western States Life Ins. Co. v. Lockwood, 166 Cal. 185,
191, 135 P. 496; In re Estate of Parker, 200 Cal. 132, 139, 251 P 907, 49 A. L. R. 1025. In Wickersham v.
Crittenden, supra, 93 Cal. at page 29, 28 P. at page 790, it is further stated in respect to a transaction wherein a
trustee sought to deal with trust property: 'Courts will not permit any investigation into the fairness of the
transaction, or allow the trustee to show that the dealing was for the best interest of the beneficiary.' This language
is quoted with approval in the case of Pacific Vinegar & Pickle Works v. Smith, 145 Cal. 352, 365, 78 P. 550, 104
Am. St. Rep 42. (In re Bogg's Estate, 121 P. 2d 678, 683).
The opinion of some commentators that, as a general rule, auto-contracts are permissible if not expressly prohibited (See
Tolentino, Civil Code of the Philippines, Vol. IV 1962, pages 375-377), and that there is no express provision of law
prohibiting an administrator from appointing himself as his own agent, even if correct, cannot and should not apply to
administrator of decedent's estates, in view of the fiduciary relationship that they occupy with respect to the heirs of the
deceased and their responsibilities toward the probate court. A contrary ruling would open the door to fraud and
maladministration, and once the harm is done, it might be too late to correct it. A concrete example would be for
administrator Tan to authorize agent Tan to sell a lot for P50, with the condition that if he can sell it for more he could keep
the difference; agent Tan sells the lot for P150.00; he retains P100.00 and deposits in the bank P50.00 "in the name of
Antonio V. A. Tan, in trust for Juna Subdivision" (as worded in the power of attorney. Annex "F-1"); thus, administrator Tan's
accounting to the estate for the sale of the lot for P50 would be in order, but the estate would have been actually cheated of
the sum of P100, which went to agent Tan in his individual capacity.
The court below also failed to notice that, as alleged in the administrator's petition (Annex "F" herein), after the death of
Carlos Villa Abrille the administrator Tan, in his personal capacity, had replaced said deceased as manager of the Juna
Subdivision by authority of the other co-owners. By the court's questioned order of 3 September 1965 empowering him to
represent the interest of the deceased in the management of the subdivision, the administrator Tan came to be the agent or
attorney-in-fact of two different principals: the court and the heirs of the deceased on the one hand, and the majority coowners of the subdivision on the other, in managing and disposing of the lots of the subdivision. This dual agency of the
respondent Tan rendered him incapable of independent defense of the estate's interests against those of the majority coowners. It is highly undesirable, if not improper, that a court officer and administrator, in dealing with property under his
administration, should have to look to the wishes of strangers as well as to those of the court that appointed him. A judicial
administrator should be at all times subject to the orders of the appointing Tribunal and of no one else.
That petitioner Jaroda, as heir of the late Carlos Villa Abrille, should hold a minor interest (/ of 19%) in the co-ownership
known as the Juna Subdivision and that the early termination of said co-ownership would redound to the benefit of the coowners, including the heirs of Carlos Villa Abrille, are beside the point. Jaroda's interest in the estate demands that she be
heard by the court in all matters affecting the disposal of her share, and that the administrator should primarily protect the
interest of the estate in which she is a participant rather than those of the decedent's co-owners.
The resolution of this Court in L-27836 (Natividad V. A. Jaroda vs. the Hon. Vicente N. Cusi, Jr., etc., et al.), dismissing the
petition for certiorari and/or mandamus and stating that appeal in due time is the remedy, is no bar to the present petition, for
it has not been shown that the allegations in both the dismissed petition and those of the present one are substantially the
same. Anyway, certiorari lies if appeal would not be prompt enough to block the injurious effects of the orders of the lower
court (Silvestre vs. Torres, et al., 57 Phil. 885; Pachoco vs. Tumangday, L-14500, 25 May 1960; Mayormente vs. Robaco
Corp., L-25337, 27 Nov. 1967, 21 SCRA 1080).
After the present case was submitted for decision, respondent Tan manifested that the co-owners of the Juna Subdivision
and the heirs of the late Carlos Villa Abrille, including the petitioner Natividad V. A. Jaroda, had executed a partial partition
and the same has been approved by the probate court. Said approved partial partition has no effect, one way or the other,
upon the orders contested in the present case. For one thing, it is not definite whether the lots described in the 57 pages of
the partition agreement correspond to those of the Juna Subdivision as described in the power of attorney.

10

FOR THE FOREGOING REASONS, the order of 5 May 1965 and 3 September 1965 of the Court of First Instance of Davao,
Branch I, in its Special Proceeding No. 1391, are hereby set aside and declared null and void. The preliminary injunction
heretofore issued is hereby made permanent. Costs against the respondent, Antonio V. A. Tan, in his personal capacity.
Concepcion, C.J., Dizon, Makalintal, Sanchez, Castro, Fernando, Capistrano, Teehankee and Barredo, JJ., concur.

[G.R. No. L-16753. June 8, 1922. ]

ROSA GARCIA ET AL., Plaintiffs-Appellees, v. PLACIDO ESCUDERO, Defendant-Appellant.
J. E. Blanco for Appellant.
Alfredo Chicote for Appellees.
SYLLABUS
1. ADMINISTRATION PROCEEDING; LIABILITY OF ADMINISTRATORS; FORTUITOUS EVENT. The administrator in
an administration proceeding is not responsible for the loss, by a fortuitous event, of the personal properties under
administration in the absence of proof that said loss was due to his negligence; nor does the fact that no written evidence
was introduced to prove that the animals under administration died of rinderpest render him liable for the value of said
animals.
2. ID.; ID.; ID.; ORIGINAL AND SECONDARY EVIDENCE. The testimony of an administrator with the will annexed on the
cause of the death of certain animals, based on his personal knowledge, is not a secondary, but an original, evidence of
such fact. It would be a secondary evidence if it were but a recital of the contents of the credentials or the annotated
certificates issued in accordance with article 7 of the Large Cattle Regulation approved by Royal Order dated August 19,
1862, in force in the Philippines in 1898.
3. ID.; ID.; ID.; RENDITION OF ACCOUNTS. Also the administrator is not bound to render an account of the products of
the realties seized by the Philippine revolutionary troops during the Philippine Revolution. No proof having been introduced
that these properties have produced anything to be accounted for, the report filed by the administrator on this point is
sufficient, and, under the circumstances of the case, it is unnecessary to require him to make a detailed account of said
products.

DECISION

ROMUALDEZ, J. :

Gregorio Garcia Verdejo, owner of certain properties situated in the municipality of Dolores, Province of Tayabas, died in
Manila in the year 1895, leaving an open will wherein he named as his heirs his three sisters, the plaintiffs herein, and
appointed as his administrators, Sisenando Marasigan and the defendant Placido Escudero.
Intestate proceedings were commenced in the justice of the peace court of Dolores for the settlement of the deceaseds
estate undisposed of by will, and testamentary proceedings leading to the settlement of his estate covered by his will were
instituted in the Court of First Instance of Tayabas by whose order said justice of the peace, on February 24, 1896, delivered
to the defendant the properties of the deceased. Such properties are those described in paragraph 1 of the complaint.
The plaintiffs, as the testamentary heirs of said deceased, brought this action based on four causes, of which the last three
were withdrawn, leaving the first wherein it is prayed that they be declared heirs of the deceased and the defendant ordered:
(a) To deliver to them the properties inherited by them, and (b) to render an account of his administration from February 24,
1896.
The defendant answered, praying the court to refrain from further proceedings with the case, for the reason that the
properties not having been administered in accordance with the Code of Civil Procedure now in force (secs. 600 and 617 in
connection with 377 and 704 of said Code), the plaintiffs have no standing in court, or, at all events, to absolve him from the

11

complaint.
The last three causes of action having been withdrawn by the plaintiffs, the lower court limited itself to the first, and decided
it with the following dispositive part of its judgment:
"The court hereby condemns Placido Escudero, the defendant, to deliver without any further delay the properties of the
deceased Gregorio Garcia Verdejo to the heirs of the same, the plaintiffs herein, and to render accounts duly verified and
proved of each year of his administration and management of the properties as executor and depositary thereof, provided
that in lieu of the furniture and jewels, he must pay the sum of P230 unless he can deliver the same; in lieu of the cattle, the
sum of P1,447 unless he can deliver the animals themselves whose deaths were declared not proven, and that the
defendant must deliver the real properties described in the complaint with all the improvements thereon.
"To render his accounts, the defendant is given sixty (60) days from date of notice of this judgment. Said accounts must
contain a statement for each year and be verified and proved; they must cover the period from February 24, 1896, to the
date of the delivery of the properties; they must be made, as regards the real properties, on the basis of the existence of the
improvements aforementioned and must include all fruits, receipts and expenses during the aforesaid period of
administration.
"Execution shall forthwith issue upon this judgment, the delivery of the properties and their improvements to be made to the
plaintiff heirs, and on their behalf, to Attorney Alfredo Chicote. The statement of accounts to be made as aforesaid shall be
filed with this court within the time allowed. The sums above fixed as the value of the jewels, furniture and cattle shall bear
interest at the rate of 6 per percent per annum from the date hereof and any balance that may result against the defendant
from the accounts to be rendered to the plaintiffs of each year of administration, shall also bear interest at the same rate of 6
per cent per annum from the date on which the respective balance shall be found to have become due.
"The defendant is condemned to pay the costs of this suit, the same to be taxed when, upon the rendition of the accounts, a
final judgment is entered by the court, either approving or adjusting them."
The defendant excepted to this judgment and asked for a stay of execution upon the filing of the necessary bond, which was
granted by the court. He, however, agreed to render an account of his administration, which he did, submitting the statement
of accounts appearing on pages 44 to 56 of the bill of exceptions.
The plaintiffs impugned these accounts, and after hearing thereon, the court, by an order dated March 30, 1920, approved
them only in part, making, among others, the following findings and order:
"The items appearing under Sundries account, amounting to P1,491.50 must be rejected and disapproved. It was not
satisfactorily proven that the defendant has really and actually incurred such travelling expenses, and, with the exception of
his testimony, there is nothing in the record to justify said expenses. Said items are, therefore, disapproved and their amount
must be deducted from the general account.
"In the decision rendered by the court on October 2, 1913, it was found that there were on the lands 1,997 fruitbearing
coconut trees and they yielded an average of 50 nuts per year. The defendant must render an account on the basis of these
receipts from the lands during the period from February 24, 1896, to January 1, 1902. The fact that during said period of
time the realties were seized by the Revolutionary Government and taken from his administration and control is immaterial,
inasmuch as in the aforesaid decision the defendant was held liable for the products of said lands during said period and he
was required to render an account covering that period.
"The defendant must also render an account of the receipts from, and products of, the lands during what is called Fourth
Period in his statement of accounts, which is from January 1, 1902, to August 15,1906. On this point the defendant himself
admits in his statement of accounts (page 4) that in the years 1902 and 1903 the coconut trees produced something though
it hardly covered the small expenses. In 1904 and 1905, says the defendant further, they began to produce something
though very little. However insignificant the product of said lands might have been the defendant must render an account of
said product and credit the plaintiffs with its value.
"Wherefore, the defendant is ordered to file within the period of 30 days, without extension, from the date of notice hereof,
an amended statement of account in accordance with the findings and rulings herein contained, under the penalties of the
law."
To these rulings of the court, the defendant excepted and perfected the present appeal, making the following assignments of
error:
"1. The trial court erred in sentencing the defendant to pay the sum of P230, the value of the personal properties listed in
Exhibit 2 of the plaintiffs; and in not holding that said properties perished by a fortuitous event or force majeure in a fire that
broke out in the barrio wherein was situated the house of the defendant in which they were kept.
"2. The trial court erred in sentencing the defendant to pay the sum of P1,445, the value of the cattle claimed in the

12

complaint, consisting of 1 black horse, 1 black mare, and 5 female carabaos, and in not holding that said animals died of
rinderpest and that the defendant, therefore, was not responsible for their loss.
"3. The trial court erred in holding that the defendant was bound to render an account of the fruits of the coconut lands and
liable for their value, notwithstanding the fact that those lands were seized and held by the revolutionists in Dolores during
the period from February 24, 1896, to January 1, 1902, and notwithstanding the fact that said properties had been taken
from his administration and control.
"4. The trial court erred in holding that the defendant was bound to render an account of the products of said coconut lands
covering the period from January 1, 1902, to August 15, 1906, and in disapproving the account rendered, covering this
period.
"5. The trial court erred in disapproving the account rendered by him insofar as the items under Sundries account are
concerned, and in not finding that the defendant had really incurred the expenses and disbursements therein specified.
"6. The trial court erred in denying the defendants motion for new trial and in not relieving him entirely from any further
responsibility, by approving the accounts as rendered."
In his brief plaintiffs counsel questions the right of the defendant to prosecute this appeal. Such an objection has not been
properly raised in this court, nor was it, nor could it be, included in any assignment of error, for, as said counsel very well
says, it is not incumbent upon the appellee to make assignment of errors.
Turning to the assignments of error, the first refers to certain personal properties, which, as appears from the evidence, were
destroyed by fire. The trial court held the defendant responsible for such properties, it being of the opinion that he was
negligent in having left them in the barrio of Santo Nino where they were. Taking into account the fact that the fire occurred
in a calamitous time, for, as appears from the evidence, it was caused by the North American forces who were fighting the
Philippine revolutionists, we find that the disaster could not have been prevented by the defendant. It might be said that he
could have foreseen it, but it does not appear just how and where those properties could have been proven that the town of
San Pablo, the place of residence of the defendant, was any safer than that of Santo Nino. It was not shown that such
properties were destroyed through the negligence of the defendant.
The second error assigned is concerned with the finding of the court below, holding the defendant liable for the value of the
cattle that perished during the rinderpest of 1898, on account of the fact that no written evidence of their death had been
introduced in accordance with the laws then in force on large cattle. In the first place the fact of the death of those animals is
proven by the testimony of the defendant based on his personal knowledge, and this testimony is not a secondary, but
original, evidence of such fact. It would be a secondary evidence if such testimony were a mere recital of the contents of the
credentials or annotated certificates issued in accordance with article 7 of the Large Cattle Regulation approved by Royal
Order dated August 19, 1862, in force in the Philippines in 1898. Besides, it does not appear that whenever an animal died,
the officer having authority on the matter (teniente de ganados) was notified in all cases of the fact and the regulations
complied with. In the second place, no timely objection was made to said testimony of the defendant. We find that the trial
court committed the second error assigned.
Coming to the third error, it refers to the order of the court requiring the defendant to render an account of the products of
the coconut lands from February 24, 1896, to January 1, 1902. The evidence shows that those coconut lands were seized
by the Philippine revolutionists in the year 1899 to 1902, they were a forest. The Philippine Revolution lasted, practically,
during the whole period from 1896 to 1902, and the defendant, residing as he was, in a town far away from the coconut
lands, could not, as he testified, go to the lands to gather their fruits, and thus he got none, according to his testimony. We
hold that the defendant should be relieved from the obligation to render the account mentioned in this assignment of error.
With regard to the accounts referred to in the fourth assignment of error, which pertain to the period from January 1, 1902, to
August 15, 1906, the defendant says in his statement of accounts that in 1902 and 1903 the fruit of the coconut trees hardly
covered the small expenses; that in 1904 and 1905, they began to yield something but very little. It not having been proven
that in those periods the coconut lands produced anything to be accounted for, we find the report made by the defendant
sufficient on this matter, and it is unnecessary to require him to make a detailed statement of said products.
As to the fifth assignment of error, which has reference to those items of the defendants accounts, appearing under
"Sundries" account, we find that those items are proved by the testimony of the defendant, the plaintiffs evidence being
insufficient to overthrow or weaken it. We believe that the items under "Sundries" account in defendants statement should
have been approved.
The sixth error is but a conclusion from the preceding assignments.
We find that the trial court committed the errors assigned.
For the foregoing reasons, the account rendered by the defendant of February 8, 1917, is hereby approved in its entirety,
and the rulings appealed from revoked, without special pronouncement s to costs. So ordered.

13

Araullo, C.J., Malcolm, Avancea, Villamor, and Ostrand, JJ., concur.

G.R. No. L-42516

August 22, 1936

Intestate estate of the deceased

SANTIAGO NICOLAS. DOMINGO NICOLAS, ex-administrator-appellant,
vs.
TIMOTEA NICOLAS, ET AL., oppositors-appellees.
Jose G. Domingo for appellant.
Sisenando Palarca for appellees.
VILLA-REAL, J.:
This is an appeal taken by Domingo Nicolas, ex-administrator of the intestate of the deceased Santiago Nicolas, from the
order of the Court of First Instance of Tarlac, the dispositive part of which reads as follows:
The court, therefore, approves the two accounts dated August 14, 1933 and March 14, 1934, presented by the exadministrator Domingo Nicolas, with the amendments above-stated and with a balance of P726.01 in favor of the
administration, which sum said Domingo Nicolas must turn over to the administrator Protasio Santos, through the
clerk of this court, within the period of twenty (20) days from this date. In case of noncompliance with this order on
the part of Domingo Nicolas, let the bond given by said ex-administrator be attached in order to collect said sum of
P726.01.
Let copies of this order be sent by registered mail to the sureties of Domingo Nicolas. It so ordered.
In support of his appeal the appellant assigns eight alleged errors as committed by the court a quo in kits order in question,
which will be discussed in the course of this decision.
The first assignment of alleged error consists, in that the lower court erred in disapproving the record on appeal presented
by the appellant on August 1, 1934, and in ordering the amendment thereof by eliminating certain pleadings, orders, decrees
and judgments not related to the order of June 20, 1934, appealed from. The appellant in insisting upon the inclusion of said
pleadings, orders, decrees and judgments in the record on appeal alleges as a ground thereof that they constitute the best
evidence of the services rendered by him and his attorney. What section 779 of the Code of Civil Procedure requires to be
transmitted to this court in case of an appeal from a decree or order approving or disapproving the accounts of an
administrator, in accordance with the provisions of section 778, is a certified transcript of the appeal, order, decree or
judgment appealed from and of the accounts embraced in the order, the inclusion of any other order, decree or judgment
from which no appeal has been taken being unnecessary and superfluous. The appealed order is the one dated June 20,
1934, and accounts partially disapproved therein are those submitted by the ex-administrator-appellant, dated August 14,
1933, and March 15, 1934, respectively, which accounts appear in the record on appeal, as amended by order of the court.
The court a quo, therefore, committed no error in ordering the elimination from the record on appeal of the other pleadings,
decrees, orders and judgments not appealed from, which, according to the appellant himself, are nothing more than
evidence of the services rendered by him and his attorney.
The second question to be decided, by reason of its procedural nature, which is raised in the eighth and last assignment of
alleged error, is whether or not the court a quo erred in not submitting the appellant to an examination under oath and in not
holding a hearing on his accounts.
The record shows that the court a quo, on May 21, 1934, ordered the accounts in question to be called for hearing, setting
July 18, 1934, at 9:30 a. m. therefor, in order that the parties might present evidence in support of their respective claims,
and in rendering its order relative to said accounts on June 20, 1934, the court a quo said:
Upon calling for hearing the accounts of the ex-administrator Domingo Nicolas, the one dated August 14, 1933,
only with respect to Nos. 3, 5 and 6 of the item "III Payments", and No. 9 of the item "IV Traveling Expenses",
and another dated May 15, 1934, there appeared the said ex-administrator Domingo Nicolas in his own behalf and
Sisenando Palarca who is opposed to the approval thereof.
After these accounts were submitted to the court with no more evidence than the vouchers attached to the record
the court, upon hearing the parties and duly considering the items in question, sustains . . . .
It is clear, therefore, that the ex-administrator-appellant Domingo Nicolas was given the opportunity to explain his accounts
and present his evidence in support thereof, and that he appeared at the hearing of said accounts. Consequently he cannot
now allege, on appeal, that he was not examined under oath and that no hearing was held on the accounts in question.

14

As to the items 3, 5, 6 and 9 under the heading "III Payments", consisting in "Money advanced to Attorney Bartolome
Domingo, P400", "Partial payment of the debt of the deceased in favor of Miguel Julian, P105.10", "Partial payment to
Commissioner Gregorio Gabriel, P100", and "Expenses during the anniversary, of the deceased, P36.50", we are of the
opinion that the court a quo correctly rejected them on the ground that they had not been authorized by said court and
because they had already been discussed in Judge Buenaventura Ocampo's order of November 14, 1933, from which no
appeal was taken. Item 9 thereof, consisting in expenses incurred by the appellant on the occasion of the anniversary of the
death of the deceased, amounting to P36.50, cannot be considered a part of the funeral expenses nor treated as the
erection of a mausoleum which forms part of the sepulture of the deceased, because it bears no relation to the funeral.
With respect to the other expenses and fees which the ex-administrator-appellant seeks to collect and which the lower court,
rejected, the law only authorizes the administrator to collect for his services as such the sum of P4 for every day actually and
necessarily spent by him in the administration and care of the estate of a deceased person, not for every act or task he
might perform, even if it were to take only a few minutes to do so, as indicated by the nature of the great majority of the task
performed by him, for each and every one of which he seeks to collect P4. Therefore this court is of the opinion that the 18
days granted by the lower court to the ex-administrator-appellant as actually and necessarily spent by him in the
performance of his duties, at P4 a day, are reasonable.
As the bills pending payment enumerated in the account of March 15, 1934, are of the same nature as those rejected in his
account of April 14, 1933, they should also be rejected for the same reason.
Wherefore, not finding any error in the order appealed from, it is affirmed in toto, with costs to the appellant. So ordered.
Avancea, C. J., Abad Santos, Imperial, Diaz, Recto and Laurel, JJ., concur.

G.R. No. L-29414

July 17, 1928

TEODORICO UY TIOCO, petitioner,

vs.
CARLOS IMPERIAL, Judge of First Instance of Manila, and ALEJANDRO M. PANIS, respondents.
Marcelo Nubla for petitioner.
The respondent Judge in his own behalf.
Alejandro M. Panis in his own behalf and in behalf of the respondent judge.
OSTRAND, J.:
This is a petition for a writ of prohibition to restrain the respondent judge from compelling the petitioner to pay the sum of
P11,250 to the other respondent, Alejandro Panis, out of the funds of the estate of the deceased Basilisa Yangco, of which
estate said petitioner is the administrator.
It appears from the record that the respondent Panis was counsel for the administration of said estate and that he on
October 31, 1927, before the final settlement of accounts, presented a motion in the probate proceedings for the allowance
of attorney's fees in the sum of P15,000. On December 5, 1927, the respondent judge, over the objections in writing
presented by the administrator, granted the motion and allowed the fees claimed by Panis. The administrator, the herein
petitioner, did not appeal from the order of the court, but on February 8, 1928, Jacinto Yangco, in his capacity as
guardian ad litem of the minors Pedro and Bruno Uy Tioco, the sons and then the only heirs of the deceased, presented a
motion for reconsideration under section 113 of the Code of Civil Procedure on the grounds that he was not notified of the
motion for the allowance of fees and had no knowledge thereof or of the order granting the motion until a few days before
the filing of there motion for reconsideration; that the fees allowed Panis were excessive and prejudicial to the interest of the
estate; and that considering the nature of the work performed, the services rendered with him did not warrant the payment of
the sum claimed. This motion was denied on February 15, 1928, the respondent judge holding that while the heirs of the
deceased were not notified by the hearing of the motion for allowance of attorney's fees, such notice was duly served upon
the administrator; that was a sufficient compliance with the law; that curador ad litem might have the right to intervene in the
case but have no absolute right to be notified of the motion; that the provisions of section 113 of the Code of Civil Procedure
were not applicable to the case; and that, in any event, the motion for reconsideration is entirely without merit.
On February 23, 1928, the guardian ad litem excepted to the order of February 15, 1928, and gave notice of his intention to
appeal to the Supreme Court. On the 28th of the same month, Attorney Felix Wijangco, on behalf of Panis, filed a motion in
the probated proceedings in which be set forth that the minor Bruno Uy Tioco is now deceased and that his share of
inheritance will go to his father, the herein petitioner; that the property involved in the case is community property in which
one-half belongs to the petitioner; that consequently the minor Pedro Uy Tioco is only entitled to a one-fourth of the property
pertaining to the estate, and that therefore his appeal from the order allowing the attorney's fees can only relate to one-fourth
of the amount allowed, wherefore the movent asked that the administrator be ordered to make payments of three-fourths of
the amount within five days from the presentation of the motion. To this motion the guardian ad litem objected, but under the
date of March 6, 1928, the respondent judge ordered the administrator to make payment of three-fourths of P15,000 within

15

five days. The administrator refused to make such payment, and on March 17th the court, after citing him to show cause,
again ordered him to pay as provided for in the order of March 6, under penalty of removal from office. The present action
was thereupon brought. Upon filing the petition the respondent were ordered to answer, as ordered, the respondents
submitted a demurrer which we, considering that there can be no dispute as to the essential facts, shall regard as a
sufficient answer to said petition.
In our opinion, the petition must be granted. The orders of March 6th and 7th for a partial payment of the fees claimed were
issued after an appeal had been taken and perfected by the filing of an appeal bond approved by the court. The appeal was
taken from the order of February 15 denying the motion for reopening and reconsideration of the allowance for attorney's
fees and involves the validity of that order and the finality of the order of December 5, 1927. Whether this orders were valid
and final need not be here determined, but they are appealable, and we are not aware of any provision of law authorizing
the lower court to enforce the immediate execution of such orders and probate proceedings after an appeal has been
perfected. The interest of the appellee are supposed to be sufficiently protected by an adequate bond.
The arguments submitted indicate a misconception of the character of the liability for the attorney's fees are claimed are
supposed to have been rendered to the executor or administrator to assist him in the execution of his trust. The attorney can
therefore not hold the estate directly liable for his fees; such fees are allowed to the executor or administrator and not to the
attorney. The liability for the payment rests on the executor or administrator, but if the fees paid are beneficial to the estate
and reasonable, he is entitled to the reimbursement from the estate. Such payment should be included in his accounts and
the reimbursement therefore settled upon the notice prescribed in section 682 of the Code of Civil Procedure. (See Church
on Probate Law and Practice, pp. 1570-1588 and authorities there cited; Woerner on the American Law of Administration,
2d ed., sections 515 and 516.)
For the reasons stated the respondent judge is hereby prohibited from enforcing the payment of the attorney's fees abovementioned until the appeal taken by Jacinto Yangco, as guardian ad litem for the minor Pedro Uy Tioco, has been passed
upon by this court or dismissed. No costs will be allowed. So ordered.
Avancea, C.J., Street, Malcolm, Villamor, Romualdez, and Villa-Real, JJ., concur.

G.R. No. L-27871

July 21, 1928

TIRSO DACANAY, administrator-appellee,

vs.
SILVERIO HERNANDEZ, in his own behalf and as guardian of the minor Maria Hernandez,
EDUVIGIS HERNANDEZ, and CARIDAD HERNANDEZ, oppositors-appellants.
Maximino Mina, Galicano Gaetos and Mariano Alisangco for appellants.
J. E. Blanco for appellee.
OSTRAND, J.:
This is an old probate which could and should have been terminated over twenty years ago. The following facts appear from
the now very voluminous record:
Justiniano Rogero Dacanay died in Bacnotan, La Union, on May 14, 1905. He left only one legitimate child, Bienvenida Julia
Dacanay, the issue of his marriage to Maria Ronquillo, who died on or about the year 1875. In addition to aforesaid
legitimate child, he also left three acknowledged natural children, Herminigilda, Tirso, and Paulina Dacanay. Bienvenida
married Silverio Hernandez in the year 1886 and died on September 18, 1907, leaving three children, Eduvigis, Caridad,
and Maria. Herminigilda Dacanay died in 1919, being survived by her husband, Gelasio Belmonte, and her children,
Florencio, Eduvigis, Maria, Isabelo, and Celestino Belmonte.
The deceased Justiniano Dacanay also left a will executed on September 1, 1904, and in which Tirso Dacanay was named
executor. It greatly favored the natural children at the expense of Bienvenida, the testator stating that she and been
disobedient and that he therefore felt justified in curtailing her inheritance. The will was presented for probate shortly after
the death of Justiniano and, notwithstanding the opposition of Bienvenida Dacanay, was duly probated on April 24, 1906.
Tirso Dacanay immediately qualified as an administrator and on March 4, 1907, Angel Lopez, Casimiro Carbonel, and
Liberato Buccat were appointed commissioners on claims and appraisal. The commissioner prepared and filed a final report
in due time, but no further steps were taken towards settlement of the estate until March 19, 1913, when Judge W. E.
McMahon, then presiding the Court of First Instance of La Union, appointed Sixto Dacanay, Casimiro Carbonel, and Liberato
Buccat commissioners for the partition of the estate among the heirs. On May 3d, 1913, these commissioners submitted a
scheme of partition in which the provision of the will were closely followed while the law governing succession appears to
have been disregarded. Silverio Hernandez, in representation of his deceased wife and his children, opposed the approval
of the scheme of partition, principally on the ground that the partition of the estate assigned to the natural children greatly
exceeded the maximum shares allowed them as acknowledged natural children by articles 806, 808, 840,et seq. of the Civil

16

Code and correspondingly diminished the legitimate shares of the children of Bienvenida. Upon hearing, Judge McMahon
rendered a decision in which he among other things said:
From an examination of the will itself, it results that the legitimate child Bienvenida Dacanay only received a part of
the estate left her mother by the deceased parents of the mother and none of the properties afterwards acquired
by the testator, and the testator attempts to dispose of the property received from the parents of his deceased wife
Maria Ronquillo as if it were his own property, giving a part thereof to recognized natural children. From the
examination of the partition made by the commissioners, it is evident that they made no attempt to discover what
was the dowry and paraphernalia property of the deceased Maria Ronquillo, if any, nor to determine what was the
separate property of each of the husband and wife Justiniano Rogero Dacanay and Maria Ronquillo, if any, and
later 'gananciales' or joint property of both husband and wife, but merely attempted to follow out the provisions of
the law, and in so far as it has not conformed to the law, should be disregarded. For these reasons the court
disapproves the partition made by the commissioner dated the 13th of May, 1913, and orders that they proceed to
make a new partition of the property left by the deceased Justininano Rogero Dacanay in conformity with the law in
such cases provided, and once having this they will submit their report at the earliest opportunity to the Court of
First Instance of La Union for its approval.
No further action seems to have been taken by the commissioners, but only July 8, 1915, the executor Tirso Dacanay,
presented a plan for the partition of the estate. Another scheme of portion was submitted by Silverio Hernandez on January
21, 1916. Both the plans submitted were unsatisfactory to the court, but on September 23, 1916, Judge Manuel Camus, who
in the meantime have been appointed judge of the district, rendered a carefully prepared decision in which among other
things provided for a complete and apparently fair distribution of the estate based upon the evidence contained in the record.
On October 3, 1916, Tirso Dacanay filed a motion for a new trial on the ground that the decision was contrary to the
evidence and to the law. The motion was denied, and on January 27, 1917, he filed an exception to the order denying the
motion and announced in his intention and appealing to the Supreme Court. The appeal was duly perfected and the case
was docketed in the office of the clerk off the Supreme Court under the number G.R. No. 12662, but on February 23, 1917,
Dacanay filed a motion for the reopening of the case on the ground that after the record of the case had been transmitted to
the Supreme Court, he had discovered new evidence consisting in an inventory of property alleged to have been donated to
Bienvenida Julia Dacanay on the occasion of her marriage in July, 1886. On March 22, 1917, the Supreme Court granted
the motion, set aside Camus' decision, and ordered the case remanded to the Court of First Instance for additional
proof.1 Considerable evidence was taken in regard to the authenticity of the inventory alleged to have been newly
discovered, and on August 11, 1919, Judge J.R. Burgett, then Judge of the Court of First Instance of La Union, rendered a
decision in which he found that the aforesaid inventory, marked Exhibit A-1, was genuine and directed the commissioners of
petition appointed in 1913 to submit a new scheme of partition of all the property belonging to the estate of Justiniano
Dacanay, including by collation the property described and referred to in the document Exhibit A-1. His Honor further
directed said commissioners to be careful to follow the instructions set forth in Judge McMahon's decision of August
14,1914, and also the rulings, findings and conclusions of Judge Camus in his decision of September 23, 1916, in so far as
these two decisions were "not contrary to the present decision." From this decision Silverio Hernandez appealed to this
court, but on January 15, 1920, the appeal was dismissed on the ground that it was premature in so far as the appellant
should have awaited the termination of the partition of the property of the estate.2
The record was again remanded to the Court of First Instance, and the aforesaid commissioners submitted another scheme
of partition which was opposed by Silverio Hernandez and set for hearing on January 15, 1921. The plan followed by the
commissioners having found unsatisfactory, the parties on the same date and in open court entered into stipulation which
reads as follows in translation:
STIPULATION IN OPEN COURT
BLANCO. The parties agreed and stipulate:
First. That the administrator be ordered to immediately present to the court a new inventory of all the properties of
the estate in the same order in which they appear in the inventory attached to the will, including in said inventory
the properties referred to in the dowry letter Exhibit A-1, without prejudice to the allegation at the attorney for
Silverio Hernandez relative to the validity of said donation; and, showing in said inventory the value given the
properties, according to the evaluation shown on folios 174-188, except so far as concerns the property said to
have been donated to Bienvenida Dacanay, according to Exhibit A-1, and the property said to have been donated
to Tirso Dacanay during their father's lifetime, according to the deed of donation on folio 303, which should be
given the value they had at the time said donations were made provided that said new inventory must exclude the
properties which, according to the administrator, were destroyed by a fire which occurred in the town of Bacnotan,
as per statement on folio 165.
Second. That the administrator be ordered to immediately file a scheme of partition of all of said properties, giving
the origin of each and everyone of them, the names of each and everyone of heirs of the deceased interested
therein; the products of the properties said to be collationable from the date of the institution of these proceedings,
that is, from May 19, 1905, without prejudice to the allegations of the parties relative to the validity of donation
Exhibit A-1, and the collationable character of said properties, and the proportion in which the heirs of the
deceased Justiniano Rogero Dacanay have the right to participate.

17

Third. That the administrator present to the court a final account of his administration of the properties of this
estate, together with the general inventory and the scheme of partition.
Fourth. That in view of this stipulation, the scheme of partition presented by the commissioner is set aside.
Fifth. That nothing stipulated by Silverio Hernandez relative to Exhibit A-1 shall affect the allegations made by his
counsel prior to this proceedings relative to the nullity of said donation propter nuptias.
Sixth. That said Silverio Hernandez be acknowledged and considered to be the duly appointed guardian of his
minor daughter Maria Hernandez y Dacanay, without prejudice to a certified copy of his appointment as such
guardian being attached to the record of this proceeding.
Seventh. That Eduvigis and Caridad Hernandez y Dacanay, children and heirs of the deceased Bienvenida
Dacanay, be required to appear personally or thru counsel in these proceedings in view of the fact that both have
already reached their majority and are married, the former being a resident of the municipality of Baguio and the
latter of the town of San Juan of the Province of La Union.
Eight. In regard to the heir Hermenigilda Dacanay, who is also deceased, it is ordered that her representatives or
heirs institute intestate proceedings and obtain the appointment of an administrator to represent her in these
proceedings. Hermenigilda Dacanay, according to information, has left as her only heirs, five children named
Florencio, Eduvigis, Maria, Rosario, Isabelo, and Celestino, had with her husband Gelacio Belmonte, who lives at
1140 Calle Azcarraga, Manila.
BLANCO AND CASTRO. We agree to this stipulation.
The court approved the stipulation, rejected the scheme of partition presented by the commissioners, and ordered the
administrator to present, with his final account, a new scheme of partition on the basis agreed upon in the stipulation.
Pursuant to this order, the administrator on April 10, 1923, submitted a scheme of partition according to which Bienvenida
Dacanay, or rather her successors in interest, after bringing to collation the property described in Exhibit A-1, would owe the
estate the sum of P20.50, with the result that all the property of the estate would go to the natural children of Justiniano
Dacanay. This scheme of partition was, of course, objected to by Silverio Hernandez, but Judge Anastacio R. Teodoro in a
decision dated August 11, 1926, overruled the objections and approved the administrator's plan of partition. The heirs of
Bienvenida Dacanay excepted to the decision and the case is now before this court on appeal.
No regular final account was presented by the administrator, but annual accounts for the period from July 18, 1915, until
October 31, 1925, were submitted to the court. These accounts show an income of P4,511.32 from the estate as against
expenses of administration amounting to P14,511.32, thus leaving a balance of P10,147.80 in favor of the administrator and
against the estate. Silverio Hernandez and his daughters opposed the approval of the accounts. Upon hearing, Judge
Teodoro in a decision dated August 6, 1926, approved the principal items of the accounts in question but disallowed some of
the minor items, thereby reducing the amount alleged to be due the administrator to P7,925.97. The opposing parties duly
excepted to the decision and perfected their appeal to this court where it has been argued and considered in direct
connection with the appeal from the decision of August 11, 1926, through separate briefs have been filed in the two appeals.
The appellants makes the following assignments of error in the appeal from the decision of August 11, 1926, which indirectly
also involves the decision of the Judge Burgett, dated August 11, 1919:
1. The court erred in declaring that Exhibit A-1 is an authentic document executed by the deceased Justiniano
Rogero Dacanay.
2. The court erred in determining the rights of the parties as to the inheritance in conformity with the Civil Code and
not in accordance with the earlier legislation.
3. The court erred in approving the scheme of partition presented by the administrator, Tirso Dacanay.
The first assignment of error raises the principal question in the whole controversy. It appears from the record that in the
earlier stages of the case not only the administrator but also his original counsel seem to have been under the erroneous
impression that the admission of the will of Justiniano Dacanay to probate validated all of its provisions as to the distribution
of the estate and that therefore Bienvenida Dacanay and her successors in interest could not successfully claim more than
the share allotted to her by the will. This conception was probably dispelled by the lucid and well considered decision of
Judge Camus dated September 23, 1916, and it must then have become clear to the administrator that the devises and
bequests made by the testator in favor of the natural children could only be taken from the one third of libre disposicion and
that devises and bequests in excess of that third would be invalid, notwithstanding the fact that the will had been duly
probated. Apparently with the object of overcoming this difficulty, Exhibit A-1 was manufactured. As we have already stated,
that document purports to be an inventory of property donated by Justiniano Dacanay to his daughter Bienvenida on the
occasion of her marriage to Silverio Hernandez. The alleged total value of the property described in the "inventory" was over
P14,000 and according to the testimony of the appellee's witness, Dionisio Garcia, it constituted the greater part of
Justiniano Dacanay's fortune. By bringing this property and the income therefrom into collation, Bienvenida could be very
neatly excluded from further participation in the inheritance.
That the document in question is a forgery is, in our opinion, established beyond all doubt. It is alleged to have been
discovered in 1916 or 1917. Pedro Floresca, who at that time was the principal public school teacher in Bacnotan and a

18

boarder in the house of Tirso Dacanay, testified that while there he wrote the document from a draft furnished him by Tirso,
but that he did not write the signatures. Judge Burgett in his decision of August 11, 1919, discredit this testimony and bases
his conclusions principally upon the "conduct, manner and demeanor" of the witness. It must be conceded that the testimony
is somewhat confused and indicates nervousness, but considering the interruptions and hecklings to which he was
subjected by the trial court, his nervousness is easily explained, and but very little weight can be given the deductions draws
therefrom by the trial judge. Standing alone, the testimony might possibly have been open to doubt, but it is corroborated by
so many circumstances that there cannot be the slightest doubt as to its truthfulness. The body of the document, although it
is dated July 24, 1886, it is written in a Spencerian hand, and is clearly the handwriting of Pedro Floresca as appearing in
authentic documents introduced in evidence. It is highly improbable that the style of handwriting could have been found in
Bacnotan in 1886.
But that is not all. An examination with a good lens of the alleged signature of Justiniano Dacanay appearing at the bottom
of Exhibit A-1 shows clearly that the pen strokes are quite different from those of the authentic signatures of Justiniano.
It is also improbable that Justiniano, who in the inventory attached to his will claims that the property received by his wife
from Bienvenida Ronquillo was community property, should have donated the greater part of property in his possession to
his daughter Bienvenida Dacanay. And can it be believed that if such an important donation had been, Justiniano would
have said nothing about it in his will where he among other things says that Bienvenida had been disobedient and that he
therefore reduced her share of the inheritance?
It is further to be noted that the document Exhibit A-1 is not in the form usually followed during the Spanish regime. The date
of which it is alleged to have been written appears at the end of the document instead of in the introductory clause and the
town name "Namacpacan" is written "Namagpakan" (the letter K was not commonly in use prior to the insurrection of 1896
but was quite generally used thereafter).
It may also be noted that the paper on which the document is written bears indications of having been subjected to some
artificial process for the evident purpose of giving it the appearance of age.
There are several other circumstances tending to support our conclusions, but which we shall not take the time and space to
discuss. We may, however, call attention to Exhibits A-2 and A-3, which were offered in evidence by the appellee for the
purpose of using them as a standard of comparison with Exhibit A-1. They are dated January 4, 1882, and May 24, 1880,
respectively, but are signed by cross marks, a practice which was unknown in the Philippines under the Spanish regime.
The paper used for the exhibits was identical with that used in Exhibit A-1 and bear the same indications of artificial aging.
The documents are unquestionably forgeries.
The question discussed under the second assignment of error might possibly have been decided in favor of the appellants if
it had been raised in time. But it is presented for the first time in the appellants' brief and during all the year preceding the
appeal, it seems to have been taken for granted that the Civil Code, and not the earlier legislation, governs the distribution of
the estate in the present case. The case has been tried on the theory and Judge Camus based his decision of September
23, 1916, thereon without objection on the part of the herein appellants and no appeal was taken by them from the decision,
a decision which therefore probably would have been affirmed if this court had not been led astray by the false
representations of the administrator of the estate. In these circumstances, we are not inclined to decide the case upon
another and different theory, nor is it now our duty to do so.
The third assignment of error is indirectly disposed of in the discussion of the first assignment and is sustained.
The question of accounting relate only to the administrator's accounts for the following periods:
July 28, 1915

to

June 30, 1916.

June 30, 1916

to

June 30, 1917.

June 30, 1917

to

November 23, 1918.

November 23, 1918

to

November 30, 1919.

November 30, 1919

to

October 10, 1920.

October 10, 1920

to

December 25, 1921.

December 25, 1921

to

October 17, 1922.

October 17, 1922

to

September 12, 1923.

19

September 12, 1923

to

October 28, 1924.

October 28, 1024

to

October 31, 1925.

As to this accounts the appellants present the following assignment of error:

The trial court erred:
A. In finding the items of attorney's fees to be legitimate expenses of the administration, and approving said items.
B. In approving the items concerning the bundles of palay alleged to have been stolen and spoiled, and in
deducting their value from the income of the testamentary estate.
C. In awarding the sum of P5,264 to administrator Tirso Dacanay as compensation for his services.
D. In failing to disapprove the following items in the accounts presented by the administrator, to wit:
(a)P264 (Appellants' Exhibit, p.8).
(b)P200 (Appellants' Exhibit, p. 8).
(c) P84 (Appellants' Exhibit, p. 19).
(d)P432 (Appellants' Exhibit, p. 31).
E. In not holding the administrator Tirso Dacanay to be manifestly unfit, negligent, dishonest, and acting in bad
faith in the performance of his duties as such administrator of this testamentary estate.
F. In denying the petition to have the administrator Tirso Dacanay removed from his office.
G. In approving the administrator's accounts showing a balance of P7,925.97 against the testamentary estate and
in favor of the administrator.
Assignment of error A is, in our opinion, well taken. The attorney's fees referred to are entered as follows in the accounts for
the periods October 17, 1920, to December 25, 1921; October 17, 1922, to September 12, 1923; September 12, 1923, to
October 28, 1924; and October 28, 1924, to October 31, 1925.
Las partidas de que se trata constan en las siguientes cuentas:
(a) Por las ocho comparecencias del Abogado Sr. Mariano Legaspi en el
Juzgado de La Union, una en la Corte Suprema, y otra en el Juzgado de
Manila, todo en interes de la tstamentaria, tambien se le ha pagado por todo
la cantidad de . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

P3,200.00

(b) Por las tres comparecencias dl Abogado Sr. J.E. Blanco en el Juzgado de
Primera Instancia de La Union, otras dos comparecencias de el en la Corte
Suprema, una en el Juzgado de Manila, todo en interes de la Testamentaria,
se le ha pagado por todo la candidad de . .

P2,000.00

(c) Candidad entegrada al Abogado Sr. J.E.Blanco como anticipo de los

quinientos pesos convenidos como honorarios de el como abogado que ha
hecho la particion y venir al Juzgado en su vista para sostener su aprobacion,
es . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

P200.00

(d) Honorarios pagados al Abogado Sr. J.E. Blanco para completar los
quinientos pesos como honorarios de el convenidos como abogado que ha
hecho el proyecto de particion por orden del Juzgado y venir al Juzgado en su
vista para sostener su approbacion, entegrada en septiembre 25 de 1923 es
200 entgrada en diciembre 9 de 1923 es 100, total es, . . . . . . . . . . . . . . . . . . .
..................................

P300.00

(e) Honorarios pagados al Abogado Sr. J.E. Blanco a cuenta de los quinientos
pesos convenidos como honorarios de el para representar al Administrador en
la aprobacion de sus cuentas y para defender su remocion que piden los
abogados de Silverio Hernandez, pagado en 1. de octubre de 1924 es 100
pagado des pues de la vista del aunto 7 de octubre de 1924 s 250 remitido
por giro en 13 de octubree de 1924 por cuenta de dicha cuenta y sus gastos

20

P425.00

de viaje es 75, total es . . . . . . . . . .

(f) Cantidad pagado al Abogado Sr. Jesus E. Blanco por cuenta de sus
honorarios como abogado de la testamentaria, pagado en 21 de febrero de
1925, es . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

P50.00

P6,175.00
============

As will be seen, all of the fees relate to services rendered for the benefit of the administrator himself and for that of the other
natural children of Justiniano Dacanay and not for the benefit of the estate.
"The estate cannot be held liable for the costs of counsel fees arising out of litigation between the beneficiaries thereof
among themselves, or in the protection of the interest of a particular persons" (Woerner on Administration, 2d ed., sec. 516,
and authorities there cited). It is true that an administrator may employ competent counsel on questions which affects his
duties as administrator and on which he is in reasonable doubt and that reasonable expenses for such services may be
charged against the estate subject to the approval of the court. But such is not the case here. In this case the administrator
deliberately and knowingly resorted to falsified documents for the purpose of defrauding the legitimate heirs of the deceased
and through his own breach of trust, brought on the litigation for which he now demands reimbursement for counsel fees.
We know of no legal authority for such reimbursement in these circumstances. The claim for P6,175 is therefore disallowed.
Assignment of error B is also well taken. The administrator claims that 2,547 manojos of palay, the greater part pertaining
to the estate, were lost through theft and the rest through deterioration, water having penetrated into the building in which it
was stored. The administrator maintains that the losses were due to the bad condition of the storehouse, and he attributes
that condition to interference on the part of the appellants and their objection to repairs. It appears, however, that repairs
were made from time to time with the permission of the court, and aside from the assertions of the administrator, there is
nothing in the record to show that there ever was any opposition to the making of such repairs. There is room for grave
suspicions that the administrator converted to his own use at least a part of the palay alleged to have been stolen or spoiled.
But be this as it may with the exception of the item of 122 3/4 manojos alleged to have been spoiled by having been left in
the storehouse for eight years, the losses occurred during the period from 1917 to 1925, when, as we have seen, the
administrator was acting as such for his own benefit and not for that of the estate. He was therefore in a position in some
respects analogous to that of a bailee for his own sole benefit and was bound to excercise great care and attention in the
conservation of the property under administration. According to his own statements, he lost over one-fourth of
thepalay under his care, and that fact in itself indicates negligence on his part. Deducting the 122 3/4 manojosspoiled prior
to 1916, we hold that the administrator must be held responsible for the loss or disappearance of the remaining 2,424
3/4 manojos of palay and must be ordered to pay the value of the same to the estate of the deceased at the rate of 50 cents
per manojo. The total amount due the estate from the administrator upon this count is therefore P1,212.37.
Assignment of error C deal with the per diem compensation claimed by the administrator. The administrator's claimed, and
the court below allowed, the sum of P1,320 for 330 days during the period from March 14, 1913, until July, 1917. For the
remaining periods from July 15, 1917, until October 31, 1925, the court below allowed the sum of P3,944 for a total number
of 986 days. In view of the fact that according to the administrator's accounts, the total income of the estate for the ten years
from July 28, 1915, to October 31, 1925, amounted only to P4,368.52, the compensation allowed the administrator seems
excessive. We think, however, that the allowance of P1,320 for the period from March 14, 1913, till July 14, 1917, may be
sustained. But we cannot agree with the court below in allowing the administrator compensation for the subsequent period.
The prolongation of the settlement of the estate was due entirely to the efforts of the administrator to defraud the legitimate
heirs, and we cannot allow him to profit by his own fraud. Moreover, his services for the period in question would have been
unnecessary if he had not, by his fraudulent acts, prevented the settlement of the estate. The rule is that the per
diem compensation of an administrator can only be allowed for necessary services. For these reasons the allowance of
P5,264 granted by the court below will be reduced to P1,320.
Assignment of error D relates to the following items:
1. Fees for the three commissioner, Messrs. Casimiro Carbonell, Sixto
Dacanay, and Liberato Buccat, for services rendered during the 22 days which
were necessarily employed in making the partition of the estate ordered by the
court, at the rate of P4 per day, as provided by law . . . . . .

P264.00

2. Paid to Mr. Harry Clark for services as a handwriting expert for the purpose
of analyzing the newly discovered document, which was done for the benefit of
the estate, according to voucher No. 52 . . . . . . . . . . . . . .

P200.00

21

3. Fees of the clerk who made a copy of Mr. Well's deposition, of the
stenographer who transcribed the notes taken down during the hearing upon
the document in question, and the fees of the clerk who made a complete
copy of Judge Burgett's judgment, according to vouchers Nos. 8, 9 and 15 . . .
...................................................
4. Fees of the three partition commissioners appointed by the court, Messrs.
Sixto Dacanay, Liberato Buccat, Simon Cacdac and of the administrator
during the 27 days which were necessarily employed in making the partition,
at the rate of P4 per day each, as provided by law. .

P84.00

P432.00

P980.00
============
As to item No. 1, the commissioners are entitled to compensation for the services rendered by them, and we can find
nothing in the record showing definitely that they have received their pay. The sum of P264 is therefore allowed.
The assignment of error is sustained as to items Nos. 2 and 3. The services there referred to cannot be said to have been
rendered for the benefit of the estate but for that of the administrator himself in furtherance of his fraudulent designs.
As to item No. 4, the record shows that during the year 1920, the commissioner referred to in said item held meetings on
various dates, and performed actual work for 23 days for which they are entitled to compensation at the rate of P4 per day
each. The administrator himself claims compensation in the amount of P108 for assistance given by himself personally to
the commissioners, but in view of what we have said in the discussion of assignment of error C, we hold that he is not
entitled to such compensation. The item in question is therefore reduced to the sum of P92 for each of the commissioners, a
total sum of P276.
Assignments of error E and F are well taken and must be sustained. It is difficult to find a more glaring example of bad faith
and dishonest intentions than that of the present administrator. Having been unfaithful to his trust has no right to be retained
as administrator, and we agree with the appellant that the court below erred in not moving him from office.
From what has been said in the foregoing discussion, it follows that assignment of error G must also be sustained.
According to the accounts of the administrator, the estate on October 31, 1925, owed him the sum of P9,902.54. The total
amount of the items disallowed by us, in accordance with the foregoing discussion, is P11,771.37. Instead of being a
creditor of the estate, the administrator is not indebted to it in the sum of P1,868.83 plus the amount of the greater part of the
shortages found by Judge Teodoro.
Reverting to the question of the partition and distribution of the estate, it must be conceded that in the confused state of the
voluminous record, it is difficult to arrive at accurate results. But the former commissioners for partition have proven
themselves unequal to the task, and it is evident that nothing will be gained by providing for the appointment of other. For
this reasons, and taking into consideration the unjustifiable delay in the settlement of the estate, the court has decided to
make the distribution upon the data existing in the record and without the appointment of other commissioners. In doing so,
we can do no better than to adhere to the plan of distribution formulated by Judge Camus in his decision of September 23,
1916. It is asserted by counsel for the appellee, that no evidence was taken as to the origin of the property to be distributed
and that Judge Camus therefore made an arbitrary classification and distribution of said property. This assertion is not borne
out by the record. The evidence is scattered throughout the first two volumes of the record and at first blush seems
somewhat confused, but taken in connection with the transcript of the testimony in civil case No. 446 of the Court of First
Instance of La Union, which transcript has been made apart of the record in the present case, it sufficiently sustains the
findings of Judge Camus. The valuation of the property of the estate, as stated in his decision, is based on the report
rendered by the committee on appraisal, and the origin of the property appears principally in the aforesaid transcript of the
testimony.
The pertinent part of the decision reads as follows:
Valor
( moneda
filipina )
Bienes parafernales de Maria Ronquillo:
1. Una parcela de terreno sita en Casantolan, Municipio de Bacnotan, La
Union, de 0.6896 o 0.7996 hectarea de extension approximada; lidante al N.
con Hermenigilda Dacanay, al E. con Sinforoso Oropilla, al S. con Anacleto

22

P130.00

Ramos, y al O. con Ramon Hernandez . . . . . . . . . . . . . . . .

2. Una partida de terreno en Bacsil o Nagsimbaanan, Bacnotan, La Union, de
2.9937 hectareas de extension approximada; lindante al N. con un arroyo, al E.
con un camino, al S. y con terreno de Feli Dacanay y un camino . . . . . . . . . . . .
...........................................

200.00

3. Un a partida de terreno en Sapilang, en Bacnotan, La Union, de 122.6965

hectareas de extension aproximada; lindante al con Andrea Quiaoit, al E. con
el terreno Sinillian del tstador, al S. con el camino Cubbu, y al O. con terrenos
de Rafael Lete, Antonio Belmonte y Pio Cariaso . . . . . . . . . . . . . . . . . . . . . . . . .
.................................

8,400.00

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,730.00
============

Bienes propios del testador:

4. Una parcela de terreno en Dan-ar, en Bacnotan, La Union, de 1.9187
hectareas de extension aproximada; lindante al N. con Alajandro Nebres y
Eutasquio Carbonel, al E. con Melchor Igoy, al S. con Cayetana Carig,
Inocencio Casem, y Pascual Morales, y al O. con Andres Dacanay y Melchor
Igoy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

350.00

5. Una parcelo de terreno en Casantolan, en Bacnotan, La Union, de 0.4604

hectarea de extension aproximada, lindante al N. con Francisco Cariaso, al E.
con Leona Carig, al S. con Bienvenida Julia Dacanay, y al O. con Ramon
Hernandez . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

100.00

6. Un terreno en Gabor, Bacnotan, La Union, de 0.8364 hectarea de extension

aproximada; lindante al N. con Salome Dacanay, Tirso Dacanay, y Telesforo
Ganuelas, el E. con Lucio Sanchez y Mateo Gamboa, al S. con Cayetano Carig
y Marcelo Rodriguez, y al O. con Angel Ramos y Beinvenida Julia Dacanay . . .
........................

150.00

7. Un terreno en Salingcob o Ganagan, en Bacnotan, La Union, de 4.6562

hectareas de extension aproximada, lindante al N. con Francisco Cariaso y
camino vecinal; al E. con Basilio Delmondo, Ambrosio Sarmiento, Juan Bucsit
y Anselmo Almohite; al S. con Lorenzo Bucsit, Pedro Licudiney Basilio
Delmondo; y al O. con Pedro Licudine, Calixto y Casimiro Buccat, Gregorio
Licudine; Cosme Buccat y Casimiro Buccat. Valor senalado por la comision de
avaluo, 650; e el valor de la donacion heche a Tirso Dacanay es . . . . . . . . . . . .
..........

700.00

8. Un terreno en Cabaroan, en Bacnotan, La Union, de 0.5500 hectarea de

extension aproximada, lindante al N. con Gabina Dacanay, al E. con un estero;
al S. con Santaromana, y al O. con Valentin Oropilla. Valor por la commision,
50, valor segun donacion a Tirso Dacanay . . . . . . . . . . . . .

100.00

9. Un terreno en Agtipa o Agtipal, en Bacnotan, La Union, de 1.0987 hectareas

de extension aproximada, lindante al N. con Fray Mariano Ruiz un arroyo, al E.
con Valentin Tangingco, al S.con Lucas Almodobar y Francisco Bacaolo, y al
O. con Esteban Oredina. Valor por la comision, 300, valor sugun donacion he
che a Tirso Dacanay . . . . . . . . . . . . . . . . . . .

150.00

10. Un terreno en Gabor, MUunicipio de Bacnotan, La Union, de 0.1859

hectarea de extnsion arpoximada, lindants al N. con Sotero Cariaso, al E. con
Telesforo Ganuelas, al S. con Hermenigilad Dacanay y al O. con Salome
Dacanay. Valor por comision de avalou, 30, valor segun donacion a Tirso

23

40.00

Dacanay . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11. Un trreno en Sinilian o Manginat, Municipio de Bacnotan, La Union, de
29.3887 hectareas de extension aproximada; lindante al N. con Justiniano
Rogero Dacanay, al E. con el Monte Lacong, al S. con un camiro de Igorrotes,
y la O. con Justiniano Rogero Dacanay. Valor por la comision de avalou . . . . . .
.........................................

1,500.00

12. Un tetrreno en Daya-ti-ili, Municipio de Bacnotan, La Union; de 0.1620

hectarea de extension aproximada; lindante al N. con Lazaro Almodovar . . . . .
..................................................

35.00

13. Un terreno en Bagutot, Municipio de Bacnotan, La Union, de 0.2500

hectarea de extension aproximada; lindante al N. con Valentin Taminco, al S.
con Fray Mariano Ruiz, y al O. con un arroyo . . . . . . . . . . . . . . . . . . . . .

50.00

14. Un terreno en Bacsil o Baroro, Municipio de Bacnotan, La Union, de 1.2437

hectareas de extension aproximada; lindante al N. con Savero Carbonel, al E.
con el Arroyo Banungal, al S. con Antonio de Guzman al SO. con el rio Baroro .
.............................................

250.00

15. Un terreno en Bassaoit, Municipio de Bacnotan, La Union, de 0.1045

hectarea de extension aproximada; linadant al N. con Luisa Pasion, al E. con
Agapito Villanueva, al S. con Victor Valin, y al O. con Liberato Buccat. Valorado
por la comision de avalou con el sigiuente terreno.
16. Un terreno en Bassaoit, Municipio de Bacnotan, La Union, de 0.0250
hectarea de extnsion aproximada, lindante al E. con Ignacio Batto, al E. con
Tomas Delmondo, al S. con Liberato Buccat, y al O. con Ignacio Batto.
Avaluado con el anterior en . . . . . . . . . . . . . . . . . . . . . . . . . . . .

25.00

17. Un solar dentro del Pueblo de Bacnotan, La Union, de 0.1365 o 0.1375

hectarea de extension aproximada, lindante al N. con el chino Cabo, al E. con
el mismo chino y Dionisio Garcia, al S. con la Calle Rosario, y al O.con la Calle
Magdalena . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

80.00

18. Un terreno en Mambug, Municipio de Bacnotan, La Union, de 0.3437

hectarea de extension aproximada, lindante al N. con Valentin Taminco, al E.
con Pedro de Guzman, al S. con Dionisio Parong, y al O. Pedro de Guzman . .
.......................................................

70.00

19. Un terreno en Cabugao, Municipio de Bacnotan, La Union, de 1.4365

hectareas de extnsion aproximada, lindante al NE. con Gabina Dacanay, al E.
con Tomas Mayo, Mariano Guererro y un rio, al NO. con Gabina Dacanay . . . .
..............................................

100.00

20. Un terreno en Bulala, Municipio de Bacnotan, La Union, de 0,1957

hectarea de extension aproximada; lindante al N. y E. con Paulino Dacanay, y
al S. y O. con Antonio Almohite . . . . . . . . . . . . . . . . . . . . . . . . . . .

40.00

21. Un terreno en Daya-ti-Ili, Municipio de Bacnotan, La Union, de 0.1364 o

0.1374 hectarea de extension aproximada; lindante al N. con Ciriaca Nebres, al
E. con Hilario Dacanay, al S. con Locadio Romero, y al O. con Paulino
Rodriguez . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

30.00

22. Un terreno en Lisquieb, Municipio de Bacnotan, La Union, de 0.3988 o

0.2726 hectarea de extension aproximada; lindante al N. y E. con Marcelo
Buccat, al S.con Cayetano Delena, y al O con Tomas Gano . . . .

24

150.00

23. Muebles:
(a) Legados a Enrique Ronquillo; avaluados por el testador: a
caraballa, 30, 1 yegua, 30, gastos de estudio e indemnizaciones,
109.50 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

169.50

(b) Donados propter nuptias a Tirso Dacanay: valores segun

donacion: 1 anillo, 120; otro anillo, 60; 1 caballo, 120; 2 caballos, 80;
2 carabaos, 150 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

530.00

(c) 1 carabao, 60;; 1 maquina de coser, 8; 1 bulto de la Virgen, 50; 1

bulto de San Jose, 30; 1 tocador, 10; 1 tocador 5; 1 mesa, 2; 1
florero, 4; 1 sofa de Viena, 4; 1 reloj de pared, 3 . . . . . . . . . . . .

176.00

No se han tomado en cuenta muebles de casa de encaso o ningun valor.

24. Un solar co un camarin en la poblacion, en Bacnotan, La Union, de 0.0700
hectarea de extension aproximada; lindante al N. con Justiniano Rogero
Dacanay, al E. con la Calle Gelacio, al S. con la Calle Soledad, y al O. con la
Calle Magdalena. Valor segun comision, 70, segun donacion a Tirso Dacanay .
........................................
25. Un terreno en Cabaroan o Sipulo, en Bacnotan, La Union, de 0.1264 o
0.1274 hectarea de extension aproximada; lindante al N. y E. con Aquilino
Fontanilla; al S. y O. con Melchor Igoy. Valor segun comision, 25; segun
redencion hecha por el administrador . . . . . . . . . . . . . . . . . . . . .

Valor total de bienes del testador . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

120.00

30.00

4,945.50
============

Bienes gananciales:
26. Un terreno en Lanas-Cabusligan, en Bacnotan, La Union, de 0.6725
hectarea de extension aproximada; lindante al N. con Alejandro Nebres, al E.
con una carretera, al S. con Paulino Dacanay, y al O. con Ramon Hernandez .
......................................................

250.00

27. Un terreno en Lanas-Cabusligan, en Bacnotan, La Union, de 0.5025

hectarea de extension aproximada, lindante al N. con Paulino Dacanay,al E.
con . . . . . . . . . . . ., al S. con . . . . . . . . . . . ., y al O. con . . . . . .

200.00

28. Un terreno en Lanas Pagbantayan en Bacnotan, La Union, de 0.1987

hectara de xtensio aproximada; linda nte al E. con Pailino Dacanay, al E. con
una careterra, al S. con una camino, y al O. con Ramon Hernandez . . . . . . . . .
.......................................

70.00

29. Un tereno secano en Laud-ti-Ili, en Bacnotan, La Union, de 0.5864

hectarea de extension aproximada, lindante al E. con Emerenciano Padua y
Pio Nebrs, al E. con uns carretera, al S. con Gabina Dacanay, y al O con . . . . .
....................................................

100.00

30. Un terreno en Zaragoza, Municipio de Bacnotan, La Union, de 1.0212

hectareas de extension aproximada, lindante al . con Jose Cariaso, al E. con
Jose Cariaso, al S. con Jose Cariaso, y al O. con Nicolas Lete . . . . . . . . . . . . .
.........................................

400.00

31. Un terrno en Camposanto, Municipio de Bacnotan, La Union, de 1.8687

hectareas de extension aproximada, limdante al N. con Paulino Dacanay, al E.

25

150.00

co Marcos Celestino, al S. con Geronima Dacanay y el camposanto antigou, y

al O. con Felisa Lagasca. Vlor segun comision y segun donacion a Tirso
Dacanay . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
32. Un terreno en Bigbiga o Biga, en Bacnotan, La Union, de 0.3062 hecatarea
aproximadamente, lindante al N. con Francisca Olaes, al E. con Roman
Corpus, al S. con Dorotea Almojera y al O con Jose Pagtacconan. Valor segun
comision, 150, segun donacion a Tirso Dacanay . . . . . . . . . . . . . . . . . . . . . . . .
.................................

120.00

33. Un terreno en Gavor, en Bacnotan, La Union, de 0.3206 hecytarea de

extension aproximada; lindante al N. con Sotero Cariaso, al E. con ugenio
Mejia, al S. con Telesforo Ganuelas, Valo segun comision y segun donacion a
Tirso Dacanay . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

60.00

34. Un terreno en Tamorong, en Bacnotan, La Union, de 25.8625 hectareas de

extension aproxiamada; lindante al N. con Gabina Dacanay, Nocolas
Parchamento, Nicolas Sipangan y Dionisio Solomon, Pablo Saluta, Domingo
Carganilla y Ramon Hernandez, y al S. y O. con la playa. Valor segun la
comision, 2,500; segun donacion a Tirso Dacanay . . . . . . . . . . . . . . . . . . . . . . .
.............................

200.00

35. Un terreno en Santa Cruz, Municipio de Bacnotan, La Union, de 0.5865 o

0.5875 hectarea de xtension aproximada; lindante al N. con Dionisio Cariso, al
E. con Andres Dacanay, al S. con Esteban Morales, y al O. con Valentin
Oropilla . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

120.00

36. Cuatro partidas de terreno en Maragayap, Municipio de Bacnotan, La

Union, a saber: Una de 0.3300 hectarea de extenion aproximada; lindante al N.
con Juan Orejudos, al E. con Bartolome, Martin y Felipe Bucago, al S. con
Gregorio Arellano, y al O. con Esteban Menguita.
Una de 0.1451 hectarea de extension aproximada; lindante al N. con Casimiro
Julaton, al E. con Mauricio Julaton, al S. con Miguel Bucasas, y al O. con
Julian Julaton. Una de 0.3168 hectarea de extension aproximada; lindante al
NE. con Casimiro Julaton, al SE. con Rufo Orejudos, al S. con Miguel Bucasas,
y al O. con Mariano Delarma. Y una de 0.1812 hectarea; lindante al N. con
Cayetano Fontanilla, al NE. con el Rio Maragayap, al SE. con Casimiro
Julaton, y al con Cayetano Fontanilla. Valor de las cuatro partidas juntas . . . . .
...................

200.00

37. Un terreno en Gabor, Municipio de Bacnotan, La Union, de 3.5508

hectareas de extension aproximada; lindante al N. con Cayetano Carig y
Segundo Ancheta, al E. con Rafael Lete y Antonio Ramos, al S. con Petra
Dacanay y el testador, y al O. con Jose Castaneda . . . . . . . . . . . . . .

700.00

38. Un terreno en Bassaoit o Cabasaan, en Bacnotan, La Union, de 0.9587

hectarea de extension aproximada . . . . . . . . . . . . . . . . . . . . . . . . . . .

350.00

39. Un solar (quemado) en la poblacion, en Bacnotan, La Union, de 0.1153,

hectarea de extension aproximada; lindante al N. con Calle Consolacion, al E.
con Calle San Gelacio, al S. con Isabel Florendo, y al O. con Calle Magdalena .
..........................................

120.00

Valor total de terrenos ganaciales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

40. Seis mil treinta y tres manojos de palay segun, cuentas del administrador
hasta 30 de junio, 1916, a 50 centimos . . . . . . . . . . . . . . . .

26

3,040.00
============

3,016.50

41. Metalico existent segun cuenta del administrador, fecha 30 de junio de

1916 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Valor total de bienes gananciales . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

39.12

6,095.62
============

Bienes vendidos porel testador, propios del mismo:

42. Un terreno en Bagutot, en Bacnotan, La Union, de 0.1350 hectarea de
extension aproximada; lindante al N. y E. con Agustin Espero y al S. y O. con
Segundo Ancheta.
43. 43.Un solar en la poblacion en Bacnotan, La Union, de 0.0528 hectarea de
extension aproximada; lindante al N. y E. con el chino Miguel Bautista, al S.
con la Calle Consolacion, y al O. con F Dionisia Garcia.
Fruto o producto de terreno donados a Tirso Dacanay:
44. No se ha dado cuenta por el administrador desde e incluyendo su cuenta
de marzo 1,1912, pendiente de desicion del Juzgado sobre las donaciones
hechas a el.
Alhajas entegradas a Bienvenida Julia Dacanay:
45. Se adjudician a Bienvenida Julia Dacanay como parafernals de la difunta
Maria Ronquillo, esposa del testador, qien manifiesta en su testamento que
esttas el alhajas feuron entegradas a esta heredera todavia cuando la misma
era soltera; manifestacion que inclina al juzgado a creer eran de Maria
Ronquillo, ademas del hecho de que el testador no da ni la cantidad ni el valor
de estos bienes.
Legados hechos por el testador
Resultando que los siguientes legados resultan del testamento mismo ser en
pago de servicios prestados al testador por las personas a quienes se hasen, y
no habiendose presentado contra ellos ningiuna oposicion por parte de
persona o entidad intersada, el juzgado los apprueba cargandolos contra los
bienes que resultan a fabor del testador, entendiendos que estos legados se
pagarian en los mismos bienes en que consisten:
Legados a Enrique Ronquillo
Terrenos marcados en la clasificacion anterior como parcelas Nos. 17, 18, y
19, avalorados respectivamante en 80, 70 y 100; y muebles marcados en dicha
clasificacion como No. 23 Muebles (a) valorados en 169.50 . . . . . . . . . . . . . . . .
...........................................

P419.50

Legados a Cornelia Dacanay

Terrnos marcados en la clasificacion anterior como parcelas Nos. 35 y 36,
valorados en 120 y 200 respectivamente . . . . . . . . . . . . . . . . . . . . . . . . .

320.00

Legados a Bonifacio Cuyo

Terrenos marcados en la clasificacion anterior como parcelas Nos. 20,21, y 22,
valoradoos en 30, 40, y 150, respectivamante . . . . . . . . . . . . .

220.00

Legado a Honorata Villanueva

Un terreno marcado como parcela No. 25 en la clasificacion anterior y valorado
en . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Valor total de bienes legados . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27

30.00

989.50
============

Resultando, pues que los bienes determinados como parafernales de la difunta

Maria Ronquillo representan un valor de 8,730; que los determinados como
propios del testador Justiniano Rogero Dacanay representan un valor de
4,945.50; y que los determinados como gananciales representan un valor total
6,095.62; dividido este ultimo valor entre uno y otro por igual, o sea asignado a
cada uno bienes gananciales que represzenten 3,047.81, los bienes que en su
totalidad deben corresponder a Justiniano Rogero Dacanay seran por valor
total de 7,993.31 que es la suma del valor de subienes propios y el du sumidad
de gananciales, o 4,945.50 y 3,047.81, respectivamente; y los que en su
totalidad deben corrsponder a Maria Ronquillo representaran bienes por valor
total de 11,777.81, que es la suma de sus bienes parafernales y sumidad de
gananciales, o sea 8,730 y 3,047.81, respectivamente; pero como del total de
bienes del tesrador se deben deducir los legados hechos en su testamento que
montan a 989.50 como se ha visto arriba, a dicho testador solo le
corresponderan un total de bienes que representan 7,003.81 resto que queda
del total de 7,993.31.
Resultando de autos que la finada Maria Ronquillo no dejo a su muerte mas
que una sola heredera legitima que es Bienvenida Julia Dacanay, una de las
partes en el presente asunto; que el testador Rogerio Justiniano Dacanay ha
dejado una sola hija legitima que es dicha Bienvenida Julia Dacanay, habida
con la mencionada Maria Ronquillo, y tres hijos naturales reconocidos que son
Tirso, Paulina y Hermenigilda, apellidados Dacanay; y que no consta en autos
haber otro u otros herederos del testador, y resultando estar pagados todos los
acreedores y demas gastos legitimos relacionados con este asunto: El
Juzgado hala que Bienvenida Julia Dacanay, es la unica hija legitima y por
tanto heredera legitima del finando Justiniano Rogero Dacanay, que esto dejo
tres hijos naturales reconocidos llamados Tirso, Paulina y Hermenigilda,
apellidados Dacanay; y en sun consequencia declara a dicha Bienvenida Julia
Dacanay unica heredera legitima del testador, con derecho a heredar dos
tarceras partes de qualisquiera bienes, creditos, derechos y aciones del
mismo, y a dichios Tirso Dacanay, Pulina Dacanay y Hermenegilda Dacanay
con derecho como hijos naturales reconocidos del testador a heredar una
tercera parte de dichos bienes, creditos, derechos y acciones de Justiniano
Rogero Dacanay. Y que los bienes clasificados mas arriba deben distribuirse
en forma tar que los parafernales y mitad de gananciales correspondientes a la
finada Maria Ronquillo, esposa legitima del testador, correspondan a la unica
hija legitima de los mismos, o sea a Bienvenida Julia Dacanay; que dos
tarceras partes de los bienes propios y mitad de gananciales de Justiniano
Rogero Dacanay correspondan a dicha Bienvenida Julia Dacanay y quel es
tercio restante de dichos bienes propios y mitad de gananciales del testador
corresponda a sus tres hiojos naturales reconocidos ya nombrados. Por lo
tanto los bienes restantes despues del pago de los legados se repartiran como
sigu:
Bienes correspodientes a la esposa del testador o sea a Maria Ronquillo:
Parafernales . . . . . . . . . . . . . . . . . . . . .

P8,730.00

Mitad de gananciales . . . . . . . . . . . . .

Suma . . . . . . . . . . . . . . . . . . . . .

3,047.81

11,777.81
============

P11,777.81

Bienes correspondientes al testador:

Propios del mismo . . . . . . . . . . . . . . . . . . . . . . 4,945.50
Mitad de gananciales . . . . . . . . . . . . . . . . . . . .

3,047.81
7,003.81
7,993.31

28

Legado a deducir . . . . . . . . . . . . . . . . . . . . . . . .

989.50

Quedan . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,003.81
P18,781.62
============

Total de bienes a dividir entre herederos como sigue:

Para Bienvenida Julia Dacanay: Parafernales de su madre .

8,730.00

Gananciales de su madre . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,047.81

11,777.81
Dos tercios de 7,003.81, valor total de los bienes de su padre
. . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . .

Total para Bienvenida Julia Dacanay . . . . . . . . . . .

11,777.81

4,669.21

16,447.02
============

Bienes para los trs hijos naturales que representan un tercio de 7,003.81 o sea
2,334.60; distribuidos como sigue:
Tirso Dacanay, 1/3 de 2,334.60 . . . . . . . . . . . . . . . . . . . . .

778.20

Paulina Dacanay, 1/3 de 2,334.60 . . . . . . . . . . . . . . . . . . .

778.20

Hermenegilda Dacanay, 1/3 de 2,334.60. . . . . . . . . . . . .

778.20

2,334.60

P2,33460

Resultando que el testador en escritura publica de 10 de septiembre de 1904

dono a su hijo natural reconocido Tirso Dancanay bienes cuyo valor total al
tiempo de haserce la donacion asciende a 2,170 y que figuran marcados como
donados en la precedente clasificacion de bienes; y que dicha donacion que
fue hecha por causa de matrimonio del mismo Tirso Dacanay con Isabel
Florendo fue aceptada en escritura publica de fetcha 15 noviembre de 1904
por dicho Tirso Dacanay; resulltando del precedente regulacion que la porcion
legitima de cada uno de los tres hijos naturales reconocidos del testador, entre
los caudes se encuentra Tirso Dacanay, es solamente 778.20 (setecientos
stenta y ocho pesos y veinte centavos, moneda filipina), suma que es mucho
menor que la representada por el valor total de la donacion referida, siendo por
lo tanto justo anular esta en tanto cuanto excede a porcion legitimaria de esto
hertedero.
Resultando que como se ha demostrado en la precedente clasificacion y
regulacion de bienes deben corrsponder a la unica hija legitima d los finados
Justiniano Rogero Dacanay y Maria Ronquillo, llamada Bienvenida Julia
Dacanay, dos tercios de todos los bienes de aquel, que representan una suma
de 4,669.21 ademas de los bienes correspondientes a dicha Maria Ronqiullo
que ascieden a un valor total de 11,777.81; y resultando que a esta heredera
solo se asignan en el testamento en cuestion bienes por valor de 6,085
descontado los bienes muebles por ser de escaso o ningun valor. Resultando,
asimismo, que las otras dos hrederas, hijas naturales reconiocidas de
Justiniano Rogero Dacanay, llamadas Paulina Dacanay y Hermenegilda

29

8,730.00

Dacanay, solo han recibido asignaciones de bienes por valor de 360 y 650,
respectivamente, a pesar de ascender la porcion legitimaria de cada una de las
miamas a 778.20, como se ha demostrados en la precedente clasificacion y
regulacion de bienes. Considerando que estas tres herederas aparecn
lesionadas en sus respectivas porciones legitimas ademas de haberce
dispuesto por el testador de bienes parafernales de su finada esposa Maria
Ronquillo en perjuicio de la heredera Bienvenida Julia Dacanay; y quer por lo
tanto procede anular el testamento de que se trata en tanto cuanto lesiona
dichos derechos, sin que sea suficiente obstaculo en derecho la razon alegada
en el testamento de que dicha Bienvenida Julia Dacanay debe ser
desheredada por causa de desobediencia pues dicha causa no esta
comprendida en el articulo 853 del Cidigo Civil, aparte de no haberse
presentido por ninguna de las partes sostener como valida dicha clausula
testamentaria.
Y resultando, por ultimo de autos que las partes interesadas han objetado en el
corso de la trimitacion de este asunto contra la no inclusion por Tirso Dacanay
como administrador en sus cuentas como tal de los productos de bienes
donados al mismo por el testador como se ha dicho.
El Juzgado es de opinion que: las disposisciones contenidas en el testamento
en cuestion asi como las donaciones hechas por el testador a Tirso Dacanay,
de ben invalidarse en cuante perjudican las legitimas de las demas herderas
del finado que queben consederse y cargarse contra los bienes que resultan a
favor del testador los regados hechos por eel mismo antes de distribuirse sus
bienes entre sus herederos; que dos tercios de todos los bienes remanentes
del testador correspondn a su unica hija legitima Bienvenida Julia Dacanay y el
tercio restante en parytes iguales a Tirso, Paulina y Hermenegilda, apellidados
Dacanay; que los bienes patrafernales y mitad de ganancials que pertenecen a
la difunta Maria Ronquillo, deben separarse y entegrase an la hija de la misma,
dicha Bienvenida Julia Dacanay; que deben revarse a las partes interesadas
los derechos que crean tener a los frutos de los bienes donados por el finado
Justiniano Rogero Dacanay a Tirso Dacanay, para que los ejerciten en accion
separada del presente asunto.
En su consecuencia, el Juzgado, procidiento a designar los bienes que
corresponden a cada heredero y sin perjuicio de los legados mencionados en
el cuierpo de este decicion, y desaprobando los proyectos de particion
presentados por las partes, designa y adjudica a cada herdero nombrado
bienes como sigue:
A Bienvenida Julia Dacanay:
Todos los bienes mencionados y descritos en autos en la presente decicion
que, deducidos los corrspondientes a los tres hijos naturales Tirso, Paulina y
Hermenegilda, appelidados Dacanay, y a los legatarios Enrique Ronquillo,
Cornelio Dacnay, Bonifacio Cuyo y Honorata Villanueva, importan:
Parafernales de la finada Maria Ronquillo . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gananciales para la misma . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,047.81

Dos tercios de 7,003.81 valor de bienes y gananciales del testador, despues

de dedocidos los legados . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,669.21

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16,447.02
============

A Tirso Dacanay
Un terreno en Camposanto, de unas 1.8687 hectareas de extension, marcado
como parcela No. 31, ganancial, en la clasificacion hecha en esta decision.
Valor segun tasacion de la comision de avalou y segun escritura de donacion
otorgada por el testador a favor de este heredero . . . . . . . . . . . . . . . . . . . . . . . .

30

150.00

.................................
Un terreno en Agtipal, de unas 1.0687 hectareas de extension, que aparece en
la clasificacion como parcela No.9, bienes propios del tstador. Valor segun
comision 300;valor segun donacion . . . . . . . . . . . . . .

150.00

Un terreno (solar) con camarin, en la poblacion, en Bacnotan, que aparece en

la clasificacion como parcela No. 24, bienes deel padre, de 0.0700 hectarea
proximamente. Valor segun comision 70,;segun donacion es . . . . . . . . . . . . . . .
.......................................

120.00

Un terreno en Gabor, de 0.3206 hectarea de extension aproximada, que figura

en la clasificacion como parcela No. 33 ganancial; valor segun comicion y
donacion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

60.00

Un terreno en Tamorong, secano, de 25.8625 hectareas de extension

aproximada; parcela No. 34 en la clasificacion ganancial; valor segun comision
2,500; segun donacion es . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

200.00

Un terreno en Cabaroan, de 0.5500 hectara de extension aproximada; parcela

No. 8 en la clasificacion, bienes del padre. Valor segun comision, 50; segun
donacion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

100.00

780.00
Debe pagar Tirso Dacanay a Bienvenida Julia Dacanay una diferencia de . . . .
...........................................................
Importa su legitima . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.80
778.20

A Paulina Dacanay:
Un terreno en Daya-ti-Ili, de 0.1620 o 0.1720 hectarea de extension
aproximada, que figura como parcela No. 12, propio del padre, en la
clasificacion hecha en le cuerpo de esta decision . . . . . . . . . . . . . . . . . . . .

35.00

Dos parcelas de terreno en Bossaoit, de 0.1045 y 0.2500 hectarea

proximamente cada una; parclas Nos. 15 y 16 de la clasificacion (biuenes del
padre) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

25.00

Un terrenoen Bagutot, de 0.2500 hectarea proximamente, parcela No. 13 en la

clasificacion (bienes del padre) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

50.00

Un terreno en Bacsil o Barroro, de 1.2437 hectareas proximamente parcela No.

14 (bienes del padre) en la clasificacion . . . . . . . . . . . . . . . . . .

250.00

Ochosientos treinta y seis y cuatro decimos de manojos depalay a 50c manojo

..........................................................

418.20

778.20
============
A Hermenegilda Dacanay:
Un terreno en Casantolan, de 0.4604 hectarea de extension aproximada;

31

100.00

parcela No. 5, bienes del padre . . . . . . . . . . . . . . . . . . . . . . . . .

Un terreno en Gabor, de 1.8364 hectareas de extension proximamente;
parcela No. 6, bienes del padre . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

150.00

Un terreno en Zaragoza, de 1.0212 hectareas de extension aproximada; parcel

No. 30 gananciales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

400.00

Doscientos cincuenta y seis y cuatro decimos manojos depalay a 50c manojo .

.........................................................

128.00

778.20
============
Los siguientes son los bienes legados por el testador que por la presente
decision se confirman:
A Enrique Ronquillo:
Un solar en la poblacion, partida No. 17, del testador . . . . . . . . . . . . . . . . .

80.00

Un terreno en Mambug, partida No. 18, del testador . . . . . . . . . . . . . . . . . .

70.00

Un terreno en Cabugao, partida No. 19 del testador . . . . . . . . . . . . . . . . . .

100.00

Partida No. 23 (a) del testador; 1 caraballa, 30; 1 yegua, 30; gastos de estudio
e indemnizaciones,109.50 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

169.50

419.50
============
A Cornelia Dacanay:
Un terreno en Santa Cruz, partida No. 35, ganancial . . . . . . . . . . . . . . . . . .

120.00

Cuatro parcelas de terreno en Maragayap, partida No. 36, gananciales .

200.00
320.00

A Bonifacio Cuyo:
Un terrno en Bulala, partida No. 20, del testador . . . . . . . . . . . . . . . . . . . . . .

40.00

Un terreno en Dya-ti-Ili, partida No. 21 del testador . . . . . . . . . . . . . . . . . . . .

30.00

Un terreno en Lisqueb, partida No. 22, del testador . . . . . . . . . . . . . . . . . . .

150.00

220.00
============
A Honorata Villanueva:
Un terreno en Cabaroan o Sipulo, partida No. 30 del testador . . . . . . . . . .

30.00

The plan of distribution quoted may possibly be defective in some respects, but it is approximately correct, and as we have
already intimated, it is the best which can be prepared under the circumstances of the case and is approved and adopted by

32

us as providing for a satisfactory distribution of the estate as of September 23, 1916, but since that date, changes relating to
the subsequent accounts of the administrator have taken place, and it will be therefore be necessary to make some
additional provisions for said distribution and which we shall proceed to explain.
As we have already stated, the administrator owes the estate the sum of P1,868.83 together with the shortages found by
Judge Teodoro. These shortages consist of discrepancies between the accounts and the vouchers presented in support
thereof as to the palay harvested from the land under administration, and which discrepancies according to Judge Teodoro's
calculations, amounted to P1,129.31. It is, however, obvious that an error was committed in regard to the palay account for
the agricultural year 1921-1922, when the court below found that the administrator's accounts showed a harvest of 3,461
3/4 manojos of palay while the vouchers showed 4,208 manojos resulting in a difference of 746 3/4 manojos valued at
P403.25. Upon further examination, we find that according to the accounts, the harvest for the agricultural year was only
817 manojosand that there are no vouchers showing the alleged shortage in an intelligible manner. The sum of P403,25
must therefore be deducted from the total amount of the shortage found by Judge Teodoro (P1,129.31) thus leaving a total
shortage of P716.06, which added to the sum of P1,868.83 found to be due the estate under assignment of error G,
increases the administrator's debt to P2,584.43.
Judge Teodoro also found that in the accounts of 1914-1915 there was a balance of 2,540 3/4 manojos in favor of the estate
and that no account thereof had been rendered in the account of 1915-1916. His Honor therefore held the administrator
responsible for said palay and ordered him to pay its value to the estate. Inasmuch as thispalay must be considered
included in the 6,033 manojos of palay listed by Judge Camus in his scheme of distribution and there classified as
community property, it may be considered eliminated as a separate item.
As to said 6,033 manojos, it may further be observed that on January 27, 1915, Judge Camus ordered that thepalay in the
hands of the administrator to be distributed among the four heirs of the estate, on the condition that they would give bonds to
respond for the value of the palay so distributed. According to the accounts, there was at the time 4,445 2/3 manojos under
administration. In January, 1916, the administrator filed a statement to the effect that including the crop for 1915, there was
about 5,080 manojos of palay under administration, but in making the distribution, he found that 1,270 manojos and been
destroyed by water or else stolen in 1912 and 1913. He did not definitely assert that the distribution was actually made. The
fact that Judge Camus included thispalay together with the crop for 1916 in his plan of distribution of the estate shows quit
conclusive that, as a matter of fact, the distribution of palay had not been carried into the effect. It is also obvious that Judge
Camus did not exonerate the administrator from liability for the alleged loss of over one-fourth of the palay for which he was
accountable. Upon this points, we think the conclusions of His Honor were correct.
The income of the property donated to Tirso Dacanay by his father should have been brought into collation, but we have no
sufficient data from which the amount of said income can be determined. For the reason Judge Camus reserved the right of
the parties in interest to bring a separate suit against the administrator for the recovery of their share of the collationable
income. But the case has been pending for so many years that we do not feel justified in encouraging further litigation, and
that question will now by considered closed. The appellants have had ample time and opportunity to present evidence from
which the approximate income might have been determined. Having failed to do so, they must suffer the consequences.
It will be noted that in Judge Camus' order of distribution, the property assigned to Bienvenida Dacanay is not specifically
enumerated but she is given the residue of the estate after deducting the shares of the other heirs and the legatees. In order
to avoid misunderstanding, we will here state the said residue consist of the properties given the following numbers in the
plan of distribution: one (1), two (2), three (3), four (4), seven (7), ten (10), eleven (11), twenty-six (26), twenty-seven (27),
twenty-eight (28), twenty-nine (29), thirty-two (32), thirty-seven (37), thirty-eight (38), thirty-nine (39), and P2,470 out of
number forty (40). Number forty-one (41), the cash in the hands of the administrator on June 30, 1916, has been included in
the subsequent accounts and need not be taken into consideration here. The parcels described under number forty-two (42)
and forty-three (43) were sold by the deceased and have nothing to do with the inheritance and the distribution thereof.
In the plan of distribution Judge Camus says: "Debe pagar Tirso Dacanay a Bienvenida Dacanay una diferencia de P780."
This amount should, as far as we can see, be reduced to 530 which will cover the personal property donated to Tirso
Dacanay and described under item (b) of number twenty-three (23). The property there described will be therefore be assign
to Tirso Dacanay. The heirs of Bienvenida Dacanay are entitled to the property described in item (c) of said number 23 and
to the payment to them of P530 as aforesaid. This payment is, of course, separate and distinct from the debt to the estate
incurred by the administrator subsequent to September 23, 1916, the date of Judge Camus' order of distribution.
For the reasons stated, the decision appealed from is hereby reversed and it is ordered:
(a) That Tirso Dacanay be immediately removed from his office as administrator of the estate in question and the
court below is directed to appoint a suitable person as his successor.
(b) That said Torso Dacanay be required to render strict account of his administration of the estate during the
period subsequent to October 31, 1925, and that he make immediate delivery to his successor of property under
his administration. He will not be allowed compensation for his own personal services nor will be granted any
allowance for attorney's fees.
(c) That at the earliest possible moment of distribution be made of the property enumerated in the foregoing plan of
distribution to made be made in accordance with said plan as far as practicable and taking into consideration the
foregoing discussion. The claims against Tirso Dacanay for the value of the 6,033 manojos of palay listed under
the number 40 and the P530 due Bienvenida Dacanay under number 23 (b) will be included in this distribution.

33

(d) That Tirso Dacanay be further required to pay the sum of P2,584.43 for which he became indebted to the
estate during the period from September 23, 1916, until October 31, 1925, and that this sum together with the net
credits which may have accrued to the estate subsequent to said period, be distributed among the heirs in the
proportion of two-thirds to the heirs of Bienvenida Dacanay, and one-ninth to each of the two other natural children
of the deceased.
Eliminating the items which we have disapproved as hereinbefore shown, the accounts of the administrator up to and
including the date of October 31, 1925, are approved. No costs. So ordered.
Johnson, Street, Malcolm, Villamor, Romualdez, and Villa-Real, JJ., concur.

G.R. No. 86250 February 26, 1990

ALBERTO F. LACSON, EDITHA F. LACSON, ROMEO F. LACSON and ZENA F. VELASCO, petitioners,
vs.
HON. LUIS R. REYES, in his capacity as presiding judge of Branch 22 of the Regional Trial Court of Cavite, Branch
22, and/or Multiple Sala, Imus, Cavite, and EPHRAIM J. SERQUINA, respondents.
Victor H. Volfango for petitioners.
Ephraim J. Serquina for and his own behalf as respondent.

SARMIENTO, J.:
On August 26, 1987, the private respondent, Ephraim Serquina, petitioned the respondent court for the probate of the last
will and testament of Carmelita Farlin. His petition was docketed as Sp. Proc. No. 127-87 of the respondent court, entitled
"In Re Testate Estate of Carmelita S. Farlin, Ephraim J. Serquina, Petitioner." He also petitioned the court in his capacity as
counsel for the heirs, the herein petitioners, and as executor under the will.
The petition was not opposed and hence, on November 17, 1987, the respondent court issued a "certificate of
allowance," 1 the dispositive part of which reads as follows:
WHEREFORE, upon the foregoing, the Court hereby renders certification that subject will and testament
is accordingly allowed in accordance with Sec. 13 of Rule 76 of the Rules of Court.
SO ORDERED. 2
On March 14, 1988, Atty. Ephraim Serquina filed a "motion for attorney's fees" 3 against the petitioners, alleging that the
heirs had agreed to pay, as and for his legal services rendered, the sum of P68,000.00.
Thereafter summonses were served upon the heirs "as if it were a complaint against said heirs" 4 directing them to answer
the motion.
Thereafter, the heirs filed their answer and denied the claim for P68,000.00 alleging that the sum agreed upon was only
P7,000.00, a sum they had allegedly already paid.
After pre-trial, the respondent court rendered judgment and disposed as follows:
In the light of the foregoing, considering the extent of the legal services rendered to the clients, the value
of the properties gained by the clients out of said services, the petition for attorney's fees is granted.
Judgment is hereby rendered directing the respondent heirs to pay their lawyer the sum of P65,000.00 as
true and reasonable attorney's fees which shall be a lien on the subject properties. Cost against the
respondent.
SO ORDERED. 5
On October 21, 1988, eleven days after the heirs received a copy of the decision, 6 the latter filed a notice of appeal.
On November 7, 1988, the respondent court issued an order directing the heirs to amend their notice of appeal.

On October 27, 1988, the respondent court issued an order "noting" the notice on appeal "appellants [the heirs] having failed
to correct or complete the same within the reglementary period to effect an appeal." 8
On November 24, 1988, the respondent court issued yet another order denying the notice of appeal for failure of the heirs to
file a record on appeal. 9
Thereafter, Atty. Serquina moved for execution.

34

On December 5, 1988, the respondent court issued an order granting execution.

10

The petitioners submit that the decision, dated October 26, 1988, and the orders, dated October 27, 1988, November 24,
1988, and December 5, 1988, respectively, are nun and void for the following reasons: (1) the respondent court never
acquired jurisdiction over the "motion for attorney's fees" for failure on the part of the movant, Ephraim Serquina, to pay
docket fees; (2) the respondent court gravely abused its discretion in denying the heirs' notice of appeal for their failure to file
a record on appeal; and (3) the respondent court also gravely abused its discretion in awarding attorney's fees contrary to
the provisions of Section 7, of Rule 85, of the Rules of Court.
Atty. Serquina now defends the challenged acts of the respondent court: (1) his motion was a mere incident to the main
proceedings; (2) the respondent court rightly denied the notice of appeal in question for failure of the heirs to submit a record
on appeal; and (3) in collecting attorney's fees, he was not acting as executor of Carmelita Farlin's last will and testament
because no letters testamentary had in fact been issued.
We take these up seriatim.
I.
Anent docket fees, it has been held 11 that the court acquires jurisdiction over any case only upon payment of the prescribed
docket fee.
Although the rule has since been tempered, 12 that is, there must be a clear showing that the party had intended to evade
payment and to cheat the courts, it does not excuse him from paying docket fees as soon as it becomes apparent that
docket fees are indeed payable.
In the case at bar, the "motion for attorney's fees" was clearly in the nature of an action commenced by a lawyer against his
clients for attorney's fees. The very decision of the court states:
This case is an out-growth from Sp. Proc. No. 127-87 of same Court which was long decided (sic). It
resulted from the filing of a petition for attorney's fees by the lawyer of the petitioner's heirs in the case
against the latter.
Upon the filing of the petition for attorney's fees, the heir- respondents (sic) were accordingly summoned
to answer the petition as if it were a complaint against said heirs who retained the petitioner as their
lawyer in the said case. 13
In that event, the parties should have known, the respondent court in particular, that docket fees should have been priorly
paid before the court could lawfully act on the case, and decide it.
It may be true that the claim for attorney's fees was but an incident in the main case, still, it is not an escape valve from the
payment of docket fees because as in all actions, whether separate or as an offshoot of a pending proceeding, the payment
of docket fees is mandatory.
Assuming, therefore, ex gratia argumenti, that Atty. Serquina's demand for attorney's fees in the sum of P68,000.00 is valid,
he, Atty. Serquina, should have paid the fees in question before the respondent court could validly try his "motion".
II.
With respect to the second issue, it has been held that in appeals arising from an incident in a special proceeding, a record
on appeal is necessary, otherwise, the appeal faces a dismissal. 14 It has likewise been held, however, that in the interest of
justice, an appeal, brought without a record on appeal, may be reinstated under exceptional circumstances. Thus:
xxx xxx xxx
It is noted, however, that the question presented in this case is one of first impression; that the petitioner
acted in honest, if mistaken, interpretation of the applicable law; that the probate court itself believed that
the record on appeal was unnecessary; and that the private respondent herself apparently thought so,
too, for she did not move to dismiss the appeal and instead impliedly recognized its validity by filing the
appellee's brief.
In view of these circumstances, and in the interest of justice, the Court feels that the petitioner should be
given an opportunity to comply with the above-discussed rules by submitting the required record on
appeal as a condition for the revival of the appeal. The issue raised in his appeal may then be fully
discussed and, in the light of the briefs already filed by the parties, resolved on the merits by the
respondent court. 15
In the instant case, the Court notes the apparent impression by the parties at the outset, that a record on appeal was
unnecessary, as evidenced by: (1) the very holding of the respondent court that "[i]t is now easy to appeal as there is no
more need for a record on appeal . . . [b]y merely filing a notice of appeal, the appellant can already institute his appeal . . .
;" 16 (2) in its order to amend notice of appeal, it did not require the appellants to submit a record on appeal; and (3) Atty.
Serquina interposed no objection to the appeal on that ground.
In any event, since we are annulling the decision appealed from, the matter is a dead issue.

35

III.
As we have indicated, we are granting certiorari and are annulling the decision appealed from, but there seems to be no
reason why we can not dispose of the heirs' appeal in a single proceeding.
It is pointed out that an attorney who is concurrently an executor of a will is barred from recovering attorney's fees from the
estate. The Rule is specifically as follows:
SEC. 7. What expenses and fees allowed executor or administrator. Not to charge for services as
attorney. Compensation provided by will controls unless renounced. An executor or administrator shall
be allowed the necessary expenses in the care, management and settlement of the estate, and for his
services, four pesos per day for the time actually and necessarily employed, or a commission upon the
value of so much of the estate as comes into his possession and is finally disposed of by him in the
payment of debts, expenses, legacies, or distributive shares, or by delivery to heirs or devisees, of
two per centum of the first five thousand pesos of such value, one per centum of so much of such value
as exceeds five thousand pesos and does not exceed thirty thousand pesos, one-half per centum of so
much of such value as exceeds thirty thousand pesos and does not exceed one hundred thousand
pesos, and one-quarter per centum of so much of such value as exceeds one hundred thousand pesos.
But in any special case, where the estate is large, and the settlement has been attended with great
difficulty, and has required a high degree of capacity on the part of the executor or administrator, a
greater sum may be allowed. If objection to the fees allowed be taken, the allowance may be reexamined
on appeal.
If there are two or more executors or administrators, the compensation shall be apportioned among them
by the court according to the services actually rendered by them respectively.
When the executor or administrator is an attorney, he shall not charge against the estate any
professional fees for legal services rendered by him.
When the deceased by will makes some other provision for the compensation of his executor, that
provision shall be a full satisfaction for his services unless by a written instrument filed in the court he
renounces all claim to the compensation provided by the will. 17
The rule is therefore clear that an administrator or executor may be allowed fees for the necessary expenses he has
incurred as such, but he may not recover attorney's fees from the estate. His compensation is fixed by the rule but such a
compensation is in the nature of executor's or administrator's commissions, and never as attorney's fees. In one case, 18 we
held that "a greater sum [other than that established by the rule] may be allowed 'in any special case, where the estate is
large, and the settlement has been attended with great difficulty, and has required a high degree of capacity on the part of
the executor or administrator.'" 19 It is also left to the sound discretion of the court. 20With respect to attorney's fees, the rule,
as we have seen, disallows them. Accordingly, to the extent that the trial court set aside the sum of P65,000.00 as and for
Mr. Serquina's attorney's fees, to operate as a "lien on the subject properties," 21the trial judge must be said to have gravely
abused its discretion (apart from the fact that it never acquired jurisdiction, in the first place, to act on said Mr. Serquina's
"motion for attorney's fees").
The next question is quite obvious: Who shoulders attorney's fees? We have held that a lawyer of an administrator or
executor may not charge the estate for his fees, but rather, his client. 22 Mutatis mutandis, where the administrator is himself
the counsel for the heirs, it is the latter who must pay therefor.
In that connection, attorney's fees are in the nature of actual damages, which must be duly proved. 23 They are also subject
to certain standards, to wit: (1) they must be reasonable, that is to say, they must have a bearing on the importance of the
subject matter in controversy; (2) the extent of the services rendered; and (3) the professional standing of the lawyer. 24 In all
cases, they must be addressed in a full-blown trial and not on the bare word of the parties. 25 And always, they are subject to
the moderating hand of the courts.
The records show that Atty. Ephraim Serquina, as counsel for the heirs, performed the following:
xxx xxx xxx
5. That after the order of allowance for probate of the will, the undersigned counsel assisted the heirs to
transfer immediately the above-mentioned real estate in their respective names, from (sic) the payment
of estate taxes in the Bureau of Internal Revenue to the issuance by the Registry of Deeds of the titles, in
order for the heirs to sell the foregoing real estate of 10,683 sq. cm (which was also the subject of sale
prior to the death of the testator) to settle testator's obligations and day-to-day subsistence being (sic)
that the heirs, except Zena F. Velasco, are not employed neither doing any business; 26
The Court is not persuaded from the facts above that Atty. Serquina is entitled to the sum claimed by him (P68,000.00) or
that awarded by the lower court (P65,000.00). The Court observes that these are acts performed routinely since they form
part of what any lawyer worth his salt is expected to do. The will was furthermore not contested. They are not, so Justice
Pedro Tuason wrote, "a case [where] the administrator was able to stop what appeared to be an improvident disbursement
of a substantial amount without having to employ outside legal help at an additional expense to the estate," 27 to entitle him
to a bigger compensation. He did not exactly achieve anything out of the ordinary.

36

The records also reveal that Atty. Serquina has already been paid the sum of P6,000.00. 28 It is our considered opinion that
he should be entitled to P15,000.00 for his efforts on a quantum meruit basis. Hence, we hold the heirs liable for P9,000.00
more.
WHEREFORE, premises considered, judgment is hereby rendered: (1) GRANTING the petition and making the temporary
restraining order issued on January 16, 1989 PERMANENT; and (2) ORDERING the petitioners to PAY the private
respondent, Atty. Ephraim Serquina, attorney's fees in the sum of P9,000.00. The said fees shall not be recovered from the
estate of Carmelita Farlin.
No costs.
SO ORDERED.
Melencio-Herrera (Chairperson), Paras, Padilla and Regalado, JJ., concur.

G.R. No. L-23718

August 28, 1925

In the matter of estate of Henry w. Elser, deceased.

VICENTE E. REYES, claimnant-appellant,
vs.
C.W. ROSENSTOCK, executor-appelant.
STATEMENT
On or about April 30, 1923, the plaintiff obtained a judgment against Henry W. Elser, who was then living, for the sum of
P64,242.69, and for the foreclosure of a certain real mortgage on property in Manila and the sale thereof to satisfy the
judgment. Pending proceedings to appeal to this court from the judgment, Elser died June 18, 1923, and in the ordinary
course of business C.W. Rosenstock was appointed as executor of his estate, and later the appeal was perfected by him as
executor, and the judgment of the lower court was affirmed by this court and the case returned to the court of its origin for
further proceedings.1 Execution was issued, and on May 17, 1924, the mortgaged property was sold by the sheriff of Manila
at public auction for P13,000. On June 2, 1924, the sale was duly confirmed, and no appeal was taken from the order of
confirmation. The plaintiff duly applied for and on July 25, 1924, obtained a deficiency judgment against the Elser estate for
the sum of P68,700.88 with interest at 12 per cent per annum on P64,242.69 of said sum from July 8, 1924. After obtaining
the deficiency judgment, the plaintiff at once applied to the Court of First Instance for the appointment of a committee on
claims to examine and approve his claim against the Elser estate, of which the defendant was duly notified, and to which he
duly objected.
After a hearing the court appointed Jose de Guzman and P.D. Carman as commissioners.
August 29, 1924, the plaintiff, based upon his deficiency judgment, filed with the commissioners his proof of claim, to which
the defendant objected. September 19, 1924, the plaintiff's claim was allowed in full by the commissioners, as a claim
against the Elser estate, to which the defendant excepted. December 8, 1924, the defendant filed a motion for a
reconsideration, which was denied, and from an order approving the allowance of the committee on claims, the defendant
prosecutes this appeal, assigning the following errors:.
I. The Court of First Instance erred and exceeded its jurisdiction in entering the order of August 21, 1924,
reappointing the committee on claims and appraisals in the above-entitled proceeding, for the purpose of hearing
and deciding the claim of Vicente E. Reyes against the estate.
II. The Court of First Instance erred in entering the order of November 18, 1924, declaring the appeal of the
executor from the decision of the committee allowing the claim of Vicente E. Reyes to have been presented out of
time, and ordering the executor to pay the said claim of Vicente E. Reyes out of the funds of the estate.

JOHNS, J.:
There is no dispute about any material fact. The question presented is a legal one which involves the construction of section
708 of the Code of Civil Procedure, which is as follows:
Mortgage debt due from estate. A creditor holding a claim against the deceased, secured by mortgage or other
collateral security, may abandon the security and prosecute his claim before the committee, and share in the
general distribution of the assets of the estate; or he may foreclose his mortgage or realize upon his security, by
ordinary action in court, making the executor or administrator a party defendant; and if there is a judgment for a
deficiency, after the sale of the mortgaged premises, or the property pledged, in the foreclosure or other
proceeding to realize upon the security, he may prove his deficiency judgment before the committee against the
estate of the deceased; or he may rely upon his mortgage or other security alone, and foreclose the same at any

37

time, within the period of the statute of limitations, and in that event he shall not be admitted as a creditor, and shall
receive no share in the distribution of the other assets of the estate; but nothing herein contained shall prohibit the
executor or administrator from redeeming the property mortgaged or pledged, by paying the debt for which it is
held as security, under the direction of the court, if the court shall adjudge it to be for the best interest of the estate
that such redemption shall be made.
It is important to note that the original judgment against Elser was rendered on April 30, 1923, and that he was living at the
time it was rendered, and that he died on June 18, 1923, pending his appeal to this court, or forty-nine days after the
rendition of the judgment.
This section provides for three separate distinct proceedings. First, a creditor holding a claim against the deceased, secured
by mortgage or other collateral security, may abandon his security and prosecute his claim before the committee and share
in the general distribution of the assets of the estate; or, second, he may foreclose his mortgage or realize upon his security,
by an ordinary action in court, making the executor or administrator a party defendant; and if there is a deficiency judgment,
after the sale of the mortgaged property, he may prove his deficiency judgment before the committee on claims against the
estate of the deceased, or, third, he may rely exclusively upon his mortgage and foreclose it at any time, within the period of
the statute of limitations, and if he relies exclusively upon the mortgage, he shall not be admitted as a creditor of the estate,
and shall not share in the distribution of the assets of the estate.
In the instant case, the plaintiff proceeded under and fully complied with all of the requirements of the second provision. He
obtained his judgment and decree of foreclosure during the lifetime of the deceased.On his own motion and as executor of
the estate, Rosenstock was substituted as a defendant and prosecuted the appeal. After the judgment was affirmed, the
plaintiff promptly issued an execution and sold the property. After applying the proceeds of the sale to the satisfaction of the
judgment, the plaintiff promptly applied for and obtained a deficiency judgment. When the deficiency judgment was obtained,
the plaintiff petitioned the court to appoint a committee on claims. His petition was granted and the committee was
appointed. The plaintiff then appeared before the committee and presented his claim based upon the deficiency judgment,
and it was allowed, and the allowance of his claim was confirmed by the court. The defendant had notice of all of such
proceedings, to all of which he objected and duly excepted. Hence, plaintiff's claim comes squarely under the second
provision of section 708 of the Code of Civil Procedure above quoted.
Defendant contends that the claim in question is a contingent claim, and that as such it should have been presented to the
original committee on claims of the estate, and that because it was not presented it is barred.
In his brief appellant says:
At all times prior to May 17, 1924, his deficiency judgment, his present claim, was a mere contingent claim. The
holder of a contingent claim is not a creditor and it is not known until the happening of the contingency, that he will
become one; the Code nowhere calls him a "creditor;" he is merely "a person" who has a contingent claim
(see section 746, Code of Civil Procedure). It is true that claimant-appellee during all of "the time previously
limited" was a mortgage creditor of the estate, but as such creditor, he elected not to surrender and prove his claim
as he might have done under section 708, or to present the possibility of his requiring a deficiency judgment, to the
committee in the form of a contingent claim. But claimant-appellee, on August 2, 1924, when he applied to the
court to have the committee recommissioned did not apply as a creditor with a mortgage credit which he had failed
to present, but he applied as the holder of a claim which had been contingent during all of "the time previously
limited" and had not been presented as required by section 746 of the Code of Civil Procedure, and which had
then become absolute, after the expiration of the "time previously limited." There is no remedy in section 690 for a
holder of a contingent claim who has not presented it before the "time previously limited" has expired. Section 690,
as we have seen, is a remedy for a "creditor" of an estate, who was a creditor before the expiration of the "time
previously limited;" but to have been a creditor, he must have had a claim which he could have presented and
proved, before the committee; moreover, it must have been the same claim which he now seeks to have allowed
and not a mere contingent claim. The holder of a contingent claim is not a creditor. Therefore it must be concluded
that section 690 does not provide for recommissioning the committee to hear a contingent claim that has become
absolute. Provision for that proceeding is made in section 748 of the Code of Civil Procedure, but a jurisdictional
fact required by that section is that the contingent claim must have been presented to the committee before the
expiration of the "time previously limited" and mentioned in the committee's report as provided in section 746 of the
Code.
Let it be said again that before the court can have jurisdiction under section 690 to recommission the committee, an
application must be made by a creditor who was a creditor before the expiration of "the time previously limited," and is a
creditor at the time the application is made, by virtue of one and the same claim. But claimant-appellee does not fit that
requirement. In so far his present claim was concerned, he was a mere contingent claimant and therefore not a creditor of
the estate, prior to the expiration of "the time previously limited."
Words & Phrases, volume 2, page 1498, says:
A "contingent claim" is one which has not accrued, and which is dependent on the happening of some future event.
A "contingent claim," within the rule that claims against an estate which are not contingent are barred if not
presented within a certain time, is one depending upon something thereafter to happen. Such a claim is not
contingent after the happening of the event.

38

A "contingent claim," within Comp. St., c. 23, secs. 258 et seq., is a claim against a decedent, not absolute or
certain, but depending upon some event after the death of the testator or intestate which may or may not happen.
A subsisting demand against the estate of a deceased person which had matured and was capable of being
enforced during the lifetime of the deceased is not a contingent claim.
Plaintiff's claim comes squarely within the last definition.
Defendant's contention that the claim of the plaintiff is a contingent one is not tenable.
In Hinlo vs. De Leon (18 Phil., 221), this court, on page 230 of the opinion, says:
If there is a judgment for a deficiency, continues the section above quoted, "after the sale of the mortgaged
premises, or the property pledged, in the foreclosure or other proceeding to realize upon the security, he may
prove his deficiency judgment, before the committee against the estate of the deceased. . . ."
In Osorio vs. San Agustin (25 Phil., 404), this court, on page 409 of the opinion, says:.
. . . . In view of the fact that the plaintiff had elected to abandon the security given him by his mortgage and to
prosecute his claim before the committee, he forfeited his right to bring an action upon the security in another
separate and distinct action. . . .
There is a clear distinction between the facts in that and this case. In pointing out the distinction, Justice Carson, in his
concurring opinion on page 409 says:
I concur in the disposition of this case.
Merely to avoid possibility of misunderstanding, I think it well to point out that under the provisions of section 708 of Act No.
190, part of which is quoted in the opinion, it would appear that in case a creditor elects to rely upon his mortgage he may
foreclose his mortgage or realize upon the security by an ordinary action in court, making the executor or administrator a
party defendant; and if there is a judgment for a deficiency after the sale of the mortgaged premises or the other property
pledged in the foreclosure or other proceeding, he may prove his deficiency judgment before the committee and to that
amount he may share in the general assets of the estate of the deceased. In other words, a creditor holding a claim against
the deceased person secured by mortgage or other collateral security may rely upon his security and institute an ordinary
action based thereon without abandoning his right to present his claim to the committee should the security not be sufficient
to pay the debt.
That is this case. The construction for which the defendant contends would nullify the second provision of section 708 of the
Code of Civil Procedure, and leave it without any legal force and effect.The Code of Civil Procedure provides as follows:.
Sec. 689. Court to limit time for presenting claims. The court shall allow such time as the circumstances of the
case require for the creditors to present their claims to the committee for examination and allowance; but not, in
the first instance, more than twelve months, or less than six months; and the time allowed shall be stated in the
commission. The court may extend the time as circumstances require, but not so that the whole time shall exceed
eighteen months..
Sec. 690. When time may be extended. On application of a creditor who has failed to present his claim, if made
within six months after the time previously limited, or, if a committee fails to give the notice required by this chapter,
and such application is made before the final settlement of the estate, the court may, for cause shown, and on
such terms as are equitable, renew the commission and allow further time, not exceeding one month, for the
committee to examine such claim, in which case it shall personally notify the parties of the time and place of
hearing, and as soon as may be make the return of their doings to the court..
The contention of the defendant that the petitioner was not a creditor within the meaning of section 690 is not tenable.
Petitioner's claim was based upon a judgment rendered in a court of competent jurisdiction forty-nine days before the death
of Elser, and pending the appeal Rosenstock, as executor, on his own motion, was made defendant as such, and the final
judgment upon which the property was sold was rendered against Rosenstock as executor of the Elser estate.The
defendant has filed an able and exhaustive brief, but has overlooked the fundamental fact that the original judgment in this
case was personally rendered against the deceased while he was still living.
The judgment of the lower court is affirmed, with costs. So ordered.
Avancea, C.J., Street, Malcolm, Villamor, Ostrand, and Villa-Real, JJ., concur.

[G.R. No. 24659. February 15, 1926. ]

In re will of Henry W. Elser, deceased. C. W. ROSENSTOCK, executor-appellee, v. ELAINE CHILDS
ELSER, Appellant.
[G.R. No. 24867. February 15, 1926. ]

39

In re will of Henry W. Elser, deceased. ELAINE CHILDS ELSER, Petitioner-Appellant, v. C. W. ROSENSTOCK,

executor-appellant.
Fisher, DeWitt, Perkins & Brady for appellant in cases Nos. 24659 and 24867.
Gibbs & McDonough and Roman Ozaeta for appellee in case No. 24659, and for appellant in case No. 24867.
SYLLABUS
1. AN ORDER OF COURT BASED UPON A STIPULATION FIXING THE AMOUNT OF AN EXECUTORS FEE: AT THE
TIME OF HIS APPOINTMENT IS NOT A BINDING CONTINUOUS CONTRACT. Where at the time of his appointment,
all of the parties in interest stipulated that R should have a compensation of P1,000 per month for his services as executor of
the estate of E, and the court approved the stipulation, such facts do not constitute a valid and binding contract which runs
throughout the whole administration of the estate, and in such a case, the court, on a proper showing of changed conditions,
may increase or decrease the monthly compensation of the executor.
2. IN "ANY SPECIAL CASE" THE AMOUNT OF AN EXECUTORS FEE IS LARGELY IN THE DISCRETION OF THE
PROBATE COURT. The amount of an executors fee allowed by the Court of First Instance in "any special case" under
the provisions of section 680 of the Code of Civil Procedure is a matter largely in the discretion of the probate court, which
will not be disturbed on appeal, except for an abuse of discretion.
STATEMENT
Upon the death of Henry W. Elser, and on June 21, 1923, C. W. Rosenstock filed a petition in the Court of First Instance of
Manila for the probate of Elsers will, and that he, Rosenstock, be appointed as executor of the estate.
August 18, 1923, Judge Diaz admitted the will to probate, and appointed Rosenstock as executor, who later qualified and
entered upon the discharge of his duties.
August 30, 1923, the executor filed the following petition: "Comes now the executor in the above-entitled case and shows
the court:
"1. That the work of administering the above-entitled estate is such as to require an unusual amount of time of the executor,
owing to the size and involved condition of the estate.
"2. That as manager of the business of the deceased and for administering the said as guardian of the deceased
immediately prior to his death and for administering the said estate as special administrator, after the death of the deceased
and before the probate of the will of the deceased, the administrator was allowed one thousand pesos (P1,000) per month.
"3. That all parties in the Philippines of interest in the above-entitled case have agreed that the said sum of P1,000 per
month, as compensation for the executor, is just and reasonable.
"Wherefore, the executor prays the court that the executor be allowed P1,000 per month as compensation as administrator
of the estate in the above-entitled case."
October 3, 1923, the court made the following order:
"It appearing from the inventory of the estate filed by the executor and appraised by the committee appointed for the
purpose, that the estate in the above-entitled case is unusually large and involved; it further appearing that notice of the said
petition was duly served upon all interested parties in the Philippine Islands, who not only did not oppose the petition but
joined in the prayer of the same; and it appearing that the compensation asked, in view of the circumstances of the case, is
reasonable, and it appearing further that the guardian ad litem of the minor interested in this case, Frederick Johnson Elser,
has expressed his concurrence in the petition referred to of the executor herein; no reason appearing why the said petition
should not be granted, let the same be granted."
April 15, 1925, the widow of Mr. Elser filed a petition asking that the order of October 3, 1923, be revoked, and that the
compensation of the executor should be based upon the provisions of section 680 of the Code of Civil Procedure.
June 13, 1925, Judge Imperial revoked the order of October 3, 1923, and fixed the compensation of the executor at P400
per month, commencing with the 1st of June, 1925. From this order. the widow appeals. contending that the trial court erred
in failing to reduce the compensation of the executor to the statutory amount allowed under section 680.
The executor appeals, and assigns the following errors:
"I. The trial court erred in finding that the grounds upon which movents motion is based were established by the various

40

writings which appear in the record, and particularly by the accounts filed by the executor.
"II. The trial court erred in finding that the work which is being done by the executor at the present time has been reduced to
much less than half of that which he did when he was appointed and for several months thereafter.
"III. The trial court erred in reducing the executors compensation from P1,000 to P400 a month, and in not denying movents
motion."
DECISION
JOHNS, J. :
The record speaks for itself. At the time of his appointment, all parties agreed that the executor should have and receive
P1,000 per month for his services.
The order of October 3, 1923, among other things, recites the agreed facts, and is largely founded upon that stipulation. The
present order, reducing the executors fee to P400 per month, from which both parties have appealed, was made on June
13, 1925, more than nineteen months after the original order was made. That is to say, that at the time the last order was
made, Rosenstock had been acting as executor of the estate for more than nineteen months, and, as such, had been
administering the affairs of the estate, with the ultimate view of winding up and closing it. It is very apparent that whatever
reasons may have existed for allowing him a compensation of P1,000 per month at the time of his appointment have ceased
to exist. During that period, all of the assets and liabilities of the estate should have been legally ascertained and
determined. In other words, the character and class of the work which now devolves upon the executor is of a very different
type and nature now than at the time of his appointment. Although by mutual consent his compensation was fixed at P1,000
per month at the time of his appointment, that was not a valid or binding contract continuous throughout the whole
administration of the estate. It was always subject to change and the approval of the court, and to either an increase or
decrease as conditions might warrant. At all times the compensation of the executor was a matter largely in the discretion of
the probate court.
The original order of October 3, 1923, and the last order of June 13, 1925, were both made in the court in which the probate
proceedings were pending, and all matters pertaining to the estate were peculiarly within the knowledge and province of that
court, by which all orders were made, and in which all accounts were filed. That is to say, from the date of the appointment
of the executor until the order of June 13, 1925, the lower court had before it all of the records, orders, and proceedings
growing out of the administration of the estate. Based upon such records, it found as a fact that under all of the existing
circumstances the fee of the executor from June 1, 1925, should be P400 per month.
In matters of this nature, the findings and conclusions of the probate court are entitled to much weight, particularly on
questions of fact.
It appears from the record that the widow filed a motion for the removal of the executor, and that an exhaustive hearing was
had and the motion denied.
It may be that the feeling now shown to exist by the widow against the executor was the primary cause of her motion to have
his allowance reduced. Be that as it may, the court of origin, in which the probate proceedings were pending, made the
reduction, and there is ample evidence to sustain its finding.
For the reasons above stated, there is no merit in the appeal of the widow. The judgment of the lower court is in all respects
affirmed. Neither party to recover costs. So ordered.
Avancea, C.J., Street, Malcolm, Villamor, Ostrand, Romualdez and Villa-Real, JJ., concur.
Johnson, J., did not take part.

G.R. No. L-9686. May 30, 1961.]

FELICISIMO C. JOSON, administrator-appellee, v. EDUARDO JOSON, ET AL., heirs-appellants.
Lavides, Sicat & Lavides for administrator-appellee.
Mario S. Garcia for heirs-appellants.

41

SYLLABUS

1. EXECUTOR AND ADMINISTRATOR; EXTENT AND SCOPE OF RESPONSIBILITIES ENUMERATED. Section 1 of

Rule 86 categorically charges an administrator "with the whole of the estate of the deceased which has come into his
possession at the value of appraisement contained in the inventory; with all the proceeds of so much of the estate as is sold
by him, at third price at which sold." Section 8 of the same rule imposes upon him the duty to render an account of his
administration within one year from his appointment, unless the court otherwise directs, as well as to render such further
accounts as the court may require until the estate is fully, settled. Section 10 likewise provides that before an account of the
administrator is allowed notice shall be given to all persons interested of the time and place of examining and allowing the
same. And finally section 9 expressly directs that the court shall examine the administrator upon oath with respect to every
matter relating to his account except when no objection is made to the allowance of the account and its correctness is
satisfactorily established by the competent testimony.
2. DUTIES TO RENDER ACCOUNTING; CANNOT BE WAIVED. The duty an administrator to render an account is not a
mere incident of an administration proceeding which can be waived or disregarded when the same is terminated, but that it
is a duty that has to be performed and duly acted upon by the Court before the administration is finally ordered closed and
terminated.
DECISION
BAUTISTA ANGELO, J.:
Tomas Joson died on July 5, 1945 in Quezon, Nueva Ecija leaving behind heirs and properties. He married three times and
was survived by nine (9) heirs: two (2) children and grandchildren by his first wife Eufemia de la Cruz; two (2) daughters by
his second wife Pomposa Miguel; and his third wife and surviving widow Dominga M. Joson. Upon his death, his will was
presented to the Court of First Instance of Nueva Ecija by his son Felicisimo Joson for probate. In August, 1945, said will
having been duly probated, Felicisimo Joson was appointed administrator of the estate and, accordingly, he filed an
inventory of the properties left by the deceased.
On April 15, 1948, the administrator filed his first account for the year 1945-1946. This was ordered by the court to be
examined by the clerk of court but the same has never been approved. On July 19, 1948, he filed his second account for the
year 1946-1947 which was also referred to the clerk of court for examination. The same has never been also approved by
the court. On November 11, 1948, the administrator filed another account for the year 1947-1948 and, upon motion of the
heirs, he was ordered to file an accounting covering the properties under his administration. On September 7, 1954,
Eduardo Joson, one of the heirs, filed an opposition to all the accounts filed by the administrator wherein he alleged that the
administrator diminished the shares of the heirs in the yearly produce of the properties and had padded his expenses of
administration, and on September 29, 1954, the same heir filed another motion praying the court to order the administrator
to post a bond in the amount of P50,000 for the reason that from the accounts represented by him to be the true income of
the estate from 1947 to 1953 there was a big difference of P132,600 which the administrator should account for to the heirs.
On October 14, 1954, the administrator submitted an amended statement of accounts for the same years which were
objected by two more heirs on the ground that the administrator had reported for the years 1947-1952 an income short of
what was actually received and expenses much bigger than those actually incurred by him.
In the meantime, or on December 30, 1952, the heirs were able to compromise their differences and entered into an
extrajudicial settlement and partition of the entire estate under the provisions of Section 1, Rule 74, of the Rules of Court
which provides for the settlement of the estate without court intervention. This settlement was contained in two documents
executed on the same date wherein they manifested that they are entering into it because of their desire to put an end to the
judicial proceeding and administration. But, as the court was never informed of this extrajudicial settlement either by the
administrator or by the heirs, it issued on May 19, 1954 an order requiring the administrator to file an accounting of his
administration from 1949 to 1954, which accordingly the administrator complied with by submitting an amended statement of
his accounts as already mentioned above.
However, on November 25, 1954, without said accounts having been heard or approved, the administrator filed a motion to
declare the proceeding closed and terminated and to relieve him of his duties as such, which motion was amended by him
on January 15, 1955. Heir Eduardo Joson filed an opposition to said motion but, after hearing, the court issued on order
declaring the proceedings terminated and relieving the administrator not only of his duties as such but also of his accounts
notwithstanding the heirs opposition to said accounts. Hence this appeal:chanrob1es virtual 1aw library
In granting the motion of the administrator to declare the proceedings closed and terminated and relieving him of his duties
and of his accounts, the trial court made the following pronouncement:
". . . It is claimed by the oppositor that the estate cannot be declared closed and terminated for the reason that some of the
accounts submitted by the administrator for the years 1945 to 1948 have not been approved. The Court does not find any
logic in this contention. The heirs knew on December 30, 1952, when they entered into en extra- judicial settlement of the
estate, the existence of those accounts, but nothing is mentioned in the said extra-judicial settlement regarding the same.

42

They are, therefore, presumed to have approved these accounts and have waived their opposition thereto. There is,
therefore, no reason to suspend the closing of this proceeding and make the same depend upon the approval of these old
accounts. To do so would be like making the accessory more important than the principal. There is no doubt that the report
of the administrator of his administration is a mere incident in this proceeding to wind up the estate of the deceased. If the
parties concerned have already entered into an extra-judicial settlement of the estate, the same should put an end to this
proceeding. Once this proceeding is terminated, the incidents thereto must yield, since the only purpose of submitting a
report of the accounts by the administrator is to facilitate the liquidation. The administration of an estate cannot be an end
but only a means of settlement of the estate. It, therefore, becomes unnecessary and a mere waste of time to call the
administration to account for, or to report on, his administration from the moment that the heirs have already entered into an
extra-judicial settlement. To do so, would amount to a modification of the extra-judicial settlement which is the law between
the parties, which include the oppositors herein."
The issues now posed by appellants are: (1) Is the duty of an administrator to make an accounting of his administration a
mere incident which can be avoided once the estate has been settled?; (2) Are the proceedings deemed terminated by the
mere execution of an extrajudicial partition of the estate without the necessity of having the accounts of the administrator
heard and approved by the court?; and (3) Is the administrator ipso facto relieved of his duty of proving his account from the
moment said partition has been executed? Appellants answer this question in the negative with the argument that if the
contrary is to be upheld as was done by the trial court the same would be contrary to the express provisions of our rules
relative to the duties of a judicial administrator. Hence, they argue, the trial court committed an error in closing the estate in
disregard of the accounts submitted by the administrator.
We find merit in this contention. To begin with, Section 1 of Rule 86 categorically charges an administrator "with the whole of
the estate of the deceased which has come into his possession at the value of appraisement contained in the inventory; with
all the interest, profit, and income of such a estate; and with the proceeds of so much of the estate as is sold by him, at the
price at which sold." Section 8 of the same rule imposes upon him the duty to render an account of his administration within
one year from his appointment, unless the court otherwise directs, as well as to render such further accounts as the courts
may require until the estate is fully settled. Section 10 likewise provides that before an account of the administrator is
allowed notice shall be given to all persons interested of the time and place of examining and allowing the same. And finally
Section 9 expressly directs that the court shall examine the administrator upon oath with respect to every matter relating to
his account except when no objection is made to the allowance of the account and its correctness is satisfactorily
established by competent testimony.
It thus appears that the duty of an administrator to render an account is not a mere incident of an administration proceeding
which can be waived or disregarded when the same is terminated, but that it is a duty that has to be performed and duly
acted upon by the court before the administration is finally ordered closed and terminated. Here the administrator has
submitted his accounts for several years not only motu proprio but upon requirement of the court, to which accounts the
heirs have seasonably submitted their opposition. And when the administrator moved the court to close the proceedings and
relieve him of his administration and of his accounts, the heirs who objected thereto objected likewise to the closing of the
proceedings invoking their right to be heard but the court ignored their opposition and granted the motion setting forth as
reasons therefore what we quoted in the early part of this decision. Verily, the trial court erred in acceding to the motion for
in doing so it disregarded the express provisions of our rules relative to the settlement of accounts of a judicial
administrator.
The fact that all the heirs of the estate have entered into an extrajudicial settlement and partition in order to put an end to
their differences cannot in any way be interpreted as a waiver of the objections of the heirs to the accounts submitted by the
administrator not only because to so hold would be a derogation of the pertinent provisions of our rules but also because
there is nothing provided in said partition that the aforesaid accounts shall be deemed waived or condoned. While the
attitude of the heirs in concluding said extrajudicial settlement is plausible and has contributed to the early settlement of the
estate, the same cannot however be considered as a release of the obligation of the administrator to prove his accounts.
This is more so when, according to the oppositors, the administrator has committed in his accounts a shortage in the amount
of P132,600.00 which certainly cannot just be brushed aside by a mere technicality.
WHEREFORE, the order appealed from is set aside. The case shall be remanded to the trial court for further proceedings in
line with this decision. No costs.
Bengzon, C.J., Padilla, Labrador, Concepcion, Reyes, J.B.L., Paredes, Dizon, De Leon and Natividad,JJ., concur.
Barrera, J., took no part.

G.R. No. L-13031

May 30, 1961

INTESTATE ESTATE OF JAMES R. BURT, deceased. THE PHILIPPINE TRUST CO., administrator-appellee,
vs.
LUZON SURETY CO., INC., surety-appellant.

43

Feria, Manglapus and Associates for administrator-appellee.

Tolentino, Garcia and D. R. Cruz for surety-appellant.
DIZON, J.:
On February 14, 1946, the Court of First Instance of Manila appointed Francis R. Picard, Sr. as Administrator the Intestate
Estate of the deceased James R. Burt (Civil Case No. 71872) upon a bond of P1,000.00. Thereafter he submitted and the
Court approved his bond in the required amount, with appellant Luzon Surety Co., Inc. as his surety.
For reasons that do not fully appear of record, on May 1, 1948 the Court dismissed Picard, as administrator and appointed
the Philippine Trust Co. in his place. After qualifying for the position, the latter, on July 19, 1948, submitted an inventoryreport showing that the only asset of the Intestate Estate of Burt that had come into its possession was the sum of P57.75
representing the balance of the checking account of said deceased with the Philippine National Bank. In view thereof, on
July 26, 1948 the Court issued an order the pertinent portion of which reads as follows:
A review, however, of the record of the case reveals that former Administrator Francis Picard, filed on February 6,
1941, an inventory of the estate of the deceased, from which it appears that the sole property he found was the
amount of P8,873.73 in current account with the Philippine National Bank. This amount was reduced to P7,986.53
after deducting therefrom his expenses in the amount of P887.22; and as reported by him in his petition filed on
June 8, 1948, the further expenses in the amount of P865.20 were deducted, thereby leaving the balance of
P7,121.33 as of May 27, 1948.
In view of the foregoing, the Court hereby orders said Francis Picard, to deliver within forty-eight hours (48) from
the receipt of a copy of the order the difference of P7,063.58 to the present Administrator, Philippine Trust
Company; otherwise he will be ordered committed to prison for contempt until he shall have complied with this
order.
In compliance with the above order, Picard, submitted an itemized statement of disbursements made by him as
administrator of the estate, showing that as of February 6, 1947 the estate funds amounted to P7,986.53; that on June 8,
1948 he reported to the Court additional expenses incurred amounting to P865.20, thus leaving a balance of P7,121.33; that
thereafter he disbursed the sum of P250.00 to defray the burial expenses of the deceased, thus leaving a balance of
P6,871.33; that on several occasions during the period from February 22, 1946 to May 14, 1947, he had delivered to
Feliciano Burt adoptive son of the deceased James R. Burt different sums of money totalling P5,825.00, thus leaving a
balance of P972.33. After considering this statement, the Court, on September 18, 1948, issued an order finding Picard,
guilty of having disbursed funds of the estate amounting to about P8,000.00, without authority. For this reason, the Court
referred the matter to the City Fiscal of Manila for investigation. Result of this was the prosecution of Picard, for estafa.
Having pleaded guilty to the charge, judgment of conviction was accordingly rendered, and he was, besides, held civilly
liable in the sum of P8,000.00.
On July 8, 1957 the Court issued an order requiring appellant Luzon Surety Co., Inc. to show cause why the administrator's
bond filed by it on behalf of Picard would not be confiscated. Appellant filed a motion to set aside said order upon the
following grounds: firstly, that the Court cannot order the confiscation of the administrator's bond, on prejudice or injury to
creditors, legatees or heirs of the estate of James R. Burt having been shown, and secondly, that "a probate court
cannot, ex proprio motu, prosecute the probate bond." On August 3, 1957 the Court denied appellant's motion and ordered
the confiscation of its bond. After the denial of appellant's lotion for reconsideration, it took the present appeal.
Appellant's contention that the probate court, ex proprio motu, cannot order the confiscation or forfeiture of an
administrator's bond, is clearly without merit. Whatever may be the rule prevailing in other jurisdictions, in ours probate court
is possessed with an all-embracing power not only in requiring but also in fixing the amount, and executing or forfeiting an
administrator's bond. The execution or forfeiture of an administrator's bond, is deemed be a necessary part and incident of
the administration proceedings as much as its filing and the fixing of its amount. The rule, therefore, is that the probate court
may have said bond executed in the same probate proceeding.
Moreover, the condition of the administrator's bond in question is that Francis L. Picard shall faithfully execute the orders
and decrees of the court; that if he did so, the obligation shall become void, otherwise it shall remain in full force and effect.
In having been established that Picard disbursed funds of the estate without authority, the conclusion follows that he had
and his surety became bound upon the terms of their bond.
Appellant also contends that it was not proper for the lower court to order the confiscation of its bond because no prejudice
or injury to any creditor, heir or other interested person has been proved. This is also without merits. According to the record,
the claims against the estate filed by Antonio Gardiner and Jose Teruel for the sum of P200.00 and P3,205.00, respectively,
were approved by the probate court but the same have remained unpaid because of lack of funds.
Finally, appellant claims that it had been released from liability as surety because it received no notice of the proceedings for
the determination of the accountability of the administrator. This contention we also find to be untenable.
From the nature of the obligation entered into by the surety on an administrator's bond which makes him privy to the
proceedings against his principal he is bound and concluded, in the absence of fraud and collusion, by a judgment
against his principal, even though said surety was not a party to the proceeding. In the case of the De Mendoza vs.
Pacheco, 64 Phil. 135, the sureties on the administrator's bond were held liable thereon altho they were not parties to the

44

proceeding against the administrator, nor were they notified in connection therewith prior to the issuance of the court order
for the confiscation of the bond. Lastly, according to Section 11, Rule 86 of the Rules of Court, upon the settlement of the
account of an executor or administrator, his sureties "may upon application, be admitted as a party to such accounting." The
import of this provision is that the sureties are not entitled to notice but may be allowed to intervene in the settlement of the
accounts of the executor or administrator if they ask for leave to do so in due time.
WHEREFORE, the decision appealed from is hereby affirmed, with costs.
Bengzon, C.J., Padilla, Bautista Angelo, Labrador, Concepcion, Reyes, J.B.L., Paredes, De Leon and Natividad, JJ., concur.
Barrera, J., took no part.

G.R. No. L-18107

August 30, 1962

MARIA G. AGUAS, FELIX GUARDINO and FRANCISCO SALINAS, plaintiffs-appellants,

vs.
HERMOGENES LLEMOS, deceased defendant substituted by his representatives,
PERPETUA YERRO-LLEMOS, HERMENEGILDO LLEMOS, FELINO LLEMOS and AMADO LLEMOS,defendantsappellees.
Jesus M. Aguas for plaintiffs-appellants.
Serafin P. Ramento for defendants-appellees.
REYES, J.B.L., J.:
On 14 March 1960, Francisco Salinas and the spouses Felix Guardino and Maria Aguas jointly filed an action in the Court of
First Instance of Catbalogan, Samar (Civil Case No. 4824), to recover damages from Hermogenes Llemos, averring that the
latter had served them by registered mail with a copy of a petition for a writ of possession, with notice that the same would
be submitted to the said court of Samar on February 23, 1960 at 8: 00 a.m.; that in view of the copy and notice served,
plaintiffs proceeded to the court from their residence in Manila accompanied by their lawyers, only to discover that no such
petition had been filed; and that defendant Llemos maliciously failed to appear in court, so that plaintiffs' expenditure and
trouble turned out to be in vain, causing them mental anguish and undue embarrassment.
On 1 April 1960, before he could answer the complaint, the defendant died. Upon leave of court, plaintiffs amended their
complaint to include the heirs of the deceased. On 21 July 1960, the heirs filed a motion to dismiss, and by order of 12
August 1960, the court below dismissed it, on the ground that the legal representative, and not the heirs, should have been
made the party defendant; and that anyway the action being for recovery of money, testate or intestate proceedings should
be initiated and the claim filed therein (Rec. on Appeal, pp. 26-27).
Motion for reconsideration having been denied, the case was appealed to us on points of law.1wph1.t
Plaintiffs argue with considerable cogency that contrasting the correlated provisions of the Rules of Court, those concerning
claims that are barred if not filed in the estate settlement proceedings (Rule 87, sec. 5) and those defining actions that
survive and may be prosecuted against the executor or administrator (Rule 88, sec. 1), it is apparent that actions for
damages caused by tortious conduct of a defendant (as in the case at bar) survive the death of the latter. Under Rule 87,
section 5, the actions that are abated by death are: (1) claims for funeral expenses and those for the last sickness of the
decedent; (2) judgments for money; and (3) "all claims for money against the decedent, arising from contract express or
implied". None of these includes that of the plaintiffs-appellants; for it is not enough that the claim against the deceased
party be for money, but it must arise from "contract express or implied", and these words (also used by the Rules in
connection with attachments and derived from the common law) were construed in Leung Ben vs. O'Brien, 38 Phil., 182,
189-194.
to include all purely personal obligations other than those which have their source in delict or tort.
Upon the other hand, Rule 88, section 1, enumerates actions that survive against a decedent's executors or administrators,
and they are: (1) actions to recover real and personal property from the estate; (2) actions to enforce a lien thereon; and (3)
actions to recover damages for an injury to person or property. The present suit is one for damages under the last class, it
having been held that "injury to property" is not limited to injuries to specific property, but extends to other wrongs by which
personal estate is injured or diminished (Baker vs. Crandall, 47 Am. Rep. 126; also 171 A.L.R., 1395). To maliciously cause
a party to incur unnecessary expenses, as charged in this case, is certainly injurious to that party's property (Javier vs.
Araneta, L-4369, Aug. 31, 1953).

45

Be that as it may, it now appears from a communication from the Court of First Instance of Samar that the parties have
arrived at an amicable settlement of their differences, and that they have agreed to dismiss this appeal. The settlement has
been approved and embodied in an order of the Court of First Instance.
The case having thus become moot, it becomes unnecessary to resolve the questions raised therein. This appeal is,
therefore, ordered dismissed, without special pronouncement as to costs.
Bengzon, C.J., Padilla, Bautista Angelo, Labrador, Concepcion, Barrera, Paredes, Dizon, Regala and Makalintal,
JJ., concur.

G.R. No. L-55750 November 8, 1989

RUBEN, BELLA, ARNULFO, CARUSO, ANITA, ELSIE, all surnamed MELGAR, and ERLINA MELGAR
ASECO, petitioners,
vs.
THE HON. CARLOS R. BUENVIAJE, JUDGE, COURT OF FIRST INSTANCE OF CAMARINES SUR, BR. VII, and the
SPOUSES OSCAR PRADES and VICTORIA PRADES, respondents.
Rafael Triunfante for petitioners.
Romulo A. Badilla and Rolando Grageda Alberto for respondents.

PARAS, J.:
This is a petition for certiorari (not petition for review on certiorari) seeking the annulment of the Order of Branch VII * of the
Court of First Instance of Camarines Sur in Iriga City dated September 23, 1980 denying the motion to dismiss filed by the
defendants, the petitioners herein, in Civil Case No. IR-858, and its Order dated November 11, 1980 denying the motion for
reconsideration of the said September 23, 1980 order, as well as admitting the amended complaint filed by the plaintiffs
therein.
The questioned Order of September 23, 1980 reads as follows:
Resolving the motion to dismiss filed by defendants on the ground of lack of sufficient cause of action in
the light of the averments stated in the complaint, this Court is of the belief and so holds that the said
motion to dismiss cannot be granted for lack of merit. (p. 16, Rollo)
The equally questioned order of November 11, 1980 states:
Resolving defendant's motion for reconsideration filed on October 3, 1980 which, among other things,
seeks dismissal of the complaint on the ground that the "steps taken by the plaintiffs are procedurally
erroneous and substantially improper." In the light of the opposition interposed by counsel for the plaintiff
filed on November 10, 1980 which emphasized the argument that said defendants as heirs of the estate
of Felicidad Balla cannot properly argue that they can sue as heirs and at the same time maintain that
they cannot be used as such heirs, and which opposition is found to be well taken, the motion for
reconsideration is as, it is, denied.
The Amended Complaint filed by counsel for the plaintiffs on November 7, 1980 is hereby admitted.
Plaintiffs are required to furnish sufficient copies of the Amended Complaint. (p. 27, Rollo)
The antecedents of the case are as follows:
In the early morning of January 11, 1980 a vehicular accident happened along the National Highway of Barangay Agos,
Polangui, Albay, whereby a passenger bus bearing Plate No. PUB 4J 136 '79 owned and operated by the late Felicidad
Balla and driven by Domingo Casin swerved to the left lane and came into head-on-collision with a Ford Fiera with Plate No.
S 860 4F '79 owned by Mateo Lim Relucio and driven by Ruben Lim Relucio coming from the opposite direction. It then
swerved further to the left this time colliding head-on-with a passenger bus, FUSO with Plate No. PUB 45 255 '79 owned by
Benjamin Flores and driven by Fabian Prades. As a result of the accident, Felicidad Balla, owner and operator of the
passenger bus with Plate No. PUB 4J 136 '79, and mother of herein petitioners together with Domingo Casin, driver of the
bus, died on the spot. Ruben Lim Relucio, driver of the service jeep and Fabian Prades, driver of the other passenger bus
died in the same accident. (Rollo, pp. 3, 10 & 19)
On July 4, 1980 the spouses Oscar Prades and Victoria Prades private respondents herein as the only surviving forced heirs
of the deceased Fabian Prades, filed a complaint in the Court of First Instance of Camarines Sur against the children of

46

deceased Felicidad Balla, petitioners herein for damages, docketed as Civil Case No. IR-858 (Rollo, p. 9). The complaint
(Rollo, p. 9) alleged, among others:
5. That it was Felicidad Balla's driver Domino Casin of "Fuso" with Plate No. PUB 4J 136 Pil '79, who
drove his vehicle in a reckless and imprudent manner which was the sole, direct and proximate cause of
the incident which resulted to the death of Fabian Prades;
6. That both driver Domino Casin and owner Felicidad Balla of passenger "Fuso" with Plate No. PUB 4J
136 Pil '79 died in said incident:
7. That defendants' mother, Felicidad Balla, for allowing her driver Casin to drive recklessly and not
observing the required diligence in the selection and supervision of her employee, despite her presence
in the illfated passenger bus, the estate of deceased Felicidad Balla should be held liable to the damages
suffered by plaintiff.
The defendants in the complaint, petitioners herein, moved for the dismissal of the case on the ground that the complaint
states no cause of action against them, arguing that it is entirely incorrect to hold the children liable for the alleged
negligence of their deceased mother and to consider suing the heirs of a deceased person the same as suing the estate of
said deceased person inasmuch as the last portion of Section 21 of Rule 3 of the Rules of Court means that the creditor
should institute the proper intestate proceedings wherein which he may be able to interpose his claim (Rollo, p. 14).
Respondent court denied the motion to dismiss in its order of September 23, 1980 for lack of merit (Rollo, p. 16). On
September 30, 1989 the defendants, petitioners herein, filed a motion for reconsideration (Rollo, p. 17,) on the ground that:
Distinction should be made between a suit against the estate of Felicidad Balla and the present action
which is a personal action against the children of Felicidad Balla, considering that the children have
absolutely no participation directly or indirectly in the alleged negligent acts of Felicidad Balla, and there
is absolutely no logical basis to hold the children liable for damages resulting from alleged negligent acts
of Felicidad Balla. In fact that second sentence of Article 1311 of the New Civil Code provides:
... The heir is not liable beyond the value of the property he received from the
decedent. ... 7
In their argument, the defendants adopted and cited the conclusion and ruling of Branch V of the same court in two similar
cases brought against them by the owner of the 3rd vehicle that featured in the same accident and by the widow of the
deceased driver of the same vehicle docketed as Civil Case Nos. 867-LV and 863-LV, respectively, wherein the defendants
also filed a motion to dismiss (Rollo, p. 19). Said court concluded that "the steps taken by the plaintiffs are procedurally
erroneous and substantially improper." The same court directed the plaintiffs therein to file their redress in accordance with
the Rules of Court.
On November 7, 1980, plaintiff spouses, private respondents herein, filed their comment and motion to admit amended
complaint (Rollo, p. 21) together with an amended complaint (Rollo, p. 23), amending the title of the case naming as
defendants the Estate of the late Felicidad Balla as represented by the children named in the original complaint.
On November 11, 1980 respondent court issued its order denying the motion for reconsideration and admitting the amended
complaint (Rollo, p. 27).
Hence this petition filed with this Court on December 23, 1980 (Rollo, p. 3).
On June 5, 1981 the Court (Second Division) resolved to give due course to the petition and required the parties to file their
respective memoranda within twenty days from notice (Rollo, p. 40).
On September 14, 1981 the Court (Second Division) resolved to consider the case submitted for decision (Rollo, p. 66).
The sole issue in the instant case is whether or not the Court of First Instance has the power to entertain a suit for damages
arising from the death of a person, filed against the estate of another deceased person as represented by the heirs.
As aforestated, what was originally filed was a complaint for damages against petitioners herein, who are the children and
surviving forced heirs of the deceased Felicidad Balla, owner and operator of the passenger bus "FUSO" which allegedly
caused the death of the deceased Fabian Prades.
Under Section 5 Rule 86 of the Rules of Court, actions that are abated by death are: (1) All claims for money against the
decedent, arising from contract, express or implied, whether the same be due, not due or contingent; (2) All claims for
funeral expenses and expenses for the last sickness of the decedent; and (3) Judgments for money against the decedent
(Aguas v. Llemos, 5 SCRA 959 [1962]). It is evident that the case at bar is not among those enumerated. Otherwise stated,
actions for damages caused by the tortious conduct of the defendant survive the death of the latter.
The action can therefore be properly brought under Section 1, Rule 87 of the Rules of Court, against an executor or
administrator. The rule provides:
Section 1. Actions which may and which may not be brought against executor or administrator. No
action upon a claim for the recovery of money or debt or interest thereon shall be commenced against
the executor or administrator; but actions to recover real or personal property, or an interest therein, from

47

the state, or to enforce a lien thereon, and actions to recover damages for an injury to person or property,
real or personal, may be commenced against him.
Hence, the inclusion of the "estate of Felicidad Balla" in the amended complaint as defendant.
The point of controversy is however on the fact that no estate proceedings exist for the reason that her children had not filed
any proceedings for the settlement of her estate, claiming that Balla left no properties (Rollo, p. 6).
Thus, while petitioners may have correctly moved for the dismissal of the case and private respondents have forthwith
corrected the deficiency by filing an amended complaint, even before the lower court could act on petitioner's motion for
reconsideration of the denial of their motion to dismiss, the action under Section 17 of Rule 3 of the Rules of Court, which
allows the suit against the legal representative of the deceased, that is, the executor or administrator of his estate, would still
be futile, for the same reason that there appears to be no steps taken towards the settlement of the estate of the late
Felicidad Balla, nor has an executor or administrator of the estate been appointed. From the statement made by the
petitioners that "many persons die without leaving any asset at all" (Reply to Respondents' Comment, p. 78; Memorandum
for Petitioners, Rollo, p. 5), which insinuates that the deceased left no assets, it is reasonable to believe that the petitioners
will not take any step to expedite the early settlement of the estate, judicially or extra-judicially if only to defeat the damage
suit against the estate. (Note however the deceased Balla apparently left the bus). Under the circumstances the absence of
an estate proceeding may be avoided by requiring the heirs to take the place of the deceased (Javier v. Araneta, 90 Phil.
292 [1951]).
As restated in a much later case, in case of unreasonable delay in the appointment of an executor or administrator of the
estate or in case where the heirs resort to an extrajudicial settlement of the estate, the court may adopt the alternative of
allowing the heirs of the deceased to be substituted for the deceased (Lawas v. Court of Appeals, 146 SCRA 173 [1986]).
PREMISES CONSIDERED, the petition is hereby dismissed and petitioners are ordered substituted for the deceased
Felicidad Balla.
SO ORDERED.
Padilla, Sarmiento and Regalado, JJ., concur.
Melencio-Herrera, (Chairperson), J., is on leave.

G.R. No. 72908 August 11, 1989

EUFEMIA PAJARILLO, CLAUDIO SUTERIO, JR., NYMIA SUTERIO and MARILYN SUTERIO, petitioners,
vs.
INTERMEDIATE APPELLATE COURT, THIRD CIVIL CASES DIVISION, SALUD SUTERIO and PEDRO
MATIAS,respondents.
Agustin A. Ferrer for petitioners.
Alfredo I. Raya for respondents.

CRUZ, J.:
This is one of those distasteful litigations involving a controversy among close relatives over properties left by a common
ascendant. The petitioners are the widow and children of the brother of the principal private respondent. She and her brother
appear to be the only remaining issue of the mother who seems to have caused all the present confusion. The record does
not show how close, if at all, the members of this small family were. What is certain is that there is no affection now among
the protagonists in this case.
The mother was Juana Balane de Suterio, who had a brother named Felipe Balane and a sister named Perfecta Balane de
Cordero. Perfecta died in 1945 leaving inter alia a tract of land consisting of about 28 hectares and covered by TCT No.
4671 in the Registry of Deeds of Quezon Province. On May 20, 1946, Juana and Felipe executed a public instrument
entitled "Extra-judicial Settlement of the Estate of the Deceased Perfecta Balane de Cordero." 1 In it they disposed of the
said property as follows:
EXTRA-JUDICIAL SETTLEMENT OF THE ESTATE OF DECEASED PERFECTA BALANE DE
CORDERO.
This agreement made to 20th day of May, 1946, by and between Felipe Balane and Juana Balane de
Suterio, both of age and residents of Macalelon, Tayabas, Philippines.
WITNESSETH:
That whereas, the said Felipe Balane and Juana Balane de Suterio are the only brother and sister
respectively and forced heirs of Perfecta Balane de Cordero who dies intestate on January 21, 1945;

48

That whereas, the said Perfects Balane de Cordero, deceased, left property described as follows:
TRANSFER CERTIFICATE OF TITLE NO. 4671.
Province of Tayabas.
A parcel of land (Lot No. 6-A, Plan Psu-12210), with an buildings and improvements except those herein
expressly noted as belonging to other person, situated in the barrio of Luctol, Municipality of Macalelon.
Bounded on the NE., by Lot No. 6-B; on the E., by property by Andrea Fernandez, the sapa Luctob and
the sapa Patay; on the SE., by properties of Andrea Fernandez and Silvestra Mereis on the SW., by
properties of Felix Rodriguez, Dionisio Fornea Placido Abistado and Adriano Abistado and the mangrove
of the government; and on the NW., by properties of Orilleneda Mariano, Glindro Maxima Orilleneda
Placida Forcados and Basilio Rabe .. .. .. .. .. .. .. containing an area of TWO HUNDRED EIGHTY FIVE
THOUSAND THREE HUNDRED FIFTY-THREE SQUARE METERS (285,353) more or less.
That whereas, we Felipe Balane and Juana Balane de Suterio, the only heirs of the property described
above left by the deceased Perfecta Balane de Cordero, do hereby agree in carrying out
the antemortem wish of our beloved deceased sister that in consideration of love and affection the
property described above be donated to Salud Sutexio de Matias.
That whereas, the estate left by the said Perfecta Balane de Castro, deceased, is not free from obligation
or debt. It has an incumbrance of about ONE THOUSAND PESOS (P1,000.00) to the Philippine National
Bank, Tayabas Branch.
That whereas, Salud Suterio de Matias, to whom this property is donated extra-judicially as agreed upon
by both heirs, shall assume the said obligation to the Philippine National Bank, Tayabas Branch.
NOW, THEREFORE, we Felipe Balane and Juana Balane de Suterio have mutually agreed and
covenanted to adjudicate, give, transfer and convey the property described above to Salud Suterio de
Matias heirs, executors, administrators and assign.
And the donee does hereby accept this donation and does hereby express her gratitutde for the kindness
and liberality of the donor.
IN WITNESS WHEREOF, we have hereunto set our hands tills 20th day of May, 1946.
(Sgd.) FELIPE BALANE FELIPE BALANE
(Sgd.) JUANA BALANE DE SUTERIO JUANA
BALANE DE SUTERIO
(Acknowledgment)
On June 20, 1946, Salud Suterio executed the following public instrument, 2 petitioner Eufemia Pajarillo
was one of the witnesses:
KNOW ALL MEN BY THESE PRESENTS:
That on May 20, 1946, FELIPE BALANE and JUANA BALANE DE SUTERIO, the only heirs to the
properties of the late PERFECTA BALANE DE CORDERO, executed a DEED OF DONATION in favor of
the undersigned and the said donation was made, in accordance to the antemortem wish of my late aunt,
Perfecta Balane de Cordero, to the effect that the property described in the Deed of Donation, be given to
me because of her love and affection for me, being her only niece.
That, I, SALUD SUTERIO, DE MATIAS, the only DONEE, do hereby receive and accept this donation
and further express my gratitude for the kindness and liberality of the DONORS, FELIPE BALANE and
JUANA BALANE DE SUTERIO.
IN WITNESS WHEREOF, I have hereunto set my hand this 20th day of June, 1946.
(Sgd.) SALUD SUTERIO DE MATIAS
SUTERIO DE MATIAS
Donee
Signed in the presence of
(Sgd.) SOFRONIO BALANE
(Sgd.) EUFEMIA P. SUTERIO
(Acknowledgment)

49

These instruments were never registered nor was title transferred in Salud's name although she says she immediately took
possession of the land. Meantime, intestate proceedings were instituted on the estate of Perfecta and the said land was
among those included in the inventory of the properties belonging to the decedent. 3 Salud interposed no objection to its
inclusion nor did she oppose its subsequent adjudication to her mother Juana in the project of partition. It is not clear if the
land was ever registered in Juana's name. However, there is evidence that Juana confirmed the earlier donation of the land
to Salud but requested that she be allowed to possess the same and enjoy its fruits, until her death. 4 It has also not been
controverted that Salud paid the P1,000.00 loan for which the land was mortgaged.
Salud says that sometime in 1951, acceding to this request, she transferred the possession of the land to her mother, who
was then staying with Claudio and his family. During the period they were occupying the land, Claudio paid the realty taxes
thereon . 5 On May 25, 1956, Juana executed a deed of absolute sale conveying the land to Claudio for the declared
consideration of P12,000.00. 6 Two years later, on August 27, 1958, Claudio had the land registered in as name and was
issued TCT No. 32050 in the land records of Quezon Province. 7
Claudio died in 1961 and his mother in 1963. On June 30, 1965, the private respondents filed a complaint for the
reconveyance of the property on the ground that the deed of sale in favor of Claudio was fictitious and its registration in his
name was null and void . 8
Salud (joined by her husband) alleged that she was unaware until later of the supposed sale of the land to Claudio. She
faulted it as having been procured through fraud and improper influence on her sick and aged mother. She claimed that no
compensation was actually paid by Claudio and that the transaction was deliberately concealed from her by her brother and
the defendants. 9 For their part, the defendants assailed the donation to Salud as legally inefficacious and defective and
contended that her complaint was barred by prescription, estoppel and res judicata. They also filed a counterclaim
questioning the sale to Salud by her mother of another tract of land, in which they said they were entitled to share as Juana's
heirs. 10
On April 17,1979, Judge Juan M. Montecillo of the Court of First Instance of Quezon rendered judgment upholding the
donation to the plaintiff and annulling the deed of sale and the registration of the land in favor of Claudio Suterio, Sr. The
defendants were required to reconvey the land to Salud Suterio even as their counterclaim was dismissed for lack of
evidence. 11 On appeal, the decision was affirmed in toto. 12 The respondent court is now sought to be reversed in this
petition for certiorari under Rule 45 of the Rules of Court.
We hold at the outset that, contrary to the ruling in the challenged decision, the petitioners have the legal personality to
challenge the validity of the donation on which Salud bases her claim to the property under litigation. As defendants in the
complaint for reconveyance, they had every right to resist the plaintiffs' allegation that she was the owner of the subject
property by virtue of the claimed donation. Recognition of that donation would topple the props of their own contention that
Juana could dispose of the property as its owner when she sold it to Claudio Suterio in 1956.
The petitioners also assail the intrinsic validity of the extrajudical settlement and submit that it is not really a donation as
conceptually understood in civil law. Their argument is that the real donor of the property was Perfecta, the deceased sister,
who, however, could no longer bestow the intended gift. For their part, Felipe and Juana could not have made, the donation
either because they were not moved by the same sentiments Perfects had for her niece Salud. That feeling would have
provided the required consideration if Perfects herself had made the donation, but not the other two.
This appears to be too much nitpicking, if not sophistry. Felipe and Juana had declared themselves the heirs of Perfecta and
the owners of the property in question. As such, they were free to give the land to whomever they pleased and for whatever
reason they saw fit. Hence, if they chose to respect Perfecta's wishes and carry out her intentions by donating the land to
Salud, there was no legal impediment to their doing so. In fact, that was not only the legal but also the moral thing to do.
There is no question that Felipe and Juana could have simply disregarded their sister's sentiments and decided not to
donate the property to Salud, keeping the same for themselves. The fact that they did not do this speaks well indeed of their
integrity and their loyalty as well to their deceased sister. The extrajudicial settlement also reflects their own affection for
Salud which constituted the valid consideration for their own act of liberality. Notably, in her acceptance of the donation,
Salud referred to 'the donors Felipe Balane and Juana Balane de Suterio," and not Perfecta.
It is also pointed out that the donation is defective in form because of non-compliance with the requirements of the law
regarding its acceptance. As it was executed in 1946, the applicable rule is Article 633 of the old Civil Code reading as
follows:
Art. 633. In order that a donation of real property be valid it must be made by public instrument in which
the property donated must be specifically described and the amount of the charges to be assumed by the
donee expressed.
The acceptance may be made, in the deed of gift or in a separate public writing; but it shall produce no
effect if not made during the lifetime of the donor.
If the acceptance is made, by separate public instrument, authentic notice thereof shall be given the
donor, and this proceeding shall be noted in both instruments.

50

There is no question that the donation was accepted in a separate public instrument and that it was duly communicated to
the donors. Even the petitioners cannot deny this. But what they do contend is that such acceptance was not "noted in both
instruments," meaning the extrajudicial partition itself and the instrument of acceptance, as required by the Civil Code.
That is perfectly true. There is nothing in either of the two instruments showing that "authentic notice" of the acceptance was
made by Salud to Juana and Felipe. And while the first instrument contains the statement that "the donee does hereby
accept this donation and does hereby express her gratitude for the kindness and liberality of the donor," the only signatories
thereof were Felipe Balane and Juana Balane de Suterio. That was in fact the reason for the separate instrument of
acceptance signed by Salud a month later.
A strict interpretation of Article 633 can lead to no other conclusion than the annulment of the donation for being defective in
form as urged by the petitioners. This would be in keeping with the unmistakable language of the above-quoted provision.
However, we find that under the circumstances of the present case, a literal adherence to the requirement of the law might
result not in justice to the parties but conversely a distortion of their intentions. It is also a policy of the Court to avoid such
an intepretation.
The purpose of the formal requirement is to insure that the acceptance of the donation is duly communicated to the donor. In
the case at bar, it is not even suggested that Juana was unaware of the acceptance for she in fact confirmed it later and
requested that the donated land be not registered during her lifetime by Salud. 13 Given this significant evidence, the Court
cannot in conscience declare the donation ineffective because there is no notation in the extrajudicial settlement of the
donee's acceptance. That would be placing too much stress on mere form over substance. It would also disregard the clear
reality of the acceptance of the donation as manifested in the separate instrument dated June 20,1946, and as later
acknowledged by Juana.
The cases cited by the parties in their respective memoranda are not really in point. In Legasto v. Verzosa, 14there was no
evidence whatsoever that the claimed donations had been accepted, as stressed by Justice Villa-Real. The same
observation is made of Santos v. Robledo, 15 where Justice Torres noted that the acceptance of the donation did not appear
in the deed of donation or in any other instrument.
The petitioners would also fault the private respondents for laches and argue that Salud's inaction in protection of her rights
should bar her from asserting them at this late hour. Specifically, it is pointed out that she failed to register the deed of
donation and its acceptance in 1946; did not oppose the inclusion of the subject land in the inventory of Perfecta's properties
submitted in the intestate proceedings in 1946; did not object to the adjudication of the land to Juana in the project of
partition in 1951; did not protest the sale of the land to Claudio Suterio in 1956; and did not question its registration in his
name in 1958. It is contended that all these acts constitute laches, which has been described by this Court thus:
An estoppel by laches arises from the negligence or omission to assert a right within a reasonable time, warranting a
presumption that the party entitled to assert it either has abandoned it or declined to assert it. 16
The problem with the petitioners' theory is that it would regard Juana and Salud as strangers when they are in fact mother
and daughter. One may expect a person to be vigilant of his rights when dealing with an acquaintance or associate, or even
with a friend, but not when the other person is a close relative, as in the case at bar. To begin with, the land came from
Juana herself. Secondly, she requested her daughter not to register the land as long as she was still alive so she could
enjoy its fruits until her death. To Salud, it was not difficult to comply with this request, coming as it did from her own mother.
There was no reason to disobey her. She did not have to protect herself against her own mother. Indeed, what would have
been unseemly was her registering the land against her mother's request as if she had no confidence in her. Salud did no
less than what any dutiful daughter would have done under the circumstances.
If Salud did not protest the inclusion of the land in the inventory of Perfecta's properties and its subsequent adjudication to
Juana in the intestate proceedings, it was because she did not feel threatened by these acts. She did not distrust her
mother. Moreover, Juana had herself acknowledged the donation when she was asked in whose name the property would
be registered following the intestate proceedings. Salud felt safe because she had the extrajudicial settlement to rely on to
prove that her mother and her uncle had donated the subject land to her.
There is nothing in this instrument to suggest that the donation was to take effect upon the death of the donors as to make it
a donation mortis causa, as urged by the petitioners. The donation became effective upon acceptance by Salud except that,
in obedience to her mother's request, she chose not to register the land in the meantime and to allow her mother to enjoy its
fruits. What was deferred was not its effectivity but only its enjoyment by Salud. Registration was not necessary to make the
donation a binding commitment insofar as the donors and the donee were concerned. 17
As for her inaction against the deed of sale in favor of her brother Claudio, it should be noted in the first place that she was
not aware of it when it was executed in 1956. Her mother, who was already 76 years old at the time, never informed her
about it, nor did her brother or any of the defendants, for reasons of their own. It was only later, when the sale was
registered in 1958 and a new title to the land was issued to Claudio, that she started asking questions. Even then, being a
sister to Claudio, she did not immediatey take legal steps.
It is natural, even among non-relatives, to seek a non-judicial settlement through extra-legal measures before going to court.
It is more so in the case of relatives, who should avoid as much as possible the asperity and bitterness of litigation. That is
what Salud did when she repeatedly asked the petitioners for the return of the property albeit to no avail. It was only when it

51

became clear that amicable persuasion was not possible that she decided to sue the wife and children of her departed
brother.
The petitioners stress that it took Salud all of seven years from the registration of the land in Claudios's name before she
filed the complaint for reconveyance against them. That is true. But if one remembers that her brother died only in 1961 and
her own mother only in 1963, at the age of 83, it will be easy to understand the reason for the delay, which would otherwise
have been unjustified. Suits among brothers and sisters are especially painful to their parents. Salud must have thought
many times about filing her complaint against her brother Claudio while her old mother was still alive. In fact, Salud hesitated
still even after her mother's death and took two more years before she finally filed her complaint against Claudio's wife and
children.
It is clear that Juana Balane de Suterio had no right to sell the subject land to Claudio because she was no longer its owner,
having previously donated it to her daughter Salud. Juana herself was holding the land merely as a trustee of Salud, who
had transferred possession to her mother at the old woman's request. The deed of sale was itself vitiated by bad faith as
Claudio is presumed to have known of the previous donation to his sister Salud, whose acceptance of the donation was
formally witnessed by hiw own wife, the herein principal petitioner. 18When Claudio registered the land in his name knowing
there was a flaw in his title, an implied trust was created in favor of Salud as the real owner of the property in accordance
with Article 1456 of the Civil Code, reading as follows:
If the property is acquired through mistake or fraud, the person obtaining it is, by force of law, considered a trustee of an
implied trust for the benefit of the person from whom the property comes.
As trustor, Salud had every right to sue for the recovery of the land in the action for reconveyance against Claudio's heirs.
As we said in Vda. de Jacinto, et al. v. Vda. de Jacinto, et al. ... 19
Public policy demands that a person guilty of fraud or at least, of breach of trust, should not be allowed to use a Torrens title
as a shield against the consequences of his own wrongdoing.
The petitioners do not insist on prescription as a bar to the action for reconveyance, and understandably so. The legal
principle is that if the registration of the land is fraudulent and the person in whose name the land is registered thus holds it
as a mere trustee, the real owner is entitled to file an action for reconveyance of the property within a period of ten years. As
we have held in many cases:
Where the action is one for reconveyance based on constructive trust, a ten-year period is allowed. 20
An action for reconveyance of realty, based upon a constructive or implied trust resulting from fraud, may be barred by
prescription. The prescriptive period is reckoned from the issuance of the title which operates as a constructive notice. 21
While actions to enforce a constructive trust prescribe in 10 years from registration of the property, private respondents' right
commenced from actual discovery of petitioner's act of defraudation. 22
The record shows that while the land was registered in the name of Claudio Suterio, Sr. in 1958, the complaint for
reconveyance was filed by the petitioners in 1965, or still within the ten-year prescriptive period.
The last issue raised by the petitioners, viz., the validity of the deed of sale executed by Juana Balane de Suterio on January
29,1950, in favor of Salud Suterio, 23 need not detain us too long. The trial court sustained the contract for lack of sufficient
evidence to invalidate it and was upheld by the respondent court. We see no reason to disturb their factual finding, absent a
showing that it was reached arbitrarily. Interestingly, it occurred to the petitioners to question the transaction only when they
were sued by the private respondents, after ten years from the date of the sale. This is an even longer period than the nine
years during which the petitioners say Salud Suterio was sleeping on her rights following the sale of her land to Claudio
Suterio.
WHEREFORE, the petition is DENIED, with costs against the petitioners. It is so ordered.
Narvasa, Gancayco, Gri;o-Aquino and Medialdea, JJ., concur.

G.R. No. L-18148

February 28, 1963

DEOGRACIAS BERNARDO, executor of the testate estate of the deceased EUSEBIO CAPILI; and the instituted
heirs, namely: ARMANDO CAPILI and ARTURO BERNARDO, ET AL., petitioners,
vs.
HON. COURT OF APPEALS and THE HEIRS OF THE LATE HERMOGENA REYES, namely: FRANCISCO REYES, ET
AL., and JOSE ISIDORO, ET AL., respondents.
Ambrosio Padilla Law Offices for petitioners.
Romerico F. Flores for respondents.
BARRERA, J.:

52

This is a petition by certiorari for the review of the decision of the Court of Appeals affirming that of the Court of First
Instance of Bulacan holding that the probate court in Special Proceeding 1101 had jurisdiction to determine the validity of
the deed of donation in question and to pass upon the question of title or ownership of the properties mentioned therein.
The facts are briefly stated in the appealed decision of the Court of Appeals as follows:
Eusebio Capili and Hermogena Reyes were husband and wife. The first died on July 27, 1958 and a testate
proceeding for the settlement of his estate was instituted in the Court of the Fist Instance of Bulacan. His will was
admitted to probate on October 9, 1958, disposing of his properties in favor of his widow; his cousins Armando,
Ursula, and Buenaventura, all surnamed Capili; and Arturo, Deogracias and Eduardo, all surnamed Bernardo.
Hermogena Reyes herself died on April 24, 1959. Upon petition of Deogracias Bernardo, executor of the estate of
the deceased Eusebio Capili, she was substituted by her collateral relatives and intestate heirs, namely, Marcos,
Vicente, Francisco and Dominga, all surnamed Reyes; and Jose, Constancia, Raymunda and Elena, all surnamed
Isidoro.
On June 12, 1959, the executor filed a project of partition in the testate proceeding in accordance with the terms of
the will, adjudicating the estate of Eusebio Capili among the testamentary heirs with the exception of Hermogena
Reyes, whose share was alloted to her collateral relatives aforementioned. On June 16, 1959 these relatives filed
an opposition to the executor's project of partition and submitted a counter-project of partition of their own, claiming
1/2 of the properties mentioned in the will of the deceased Eusebio Capili on the theory that they belonged not to
the latter alone but to the conjugal partnership of the spouses.
The probate court, in two orders dated June 24, 1959 and February 10, 1960, respectively, set the two projects of
partition for hearing, at which evidence was presented by the parties, followed by the submission of memoranda
discussing certain legal issues. In the memorandum for the executor and the instituted heirs it was contended: (1)
that the properties disposed of in the will of the deceased Eusebio Capili belonged to him exclusively and not to the
conjugal partnership, because Hermogena Reyes had donated to him her half share of such partnership; (2) that
the collateral heirs of Hermogena Reyes had no lawful standing or grounds to question the validity of the donation;
and (3) that even assuming that they could question the validity of the donation, the same must be litigated not in
the testate proceeding but in a separate civil action.
Wherefore, the parties respectfully pray that the foregoing stipulation of facts be admitted and approved by this
Honorable Court, without prejudice to the parties adducing other evidence to prove their case not covered by this
stipulation of facts. 1wph1.t
The oppositors and heirs of Hermogena Reyes, on their part, argued that the deed of donation itself was
determinative of the original conjugal character to the properties, aside from the legal presumption laid down in
Article 160 of the Civil Code, and that since the donation was null and void the deceased Eusebio Capili did not
become owner of the share of his wife and therefore could not validly dispose of it in his will.
On September 14, 1960, the probate court, the Honorable M. Mejia presiding, issued an order declaring the
donation void without making any specific finding as to its juridical nature, that is, whether it was inter vivos or
mortis causa, for the reason that, considered under the first category, it falls under Article 133 of the Civil Code,
which prohibits donations between spouses during the marriage; and considered under the second category, it
does not comply with the formalities of a will as required by Article 728 in relation to Article 805 of the same Code,
there being no attestation clause. In the same order the court disapproved both projects of partition and directed
the executor to file another," dividing the property mentioned in the last will and testament of the deceased
Eusebio Capili and the properties mentioned in the deed of donation, Exhibit B, between the instituted heirs of the
deceased Eusebio Capili and the legal heirs of the deceased Hermogena Reyes, upon the basis that the said
properties were conjugal properties of the deceased spouses." On September 27, 1960, the executor filed a
motion for new trial, reiterating and emphasizing the contention previously raised in their memorandum that the
probate court had no jurisdiction to take cognizance of the claim of the legal heirs of Hermogena Reyes involving
title to the properties mentioned in the will of Eusebio Capili and taking exception to the court's declaration of the
nullity of the donation "without stating facts or provision of law on which it was based." The motion for new trial was
denied in an order dated October 3, 1960.
On appeal to the Court of Appeals the order appealed from being affirmed, petitioners filed this present petition for review
by certiorari.
The petitioners-appellants contend that the appellate court erred in not declaring that the probate court, having limited and
special jurisdiction, had generally no power to adjudicate title and erred in applying the exception to the rule.
In a line of decisions, this Court consistently held that as a general rule, question as to title to property cannot be passed
upon on testate or intestate proceedings,"1 except where one of the parties prays merely for the inclusion or exclusion from
the inventory of the property, in which case the probate court may pass provisionally upon the question without prejudice to
its final determination in a separate action. 2 However, we have also held that when the parties interested are all heirs of the
deceased, it is optional to them to submit to the probate court a question as to title to property, and when so submitted, said
probate court may definitely pass judgment thereon (Pascual v. Pascual, 73 Phil. 561; Manalac v. Ocampo, et al., 73 Phil.
661); and that with the consent of the parties, matters affecting property under judicial administration may be taken

53

cognizance of by the court in the course of intestate proceeding, provided interests of third persons are not prejudiced
(Cunanan v. Amparo, 80 Phil. 229, 232).
In the light of this doctrine, may it be said correctly that the trial court as well as the Court of Appeals erred in upholding the
power of the probate court in this case to adjudicate in the testate proceedings, the question as to whether the properties
herein involved belong to the conjugal partnership of Eusebio Capili and Hermogena Reyes, or to the deceased husband
exclusively?
At the outset, let it be clarified that the matter at issue is not a question of jurisdiction, in the sense advanced by appellants
that the trial court had completely no authority to pass upon the title to the lands in dispute, and that its decision on the
subject is null and void and does not bind even those who had invoked its authority and submitted to its decision because, it
is contended, jurisdiction is a creature of law and parties to an action can not vest, extend or broaden it. If appellants'
contention is correct, then there can be no exception to the no-jurisdiction theory. But as has been stated in the case
of Cunanan v. Amparo (supra) the Supreme Court speaking through Mr. Justice Pedro Tuason: "Determination of title to
property is within the jurisdiction of Courts of First Instance. The responding Soriano's objection (that the probate court
lacked jurisdiction to order the delivery of the possession of the lots to the estate) relates exclusively to the procedure, which
is distinct from jurisdiction. It affects only personal rights to a mode of practice (the filing of an independent ordinary action)
which may be waived". Strictly speaking, it is more a question of jurisdiction over the person, not over the subject matter, for
the jurisdiction to try controversies between heirs of a deceased person regarding the ownership of properties alleged to
belong to his estate, has been recognized to be vested in probate courts. This is so because the purpose of an
administration proceeding is the liquidation of the estate and distribution of the residue among the heirs and legatees.
Liquidation means determination of all the assets of the estate and payment of all the debts and expenses. 3 Thereafter,
distribution is made of the decedent's liquidated estate among the persons entitled to succeed him. The proceeding is in the
nature of an action of partition, in which each party is required to bring into the mass whatever community property he has in
his possession. To this end, and as a necessary corollary, the interested parties may introduce proofs relative to the
ownership of the properties in dispute. All the heirs who take part in the distribution of the decedent's estate are before the
court, and subject to the jurisdiction thereof, in all matters and incidents necessary to the complete settlement of such
estate, so long as no interests of third parties are affected. 4
In the case now before us, the matter in controversy is the question of ownership of certain of the properties involved
whether they belong to the conjugal partnership or to the husband exclusively. This is a matter properly within the jurisdiction
of the probate court which necessarily has to liquidate the conjugal partnership in order to determine the estate of the
decedent which is to be distributed among his heirs who are all parties to the proceedings, including, of course, the widow,
now represented because of her death, by her heirs who have been substituted upon petition of the executor himself and
who have appeared voluntarily. There are no third parties whose rights may be affected. It is true that the heirs of the
deceased widow are not heirs of the testator-husband, but the widow is, in addition to her own right to the conjugal property.
And it is this right that is being sought to be enforced by her substitutes. Therefore, the claim that is being asserted is one
belonging to an heir to the testator and, consequently, it complies with the requirement of the exception that the parties
interested (the petitioners and the widow, represented by dents) are all heirs claiming title under the testator.
Petitioners contend additionally that they have never submitted themselves to the jurisdiction of the probate court, for the
purpose of the determination of the question of ownership of the disputed properties. This is not borne by the admitted facts.
On the contrary, it is undisputed that they were the ones who presented the project of partition claiming the questioned
properties as part of the testator's asset. The respondents, as representatives or substitutes of the deceased widow
opposed the project of partition and submitted another. As the Court of Appeals said, "In doing so all of them must be
deemed to have submitted the issue for resolution in the same proceeding. Certainly, the petitioners can not be heard to
insist, as they do, on the approval of their project of partition and, thus, have the court take it for granted that their theory as
to the character of the properties is correct, entirely without regard to the opposition of the respondents". In other words, by
presenting their project of partition including therein the disputed lands (upon the claim that they were donated by the wife to
her husband), petitioners themselves put in issue the question of ownership of the properties which is well within the
competence of the probate court and just because of an opposition thereto, they can not thereafter withdraw either their
appearance or the issue from the jurisdiction of the court. Certainly, there is here a waiver where the parties who raise the
objection are the ones who set the court in motion. 5 They can not be permitted to complain if the court, after due hearing,
adjudges question against them.6
Finally, petitioners-appellants claim that appellees are estopped to raise the question of ownership of the properties involved
because the widow herself, during her lifetime, not only did not object to the inclusion of these properties in the inventory of
the assets of her deceased husband, but also signed an extra-judicial partition of those inventoried properties. But the very
authorities cited by appellants require that to constitute estoppel, the actor must have knowledge of the facts and be
appraised of his rights at the time he performs the act constituting estoppel, because silence without knowledge works no
estoppel.7 In the present case, the deceased widow acted as she did because of the deed of donation she executed in favor
of her husband not knowing that such deed was illegal, if inter-vivos, and ineffectual if mortis-causa, as it has not been
executed with the required formalities similar to a will.
WHEREFORE, the decision of the Court of Appeals being in accordance with law, the same is hereby affirmed with costs
against appellants. So ordered.
Bengzon, C.J., Padilla, Bautista Angelo, Labrador, Concepcion, Reyes, J.B.L., Paredes, Dizon and Regala, JJ., concur.
Makalintal, J., took no part.

54

G.R. No. L-31679

January 14, 1930

CELSO S. GUANCO, administrator-appellee,

vs.
PHILIPPINE NATIONAL BANK, oppositor-appellant.
Roman J. Lacson and Elias N. Recto for appellant.
Abelardo Hilado for appellee.
OSTRAND, J.:
On January 18, 1921, the now deceased Espiridion Guanco obtained a credit, now exceeding P175,000, with interest, from
the Philippine National Bank, pleading as security 250 shares of the capital stock of the Binalbagan Estate, Inc., and 6,196
of the capital stock of the Hinigaran Sugar Plantation, Inc. In the following year, the Hinigaran Sugar Plantation, Inc., gave
the bank a promissory note for P273,932.11, the original debt of Guanco being included therein. Shortly afterwards, the
Hinigaran Sugar Plantation gave a mortgage on real property in favor of the Philippine National Bank for P350,000 as
security for the note and for such future credits as might be granted the company. The shares given the bank as security for
the transaction of January 18, 1921, were not mentioned in the mortgage.
After Guanco's death, the administrator of his estate, on October 5, 1928, filed a petition in the intestate proceedings asking
that the Court of First Instance issue an order requiring the president or manager of the bank to appear in court for
examination in regard to the 250 shares of the Binalbagan Estate under section 709 of the Code of Civil Procedure. The
court issued the order in conformity with the administrator's motion and ordered the manager of the bank, Miguel Cuaderno,
to appear before the court. Cuaderno did not appear, but the attorney for the bank filed an answer to the administrator's
motion in which answer it was asserted that the pledge of the 250 shares was still in force as security for the debts of
Guanco and the Hinigaran Estate. Thereupon the court, in the same proceedings and without any trial, ordered the manager
of the bank to deliver the said 250 shares to the administrator of the Guanco Estate within thirty days from notice of the
order.
Upon appeal to this court, counsel for the bank maintains that the court below exceeded its jurisdiction in ordering the
delivery of the shares to the administrator in a proceeding under section 709 of the Code of Civil Procedure. This contention
is entirely correct. The section in question reads as follows:
SEC. 709. If an executor or administrator, heir, legatee, creditor, or other person interested in the estate of a
deceased person complains to the court having jurisdiction of the estate, that a person is suspected of having
concealed, embezzled, or conveyed away any of the money, goods, or chattels of the deceased, or that such
person has in his possession, or has knowledge of any deed, conveyance, bond, contract, or other writing which
contains evidence of, or tends to disclose the right, title, interest, or claim of the deceased to real or personal
estate, or the last will and testament of the deceased, the court may cite such suspected person to appear before
it, and may examine him on oath on the matter of such complaint; if the person so cited refuses to appear and
answer such examinations, or to answer such interrogatories as are put to him, the court may, by warrant, commit
him to jail or prison of the province, there to remain in close custody until he submits to the order of the court; and
such interrogatories and answers shall be in writing and signed by the party examined, and filed in the clerk's
office.
As will be seen, the section quoted only provides a proceeding for examining persons suspected of having concealed,
embezzled, or conveyed away property of the deceased or withholds information of documentary evidence tending to
disclose rights or claims of the deceased to such property or to disclose the possession of his last will and testament. The
purpose of the proceeding is to elicit evidence, and the section does not, in terms, authorize the court to enforce delivery of
possession of the things involved. To obtain the possession, recourse must therefore generally be had to an ordinary action.
It has so been held in the cases of Chanco vs. Madrilejos and Abreu (12 Phil., 543) and Alafriz vs. Mina (28 Phil., 137).
In issuing the order from which the appeal has been taken, the court below relied largely on a dictum in the Alafriz case that
"there may be cases, where papers and documentary evidence of ownership of property are held by a third person
belonging to the estate of a deceased person, in which it would be perfectly proper to the court to order the same turned
over to the court." That may be true; it might, for instance, apply to the possession of a will. But in the same case, the court
also said that "the court had no right to deprive her (the appellant) of her evidence relating to the property, until the question
of ownership had been settled."
That is practically this case. The bank maintains that the pledge of the 250 shares is still in force. It may have documentary
evidence to that effect, and it was not under obligation to turn such evidence over to the court or to a third party, on the
strength of a citation under section 709. The possession of the certificates of the shares in question is a part of that evidence
and it is obvious that if they are surrendered to the administrator of the estate and possibly disposed of by him, the bank will
lose its day in court, and its rights can only be determined in a corresponding action.
The appealed order is hereby reversed and annulled without costs. So ordered.
Johnson, Street, Malcolm, Villamor, Johns, Romualdez and Villa-Real, JJ., concur.

55

[G.R. No. 8231. October 3, 1914. ]

PROSPERO K. ALAFRIZ, Petitioner-Appellee, v. PIA MINA, objector-appellant.
Antonio M. Jimenez, for Appellant.
No appearance for Appellee.
SYLLABUS
1. EXECUTORS AND ADMINISTRATORS; PROCEEDINGS FOR DISCOVERY OF ASSETS. In accordance with section
709 of the Code of Procedure in Civil Actions, the court may, when a complaint is made, cite to appear before it any person
who is suspected of having concealed, embezzled or conveyed away any of the property belonging to an estate and he may
examine such person under oath on the matters contained in such complaint, and the interrogatories and answers submitted
in such examination shall be in writing and signed by the party examined and filed in the clerks office.
2. ID.; ID.; RECOVERY OF SUCH ASSETS. There is nothing in section 709 which authorizes the court to take
possession of the property, if any should be found in the possession of persons cited to appear, under a proper complaint,
provided for in said section. When it appears that property belonging to an estate is in the possession of a third person, it is
the duty of the administrator to proceed by an ordinary action to recover the possession of the same. There may be cases,
however, where paper and documentary evidence of ownership of property may be ordered turned over to the court.
3. ID.; ID.; ID.; DETERMINATION OF OWNERSHIP. There seems to be nothing in said section 709 which makes
provision for the determination of the ownership of property. It simply provides that a person who is suspected of having in
his possession property belonging to an estate, may be cited and the court may examine him under oath, and such
interrogatories and answers shall be in writing and signed by the party examined and filed in the clerks office. Said section
nowhere gives the court the power to determine the right of ownership of such property This conclusion seems to be
supported by section 711 of the Code of Procedure in Civil Actions.

DECISION

JOHNSON, J. :

At some time before the facts arose upon which the present appeal is based, one Gregorio Navarro died (the exact date not
appearing of record). On the 9th day of December, 1910, upon a petition presented for that purpose, Prospero K. Alafriz was
appointed as administrator of the estate of the deceased Gregorio Navarro, by the judge of the Court of First Instance of the
Province of Ilocos Sur. It appears in said order (9th of December, 1910) that the said Gregorio Navarro at the time of his
death, left some minor children, a widow, and property, real and personal. On the said 9th day of December, 1910, the court
appointed the widow of the said Gregorio Navarro as the guardian of some of the minor children.
It appears that the said administrator (Prospero K. Alafriz) duly qualified as said administrator on the 10th day of March,
1911, and presented a motion in the Court of First Instance alleging that the said Pia Mina had in her possession a certain
document or paper or receipt for certain jewelry deposited by Gregorio Navarro, before his death, as security for a loan
obtained from one Salvador Rivero and his wife. Upon the facts stated in this motion, the administrator asked that Pia Mina
be cited to appear in court for the purpose of showing whether she had such paper, document or receipt in her possession.
On the 13th day of March, 1911, the Honorable Dionisio Chanco, judge, after considering said motion, issued an order citing
Pia Mina to appear in court, upon the 22d day Of March, 1911, at 8 oclock a. m., for the purpose of answering the
allegations of said motion.
On the said 22d day of March, 1911, Pia Mina appeared in court. After hearing the respective parties, the judge, on the
same day, ordered her to deliver to the clerk of the court the paper or document mentioned in said motion.
On the 23d day of March, 1911, the said Pia Mina complied with the order of the court and deposited with the clerk of the
court the pawn ticket. No. 243. At the same time she presented her exception to the order of the court directing her to deliver
said ticket to the clerk. She also alleged that she and her mother were the real owners of the jewelry pawned.

56

On the 28th day of March, 1911, after said document No. 243 had been delivered to the clerk, the court directed the
administrator to deposit with the clerk the sum of P160, the amount of the loan obtained by the deceased Gregorio Navarro,
for which said jewelry had been deposited as security, and directed the clerk to redeem the said jewelry and to keep it
deposited in his (the clerks) office, until the final settlement of the estate. On the same day (the 28th of March, 1911) the
clerk complied with the order of the court and redeemed the jewelry in question.
On the 8th day of April, 1911, Pia Mina presented a motion asking that the jewelry represented by the pawn ticket, No. 243,
be excluded from the inventory presented by the administrator. Said motion was brought on for hearing on the 28th day of
April, 1911.
At said hearing Pia Mina offered to present proof for the purpose of showing that said jewelry belonged to her and her
mother, to which offer the administrator presented an objection, which objection was sustained by the court, and the
defendant duly excepted.
Some time after said hearing, and on the 22d day of April, 1912, the lower court made the following order:
"In deciding the written motion of the objector Pia Mina, praying for the removal of the administrator appointed in present
case, the court denies the petition and enjoins obedience to its orders of December 9, 1910, and March 28, 1911. The
administrator may bring such actions against Pia Mina as he may deem necessary and the rights of which pertain to the
intestate estate of which he is the administrator, and against this latter the objector, Pia Mina, likewise may institute such
action or actions as she may consider proper. The jewels deposited shall, however continue to remain in the office of the
clerk of the court until the right of possession and ownership thereof shall have been decided by a competent court
"It is further ordered that the objector Pia Mina shall comply with her obligation to furnish bond for the proper discharge of
her duties as guardian of her minor children, Dolores, Isidro, Salud, and Maximina, as previously ordered in this case.
"It is likewise ordered that the administrator shall present a detailed inventory which complies with all the requirements
prescribed by law, shall render accounts and take all steps that may be necessary by law for the due settlement of the
intestate estate and the speedy termination of all proceedings in connection therewith."
From the foregoing order the defendant duly excepted and appealed to this court. In this court the appellant presented the
following assignments of error:
"I. The trial court erred in granting the petition of the administrators counsel by summoning Pia Mina to testify in connection
with the pawned jewels.
"II. The lower court erred in ordering Pia Mina to present the pawn ticket of the aforementioned jewels.
"III. The court erred in ordering the clerk of the court to redeem the said pawned jewels and keep them in custody in the
court.
"IV. The court erred in not permitting the introduction of evidence relative to the ownership of the said jewels.
"V. The court erred in not ordering the exclusion of the said Jewels from the inventory presented by the administrator.
"VI. The court erred in not removing Prospero K. Alafriz from his office of administrator, and in not appointing Pia Mina in his
stead."
In support of the first assignment of error, the appellant contends that there is no law justifying the order made by the lower
court, citing her to appear and to declare concerning the question whether she had property belonging to the estate. She
also contends that the administrator should have proceeded by an ordinary action, if he believed that she had in her
possession property of the estate. She also alleges that the notice of the hearing on said motion was not served on her in
accordance with the rules of the court. As to the last contention she made no objection in the court below. She appeared
without objection. We cannot, therefore, consider that question now.
The appellee did not present a brief here.
In answer to the contention of the appellant that there is no law justifying the citation of the defendant in a testamentary
proceeding, we find that section 709 of the Code of Procedure in Civil Actions (Act No. 1901 expressly authorizes the order
of which complaint is made. Section 709 provides:
"If any executor or administrator, heir, legatee, creditor, or other person interested in the estate of a deceased person
complains to the court having jurisdiction of the estate, that a person is suspected of having concealed, embezzled, or
conveyed away any of the money, goods, or chattels of the deceased, or that such person has in his possession, or has
knowledge of any deed, conveyance, bond, contract, or other writing which contains evidence of, or tends to disclose the

57

right, title, interest or claim of the deceased to real or personal estate, or the last will and testament of the deceased, the
court may cite such suspected person to appear before it, and may examine him on oath on the matter of such complaint; if
the person so cited refuses to appear and answer such examination, or to answer such interrogatories as are put to him, the
court may, by warrant, commit him to the jail or prison of the province, there to remain in close custody until he submits to
the order of the court; and such interrogatories and answers shall be in writing and signed by the party examined, and filed
in the clerk s office."
We think said section (709) fully justifies the order made by the lower court citing the appellant to appear, and that no error
was committed in making said order
The second, third, and fourth assignments of error, we think may be considered together.
In support of the second assignment of error, the appellant alleges that the jewelry in question, which had been pawned and
which was represented by the pawn ticket belonged to her. She contends, when the court ordered the jewelry taken from her
possession and turned over to the clerk, that she had been deprived of her property without a hearing. She alleges, and the
record supports her allegation, that she requested the court to permit her to present proof of her ownership of the jewels,
and that the court refused to hear her proof. (See B. of Ex., p. 33.) So far as the record shows, the only proof which the court
had, indicating who the owner was, was the pawn ticket itself. The pawn ticket showed that it had been issued to the
deceased Gregorio Navarro. That fact, perhaps, constituted prima facie proof of ownership, but it certainly was not absolute
proof of ownership. The lower court not only ordered the appellant to turn the pawn ticket over to the clerk, but also ordered
the administrator to pay to the clerk the sum of P160, with which to redeem said jewels. In accordance with the order of the
court, the clerk did actually redeem said jewels and now has them in his possession. All this was done without permitting the
appellant to be heard upon the question of her alleged ownership. If the jewels did, in fact, belong to the appellant then, of
course, the court had no right to deprive her of the pawn ticket, nor to use the funds of the estate in redeeming them.
There is nothing in section 709 which justifies the orders complained of in the second and third assignments of error. Said
section (709) simply provides that "the court may cite such suspected person to appear before it and may examine him on
oath on the matter of such complaint." There is nothing in the section which authorizes the court to take possession of the
property, if any should be found in the possession of the defendant or of the person cited. If, upon the hearing, there was
good reason for believing that the person cited had property in his or her possession belonging to the estate, then it was the
duty of the administrator to proceed by an ordinary action to recover possession of the same. There may be cases, where
papers and documentary evidence of ownership of property are held by a third person belonging to the estate of a deceased
person, in which it would be perfectly proper for the court to order the same turned over to the court. We do not now,
however, attempt in any way to indicate what would be such a condition nor even to finally decide that such a condition
might exist. In the present case the defendant was entitled to retain possession of the pawn ticket, until the question of the
ownership of the jewels should be determined in the proper way. The court had no right to deprive her of her evidence
relating to the property, until the question of ownership had been settled.
The order of the court of the 22d of April, 1912; directed the administrator to commence an ordinary action against Pia Mina
to recover said jewels, and until that action was concluded, the clerk should retain possession of the same. In said order the
court expressly refused to pass upon the question of ownership. This order, it would seem, was not authorized in the
proceedings then pending, neither was the order directing the administrator to pay, out of the funds of the estate, the amount
necessary to redeem the jewels, until the question of ownership had been settled. No complaint, however, is here made by
any one, relating to that order. That part of the order may properly be considered when the administrator renders his
account. If, however, the estate or Pia Mina has been damaged by said order, such damages may, perhaps, be settled in an
action brought for the purpose of determining the ownership of the jewels. For the present we are not inclined to revoke said
order. It may finally appear that the jewels actually belonged to the estate and not to Pia Mina. In that case the jewels will
then be where they can be turned over to the administrator without further delay.
With reference to the fourth assignment of error, the record shows that the lower court refused, after hearing the defendant,
to allow her to present further proof concerning the ownership of the jewels in question. Section 709 does not seem to make
provision for the determination of the right of ownership of property. Said section provides that the person suspected of
having property belonging to the estate, may be cited, and the court may examine such person, under oath, on the matter of
such property. The section further provides that such interrogatories and answers shall be in writing, and signed by the party
examined, and filed in the clerks office. It will be observed that the section nowhere expressly gives the court the power to
determine the right of property. The usual way of determining the right of contending parties to the ownership of property is
by instituting an ordinary action for that purpose. This is true whether the property in question belongs to the estate of the
deceased person or not. (Chanco v. Madrilejos and Abreu, 12 Phil. Rep., 543.) We are confirmed in our belief that section
709 did not provide for a trial of the right of property of a deceased person, embezzled or alienated by a third person, by the
provisions of section 711, which expressly provides for an ordinary action to recover property of a deceased person
embezzled or alienated, etc., etc.
The appellant argues, in support of the fifth assignment of error, that the jewels in question should not have been placed in
the inventory of the administrator, until there was some positive proof showing that they belonged to the estate. There is
much merit in that contention, but the mere fact that the administrator had placed them in his inventory in no way deprives
the appellant of her property therein. She is still entitled to be heard upon the question of her ownership, when that question

58

is properly presented to the court. The administrator is responsible for what appears in his inventory. While the order
complained of in this assignment of error (fifth) may have been erroneous in the present case, yet we are of the opinion that,
for the present, it in no way prejudices the rights of the appellant in her property. She can yet show that the jewels belonged
to her.
With reference to the sixth assignment of error, there is nothing in the record which shows that there was any just cause for
the removal of the administrator.
While we are persuaded that some of the errors complained of were committed by the lower court, as we have indicated
above, nevertheless, they are errors which may be corrected in subsequent proceedings and are therefore, for the present,
not prejudicial to the rights of the Appellant. Therefore, without intending to legalize the order of the court directing the
administrator to redeem the jewels out of the funds of the estate, nor in any way to affirm the order directing that the jewels
be turned over to the clerk to be held by him until final settlement of the question of ownership, the judgment of the lower
court is hereby affirmed, and without any finding as to costs, it is so ordered.
Arellano, C.J., Torres, Carson and Araullo, JJ., concur.
Separate Opinions

MORELAND, J., dissenting:chanrob1es virtual 1aw library

The court finds that the trial court erred in taking the jewelry from the appellant without a hearing and over her objection. It
also finds affirmatively that the trial court has no authority with respect to property found in the hands of a third person by
virtue of proceedings under section 709 of the Code of Civil Procedure; and that, where the court believes that said third
person has property belonging to the estate, it should order the administrator to bring an action to recover it. It has no power
or authority, without a trial and a hearing upon the merits, to require the third person to deliver the property alleged to belong
to the estate to the administrator.
Having found that the court erred and that it acted without authority of law in depriving the appellant of the property in
question, the court does not, as would seem natural and necessary, reverse the order and require the return of the property
to the appellant, but, rather, condones the act of the court, saying:
"If, however, the estate or Pia Mina has been damaged by said order, such damages may, perhaps, be settled in an action
brought for the purpose of determining the ownership of the jewels. For the present we are not inclined to revoke said order.
It may finally appear that the jewels actually belonged to the estate and not to Pia Mina. In that case the jewels will then be
where they can be turned over to the administrator without further delay." and:
"While we are persuaded that some of the errors complained of were committed by the lower court, as we have indicated
above, nevertheless, they are errors which may be corrected in subsequent proceedings and are therefore, for the present,
not prejudicial to the rights of the Appellant. Therefore, without intending to legalize the order of the court directing the
administrator to redeem the jewels out of the funds of the estate, nor in any way to affirm the order directing that the jewels
be turned over to the clerk to be held by him until final settlement of the question of ownership, the judgment of the lower
court is hereby affirmed, and without any finding as to costs, it is so ordered."
This seems to me to be unusual. To admit that the trial court committed errors in its decision and then allege that "they are
errors which may be corrected in subsequent proceedings," and, upon this allegation, refuse to correct them; when they are
the very errors appealed from and are the very errors assigned in and presented to this court for correction, and are the sole
reason and basis of this appeal, is to pervert the purpose of appeals, to deny appellant the remedy which the law concedes,
and to assume to name the cases in which the law of appeals shall apply.
In my opinion on the order depriving the appellant of her property without due process of law and against her objection,
which order is expressly held erroneous by this court upon that ground, should be reversed and the property returned to the
appellant, where this court expressly finds it properly belongs.

G.R. No. L-27486

November 18, 1927

In the matter of the estate of J. H. Ankrom, deceased. HEIRS OF RAFAEL GREGOIRE, claimants-appellants,
vs.
ALBERT L. BAKER, administrator-appellee.

59

Camus, Delgado and Recto for appellants.

No appearance for appellee.

STREET, J.:
This appeal has been brought to set aside an order entered on March 5, 1926, by Hon. Pedro J. Rich, Judge of the Court of
First Instance of Davao, authorizing the administrator of J. H. Ankrom, deceased, to exclude a large tract of land, with
improvements, from the inventory of assets of the decedent.
It appears that J. H. Ankrom, resident of the Province of Davao, died on September 18, 1922; and on September 25,
thereafter, the appellee, A. L. Baker, qualified as his administrator. On December 13 of the same year, the administrator filed
his inventory of the assets pertaining to the estate of his decedent, in which inventory was included a tract of land covered
by Torrens certificate of title and containing an area of more than 930 hectares. In this inventory, said tract of land, with the
improvements thereon, was estimated at nearly P60,000. On September 24, 1924, the heirs of Rafael Gregoire, appellants
herein, filed a claim against the estate of Ankrom for the sum of $35,438.78, U. S. currency, or P70, 877.56, based upon a
judgment rendered in the Supreme Court of the Republic of Panama. This claim was allowed by the commissioners in the
estate of Ankrom, and no appeal was at any time taken against the order so allowing it. It appears that the total recognized
claims against the estate amounted originally to P76,645.13, but four of the creditors, having claims in the amount of
P1,639.82, have been paid in full, leaving a balance owing by the estate of P75,005.31, the greater part of which is
comprised of the claim of the appellants.
As the affairs of the estate stood upon the original inventory, there appeared to be sufficient assets to pay all claimants; but
while these intestate proceedings were being conducted the administrator discovered that on April 22, 1920, or about a year
and a half before his death, Ankrom had executed a mortgage on the property here in question in favor of the Philippine
Trust Company to secure that company from liability on a note in the amount of P20,000.00, of the same date, upon which it
had made itself contigently liable. Two days after this mortgage had been executed Ankrom appears to have made an
assignment of all his interest in the mortgaged property to one J. G. Jung, of Cincinnati, Ohio, for a purported consideration
of the sum of P1 and other good and valuable considerations. In view of these conveyances by his intestate, the
administrator presented an amended inventory, omitting therefrom the tract of 930 hectares with its improvements thereon,
the same being the land covered by the transfers above mentioned. The court, however, having its attention called to the
fact that the omission of this property from the inventory would leave the estate insolvent, made an order on October 7,
1925, directing the administrator to restore said item to his inventory. Nevertheless, upon a later motion of the administrator
accompanied by authenticated copies of the documents of transfer, the court made a new order, dated march 5, 1926,
approving of the omission by the administrator of said property from the inventory; and its is from this order that the present
appeal is here being prosecuted.
From the foregoing statement it will be collected that the appellants have an undeniable credit in a large amount against the
estate of the decedent, and that upon the showing of the last approved inventory the estate is insolvent. In view of these
facts that appellants, assuming apparently that the assignment to Jung by Ankrom of the equity of redemption of the latter in
the tract of land above mentioned was affected in fraud of creditors, are desirous of reaching and subjecting this interest to
the payment of the appellant's claim. The appellants also insist that it was the duty of the administrator to retain the
possession of this tract of land and thereby place upon Jung, or persons claiming under him, the burden of instituting any
action that may be necessary to maintain the rights of the transferee under said assignment. The administrator, on the other
hand, supposes the assignment to be valid and apparently does not desire to enter into a contest over the question of its
validity with the person or persons claiming under it.
The precise remedy open to the appellants in the predicament above described is clearly pointed pout in section 713 of our
Code of Civil Procedure, which reads as follows:
When there is a deficiency of assets in the hands of an executor or administrator to pay debts and expenses, and
when the deceased person made in his life-time such fraudulent conveyance of such real or personal estate or of a
right or interest therein, as is stated in the preceding section, any creditor of the estate may, by license of the court,
if the executor or administrator has not commenced such action, commence and prosecute to final judgment, in the
name of the executor or administrator, an action for the recovery of the same and may recover for the benefit of
the creditors, such real or personal estate, or interest therein so conveyed. But such action shall not be
commenced until the creditor files in court a bond with sufficient surety, to be approved by the judge, conditioned to
indemnify the executor or administrator against the costs of such action. Such creditor shall have a lien upon the
judgment by him so recovered for the costs incurred and such other expenses as the court deems equitable.
The remedy of the appellants is, therefore, to indemnify the administrator against costs and, by leave of court, to institute an
action in the name of the administrator to set aside the assignment or other conveyance believed to have been made in
fraud of creditors.
For the appellants it is contended that, inasmuch as no appeal was taken from the order of October 7, 1925, directing the
administrator to include the land in question in the inventory, said order became final, with the result that the appealed order
of March 5, 1926, authorizing the exclusion of said property from the inventory, should be considered beyond the
competence of the court. This contention is untenable. Orders made by a court with reference to the inclusion of items of
property in the inventory or the exclusion of items therefrom are manifestly of a purely discretionary, provisional, and

60

interlocutory nature and are subject to modification or change at any time during the course of the administration
proceedings. Such order in question not final in the sense necessary to make it appealable. In fact we note that the
appealed order was expressly made without prejudice to the rights of the creditors to proceed in the manner indicated in the
provision above quoted from the Code of Civil Procedure. lawphil.net
The order appealed from not being of an appealable nature, it results that this appeal must be dismissed, and it is so
ordered, with costs against the appellants.
Avancea, C.J., Johnson, Malcolm, Villamor, Ostrand, Johns and Villa-Real, JJ., concur.

G.R. No. L-62376 October 27, 1983

MARIA VELASQUEZ, MARY GEORGE, NELLIE GEORGE, NOBLE GEORGE, and MAYBELLE GEORGE,plaintiffsappellants,
vs.
WILLIAM GEORGE, ROBERT GEORGE, ANDRES MUOZ, ISAGANI BRIAS and CIRILO ASPERILLA defendantsappellees, ERLINDA VILLANUEVA, mortgagee-defendant-appellee.
Moises B. Ramos for plaintiffs-appellants.
Teresita G. Oledan for defendants-appellees W. George, R. George and Andres Munoz
Isagani Brias and Rogel Atienza for defendant-appellee Brias
Eladio B. Samson for mortgagee-defendant-appellee Erlinda Villanueva.

GUTIERREZ, JR., J:
Plaintiffs-appellants Maria Velasquez Vda. de George and her children, Mary, Nellie, Noble and Maybelle, all surnamed
George, appealed from the decision of the Court of First Instance of Bulacan, which dismissed their complaint for lack of
jurisdiction. According to the trial court, the case falls within the original and exclusive jurisdiction of the Securities and
Exchange Commission. The appeal was certified to us by the Court of Appeals as one involving a pure question of law.
The plaintiffs-appellants are the widow and legitimate children of the late Benjamin B. George whose estate is under
intestate proceedings. The case is docketed as Special Proceedings Nos. 18820 before the then Court of First Instance of
Rizal at Quezon City, Branch XVIII.
In their complaint, the plaintiffs-appellants alleged that the five defendants- mortgagors are officers of the Island Associates
Inc. Andres Muoz, aside from being the treasurer-director of said corporation, was also appointed and qualified as
administrator of the estate of Benjamin George in the above special proceedings. In life, the latter owned 64.8 percent or
636 shares out of the outstanding 980 shares of stock in the corporation. Without the proper approval from the probate court
and without notice to the heirs and their counsel, the defendants-mortgagors executed a Deed of First Real Estate Mortgage
in favor of the defendant-mortgagee Erlinda Villanueva, covering three parcels of land owned by Island Associates. In said
Deed, the defendants-mortgagors also expressly waived their right to redeem the said parcels. Subsequently, a power of
attorney was executed by the defendants-mortgagors in favor of Villanueva whereby the latter was given the full power and
authority to cede, transfer, and convey the parcels of land within the reglementary period provided by law for redemption.
A certificate of sale was executed in favor of Villanueva by the Provincial Sheriff of Bulacan after she submitted the highest
bids at the public auction. This led to the execution of a Deed of Sale and Affidavit of Consolidation of Ownership by virtue of
which Transfer Certificates of Titles Nos. T-16717 and T-39162, covering the three parcels of land, were cancelled and in
lieu thereof, Transfer Certificates of Titles Nos. T239675 and T-239674 were issued in favor of Villanueva. The plaintiffsappellants, therefore, filed the complaint for the annulment of the 1.) Deed of First Real Estate Mortgage; 2.) Power of
Attorney; 3.) Certificate of Sale; 4.) Amended Certificate of Sale; 5.) Affidavit of Consolidation of Ownership; and 6.) Transfer
Certificates of Title Nos. T-239674 and T-239675.
A motion to dismiss was filed by William George, Robert George, and administrator Andres Muoz on the ground that the
trial court had no jurisdiction over the case. The movants contended that the subject matter of the complaint referred to the
corporate acts of the Board of Directors of Island Associates, and, therefore, falls within the exclusive jurisdiction of the
Securities and Exchange Commission. The trial court agreed with the movants and dismissed the complaint. The plaintiffsappellants contend that the resolution of the validity of a mortgage contract is within the original and exclusive jurisdiction of
civil courts, and certainly not within the jurisdiction of the Securities and Exchange Commission and that once jurisdiction of
the civil court whether in a civil or a criminal case, has properly attached, the same cannot be ousted, divested or removed.
The appellants state that the questioned composition of the board of directors, is merely incidental to the determination of
the main issue and is insufficient cause for the trial court to divest itself of its original and exclusive jurisdiction that has
already been acquired.

61

The defendants-appellees, on the other hand maintain that since the complaint questions the validity of a corporate contract
which the appellants contend to have been entered into as a fraudulent and surreptitious scheme and devise to defraud
them, this issue places the entire case outside the jurisdiction of the civil courts. According to them, Presidential Decree No.
902-A gives the SEC exclusive jurisdiction over such a controversy. The relevant provision reads:
Sec. 5. In addition to the regulatory and adjudicative functions of the Securities and Exchange
Commission over corporations, partnerships and other forms of associations registered with it as
expressly granted under existing laws and decrees, it shall have original and exclusive jurisdiction to hear
and decide cases involving:
a) Devices or schemes employed by any acts of the board of directors, business
associations, its officers or partners amounting to fraud and misrepresentation which
may be detrimental to the interest of the public and/or of the stockholder, partner,
members of associations or organizations registered with the Commission ...
Villanueva further contends that the plaintiffs-appellants have no capacity to file the complaint because the general rule laid
down in Rule 87, Section 3 of the Rules of Court states that only the administrator or executor of the estate may bring
actions of such nature as the one in the case at bar. The only exception is when the executor or administrator is unwilling or
fails or refuses to act, which exception according to the mortgagee-appellee does not apply in the present case.
We agree with the plaintiffs-appellants. What the complaint sought to annul were documents of title which vested ownership
over the three parcels of land in question to defendant-mortgagee Villanueva, who is neither an officer, a stockholder nor a
director of the corporation, but a third party. Clearly, the lower court had jurisdiction over the controversy. The fact that the
plaintiffs-appellants subsequently questioned the legality of the constitution of the board of directors of the corporation did
not divest the court of its jurisdiction to take cognizance of the case. What determines jurisdiction of the court are the
allegations in the complaint. If from the same, the court has already acquired jurisdiction over the subject-matter, jurisdiction
is retained up to the end of the litigation. (See Lat v. Phil. Long Distance Co., 67 SCRA 425).
Whether or not the mortgage contract, with an unusual provision whereby the mortgagors waived their right to redeem the
mortgaged property, could be executed without proper approval of the probate court and without notice to the widow and
legitimate children of the deceased is a matter clearly within the authority of a trial court to decide. If in the course of trial, the
court believes that the validity of the composition of the board of directors is absolutely necessary for resolution of the issues
before it, the remedy is, at most, to require that one issue to be threshed out before the Securities and Exchange
Commission and to hold in abeyance, the trial on the merits of the principal issues in the meantime. Certainly, the solution is
not for the lower court to surrender its judicial questions to an administrative agency for resolution.
We also find without merit the defendant-mortgagee's contention that the proper party to file the complaint is the
administrator of the estate of Benjamin George. The administrator, Andres Muoz, is the same person charged by the
plaintiffs-appellants to have voted in the board of directors without securing the proper authority from the probate court to
which he is accountable as administrator. In Ramirez v. Baltazar (24 SCRA 918), we ruled that "since the ground for the
present action to annul the aforesaid foreclosure proceedings is the fraud resulting from such insidious machinations and
collusion in which the administrator has allegedly participated, it would be far fetched to expect the said administrator himself
to file the action in behalf of the estate. And who else but the heirs, who have an interest to assert and to protect, would
bring the action? Inevitably, this case should fall under the exception, rather than the general rule that pending proceedings
for the settlement of the estate, the heirs have no right to commence an action arising out of the rights belonging to the
deceased." The case at bar falls under such an exception.
WHEREFORE, the order of the Court of First Instance of Bulacan, dated June 16, 1980, dismissing the complaint and the
order dated December 1, 1980 denying the motion for reconsideration are SET ASIDE. The said court is hereby ordered to
set the case for trial on the merits as above indicated.
SO ORDERED.
Teehankee (Chairman), Melencio-Herrera, Plana and Relova JJ., concur.

G.R. No. 145982

July 3, 2003

FRANK N. LIU, deceased, substituted by his surviving spouse Diana Liu, and children, namely: Walter, Milton,
Frank, Jr., Henry and Jockson, all surnamed Liu, Rebecca Liu Shui and Pearl Liu Rodriguez,petitioners,
vs.
ALFREDO LOY, JR., TERESITA A. LOY and ESTATE OF JOSE VAO, respondents.
CARPIO, J.:

62

The Case
1

This is a petition for review on certiorari of the Decision dated 13 June 2000 and the Resolution dated 14 November 2002
of the Court of Appeals which affirmed the Decision2 of the Regional Trial Court, Branch 14, Cebu City. The Court of
Appeals agreed with the trial court that the sales by the late Teodoro Vao to respondents Alfredo Loy, Jr. and Teresita A.
Loy of Lot Nos. 5 and 6, respectively, were valid. The Court of Appeals also agreed with the trial court that the unilateral
extrajudicial rescission by the late Teodoro Vao of the contract to sell involving five lots, including Lot Nos. 5 and 6,
between him and Benito Liu (predecessor-in-interest of Frank Liu) was valid.
The Facts
On 13 January 1950, Teodoro Vao, as attorney-in-fact of Jose Vao, sold seven lots of the Banilad Estate located in Cebu
City to Benito Liu and Cirilo Pangalo.3 Teodoro Vao dealt with Frank Liu, the brother of Benito Liu, in the sale of the lots to
Benito Liu and Cirilo Pangalo. The lots sold to Benito Liu were Lot Nos. 5, 6, 13, 14, and 15 of Block 12 for a total price of
P4,900. Benito Liu gave a down payment of P1,000, undertaking to pay the balance of P3,900 in monthly installments of
P100 beginning at the end of January 1950. The lots sold to Cirilo Pangalo were Lot Nos. 14 and 15 of Block 11 for a total
price of P1,967.50. Cirilo Pangalo gave P400 as down payment, undertaking to pay the balance of P1,567.50 in monthly
installments of P400 beginning at the end of January 1950. Meanwhile, Jose Vao passed away.
Benito Liu subsequently paid installments totaling P2,900, leaving a balance of P1,000.4 Apparently, Benito Liu stopped
further payments because Teodoro Vao admitted his inability to transfer the lot titles to Benito Liu. Later, in a letter 5 dated
16 October 1954, Teodoro Vao informed Frank Liu6 that the Supreme Court had already declared valid the will of his father
Jose Vao. Thus, Teodoro Vao could transfer the titles to the buyers names upon payment of the balance of the purchase
price.
When Frank Liu failed to reply, Teodoro Vao sent him another letter, 7 dated 1 January 1955, reminding him of his
outstanding balance. It appears that it was only after nine years that Frank Liu responded through a letter, 8dated 25 January
1964. In the letter, Frank Liu informed Teodoro Vao that he was ready to pay the balance of the purchase price of the
seven lots. He requested for the execution of a deed of sale of the lots in his name and the delivery of the titles to him.
On 22 April 1966, Benito Liu sold to Frank Liu the five lots (Lot Nos. 5, 6, 13, 14 and 15 of Block 12) which Benito Liu
purchased from Teodoro Vao.9 Frank Liu assumed the balance of P1,000 for the five lots. Cirilo Pangalo likewise sold to
Frank Liu the two lots (Lot Nos. 14 and 15 of Block 11) that Pangalo purchased from Teodoro Vao. Frank Liu likewise
assumed the balance of P417 for the two lots.
On 21 March 1968, Frank Liu reiterated in a letter 10 his request for Teodoro Vao to execute the deed of sale covering the
seven lots so he could secure the corresponding certificates of title in his name. He also requested for the construction of
the subdivision roads pursuant to the original contract. In the letter, Frank Liu referred to another letter, dated 25 June 1966,
which he allegedly sent to Teodoro Vao. According to Frank Liu, he enclosed PBC Check No. D-782290 dated 6 May 1966
for P1,417, which is the total balance of the accounts of Benito Liu and Cirilo Pangalo on the seven lots. However, Frank Liu
did not offer in evidence the letter or the check. Frank Liu sent two other letters, 11 dated 7 June 1968 and 29 July 1968, to
Teodoro Vao reiterating his request for the execution of the deed of sale in his favor but to no avail.
On 19 August 1968, Teodoro Vao sold Lot No. 6 to respondent Teresita Loy for P3,930. 12 The Register of Deeds of Cebu
City entered this sale in the Daybook on 24 February 1969.13
On 2 December 1968, Frank Liu filed a complaint against Teodoro Vao for specific performance, execution of deed of
absolute sale, issuance of certificates of title and construction of subdivision roads, before the Court of First Instance of
Davao. The case was docketed as Civil Case No. 6300. 14
On 19 December 1968, Frank Liu filed with the Register of Deeds of Cebu City a notice of lis pendens on the seven lots due
to the pendency of Civil Case No. 6300.15 However, the Register of Deeds denied the registration of the lis pendens "on the
ground that the property is under administration and said claim must be filed in court." 16
On 16 December 1969, Teodoro Vao sold Lot No. 5 to respondent Alfredo Loy for P3,910. 17 The Register of Deeds of
Cebu City entered this sale in the Daybook on 16 January 1970. 18
On 3 October 1970, the Court of First Instance of Davao, on motion of Teodoro Vao, dismissed Civil Case No. 6300 on the
ground that Frank Liu should have filed the claim with the probate court.19 Thus, on 17 February 1972, Frank Liu filed before
the probate court a claim against the Estate of Jose Vao for "Specific Performance, Execution of Deed of Absolute Sale,
Issuance of Certificate of Title, and Construction of Subdivision Roads."20
During the proceedings, Teodoro Vao died. His widow, Milagros Vao, succeeded as administratrix of the Estate of Jose
Vao.
On 24 February 1976, the probate court approved the claim of Frank Liu. On 5 March 1976, Milagros Vao executed a deed
of conveyance covering the seven lots in favor of Frank Liu, in compliance with the probate courts order. 21 The deed of
conveyance included Lot Nos. 5 and 6, the same lots Teodoro Vao sold respectively to Alfredo Loy, Jr. on 16 December
1969 and to Teresita Loy on 19 August 1968.
On 19 March 1976, the probate court, upon an ex-parte motion filed by Teresita Loy, issued an Order 22approving the 16
August 1968 sale by Teodoro Vao of Lot No. 6 in her favor. Likewise, upon an ex-parte motion filed by Alfredo Loy, Jr., the

63

probate court issued on 23 March 1976 an Order 23 approving the 16 December 1969 sale of Lot No. 5 by Teodoro Vao in
his favor.
On 10 May 1976, the Register of Deeds of Cebu City cancelled TCT No. 44204 in the name of the Estate of Jose Vao
covering Lot No. 5 and issued a new title, TCT No. 64522, in the name of Alfredo Loy, Jr. and Perfeccion V. Loy. 24 Likewise,
on the same date, the Register of Deeds cancelled TCT No. 44205 in the name of the Estate of Jose Vao covering Lot No.
6, and issued TCT No. 64523 in the name of Teresita A. Loy. 25
On 3 June 1976, Milagros Vao, as administratrix of the estate, filed a motion for reconsideration of the Orders of the
probate court dated 19 and 23 March 1976. She contended that she already complied with the probate courts Order dated
24 February 1976 to execute a deed of sale covering the seven lots, including Lot Nos. 5 and 6, in favor of Frank Liu. She
also stated that no one notified her of the motion of the Loys, and if the Loys or the court notified her, she would have
objected to the sale of the same lots to the Loys.
On 4 June 1976, Frank Liu filed a complaint for reconveyance or annulment of title of Lot Nos. 5 and 6. Frank Liu filed the
case in the Regional Trial Court of Cebu City, Branch 14, which docketed it as Civil Case No. R-15342.
On 5 August 1978, the probate court denied the motion for reconsideration of Milagros Vao on the ground that the
conflicting claims regarding the ownership of Lot Nos. 5 and 6 were already under litigation in Civil Case No. R-15342.
On 8 April 1991, the Regional Trial Court of Cebu City ("trial court"), Branch 14, rendered judgment against Frank Liu as
follows:
WHEREFORE, judgment is hereby rendered:
(1) Dismissing the complaint at bar; and
(2) Confirming the unilateral extrajudicial rescission of the contract Exhibit A by the late Teodoro Vao,
conditioned upon the refund by the Estate of Jose Vao of one-half (1/2) of what the plaintiff had paid
under that contract.
The counterclaims by the defendants Alfredo A. Loy, Jr. and Teresita A. Loy and by the defendant Estate of Jose
Vao, not having been substantiated, are hereby denied.
Without special pronouncement as to costs.
SO ORDERED.26
Frank Liu appealed to the Court of Appeals, which affirmed in toto the decision of the trial court. Frank Liu27 filed a motion for
reconsideration but the Court of Appeals denied the same.
Hence, the instant petition.
The Trial Courts Ruling
The trial court held that the contract between Teodoro Vao and Benito Liu was a contract to sell. Since title to Lot Nos. 5
and 6 never passed to Benito Liu due to non-payment of the balance of the purchase price, ownership of the lots remained
with the vendor. Therefore, the trial cour ruled that the subsequent sales to Alfredo Loy, Jr. and Teresita Loy of Lot Nos. 5
and 6, respectively, were valid.
The trial court viewed the letter of Teodoro Vao dated 1 January 1995 addressed to Frank Liu as a unilateral extrajudicial
rescission of the contract to sell. The trial court upheld the unilateral rescission subject to refund by the Estate of Jose Vao
of one-half (1/2) of what Frank Liu paid under the contract.
The trial court ruled that Teodoro Vao, as administrator of the Estate of Jose Vao and as sole heir of Jose Vao, acted
both as principal and as agent when he sold the lots to Alfredo Loy, Jr. and Teresita Loy. The probate court subsequently
approved the sales. The trial court also found that Alfredo Loy, Jr. and Teresita Loy were purchasers in good faith.
The Court of Appeals Ruling
In affirming in toto the trial courts decision, the appellate court found no evidence of fraud or ill-motive on the part of Alfredo
Loy, Jr. and Teresita Loy. The Court of Appeals cited the rule that "the law always presumes good faith such that any person
who seeks to be awarded damages due to the acts of another has the burden of proving that the latter acted in bad faith or
ill-motive."
The Court of Appeals also held that the sales to Alfredo Loy, Jr. and Teresita Loy of Lot Nos. 5 and 6, respectively, were
valid despite lack of prior approval by the probate court. The Court of Appeals declared that Teodoro Vao sold the lots in
his capacity as heir of Jose Vao. The appellate court ruled that an heir has a right to dispose of the decedents property,
even if the same is under administration, because the hereditary property is deemed transmitted to the heir without
interruption from the moment of the death of the decedent.
The Court of Appeals held that there is no basis for the claim of moral damages and attorneys fees. The appellate court
found that Frank Liu failed to prove that he suffered mental anguish due to the actuations of the Loys. The Court of Appeals
likewise disallowed the award of attorneys fees. The fact alone that a party was compelled to litigate and incur expenses to

64

protect his claim does not justify an award of attorneys fees. Besides, the Court of Appeals held that where there is no basis
to award moral damages, there is also no basis to award attorneys fees.
The Issues
Petitioners

28

raise the following issues:

29

1. Whether prior approval of the probate court is necessary to validate the sale of Lot Nos. 5 and 6 to Loys;
2. Whether the Loys can be considered buyers and registrants in good faith despite the notice of lis pendens;
3. Whether Frank Liu has a superior right over Lot Nos. 5 and 6;
4. Whether the Court of Appeals erred in not passing upon the trial courts declaration that the extra-judicial
rescission by Teodoro Vao of the sale in favor of Frank Liu is valid;
5.Whether petitioners are entitled to moral damages and attorneys fees.
The Courts Ruling
The petition is meritorious.
Whether there was a valid cancellation of the contract to sell
There was no valid cancellation of the contract to sell because there was no written notice of the cancellation to Benito Liu or
Frank Liu. There was even no implied cancellation of the contract to sell. The trial court merely "viewed" the alleged
"unilateral extrajudicial rescission" from the letter of Teodoro Vao, dated 1 January 1955, addressed to Frank Liu, stating
that:
Two months, I believe, is ample for the allowance of delays caused by your (sic) either too busy, or having been
some place else, or for consultations. These are the only reasons I can think of that could have caused the delay in
your answer, unless you do not think an answer is necessary at all, as you are not the party concerned in the
matter.
I shall therefor (sic) appreciate it very much, if you will write me within ten days from receipt of this letter, or
enterprete (sic) your silence as my mistake in having written to the wrong party, and therefor (sic) proceed to write
Misters: B. Liu and C. Pangalo.30 (Emphasis supplied)
Obviously, we cannot construe this letter as a unilateral extrajudicial rescission of the contract to sell. As clearly stated in the
letter, the only action that Teodoro Vao would take if Frank Liu did not reply was that Teodoro Vao would write directly to
Benito Liu and Cirilo Pangalo. The letter does not mention anything about rescinding or cancelling the contract to sell.
Although the law allows the extra-judicial cancellation of a contract to sell upon failure of one party to comply with his
obligation, notice of such cancellation must still be given to the party who is at fault.31 The notice of cancellation to the other
party is one of the requirements for a valid cancellation of a contract to sell, aside from the existence of a lawful cause. Even
the case cited by the trial court emphasizes the importance of such notice:
Of course, it must be understood that the act of a party in treating a contract as cancelled or resolved on account
of infractions by the other contracting party must be made known to the other and is always provisional, being ever
subject to scrutiny and review by the proper court. If the other party denies that rescission is justified, it is free to
resort to judicial action in its own behalf, and bring the matter to court. Then, should the court, after due hearing,
decide that the resolution of the contract was not warranted, the responsible party will be sentenced to damages;
in the contrary case, the resolution will be affirmed, and the consequent indemnity awarded to the party
prejudiced.32 (Emphasis supplied)
The fact that Teodoro Vao advised Frank Liu to file his claim with the probate court is certainly not the conduct of one who
supposedly unilaterally rescinded the contract with Frank Liu. 33
In this case, there was prior delay or default by the seller. As admitted by Teodoro Vao, he could not deliver the titles
because of a case questioning the authenticity of the will of his father. In a letter 33 to Frank Liu dated 16 October 1954,
Teodoro Vao stated:
Some time last May, if I remember correctly, you offered to settle the whole balance of your account if I can have
the Titles transferred immediately in your brothers name, and to that of Mr. Pangalos. I cannot blame you if you
were disappointed then, to know that I could not have the titles transferred, even should you have paid in full.
(Emphasis supplied)
In the same letter of 16 October 1954, Teodoro Vao informed Frank Liu that the titles were ready for transfer, thus:
However, last June 30, of this year, the Supreme Court, unanimously concurred in the reversal of the decision of
the Court of First Instance, as regard the legality of the Will of my father. Now that the Will of my Father has been
declared Legal, my opponents have lost their personality in the case, and with it their power to harass me in court.
Also, sometime in the middle of July, also this year, the Supreme Court again declared that all the sales I have
made of the properties of my Father, were Legal, and that I should be empowered to have the Titles transferred in

65

the buyers names, should they have paid in full. A few have already received their Titles. And yours can be had
too in two days time from the time you have paid in full.
Nevertheless, the subsequent approval by the probate court of the sale of Lot Nos. 5 and 6 to Frank Liu rendered
moot any question on the continuing validity of the contract to sell.
Whether the lis pendens in the Davao case served as notice to the Loys
The lis pendens in the Davao case did not serve as notice to the Loys. The Register of Deeds of Cebu City denied
registration of the lis pendens on 19 December 1968.35 Frank Liu did not appeal to the Land Registration Commission 36 to
keep alive the lis pendens. Republic Act No. 1151,37 which took effect 17 June 1954, provides:
SEC. 4. Reference of doubtful matters to Commissioner of Land Registration. When the Register of Deeds is in
doubt with regard to the proper step to be taken or memorandum to be made in pursuance of any deed, mortgage,
or other instrument presented to him for registration, or where any party in interest does not agree with the
Register of Deeds with reference to any such matter, the question shall be submitted to the Commissioner of Land
Registration either upon the certification of the Register of Deeds, stating the question upon which he is in doubt,
or upon the suggestion in writing by the party in interest; and thereupon the Commissioner, after consideration of
the matter shown by the records certified to him, and in case of registered lands, after notice to the parties and
hearing, shall enter an order prescribing the step to be taken or memorandum to be made. His decision in such
cases shall be conclusive and binding upon all Registers of Deeds: Provided, however, That when a party in
interest disagrees with a ruling or resolution of the Commissioner and the issue involves a question of law, said
decision may be appealed to the Supreme Court within thirty days from and after receipt of the notice thereof.
(Emphasis supplied)
Frank Lius failure to appeal38 the denial of the registration rendered the lis pendens ineffective. The Court of First Instance
of Davao City eventually dismissed Frank Lius complaint on 3 October 1970.
Whether the registration by the Loys of their contracts of sale made them the first registrants in good faith to defeat
prior buyers
The registration by the Loys of their contracts of sale did not defeat the right of prior buyers because the person who signed
the Loys contracts was not the registered owner. The registered owner of Lot Nos. 5 and 6 was the "Estate of Jose Vao."
Teodoro Vao was the seller in the contract of sale with Alfredo Loy, Jr. The Estate of Jose Vao was the seller in the
contract of sale with Teresita Loy. Teodoro Vao signed both contracts of sale. The rule is well-settled that "one who buys
from a person who is not the registered owner is not a purchaser in good faith."39 As held in Toledo-Banaga v. Court of
Appeals:40
To repeat, at the time of the sale, the person from whom petitioner Tan bought the property is neither the registered owner
nor was the former authorized by the latter to sell the same. She knew she was not dealing with the registered owner or a
representative of the latter. One who buys property with full knowledge of the flaws and defects in the title of his vendor is
enough proof of his bad faith and cannot claim that he acquired title in good faith as against the owner or of an interest
therein. When she nonetheless proceeded to buy the lot, petitioner Tan gambled on the result of litigation. She is bound by
the outcome of her indifference with no one to blame except herself if she looses her claim as against one who has a
superior right or interest over the property. x x x.
The Loys were under notice to inquire why the land was not registered in the name of the person who executed the
contracts of sale. They were under notice that the lots belonged to the "Estate of Jose Vao" and any sale of the lots
required court approval. Any disposition would be subject to the claims of creditors of the estate who filed claims before the
probate court.41
The contracts of the Loys did not convey ownership of the lots to them as against third persons. The contracts were binding
only on the seller, Teodoro Vao. The contracts of the Loys would become binding against third persons only upon approval
of the sale by the probate court and registration with the Register of Deeds. Registration of the contracts without court
approval would be ineffective to bind third persons, especially creditors of the estate. Otherwise, this will open the door to
fraud on creditors of the estate.
Whether the probate courts ex-parte approval of the contracts of the Loys was valid
Section 8, Rule 89 of the 1964 Rules of Court 42 specifically requires notice to all interested parties in any application for
court approval to convey property contracted by the decedent in his lifetime. Thus:
SECTION 8. When court may authorize conveyance of realty which deceased contracted to convey. Notice. Effect
of deed. Where the deceased was in his lifetime under contract, binding in law, to deed real property, or an
interest therein, the court having jurisdiction of the estate may, on application for that purpose, authorize the
executor or administrator to convey such property according to such contract, or with such modifications as are
agreed upon by the parties and approved by the court; and if the contract is to convey real property to the executor
or administrator, the clerk of the court shall execute the deed. The deed executed by such executor, administrator,
or clerk of court shall be as effectual to convey the property as if executed by the deceased in his lifetime; but no
such conveyance shall be authorized until notice of the application for that purpose has been given personally or
by mail to all persons interested, and such further notice has been given, by publication or otherwise, as the court

66

deems proper; nor if the assets in the hands of the executor or administrator will thereby be reduced so as to
prevent a creditor from receiving his full debt or diminish his dividend. (Rule 89, 1964 Rules of Court) (Emphasis
supplied)
Despite the clear requirement of Section 8 of Rule 89, the Loys did not notify the administratrix of the motion and hearing to
approve the sale of the lots to them. The administratrix, who had already signed the deed of sale to Frank Liu as directed by
the same probate court, objected to the sale of the same lots to the Loys. Thus, as found by the trial court:
On June 3, 1976, Milagros H. Vao moved for the reconsideration of the Order issued by Judge Ramolete on March 19,
1976 and March 23, 1976, contending that she had not been personally served with copies of the motions presented to the
Court by Alfredo Loy, Jr. and by Teresita Loy seeking the approval of the sales of the lots in their favor, as well as the
Orders that were issued by the Court pursuant thereto; that the Court in its Order of February 24, 1976 had ordered her
(Milagros H. Vao), to execute a deed of absolute sale in favor of the plaintiff, which sale had been approved by the Court;
that she had not known of the sale of Lots 5 and 6 to any other person except to the plaintiff; that the sale of the two lots in
favor of plaintiff was made earlier, when there was yet no litigation with the Bureau of Internal Revenue, while those in favor
of the defendant Loys were made when there was already a prohibition by the Court against any sale thereof; that the sales
in favor of the Loys were made without Court authority; and that if the approval of the sales had not been obtained ex-parte
she would have informed the Court of the complication arising therefrom, and she would not have executed the sale in favor
of plaintiff, and she would have asked the Court to decide first as to who had preference over said lots. 43
The failure to notify the administratrix and other interested persons rendered the sale to the Loys void. As explained by
Justice J.B.L. Reyes in De Jesus v. De Jesus:44
Section 9, Rule 90, however, provides that authority can be given by the probate court to the administrator to
convey property held in trust by the deceased to the beneficiaries of the trust only "after notice given as required in
the last preceding section"; i.e., that "no such conveyance shall be authorized until notice of the application for that
purpose has been given personally or by mail to all persons interested, and such further notice has been given, by
publication or otherwise, as the court deems proper" (sec. 8, Rule 90). This rule makes it mandatory that notice be
served on the heirs and other interested persons of the application for approval of any conveyance of property held
in trust by the deceased, and where no such notice is given, the order authorizing the conveyance, as well as the
conveyance itself, is completely void. (Emphasis supplied)
In this case, the administratrix, the wife of the deceased Teodoro Vao, was not notified of the motion and hearing to
approve the sale of the lots to the Loys. Frank Liu did not also receive any notice, although he obviously was an interested
party. The issuance of new titles to the Loys on 10 May 1976 by the Registry of Deeds did not vest title to the Loys because
the "conveyance itself" was "completely void." The consequences for the failure to notify the administratrix and other
interested parties must be borne by the Loys.
Necessity of court approval of sales
Indisputably, an heir can sell his interest in the estate of the decedent, or even his interest in specific properties of the
estate. However, for such disposition to take effect against third parties, the court must approve such disposition to protect
the rights of creditors of the estate. What the deceased can transfer to his heirs is only the net estate, that is, the gross
estate less the liabilities. As held in Baun v. Heirs of Baun: 45
The heir legally succeeds the deceased, from whom he derives his right and title, but only after the liquidation of
the estate, the payment of the debts of the same, and the adjudication of the residue of the estate of the deceased;
and in the meantime the only person in charge by law to attend to all claims against the estate of the deceased
debtor is the executor or administrator appointed by the court.
In Opulencia v. Court of Appeals,46 an heir agreed to convey in a contract to sell her share in the estate then under probate
settlement. In an action for specific performance filed by the buyers, the seller-heir resisted on the ground that there was no
approval of the contract by the probate court. The Court ruled that the contract to sell was binding between the parties, but
subject to the outcome of the testate proceedings. The Court declared:
x x x Consequently, although the Contract to Sell was perfected between the petitioner (seller-heir) and private
respondents (buyers) during the pendency of the probate proceedings, the consummation of the sale or the
transfer of ownership over the parcel of land to the private respondents is subject to the full payment of the
purchase price and to the termination and outcome of the testate proceedings. x x x Indeed, it is settled that the
sale made by an heir of his share in an inheritance, subject to the pending administration, in no wise stands in the
way of such administration. (Emphasis supplied)
In Alfredo Loys case, his seller executed the contract of sale after the death of the registered owner Jose Vao. The seller
was Teodoro Vao who sold the lot in his capacity as sole heir of the deceased Jose Vao. Thus, Opulencia applies to the
sale of the lot to Alfredo Loy, Jr., which means that the contract of sale was binding between Teodoro Vao and Alfredo Loy,
Jr., but subject to the outcome of the probate proceedings.
In Frank Lius case, as successor-in-interest of Benito Liu, his seller was Jose Vao, who during his lifetime executed the
contract to sell through an attorney-in-fact, Teodoro Vao. This is a disposition of property contracted by the decedent
during his lifetime. Section 8 of Rule 89 specifically governs this sale:

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SECTION 8. When court may authorize conveyance of realty which deceased contracted to convey. Notice. Effect
of deed. Where the deceased was in his lifetime under contract, binding in law, to deed real property, or an
interest therein, the court having jurisdiction of the estate may, on application for that purpose, authorize the
executor or administrator to convey such property according to such contract, or with such modifications as are
agreed upon by the parties and approved by the court; x x x
Thus, Frank Liu applied to the probate court for the grant of authority to the administratrix to convey the lots in accordance
with the contract made by the decedent Jose Vao during his lifetime. The probate court approved the application.
In Teresita Loys case, her seller was the Estate of Jose Vao. Teodoro Vao executed the contract of sale in his capacity
as administrator of the Estate of Jose Vao, the registered owner of the lots. The Court has held that a sale of estate
property made by an administrator without court authority is void and does not confer on the purchaser a title that is
available against a succeeding administrator. 47
Manotok Realty, Inc. v. Court of Appeals48 emphasizes the need for court approval in the sale by an administrator of estate
property. The Court held in Manotok Realty:
We also find that the appellate court committed an error of law when it held that the sale of the lot in question did
not need the approval of the probate court.
Although the Rules of Court do not specifically state that the sale of an immovable property belonging to an estate of a
decedent, in a special proceeding, should be made with the approval of the court, this authority is necessarily included in its
capacity as a probate court.
An administrator under the circumstances of this case cannot enjoy blanket authority to dispose of real estate as he pleases,
especially where he ignores specific directives to execute proper documents and get court approval for the sales validity.
Section 91 of Act No. 496 (Land Registration Act) specifically requires court approval for any sale of registered land by an
executor or administrator, thus:
SEC. 91. Except in case of a will devising the land to an executor to his own use or upon some trust or giving to
the executor power to sell, no sale or transfer of registered land shall be made by an executor or by an
administrator in the course of administration for the payment of debts or for any other purpose, except in
pursuance of an order of a court of competent jurisdiction obtained as provided by law. (Emphasis supplied)
Similarly, Section 88 of Presidential Decree No. 1529 (Property Registration Decree) provides:
SEC. 88. Dealings by administrator subject to court approval. After a memorandum of the will, if any, and order
allowing the same, and letters testamentary or letters of administration have been entered upon the certificate of
title as hereinabove provided, the executor or administrator may alienate or encumber registered land belonging to
the estate, or any interest therein, upon approval of the court obtained as provided by the Rules of Court.
(Emphasis supplied)
Clearly, both the law and jurisprudence expressly require court approval before any sale of estate property by an executor or
administrator can take effect.
Moreover, when the Loys filed in March 1976 their ex-parte motions for approval of their contracts of sale, there was already
a prior order of the probate court dated 24 February 1976 approving the sale of Lot Nos. 5 and 6 to Frank Liu. In fact, the
administratrix had signed the deed of sale in favor of Frank Liu on 5 March 1976 pursuant to the court approval. This deed of
sale was notarized on 5 March 1976, which transferred ownership of Lot Nos. 5 and 6 to Frank Liu on the same date. 49
Thus, when the probate court approved the contracts of the Loys on 19 and 23 March 1976, the probate court had already
lost jurisdiction over Lot Nos. 5 and 6 because the lots no longer formed part of the Estate of Jose Vao.
In Dolar v. Sundiam,50 an heir sold parcels of land that were part of the estate of the decedent. The probate court approved
the sale. Thereafter, the probate court authorized the administrator to sell again the same parcels of land to another person.
The Court ruled that the probate court had already lost jurisdiction to authorize the further sale of the parcels of land to
another person because such property no longer formed part of the estate of the decedent. The Court declared:
In our opinion, where, as in this case, a piece of property which originally is a part of the estate of a deceased
person is sold by an heir of the deceased having a valid claim thereto, and said piece of property is, by mistake,
subsequently inventoried or considered part of the deceaseds estate subject to settlement, and, thereafter, with
the authority and approval of the probate court, it sold once more to another person, a receiver of the property so
sold may, during the pendency of a motion to set aside the second sale, be appointed by the court when in its
sound judgment the grant of such temporary relief is reasonably necessary to secure and protect the rights of its
real owner against any danger of loss or material injury to him arising from the use and enjoyment thereof by
another who manifestly cannot acquire any right of dominion thereon because the approving surrogate court had
already lost jurisdiction to authorize the further sale of such property. (Emphasis supplied)
Similarly, in this case, the Loys cannot acquire any right of dominion over Lot Nos. 5 and 6 because the probate court had
already lost jurisdiction to authorize the second sale of the same lots. Moreover, the probate courts approval of the sale to
the Loys was completely void due to the failure to notify the administratrix of the motion and hearing on the sale.

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Whether the Loys were in good faith when they built on the Lots.
The Civil Code describes a possessor in good faith as follows:
Art. 526. He is deemed a possessor in good faith who is not aware that there exists in his title or mode of
acquisition any flaw which invalidates it.
He is deemed a possessor in bad faith who possesses in any case contrary to the foregoing.
Mistake upon a doubtful or difficult question of law may be the basis of good faith.
Art. 1127. The good faith of the possessor consists in the reasonable belief that the person from whom he received the thing
was the owner thereof, and could transmit his ownership.
In Duran v. Intermediate Appellate Court,51 the Court explained possession in good faith in this manner:
Guided by previous decisions of this Court, good faith consists in the possessors belief that the person from whom
he received the thing was the owner of the same and could convey his title (Arriola vs. Gomez de la Serna, 14 Phil.
627). Good faith, while it is always presumed in the absence of proof to the contrary, requires a well-founded belief
that the person from whom title was received was himself the owner of the land, with the right to convey it
(Santiago vs. Cruz, 19 Phil. 148). There is good faith where there is an honest intention to abstain from taking
unconscientious advantage from another (Fule vs. Legare, 7 SCRA 351).
The Loys were not in good faith when they built on the lots because they knew that they bought from someone who was not
the registered owner. The registered owner on the TCTs of the lots was the "Estate of Jose Vao," clearly indicating that the
sale required probate court approval. Teodoro Vao did not show any court approval to the Loys when they purchased the
lots because there was none. To repeat, any one who buys from a person who is not the registered owner is not a purchaser
in good faith.52 If the Loys built on the lots before the court approval, then they took the risk.
Contract to sell versus contract of sale
A prior contract to sell made by the decedent prevails over the subsequent contract of sale made by the administrator
without probate court approval. The administrator cannot unilaterally cancel a contract to sell made by the decedent in his
lifetime.53 Any cancellation must observe all legal requisites, like written notice of cancellation based on lawful cause. 54
It is immaterial if the prior contract is a mere contract to sell and does not immediately convey ownership. 55 If it is valid, then
it binds the estate to convey the property in accordance with Section 8 of Rule 89 upon full payment of the consideration.
Frank Lius contract to sell became valid and effective upon its execution.56 The seller, Jose Vao, was then alive and thus
there was no need for court approval for the immediate effectivity of the contract to sell. In contrast, the execution of the
contracts of sale of the Loys took place after the death of the registered owner of the lots. The law requires court approval
for the effectivity of the Loys contracts of sale against third parties. The probate court did not validly give this approval since
it failed to notify all interested parties of the Loys motion for court approval of the sale. Besides, the probate court had lost
jurisdiction over the lots after it approved the earlier sale to Frank Liu. Clearly, Frank Lius contract to sell prevails over the
Loys contracts of sale.
Whether petitioners are entitled to award of moral damages and attorneys fees.
The Court upholds the ruling of the trial and appellate courts that petitioners are not entitled to moral damages. Moral
damages should not enrich a complainant at the expense of the defendant. 57
Likewise, as found by the trial court and the appellate court, there is no basis to award attorneys fees. The policy of the law
is to put no premium on the right to litigate. 58 The court may award attorneys fees only in the instances mentioned in Article
2208 of the Civil Code. The award of attorneys fees is the exception rather than the rule. 59None of the instances mentioned
in Article 2208 apply to this case.
Conclusion
Since the Loys have no contract of sale validly approved by the probate court, while Frank Liu has a contract of sale
approved by the probate court in accordance with Section 8 of Rule 89, Lot Nos. 5 and 6 belong to Frank Liu. The Estate of
Jose Vao should reimburse the Loys their payments on Lot Nos. 5 and 6, with annual interest at 6% from 4 June 1976, the
date of filing of the complaint, until finality of this decision, and 12% thereafter until full payment. 60
WHEREFORE, the Decision of the Court of Appeals is SET ASIDE and a new one is RENDERED:
1. Declaring null and void the deeds of sale of Lot Nos. 5 and 6 executed by Teodoro Vao in favor of Alfredo Loy,
Jr. and Teresita Loy, respectively.
2.Ordering the Register of Deeds of Cebu City to cancel TCT Nos. 64522 and 64523 and to issue a new one in the
name of petitioner Frank N. Liu;
3. Ordering the Estate of Jose Vao to reimburse to respondent Loys the amounts paid on Lot Nos. 5 and 6, with
interest at 6% per annum from 4 June 1976 until finality of this decision, and 12% per annum thereafter until full
payment.

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SO ORDERED.
Davide, Jr., C.J., Vitug, Ynares-Santiago, and Azcuna, JJ., concur.

[G.R. No. 127920. August 9, 2005]

EMILIO B. PACIOLES, JR., IN HIS CAPACITY AS ADMINISTRATOR AND HEIR OF THE INTESTATE ESTATE OF
MIGUELITA CHING-PACIOLES, petitioner, vs. MIGUELA CHUATOCO-CHING, respondent.
DECISION
SANDOVAL-GUTIERREZ, J.:
Oftentimes death brings peace only to the person who dies but not to the people he leaves behind. For in death, a
persons estate remains, providing a fertile ground for discords that break the familial bonds. Before us is another case that
illustrates such reality. Here, a husband and a mother of the deceased are locked in an acrimonious dispute over the estate
of their loved one.
This is a petition for review on certiorari filed by Emilio B. Pacioles, Jr., herein petitioner, against Miguela ChuatocoChing, herein respondent, assailing the Court of Appeals Decision [1] dated September 25, 1996 and Resolution[2] dated
January 27, 1997 in CA-G.R. SP No. 41571.[3] The Appellate Court affirmed the Order dated January 17, 1996 of the
Regional Trial Court (RTC), Branch 99, Quezon City denying petitioners motion for partition and distribution of the estate of
his wife, Miguelita Ching-Pacioles; and his motion for reconsideration.
The facts are undisputed.
On March 13, 1992, Miguelita died intestate, leaving real properties with an estimated value of P10.5 million, stock
investments worth P518,783.00, bank deposits amounting to P6.54 million, and interests in certain businesses. She was
survived by her husband, petitioner herein, and their two minor children.
Consequently, on August 20, 1992, petitioner filed with the RTC a verified petition [4] for the settlement of Miguelitas
estate. He prayed that (a) letters of administration be issued in his name, and (b) that the net residue of the estate be
divided among the compulsory heirs.
Miguelitas mother, Miguela Chuatoco-Ching, herein respondent, filed an opposition, specifically to petitioners prayer
for the issuance of letters of administration on the grounds that (a) petitioner is incompetent and unfit to exercise the duties
of an administrator; and (b) the bulk of Miguelitas estate is composed of paraphernal properties. Respondent prayed that
the letters of administration be issued to her instead. [5] Afterwards, she also filed a motion for her appointment as special
administratrix.[6]
Petitioner moved to strike out respondents opposition, alleging that the latter has no direct and material interest in the
estate, she not being a compulsory heir, and that he, being the surviving spouse, has the preferential right to be appointed
as administrator under the law.[7]
Respondent countered that she has direct and material interest in the estate because she gave half of her inherited
properties to Miguelita on condition that both of them would undertake whatever business endeavor they decided to, in
the capacity of business partners.[8]
In her omnibus motion[9] dated April 23, 1993, respondent nominated her son Emmanuel Ching to act as special
administrator.
On April 20, 1994, the intestate court issued an order appointing petitioner and Emmanuel as joint regular
administrators of the estate.[10] Both were issued letters of administration after taking their oath and posting the requisite
bond.
Consequently, Notice to Creditors was published in the issues of the Manila Standard on September 12, 19, and 26,
1994. However, no claims were filed against the estate within the period set by the Revised Rules of Court.
Thereafter, petitioner submitted to the intestate court an inventory of Miguelitas estate. [11] Emmanuel did not submit
an inventory.
On May 17, 1995, the intestate court declared petitioner and his two minor children as the only compulsory heirs of
Miguelita.[12]
On July 21, 1995, petitioner filed with the intestate court an omnibus motion [13] praying, among others, that an Order be
issued directing the: 1) payment of estate taxes; 2) partition and distribution of the estate among the declared heirs;
and 3) payment of attorneys fees.

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Respondent opposed petitioners motion on the ground that the partition and distribution of the estate is premature
and precipitate, considering that there is yet no determination whether the properties specified in the inventory are
conjugal, paraphernal or owned in a joint venture.[14] Respondent claimed that she owns the bulk of Miguelitas estate
as an heir and co-owner. Thus, she prayed that a hearing be scheduled.
On January 17, 1996, the intestate court allowed the payment of the estate taxes and attorneys fees but denied
petitioners prayer for partition and distribution of the estate, holding that it is indeed premature. The intestate court
ratiocinated as follows:
On the partition and distribution of the deceaseds properties, among the declared heirs, the Court finds the prayer of
petitioner in this regard to be premature. Thus, a hearing on oppositors claim as indicated in her opposition to the instant
petition is necessary to determine whether the properties listed in the amended complaint filed by petitioner are
entirely conjugal or the paraphernal properties of the deceased, or a co-ownership between the oppositor and the
petitioner in their partnership venture.
Petitioner filed a motion for reconsideration but it was denied in the Resolution dated May 7, 1996.
Forthwith, petitioner filed with the Court of Appeals a petition for certiorari seeking to annul and set aside the intestate
courts Order dated January 17, 1996 and Resolution dated May 7, 1996 which denied petitioners prayer for partition and
distribution of the estate for being premature, indicating that it (intestate court) will first resolve respondents claim of
ownership.
The Appellate Court dismissed the petition for certiorari, holding that in issuing the challenged Order and Resolution,
the intestate court did not commit grave abuse of discretion.
The Appellate Court ruled:
Regarding the second issue raised, respondent judge did not commit grave abuse of discretion in entertaining private
respondents unsupported claim of ownership against the estate. In fact, there is no indication that the probate court has
already made a finding of title or ownership. It is inevitable that in probate proceedings, questions of collation or of
advancement are involved for these are matters which can be passed upon in the course of the proceedings. The probate
court in exercising its prerogative to schedule a hearing, to inquire into the propriety of private respondents claim, is being
extremely cautious in determining the composition of the estate. This act is not tainted with an iota of grave abuse of
discretion.
Petitioner moved for a reconsideration but it was likewise denied. Hence, this petition for review on certiorari anchored
on the following assignments of error:
I
RESPONDENT COURTS DECISION WHICH AFFIRMS THE INTESTATE COURTS ORDER IS A GRAVE ERROR FOR
BEING CONTRARY TO THE SETTLED JURISPRUDENCE AND POLICY OF THE LAW THAT ESTATE PROCEEDINGS
MUST BE SETTLED EXPEDITIOUSLY.
II
RESPONDENT COURT COMMITTED GRAVE ERROR IN SUSTAINING THE INTESTATE COURTS ORDER TO
CONDUCT HEARING ON THE ISSUE OF OWNERSHIP CLAIM AGAINST THE ESTATE, AS SAID FUNCTION IS
OUTSIDE AND BEYOND THE JURISDICTION OF THE INTESTATE COURT.
III
RESPONDENT COURT GRAVELY ERRED IN AFFIRMING THE INTESTATE COURTS ORDER AND RESOLUTION
NOTWITHSTANDING THAT RESPONDENT CHINGS OWNERSHIP CLAIMS ARE CONFLICTING, FRIVOLOUS AND
BASELESS.
The fundamental issue for our resolution is: May a trial court, acting as an intestate court, hear and pass upon
questions of ownership involving properties claimed to be part of the decedents estate?
The general rule is that the jurisdiction of the trial court either as an intestate or a probate court relates only to matters
having to do with the settlement of the estate and probate of will of deceased persons but does not extend to the
determination of questions of ownership that arise during the proceedings.[15] The patent rationale for this rule is that
such court exercises special and limited jurisdiction. [16]
A well-recognized deviation to the rule is the principle that an intestate or a probate court may hear and pass upon
questions of ownership when its purpose is to determine whether or not a property should be included in the inventory. In
such situations the adjudication is merely incidental and provisional. Thus, in Pastor, Jr. vs. Court of Appeals,[17] we held:
x x x As a rule, the question of ownership is an extraneous matter which the probate court cannot resolve with
finality. Thus, for the purpose of determining whether a certain property should or should not be included in the
inventory of estate properties, the probate court may pass upon the title thereto, but such determination is
provisional, not conclusive, and is subject to the final decision in a separate action to resolve title.

71

The Court of Appeals relied heavily on the above principle in sustaining the jurisdiction of the intestate court to conduct
a hearing on respondents claim. Such reliance is misplaced. Under the said principle, the key consideration is that the
purpose of the intestate or probate court in hearing and passing upon questions of ownership is merely to determine
whether or not a property should be included in the inventory. The facts of this case show that such was not the
purpose of the intestate court.
First, the inventory was not disputed. In fact, in her Manifestation and Opposition[18] dated September 18, 1995,
respondent expressly adopted the inventory prepared by petitioner, thus:
6. She adopts the inventory submitted by the petitioner in his Amended Compliance dated October 6, 1994, and
filed only on November 4, 1994 not October 5, 1995 as erroneously asserted in Par. 12 of the Omnibus Motion. Oppositor,
however, takes exception to the low valuation placed on the real estate properties and reserves her right to submit a more
accurate and realistic pricing on each.
Respondent could have opposed petitioners inventory and sought the exclusion of the specific properties which
she believed or considered to be hers. But instead of doing so, she expressly adopted the inventory, taking exception
only to the low valuation placed on the real estate properties.
And second, Emmanuel, respondents son and representative in the settlement of Miguelitas estate, did not submit
his own inventory. His mandate, as co-administrator, is to submit within three (3) months after his appointment a true
inventory and appraisal of all the real and personal estate of the deceased which have come into his possession or
knowledge.[19] He could have submitted an inventory, excluding therefrom those properties which respondent
considered to be hers. The fact that he did not endeavor to submit one shows that he acquiesced with petitioners
inventory.
Obviously, respondents purpose here was not to obtain from the intestate court a ruling of what properties should or
should not be included in the inventory. She wanted something else, i.e., to secure from the intestate court a final
determination of her claim of ownership over properties comprising the bulk of Miguelitas estate. The intestate
court went along with respondent on this point as evident in its Resolution [20] dated May 7, 1996, thus:
On petitioners motion for partition and distribution of the estate of the late Miguelita Ching Pacioles, it is believed that since
oppositor had interposed a claim against the subject estate, the distribution thereof in favor of the heirs could not possibly be
implemented as there is still a need for appropriate proceedings to determine the propriety of oppositors claim. It must be
mentioned that if it is true that oppositor owns the bulk of the properties, which she allegedly placed/registered in the name
of the deceased for convenience, Oppositor, therefore, has a material and direct interest in the estate and hence, should be
given her day in Court.
It is apparent from the foregoing Resolution that the purpose of the hearing set by the intestate court was actually to
determine the propriety of oppositors (respondents) claim. According to the intestate court, if it is true that the
oppositor (respondent) owns the bulk of (Miguelitas) properties, then it means that she has a material and direct
interest in the estate and, hence, she should be given her day in court. The intended day in court or hearing is
geared towards resolving the propriety of respondents contention that she is the true owner of the bulk of Miguelitas estate.
Surely, we cannot be deluded by respondents ingenious attempt to secure a proceeding for the purpose of resolving
her blanket claim against Miguelitas estate. Although, she made it appear that her only intent was to determine the
accuracy of petitioners inventory, however, a close review of the facts and the pleadings reveals her real intention.
Clearly, the RTC, acting as an intestate court, had overstepped its jurisdiction. Its proper course should have been to
maintain a hands-off stance on the matter. It is well-settled in this jurisdiction, sanctioned and reiterated in a long line of
decisions, that when a question arises as to ownership of property alleged to be a part of the estate of the deceased person,
but claimed by some other person to be his property, not by virtue of any right of inheritance from the deceased but by title
adverse to that of the deceased and his estate, such question cannot be determined in the course of an intestate or probate
proceedings. The intestate or probate court has no jurisdiction to adjudicate such contentions, which must be
submitted to the court in the exercise of its general jurisdiction as a regional trial court.[21] Jurisprudence teaches us
that:
[A] probate court or one in charge of proceedings whether testate or intestate cannot adjudicate or determine title
to properties claimed to be a part of the estate and which are claimed to belong to outside parties. All that the said
court could do as regards said properties is to determine whether they should or should not be included in the inventory or
list of properties to be administered by the administrator. If there is no dispute, well and good, but if there is, then the
parties, the administrator, and the opposing parties have to resort to an ordinary action for a final determination of
the conflicting claims of title because the probate court cannot do so.[22]
Hence, respondents recourse is to file a separate action with a court of general jurisdiction. The intestate court is not
the appropriate forum for the resolution of her adverse claim of ownership over properties ostensibly belonging to Miguelita's
estate.
Now, even assuming that the intestate court merely intended to make a provisional or prima facie determination of the
issue of ownership, still respondents claim cannot prosper. It bears stressing that the bulk of Miguelitas estate, as stated in
petitioners inventory, comprises real estates covered by the Torrens System which are registered either in the name of

72

Miguelita alone or with petitioner. As such, they are considered the owners of the properties until their title is nullified
or modified in an appropriate ordinary action. We find this Courts pronouncement in Bolisay vs. Alcid[23] relevant, thus:
It does not matter that respondent-administratrix has evidence purporting to support her claim of ownership, for, on the
other hand, petitioners have a Torrens title in their favor, which under the law is endowed with incontestability until after it
has been set aside in the manner indicated in the law itself, which, of course, does not include, bringing up the matter as
a mere incident in special proceedings for the settlement of the estate of deceased persons. x x x
x x x In regard to such incident of inclusion or exclusion, We hold that if a property covered by Torrens Title is involved, the
presumptive conclusiveness of such title should be given due weight, and in the absence of strong compelling evidence to
the contrary, the holder thereof should be considered as the owner of the property in controversy until his title is
nullified or modified in an appropriate ordinary action, particularly, when as in the case at bar, possession of the
property itself is in the persons named in the title. x x x
Corrolarily, P.D. 1529, otherwise known as, The Property Registration Decree, proscribes collateral attack against
Torrens Title, hence:
Section 48. Certificate not subject to collateral attack.
A certificate of title shall not be subject to collateral attack. It cannot be altered, modified or cancelled except in a
direct proceeding in accordance with law.
Significantly, a perusal of the records reveals that respondent failed to present convincing evidence to bolster her bare
assertion of ownership. We quote her testimony, thus:
Q: I now direct your attention to paragraph (5) appearing on page 1 of this sworn statement of yours which I
quote: In accordance with the Chinese tradition and culture in the distribution of properties to the legal
heirs, we decided to give only a token to our daughter Miguelita and leave the rest to our only son
Emmanuel, with the undertaking that being the son he will take full responsibility of the rest of the family
despite his marriage. Madame witness, do you recall having stated that in your sworn statement?
A:

Yes sir, but it was not carried out.

What was actually given to your daughter Miguelita is only a token, is that right?

A:

Not a token, sir, but one half of the share of the estate was given to Lita and the other half was given to
Emmanuel.

Q: What went to Emmanuel was also , is that right?

A:

Yes, sir.

Q: What makes up the one half share of Lita, if you recall?

A:

What was given to her were all checks, sir, but I cannot remember any more the amount.
x x x

x x x

Q:

Summing up your testimony, Madame, you cannot itemize the one half share of the estate of
Miguelita, is that right?

A:

Yes, sir.

Q: Was there any document covering this partition of the estate among you, Emmanuel and Miguelita
with respect to the estate of your late husband?
A:

If I only knew that this will happen

Q: Samakatuwid po ay walang dokumento?

A:

Wala po.[24]

She further testified as follows:

Q: Among the properties listed like the various parcels of land, stocks, investments, bank accounts and
deposits both here and abroad, interests and participation in IFS Pharmaceuticals and Medical
Supplies, Inc. and various motor vehicles, per your pleasure, Madam Witness, how should these
properties be partitioned or what should be done with these properties? According to you earlier,
you are agreeable for the partition of the said properties with Emil on a 50-50 basis, is that right?
A:

Kung ano po ang sa akin, iyon ang dapat na bumalik sa akin, sir.

Halimbawa ay ano po iyon? Real estate properties, parcels of land located in Pag-Asa, in Silangan,
in San Lazaro, in Sta. Cruz, in San Francisco del Monte and shares of stock. Alinsunod sa inyo,
paano po ang dapat na partihan o hatian ninyo ni Emil?

73

A:

Kung ano ang sa akin

x x x

x x x

Ang tanong ko po sa inyo ay ganito, ito po ba ang inyong iminungkahi kay Emil? Ito po ba ang
inyong paghahatian or hindi?

A:

Iyo akin talaga na hindi nila pinaghirapan, sir.[25]

Unfortunately, respondent could not even specify which of the properties listed in petitioners inventory belong to her.
Neither could she present any document to prove her claim of ownership. The consistently changing basis of her claim did
nothing to improve her posture. Initially, she insisted that the bulk of Miguelitas estate is composed of paraphernal
properties.[26] Sensing that such assertion could not strengthen her claim of ownership, she opted to change her submission
and declare that she and Miguelita were business partners and that she gave to the latter most of her properties to be used
in a joint business venture.[27] Respondent must have realized early on that if the properties listed in petitioners inventory are
paraphernal, then Miguelita had the absolute title and ownership over them and upon her death, such properties would be
vested to her compulsory heirs, petitioner herein and their two minor children. [28]
At any rate, we must stress that our pronouncements herein cannot diminish or deprive respondent of whatever rights
or properties she believes or considers to be rightfully hers. We reiterate that the question of ownership of properties
alleged to be part of the estate must be submitted to the Regional Trial Court in the exercise of its general jurisdiction. [29]
WHEREFORE, the instant petition is GRANTED. The assailed Decision and Resolution of the Court of Appeals in CAG.R. SP No. 41571 are hereby REVERSED.
SO ORDERED.
Panganiban, (Chairman), Carpio-Morales, and Garcia, JJ., concur.
Corona, J., on leave.

G.R. No. 167379

June 27, 2006

PRIMELINK PROPERTIES AND DEVELOPMENT CORPORATION and RAFAELITO W. LOPEZ, Petitioners,

vs.
MA. CLARITA T. LAZATIN-MAGAT, JOSE SERAFIN T. LAZATIN, JAIME TEODORO T. LAZATIN and JOSE MARCOS
T. LAZATIN, Respondents.
DECISION
CALLEJO, SR., J.:
Before us is a Petition for Review on Certiorari under Rule 45 of the 1997 Rules of Civil Procedure of the Decision 1 of the
Court of Appeals (CA) in CA-G.R. CV No. 69200 and its Resolution2 denying petitioners motion for reconsideration thereof.
The factual and procedural antecedents are as follows:
Primelink Properties and Development Corporation (Primelink for brevity) is a domestic corporation engaged in real estate
development. Rafaelito W. Lopez is its President and Chief Executive Officer. 3
Ma. Clara T. Lazatin-Magat and her brothers, Jose Serafin T. Lazatin, Jaime T. Lazatin and Jose Marcos T. Lazatin (the
Lazatins for brevity), are co-owners of two (2) adjoining parcels of land, with a combined area of 30,000 square meters,
located in Tagaytay City and covered by Transfer Certificate of Title (TCT) No. T-108484of the Register of Deeds of
Tagaytay City.
On March 10, 1994, the Lazatins and Primelink, represented by Lopez, in his capacity as President, entered into a Joint
Venture Agreement5 (JVA) for the development of the aforementioned property into a residential subdivision to be known as
"Tagaytay Garden Villas." Under the JVA, the Lazatin siblings obliged themselves to contribute the two parcels of land as
their share in the joint venture. For its part, Primelink undertook to contribute money, labor, personnel, machineries,
equipment, contractors pool, marketing activities, managerial expertise and other needed resources to develop the property
and construct therein the units for sale to the public. Specifically, Primelink bound itself to accomplish the following, upon the
execution of the deed:

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a.) Survey the land, and prepare the projects master plans, engineering designs, structural and architectural plans,
site development plans, and such other need plans in accordance with existing laws and the rules and regulations
of appropriate government institutions, firms or agencies;
b.) Secure and pay for all the licenses, permits and clearances needed for the projects;
c.) Furnish all materials, equipment, labor and services for the development of the land in preparation for the
construction and sale of the different types of units (single-detached, duplex/twin, cluster and row house);
d.) Guarantee completion of the land development work if not prevented by force majeure or fortuitous event or by
competent authority, or other unavoidable circumstances beyond the DEVELOPERS control, not to exceed three
years from the date of the signing of this Joint Venture Agreement, except the installation of the electrical facilities
which is solely MERALCOS responsibility;
e.) Provide necessary manpower resources, like executive and managerial officers, support personnel and
marketing staff, to handle all services related to land and housing development (administrative and construction)
and marketing (sales, advertising and promotions).6
The Lazatins and Primelink covenanted that they shall be entitled to draw allowances/advances as follows:
1. During the first two years of the Project, the DEVELOPER and the LANDOWNER can draw allowances or make
advances not exceeding a total of twenty percent (20%) of the net revenue for that period, on the basis of sixty
percent (60%) for the DEVELOPER and forty percent (40%) for the LANDOWNERS.
The drawing allowances/advances are limited to twenty percent (20%) of the net revenue for the first two years, in
order to have sufficient reserves or funds to protect and/or guarantee the construction and completion of the
different types of units mentioned above.
2. After two years, the DEVELOPER and the LANDOWNERS shall be entitled to drawing allowances and/or
advances equivalent to sixty percent (60%) and forty percent (40%), respectively, of the total net revenue or
income of the sale of the units.7
They also agreed to share in the profits from the joint venture, thus:
1. The DEVELOPER shall be entitled to sixty percent (60%) of the net revenue or income of the Joint Venture
project, after deducting all expenses incurred in connection with the land development (such as administrative
management and construction expenses), and marketing (such as sales, advertising and promotions), and
2. The LANDOWNERS shall be entitled to forty percent (40%) of the net revenue or income of the Joint Venture
project, after deducting all the above-mentioned expenses.8
Primelink submitted to the Lazatins its Projection of the Sales-Income-Cost of the project:
SALES-INCOME-COST PROJECTION
lawphil.net
SELLING PRICE

COST PRICE

DIFFERENCE

INCOME

CLUSTER:
A1 3,200,000

A2 1,260,000

1,940,000 x 24 =

P 46,560,000.00

B2 960,000

1,540,000 x 24 =

36,960,000.00

C2 1,400,000

2,100,000 x 16 =

33,600,000.00

900,000 x 24 =

21,600,000.00

TWIN:
B1 2,500,000
SINGLE:
C1 3,500,000

ROW-TYPE TOWNHOMES:
D1 1,600,000

D2 700,000

75

P138,720,000.00
(GROSS)

Total Cash Price (A1+B1+C1+D1)

P231,200,000.00

Total Building Expense (A2+B2+C2+D2) =

92,480,000.00

COMPUTATION OF ADDL. INCOME ON INTEREST

TCP x 30% D/P =
Balance = 70%

P 69,360,000

161,840,000

x .03069 x 48 =

P238,409,740

P 69,360,000.00

238,409,740.00

Total Amount (TCP + int. earn.)

P307,769,740.00

EXPENSES:
less: A Building expenses

P 92,480,000.00

B Commission (8% of TCP)

18,496,000.00

C Admin. & Mgmt. expenses (2% of TCP)

4,624,000.00

D Advertising & Promo exp. (2% of TCP)

4,624,000.00

E Building expenses for the open

spaces and Amenities (Development
cost not incl. Housing) 400 x 30,000 sqms.

TOTAL EXPENSES (A+B+C+D+E)

12,000,000.00

P132,224,000.00

RECONCILIATION OF INCOME VS. EXPENSES

Total Projected Income (incl. income from interest earn.)

less:

P307,769,740.00

132,224,000.00
P175,545,740.009

Total Expenses

The parties agreed that any unsettled or unresolved misunderstanding or conflicting opinions between the parties relative to
the interpretation, scope and reach, and the enforcement/implementation of any provision of the agreement shall be referred
to Voluntary Arbitration in accordance with the Arbitration Law. 10
The Lazatins agreed to subject the title over the subject property to an escrow agreement. Conformably with the escrow
agreement, the owners duplicate of the title was deposited with the China Banking Corporation. 11However, Primelink failed
to immediately secure a Development Permit from Tagaytay City, and applied the permit only on August 30, 1995. On
October 12, 1995, the City issued a Development Permit to Primelink. 12
In a Letter13 dated April 10, 1997, the Lazatins, through counsel, demanded that Primelink comply with its obligations under
the JVA, otherwise the appropriate action would be filed against it to protect their rights and interests. This impelled the
officers of Primelink to meet with the Lazatins and enabled the latter to review its business records/papers. In another
Letter14 dated October 22, 1997, the Lazatins informed Primelink that they had decided to rescind the JVA effective upon its
receipt of the said letter. The Lazatins demanded that Primelink cease and desist from further developing the property.

76

Subsequently, on January 19, 1998, the Lazatins filed, with the Regional Trial Court (RTC) of Tagaytay City, Branch 18, a
complaint for rescission accounting and damages, with prayer for temporary restraining order and/or preliminary injunction
against Primelink and Lopez. The case was docketed as Civil Case No. TG-1776. Plaintiffs alleged, among others, that,
despite the lapse of almost four (4) years from the execution of the JVA and the delivery of the title and possession of the
land to defendants, the land development aspect of the project had not yet been completed, and the construction of the
housing units had not yet made any headway, based on the following facts, namely: (a) of the 50 housing units programmed
for Phase I, only the following types of houses appear on the site in these condition: (aa) single detached, one completed
and two units uncompleted; (bb) cluster houses, one unit nearing completion; (cc) duplex, two units completed and two units
unfinished; and (dd) row houses, two units, completed; (b) in Phase II thereof, all that was done by the defendants was to
grade the area; the units so far constructed had been the object of numerous complaints by their owners/purchasers for poor
workmanship and the use of sub-standard materials in their construction, thus, undermining the projects marketability.
Plaintiffs also alleged that defendants had, without justifiable reason, completely disregarded previously agreed accounting
and auditing procedures, checks and balances system installed for the mutual protection of both parties, and the scheduled
regular meetings were seldom held to the detriment and disadvantage of plaintiffs. They averred that they sent a letter
through counsel, demanding compliance of what was agreed upon under the agreement but defendants refused to heed
said demand. After a succession of letters with still no action from defendants, plaintiffs sent a letter on October 22, 1997, a
letter formally rescinding the JVA.
Plaintiffs also claimed that in a sales-income-costs projection prepared and submitted by defendants, they (plaintiffs) stood
to receive the amount of P70,218,296.00 as their net share in the joint venture project; to date, however, after almost four (4)
years and despite the undertaking in the JVA that plaintiffs shall initially get 20% of the agreed net revenue during the first
two (2) years (on the basis of the 60%-40% sharing) and their full 40% share thereafter, defendants had yet to deliver these
shares to plaintiffs which by conservative estimates would amount to no less than P40,000,000.00.15
Plaintiffs prayed that, after due proceedings, judgment be rendered in their favor, thus:
WHEREFORE, it is respectfully prayed of this Honorable Court that a temporary restraining order be forthwith issued
enjoining the defendants to immediately stop their land development, construction and marketing of the housing units in the
aforesaid project; after due proceedings, to issue a writ of preliminary injunction enjoining and prohibiting said land
development, construction and marketing of housing units, pending the disposition of the instant case.
After trial, a decision be rendered:
1. Rescinding the Joint Venture Agreement executed between the plaintiffs and the defendants;
2. Immediately restoring to the plaintiffs possession of the subject parcels of land;
3. Ordering the defendants to render an accounting of all income generated as well as expenses incurred and
disbursement made in connection with the project;
4. Making the Writ of Preliminary Injunction permanent;
5. Ordering the defendants, jointly and severally, to pay the plaintiffs the amount Forty Million Pesos
(P40,000,000.00) in actual and/or compensatory damages;
6. Ordering the defendants, jointly and severally, to pay the plaintiffs the amount of Two Million Pesos
(P2,000,000.00) in exemplary damages;
7. Ordering the defendants, jointly and severally, to pay the plaintiffs the amount equivalent to ten percent (10%) of
the total amount due as and for attorneys fees; and
8. To pay the costs of this suit.
Other reliefs and remedies as are just and equitable are likewise being prayed for. 16
Defendants opposed plaintiffs plea for a writ of preliminary injunction on the ground that plaintiffs complaint was premature,
due to their failure to refer their complaint to a Voluntary Arbitrator pursuant to the JVA in relation to Section 2 of Republic
Act No. 876 before filing their complaint in the RTC. They prayed for the dismissal of the complaint under Section 1(j), Rule
16 of the Rules of Court:
WHEREFORE, it is respectfully prayed that an Order be issued:
a) dismissing the Complaint on the basis of Section 1(j), Rule 16 of the aforecited Rules of Court, or, in the
alternative,
b) requiring the plaintiffs to make initiatory step for arbitration by filing the demand to arbitrate, and then asking the
parties to resolve their controversies, pursuant to the Arbitration Law, or in the alternative;
c) staying or suspending the proceedings in captioned case until the completion of the arbitration, and
d) denying the plaintiffs prayer for the issuance of a temporary restraining order or writ of preliminary injunction.
Other reliefs and remedies just and equitable in the premises are prayed for. 17

77

In the meantime, before the expiration of the reglementary period to answer the complaint, defendants, invoking their
counsels heavy workload, prayed for a 15-day extension18 within which to file their answer. The additional time prayed for
was granted by the RTC.19 However, instead of filing their answer, defendants prayed for a series of 15-day extensions in
eight (8) successive motions for extensions on the same justification. 20 The RTC again granted the additional time prayed
for, but in granting the last extension, it warned against further extension.21Despite the admonition, defendants again moved
for another 15-day extension,22 which, this time, the RTC denied. No answer having been filed, plaintiffs moved to declare
the defendants in default,23 which the RTC granted in its Order24 dated June 24, 1998.
On June 25, 1998, defendants filed, via registered mail, their "Answer with Counterclaim and Opposition to the Prayer for the
Issuance of a Writ of Preliminary Injunction."25 On July 8, 1998, defendants filed a Motion to Set Aside the Order of
Default.26 This was opposed by plaintiffs.27 In an Order28 dated July 14, 1998, the RTC denied defendants motion to set
aside the order of default and ordered the reception of plaintiffs evidence ex parte. Defendants filed a motion for
reconsideration29 of the July 14, 1998 Order, which the RTC denied in its Order30 dated October 21, 1998.
Defendants thereafter interposed an appeal to the CA assailing the Order declaring them in default, as well as the Order
denying their motion to set aside the order of default, alleging that these were contrary to facts of the case, the law and
jurisprudence.31 On September 16, 1999, the appellate court issued a Resolution 32 dismissing the appeal on the ground that
the Orders appealed from were interlocutory in character and, therefore, not appealable. No motion for reconsideration of
the Order of the dismissal was filed by defendants.
In the meantime, plaintiffs adduced ex parte their testimonial and documentary evidence. On April 17, 2000, the RTC
rendered a Decision, the dispositive part of which reads:
WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and against the defendants as follows:
1. Ordering the rescission of the Joint Venture Agreement as of the date of filing of this complaint;
2. Ordering the defendants to return possession, including all improvements therein, of the real estate property
belonging to the plaintiffs which is described in, and covered by Transfer Certificate of Title No. T-10848 of the
Register of Deeds of Tagaytay City, and located in Barangay Anulin, City of Tagaytay;
3. Ordering the defendants to turn over all documents, records or papers that have been executed, prepared and
retained in connection with any contract to sell or deed of sale of all lots/units sold during the effectivity of the joint
venture agreement;
4. Ordering the defendants to pay the plaintiffs the sum of P1,041,524.26 representing their share of the net
income of the P2,603,810.64 as of September 30, 1995, as stipulated in the joint venture agreement;
5. Ordering the defendants to pay the plaintiffs attorneys fees in the amount of P104,152.40;
6. Ordering the defendants to pay the costs.
SO ORDERED.33
The trial court anchored its decision on the following findings:
x x x Evidence on record have shown patent violations by the defendants of the stipulations particularly paragraph II
covering Developers (defendant) undertakings, as well as paragraph III and paragraph V of the JVA. These violations are
not limited to those made against the plaintiffs alone as it appears that some of the unit buyers themselves have their own
separate gripes against the defendants as typified by the letters (Exhibits "G" and "H") of Mr. Emmanuel Enciso.
xxxx
Rummaging through the evidence presented in the course of the testimony of Mrs. Maminta on August 6, 1998 (Exhibits "N,"
"O," "P," "Q" and "R" as well as submarkings, pp. 60 to 62, TSN August 6, 1998) this court has observed, and is thus
convinced, that a pattern of what appears to be a scheme or plot to reduce and eventually blot out the net income generated
from sales of housing units by defendants, has been established. Exhibit "P-2" is explicit in declaring that, as of September
30, 1995, the joint venture project earned a net income of aboutP2,603,810.64. This amount, however, was drastically
reduced in a subsequent financial report submitted by the defendants to P1,954,216.39. Shortly thereafter, and to the
dismay of the plaintiffs, the defendants submitted an income statement and a balance sheet (Exhibits "R" and "R-1")
indicating a net loss of P5,122,906.39 as of June 30, 1997.
Of the reported net income of P2,603,810.64 (Exhibit "P-2") the plaintiffs should have received the sum ofP1,041,524.26
representing their 40% share under paragraph II and V of the JVA. But this was not to be so. Even before the plaintiffs could
get hold of their share as indicated above, the defendants closed the chance altogether by declaring a net loss. The court
perceives this to be one calculated coup-de-grace that would put to thin air plaintiffs hope of getting their share in the profit
under the JVA.
That this matter had reached the court is no longer a cause for speculation. The way the defendants treated the JVA and the
manner by which they handled the project itself vis--vis their partners, the plaintiffs herein, there is bound to be certain
conflict as the latter repeatedly would received the losing end of the bargain.

78

Under the intolerable circumstances, the plaintiffs could not have opted for some other recourse but to file the present action
to enforce their rights. x x x34
On May 15, 2000, plaintiffs filed a Motion for Execution Pending Appeal 35 alleging defendants dilatory tactics for its
allowance. This was opposed by defendants. 36
On May 22, 2000, the RTC resolved the motion for execution pending appeal in favor of plaintiffs. 37 Upon posting a bond
of P1,000,000.00 by plaintiffs, a writ of execution pending appeal was issued on June 20, 2000.38
Defendants appealed the decision to the CA on the following assignment of errors:
I
THE TRIAL COURT ERRED IN DECIDING THE CASE WITHOUT FIRST REFERRING THE COMPLAINT FOR
VOLUNTARY ARBITRATION (RA NO. 876), CONTRARY TO THE MANDATED VOLUNTARY ARBITRATION CLAUSE
UNDER THE JOINT VENTURE AGREEMENT, AND THE DOCTRINE IN "MINDANAO PORTLAND CEMENT
CORPORATION V. MCDONOUGH CONSTRUCTION COMPANY OF FLORIDA" (19 SCRA 814-815).
II
THE TRIAL COURT ERRED IN ISSUING A WRIT OF EXECUTION PENDING APPEAL EVEN IN THE ABSENCE OF
GOOD AND COMPELLING REASONS TO JUSTIFY SAID ISSUANCE, AND DESPITE PRIMELINKS STRONG
OPPOSITION THERETO.
III
THE TRIAL COURT ERRED IN REFUSING TO DECIDE PRIMELINKS MOTION TO QUASH THE WRIT OF EXECUTION
PENDING APPEAL AND THE MOTION FOR RECONSIDERATION, ALTHOUGH THE COURT HAS RETAINED ITS
JURISDICTION TO RULE ON ALL QUESTIONS RELATED TO EXECUTION.
IV
THE TRIAL COURT ERRED IN RESCINDING THE JOINT VENTURE AGREEMENT ALTHOUGH PRIMELINK HAS
SUBSTANTIALLY DEVELOPED THE PROJECT AND HAS SPENT MORE OR LESS FORTY MILLION PESOS, AND
DESPITE APPELLEES FAILURE TO PRESENT SUFFICIENT EVIDENCE JUSTIFYING THE SAID RESCISSION.
V
THE TRIAL COURT ERRED IN DECIDING THAT THE APPELLEES HAVE THE RIGHT TO TAKE OVER THE
SUBDIVISION AND TO APPROPRIATE FOR THEMSELVES ALL THE EXISTING IMPROVEMENTS INTRODUCED
THEREIN BY PRIMELINK, ALTHOUGH SAID RIGHT WAS NEITHER ALLEGED NOR PRAYED FOR IN THE
COMPLAINT, MUCH LESS PROVEN DURING THE EX PARTE HEARING, AND EVEN WITHOUT ORDERING
APPELLEES TO FIRST REIMBURSE PRIMELINK OF THE SUBSTANTIAL DIFFERENCE BETWEEN THE MARKET
VALUE OF APPELLEES RAW, UNDEVELOPED AND UNPRODUCTIVE LAND (CONTRIBUTED TO THE PROJECT) AND
THE SUM OF MORE OR LESS FORTY MILLION PESOS WHICH PRIMELINK HAD SPENT FOR THE HORIZONTAL AND
VERTICAL DEVELOPMENT OF THE PROJECT, THEREBY ALLOWING APPELLEES TO UNJUSTLY ENRICH
THEMSELVES AT THE EXPENSE OF PRIMELINK.39
The appeal was docketed in the CA as CA-G.R. CV No. 69200.
On August 9, 2004, the appellate court rendered a decision affirming, with modification, the appealed decision. The fallo of
the decision reads:
WHEREFORE, in view of the foregoing, the assailed decision of the Regional Trial Court of Tagaytay City, Branch 18,
promulgated on April 17, 2000 in Civil Case No. TG-1776, is hereby AFFIRMED. Accordingly, Transfer Certificate of Title
No. T-10848 held for safekeeping by Chinabank pursuant to the Escrow Agreement is ordered released for return to the
plaintiffs-appellees and conformably with the affirmed decision, the cancellation by the Register of Deeds of Tagaytay City of
whatever annotation in TCT No. 10848 by virtue of the Joint Venture Agreement, is now proper.
SO ORDERED.40
Citing the ruling of this Court in Aurbach v. Sanitary Wares Manufacturing Corporation, 41 the appellate court ruled that, under
Philippine law, a joint venture is a form of partnership and is to be governed by the laws of partnership. The aggrieved
parties filed a motion for reconsideration, 42 which the CA denied in its Resolution43dated March 7, 2005.
Petitioners thus filed the instant Petition for Review on Certiorari, alleging that:
1) DID THE HONORABLE COURT OF APPEALS COMMIT A FATAL AND REVERSIBLE LEGAL ERROR
AND/OR GRAVE ABUSE OF DISCRETION IN ORDERING THE RETURN TO THE RESPONDENTS OF THE
PROPERTY WITH ALL IMPROVEMENTS THEREON, EVEN WITHOUT ORDERING/REQUIRING THE
RESPONDENTS TO FIRST PAY OR REIMBURSE PRIMELINK OF ALL EXPENSES INCURRED IN
DEVELOPING AND MARKETING THE PROJECT, LESS THE ORIGINAL VALUE OF THE PROPERTY, AND
THE SHARE DUE RESPONDENTS FROM THE PROFITS (IF ANY) OF THE JOINT VENTURE PROJECT?

79

2) IS THE AFORESAID ORDER ILLEGAL AND CONFISCATORY, OPPRESSIVE AND UNCONSCIONABLE,

CONTRARY TO THE TENETS OF GOOD HUMAN RELATIONS AND VIOLATIVE OF EXISTING LAWS AND
JURISPRUDENCE ON JUDICIAL NOTICE, DEFAULT, UNJUST ENRICHMENT AND RESCISSION OF
CONTRACT WHICH REQUIRES MUTUAL RESTITUTION, NOT UNILATERAL APPROPRIATION, OF
PROPERTY BELONGING TO ANOTHER?44
Petitioners maintain that the aforesaid portion of the decision which unconditionally awards to respondents "all
improvements" on the project without requiring them to pay the value thereof or to reimburse Primelink for all expenses
incurred therefore is inherently and essentially illegal and confiscatory, oppressive and unconscionable, contrary to the
tenets of good human relations, and will allow respondents to unjustly enrich themselves at Primelinks expense. At the time
respondents contributed the two parcels of land, consisting of 30,000 square meters to the joint venture project when the
JVA was signed on March 10, 1994, the said properties were worth not more than P500.00 per square meter, the "price tag"
agreed upon the parties for the purpose of the JVA. Moreover, before respondents rescinded the JVA sometime in
October/November 1997, the property had already been substantially developed as improvements had already been
introduced thereon; petitioners had likewise incurred administrative and marketing expenses, among others, amounting to
more or less P40,000,000.00.45
Petitioners point out that respondents did not pray in their complaint that they be declared the owners and entitled to the
possession of the improvements made by petitioner Primelink on the property; neither did they adduce evidence to prove
their entitlement to said improvements. It follows, petitioners argue, that respondents were not entitled to the improvements
although petitioner Primelink was declared in default.
They also aver that, under Article 1384 of the New Civil Code, rescission shall be only to the extent necessary to cover the
damages caused and that, under Article 1385 of the same Code, rescission creates the obligation to return the things which
were not object of the contract, together with their fruits, and the price with its interest; consequently, it can be effected only
when respondents can return whatever they may be obliged to return. Respondents who sought the rescission of the JVA
must place petitioner Primelink in the status quo. They insist that respondents cannot rescind and, at the same time, retain
the consideration, or part of the consideration received under the JVA. They cannot have the benefits of rescission without
assuming its burden. All parties must be restored to their original positions as nearly as possible upon the rescission of a
contract. In the event that restoration to the status quo is impossible, rescission may be granted if the Court can balance the
equities and fashion an appropriate remedy that would be equitable to both parties and afford complete relief.
Petitioners insist that being defaulted in the court a quo would in no way defeat their claim for reimbursement because
"[w]hat matters is that the improvements exist and they cannot be denied." 46 Moreover, they point out, the ruling of this Court
in Aurbach v. Sanitary Wares Manufacturing Corporation47 cited by the CA is not in point.
On the other hand, the CA ruled that although respondents therein (plaintiffs below) did not specifically pray for their
takeover of the property and for the possession of the improvements on the parcels of land, nevertheless, respondents were
entitled to said relief as a necessary consequence of the ruling of the trial court ordering the rescission of the JVA. The
appellate court cited the ruling of this Court in the Aurbach case and Article 1838 of the New Civil Code, to wit:
As a general rule, the relation of the parties in joint ventures is governed by their agreement. When the agreement is silent
on any particular issue, the general principles of partnership may be resorted to. 48
Respondents, for their part, assert that Articles 1380 to 1389 of the New Civil Code deal with rescissible contracts. What
applies is Article 1191 of the New Civil Code, which reads:
ART. 1191. The power to rescind obligations is implied in reciprocal ones, in case one of the obligors should not comply with
what is incumbent upon him.
The injured party may choose between the fulfillment and the rescission of the obligation, with the payment of damages in
either case. He may also seek rescission, even after he has chosen fulfillment, if the latter should become impossible.
The court shall decree the rescission claimed, unless there be just cause authorizing the fixing of a period.
This is understood to be without prejudice to the rights of third persons who have acquired the thing, in accordance with
articles 1385 and 1388 and the Mortgage Law.
They insist that petitioners are not entitled to rescission for the improvements because, as found by the RTC and the CA, it
was petitioner Primelink that enriched itself at the expense of respondents. Respondents reiterate the ruling of the CA, and
argue as follows:
PRIMELINK argued that the LAZATINs in their complaint did not allege, did not prove and did not pray that they are and
should be entitled to take over the development of the project, and that the improvements and existing structures which were
introduced by PRIMELINK after spending more or less Forty Million Pesos be awarded to them. They merely asked in the
complaint that the joint venture agreement be rescinded, and that the parcels of land they contributed to the project be
returned to them.
PRIMELINKs argument lacks merit. The order of the court for PRIMELINK to return possession of the real estate property
belonging to the LAZATINs including all improvements thereon was not a judgment that was different in kind than what was

80

prayed for by the LAZATINs. The order to return the property with all the improvements thereon is just a necessary
consequence to the order of rescission.
As a general rule, the relation of the parties in joint ventures is governed by their agreement. When the agreement is silent
on any particular issue, the general principles of partnership may be resorted to. In Aurbach v. Sanitary Wares
Manufacturing Corporation, the Supreme Court discussed the following points regarding joint ventures and partnership:
The legal concept of a joint venture is of common law origin. It has no precise legal definition, but it has been generally
understood to mean an organization formed for some temporary purpose. (Gates v. Megargel, 266 Fed. 811 [1920]) It is, in
fact, hardly distinguishable from the partnership, since elements are similar community of interest in the business, sharing
of profits and losses, and a mutual right of control. (Blackner v. McDermott, 176 F.2d 498 [1949]; Carboneau v. Peterson, 95
P.2d 1043 [1939]; Buckley v. Chadwick, 45 Cal.2d 183, 288 P.2d 12, 289 P.2d 242 [1955]) The main distinction cited by
most opinions in common law jurisdictions is that the partnership contemplates a general business with some degree of
continuity, while the joint venture is formed for the execution of a single transaction, and is thus of a temporary nature. (Tuffs
v. Mann, 116 Cal.App. 170, 2 P.2d 500 [1931]; Harmon v. Martin, 395 III. 595, 71 N.E.2d 74 [1947]; Gates v. Megargel, 266
Fed. 811 [1920]) This observation is not entirely accurate in this jurisdiction, since under the Civil Code, a partnership may
be particular or universal, and a particular partnership may have for its object a specific undertaking. (Art. 1783, Civil Code).
It would seem therefore that, under Philippine law, a joint venture is a form of partnership and should thus be governed by
the laws of partnership. The Supreme Court has, however, recognized a distinction between these two business forms, and
has held that although a corporation cannot enter into a partnership contract, it may, however, engage in a joint venture with
others. (At p. 12, Tuazon v. Bolanos, 95 Phil. 906 [1954]; Campos and Lopez Campos Comments, Notes and Selected
Cases, Corporation Code 1981) (Emphasis Supplied)
The LAZATINs were able to establish fraud on the part of PRIMELINK which, in the words of the court a quo, was a pattern
of what appears to be a scheme or plot to reduce and eventually blot out the net incomes generated from sales of housing
units by the defendants. Under Article 1838 of the Civil Code, where the partnership contract is rescinded on the ground of
the fraud or misrepresentation of one of the parties thereto, the party entitled to rescind is, without prejudice to any other
right is entitled to a lien on, or right of retention of, the surplus of the partnership property after satisfying the partnership
liabilities to third persons for any sum of money paid by him for the purchase of an interest in the partnership and for any
capital or advance contributed by him. In the instant case, the joint venture still has outstanding liabilities to third parties or
the buyers of the property.
It is not amiss to state that title to the land or TCT No. T-10848 which is now held by Chinabank for safekeeping pursuant to
the Escrow Agreement executed between Primelink Properties and Development Corporation and Ma. Clara T. LazatinMagat should also be returned to the LAZATINs as a necessary consequence of the order of rescission of contract. The
reason for the existence of the Escrow Agreement has ceased to exist when the joint venture agreement was rescinded. 49
Respondents stress that petitioners must bear any damages or losses they may have suffered. They likewise stress that
they did not enrich themselves at the expense of petitioners.
In reply, petitioners assert that it is unjust and inequitable for respondents to retain the improvements even if their share in
the P1,041,524.26 of the net income of the property and the sale of the land were to be deducted from the value of the
improvements, plus administrative and marketing expenses in the total amount ofP40,000,000.00. Petitioners will still be
entitled to an accounting from respondents. Respondents cannot deny the existence and nature of said improvements as
they are visible to the naked eye.
The threshold issues are the following: (1) whether respondents are entitled to the possession of the parcels of land covered
by the JVA and the improvements thereon introduced by petitioners as their contribution to the JVA; (2) whether petitioners
are entitled to reimbursement for the value of the improvements on the parcels of land.
The petition has no merit.
On the first issue, we agree with petitioners that respondents did not specifically pray in their complaint below that
possession of the improvements on the parcels of land which they contributed to the JVA be transferred to them.
Respondents made a specific prayer in their complaint that, upon the rescission of the JVA, they be placed in possession of
the parcels of land subject of the agreement, and for other "reliefs and such other remedies as are just and equitable in the
premises." However, the trial court was not precluded from awarding possession of the improvements on the parcels of land
to respondents in its decision. Section 2(c), Rule 7 of the Rules of Court provides that a pleading shall specify the relief
sought but it may add as general prayer for such further or other relief as may be deemed just and equitable. Even without
the prayer for a specific remedy, proper relief may be granted by the court if the facts alleged in the complaint and the
evidence introduced so warrant.50 The court shall grant relief warranted by the allegations and the proof even if no such
relief is prayed for.51 The prayer in the complaint for other reliefs equitable and just in the premises justifies the grant of a
relief not otherwise specifically prayed for. 52
The trial court was not proscribed from placing respondents in possession of the parcels of land and the improvements on
the said parcels of land. It bears stressing that the parcels of land, as well as the improvements made thereon, were
contributed by the parties to the joint venture under the JVA, hence, formed part of the assets of the joint venture. 53 The trial
court declared that respondents were entitled to the possession not only of the parcels of land but also of the improvements
thereon as a consequence of its finding that petitioners breached their agreement and defrauded respondents of the net
income under the JVA.

81

On the second issue, we agree with the CA ruling that petitioner Primelink and respondents entered into a joint venture as
evidenced by their JVA which, under the Courts ruling in Aurbach, is a form of partnership, and as such is to be governed
by the laws on partnership.
When the RTC rescinded the JVA on complaint of respondents based on the evidence on record that petitioners willfully and
persistently committed a breach of the JVA, the court thereby dissolved/cancelled the partnership.54With the rescission of
the JVA on account of petitioners fraudulent acts, all authority of any partner to act for the partnership is terminated except
so far as may be necessary to wind up the partnership affairs or to complete transactions begun but not yet finished. 55 On
dissolution, the partnership is not terminated but continues until the winding up of partnership affairs is completed. 56 Winding
up means the administration of the assets of the partnership for the purpose of terminating the business and discharging the
obligations of the partnership.
The transfer of the possession of the parcels of land and the improvements thereon to respondents was only for a specific
purpose: the winding up of partnership affairs, and the partition and distribution of the net partnership assets as provided by
law.57 After all, Article 1836 of the New Civil Code provides that unless otherwise agreed by the parties in their JVA,
respondents have the right to wind up the partnership affairs:
Art. 1836. Unless otherwise agreed, the partners who have not wrongfully dissolved the partnership or the legal
representative of the last surviving partner, not insolvent, has the right to wind up the partnership affairs, provided, however,
that any partner, his legal representative or his assignee, upon cause shown, may obtain winding up by the court.
It must be stressed, too, that although respondents acquired possession of the lands and the improvements thereon, the
said lands and improvements remained partnership property, subject to the rights and obligations of the parties, inter se, of
the creditors and of third parties under Articles 1837 and 1838 of the New Civil Code, and subject to the outcome of the
settlement of the accounts between the parties as provided in Article 1839 of the New Civil Code, absent any agreement of
the parties in their JVA to the contrary.58 Until the partnership accounts are determined, it cannot be ascertained how much
any of the parties is entitled to, if at all.
It was thus premature for petitioner Primelink to be demanding that it be indemnified for the value of the improvements on
the parcels of land owned by the joint venture/partnership. Notably, the JVA of the parties does not contain any provision
designating any party to wind up the affairs of the partnership.
Thus, under Article 1837 of the New Civil Code, the rights of the parties when dissolution is caused in contravention of the
partnership agreement are as follows:
(1) Each partner who has not caused dissolution wrongfully shall have:
(a) All the rights specified in the first paragraph of this article, and
(b) The right, as against each partner who has caused the dissolution wrongfully, to damages for breach
of the agreement.
(2) The partners who have not caused the dissolution wrongfully, if they all desire to continue the business in the
same name either by themselves or jointly with others, may do so, during the agreed term for the partnership and
for that purpose may possess the partnership property, provided they secure the payment by bond approved by
the court, or pay to any partner who has caused the dissolution wrongfully, the value of his interest in the
partnership at the dissolution, less any damages recoverable under the second paragraph, No. 1(b) of this article,
and in like manner indemnify him against all present or future partnership liabilities.
(3) A partner who has caused the dissolution wrongfully shall have:
(a) If the business is not continued under the provisions of the second paragraph, No. 2, all the rights of a
partner under the first paragraph, subject to liability for damages in the second paragraph, No. 1(b), of
this article.
(b) If the business is continued under the second paragraph, No. 2, of this article, the right as against his
co-partners and all claiming through them in respect of their interests in the partnership, to have the value
of his interest in the partnership, less any damage caused to his co-partners by the dissolution,
ascertained and paid to him in cash, or the payment secured by a bond approved by the court, and to be
released from all existing liabilities of the partnership; but in ascertaining the value of the partners
interest the value of the good-will of the business shall not be considered.
And under Article 1838 of the New Civil Code, the party entitled to rescind is, without prejudice to any other right, entitled:
(1) To a lien on, or right of retention of, the surplus of the partnership property after satisfying the partnership
liabilities to third persons for any sum of money paid by him for the purchase of an interest in the partnership and
for any capital or advances contributed by him;
(2) To stand, after all liabilities to third persons have been satisfied, in the place of the creditors of the partnership
for any payments made by him in respect of the partnership liabilities; and

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(3) To be indemnified by the person guilty of the fraud or making the representation against all debts and liabilities
of the partnership.
The accounts between the parties after dissolution have to be settled as provided in Article 1839 of the New Civil Code:
Art. 1839. In settling accounts between the partners after dissolution, the following rules shall be observed, subject to any
agreement to the contrary:
(1) The assets of the partnership are:
(a) The partnership property,
(b) The contributions of the partners necessary for the payment of all the liabilities specified in No. 2.
(2) The liabilities of the partnership shall rank in order of payment, as follows:
(a) Those owing to creditors other than partners,
(b) Those owing to partners other than for capital and profits,
(c) Those owing to partners in respect of capital,
(d) Those owing to partners in respect of profits.
(3) The assets shall be applied in the order of their declaration in No. 1 of this article to the satisfaction of the
liabilities.
(4) The partners shall contribute, as provided by article 1797, the amount necessary to satisfy the liabilities.
(5) An assignee for the benefit of creditors or any person appointed by the court shall have the right to enforce the
contributions specified in the preceding number.
(6) Any partner or his legal representative shall have the right to enforce the contributions specified in No. 4, to the
extent of the amount which he has paid in excess of his share of the liability.
(7) The individual property of a deceased partner shall be liable for the contributions specified in No. 4.
(8) When partnership property and the individual properties of the partners are in possession of a court for
distribution, partnership creditors shall have priority on partnership property and separate creditors on individual
property, saving the rights of lien or secured creditors.
(9) Where a partner has become insolvent or his estate is insolvent, the claims against his separate property shall
rank in the following order:
(a) Those owing to separate creditors;
(b) Those owing to partnership creditors;
(c) Those owing to partners by way of contribution.
IN LIGHT OF ALL THE FOREGOING, the petition is DENIED. The assailed Decision and Resolution of the Court of Appeals
in CA-G.R. CV No. 69200 are AFFIRMED insofar as they conform to this Decision of the Court.
Costs against petitioners.
SO ORDERED.

[G.R. No. 147999. February 27, 2004]

SUI MAN HUI CHAN and GONZALO CO, petitioners, vs. HON. COURT OF APPEALS and OSCAR D.
MEDALLA, respondents.
DECISION
QUISUMBING, J.:
For review on certiorari is the Decision[1] dated May 3, 2001, of the Court of Appeals in CA-G.R. SP No. 61889,
affirming the Order[2] dated January 11, 2000, of the Regional Trial Court (RTC) of Mandaluyong City, Branch 213, in Civil
Case No. MC99-666, which had denied petitioners Motion to Dismiss the complaint filed by private respondent.

83

The facts, as culled from records, are as follows:

On March 30, 1999, private respondent Oscar Medalla filed a complaint before the RTC of Mandaluyong City,
docketed as Civil Case No. MC99-666, for collection of a sum of money arising from breach of a contract of lease and
damages, against petitioners Sui Man Hui Chan and Gonzalo Co.
The complaint alleged that on November 14, 1988, Napoleon C. Medalla as lessor and Ramon Chan as lessee
entered into a Lease Contract[3] over a hotel building located at No. 29 Abanao Street, Baguio City. Chan would use the
leased premises as a restaurant named Cypress Inn. Pertinently, the parties agreed on the following:
1. The period of lease shall be for ten (10) years or from 15 July 1988 to 15 July 1998.
2. The payment of the realty taxes due to the government on the leased premises shall be for the account of the
Lessee.
3. The agreement is binding upon the heirs and/or successors-in-interest of the Lessor and the Lessee.
Petitioner Gonzalo Co was employed by Ramon Chan as the general manager of Cypress Inn and acted as his
agent in all his dealings with Napoleon Medalla.
On August 5, 1989, Ramon Chan died. He was survived by his wife, petitioner Sui Man Hui Chan, who continued to
operate the restaurant.
On July 17, 1996, Napoleon Medalla died. Among his heirs is private respondent Oscar Medalla, who succeeded him
as owner and lessor of the leased premises. The contract was neither amended nor terminated after the death of the
original parties but was continued by their respective successors-in-interest pursuant to the terms thereof. Petitioners Chan
and Co, the latter, in his capacity as agent and general manager, continued to deal with private respondent Medalla in all
transactions pertaining to the contract.
On various occasions, petitioners failed to pay the monthly rentals due on the leased premises. Despite several
Statements of Accounts sent by Medalla, petitioners failed to pay the rentals due but, nonetheless, continued to use and
occupy the leased premises.
On February 26, 1997, Medalla sent a letter addressed to Ramon Chan, indicating that (1) the contract of lease would
expire on July 15, 1998, and (2) he was not amenable to a renewal of said contract after its expiration.
Medalla then sent demand letters to petitioners, but the latter still failed to pay the unpaid rentals. He also found out
that petitioners had not paid the realty taxes due on the leased premises since 1991, amounting to P610,019.11. Medalla
then asked petitioners to settle the unpaid rentals, pay the unpaid real estate taxes, and vacate the leased premises.
On January 1999, petitioners vacated the premises but without paying their unpaid rentals and realty taxes. Aggrieved
by petitioners refusal to pay the amounts owing, which had reached P4,147,901.80 by March 1999, private respondent
Medalla instituted Civil Case No. MC99-666.
In their Answer to the Complaint, petitioners denied owing private respondent the amounts claimed by the latter. They
alleged that the late Ramon Chan had paid all the rentals due up to March 15, 1998. Moreover, they need not pay any
balance owing on the rentals as they were required to pay two (2) months advance rentals upon signing of the contract and
make a guarantee deposit amounting to P220,000. On the matter of unpaid realty taxes, petitioners alleged that private
respondent was responsible therefor as the owner of the leased premises, notwithstanding any contrary stipulations in the
contract.
On July 19, 1999, petitioners filed a Supplemental Answer with Motion to Dismiss alleging that they were neither
parties nor privies to the Contract of Lease, hence they are not the real parties-in-interest.
Private respondent filed a Reply and Opposition to petitioners Supplemental Answer with Motion to Dismiss dated
August 2, 1999, praying for the denial of the Motion to Dismiss for having been belatedly filed in direct contravention of
Section 1, Rule 16, of the 1997 Rules of Civil Procedure. [4] He further alleged that petitioner Chan, as the owner of the
business and petitioner Co as the agent of petitioner Chan, are clearly real parties-in-interest in the case. Private
respondent pointed to their continuous dealings with him in all transactions relating to the contract after the death of Ramon
Chan and even after the expiration of the Contract of Lease.
On January 11, 2000, the RTC denied petitioners Motion to Dismiss, thus:
WHEREFORE, in view of the foregoing, the motion to dismiss dated July 19, 1999 filed by defendant through counsel
against plaintiff is hereby DENIED for lack of merit.
SO ORDERED.[5]
The trial court pointed out that petitioners continued to transact business with private respondent after the death of
Ramon Chan as shown by the communications between the parties. It also declared that private respondents
acquiescence to petitioners continued occupation and enjoyment of the leased premises and the latters recognition of the
formers ownership of said premises reflected an oral agreement between the parties to continue the Lease Contract.

84

Petitioners moved for reconsideration on the ground that any claim should be filed against the estate of Ramon Chan
in an estate proceeding pursuant to Section 5, Rule 86, of the Revised Rules of Court [6] since Ramon Chans estate is the
real party-in-interest. The court denied said motion and declared that Section 5, Rule 86 is inapplicable in the case. It
pointed out that the unpaid rentals being claimed were those for the period April 1993 to December 1998. These were
incurred by petitioners and not by the late Ramon Chan, who died on August 5, 1989.
Dissatisfied, petitioners elevated the matter to the Court of Appeals through a special civil action of certiorari, docketed
as CA-G.R. SP No. 61889. The Court of Appeals, however, affirmed the RTC Orders, as follows:
WHEREFORE, foregoing premises considered, the petition having no merit in fact and in law is hereby DENIED DUE
COURSE and ACCORDINGLY ORDERED DISMISSED. The assailed Orders are resultantly AFFIRMED WITH COSTS TO
PETITIONERS.
SO ORDERED.[7]
Hence, the instant petition submitting as sole issue for our resolution:
WHETHER OR NOT RESPONDENT COURT OF APPEALS COMMITTED SERIOUS ERROR IN LAW IN AFFIRMING THE
RTC ORDERS DENYING PETITIONERS MOTION TO DISMISS AND THE SUBSEQUENT MOTION FOR
RECONSIDERATION.[8]
Petitioners argue that the Court of Appeals erred in affirming the RTCs Orders because they are not the real partiesin-interest and hence, were improperly impleaded in the complaint as defendants. Petitioners insist that they were neither
parties nor were they privy to the Contract of Lease between the late Ramon Chan and Napoleon Medalla. They vigorously
assert that any claim for unpaid rentals should be made against the estate of Ramon Chan pursuant to Section 5, Rule 86 of
the Revised Rules of Court.
We find for private respondent. Prefatorily, it bears stressing that petitioners Motion to Dismiss was filed after an
Answer had already been filed. This alone warranted an outright dismissal of the motion for having been filed in
contravention of the clear and explicit mandate of Section 1, Rule 16, of the Revised Rules of Civil Procedure. Under this
section, a motion to dismiss shall be filed within the time for but before filing the answer to the complaint or pleading
asserting a claim.[9] Here, petitioners filed their Supplemental Answer with Motion to Dismiss almost two months after filing
their Answer, in clear contravention of the aforecited rule.
The Court of Appeals stated that the grant or denial of a Motion to Dismiss is an interlocutory order, and it cannot be
the proper subject of a special civil action for certiorari. The proper remedy in such a case is to appeal after a decision has
been rendered, the CA said. A writ of certiorari is not intended to correct every controversial interlocutory ruling; it is
resorted to only to correct a grave abuse of discretion or a whimsical exercise of judgment equivalent to lack or excess of
jurisdiction. The function of a petition forcertiorari is limited to keeping an inferior court within the bounds of its jurisdiction
and to relieve persons from arbitrary acts, acts which courts or judges have no power or authority in law to
perform. Certiorari is not designed to correct erroneous findings and conclusions made by the court. [10] On this score, we
are in agreement with the appellate court.
At any rate, we find no merit to petitioners contention that they are not real parties-in-interest since they are not parties
nor signatories to the contract and hence should not have been impleaded as defendants. It is undeniable that petitioner
Chan is an heir of Ramon Chan and, together with petitioner Co, was a successor-in-interest to the restaurant business of
the late Ramon Chan. Both continued to operate the business after the death of Ramon. Thus, they are real parties-ininterest in the case filed by private respondent, notwithstanding that they are not signatories to the Contract of Lease.
A lease contract is not essentially personal in character. Thus, the rights and obligations therein are transmissible to
the heirs.[11] 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.[12] In the subject Contract of Lease, not only were there no stipulations prohibiting any transmission of
rights, but its very terms and conditions explicitly provided for the transmission of the rights of the lessor and of the lessee to
their respective heirs and successors. The contract is the law between the parties. 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
successors or 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. [13]
Finally, as to petitioners contention that any claim should have been filed before the estate proceeding of Ramon
Chan pursuant to Section 5 of Rule 86, the trial court found that the unpaid rentals sought to be claimed were for the period
April 1993 to December 1998. Note that Ramon Chan, the original lessee, died on August 5, 1989. In other words, as the
unpaid rentals did not accrue during the lifetime of Ramon Chan, but well after his death, his estate might not be held liabl e
for them. Hence, there is no indubitable basis to apply Section 5, Rule 86, of the Revised Rules of Court as petitioners urge
respondents to do.
WHEREFORE, the instant petition is DENIED and the Decision of the Court of Appeals in CA-G.R. SP. No. 61889 is
AFFIRMED. Costs against petitioners.
SO ORDERED.

85

Callejo, Sr., and Tinga, JJ., concur.

Puno, J., (Chairman), on leave.
Austria-Martinez, J., no part.

[G.R. No. 146006. April 22, 2005]

JOSE C. LEE AND ALMA AGGABAO, in their capacities as President and Corporate Secretary, respectively, of
Philippine
International
Life
Insurance
Company,
and
FILIPINO
LOAN
ASSISTANCE
GROUP, petitioners, vs. REGIONAL TRIAL COURT OF QUEZON CITY, BRANCH 85 presided by JUDGE
PEDRO M. AREOLA, BRANCH CLERK OF COURT JANICE Y. ANTERO, DEPUTY SHERIFFS ADENAUER G.
RIVERA and PEDRO L. BORJA, all of the Regional Trial Court of Quezon City Branch 85, MA. DIVINA
ENDERES claiming to be Special Administratrix, and other persons/public officers acting for and in their
behalf, respondents.
RESOLUTION
CORONA, J.:
For resolution is private respondent Ma. Divina Ortaez-Enderes omnibus motion to cite petitioners in indirect
contempt of Court and for the disbarment and/or imposition of disciplinary sanctions on petitioners counsel[1] for their refusal
to comply with the final and executory decision of this Court dated February 23, 2004.
This case began with a petition for letters of administration of the intestate estate of Dr. Juvencio P. Ortaez filed 25
years ago on September 24, 1980. Forming part of the inventory of the estate were 2,029 shares of stock in Philippine
International Life Insurance Company (Philinterlife). During the pendency of these proceedings, Juliana, Jose and Rafael (all
surnamed Ortaez), the surviving legitimate spouse and legitimate children of the decedent respectively, executed an
extrajudicial settlement of the estate, partitioning it (including the Philinterlife shares of stock) among themselves.
Thereafter, Juliana and Jose sold the 2,029 shares to the Filipino Loan Assistance Group (FLAG). [2]
However, private respondent, one of the illegitimate children of the decedent, was in the meantime appointed as
special administratrix of the 2,029 Philinterlife shares of stock. When Jose Ortaez filed an omnibus motion seeking the
approval of the sale of the shares of stock to FLAG and the release of private respondent as special administratrix, the trial
court in its August 11, 1997 order, denied said motion. On August 29, 1997, the intestate court declared the extrajudicial
settlement made by Juliana, Jose and Rafael partially void ab initio insofar as the transfer of the Philinterlife shares was
concerned. These orders were later upheld by the Court of Appeals (CA) and this Court.
In its order dated July 6, 2000, the intestate court granted the motion for execution filed by private respondent:
WHEREFORE, premises considered, let a writ of execution issue as follows:
1. Confirming the nullity of the sale of the 2,029 Philinterlife shares in the name of the Estate of Dr. Juvencio
Ortaez to Filipino Loan Assistance Group (FLAG);
2. Commanding the President and the Corporate Secretary of Philinterlife to reinstate in the stock and transfer
book of Philinterlife the 2,029 Philinterlife shares of stock in the name of the Estate of Dr. Juvencio P.
Ortaez as the owner thereof without prejudice to other claims for violation of pre-emptive rights pertaining to
the said 2,029 Philinterlife shares;
3. Directing the President and the Corporate Secretary of Philinterlife to issue stock certificates of Philinterlife for
2,029 shares in the name of the Estate of Dr. Juvencio P. Ortaez as the owner thereof without prejudice to
other claims for violation of pre-emptive rights pertaining to the said 2,029 Philinterlife shares; and
4. Confirming that only the Special Administratrix, Ma. Divina Ortaez-Enderes, has the power to exercise all the
rights appurtenant to the said shares, including the right to vote and to receive dividends;
5. Directing Philinterlife and/or any other person or persons claiming to represent it or otherwise, to acknowledge
and allow the said Special Administratrix to exercise all the aforesaid rights on the said shares and to refrain
from resorting to any action which may tend (to) directly or indirectly impede, obstruct or bar the free exercise
thereof under pain of contempt.

86

6. The President, Corporate Secretary, any responsible officer/s of Philinterlife, or any other person or persons
claiming to represent it or otherwise, are hereby directed to comply with this Order within three (3) days from
receipt hereof under pain of contempt.
7. The Deputy Sheriffs Adenauer Rivera and Pedro Borja are hereby directed to implement the writ of execution
with dispatch to forestall any/or further damage to the Estate.
SO ORDERED.[3]
Unfortunately, however, the writ of execution was not enforced due to the resistance of herein petitioners. To block
the execution, petitioners filed before the CA a petition for certiorari, docketed as CA G.R. SP No. 59736, questioning the
order of execution, among others. The petition was dismissed outright on July 26, 2000. Petitioners then elevated the case
to us. On February 23, 2004, a decision was promulgated by the Third Division of this Court:[4]
WHEREFORE, the petition is hereby DENIED. The decision of the Court of Appeals in CA-G.R. S.P. No. 59736 dated July
26, 2000, dismissing petitioners petition for certiorari and affirming the July 6, 2000 order of the trial court which ordered the
execution of its (trial courts) August 11 and 29, 1997 orders, is hereby AFFIRMED.
SO ORDERED.[5]
On April 27, 2004, petitioners filed an omnibus motion for reconsideration and referral of this case to the en banc
allegedly in view of the conflicting rulings of two divisions of the Court. In a resolution dated May 26, 2004, the Court denied
the motion for lack of merit:
The Court deliberated on the petitioners omnibus motion for reconsideration of the decision of February 23, 2004 which
denied the petition for review on certiorari. It appears to the Court that the motion merely reiterates the same arguments
earlier raised and does not present any substantial reason not previously invoked nor any matter not already considered and
passed upon by the Court.
ACCORDINGLY, the Court Resolved to DENY the motion for reconsideration for lack of merit. This denial is FINAL.[6]
Thus on July 9, 2004, the February 23, 2004 decision became final and executory, and was recorded in the book of
entries of judgments. On October 1, 2004, an alias writ of execution was issued by the intestate court (the court of origin).
In said writ, the deputy sheriffs were ordered to enforce the August 11 and 29, 1997 and July 6, 2000 orders of the intestate
court.
Instead of complying with the writ, petitioners filed on October 15, 2004, a motion to suspend execution/period of
compliance by reason of supervening events, raising the following arguments: (1) the intestate court had already revoked
the appointment of private respondent as special administratrix; (2) there was a need to lay down the legal procedure in the
implementation of the writ and (3) there must be a declaration that the price per share of the 2,029 shares was only P1,000
which was its book value at the time the shares were sold in 1989 and 1991. [7]
Private respondent went back to this Court and filed this omnibus motion asserting that petitioners made a travesty of
the final and executory decisions of the Lower Courts and this Honorable Court when they refused to comply with the
Alias Writ of Execution issued by the Lower Court. [8]
Before we discuss the substance of private respondents motion, we note that attached to it were mere photocopies of
the supporting documents and not certified true copies of documents or papers involved therein as required by the Rules of
Court.[9] However, given that the motion was verified and petitioners, who were given a chance to oppose or comment on it,
made no objection thereto, we brush aside the defect in form and proceed to discuss the merits of the motion.
Furthermore, as held in Remman Enterprises, Inc. v. CA,[10] Section 3, Rule 71 of the Rules of Court outlines the
procedural requisites before the accused may be punished for indirect contempt: (1) the filing of a written charge and (2) an
opportunity to be heard by himself or counsel. All that the law requires is that there is a charge in writing duly filed in court
and an opportunity given to the person charged to be heard by himself or counsel. What is important is that the alleged
contemner be granted an opportunity to meet the charges against him and to be heard in his defense.[11] Petitioners were
given this opportunity; they in fact filed their Opposition. [12]
Petitioners assert that private respondent engaged in forum-shopping because the latter had previously filed a similar
motion in the intestate court. The argument has no merit. The charge for indirect contempt must be filed before the court
against which the indirect contempt was committed. Section 4, Rule 71 states:
SEC. 5. Where charge to be filed. Where the charge for indirect contempt has been committed against a Regional Trial
Court or a court of equivalent or higher rank, or against an officer appointed by it, the charge may be filed with such court.
xxx
Hence, the charge for indirect contempt for disobedience to our February 23, 2004 decision was correctly brought to
us. As we explained in the case of Igot v. Court of Appeals:
In whatever context it may arise, contempt of court involves the doing of an act, or the failure to do an act, in such a manner
as to create an affront to the court and the sovereign dignity with which it is clothed. As a matter of practical judicial
administration, jurisdiction has been felt to properly rest in only one tribunal at a time with respect to a given controversy.

87

Only the court which rendered the order commanding the doing of a certain act is vested with the right to determine whether
or not the order has been complied with, or whether a sufficient reason has been given for noncompliance, and, therefore,
whether a contempt has been committed. It is a well-established rule that the power to determine the existence of contempt
of court rests exclusively with the court contemned. No court is authorized to punish a contempt against another.
The rationale that is usually advanced for the general rule ... is that, contempt proceedings are sui generis and are triable
only by the court against whose authority the contempts are charged; the power to punish for contempt exists for the
purpose of enabling a court to compel due decorum and respect in its presence and due obedience to its judgments, orders
and processes and in order that a court may compel obedience to its orders, it must have the right to inquire whether there
has been any disobedience thereof, for to submit the question of disobedience to another tribunal would operate to deprive
the proceeding of half its efficiency.[13]
We now proceed to the merits of the motion to cite for indirect contempt and for imposition of disciplinary sanctions.
The private respondent alleges that the following acts of the petitioners constituted indirect contempt under Section 3,
Rule 71 of the Rules of Court: (1) petitioners failure to comply with the alias writ of execution served upon them on October
12, 2004 and (2) their act of filing a patently baseless motion (to suspend execution/period of compliance by reason of
supervening events) which was obviously intended to defeat the implementation of the final and executory decision of this
Court.
On the other hand, petitioners allege that the immediate execution of the subject decision would be inequitable and
should be suspended pending an order of clarification of certain matters. According to them, the certificates of the shares of
stock were turned over to the intestate court and not to private respondent because her appointment as special
administratrix had already been revoked by the court.
Petitioners obstinate refusal to abide by this Courts February 23, 2004 decision demonstrates a contumacious
attitude which this Court cannot countenance. This contumacy becomes all the more glaring because of the strongly worded
admonition in our decision that (p)etitioners and all parties claiming rights under them are hereby warned not to further
delay the execution of the Orders of the intestate court dated August 11 and August 29, 1997.[14] The previously quoted July
6, 2000 order of the intestate court, which was affirmed by this Court, also contained the following directives:
xxx

xxx

xxx

5. Directing Philinterlife and/or any other person or persons claiming to represent it or otherwise, to acknowledge
and allow the said Special Administratrix to exercise all the aforesaid rights on the said shares and to refrain
from resorting to any action which may tend (to) directly or indirectly impede, obstruct or bar the free
exercise thereof under pain of contempt.
6. The President, Corporate Secretary, any responsible officer/s of Philinterlife, or any other person or persons
claiming to represent it or otherwise, are hereby directed to comply with this Order within three (3) days
from receipt hereof under pain of contempt.
7. The Deputy Sheriffs Adenauer Rivera and Pedro Borja are hereby directed to implement the writ of execution
with dispatch to forestall any/or further damage to the Estate.
SO ORDERED. [15] (Emphasis supplied)
Clearly, petitioners defiant non-compliance with these directives, as proved by the sheriffs report dated October 13,
2004, constituted indirect contempt. The pertinent portion of this report stated:
That on October 12, 2004, when Sheriff Borja went to the Philenterlife (sic) Office to check whether there was already
compliance with the Alias Writ of Execution, one of their staff told Sheriff Borja that Mr. Jose Lee wanted to talk with Sheriff
Borja over the Telephone. In their telephone conversation, Mr. Jose Lee told Sheriff Borja that he had already consulted his
lawyer regarding the matter.
WHEREFORE, we respectfully submit this report to the Honorable Court with the information that up to this writing,
Philenterlife (sic) has not submitted their compliance to the Sheriff or to the Court. [16]
Petitioners act of filing their motion to suspend execution/period of compliance by reason of supervening events also
showed their continuing, stubborn resistance to this Courts judgment. Indeed, one of the exceptions to the principle of
immutability of final judgments is the existence of supervening events. Supervening events refer to facts which
transpire after judgment has become final and executory or to new circumstances which develop after the judgment has
acquired finality.[17]
The private respondent alleges that the revocation of her appointment as special administratrix was made by the
intestate court in its May 12, 2003 and September 4, 2003 orders. [18] This is not disputed by the petitioners. In short, this fact
already existed before the decision of this Court was promulgated on February 23, 2004 and before it became final and
executory on July 9, 2004. Therefore, the revocation of the appointment of private respondent as special administratrix was
evidently not a supervening event.
Furthermore, this issue had already been raised in petitioners motion for reconsideration [19] of this Courts February
23, 2004 decision and passed upon by the Court in its resolution dated May 26, 2004 denying the motion for lack of merit.

88

Likewise, the increase in the value of the shares from P1,000 to P4,000 was also raised in the same motion for
reconsideration.[20] The Court stated that the motion merely reiterate(d) the same arguments earlier raised and (did) not
present any substantial reason not previously invoked nor any matter not already considered and passed upon by the
Court.[21]
Petitioners insist that there must be an order laying down the legal procedure for the implementation of the writ, which
implementation did not include taking over the management of Philinterlife and obtaining possession of office premises. We
disagree. The execution should not be suspended for that reason.
Our February 23, 2004 ruling categorically stated that the estate of Dr. Juvencio P. Ortaez was the lawful owner of
2,029 Philinterlife shares. As lawful owner of the Philinterlife shares, the estate can exercise all the rights of ownership,
including the right to vote the shares. If, by voting the shares, the estate is able to elect its own representatives who
succeed in attaining management control of Philinterlife, then let it be as such would be a legitimate consequence of our
February 23, 2004 decision.
We call particular attention to the fact that in our February 23, 2004 decision, we noted that petitioners, with the rest of
the FLAG-controlled directors and stockholders, increased the authorized capital stock of Philinterlife, diluting in the process
the 2,029 shares of the estate[22] representing 50.725% of Philinterlife. We observed that this was obviously calculated to
make it difficult for the estate to reassume its controlling interest in Philinterlife. Thus, we ruled that, considering the nullity of
the sale of the 2,029 shares to FLAG, the increase in Philinterlifes authorized capital stock was void ab
initio.[23] Consequently, any approval by the Securities and Exchange Commission of this increase would likewise be void ab
initio.
Moreover, the directives to petitioners Jose C. Lee and Alma Aggabao, as president and corporate secretary,
respectively, of Philinterlife, were sufficiently clear and needed absolutely no clarification in order to exact their compli ance
thereto. Since the nullity of the sale of the 2,029 Philinterlife shares to FLAG had been confirmed, they were ordered to:
(1)

reinstate the shares in the name of the estate in the stock and transfer book;

(2)

issue stock certificates in the name of the estate;

(3)

acknowledge and allow the special administratrix to exercise all the rights appurtenant to the shares;

(4)

refrain from resorting to any action which may tend to directly or indirectly impede, obstruct or bar the free
exercise of these rights and

(5)

comply with the order within three days from receipt.

The first two directives were undoubtedly covered by the duties and functions of the corporate secretary and president
of a corporation. The next two ordered them not to resist the writ and the last directive provided a period for their
compliance. Given the foregoing, there was never any need to clarify the procedure for the implementation of the writ.
Pertinent portions of Section 3, Rule 71 of the Rules of Court read:
Sec. 3. Indirect contempt to be punished after charge and hearing. After a charge in writing has been filed, and an
opportunity given to the respondent to comment thereon within such period as may be fixed by the court and to be heard by
himself or counsel, a person guilty of any of the following acts may be punished for indirect contempt:
xxx

xxx

xxx

(b)

Disobedience of or resistance to a lawful writ, process, order or judgment of a court xxx

(c )
xxx

Any abuse of or any unlawful interference with the processes or proceedings of a court not constituting direct contempt

(d)

Any improper conduct tending, directly or indirectly, to impede, obstruct, or degrade the administration of justice;
xxx

xxx

xxx

In the recent case of Heirs of Trinidad de Leon vda. de Roxas v. Court of Appeals, we explained the concept of
contempt of court:
Contempt of court is a defiance of the authority, justice or dignity of the court; such conduct as tends to bring the authority
and administration of the law into disrespect or to interfere with or prejudice parties litigant or their witnesses during litigation
(12 Am. Jur. 389, cited in 14 SCRA 813).
Contempt of court is defined as a disobedience to the Court by acting in opposition to its authority, justice and dignity. It
signifies not only a willful disregard or disobedience of the courts orders, but such conduct as tends to bring the authority of
the court and the administration of law into disrepute or in some manner to impede the due administration of justice (17
C.J.S. 4).
This Court has thus repeatedly declared that the power to punish for contempt is inherent in all courts and is essential to the
preservation of order in judicial proceedings and to the enforcement of judgments, orders and mandates of the court, and

89

consequently, to the due administration of justice (Slade Perkins vs. Director of Prisons, 58 Phil. 271; In re Kelly, 35 Phil.
944; Commissioner of Immigration vs. Cloribel, 20 SCRA 1241; Montalban vs. Canonoy, 38 SCRA 1). [24]
Petitioners disobedience to this Courts judgment is an affront to the Court and the dignity with which it is clothed.
Their attempt to raise issues already laid to rest by a final and executory judgment of no less than the highest tribunal of the
land constitutes a disrespectful and insolent defiance of the authority of this Court and impedes the speedy administration of
justice.[25] As mentioned in the beginning of this Resolution, this controversy has been pending for 25 long years already.
Apparently, petitioners want to prolong it to eternity.
In Sacdalan v. Court of Appeals, we said:
Well-settled is the principle that a decision that has acquired finality becomes immutable and unalterable and may no longer
be modified in any respect even if the modification is meant to correct erroneous conclusions of fact or law and whether it
will be made by the court that rendered it or by the highest court of the land.
The reason for this is that litigation must end and terminate sometime and somewhere, and it is essential to an effective and
efficient administration of justice that, once a judgment has become final, the winning party be not deprived of the fruits of
the verdict. Courts must guard against any scheme calculated to bring about that result and must frown upon any attempt to
prolong the controversies.
The only exceptions to the general rule are the correction of clerical errors, the so-called nunc pro tunc entries which cause
no prejudice to any party, void judgments, and whenever circumstances transpire after the finality of the decision rendering
its execution unjust and inequitable. [26]
This case does not fall under any of the recognized exceptions. Moreover, the immutability of the February 23, 2004
decision is all the more emphasized in this case since it is this Court, the highest Court of the land and final arbiter of a ll
legal controversies, that promulgated it. Thus, petitioners are bound by the finality of our decision and cannot, under the
guise of a phony motion to suspend execution/period of compliance by reason of supervening events, reopen a case already
decided with finality. Nor should they be permitted to litigate anew questions or issues already laid to rest.
The fact is that virtually the same issues have been elevated to this Court no less than three times: in G.R. Nos.
128525, 135177 and 146006. Private respondent obtained a writ of execution in 2000 but her attempt to enforce the writ
was unsuccessful. After our February 23, 2004 decision became final and executory, she obtained an alias writ of execution
on October 1, 2004 but the petitioners again managed to frustrate her efforts to execute the decision and torpedo its
enforcement.
As we ruled in Beautifont, Inc. v. Court of Appeals:
Considerable time has already elapsed and, to serve the ends of justice, it is time that [the] controversy is finally laid to
rest. Sound practice seeks to accommodate the theory which avoids waste of time, effort and expense, both to the parties
and the government, not to speak of delay in the disposal of the case. A marked characteristic of our judicial set-up is that
where the dictates of justice so demand ... the Supreme Court should act, and act with finality. In this case, the dictates of
justice do demand that this Court act, and act with finality. [27]
This Court is becoming impatient with the devious tricks and maneuvers of petitioners.
Section 7, Rule 71 of the Rules of Court penalizes indirect contempt as follows:
Sec. 7. Punishment for indirect contempt. If the respondent is adjudged guilty of indirect contempt committed against a
Regional Trial Court or a court of equivalent or higher rank, he may be punished by a fine not exceeding thirty thousand
pesos or imprisonment not exceeding six (6) months or both. xxx
Petitioners Jose C. Lee and Alma Aggabao, for their defiance and resistance to the October 1, 2004 alias writ of
execution enforcing this Courts February 23, 2004 decision resulting in the frustration of its execution are hereby
adjudged guilty of indirect contempt.
Finally, with regard to the administrative charge against petitioners counsel, Atty. Teodorico Fernandez, pursuant to
paragraph 2, Section 1, Rule 139-B of the Rules of Court, this Court resolves to refer it to the Commission on Bar Discipline
of the Integrated Bar of the Philippines for investigation, report and recommendation.
WHEREFORE, petitioners Jose C. Lee and Alma Aggabao, president and corporate secretary, respectively, of
petitioner Philippine International Life Insurance Company, are hereby found GUILTY of INDIRECT CONTEMPT for which
the maximum FINE of P30,000 is hereby imposed on each of them, payable in full within five days from receipt of this
resolution. They are furthermore given a final non-extendible period of five days from receipt of this resolution within which
to comply within our decision and orders as aforementioned. Petitioners are hereby warned not to file any more pleadings in
connection herewith. Failure to comply with our decision, orders and P30,000 fine within the five-day period will subject
them to imprisonment till full compliance.
In view hereof, petitioners counsel, Atty. Teodorico Fernandez, is likewise strongly warned to refrain from any further
attempts to make a mockery of our judicial processes.
SO ORDERED.

90

Panganiban, (Chairman), Carpio-Morales and Garcia, JJ., concur.

Sandoval-Gutierrez, J., no part.

SECOND DIVISION

HEIRS OF BELINDA DAHLIA

G.R. No. 162934

A. CASTILLO, namely, BENA

JEAN, DANIEL, MELCHOR,

Present:

MICHAEL and DANIBEL, all

surnamed CASTILLO,

PUNO, J., Chairman,

Petitioners,

AUSTRIA-MARTINEZ,
CALLEJO, SR.,
TINGA, and
CHICO-NAZARIO,* JJ.

- versus -

Promulgated:
DOLORES LACUATA-GABRIEL,
Respondent.

November 11, 2005

x --------------------------------------------------x

DECISION

CALLEJO, SR., J.:

This is a petition for review on certiorari of the Decision[1] of the Court of Appeals (CA) in CA-G.R. SP No.
70645, as well as its Resolution[2]denying the motion for reconsideration thereof.

On January 25, 1989, Crisanta Yanga-Gabriel, wife of Lorenzo B. Almoradie, died in Malabon City, Metro Manila,
leaving behind a sizable inheritance consisting mostly of real estate and shares of stock. [3]

A little over a month after Crisantas death, her mother, Crisanta Santiago Vda. de Yanga, commenced an
intestate proceeding before the Regional Trial Court (RTC) of Malabon City, Branch 72, docketed as Spec. Proc. No. 192MN. She alleged, among others, that to her knowledge, her daughter died intestate leaving an estate with an estimated net
value of P1,500,000.00 and that such estate was being managed by her wastrel and incompetent son-in-law, Lorenzo, and
by two other equally incompetent persons. She prayed that letters of administration be issued to her son, Mariano Yanga,
Jr., also the brother of the deceased, and that she be awarded her share of the estate of her daughter after due hearing. [4]
However, the RTC appointed Lorenzo as administrator.

Meantime, the marriage between Crisanta Yanga-Gabriel and Lorenzo Almoradie was declared void for being
bigamous. The RTC then removed Lorenzo as administrator and appointed Mariano, Jr. in his stead.[5]

91

On October 16, 1989, one Belinda Dahlia Y. Almoradie Castillo, claiming to be the only legitimate child of Lorenzo
and Crisanta, filed a motion for intervention.[6] Resolution on this motion was, however, held in abeyance pending some
incidents in the CA.

On November 3, 1989, Roberto Y. Gabriel, the legally adopted son of Crisanta Y. Gabriel, filed before the RTC of
Malabon City a petition for probate of an alleged will and for the issuance of letters testamentary in his favor. The petition
was docketed as Spec. Proc. No. 211-MN. [7] He alleged that he discovered his mothers will on October 25, 1989 in which
he was instituted as the sole heir of the testatrix, and designated as alternate executor for the named executor therein,
Francisco S. Yanga, a brother of Crisanta, who had predeceased the latter sometime in 1985 or 1986.

On June 2, 1990, Belinda Castillo died.

The two (2) special proceedings were consolidated. On May 15, 1991, the RTC issued an Order dismissing the
intestate proceedings, Spec. Proc. No. 192-MN.[8] Mariano Yanga, Jr. questioned the dismissal of the intestate
proceedings before the appellate court via a petition for certiorari (CA-G.R. SP No. 25897).

On July 8, 1991, the probate court appointed Roberto Y. Gabriel as special administrator of his mothers estate. [9]

On May 23, 2001, the heirs of Belinda, namely, Bena Jean, Daniel, Melchor, Michael, and Danibel, all
surnamed Castillo, filed a Motion[10] praying that they be substituted as party-litigants in lieu of their late mother Belinda, who
died in 1990.

On April 16, 2001, Roberto Gabriel died. His widow, Dolores L. Gabriel, filed a Manifestation and
Motion[11] where she informed the probate court of her husbands death and prayed that she be admitted as substitute in
place of her late husband, and be appointed as administratrix of the estate of Crisanta Gabriel as well. She alleged that she
had a bachelors degree in law and had worked for several years in a law office. [12]

On August 14, 2001, the heirs of Belinda opposed Dolores manifestation and motion. They averred that Dolores
was not Crisanta Gabriels next of kin, let alone the lawful wife of the late Roberto. [13] This elicited a Reply[14] from Dolores
where she refuted these allegations.

On August 24, 2001, Bena Jean filed a Motion for Appointment as Administrator of the Estate of Crisanta Y.
Gabriel[15] praying that she be appointed administratrix of the estate of her grandmother Crisanta.

On October 11, 2001, Dolores opposed the motion of Bena Jean, claiming that the latter has neither proven her
kinship with Crisanta Gabriel nor shown any particular qualification to act as administratrix of the estate. [16]

On November 28, 1991, the CA dismissed the petition for certiorari of Mariano Yanga, Jr. in CA-G.R. SP No.
25897.

In a Resolution[17] dated December 5, 2001, the lower court appointed Dolores as special administratrix upon a
bond of P200,000.00. The probate court merely noted the motion for substitution filed by the heirs of Belinda, stating that
they were mere strangers to the case and that their cause could better be ventilated in a separate proceeding. According
to the trial court
Contrary to the assertions of Oppositors Heirs of Belinda A. Castillo, movant Dolores L. Gabriel
has amply proven her kinship with petitioner Roberto Y. Gabriel, and therefore her kinship, by operation
of law, with decedent Crisanta Y. Gabriel. In the probate proceedings, this Court has the power to
determine questions as to who are the heirs of the decedent , the recognition of a natural child , the
validity of disinheritance effected by the testator and the status of a woman who claims to be the lawful
wife of the decedent. ...

92

Guided by the foregoing precepts, this Court is of the opinion, and so holds, that movant Dolores
L. Gabriel has established her claim that she is the lawfully wedded wife of petitioner Roberto Y. Gabriel
and that the previous marriage between petitioner and one Lucita V. Cruz was already long dissolved
prior to the celebration of marriage between petitioner and movant Dolores L. Gabriels marriage in July
4, 1997.

And even assuming that movant Dolores L. Gabriels lawful relationship with petitioner, and
corollarily with the decedent, was not proven, the stringent rules regarding the order of preference in the
appointment of an Administrator does not find application in the instant case for what is at stake here
is the appointment of a Special Administrator as such position was vacated by the death of the previously
appointed Special Administrator in the person of petitioner herein. The reason for the relaxation of the
rules regarding the appointment of a Special Administrator is the nature of its position, being merely
temporary and will subsist only until a regular administrator or executor is appointed.

In view thereof, movant Dolores L. Gabriel is hereby appointed as Special Administrator of the
estate of decedent Crisanta Y. Gabriel, and upon posting of a bond in the amount of P200,000.00
pursuant to the mandate of Section 4, Rule 81 of the Rules of Court, may assume the functions and
duties of such Special Administrator.

SO ORDERED.[18]

The heirs of Belinda moved to reconsider. [19] In the meantime, Dolores took her oath of office on January 11,
2002.[20]

The probate court denied the motion for reconsideration filed by Belindas heirs in its Order [21] dated March 19, 2002.
The said heirs then filed with the CA a petition for certiorari with prayer for a temporary restraining order or/and preliminary
injunction against Dolores and the probate court. The case was docketed as CA-G.R. SP No. 70645. They prayed, among
others, that Bena Jean be appointed as the regular administratrix of Crisanta Gabriels estate, thus

WHEREFORE, premises considered, petitioners most respectfully pray that:

1. Upon filing of this petition and in order not to prejudice the rights of petitioners, a
temporary restraining order and/or writ of preliminary injunction be issued against respondent
Dolores L. Gabriel enjoining her to cease and desist from acting as special administratrix of the
estate of Crisanta Y. Gabriel;

2. After hearing and consideration, a writ of preliminary injunction be issued against

respondent Dolores L. Gabriel to cease and desist from acting as special administratrix of Crisanta
Y. Gabriel until further order from this Honorable Court;

3. An Order be issued nullifying and setting aside the assailed Orders dated December 5,
2001 and March 19, 2002 both issued by the respondent Judge for having been rendered with
grave abuse of discretion amounting to lack of jurisdiction and for this Honorable Court to issue a
new one by appointing petitioner Bena Jean A. Castillo as regular administratrix of the estate of
Crisanta Y. Gabriel.

Petitioner likewise prays for such other just, fair and equitable relief under the premises. [22]

93

On October 30, 2003, the appellate court dismissed the petition in CA-G.R. SP No. 70645. It ruled that the probate
court did not commit grave abuse of discretion in appointing Dolores as special administratrix.[23]

The heirs of Belinda Dahlia Castillo, now the petitioners, filed the instant petition for review on certiorari against
Dolores Lacuata-Gabriel, assigning the following errors

WITH DUE RESPECT, THE DECISION DATED OCTOBER 30, 2003 RENDERED BY THE
HONORABLE COURT OF APPEALS IS BASED ON A MISAPPREHENSION OF FACTS.

WITH DUE RESPECT, THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT PRIVATE
RESPONDENT DOLORES LACUATA-GABRIEL IS ENTITLED TO THE ADMINISTRATION OF THE
ESTATE OF CRISANTA Y. GABRIEL, SHE BEING THE HEIR OF HER DECEASED HUSBAND
WHOSE ESTATE IS THE FORMER ESTATE OF HIS ADOPTING MOTHER CRISANTA AS THE SAME
IS CONTRARY TO THE LAW ON SUCCESSION.

THE APPOINTMENT OF PRIVATE RESPONDENT DOLORES LACUATA-GABRIEL IS CONTRARY TO

THE RULING LAID DOWN BY THIS HONORABLE COURT IN THE CASE OF GONZALEZ VS. GUIDO,
190 SCRA 112.

THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT IT IS SECTION 1, RULE 80 AND
NOT SECTION 6, RULE 78 OF THE RULES OF COURT WHICH IS APPLICABLE IN THIS CASE.[24]

The assigned errors in this case boil down to the propriety of the appointment of respondent as special
administratrix of the estate left by Crisanta Yanga-Gabriel.

The petitioners argue that since the respondent does not have any right to inherit from their grandmother, either by
her own right or by the right of representation, she is not qualified to be appointed as administratrix of the estate; in contrast,
they are Crisanta Gabriels only compulsory heirs. They insist that the respondents late husband, Roberto, was just a
nephew of the decedent and not a legally adopted son as he claimed to be. Even assuming this claim was true, the fact
that the respondent is not naturally related to the decedent by blood in the direct descending line makes it unfair to appoint
her as the special administratrix. Citing jurisprudence, the petitioners explain that the principal consideration in the
appointment of administrator of a deceased persons estate is the applicants interest therein. This is the same consideration
which Section 6,[25] Rule 78 of the Rules of Court takes into account in establishing the order of preference in the
appointment of such administrators. The underlying assumption behind this rule, the petitioners insist, is that those who will
reap the benefit of a wise, speedy, economical administration of the estate, or suffer the consequences of waste,
improvidence or mismanagement, have the highest interest and most influential motive to administer the estate correctly.

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Lastly, the petitioners posit that since CA-G.R. SP No. 25897 had long been dismissed by the CA, a regular administrator of
the said estate should now be appointed.

The petition is without merit.

In ruling against the petitioners and dismissing their petition, the CA ratiocinated as follows:

The appointment of a special administrator lies entirely in the discretion of the court. The order
of preference in the appointment of a regular administrator under Section 6, Rule 78 of the Rules of Court
does not apply to the selection of a special administrator. In the issuance of such appointment, which is
but temporary and subsists only until a regular administrator is appointed, the court determines who is
entitled to the administration of the estate of the decedent. On this point, We hold that the preference of
private respondent Dolores Gabriel is with sufficient reason.

The facts of this case show that Roberto Gabriel the legally adopted son of Crisanta YangaGabriel survived Crisantas death. When Crisanta died on January 25, 1989, her estate passed on to
her surviving adopted son Roberto. When Roberto himself later died on April 16, 2001, pursuant to the
law on succession, his own estate which he inherited from Crisanta passed on to his surviving widow,
private respondent.

While it is true, as petitioners submit, that private respondent is neither a compulsory nor a legal
heir of Crisanta Yanga-Gabriel and is considered a third person to the estate of Crisanta, nonetheless,
private respondent is undeniably entitled to the administration of the said estate because she is an heir of
her husband Roberto, whose estate is the former estate of his adopting mother Crisanta.[26]

The ruling of the CA is correct. The Court has repeatedly held that the appointment of a special administrator lies
in the sound discretion of the probate court.[27] A special administrator is a representative of a decedent appointed by the
probate court to care for and preserve his estate until an executor or general administrator is appointed.[28] When appointed,
a special administrator is regarded not as a representative of the agent of the parties suggesting the appointment, but as the
administrator in charge of the estate, and, in fact, as an officer of the court. [29] As such officer, he is subject to the
supervision and control of the probate court and is expected to work for the best interests of the entire estate, especially its
smooth administration and earliest settlement. [30] The principal object of appointment of temporary administrator is to
preserve the estate until it can pass into hands of person fully authorized to administer it for the benefit of creditors and
heirs.[31] In many instances, the appointment of administrators for the estates of decedents frequently become involved in
protracted litigations, thereby exposing such estates to great waste and losses unless an authorized agent to collect the
debts and preserve the assets in the interim is appointed. The occasion for such an appointment, likewise, arises where, for
some cause, such as a pendency of a suit concerning the proof of the will, regular administration is delayed.[32]

Section 1, Rule 80 of the Revised Rules of Court provides:

Section 1. Appointment of Special Administrator. When there is delay in granting letters

testamentary or of administration by any cause including an appeal from the allowance or disallowance of
a will, the court may appoint a special administrator to take possession and charge of the estate of the
deceased until the questions causing the delay are decided and executors or administrators appointed.

The new Rules have broadened the basis for the appointment of an administrator, and such appointment is allowed when
there is delay in granting letters testamentary or administration by any cause, e.g., parties cannot agree among themselves.
Nevertheless, the discretion to appoint a special administrator or not lies in the probate court. [33] In De Guzman v. Guadiz,
Jr.,[34] the Court further elucidated

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Under the above rule, the probate court may appoint a special administrator should there be a
delay in granting letters testamentary or of administration occasioned by any cause including an appeal
from the allowance or disallowance of a will. Subject to this qualification, the appointment of a special
administrator lies in the discretion of the Court. This discretion, however, must be sound, that is, not
whimsical, or contrary to reason, justice, equity or legal principle.

The basis for appointing a special administrator under the Rules is broad enough to include any
cause or reason for the delay in granting letters testamentary or of administration as where a contest as
to the will is being carried on in the same or in another court, or where there is an appeal pending as to
the proceeding on the removal of an executor or administrator, or in cases where the parties cannot
agree among themselves. Likewise, when from any cause general administration cannot be immediately
granted, a special administrator may be appointed to collect and preserve the property of the deceased.

It is obvious that the phrase by any cause includes those incidents which transpired in the
instant case clearly showing that there is a delay in the probate of the will and that the granting of letters
testamentary will consequently be prolonged necessitating the immediate appointment of a special
administrator.[35]

As enunciated above, the probate court has ample jurisdiction to appoint respondent as special administratrix. The
deceased Crisanta Yanga-Gabriel left a document purporting to be her will where her adopted son, Roberto, was named as
the sole heir of all her properties. However, pending probate of the will, Roberto died leaving his widow, the respondent
herein, as his sole heir. Thus, the respondent has much stake in Crisantas estate in case the latters will is allowed probate.
It needs to be emphasized that in the appointment of a special administrator (which is but temporary and subsists only until
a regular administrator is appointed), the probate court does not determine the shares in the decedents estate, but merely
appoints who is entitled to administer the estate. The issue of heirship is one to be determined in the decree of distribution,
and the findings of the court on the relationship of the parties in the administration as to be the basis of distribution. [36] Thus,
the preference of respondent is sound, that is, not whimsical, or contrary to reason, justice, equity or legal principle.

The petitioners strenuous invocation of Section 6, Rule 78 of the Rules of Court is misplaced. The rule refers to
the appointment of regular administrators of estates; Section 1, Rule 80, on the other hand, applies to the appointment of a
special administrator. It has long been settled that the appointment of special administrators is not governed by the rules
regarding the appointment of regular administrators.[37] Thus, in Roxas v. Pecson,[38] this Court ruled:
It is well settled that the statutory provisions as to the prior or preferred right of certain persons
to the appointment of administrator under Section 1, Rule 81, as well as the statutory provisions as to
causes for removal of an executor or administrator under section 653 of Act No. 190, now Section 2, Rule
83, do not apply to the selection or removal of special administrator. ... As the law does not say who shall
be appointed as special administrator and the qualifications the appointee must have, the judge or court
has discretion in the selection of the person to be appointed, discretion which must be sound, that is, not
whimsical or contrary to reason, justice or equity.

On the plea of the petitioners for this Court to appoint their co-petitioner, Bena Jean Castillo, as the regular
administratrix of the estate of Crisanta Yanga-Gabriel, the matter should be addressed to the probate court for its
consideration. It is not for this Court to preempt the discretion of the probate court and appoint a regular administrator in the
present action.

WHEREFORE, the petition is hereby DENIED. The Decision of the Court of Appeals in CA-G.R. SP No. 70645,
dated October 30, 2003, and its Resolution of March 26, 2004 are AFFIRMED. Costs against the petitioners.

SO ORDERED.

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