Sebial v.

Sebial Digest

G.R. No. L-23419

Facts of the Case:

Gelacio Sebial died in 1943, he had 3 children with this 1st wife Reoncia (Roberta's mother) and 6 other
children with his 2nd wife Dolores, (Benjamina's mother). In 1960, BEjamina filed for the settlement of her
father's estate and her appointment as administrator. Thisd petition was oppsed by Roberta on the ground that
said estate had already been apportioned and that she should be the one appointed as administrator and not
Benjamina. The Court appointed Benjamina and found that alleged partition was invalid and ineffective. So the
letters of administration were issued and a notice to the creditors was issue don the same date. The oppositors
motion for reconsideration was denied. For the possibility of an amicale settlement, the court ordered both sides
to give a complete list of the porperties of te decedent with segregation for each marriage.
On Nov. 1961, the lower court approved the administrator's inventory (second one) or six months from the
appointment. Roberta them moved for the motion reocnsideration alleging as ground that the court has no
jusridiction to approve the inventory as it was files beyiind the 3-month period. The Court of Appeals certified
the case to the Supreme Court.
Issue: Did the court lose jurisdiction to approve the inventory which was made 6 months after the
appointment?
Ruling. NO. Under section 1 of Rule 83 of the Rules of Court, the prescribed three-month period is not
mandatory. Once a petition for the issuance of letters of administration is filed with the proper court and the
publication of the notice of hearing is complied with, said court acquires jurisdiction over the estate and retains
such until the probate proceedings is closed. Hence, even if the inventory was filed only after the three-month
period, this delay will not deprive the probate court of its jurisdiction to approve it. However, under section 2 of
Rule 82 of the Rules of Court, such unexplained delay can be a ground for an administrator's removal.

Delfin Tan v. Erlinda Benolirao, et. al.

G.R. №. 153820 , October 16, 2009; Brion, J.

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Facts: A 689 sq.m. parcel of land in Tagaytay City with TCT №. 26432, co-owned by respondent spouses Lamberto
and Erlinda Benolirao and spouses Reynaldo and Norma Taningco, was the subject of a Deed of Conditional Sale in
favor of petitioner Delfin Tan for P 1,378,000. Pursuant to the deed, petitioner paid the P 200,000 downpayment.
Then, Lamberto Benolirao died and an extrajudicial settlement of his estate was executed which caused the
issuance of a new certificate of title over the property (TCT №. 27355) with a corresponding annotation in
accordance with Section 4, Rule 74 of the Rules of Court. Despite a second extension, petitioner failed to comply
with his obligation to pay the remaining balance due. In response to the demand letter subsequently sent by the
vendors, petitioner demanded the return of his downpayment, contending that the annotation on the title was an
encumberance on the property that would prevent the vendors from delivering a clear title to him. When the
vendors refused, petitioner filed a complaint for specific performance and caused the annotation of a notice of lis
pendens on the title. Respondents filed a motion for cancellation of the notice of lis pendens and was granted. The
lower court, after due proceedings, ruled that the forfeiture was proper while the Court of Appeals affirmed in
toto hence, the present petition.

Issue: WON an annotation made pursuant to Section 3, Rule 74 of the ROC on a COT conveying real property
considered an encumberance on the property?

Held: Court ruled in the affirmative. The litigation subject of a notice of lis pendens must directly involve a specific
property which is necessarily affected by the judgment. While the deed does have real property for its object,
petitioner’s complaint is an in personam action since it asks the court to compel the respondent to do something
— either to rescind or reform the contract — and enforces his personal rights against the respondent, not against
the property subject of the deed.

The contract between the parties was merely a contract to sell where the vendor retained title and ownership to
the property until petitioner has fully paid the purchase price. Since he had no claim of ownership or title yet, he
had no right to ask for the annotation of a lis pendens notice on the title of the property.

Jurisprudence has established that where the seller promises to execute a deed of absolute sale upon the
completion by the buyer of the payment of the price, contract is only a contract to sell.

An annotation is placed on new certificates of title issued pursuant to the distribution and partition of a
decedent’s real properties to warn third persons on the possible interests of excluded heirs or unpaid creditors in
these properties. The annotation, therefore, creates a legal encumbrance or lien on the real property in
favor of the excluded heirs or creditors. Where a buyer purchases the real property despite the
annotation, he must be ready for the possibility that the title could be subject to the rights of excluded
parties.

The remedy of rescission under Art. 1191 cannot apply to mere contracts to sell. In a contract to sell, the vendor
remains the owner for as long as the vendee has not complied fully with the condition of paying the purchase
price. If the vendor should eject vendee for failure to meet the condition precedent, he is enforcing the contract
and not rescinding it. (Termination is the proper remedy.)

Unless time is of the essence to the contract, slight delay is not a ground for rescission.

Pedrosa vs. CA (GR: 118680)

Section 4, Rule 74 provides for a two year prescriptive period (1) to persons who have participated or taken part

or had notice of the extrajudicial partition, and in addition (2) when the provisions of Section 1 of Rule 74 have

been strictly complied with, i.e., that all the persons or heirs of the decedent have taken part in the extrajudicial

settlement or are represented by themselves or through guardians.

Petitioner, as the records confirm, did not participate in the extrajudicial partition. Patently then, the two-year

prescriptive period is not applicable in her case.

The applicable prescriptive period here is four (4) years as provided in Gerona vs. De Guzman, 11 SCRA 153

(1964), which held that:

The action to annul] a deed of extrajudicial settlement upon the ground of fraud…may be filed within four

years from the discovery of the fraud. Such discovery is deemed to have taken place when said instrument was

filed with the Register of Deeds and new certificates of title were issued in the name of respondents exclusively.

Sps. Arenas vs. Roces (GR: 147468)

As stated above, the titles, namely, TCT Nos. 7299 and 7673, contained annotations which made reference to the

provisions of Rule 74, Section 4 of the Rules of Court, viz:

SEC. 4. Liability of distributees and estate. If it shall appear at any time within two (2) years after the settlement

and distribution of an estate in accordance with the provisions of either of the first two sections of this rule, that

an heir or other person has been unduly deprived of his lawful participation in the estate, such heir or such

other person may compel the settlement of the estate in the courts in the manner hereinafter provided for the

purpose of satisfying such lawful participation. And if within the same time of two (2) years, it shall appear that

there are debts outstanding against the estate which have not been paid, or that an heir or other person has

been unduly deprived of his lawful participation payable in money, the court having jurisdiction of the estate

may, by order for that purpose, after hearing, settle the amount of such debts or lawful participation and order

how much and in what manner each distributee shall contribute in the payment thereof, and may issue

execution, if circumstances require, against the bond provided in the preceding section or against the real estate

belonging to the deceased, or both. Such bond and such real estate shall remain charged with a liability to

creditors, heirs, or other persons for the full period of two (2) years after such distribution, notwithstanding any

transfers of real estate that may have been made.

The foregoing rule clearly covers transfers of real property to anyperson, as long as the deprived heir or creditor

vindicates his rights within two years from the date of the settlement and distribution of estate. Contrary to

petitioners contention, the effects of this provision are not limited to the heirs or original distributees of the

estate properties, but shall affect any transferee of the properties.

In David vs. Malay, it was held that the buyer of real property the title of which contain an annotation pursuant

to Rule 74, Section 4 of the Rules of Court cannot be considered innocent purchasers for value. In the same vein,

the annotation at the back of TCT No. 7299 in this case referring to Rule 74, Section 4 of the Rules of Court was

sufficient notice to petitioners of the limitation on Montinolas right to dispose of the property. The presence of

an irregularity which excites or arouses suspicion should prompt the vendee to look beyond the certificate and

investigate the title of the vendor appearing on the face thereof. Purchasers of registered land are bound by the

annotations found at the back of the certificate of title.

Hence, petitioners cannot be considered buyers in good faith and cannot now avoid the consequences brought

about by the application of Rule 74, Section 4 of the Rules of Court.

PEZA vs. Hon. Fernandez (GR: 138971)

In the present case, private respondents are deemed to have been constructively notified of the extrajudicial

settlement by reason of its registration and annotation in the certificate of title over the subject lot. From the

time of registration, private respondents had two (2) years or until July 8, 1984, within which to file their

objections or to demand the appropriate settlement of the estate.

On the matter of constructive notice vis–vis prescription of an action to contest an extrajudicial partition, a

leading authority on land registration elucidates as follows:

While it may be true that an extrajudicial partition is an ex parte proceeding, yet after its registration

under the Torrens system and the annotation on the new certificate of title of the contingent liability of the

estate for a period of two years as prescribed in Rule 74, Section 4, of the Rules of Court, by operation of law a

constructive notice is deemed made to all the world, so that upon the expiration of said period all third

persons should be barred [from going] after the particular property, except where title thereto still remains

in the names of the alleged heirs who executed the partition tainted with fraud, or their transferees who may not

qualify as innocent purchasers for value.

The only exception to the above-mentioned prescription is when the title remains in the hands of the heirs who

have fraudulently caused the partition of the subject property or in those of their transferees who cannot be

considered innocent purchasers for value.

In this regard, title to the property in the present case was no longer in the name of the allegedly fraudulent

heirs, but already in that of an innocent purchaser for value the government. Moreover, the government is

presumed to have acted in good faith in the acquisition of the lot, considering that title thereto was obtained

through a Compromise Agreement judicially approved in proper expropriation proceedings.

Even assuming that there was in fact fraud on the part of the other heirs, private respondents may proceed only

against the defrauding heirs, not against petitioner which had no participation in or knowledge of the alleged

fraud. The fact that the co-heirs title to the property was fraudulently secured cannot prejudice the rights of

petitioner which, absent any showing that it had knowledge or participation in the irregularity, is considered a

purchaser in good faith and for value.

The remedy of an owner alleged to have been prejudiced or fraudulently deprived of property that was

subsequently sold to an innocent purchaser for value is an action for damages against the person or persons

who perpetrated the fraud.

Cua vs. Vargas (GR: 156536)

J. Azcuna:

The procedure outlined in Section 1 of Rule 74 is an ex parteproceeding. The rule plainly states, however, that

persons who do not participate or had no notice of an extrajudicial settlement will not be bound thereby. It

contemplates a notice that has been sent out or issued before any deed of settlement and/or partition is agreed

upon (i.e., a notice calling all interested parties to participate in the said deed of extrajudicial settlement and

partition), and not after such an agreement has already been executed as what happened in the instant case with

the publication of the first deed of extrajudicial settlement among heirs.

The publication of the settlement does not constitute constructive notice to the heirs who had no knowledge or

did not take part in it because the same was notice after the fact of execution. The requirement of publication is

geared for the protection of creditors and was never intended to deprive heirs of their lawful participation in the

decedents estate. In this connection, the records of the present case confirm that respondents never signed

either of the settlement documents, having discovered their existence only shortly before the filing of the

present complaint. Following Rule 74, these extrajudicial settlements do not bind respondents, and the partition

made without their knowledge and consent is invalid insofar as they are concerned.

PHILIPPINE ECONOMIC ZONE AUTHORITY (PEZA) V. FERNANDEZ

FACTS:

Lot 4673 was registered in the names of Florentina Rapaya, Victorino Cuizon among others covered by an OCT.

Sometime thereafter, Jorgea Igot-Soro ño et al executed an Extra-judicial Partition claiming to be the only

surviving heirs of the registered owners, through which they were issued a TCT.

Said lot was among the object of an expropriation proceeding before the RTC. Said RTC approved the

compromise Agreement b/w the Export Processing Zone Authority (EPZA) and Igot-Soroño et al wherein EPZA

would pay a certain amount in exchange for the subject property.

EPZA acquired title to said land by virtue of the RTC decision and was issued a corresponding TCT.

The Heirs of the Florentina Rapaya and Juan Cuizon filed a complaint to nullify several documents including the

TCT issued to EPZA for they were excluded from the extrajudicial settlement of the estate.

EPZA filed a motion to dismiss on the ground of prescription and was denied thus elevated the case to the CA

wherein the CA ruled that the heirs of Igot-Soroño defrauded the other heirs by falsely representing that they

were the only heirs enabling them to appropriate the land in favor of EPZA. This method of acquiring property

created a constructive trust in favor of the defrauded party and grants them the right to vindicate regardless of

the lapse of time. Thus, the case at bar.

ISSUE/S:
1) Whether or not private respondent’s claim over the expropriated land has prescribed

2) Whether or not reconveyance lies against expropriated property

HELD:

1) YES. As provided in the Rules of Court, persons unduly deprived of their lawful participation in a settlement

may assert their claim only w/in the 2-year period after the settlement and distribution of the estate. However,

this prescriptive period will not apply to those who had not been notified of the settlement.

The Private respondents are deemed to have been notified of the extrajudicial settlement since it was registered

and annotated on the certificate of title over the lot.

The only exception to this rule is when the title still remains in the hands of the heirs who have fraudulently

caused the partition of the said property. In the case at bar, the title has already passed to an innocent purchaser

for value, the gov’t through EPZA.

Their remedies of action for reconveyance resulting from fraud, and action for reconveyance based on an

implied constructive trust has already prescribed as well the former having prescribed 4 years from the

discovery and the latter prescribing 10 years from the alleged fraudulent registration.

2) NO. Reconveyance is a remedy for those whose property has been wrongfully or erroneously registered in

another’s name. However, this cannot be availed once the property has passed to an innocent purchaser for

value. Since the property has already passed to the gov’t in an expropriation proceeding, EPZA is entitled to

enjoy the security afforded innocent 3rd persons and their title to the property must be preserved.

However, the private respondents are not w/o remedy. They can sue for damages their co-heirs.