G.R. No.
192413 June 13, 2012 Sometime in 1990, a certain Teresita Millan ("Millan"), through her representative,
Rizal Commercial Banking Corporation, Petitioner,
vs.
Hi-Tri Development Corporation and Luz R. Bakunawa, Respondents.
DECISION
SERENO, J.:
Before the Court is a Rule 45 Petition for Review on Certiorari filed by petitioner
Rizal Commercial Banking Corporation (RCBC) against respondents Hi-Tri
Development Corporation (Hi-Tri) and Luz R. Bakunawa (Bakunawa). Petitioner
seeks to appeal from the 26 November 2009 Decision and 27 May 2010 Resolution of
the Court of Appeals (CA),1 which reversed and set aside the 19 May 2008 Decision
and 3 November 2008 Order of the Makati City Regional Trial Court (RTC) in Civil
Case No. 06-244.2 The case before the RTC involved the Complaint for Escheat filed
by the Republic of the Philippines (Republic) pursuant to Act No. 3936, as amended
by Presidential Decree No. 679 (P.D. 679), against certain deposits, credits, and
unclaimed balances held by the branches of various banks in the Philippines. The trial
court declared the amounts, subject of the special proceedings, escheated to the
Republic and ordered them deposited with the Treasurer of the Philippines
(Treasurer) and credited in favor of the Republic.3 The assailed RTC judgments
included an unclaimed balance in the amount of ₱ 1,019,514.29, maintained by
RCBC in its Ermita Business Center branch.
We quote the narration of facts of the CA4 as follows:
x x x Luz [R.] Bakunawa and her husband Manuel, now deceased ("Spouses
Bakunawa") are registered owners of six (6) parcels of land covered by TCT Nos.
324985 and 324986 of the Quezon City Register of Deeds, and TCT Nos. 103724,
98827, 98828 and 98829 of the Marikina Register of Deeds. These lots were
sequestered by the Presidential Commission on Good Government [(PCGG)].
Jerry Montemayor, offered to buy said lots for "₱ 6,724,085.71", with the promise
that she will take care of clearing whatever preliminary obstacles there may[]be to
effect a "completion of the sale". The Spouses Bakunawa gave to Millan the Owner’s
Copies of said TCTs and in turn, Millan made a down[]payment of "₱ 1,019,514.29"
for the intended purchase. However, for one reason or another, Millan was not able to
clear said obstacles. As a result, the Spouses Bakunawa rescinded the sale and offered
to return to Millan her down[]payment of ₱ 1,019,514.29. However, Millan refused to
accept back the ₱ 1,019,514.29 down[]payment. Consequently, the Spouses
Bakunawa, through their company, the Hi-Tri Development Corporation ("Hi-Tri")
took out on October 28, 1991, a Manager’s Check from RCBC-Ermita in the amount
of ₱ 1,019,514.29, payable to Millan’s company Rosmil Realty and Development
Corporation ("Rosmil") c/o Teresita Millan and used this as one of their basis for a
complaint against Millan and Montemayor which they filed with the Regional Trial
Court of Quezon City, Branch 99, docketed as Civil Case No. Q-91-10719 [in 1991],
praying that:
1. That the defendants Teresita Mil[l]an and Jerry Montemayor may be
ordered to return to plaintiffs spouses the Owners’ Copies of Transfer
Certificates of Title Nos. 324985, 324986, 103724, 98827, 98828 and 98829;
2. That the defendant Teresita Mil[l]an be correspondingly ordered to receive
the amount of One Million Nineteen Thousand Five Hundred Fourteen Pesos
and Twenty Nine Centavos (₱ 1,019,514.29);
3. That the defendants be ordered to pay to plaintiffs spouses moral damages
in the amount of ₱ 2,000,000.00; and
4. That the defendants be ordered to pay plaintiffs attorney’s fees in the
amount of ₱ 50,000.00.
Being part and parcel of said complaint, and consistent with their prayer in Civil Case
No. Q-91-10719 that "Teresita Mil[l]an be correspondingly ordered to receive the
amount of One Million Nineteen Thousand Five Hundred Fourteen Pesos and Twenty
Nine [Centavos] ("₱ 1,019,514.29")["], the Spouses Bakunawa, upon advice of their
counsel, retained custody of RCBC Manager’s Check No. ER 034469 and refrained
from canceling or negotiating it.
All throughout the proceedings in Civil Case No. Q-91-10719, especially during
negotiations for a possible settlement of the case, Millan was informed that the
Manager’s Check was available for her withdrawal, she being the payee.
On January 31, 2003, during the pendency of the abovementioned case and without
the knowledge of [Hi-Tri and Spouses Bakunawa], x x x RCBC reported the "₱
1,019,514.29-credit existing in favor of Rosmil" to the Bureau of Treasury as among
its "unclaimed balances" as of January 31, 2003. Allegedly, a copy of the Sworn
Statement executed by Florentino N. Mendoza, Manager and Head of RCBC’s Asset
Management, Disbursement & Sundry Department ("AMDSD") was posted within
the premises of RCBC-Ermita.
On December 14, 2006, x x x Republic, through the [Office of the Solicitor General
(OSG)], filed with the RTC the action below for Escheat [(Civil Case No. 06-244)].
On April 30, 2008, [Spouses Bakunawa] settled amicably their dispute with Rosmil
and Millan. Instead of only the amount of "₱ 1,019,514.29", [Spouses Bakunawa]
agreed to pay Rosmil and Millan the amount of "₱ 3,000,000.00", [which is] inclusive
[of] the amount of ["]₱ 1,019,514.29". But during negotiations and evidently prior to
said settlement, [Manuel Bakunawa, through Hi-Tri] inquired from RCBC-Ermita the
availability of the ₱ 1,019,514.29 under RCBC Manager’s Check No. ER 034469.
[Hi-Tri and Spouses Bakunawa] were however dismayed when they were informed
that the amount was already subject of the escheat proceedings before the RTC.
On April 17, 2008, [Manuel Bakunawa, through Hi-Tri] wrote x x x RCBC, viz:
"We understand that the deposit corresponding to the amount of Php 1,019,514.29
stated in the Manager’s Check is currently the subject of escheat proceedings pending
before Branch 150 of the Makati Regional Trial Court.
Please note that it was our impression that the deposit would be taken from [Hi-Tri’s]
RCBC bank account once an order to debit is issued upon the payee’s presentation of
the Manager’s Check. Since the payee rejected the negotiated Manager’s Check,
presentation of the Manager’s Check was never made.
Consequently, the deposit that was supposed to be allocated for the payment of the
Manager’s Check was supposed to remain part of the Corporation[’s] RCBC bank
account, which, thereafter, continued to be actively maintained and operated. For this
reason, We hereby demand your confirmation that the amount of Php 1,019,514.29
continues to form part of the funds in the Corporation’s RCBC bank account, since
pay-out of said amount was never ordered. We wish to point out that if there was any
attempt on the part of RCBC to consider the amount indicated in the Manager’s
Check separate from the Corporation’s bank account, RCBC would have issued a
statement to that effect, and repeatedly reminded the Corporation that the deposit
would be considered dormant absent any fund movement. Since the Corporation
never received any statements of account from RCBC to that effect, and more
importantly, never received any single letter from RCBC noting the absence of fund
movement and advising the Corporation that the deposit would be treated as
dormant."
On April 28, 2008, [Manuel Bakunawa] sent another letter to x x x RCBC reiterating
their position as above-quoted.
In a letter dated May 19, 2008, x x x RCBC replied and informed [Hi-Tri and Spouses
Bakunawa] that:
"The Bank’s Ermita BC informed Hi-Tri and/or its principals regarding the inclusion
of Manager’s Check No. ER034469 in the escheat proceedings docketed as Civil
Case No. 06-244, as well as the status thereof, between 28 January 2008 and 1
February 2008.
xxx xxx xxx
Contrary to what Hi-Tri hopes for, the funds covered by the Manager’s Check No.
ER034469 does not form part of the Bank’s own account. By simple operation of law,
the funds covered by the manager’s check in issue became a deposit/credit susceptible
for inclusion in the escheat case initiated by the OSG and/or Bureau of Treasury.
xxx xxx xxx
Granting arguendo that the Bank was duty-bound to make good the check, the Bank’s
obligation to do so prescribed as early as October 2001."
(Emphases, citations, and annotations were omitted.)
The RTC Ruling
The escheat proceedings before the Makati City RTC continued. On 19 May 2008,
the trial court rendered its assailed Decision declaring the deposits, credits, and
unclaimed balances subject of Civil Case No. 06-244 escheated to the Republic.
Among those included in the order of forfeiture was the amount of ₱ 1,019,514.29
held by RCBC as allocated funds intended for the payment of the Manager’s Check
issued in favor of Rosmil. The trial court ordered the deposit of the escheated
balances with the Treasurer and credited in favor of the Republic. Respondents claim
that they were not able to participate in the trial, as they were not informed of the
ongoing escheat proceedings.
Consequently, respondents filed an Omnibus Motion dated 11 June 2008, seeking the
partial reconsideration of the RTC Decision insofar as it escheated the fund allocated
for the payment of the Manager’s Check. They asked that they be included as party-
defendants or, in the alternative, allowed to intervene in the case and their motion
considered as an answer-in-intervention. Respondents argued that they had
meritorious grounds to ask reconsideration of the Decision or, alternatively, to seek
intervention in the case. They alleged that the deposit was subject of an ongoing
dispute (Civil Case No. Q-91-10719) between them and Rosmil since 1991, and that
they were interested parties to that case.5
On 3 November 2008, the RTC issued an Order denying the motion of respondents.
The trial court explained that the Republic had proven compliance with the
requirements of publication and notice, which served as notice to all those who may
be affected and prejudiced by the Complaint for Escheat. The RTC also found that the
motion failed to point out the findings and conclusions that were not supported by the
law or the evidence presented, as required by Rule 37 of the Rules of Court. Finally, it
ruled that the alternative prayer to intervene was filed out of time.
The CA Ruling
On 26 November 2009, the CA issued its assailed Decision reversing the 19 May
2008 Decision and 3 November 2008 Order of the RTC. According to the appellate
court,6 RCBC failed to prove that the latter had communicated with the purchaser of
the Manager’s Check (Hi-Tri and/or Spouses Bakunawa) or the designated payee
(Rosmil) immediately before the bank filed its Sworn Statement on the dormant
accounts held therein. The CA ruled that the bank’s failure to notify respondents
deprived them of an opportunity to intervene in the escheat proceedings and to
present evidence to substantiate their claim, in violation of their right to due process.
Furthermore, the CA pronounced that the Makati City RTC Clerk of Court failed to
issue individual notices directed to all persons claiming interest in the unclaimed
balances, as well as to require them to appear after publication and show cause why
the unclaimed balances should not be deposited with the Treasurer of the Philippines.
It explained that the jurisdictional requirement of individual notice by personal
service was distinct from the requirement of notice by publication. Consequently, the
CA held that the Decision and Order of the RTC were void for want of jurisdiction.
Issue
After a perusal of the arguments presented by the parties, we cull the main issues as
follows:
I. Whether the Decision and Order of the RTC were void for failure to send
separate notices to respondents by personal service
II. Whether petitioner had the obligation to notify respondents immediately
before it filed its Sworn Statement with the Treasurer
III. Whether or not the allocated funds may be escheated in favor of the
Republic
Discussion
Petitioner bank assails7 the CA judgments insofar as they ruled that notice by
personal service upon respondents is a jurisdictional requirement in escheat
proceedings. Petitioner contends that respondents were not the owners of the
unclaimed balances and were thus not entitled to notice from the RTC Clerk of Court.
It hinges its claim on the theory that the funds represented by the Manager’s Check
were deemed transferred to the credit of the payee or holder upon its issuance.
We quote the pertinent provision of Act No. 3936, as amended, on the rule on service
of processes, to wit:
Sec. 3. Whenever the Solicitor General shall be informed of such unclaimed balances,
he shall commence an action or actions in the name of the People of the Republic of
the Philippines in the Court of First Instance of the province or city where the bank,
building and loan association or trust corporation is located, in which shall be joined
as parties the bank, building and loan association or trust corporation and all such
creditors or depositors. All or any of such creditors or depositors or banks, building
and loan association or trust corporations may be included in one action. Service of
process in such action or actions shall be made by delivery of a copy of the complaint
and summons to the president, cashier, or managing officer of each defendant bank,
building and loan association or trust corporation and by publication of a copy of such
summons in a newspaper of general circulation, either in English, in Filipino, or in a
local dialect, published in the locality where the bank, building and loan association
or trust corporation is situated, if there be any, and in case there is none, in the City of
Manila, at such time as the court may order. Upon the trial, the court must hear all
parties who have appeared therein, and if it be determined that such unclaimed
balances in any defendant bank, building and loan association or trust corporation are
unclaimed as hereinbefore stated, then the court shall render judgment in favor of the
Government of the Republic of the Philippines, declaring that said unclaimed
balances have escheated to the Government of the Republic of the Philippines and
commanding said bank, building and loan association or trust corporation to forthwith
deposit the same with the Treasurer of the Philippines to credit of the Government of
the Republic of the Philippines to be used as the National Assembly may direct.
At the time of issuing summons in the action above provided for, the clerk of court
shall also issue a notice signed by him, giving the title and number of said action, and
referring to the complaint therein, and directed to all persons, other than those named
as defendants therein, claiming any interest in any unclaimed balance mentioned in
said complaint, and requiring them to appear within sixty days after the publication or
first publication, if there are several, of such summons, and show cause, if they have
any, why the unclaimed balances involved in said action should not be deposited with
the Treasurer of the Philippines as in this Act provided and notifying them that if they
do not appear and show cause, the Government of the Republic of the Philippines will
apply to the court for the relief demanded in the complaint. A copy of said notice
shall be attached to, and published with the copy of, said summons required to be
published as above, and at the end of the copy of such notice so published, there shall
be a statement of the date of publication, or first publication, if there are several, of
said summons and notice. Any person interested may appear in said action and
become a party thereto. Upon the publication or the completion of the publication, if
there are several, of the summons and notice, and the service of the summons on the
defendant banks, building and loan associations or trust corporations, the court shall
have full and complete jurisdiction in the Republic of the Philippines over the said
unclaimed balances and over the persons having or claiming any interest in the said
unclaimed balances, or any of them, and shall have full and complete jurisdiction to
hear and determine the issues herein, and render the appropriate judgment thereon.
(Emphasis supplied.)
Hence, insofar as banks are concerned, service of processes is made by delivery of a
copy of the complaint and summons upon the president, cashier, or managing officer
of the defendant bank.8 On the other hand, as to depositors or other claimants of the
unclaimed balances, service is made by publication of a copy of the summons in a
newspaper of general circulation in the locality where the institution is situated.9 A
notice about the forthcoming escheat proceedings must also be issued and published,
directing and requiring all persons who may claim any interest in the unclaimed
balances to appear before the court and show cause why the dormant accounts should
not be deposited with the Treasurer.
Accordingly, the CA committed reversible error when it ruled that the issuance of
individual notices upon respondents was a jurisdictional requirement, and that failure
to effect personal service on them rendered the Decision and the Order of the RTC
void for want of jurisdiction. Escheat proceedings are actions in rem,10 whereby an
action is brought against the thing itself instead of the person.11 Thus, an action may
be instituted and carried to judgment without personal service upon the depositors or
other claimants.12 Jurisdiction is secured by the power of the court over the res.13
Consequently, a judgment of escheat is conclusive upon persons notified by
advertisement, as publication is considered a general and constructive notice to all
persons interested.14
Nevertheless, we find sufficient grounds to affirm the CA on the exclusion of the
funds allocated for the payment of the Manager’s Check in the escheat proceedings.
Escheat proceedings refer to the judicial process in which the state, by virtue of its
sovereignty, steps in and claims abandoned, left vacant, or unclaimed property,
without there being an interested person having a legal claim thereto.15 In the case of
dormant accounts, the state inquires into the status, custody, and ownership of the
unclaimed balance to determine whether the inactivity was brought about by the fact
of death or absence of or abandonment by the depositor.16 If after the proceedings the
property remains without a lawful owner interested to claim it, the property shall be
reverted to the state "to forestall an open invitation to self-service by the first
comers."17 However, if interested parties have come forward and lain claim to the
property, the courts shall determine whether the credit or deposit should pass to the
claimants or be forfeited in favor of the state.18 We emphasize that escheat is not a
proceeding to penalize depositors for failing to deposit to or withdraw from their
accounts. It is a proceeding whereby the state compels the surrender to it of
unclaimed deposit balances when there is substantial ground for a belief that they
have been abandoned, forgotten, or without an owner.19
Act No. 3936, as amended, outlines the proper procedure to be followed by banks and
other similar institutions in filing a sworn statement with the Treasurer concerning
dormant accounts:
Sec. 2. Immediately after the taking effect of this Act and within the month of January
of every odd year, all banks, building and loan associations, and trust corporations
shall forward to the Treasurer of the Philippines a statement, under oath, of their
respective managing officers, of all credits and deposits held by them in favor of
persons known to be dead, or who have not made further deposits or withdrawals
during the preceding ten years or more, arranged in alphabetical order according to
the names of creditors and depositors, and showing:
(a) The names and last known place of residence or post office addresses of
the persons in whose favor such unclaimed balances stand;
(b) The amount and the date of the outstanding unclaimed balance and
whether the same is in money or in security, and if the latter, the nature of the
same;
(c) The date when the person in whose favor the unclaimed balance stands
died, if known, or the date when he made his last deposit or withdrawal; and
 (d) The interest due on such unclaimed balance, if any, and the amount
thereof.
A copy of the above sworn statement shall be posted in a conspicuous place in the
premises of the bank, building and loan association, or trust corporation concerned for
at least sixty days from the date of filing thereof: Provided, That immediately before
filing the above sworn statement, the bank, building and loan association, and trust
corporation shall communicate with the person in whose favor the unclaimed balance
stands at his last known place of residence or post office address.
It shall be the duty of the Treasurer of the Philippines to inform the Solicitor General
from time to time the existence of unclaimed balances held by banks, building and
loan associations, and trust corporations. (Emphasis supplied.)
As seen in the afore-quoted provision, the law sets a detailed system for notifying
depositors of unclaimed balances. This notification is meant to inform them that their
deposit could be escheated if left unclaimed. Accordingly, before filing a sworn
statement, banks and other similar institutions are under obligation to communicate
with owners of dormant accounts. The purpose of this initial notice is for a bank to
determine whether an inactive account has indeed been unclaimed, abandoned,
forgotten, or left without an owner. If the depositor simply does not wish to touch the
funds in the meantime, but still asserts ownership and dominion over the dormant
account, then the bank is no longer obligated to include the account in its sworn
statement.20 It is not the intent of the law to force depositors into unnecessary
litigation and defense of their rights, as the state is only interested in escheating
balances that have been abandoned and left without an owner.
In case the bank complies with the provisions of the law and the unclaimed balances
are eventually escheated to the Republic, the bank "shall not thereafter be liable to
any person for the same and any action which may be brought by any person against
in any bank xxx for unclaimed balances so deposited xxx shall be defended by the
Solicitor General without cost to such bank."21 Otherwise, should it fail to comply
with the legally outlined procedure to the prejudice of the depositor, the bank may not
raise the defense provided under Section 5 of Act No. 3936, as amended.
Petitioner asserts22 that the CA committed a reversible error when it required RCBC
to send prior notices to respondents about the forthcoming escheat proceedings
involving the funds allocated for the payment of the Manager’s Check. It explains
that, pursuant to the law, only those "whose favor such unclaimed balances stand" are
entitled to receive notices. Petitioner argues that, since the funds represented by the
Manager’s Check were deemed transferred to the credit of the payee upon issuance of
the check, the proper party entitled to the notices was the payee – Rosmil – and not
respondents. Petitioner then contends that, in any event, it is not liable for failing to
send a separate notice to the payee, because it did not have the address of Rosmil.
Petitioner avers that it was not under any obligation to record the address of the payee
of a Manager’s Check.
In contrast, respondents Hi-Tri and Bakunawa allege23 that they have a legal interest
in the fund allocated for the payment of the Manager’s Check. They reason that, since
the funds were part of the Compromise Agreement between respondents and Rosmil
in a separate civil case, the approval and eventual execution of the agreement
effectively reverted the fund to the credit of respondents. Respondents further posit
that their ownership of the funds was evidenced by their continued custody of the
Manager’s Check.
An ordinary check refers to a bill of exchange drawn by a depositor (drawer) on a
bank (drawee),24 requesting the latter to pay a person named therein (payee) or to the
order of the payee or to the bearer, a named sum of money.25 The issuance of the
check does not of itself operate as an assignment of any part of the funds in the bank
to the credit of the drawer.26 Here, the bank becomes liable only after it accepts or
certifies the check.27 After the check is accepted for payment, the bank would then
debit the amount to be paid to the holder of the check from the account of the
depositor-drawer.
There are checks of a special type called manager’s or cashier’s checks. These are
bills of exchange drawn by the bank’s manager or cashier, in the name of the bank,
against the bank itself.28 Typically, a manager’s or a cashier’s check is procured from
the bank by allocating a particular amount of funds to be debited from the depositor’s
account or by directly paying or depositing to the bank the value of the check to be
drawn. Since the bank issues the check in its name, with itself as the drawee, the
check is deemed accepted in advance.29 Ordinarily, the check becomes the primary
obligation of the issuing bank and constitutes its written promise to pay upon
demand.30
Nevertheless, the mere issuance of a manager’s check does not ipso facto work as an
automatic transfer of funds to the account of the payee. In case the procurer of the
manager’s or cashier’s check retains custody of the instrument, does not tender it to
the intended payee, or fails to make an effective delivery, we find the following
provision on undelivered instruments under the Negotiable Instruments Law
applicable:31
Sec. 16. Delivery; when effectual; when presumed. – Every contract on a negotiable
instrument is incomplete and revocable until delivery of the instrument for the
purpose of giving effect thereto. As between immediate parties and as regards a
remote party other than a holder in due course, the delivery, in order to be effectual,
must be made either by or under the authority of the party making, drawing,
accepting, or indorsing, as the case may be; and, in such case, the delivery may be
shown to have been conditional, or for a special purpose only, and not for the purpose
of transferring the property in the instrument. But where the instrument is in the hands
of a holder in due course, a valid delivery thereof by all parties prior to him so as to
make them liable to him is conclusively presumed. And where the instrument is no
longer in the possession of a party whose signature appears thereon, a valid and
intentional delivery by him is presumed until the contrary is proved. (Emphasis
supplied.)
Petitioner acknowledges that the Manager’s Check was procured by respondents, and
that the amount to be paid for the check would be sourced from the deposit account of
Hi-Tri.32 When Rosmil did not accept the Manager’s Check offered by respondents,
the latter retained custody of the instrument instead of cancelling it. As the Manager’s
Check neither went to the hands of Rosmil nor was it further negotiated to other
persons, the instrument remained undelivered. Petitioner does not dispute the fact that
respondents retained custody of the instrument.33
Since there was no delivery, presentment of the check to the bank for payment did not
occur. An order to debit the account of respondents was never made. In fact,
petitioner confirms that the Manager’s Check was never negotiated or presented for
payment to its Ermita Branch, and that the allocated fund is still held by the bank.34
As a result, the assigned fund is deemed to remain part of the account of Hi-Tri,
which procured the Manager’s Check. The doctrine that the deposit represented by a
manager’s check automatically passes to the payee is inapplicable, because the
instrument – although accepted in advance – remains undelivered. Hence,
respondents should have been informed that the deposit had been left inactive for
more than 10 years, and that it may be subjected to escheat proceedings if left
unclaimed.1âwphi1
After a careful review of the RTC records, we find that it is no longer necessary to
remand the case for hearing to determine whether the claim of respondents was valid.
There was no contention that they were the procurers of the Manager’s Check. It is
undisputed that there was no effective delivery of the check, rendering the instrument
incomplete. In addition, we have already settled that respondents retained ownership
of the funds. As it is obvious from their foregoing actions that they have not
abandoned their claim over the fund, we rule that the allocated deposit, subject of the
Manager’s Check, should be excluded from the escheat proceedings. We reiterate our
pronouncement that the objective of escheat proceedings is state forfeiture of
unclaimed balances. We further note that there is nothing in the records that would
show that the OSG appealed the assailed CA judgments. We take this failure to
appeal as an indication of disinterest in pursuing the escheat proceedings in favor of
the Republic.
WHEREFORE the Petition is DENIED. The 26 November 2009 Decision and 27
May 2010 Resolution of the Court of Appeals in CA-G.R. SP No. 107261 are hereby
AFFIRMED.
SO ORDERED.
MARIA LOURDES P. A. SERENO
Associate Justice
G.R. No. 143483 January 31, 2002
REPUBLIC OF THE PHILIPPINES represented by the REGISTER OF
DEEDS OF PASAY CITY, petitioner,
vs.
COURT OF APPEALS (SPECIAL FORMER 3RD DIVISION) AND AMADA
H. SOLANO, assisted by her husband ROMEO SOLANO, respondents.
BELLOSILLO , J.:
This petition for certiorari seeks to nullify two (2) Resolutions of the Court of
Appeals dated 12 November 1998 and 4 May 2000 giving due course to the petition
for annulment of judgment filed by private respondent Amada H. Solano on 3
February 1997 and denying petitioner's motion for reconsideration.
For more than three (3) decades (from 1952 to 1985) private respondent Amada
Solano served as the all-around personal domestic helper of the late Elizabeth
Hankins, a widow and a French national. During Ms. Hankins' lifetime and most
especially during the waning years of her life, respondent Solano was her faithful girl
Friday and a constant companion since no close relative was available to tend to her
needs.
In recognition of Solano's faithful and dedicated service, Ms. Hankins executed in her
favor two (2) deeds of donation involving two (2) parcels of land covered by TCT
Nos. 7807 and 7808 of the Registry of Deeds. Private respondent alleged that she
misplaced the deeds of donation and were nowhere to be found.
While the deeds of donation were missing, the Republic filed a petition for the
escheat of the estate of Elizabeth Hankins before the Regional Trial Court of Pasay
City.1 During the proceedings, a motion for intervention was filed by Romeo Solano,
spouse of private respondent, and one Gaudencio Regosa, but on 24 June 1987 the
motion was denied by the trial court for the reason that "they miserably failed to show
valid claim or right to the properties in question."2 Since it was established that there
were no known heirs and persons entitled to the properties of decedent Hankins, the
lower court escheated the estate of the decedent in favor of petitioner Republic of the
Philippines.
By virtue of the decision of the trial court, the Registry of Deeds of Pasay City
cancelled TCT Nos. 7807 and 7808 and issued new ones, TCT Nos. 129551 and
129552, both in the name of Pasay City.
In the meantime, private respondent claimed that she accidentally found the deeds of
donation she had been looking for a long time. In view of this development,
respondent Amada Solano filed on 28 January 1997 a petition before the Court of
Appeals for the annulment of the lower court's decision alleging, among other, that3 -
13.1. The deceased Elizabeth Hankins having donated the subject properties to
the petitioner in 1983 (for TCT No. 7807) and 1984 (for TCT No. 7808), these
properties did not and could not form part of her estate when she died on
September 20, 1985. Consequently, they could not validly be escheated to the
Pasay City Government;
13.2. Even assuming arguendo that the properties could be subject of escheat
proceedings, the decision is still legally infirm for escheating the properties to
an entity, the Pasay City Government, which is not authorized by law to be the
recipient thereof. The property should have been escheated in favor of the
 Republic of the Philippines under Rule 91, Section 1 of the New Rules of
Court x x x x
On 17 March 1997 the Office of the Solicitor General representing public respondents
RTC and the Register of Deeds (herein petitioner) filed an answer setting forth their
affirmative defenses, to wit: (a) lack of jurisdiction over the nature of the action; and,
(b) the cause of action was barred by the statute of limitations.
Finding no cogent reason to justify the dismissal of the petition for annulment, the
Court of Appeals issued on 12 November 1998 the first of its assailed Resolutions
giving due course to the petition for annulment of judgment and setting the date for
trial on the merits. In upholding the theory of respondent Solano, the Appeals Court
ruled that -
Herein petitioner invokes lack of jurisdiction over the subject matter on the
part of respondent RTC to entertain the escheat proceedings x x x because the
parcels of land have been earlier donated to herein petitioner in 1983 and 1984
prior to the death of said Hankins; and therefore, respondent court could not
have ordered the escheat of said properties in favor of the Republic of the
Philippines, assign them to respondent Pasay City government, order the
cancellation of the old titles in the name of Hankins and order the properties
registered in the name of respondent Pasay City x x x x The 1997 Rules of
Civil Procedure specifically laid down the grounds of annulment filed before
this Court, to wit: extrinsic fraud and lack of jurisdiction. Jurisdiction over the
subject matter is conferred by law and this jurisdiction is determined by the
allegations of the complaint. It is axiomatic that the averments of the
complaint determine the nature of the action and consequently the jurisdiction
of the courts. Thus whether or not the properties in question are no longer part
of the estate of the deceased Hankins at the time of her death; and, whether or
not the alleged donations are valid are issues in the present petition for
annulment which can be resolved only after a full blown trial x x x x
It is for the same reason that respondent’s espousal of the statute of limitations
against herein petition for annulment cannot prosper at this stage of the
proceedings. Indeed, Section 4, Rule 91 of the Revised Rules of Court
expressly provides that a person entitled to the estate must file his claim with
the court a quo within five (5) years from the date of said judgment. However,
it is clear to this Court that herein petitioner is not claiming anything from the
estate of the deceased at the time of her death on September 20, 1985; rather
she is claiming that the subject parcels of land should not have been included
as part of the estate of the said decedent as she is the owner thereof by virtue
of the deeds of donation in her favor.
In effect, herein petitioner, who alleges to be in possession of the premises in
question, is claiming ownership of the properties in question and the
consequent reconveyance thereof in her favor which cause of action prescribes
ten (10) years after the issuance of title in favor of respondent Pasay City on
August 7, 1990. Herein petition was seasonably filed on February 3, 1997
under Article 1144, to wit:
Art. 1144. The following actions must be brought within ten years
from the time the right of action accrues: (1) Upon a written contract;
(2) Upon an obligation created by law; (3) Upon a judgment.
And Article 1456, to wit:
Art. 1456. If 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.4
In its Resolution of 4 May 2000 the Court of Appeals denied the motion for
reconsideration filed by public respondents Register of Deeds of Pasay City and the
Presiding judge of the lower court and set the trial on the merits for June 15 and 16,
2000.
In its effort to nullify the Resolutions herein before mentioned, petitioner points out
that the Court of Appeals committed grave abuse of discretion amounting to lack or
excess of jurisdiction (a) in denying petitioner's affirmative defenses set forth in its
answer and motion for reconsideration, and in setting the case for trial and reception
of evidence; and, (b) in giving due course to private respondent's petition for
annulment of decision despite the palpable setting-in of the 5-year statute of
limitations within which to file claims before the court a quo set forth in Rule 91 of
the Revised Rules of Court and Art. 1014 of the Civil Code.
Petitioner argues that the lower court had jurisdiction when it escheated the properties
in question in favor of the city government and the filing of a petition for annulment
of judgment on the ground of subsequent discovery of the deeds of donation did not
divest the lower court of its jurisdiction on the matter. It further contends that Rule 47
of the 1997 Rules of Civil Procedure only provides for two (2) grounds for the
annulment of judgment, namely: extrinsic fraud and lack of jurisdiction. As such the
discovery of the deeds of donation seven (7) years after the finality of the escheat
proceedings is an extraneous matter which is clearly not an instance of extrinsic fraud
nor a ground to oust the lower court of its jurisdiction.
Petitioner also insists that notwithstanding the execution of the deeds of donation in
favor of private respondent, the 5-year statute of limitations within which to file
claims before the court a quo as set forth in Rule 91 of the Revised Rules of Court has
set in.
The present controversy revolves around the nature of the parcels of land purportedly
donated to private respondent which will ultimately determine whether the lower
court had jurisdiction to declare the same escheated in favor of the state.
We rule for the petitioner. Escheat is a proceeding, unlike that of succession or
assignment, whereby the state, by virtue of its sovereignty, steps in and claims the
real or personal property of a person who dies intestate leaving no heir. In the absence
of a lawful owner, a property is claimed by the state to forestall an open "invitation to
self-service by the first comers."5 Since escheat is one of the incidents of sovereignty,
the state may, and usually does, prescribe the conditions and limits the time within
which a claim to such property may be made. The procedure by which the escheated
property may be recovered is generally prescribed by statue, and a time limit is
imposed within which such action must be brought.
In this jurisdiction, a claimant to an escheated property must file his claim "within
five (5) years from the date of such judgment, such person shall have possession of
and title to the same, or if sold, the municipality or city shall be accountable to him
for the proceeds, after deducting the estate; but a claim not made shall be barred
forever."6 The 5-year period is not a device capriciously conjured by the state to
defraud any claimant; on the contrary, it is decidedly prescribed to encourage would-
be claimants to be punctilious in asserting their claims, otherwise they may lose them
forever in a final judgment.
Incidentally, the question may be asked: Does herein private respondent, not being an
heir but allegedly a donee, have the personality to be a claimant within the purview of
Sec. 4, Rule 91, of the Revised Rules of Court? In this regard, we agree with the
Solicitor General that the case of Municipal Council of San Pedro, Laguna v. Colegio
de San Jose, Inc.,7 is applicable at least insofar as it concerns the Court's discussion
on who is an "interested party" in an escheat proceeding -
In a special proceeding for escheat under sections 750 and 751 the petitioner is
not the sole and exclusive interested party. Any person alleging to have a
direct right or interest in the property sought to be escheated is likewise an
interested party and may appear and oppose the petition for escheat. In the
present case, the Colegio de San Jose, Inc. and Carlos Young appeared
alleging to have a material interest in the Hacienda de San Pedro Tunasan; the
former because it claims to be the exclusive owner of the hacienda, and the
latter because he claims to be the lessee thereof under a contract legally
entered with the former (underscoring supplied).
In the instant petition, the escheat judgment was handed down by the lower court as
early as 27 June 1989 but it was only on 28 January 1997, more or less seven (7)
years after, when private respondent decided to contest the escheat judgment in the is settled that courts decide only after a close scrutiny of every piece of evidence and
guise of a petition for annulment of judgment before the Court of Appeals. Obviously, analyze each case with deliberate precision and unadulterated thoroughness, the
private respondent's belated assertion of her right over the escheated properties judgment not being diluted by speculations, conjectures and unsubstantiated
militates against recovery. assertions.

A judgment in escheat proceedings when rendered by a court of competent
jurisdiction is conclusive against all persons with actual or constructive notice, but not
against those who are not parties or privies thereto. As held in Hamilton v. Brown,8 "a
judgment of escheat was held conclusive upon persons notified by advertisement to
all persons interested. Absolute lack on the part of petitioners of any dishonest intent
to deprive the appellee of any right, or in any way injure him, constitutes due process
of law, proper notice having been observed." With the lapse of the 5-year period
therefore, private respondent has irretrievably lost her right to claim and the supposed
"discovery of the deeds of donation" is not enough justification to nullify the escheat
judgment which has long attained finality.
WHEREFORE, the petition is GRANTED. The assailed Resolution of the Court of
Appeals dated 12 November 1998 giving due course to the petition for annulment of
judgment, and its Resolution dated 4 May 2000 denying petitioner's motion for
reconsideration, are SET ASIDE. The decision of the RTC-Br. 114, Pasay City, dated
27 June 1989, is REINSTATED.
SO ORDERED.

In the mind of this Court the subject properties were owned by the decedent during
the time that the escheat proceedings were being conducted and the lower court was
not divested of its jurisdiction to escheat them in favor of Pasay City notwithstanding
an allegation that they had been previously donated. We recall that a motion for
intervention was earlier denied by the escheat court for failure to show "valid claim or
right to the properties in question."9 Where a person comes into an escheat
proceeding as a claimant, the burden is on such intervenor to establish his title to the
property and his right to intervene. A fortiori, the certificates of title covering the
subject properties were in the name of the decedent indicating that no transfer of
ownership involving the disputed properties was ever made by the deceased during
her lifetime. In the absence therefore of any clear and convincing proof showing that
the subject lands had been conveyed by Hankins to private respondent Solano, the
same still remained, at least before the escheat, part of the estate of the decedent and
the lower court was right not to assume otherwise. The Court of Appeals therefore
cannot perfunctorily presuppose that the subject properties were no longer part of the
decedent's estate at the time the lower court handed down its decision on the strength
of a belated allegation that the same had previously been disposed of by the owner. It

G.R. No. L-10033 August 30, 1917
THE CITY OF MANILA, petitioner-appellant,
vs.
THE ROMAN CATHOLIC ARCHBISHOP OF MANILA and THE
ADMINISTRATOR FOR THE ESTATE OF MARIA CONCEPCION
SARMIENTO, interveners-appellees.
City Attorney Escaler for appellant.
William A. Kincaid and Thomas L. Hartigan for the appellee Roman Catholic
Archbishop of Manila.
No appearance for the other appellee.
JOHNSON, J.:
This action was commenced in the Court of First Instance of the city of Manila on the
15th day of February, 1913. Its purpose was to have declared escheated to the city of
Manila certain property situated in and around said city; that said property consists of
five parcels of land located ion the districts of Malate and Paco of the city of Manila,
as shown in a plan, in the office of the Department of Engineering and Public Works
of said city of Manila, No. B-10-27. The theory of the plaintiff is that one Ana
Sarmiento was the owner of said property and died in the year 1668 without leaving
"her or person entitled to the same."
After hearing the evidence, the Honorable A. S. Crossfield, in a carefully prepared
opinion, reached the conclusion that the prayer of the plaintiff should be denied
without any finding as to costs. From that conclusion the plaintiff appealed to this
court and made a number of assignments of error.
After an examination of the evidence adduced during the trial of the cause, we find
that the following facts were proved by a large preponderance of the evidence: That
Ana Sarmiento resided, with her husband, in the city of Manila sometime prior to the
17th day of November, 1668; that on said date she made a will; that on the 23d day of
November, 1668, she added a codicil to said will, that on the 19th day of May, 1669,
she made another will making a part thereof the said codicil of November 23d, 1668;
that said will contained provisions for the establishment of a "Capellania de Misas;"
that the first chaplain of said capellania should be her nephew Pedro del Castillo; that
said will contained a provision for the administration of said property in relation with
the said "Capellania de Misas" succeeding administration should continue
perpetually; that said Ana Sarmiento died about the year 1672; that for more than two
hundred years the intervener, the Roman Catholic Archbishop of Manila, through his
various agencies, has administered said property; that the Roman Catholic
Archbishop of Manila has rightfully and legally succeeded in accordance with the
terms and provisions of the will of Ana Sarmiento.
Section 750 of Act No. 190 provides when property may be declared escheated. It
provides, "when a person dies intestate, seized of real or personal property . . . leaving
no heir or person by law entitled to the same," that then and in that case such property
under the procedure provided for by sections 751 and 752, may de declared
escheated.
The proof shows that Ana Sarmiento did not die intestate. She left a will. The will
provides for the administration of said property by her nephew as well as for the
subsequent administration of the same. She did not die without an heir nor without
persons entitled to administer her estate. It further shows that she did not die without
leaving a person by law entitled to inherit her property. In view of the facts, therefore,
the property in question cannot be declared escheated as of the property of Ana
Sarmiento. If by any chance the property may be declared escheated, it must be based
upon the fact that persons subsequent to Ana Sarmiento died intestate without leaving
heir or person by law entitled to the same.
The will clearly, definitely and unequivocally defines and designates what disposition
shall be made of the property in question. The heir mentioned in said will evidently
accepted its terms and permitted the property to be administered in accordance
therewith. And, so far as the record shows, it is still being administered in accordance
with the terms of said will for the benefit of the real beneficiary as was intended by
the original owner.
The record fully and completely shows that the theory of the plaintiff is without
foundation either in fact or in law.
The judgment of the lower court is, therefore, hereby affirmed, with costs in this
instance. So ordered.
Arellano, C.J., Araullo, Street and Malcolm, JJ., concur.
G.R. No. 128195 October 3, 2001
ELIZABETH LEE and PACITA YU LEE, HON. JUDGE JOSE D.
ALOVERA,* Presiding Judge, Regional Trial Court, Branch 17, Roxas City,
THE REGISTER OF DEEDS OF ROXAS CITY, petitioners,
vs.
REPUBLIC OF THE PHILIPPINES, represented by THE DIRECTOR OF
LANDS AND THE ADMINISTRATOR, LAND REGISTRATION
AUTHORITY and THE HON. COURT OF APPEALS,* respondents.
PARDO, J.:
The case under consideration is a petition for review on certiorari of the decision1 of
the court of appeals nullifying that of the Regional Trial Court, Roxas City, in
Reconstitution case No. R-1928,2 pertaining to lot 398, Capiz Cadastre, covered by
Original Certificate of Title No. 3389.
Sometime in March 1936, Carmen, Francisco, Jr., Ramon, Lourdes, Mercedes,
Concepcion, Mariano, Jose, Loreto, Manuel, Rizal, and Jimmy, alll surnamed
Dinglasan sold to Lee Liong, A Chinese citizen, a parcel of land with an approximate
area of 1,631 square meters, designed as lot 398 and covered by Original Certificate
of Title No. 3389, situated at the corner of Roxas Avenue and Pavia Street, Roxas
City.3
However, in 1948, the former owners filed with the Court of First Instance, Capiz an
action against the heirs of Lee Liong for annulment of sale and recovery of land.4 The
plaintiffs assailed the validity of the sale because of the constitutional prohibition
against aliens acquiring ownership of private agriculture land, including residential,
commercial or industrial land. Rebuffed in the trial court and the Court of Appeals,
plaintiffs appealed to the Supreme Court. On June 27, 1956, the Supreme Court ruled
thus:
"granting the sale to be null and void and can not give title to the vendee, it
does not necessarily follow therefrom that title remained in the vendor, who
had also violated the constitutional prohibition, or that he (vendor) has the
right to recover the title of which he has divested himself by his in ignoring
the prohibition. In such contingency another principle of law sets in to bar the
equally guilty vendor from recovering the title which he had voluntarily
conveyed for a consideration, that of pari delicto."5
On July 1, 1968, the same former owners Rafael A. Dinglasan, together with
Francisco, Carmen, Ramon, Lourdes, Mercedes, Concepcion, Mariano, Jose, Loreto,
Rizal, Jimmy, and Jesse Dinglasan filed with the Court of First Instance, Capiz an
action for recovery of the same parcel of land.6 Citing the case of the Philippines
Banking Corporation v. Lui She,7 they submitted that the sale to Lee Liong was null
and void for being violative of the Constitution. On September 23, 1968, the heirs of
Lee Liong filed with the trial court a motion to dismiss the case on the ground of res
judicata.8 On October 10, 1968, and November 9, 1968, the trial court denied the
motion.9 The heirs of Lee Liong elevated the case to the Supreme Court by petition
for certiorari. On April 22, 1977, the Supreme Court annulled the orders of the trial
court and directed it to dismiss the case, holding that the suit was barred by res
judicata.10
On September 7, 1993, Elizabeth Manuel-Lee and Pacita Yu Lee filed with the
regional Trial Court, Roxas City a petition for reconstitution of title of Lot No. 398 of
the Capiz Cadastre, formerly covered by Original Certificate of title No. 3389 of the
register of Deeds of Roxas City.11 Petitioners alleged that they were the windows of
the deceased Lee Bing Hoo and Lee Bun Ting , who were the heirs of Lee Liong, The
owner of the lot. Lee Liong died intestate in February 1944. On June 30, 1947, Lee
Liong's widow, Ang Chia, and his two sons, Lee Bun Ting and Lee Bing Ho,
executed an extra judicial settlement of the state of Lee Liong, adjudicating to
themselves the subject parcel of land.12 Petitioner Elizabeth Lee acquired her share in
lot No. 398 through an extra-judicial settlement and donation executed in her favor by
her deceased husband Lee Bong Hoo. Petitioner Pacita Yu Lee acquired her share in
the same lot by succession from her deceased husband Lee Bun Ting, as evidenced by
a deed of extra-judicial settlement.13
Previously, on December 9, 1948, the Register of Deeds, Capiz Salvador Villaluz,
issued a certification that a transfer certificate of title over the property was issued in
the name of Lee Liong.14 However, the records of the Register of Deeds, Roxas City
were burned during the war. Thus, as heretofore stated, on September 7, 1968,
petitioners filed a petition for reconstitution of title.1âwphi1.nêt
On June 10, 1994, the Regional Trial Court, Roxas City, Branch 17, ordered the
reconstitution of the lost or destroyed certificate of title in the name of Lee Liong on
the basis of an approved plan and technical description.15 The dispositive portion of
the trial Court's decision reads thus:
"WHEREFORE, in reiteration the Register of Deeds for the City of Roxas is
ordered to reconstitute the lost or destroyed certificate of title in the name Lee
Liong, deceased, of Roxas City, with all the conditions stated in paragraph 2
of this decision. This decision shall become final after the lapse of thirty (30)
days from receipt by the Register of Deeds and by the Commissioner of LRA
of a notice of such judgement without any appeal having been filed by any of
such officials.
"SO ORDERED.
"Given at Roxas City, Philippines,
"June 10, 1994.
"JOSE O. ALOVERA
"Judge"16
On August 18, 1994, the Clerk of Court, Regional Trial Court, Roxas City, Branch 17
issued an Entry of Judgement.17
On January 25, 1995, the Solicitor General filed with the Court of Appeals a petition
for annulment of judgement in Reconstitution Case No. 1928, alleging that the
Regional Trial Court, Roxas City had no jurisdiction over the case.18 The Solicitor
General contended that the petitioners were not the proper parties in the reconstitution
of title, since their predecessor-in-interest Lee Liong did not acquire title to the lot
because he was a Chinese citizen and was constitutionally not qualified to own the
subject land.
On April 30, 1996, the Court of Appeals promulgated its decision declaring the
judgement of reconstitution void.19
On May 24, 1996, Elizabeth Manuel-Lee and Pacita Yu Lee filed with the Court of
Appeals a motion for reconsideration of the decision. 20 On February 18, 19976, the
Court of appeals denied the motion.21
Hence this petition.22
Petitioners submitted that the Solicitor General was estopped from seeking annulment
of the judgement of reconstitution after failing to object during the reconstitution
proceedings before the trial court, despite due notice. Petitioners alleged that the
Solicitor General merely acted on the request of private and politically powerful
individuals who wished to capitalize on the prime location of the subject land.
Petitioners emphasized that the ownership of the land had been settled in two
previous cases of the Supreme Court, where the Court ruled in favor of their
predecessor-in-interest, Lee Liong. Petitioners also pointed out that they acquired
ownership of the land through actual possession of the lot and their consistent
payment of taxes over the land for more than sixty years.
On the other hand, the Solicitor General submitted that the decision in the
reconstitution case was void; otherwise, it would amount to circumventing the
constitutional proscription against aliens acquiring ownership of private or public
agricultural lands.
We grant the petition.
The reconstitution of a certificate of title denotes restoration in the original form and
condition of a lost or destroyed instrument attesting the title of a person to a piece of
land23. The purpose of the reconstruction of title is to have, after observing the
procedures prescribed by law, the title reproduced in exactly the same way it has been
when the loss or destruction occurred.24
In this case, petitioners sought a reconstitution of title in the name of Lee Liong,
alleging that the transfer of certificate of title issued to him was lost or destroyed
during World War II. All the documents recorded and issued by the Register of Deed,
Capiz, which include the transfer certificate of title issued in the name of Lee Liong,
were all destroyed during the war. The fact that the original of the transfer certificate
of title was not in the files of the Office of the Register of Deeds did not imply that a
transfer certificate of title had not been issued.25 In the trial court proceeding,
petitioners presented evidence proving the sale of the land from the Dinglasans to Lee
Liong and the latter's subsequent possessions of the of the property in the concept of
owner. Thus, the trial court after examining all the evidence before it, ordered the
reconstruction of title in the name of Lee Liong.
However, there is a question as to whether Lee Liong as the qualification to own land
in the Philippines.
The sale of the land in question was consummated sometime in March 1936, during
the effectivity of the 1935 Constitution. Under the 1935 Constitution,26 aliens could
not acquire private agricultural lands, save in cases of hereditary succession.27 Thus,
Lee Liong, a chinese citizen, was disqualified to acquire the land in question.28
The fact that the Court did not annul the sale of the land to an alien did not validate
the transaction, for it was still contrary to the constitutional proscription against aliens
acquiring lands of the public or private domain. However, the proper party to assail
the illegality of the transaction was not the parties to the transaction.29 "In sales of real
estate to aliens incapable of holding title thereto by virtue of the provisions of the
Constitution both the vendor and the vendee are deemed to have committed the
constitutional violation and being thus in pari delicto the courts will not afford
protection to either party."30 The proper party to assail the sale is the Solicitor
General. This was what was done in this case when the Solicitor General initiated an
action for annulment of judgment of reconstitution of title. While it took the Republic
more than sixty years to assert itself, it is not barred from initiating such action.
Prescription never against the State.31
Although ownership of the land cannot revert to the original sellers, because of the
doctrine of pari delicto, the Solicitor General may initiate an action for reversion or
escheat of the land to the State, subject to other defenses, as hereafter set forth.32
In this case, subsequent circumstances militate against escheat proceedings because
the land is now in the hands of Filipinos. The original vendee, Lee Liong, has since
died and the land has been inherited by his heirs and subsequently their heirs,
petitioners herein. Petitioners are Filipino citizens, a fact the Solicitor General does
not dispute.
The constitutional proscription on alien ownership of lands of the public or private
domain was intended to protect lands from falling in the hands of non-Filipinos. In
this case, however, there would be no more public policy violated since the land is in
the hands of Filipinos qualified to acquire and own such land. "If land is invalidly
transferred to an alien who subsequently becomes a citizen or transfers it to a citizen,
the flaw in the original transaction is considered cured and the title of the transferee is
rendered valid.33 Thus, the subsequent transfer of the property to qualified Filipinos
may no longer be impugned on the basis of the invalidity of the initial transfer.34 The
objective of the constitutional provision to keep our lands in Filipino hands has been
achieved.
Incidentally, it must be mentioned that reconstitution of the original certificate of title
must be based on an owner's duplicate, secondary evidence thereof, or other valid
sources of the title be reconstituted.35 In this case, reconstitution was based on the
plan and technical description approved by the Land Registration Authority.36 This
renders the order of reconstitution void for lack of factual support.37 A judgment with
absolute nothing to support it is void.38
As earlier mentioned, a reconstitution of the title is the reissuance of a new certificate
of title lost or destroyed in its original form and condition.39 It does not pass upon the
ownership of the land covered by the lost or destroyed title.40 Any change in the
ownership of the property must be the subject of a separate suit.41 Thus, although
petitioners are in possession of the land, a separate proceedings is necessary to thresh
out the issue of ownership of the land.
WHEREFORE, the Court REVERSES and SETS ASIDE the decision of the Court
of Appeals in CA-G. R. SP No. 36274. In lieu thereof, the Court sets aside the order
of reconstitution of title in Reconstitution Case No. R-1928, Regional Trial Court,
Roxas City, and dismisses the petition, without prejudice.1âwphi1.nêt
G.R. No. 146737 December 10, 2001
IN THE MATTER OF THE INTESTATE ESTATE OF THE LATE JUAN
"JHONNY" LOCSIN, SR., LUCY A. SOLINAP (Daughter of the late Maria
Locsin Araneta), the successors of the late LOURDES C. LOCSIN, MANUEL C.
LOCSIN, ESTER LOCSIN JARANTILLA and the intestate estate of the late
JOSE C. LOCSIN, JR., petitioners,
vs.
JUAN C. LOCSIN, JR., respondent.
SANDOVAL-GUTIERREZ, J.:
A Certificate of Live Birth duly recorded in the Local Civil Registry, a copy of which
is transmitted to the Civil Registry General pursuant to the Civil Registry Law, is
prima facie evidence of the facts therein stated. However, if there are material
discrepancies between them, the one entered in the Civil Registry General prevails.
This is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil
Procedure, as amended, seeking the reversal of the September 13, 2000 Decision of
the Court of Appeals in CA-G.R. CV No. 57708 which affirmed in toto the
September 13, 1996 order of the Regional Trial Court, Branch 30, of Iloilo City in
Special Proceeding No. 4742. The September 13 order of the trial court appointed
Juan E. Locsin, Jr., respondent, as the sole administrator of the Intestate Estate of the
late Juan "Jhonny" Locsin, Sr.
Records show that on November 11, 1991, or eleven (11) months after Juan "Jhonny"
Locsin, Sr.1 died intestate on December 11, 1990, respondent Juan E. Locsin, Jr. filed
with the Regional Trial Court of Iloilo City, Branch 30, a "Petition for Letters of
Administration" (docketed as Special Proceeding No. 4742) praying that he be
appointed Administrator of the Intestate Estate of the deceased. He alleged, among
others, (a) that he is an acknowledged natural child of the late Juan C. Locsin; (b) that
during his lifetime, the deceased owned personal properties which include
undetermined savings, current and time deposits with various banks, and 1/6 portion
of the undivided mass of real properties owned by him and his siblings, namely: Jose
Locsin, Jr., Manuel Locsin, Maria Locsin Yulo, Lourdes Locsin and Ester Locsin; and
(c) that he is the only surviving legal heir of the decedent.
On November 13, 1991, the trial court issued an order setting the petition for hearing
on January 13, 1992, which order was duly published,2 thereby giving notice to all
persons who may have opposition to the said petition.
Before the scheduled hearing, or on January 10, 1992, the heirs of Jose Locsin, Jr., the
heirs of Maria Locsin, Manuel Locsin and Ester Jarantilla, claiming to be the lawful
heirs of the deceased, filed an opposition to respondent's petition for letters of
administration. They averred that respondent is not a child or an acknowledged
natural child of the late Juan C. Locsin, who during his lifetime, never affixed "Sr." in
his name.
On January 5, 1993, another opposition to the petition was filed by Lucy Salinop
(sole heir of the late Maria Locsin Vda. De Araneta, sister of the deceased), Manuel
Locsin and the successors of the late Lourdes C. Locsin alleging that respondent's
claim as a natural child is barred by prescription or the statute of limitations.
The Intestate Estate of the late Jose Locsin, Jr. (brother of the deceased) also entered
its appearance in the estate proceedings, joining the earlier oppositors. This was
followed by an appearance and opposition dated January 26, 1993 of Ester Locsin
Jarantilla (another sister of Juan C. Locsin), likewise stating that there is no filial
relationship between herein respondent and the deceased.
Thereupon, the trial court conducted hearings.
To support his claim that he is an acknowledged natural child of the deceased and,
therefore, entitled to be appointed administrator of the intestate estate, respondent
submitted a machine copy (marked as Exhibit "D")3 of his Certificate of Live Birth
No. 477 found in the bound volume of birth records in the Office of the Local Clerk
Registrar of Iloilo City. Exhibit "D" contains the information that respondent's father
is Juan C. Locsin, Sr. and that he was the informant of the facts stated therein, as
evidenced by his signatures (Exhibit "D-2" and "D-3"). To prove the existence and
authenticity of Certificate of Live Birth No. 477 from which Exhibit "D" was
machine copied, respondent presented Rosita J. Vencer, the Local Civil Registrar of
Iloilo City. She produced and identified in court the bound volume of 1957 records of
birth where the alleged original of Certificate of Live Birth No. 477 is included.
Respondent also offered in evidence a photograph (Exhibit "C")4 showing him and
his mother, Amparo Escamilla, in front of a coffin bearing Juan C. Locsin's dead
body. The photograph, respondent claims, shows that he and his mother have been
recognized as family members of the deceased.
In their oppositions, petitioners claimed that Certificate of Live Birth No. 477
(Exhibit "D") is spurious. They submitted a certified true copy of Certificate of Live
Birth No. 477 found in the Civil Registrar General, Metro Manila, marked as Exhibit
"8",5 indicating that the birth of respondent was reported by his mother, Amparo
Escamilla, and that the same does not contain the signature of the late Juan C. Locsin.
They observed as anomalous the fact that while respondent was born on October 22,
1956 and his birth was recorded on January 30, 1957, however, his Certificate of Live
Birth No. 447 (Exhibit "D") was recorded on a December 1, 1958 revised form. Upon
the other hand, Exhibit "8" appears on a July, 1956 form, already used before
respondent's birth. This scenario dearly suggests that Exhibit "D" was falsified.
Petitioners presented as witness, Col. Pedro L. Elvas, a handwriting expert. He
testified that the signatures of Juan C. Locsin and Emilio G. Tomesa (then Civil
Registrar of Iloilo City) appearing in Certificate of Live Birth No. 477 (Exhibit "D")
are forgeries. He thus concluded that the said Certificate is a spurious document
surreptitiously inserted into the bound volume of birth records of the Local Civil
Registrar of Iloilo City.
After hearing, the trial court, finding that Certificate of Live Birth No. 477 (Exhibit
"D") and the photograph (Exhibit "C") are sufficient proofs of respondent's
illegitimate filiation with the deceased, issued on September 13, 1996 an order, the
dispositive portion of which reads:
 "WHEREFORE, premises considered, this PETITION is hereby GRANTED
and the petitioner Juan E. Locsin, Jr. is hereby appointed Administrator of the
Intestate Estate of the late Juan "Johnny" Locsin, Sr.
"Let Letters of Administration be issued in his favor, upon his filing of a bond
in the sum of FIFTY THOUSAND PESOS (P50,000.00) to be approved by
this Court.
"SO ORDERED."6
On appeal, the Court of Appeals rendered the challenged Decision affirming in toto
the order of the trial court dated September 13, 1996. Petitioners moved for a
reconsideration, while respondent filed a motion for execution pending appeal. Both
motions were, however, denied by the Appellate Court in its Resolution dated January
10, 2001.
Hence, the instant petition for review on certiorari by petitioners.
The focal issue for our resolution is which of the two documents — Certificate of
Live Birth No. 477 (Exhibit "D") and Certificate of Live Birth No. 477 (Exhibit "8")
is genuine.
The rule that factual findings of the trial court, adopted and confirmed by the Court of
Appeals, are final and conclusive and may not be reviewed on appeal7 does not apply
when there appears in the record of the case some facts or circumstances of weight
and influence which have been overlooked, or the significance of which have been
misinterpreted, that if considered, would affect the result of the case.8 Here, the trial
court failed to appreciate facts and circumstances that would have altered its
conclusion.
Section 6, Rule 78 of the Revised Rules of Court lays down the persons preferred
who are entitled to the issuance of letters of administration, thus:
"Section 6. When and to whom letters of administration granted. — If no
executor is named in the will, or the executor or executors are incompetent,
refuse the trust, or fail to give bond, or a person dies intestate, administration
shall be granted:
(a) To the surviving husband or wife, as the case may be, or next of kin, or
both, in the discretion of the court, or to such person as such surviving
husband or wife, or next of kin, requests to have appointed, if competent and
willing to serve;
(b) If such surviving husband or wife, as the case may be, or next of kin, or
the person selected by them, be incompetent or unwilling, or if the husband or
widow, or next of kin, neglects for thirty (30) days after the death of a person
to apply for administration or to request that administration be granted to
some other person, it may be granted to one or more of the principal creditors,
if competent and willing to serve;
(c) If there is no such creditor competent and willing to serve, it may be
granted to such other person as the court may select." (Emphasis ours)
Upon the other hand, Section 2 of Rule 79 provides that a petition for letters of
administration must be filed by an interested person, thus:
"Sec. 2 Contents of petition for letters of administration. — A petition for
letters of administration must be filed by an interested person and must show,
so far as known to the petitioner:
(a) The jurisdictional facts; x x x" (Emphasis ours)
An "interested party", in estate proceedings, is one who would be benefited in the
estate, such as an heir, or one who has a claim against the estate, such as a creditor.9
Also, in estate proceedings, the phrase "next of kin" refers to those whose relationship
with the decedent is such that they are entitled to share in the estate as distributees.10
In Gabriel v. Court of Appeals,11 this Court held that in the appointment of the
administrator of the estate of a deceased person, the principal consideration reckoned
with is the interest in said estate of the one to be appointed administrator.
Here, undisputed is the fact that the deceased, Juan C. Locsin, was not survived by a
spouse. In his petition for issuance of letters of administration, respondent alleged that
he is an acknowledged natural son of the deceased, implying that he is an interested
person in the estate and is considered as next of kin. But has respondent established
that he is an acknowledged natural son of the deceased? On this point, this Court,
through Mr. Justice Jose C. Vitug, held:
"The filiation of illegitimate children, like legitimate children, is established
by (1) the record of birth appearing in the civil register or a final judgment; or
(2) an admission of legitimate filiation in a public document or a private
handwritten instrument and signed by the parent concerned. In the absence
thereof, filiation shall be proved by (1) the open and continuous possession of
the status of a legitimate child; or (2) any other means allowed by the Rules of
Court and special laws. The due recognition of an illegitimate child in a record
of birth, a will, a statement before a court of record, or in any authentic
writing is, in itself, a consummated act of acknowledgment of the child, and
no further court action is required. In fact, any authentic writing is treated not
just a ground for compulsory recognition; it is in itself a voluntary recognition
that does not require a separate action for judicial approval. Where, instead, a
claim for recognition is predicated on other evidence merely tending to prove
paternity, i.e., outside of a record of birth, a will, a statement before a court of
record or an authentic writing, judicial action within the applicable statute of
limitations is essential in order to establish the child's acknowledgment."12
(Emphasis ours)
Here, respondent, in order to establish his filiation with the deceased, presented to the
trial court his Certificate of Live Birth No. 477 (Exhibit "D") and a photograph
(Exhibit "C") taken during the burial of the deceased.
Regarding the genuineness and probative value of Exhibit "D", the trial court made
the following findings, affirmed by the Appellate Court:
"It was duly established in Court that the Certificate of Live Birth No. 477 in
the name of Juan E. Locsin, Jr., the original having been testified to by Rosita
Vencer, exists in the files of the Local Civil Registrar of Iloilo. Petitioner
since birth enjoyed the open and continuous status of an acknowledged natural
child of Juan C. Locsin, Sr., he together with his mother was summoned to
attend to the burial as evidenced by a picture of relatives facing the coffin of
the deceased with petitioner and his mother in the picture. x x x. It was duly
proven at the trial that the standard signatures presented by oppositors were
not in public document and may also be called questioned document whereas
in the certificate of live birth No. 477, the signature of Juan C. Locsin, Sr. was
the original or primary evidence. The anomalous and suspicious characteristic
of the bound volume where the certificate of live birth as alleged by
oppositors was found was testified to and explained by Rosita Vencer of the
office of the Local Civil Registrar that they run out of forms in 1957 and
requisitioned forms. However, the forms sent to them was the 1958 revised
form and that she said their office usually paste the pages of the bound volume
if destroyed. All the doubts regarding the authenticity and genuineness of the
signatures of Juan C. Locsin, Sr. and Emilio Tomesa, and the suspicious
circumstances of the bound volume were erased due to the explanation of
Rosita Vencer."
This Court cannot subscribe to the above findings.
Pursuant to Section 12 of Act 3753 (An Act to Establish a Civil Register), the records
of births from all cities and municipalities in the Philippines are officially and
regularly forwarded to the Civil Registrar General in Metro Manila by the Local Civil
Registrars. Since the records of births cover several decades and come from all parts
of the country, to merely access them in the Civil Registry General requires expertise.
To locate one single birth record from the mass, a regular employee, if not more, has
to be engaged. It is highly unlikely that any of these employees in Metro Manila
would have reason to falsify a particular 1957 birth record originating from the Local
Civil Registry of Iloilo City.
With respect to Local Civil Registries, access thereto by interested parties is
obviously easier. Thus, in proving the authenticity of Exhibit "D," more convincing
evidence than those considered by the trial court should have been presented by
respondent.
The trial court held that the doubts respecting the genuine nature of Exhibit "D" are
dispelled by the testimony of Rosita Vencer, Local Civil Registrar of Iloilo City.
The event about which she testified on March 7, 1994 was the record of respondent's
birth which took place on October 22, 1956, on 37 or 38 years ago. The Local Civil
Registrar of Iloilo City at that time was Emilio G. Tomesa. Necessarily, Vencer's
knowledge of respondent's birth record allegedly made and entered in the Local Civil
Registry in January, 1957 was based merely on her general impressions of the
existing records in that Office.
When entries in the Certificate of Live Birth recorded in the Local Civil Registry vary
from those appearing in the copy transmitted to the Civil Registry General, pursuant
to the Civil Registry Law, the variance has to be clarified in more persuasive and
rational manner. In this regard, we find Vencer's explanation not convincing.
Respondent's Certificate of Live Birth No. 477 (Exhibit "D") was recorded in a
December 1, 1958 revised form. Asked how a 1958 form could be used in 1957 when
respondent's birth was recorded, Vencer answered that "x x x during that time, maybe
the forms in 1956 were already exhausted so the former Civil Registrar had requested
for a new form and they sent us the 1958 Revised Form."13
The answer is a "maybe", a mere supposition of an event. It does not satisfactorily
explain how a Revised Form dated December 1, 1958 could have been used on
January 30, 1957 or almost (2) years earlier.
Upon the other hand, Exhibit "8" of the petitioners found in the Civil Registrar
General in Metro Manila is on Municipal Form No 102, revised in July, 1956. We
find no irregularity here. Indeed, it is logical to assume that the 1956 forms would
continue to be used several years thereafter. But for a 1958 form to be used in 1957 is
unlikely.
There are other indications of irregularity relative to Exhibit "D." The back cover of
the 1957 bound volume in the Local Civil Registry of Iloilo is torn. Exhibit "D" is
merely pasted with the bound volume, not sewn like the other entries.
The documents bound into one volume are original copies. Exhibit "D" is a carbon
copy of the alleged original and sticks out like a sore thumb because the entries
therein are typewritten, while the records of all other certificates are handwritten.
Unlike the contents of those other certificates, Exhibit "D" does not indicate
important particulars, such as the alleged father's religion, race, occupation, address
and business. The space which calls for an entry of the legitimacy of the child is
blank. On the back page of Exhibit "D", there is a purported signature of the alleged
father, but the blanks calling for the date and other details of his Residence Certificate
were not filled up.
When asked to explain the torn back cover of the bound volume, Vencer had no
answer except to state, "I am not aware of this because I am not a bookbinder." As to
why Exhibit "D" was not sewn or bound into the volume, she explained as follows:
"COURT:
I will butt in. Are these instances where your employees would only
paste a document like this Certificate of Live Birth?
WITNESS:
 Yes, Your Honor, we are pasting some of the leaves just to replace the
record. Sometimes we just have it pasted in the record when the leaves
were taken.
ATTY. TIROL:
You mean to say you allow the leaves of the bound volume to be taken
out?
A: No sir. It is because sometimes the leaves are detached so we have to paste
them."14(Emphasis ours)
There is no explanation why out of so many certificates, this vital document, Exhibit
"D", was merely pasted with the volume.
Vencer's testimony suffers from infirmities. Far from explaining the anomalous
circumstances surrounding Exhibit "D", she actually highlighted the suspicious
circumstances surrounding its existence.
The records of the instant case adequately support a finding that Exhibit "8" for the
petitioners, not respondent's Exhibit "D", should have been given more faith and
credence by the courts below.
The Civil Registry Law requires, inter alia, the Local Civil Registrar to send copies
of registrable certificates and documents presented to them for entry to the Civil
Registrar General, thus:
"Duties of Local Civil Registrar. — Local civil registrars shall (a) file
registrable certificates and documents presented to them for entry; (b) compile
the same monthly and prepare and send any information required of them by
the Civil-Registrar; (c) issue certified transcripts or copies of any document
registered upon payment of proper fees; (d) order the binding, properly
classified, of all certificates or documents registered during the year; (e) send
to the Civil Registrar-General, during the first ten days of each month, a copy
of the entries made during the preceding month, for filing; (f) index the same
to facilitate search and identification in case any information is required; and
(g) administer oaths, free of charge, for civil register purposes"15 (Emphasis
ours)
In light of the above provisions, a copy of the document sent by the Local Civil
Registrar to the Civil Registrar General should be identical in form and in substance
with the copy being kept by the latter. In the instant case, Exhibit "8", as transmitted
to the Civil Registrar General is not identical with Exhibit "D" as appearing in the
records of the Local Civil Registrar of Iloilo City. Such circumstance should have
aroused the suspicion of both the trial court and the Court of Appeals and should have
impelled them to declare Exhibit "D" a spurious document.
Exhibit "8" shows that respondent's record of birth was made by his mother. In the
same Exhibit "8", the signature and name of Juan C. Locsin listed as respondent's
father and the entry that he and Amparo Escamilla were married in Oton, Iloilo on
November 28, 1954 do not appear.
In this connection, we echo this Court's pronouncement in Roces vs. Local Civil
Registrar16 that:
"Section 5 of Act No. 3753 and Article 280 of the Civil Code of the
Philippines . . . explicitly prohibit, not only the naming of the father of the
child born out of wedlock, when the birth certificate, or the recognition, is not
filed or made by him, but also, the statement of any information or
circumstances by which he could be identified. Accordingly, the Local Civil
Registrar had no authority to make or record the paternity of an illegitimate
child upon the information of a third person and the certificate of birth of an
illegitimate child, when signed only by the mother of the latter, is incompetent
evidence of fathership of said child." (Emphasis ours)
The Roces ruling regarding illegitimate filiation is further elucidated in Fernandez vs. WHEREFORE, the petition is hereby GRANTED. The challenged Decision and
Court of Appeals17 where this Court said that "a birth certificate not signed by the Resolution of the Court of Appeals in CA-G.R. No. 57708 are REVERSED and SET
alleged father (who had no hand in its preparation) is not competent evidence of ASIDE. Respondent's petition for issuance of letters of administration is ORDERED
paternity." DISMISSED.

A birth certificate is a formidable piece of evidence prescribed by both the Civil Code SO ORDERED.
and Article 172 of the Family Code for purposes of recognition and filiation.
However, birth certificate offers only prima facie evidence of filiation and may be
refuted by contrary evidence.18 Its evidentiary worth cannot be sustained where there
exists strong, complete and conclusive proof of its falsity or nullity. In this case,
respondent's Certificate of Live Birth No. 477 entered in the records of the Local
Civil Registry (from which Exhibit "D" was machine copied) has all the badges of
nullity. Without doubt, the authentic copy on file in that office was removed and
substituted with a falsified Certificate of Live Birth.

At this point, it bears stressing the provision of Section 23, Rule 132 of the Revised
Rules of Court that "(d)ocuments consisting of entries in public records made in the
performance of a duty by a public officer are prima facie evidence of the facts therein
stated." In this case, the glaring discrepancies between the two Certificates of Live
Birth (Exhibits "D" and "8") have overturned the genuineness of Exhibit "D" entered
in the Local Civil Registry. What is authentic is Exhibit "8" recorded in the Civil
Registry General.

Incidentally, respondent's photograph with his mother near the coffin of the late Juan
C. Locsin cannot and will not constitute proof of filiation,19 lest we recklessly set a
very dangerous precedent that would encourage and sanction fraudulent claims.
Anybody can have a picture taken while standing before a coffin with others and
thereafter utilize it in claiming the estate of the deceased.

Respondent Juan E. Locsin, Jr. failed to prove his filiation with the late Juan C.
Locsin, Sr.. His Certificate of Live Birth No. 477 (Exhibit "D") is spurious. Indeed,
respondent is not an interested person within the meaning of Section 2, Rule 79 of the
Revised Rules of Court entitled to the issuance of letters of administration.

G.R. No. L-14157 October 26, 1960
In the matter of escheat proceedings of the estate of the deceased Anne Fallon
Murphy and Tomas Fallon married to Julia Fallon. MUNICIPALITIES OF
MAGALLON, ISABELA and LA CASTELLANA, NEGROS OCCIDENTAL,
petitioners-appellees,
vs.
IGNATIUS HENRY BEZORE, ET AL., oppositors-heirs appellants.
Martiniano O. dela Cruz for appellant.
Assistant General Antonio A. Torres and Solicitor Conrado T. Limcaoco for
appellees.
LABRADOR, J.:
These are escheat proceedings instituted by the Municipalities of Magallon, La
Castellana and Isabela, Province of Negros Occidental, in the Court of First Instance
of that province, praying that the estates of the deceased Anne Fallon Murphy and
Thomas Fallon the latter married to Julia Fallon, consisting of agricultural lands and
residential lots, as well as accrued rentals deposited with the Warner, Barnes and Co.,
Ltd., be escheated in favor of the above-named municipalities, respectively, wherever
the real estates are situated. Finding that the petition was in order, the judge of the
court ordered the publication of the petition and set the same for hearing before itself
on October 9, 1957.
The evidence shows that the properties sought to be escheated originally to Charles J.
Fallon, an American citizen, married to Rosario Santaromana. Fallon died in Manila
on March 25, 1935, so his wife acquired by inheritance one-half of the said properties
as owner, and the other half as usufructuary. The value of the properties of Charles J.
Fallon in 1936 is estimated at P46l,105.41 (Exhibit "H"). His wife Rosario
Santaromana died in 1943, and thereupon the properties which she held in usufruct
were transmitted to the brother and sister of her deceased husband, namely, Thomas
Fallon and Anne Fallon Murphy. The value of the estate belonging to both Thomas
Fallon and Anne Fallon Murphy were residents of the United States and as nothing
was known about them from their relatives in the United States, the petitioning
municipalities believed that they had died without heirs. Hence the petition for
escheat.
At the hearing of the petition, evidence was submitted that Anne Fallon Murphy died
on March 12, 1936 in San Francisco, California (ROA p. 21), while Thomas Fallon,
died on May 26, 1936, also in San Francisco, California (ROA p. 25). Julia Fallon, on
the other hand, died in San Francisco, California on December 2, 1944 (ROA p. 26).
Opposition to the petition for escheat was filed by Ignatius Bezore. Elwood
Knickerbocker and Mary Irene Fallon McCormick Henry Bezore claims that he is the
a nephew of the decedents because his mother was their sister. Elwood Knickerbocker
also claims to be the sole legatee of his wife Loreta Knickerbocker, who in turn, was
the residuary legatee of Anne Fallon Murphy. Mary Irene Murphy McCormick
likewise claims that she is the niece of the decedents as her father was a brother of
said decedents. Conformably to their petitions, all the oppositors pray that the petition
for escheat be dismissed and that the properties of the decedents be disturbed among
them.
The court, after hearing, found that Anne Fallon Murphy died in San Francisco on
March 12, 1936 and Thomas Fallon, also in the same city on May 26, 1936; that
Thomas Fallon was survived by his wife Julia Fallon, who in turn, died in San
Francisco on December 22, 1944; that Ane Fallon Murphy executed a will on
February 7, 1935, which was admitted to probate on May 7, 1937. Considering these
facts the court denied the petition for escheat of the properties of the deceased Anne
Fallon Murphy and Thomas Fallon, for the reason that Thomas Fallon died with an
heir his wife Julia Fallon, and Anne Fallon Murphy, for her part, died leaving a will,
in which she disposed of all her properties.
As to prayers contained in the opposition asking that the oppositors be declared heirs
of the deceased Thomas Fallon and Anne Fallon Murphy, the court declared that the
evidence submitted was not competent or sufficient to sustain the claim of the
oppositors and, therefore denied said prayers.
The petitioning municipalities presented no appeal, but the oppositors did appeal,
claiming that the lower court erred in not rendering judgment in their favor and in not
declaring them heirs of the decedents Anne Fallon Murphy and Thomas Fallon.
This appeal can not be entertained. While it is possible for the estates of the deceased
Anne Fallon Murphy and Thomas Fallon, who at the time of their death were
residents of San Francisco, California, to be settled here, or more especially in Negros
Occidental where they had properties, these proceedings were instituted as escheat
proceedings and not for the settlement of the estate of deceased persons. The court
acquired jurisdiction to hear the petition for escheat by virtue of the publication of the
petition for escheat. The jurisdiction acquired can not be converted into one for the
distribution of the properties of the said decedents. For such proceedings (for the
distribution of the estate of the decedents) to be instituted, the proper parties must be
presented and the proceedings should comply with the requirements of the Rule.
Hence, the court of First Instance did not have the power to order, or to proceed with,
the distribution of the estates of the decedents in these escheat proceedings, and
adjudicate the properties to the oppositors.
WHEREFORE, the decision appealed from should be, as it hereby is, affirmed,
without costs.
Paras, C.J., Bengzon. Padilla, Bautista Angelo, Reyes, J.B.L. Barrera, Gutierrez
David, and Paredes, JJ., concur.
G.R. No. 117246 August 21, 1995
BENIGNO MANUEL, LIBERATO MANUEL, LORENZO MANUEL, PLACIDA
MANUEL, MADRONA MANUEL, ESPERANZA MANUEL, AGAPITA
MANUEL, BASILISA MANUEL, EMILIA MANUEL and NUMERIANA
MANUEL, petitioners,
vs.
HON. NICODEMO T. FERRER, Presiding Judge, Regional Trial Court,
Branch 37, Lingayen, Pangasinan, MODESTA BALTAZAR and
ESTANISLAOA MANUEL, respondents.
VITUG, J.:
The property involved in this petition for review on certiorari is the inheritance
left by an illegitimate child who died intestate without any surviving
descendant or ascendant.
Petitioners, the legitimate children of spouses Antonio Manuel and Beatriz
Guiling, initiated this suit. During his marriage with Beatriz, Antonio had an
extra-marital affair with one Ursula Bautista. From this relationship, Juan
Manuel was born. Several years passed before Antonio Manuel, his wife
Beatriz, and his mistress Ursula finally crossed the bar on, respectively, 06
August 1960, 05 February 1981 and 04 November 1976.
Juan Manuel, the illegitimate son of Antonio, married Esperanza Gamba. In
consideration of the marriage, a donation propter nuptias over a parcel of
land, with an area of 2,700 square meters, covered by Original Certificate of
Title ("OCT") No. P-20594 was executed in favor of Juan Manuel by
Laurenciana Manuel. Two other parcels of land, covered by OCT P-19902
and Transfer Certificate of Title ("TCT") No. 41134, were later bought by Juan
and registered in his name. The couple were not blessed with a child of their
own. Their desire to have one impelled the spouses to take private
respondent Modesta Manuel-Baltazar into their fold and so raised her as their
own "daughter".
On 03 June 1980, Juan Manuel executed in favor of Estanislaoa Manuel a
Deed of Sale Con Pacto de Retro (with a 10-year period of redemption) over
a one-half (1/2) portion of his land covered by TCT No. 41134. Juan Manuel
died intestate on 21 February 1990. Two years later, or on 04 February 1992,
Esperanza Gamba also passed away.
On 05 March 1992, a month after the death of Esperanza, Modesta executed
an Affidavit of Self-Adjudication claiming for herself the three parcels of land
covered by OCT P-20594, OCT P-19902 and TCT No. 41134 (all still in the
name of Juan Manuel). Following the registration of the document of
adjudication with the Office of the Register of Deeds, the three titles
(OCT P-20594, OCT P-19902 and TCT No. 41134) in the name of Juan
Manuel were canceled and new titles, TCT No. 184223, TCT No. 184224 and
TCT No. 184225, were issued in the name of Modesta Manuel-Baltazar. On
19 October 1992, Modesta executed in favor of her co-respondent
Estanislaoa Manuel a Deed of Renunciation and Quitclaim over the
unredeemed one-half (1/2) portion of the land (now covered by TCT No.
184225) that was sold to the latter by Juan Manuel under the 1980 Deed of
Sale Con Pacto de Retro. These acts of Modesta apparently did not sit well
with petitioners. In a complaint filed before the Regional Trial Court of
Lingayen, Pangasinan, the petitioners sought the declaration of nullity of the
aforesaid instruments.
The case, there being no material dispute on the facts, was submitted to the
court a quo for summary judgment.
The trial court, in its now assailed 15th August 1994 decision, dismissed the
complaint holding that petitioners, not being heirs ab intestato of their
illegitimate brother Juan Manuel, were not the real parties-in-interest to
institute the suit. Petitioners were also ordered to jointly and severally
(solidarily) pay
(a) respondent Modesta Manuel-Baltazar the sum of P5,000.00 for moral
damages, P5,000.00 for exemplary damages, P5,000.00 for attorney's fees
and P500.00 for litigation expenses and (b) Estanislaoa Manuel the sum of
P5,000.00 for moral damages, P5,000.00 for exemplary damages and
P500.00 for attorney's fees.
Petitioners' motion for reconsideration was denied by the trial court.
The petition before us raises the following contentions: That —
1. THE LOWER COURT (HAS) FAILED TO CONSIDER THE LAST
PARAGRAPH OF ARTICLE 994 OF THE NEW CIVIL CODE, AS THE
CONTROLLING LAW APPLICABLE BY VIRTUE OF THE ADMITTED
FACTS, AND NOT ARTICLE 992 OF THE SAME CODE.
2. THE LOWER COURT, IN NOT ANNULLING ALL THE ACTS OF,
AND VOIDING ALL DOCUMENTS EXECUTED BY, RESPONDENT
MODESTA BALTAZAR, WHO ARROGATED UNTO HERSELF THE
RIGHTS OF AN HEIR TO THE ESTATE OF DECEDENT JUAN
MANUEL, (HAS) VIRTUALLY GRANTED SAID RESPONDENT THE
STATUS OF AN HEIR MANIFESTLY CONTRARY TO LAW, MORALS
AND PUBLIC POLICY.
3. TO ENFORCE ONE'S RIGHT WHEN THEY ARE VIOLATED IS
NEVER A LEGAL WRONG.1
Petitioners argue that they are the legal heirs over one-half of Juan's intestate
estate (while the other half would pertain to Juan's surviving spouse) under
the provision of the last paragraph of Article 994 of the Civil Code, providing
thusly:
Art. 994. In default of the father or mother, an illegitimate child shall be
succeeded by his or her surviving spouse, who shall be entitled to the
entire estate.
If the widow or widower should survive with brothers and sisters,
nephews and nieces, she or he shall inherit one-half of the estate, and
the latter the other half. (Emphasis supplied)
Respondents, in turn, submit that Article 994 should be read in conjunction
with Article 992 of the Civil Code, which reads:
Art. 992. 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 relative inherit in the same manner from the
illegitimate child. (Emphasis supplied)
Article 992, a basic postulate, enunciates what is so commonly referred to in
the rules on succession as the "principle of absolute separation between the
legitimate family and the illegitimate family." The doctrine rejects succession
ab intestato in the collateral line between legitimate relatives, on the one
hand, and illegitimate relatives, on other hand, although it does not totally
disavow such succession in the direct line. Since the rule is predicated on the
presumed will of the decedent, it has no application, however, on
testamentary dispositions.
This "barrier" between the members of the legitimate and illegitimate family in
intestacy is explained by a noted civilist.2 His thesis:
What is meant by the law when it speaks of brothers and sisters,
nephews and nieces, as legal or intestate heirs of an illegitimate child?
It must be noted that under Art. 992 of the Code, there is a barrier
dividing members of the illegitimate family from members of the
legitimate family. It is clear that by virtue of this barrier, the legitimate
brothers and sisters as well as the children, whether legitimate or
illegitimate, of such brothers and sisters, cannot inherit from the
illegitimate child. Consequently, when the law speaks of "brothers and
sisters, nephews and nieces" as legal heirs of an illegitimate child, it
refers to illegitimate brothers and sisters as well as to the children,
whether legitimate or illegitimate, of such brothers and sisters.
(Emphasis supplied)
The Court, too, has had occasions to explain this "iron curtain", firstly, in the
early case of Grey v. Fabie3 and, then, in the relatively recent cases of Diaz
v. Intermediate Appellate Court4 and De la Puerta v. Court of Appeals.5 In
Diaz, we have said:
Article 992 of the New Civil Code . . . prohibits absolutely a succession
ab intestato between the illegitimate child and the legitimate children
and relatives of the father or mother of said legitimate child. They may
have a natural tie of blood, but this is not recognized by law for the
purposes of Article 992. Between the legitimate family and the
illegitimate family there is presumed to be an intervening antagonism
and incompatibility. The illegitimate child is disgracefully looked down
upon by the legitimate family; the legitimate family is, in turn, hated by
the illegitimate child; the latter considers the privileged condition of the
former, and the resources of which it is thereby deprived; the former, in
turn, sees in the illegitimate child nothing but the product of sin,
palpable evidence of a blemish broken in life; the law does no more
than recognize this truth, by avoiding further grounds of resentment.
The rule in Article 992 has consistently been applied by the Court in several
other cases. Thus, it has ruled that where the illegitimate child had
half-brothers who were legitimate, the latter had no right to the former's
inheritance;6 that the legitimate collateral relatives of the mother cannot (e) Brothers and Sisters/ (e) Brothers and Sisters/
succeed from her illegitimate child;7 that a natural child cannot represent his Nephews and Nephews and Nieces
natural father in the succession to the estate of the legitimate grandparent;8
Nieces and Surviving Spouse
that the natural daughter cannot succeed to the estate of her deceased uncle
who is a legitimate brother of her natural father;9 and that an illegitimate child (f) Other Collateral Relatives (f) Alone
has no right to inherit ab intestato from the legitimate children and relatives of (within the fifth civil degree)
his father.10 Indeed, the law on succession is animated by a uniform general (g) State (g) Alone
intent, and thus no part should be rendered inoperative11 by, but must always
be construed in relation to, any other part as to produce a harmonious In her answer to the complaint, Modesta candidly admitted that she
whole.12 herself is not an intestate heir of Juan Manuel. She is right. A ward
(ampon), without the benefit of formal (judicial) adoption, is neither a
In passing, we might, in easy graphic presentation, collate the order of compulsory nor a legal heir.13
preference and concurrence in intestacy expressed in Article 978 through
Article 1014, inclusive, of the Civil Code; viz.: We must hold, nevertheless, that the complaint of petitioners seeking
the nullity of the Affidavit of Self-Adjudication executed by Modesta, the
Order of Preference Order of Concurrence three (3) TCT's issued to her favor, as well as the Deed of
(a) Legitimate Children and (a) Legitimate Children and Renunciation and Quitclaim in favor of Estanislaoa Manuel, was
Descendants Descendants, Illegitimate properly dismissed by the trial court. Petitioners, not being the real
"parties-in-interest"14 in the case, had neither the standing nor the
Children and Descendants,
cause of action to initiate the complaint.
and Surviving Spouse
(b) Legitimate Parents and (b) Legitimate Parents and The Court, however, sees no sufficient reason to sustain the award of
Ascendants Ascendants Illegitimate amounts for moral and exemplary damages, attorney's fees and
Children and Descendants, litigation expenses. An adverse result of a suit in law does not mean
that its advocacy is necessarily so wrongful as to justify an assessment
and Surviving Spouse
of damages against the actor.15
(c) Illegitimate Children and (c) Illegitimate Children and
Descendants (in the absence Descendants and Surviving WHEREFORE, the appealed decision of the Regional Trial Court of
of ICDs and LPAs, the Spouse Pangasinan (Branch 37) is AFFIRMED, except insofar as it has
Illegitimate Parents) awarded moral and exemplary damages, as well as attorney's fees and
litigation expenses, in favor of private respondents, which portion is
(d) Surviving Spouse (d) Surviving Spouse and hereby DELETED. No special pronouncement on costs.
Illegitimate Parents
SO ORDERED.

Feliciano, Romero and Melo, JJ., concur.